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Wednesday, February 23rd, 2011 at 11:56 am | 5 responses 4 3Like

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Knicks $core Big With CarmeloKnicks likely to add to riches with Carmelo Anthony on-board.

by Kyle Stack / @KyleStack

Much has been made about the on-court implications of the New York Knicks acquiring Carmelo Anthony. Farless has been written of the financial ramifications, which seem to go hand-in-hand with the team’s futuresuccess on the hardwood. Yet it appears as though the ‘Bockers might have scored a win even before ‘Melogets a chance to don the blue and orange.

The Knicks are already a revenue juggernaut given theirultra-high average ticket price of $88.66, which trails only theLos Angeles Lakers‘ $95.25 figure for the highest in theLeague. They have a slew of corporate partners, including adeal with JPMorgan Chase signed in September whichreportedly will pay them $300 million during 10 years. Theypulled in $226 million of revenue last year, tops among all NBAteams. And according to a series of e-mails with sportseconomists, the Knicks’ bank account will likely get fatter nowthat they have added Anthony to form a superstar duo withAmar’e Stoudemire.

“I can see [Anthony] having an impact across the board,” wroteGabe Feldman, Director of the Sports Law Program at TulaneUniversity. “He will likely put more butts in seats, which will helpwith everything from concessions to local broadcast fees tosponsors and to increased exposure on national television.”

Television is where a real financial benefit can be discovered,according to Robert Baumann, an associate professor ofeconomics at College of the Holy Cross. The Knicks rank fourth in the NBA in number of household viewersper game (115,000), but their 1.5 ratings on MSG Network don’t even rank in the top five. Still, Baumannclaimed they should hold a greater ability to sell advertising space for a higher price.

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“My hunch is that revenue makes acquiring Carmelo profitable, even if he signs the extension,” wroteBaumann. To complete the trade, Anthony signed a three-year, $65 million extension that will begin with the‘12-13 season. His salary for the balance of this season is $5.1 million, and he will pick up the $18.5 million inhis contract for the ‘11-12 campaign, bringing his total future earnings as a Knick to $88.6 million.

Fans are also likely to scoop up Anthony’s No. 7 jersey at team stores. He has placed 15th and 10th intop-selling jerseys the past two years. Combine that with the Knicks’ finish last year as the fifth-most popularchoice for NBA team merchandise, and there is likely to be a significant amount of home and away Anthonyjerseys sold, as well as other Knicks gear which may not have sold if not for the excitement of the Anthonytrade.

Robert Boland, a sports business professor at New York University, said the Knicks may not derive a notablefinancial benefit from jersey sales since all merchandise revenue is pooled and split among all NBA teams. Hedid acknowledge that the potential drive of Anthony’s jersey sales could help the NBA as a whole, which hasn’thad many stars to market in a Knicks uniform for the past decade.

Then there is the advantage of having a second face — asidefrom Stoudemire — to sell fans on season tickets andcompanies on luxury suites. Madison Square Garden is amidstan $850 million renovation to be completed for the ‘13-14season. With a glut of stadiums in the New York metropolitanarea either having opened recently or set to open in the nextseveral years, the Knicks could use their acquisition of Anthonyto set itself apart from others.

“The market for luxury boxes and clubs seats in New York Cityhas become extraordinarily competitive,” wrote Boland. He citedthe recent openings of Yankee Stadium, New Meadowlands

Stadium, Citi Field and Prudential Center and the expected opening of Barclays Center in 2012 as directcompetition to MSG. “It doesn’t take an economist to understand that a five- or a six-fold increase in supply ofluxury boxes and club seats without a similar increase in demand could negatively affect price.”

The addition of more lower bowl luxury amenities and boxes in the renovated Garden could entice prospectiveclients to choose Knicks tickets over those from other New York-based teams, Boland explained. “MSGalready has an edge in total events, having the highest profile lineup from the Rangers to concerts to theWestminster Kennel Club dog show to the NIT,” Boland continued. “The Knicks having the expectation of adozen or so more Playoff games annually, along with high-profile regular-season games, would enhanceMSG’s ability to maximize all of its luxury amenities.”

The Knicks are selling game tickets at near capacity, and a Playoff run led by Anthony and Stoudemire shouldkeep fans venturing into MSG. Allen Sanderson, an economist at the University of Chicago said a potentialmatch-up with the Chicago Bulls — or another rival — in first round of the Playoffs could also ensure moremonetary support from fans.

Whether or not the Knicks gave up too much for Anthony is a discussion for another story. The team’s reign asa money-maker will probably continue, and they can thank their newest and boldest acquisition for that.

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5 Responses to “Knicks $core Big With Carmelo”c_cantrell Posted: Feb.23 at 12:21 pm

good sh*t.. good sh*t

ciroqobama Posted: Feb.23 at 12:35 pm

I hope Wilson Chandler gets a ring before Melo

epic win Posted: Feb.23 at 1:52 pm

CP3 to NY in 2012.

Wayno Posted: Feb.23 at 2:21 pm

They should go for Steve Nash now…

Jer dawg Posted: Feb.23 at 3:54 pm

And all this owners are locking out players. Granted, small market teamsaren’t getting that money but won’t they cash in and still profit? This pissesfans off.

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