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from Rolfe Winkler:

No MSG Please

Cross-posted from today's Times.

The formidable skills of LeBron James probably won’t reach the stock market. Speculation is rampant he could soon be headed to the New York Knicks basketball team, whose owner is now trading on the Nasdaq.

The listing followed a spinoff of Madison Square Garden Inc. from the cable operator Cablevision to its shareholders last week. MSG is a collection of trophy assets but doesn’t seem to be a gold-plated investment.

In addition to the Knicks, MSG owns the New York Rangers hockey team, the Madison Square Garden arena, Radio City Music Hall and some lesser-known teams and theaters. But the teams lose money, and the entertainment division, home to the Rockettes Christmas show, only broke even last year. The real value is in MSG’s two regional sports networks, where the Knicks and Rangers are the primary draw.

The shares look fully priced already, after rising to $19.76, or 8.5 percent, in their first days of trading. Analysts expect MSG to generate about $95 million in earnings before interest, tax, depreciation and amortization, or Ebitda, for 2009. Add $30 million from a new broadcast deal with Cablevision, a better year for the Rockettes, other television-contract renewals and narrower losses for the teams, and MSG might just have EBITDA of $160 million in 2010, as some analysts forecast. Put that on a multiple of 10, the same as its closest peers, and you get an optimistic enterprise value of $1.6 billion.

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