economy
Want to own a piece of the Knicks? Jim Cramer says buy this stock to do it
CNBC's Jim Cramer said MSG Sports is an attractive investment because the stock trades at a discount to the combined value of the Knicks and Rangers.
TL;DR
- Jim Cramer believes Madison Square Garden Sports (MSG Sports) is an attractive investment despite recent gains.
- The stock is seen as undervalued because its market capitalization is less than the sum of its parts, the New York Knicks and New York Rangers.
- CNBC's valuations estimate the Knicks at $10.1 billion and the Rangers at $3.8 billion, totaling nearly $14 billion, while MSG Sports' enterprise value is under $10 billion.
- MSG Sports is exploring a spin-off of the Rangers, which could help unlock the franchises' hidden value.
- Previous spin-offs by MSG Sports management, including MSG Entertainment and Sphere Entertainment, have been successful investments.
- Cramer acknowledges Chairman and CEO James Dolan's control through Class B shares and modest earnings relative to valuation, but believes investors are betting on rising franchise values.