Madison Square Garden shares rise on NHL deal
NEW YORK (AP) — Madison Square Garden Inc. shares hit an all-time high Monday, boosted by news of a tentative deal to end the NHL lockout.
THE SPARK: Early Sunday, the NHL and the players' association announced that they agreed on a tentative pact to end the lockout and save what is left of this year's season. Teams are expected to hold brief training camps before starting an at least 48-game season.
THE BIG PICTURE: The New York-based company owns the New York Rangers, along with the iconic building that the company is named for, the New York Knicks and the MSG TV network. The absence of hockey so far this season has meant significant lost revenue for it and other team owners.
If the season had been canceled, the company also would have been required to give rebates to cable companies from its cable channels that would have normally broadcast the games.
THE ANALYSIS: Stifel Nicolaus analyst Benjamin Mogil backed his "Buy" rating for the company, saying that the expected 48 to 50 game season should be enough to fulfill contracts with cable companies and keep Madison Square Garden from having to provide rebates on affiliate fees to the cable companies.
In addition, Mogil said the terms included in the labor pact, including a drop in the players' revenue percentage and a lower salary cap starting next season, are favorable for Madison Square Garden and the other owners.
THE SHARES: Up $1.02, or 2 percent, to $46.30 in morning trading, after jumping to $47.26 earlier in the day and passing their previous all-time high of $46.19 set last week.
Madison Square Garden shares posted steady gains in 2012, rising about 55 percent.