Monday, February 13, 2012 at 11:26 am.
‘Linsanity’ Is Money For MSG, And: Why Grownups Steal
It has been a particularly memorable week living in New York, as unexpected Knicks star Jeremy Lin has taken over the city. (Good intro/explainer here by Peter Kafka.) I am a lifelong Chicago Bulls fan and have hated the Knicks forever, but even I have watched the last two entire Knicks games live to check out the Harvard kid.
“Linsanity” is also having a profound business effect.
- Madison Square Garden (MSG) stock — the company that owns the Knicks, plus the stadium they play at and the cable network they play on — is up ~11% since the end of trading on Friday, Feb. 3. That was the last day of trading before his big splash performance on Feb. 4. Today, MSG hit an all-time high of $33.18 before dipping a bit. (Via Joe Weisenthal.)
- Lin gear sales are on fire, as this Bloomberg article notes. NBAStore.com has a temporary Lin banner up to funnel jersey buyers through the buying process.
Lin’s rise may also force MSG to finally figure out a new deal with Time Warner Cable, the dominant cable provider in NYC. Since Jan. 1, MSG Network hasn’t been on the air for TWC subscribers, because MSG is demanding a ~50% raise per subscriber for its channels, and TWC doesn’t want to pay it.
It wasn’t a big problem for a while because the Knicks were bad. But now, people want to watch the games, so it’s starting to become an issue. If Lin’s streak continues, it could force a deal… or riots! (Or, he could stop playing well, and then it might not matter.)
Btw, semi-related, this is a great example where corporate greed — whether it’s on MSG’s side or TWC’s, or both — is actually forcing piracy. And media companies can only blame themselves for it.
You don’t have to look hard to see prominent people semi-publicly sharing links to pirate streams of Knicks games these days, because it’s the only option. These are people who are paying a lot of money to receive a service they signed up for, but aren’t getting it, because two giant companies can’t figure out a deal.
Piracy — particularly among adults with disposable income — is rarely about getting stuff for free so you don’t have to pay for it. It’s about getting stuff, period, that you know exists but aren’t allowed access to. Knicks games. European or Canadian TV series. Movies/shows at a particular quality level or release time. Whatever. Artificial barriers from media companies will be defeated by piracy, always and forever.
The smart companies will figure out a way to profit from demand. (I’ve paid quite a bit of money out of pocket, in addition to my cable bill, to stream MLB/Cubs games and full Tour de France stages the past few years. And I’m happy to do it: The product is great!) The dumb ones will whine about piracy.