In the span of 10 days, New York Knicks point guard Jeremy Lin has gone from seldom-used benchwarmer to the NBA’s most improbable success story. Not only is Lin the first Harvard University graduate to play in the league since the 1950s, but he’s also the first American-born player of ethnic Chinese descent to suit up in the NBA. After being cut from two teams and languishing in the NBA’s development league, the 23-year-old underdog has become an instant fan favourite and is praised for reversing the Knicks’ fortunes.
But recently Lin has been getting credit for something more befitting his economics degree: driving up share prices of Madison Square Garden Co., which owns his team and various other sports properties.
Last week, The Wall Street Journal was hesitant to credit Lin for MSG’s recent uptick. Instead, the paper noted positive news in the company’s recent 3Q earnings report. But earlier this morning, MSG shares were trading at all-time highs, and several media outlets are saying that “Linsanity” is the reason why. Since Feb. 3, the day before Lin debuted in the Knicks’ starting line-up, MSG shares have risen by more than 11%, easily outpacing growth on the S&P 500.
Investors might be reacting emotionally to a feel-good sports story, but in their defence, Lin’s popularity has already made a significant impact on ticket and merchandising revenues.
In the last nine days, Lin’s jersey has been the NBA’s highest-selling, and sporting goods stores are running through multiple shipments of Lin-related merchandise. According to Delivery Agent, which powers the Knicks’ online store, sales and traffic on the site are up by more than 3,000% in the past week. On Forbes’ website—where Lin stories are plentiful—one contributor estimates that Lin’s ascent could generate tens of millions in additional revenues for both the Knicks and the NBA, this season and next. Another Forbes writer has noted that Knicks ticket prices have risen substantially on both the primary and secondary ticket markets.
That said, the rate at which Lin merchandise is being sold is likely unsustainable. Everyone is quick to snatch up Lin jerseys, but after buying one, how many do you need?
Lin does, however, provide the league with a host of opportunities in Asian markets, where he could occupy a marketing void left by Yao Ming, a highly popular Chinese basketball player who retired from the NBA last summer.
Even though Lin is American-born and Taiwanese, his popularity in mainland China is substantial. The New Yorker wrote today that Lin was the most-searched item last week on Baidu, a Chinese search engine, and that Lin has a bigger social media following in China than in the United States. Meanwhile, Chinese broadcasters are picking up extra Knicks games, which so far have been watched by “tens of millions of Chinese fans,” according to Reuters.
China has long been a key international growth market for the NBA, and with Lin’s improbable rise, the league and Knicks franchise have struck gold—even if his stock market impact is short-lived.