During their latest episode of the VALUE: After Hours Podcast, Boyar, Taylor, and Carlisle discussed Investors Can Buy The Knicks And The Rangers At A Discount. Here’s an excerpt from the episode:
Jake: Would you say capital allocation is an important part of your assessment?
Jonathan: Yeah, it’s critically important. Sometimes, the worst capital allocators can end up being the best investments because you get a stock that’s so cheap. Going back to the Madison Square Garden sports story, which right now enterprise value is $6 billion. You can buy the Knicks and the Rangers for $6 billion. The Knicks alone, on a standalone basis, probably would go for a little over eight Rangers. Three or four in that range. Three, three and a half. So, you have a big discount there, and that’s because James Dolan controls it, and people think he’s a terrible capital allocator. He’s a terrible owner of a sports team, as a Nick and Ranger fan.
Jonathan: The best thing he could have done for shareholders over the past 10 years since I talked to you about this at the Value Investor Conference, Toby, is not sell the teams because they’ve just gone up and up in value, and that’s been the best thing that could have happened. The stock price might not have fully reflected that, but these are the things that get us excited. So, you can have the terrible capital, perceived capital allocators that give you that opportunity, or you can invest alongside someone like John Malone, who for the most part, gets high marks in terms of capital allocation.
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