I have a feeling Knicks fans will be changing their tune (or at least should be) soon.
Lin caught lightning in a bottle. He came into a perfect situation, where he was in the perfect system, where the stars were hurt, and they needed him to step up, and where he was having an incredible hotstreak.
That led to an incredible 15 minutes of fame, and like some of the great entertainers who died at the height of their greatness, when he got injured, the flaws in his game had not yet been properly exposed, and everyone only remembers the good times.
I have a feeling once he gets settled in Houston, and the 15 minutes is up when he can't live up to the insane hype that was built on an unprecedented hot streak in a perfect situation, he is just going to be another overpaid backup PG, who no one wants.
Define overpaid. MSG's market cap jumped $71 million during his run and dropped $50 million yesterday alone after his departure was announced.
How can a guy who provides enormous return on investment be overpaid from a financial standpoint? You really think the Knicks won't make back his contract on his marketability alone? It is impossible to overpay Jeremy Lin.
I think this reasoning uses some faulty finance.
1. MSG market cap is about 2.67 billion (as of close 7/17). So a $50m swing is less than 2% which is a pretty typical movement for a stock on any given day. Not a big deal. Does it really make sense to attribute one days normal movement to Lin?
2. But you know what, the day after the Knicks were eliminated from the playoffs, the market cap increased by $50m! I guess the Knicks should keep losing because it’s apparently good for business. See maybe it’s not a good idea to judge the value of one part of company by how the stock moves in one day.
3. The Knicks acquired Carmelo Anthony on 2/22/12. The Knicks change in market cap from 2/17 to 2/27? It went from +73m to +43m to -63m to +19m to -49m to -18m? Man I guess people didn’t know if Carmelo Anthony was worth it, because the market cap was all over the place. Hmm maybe it’s not a good idea to judge a players worth based on the market cap of a bigger organization.
4. When the Knicks won 13 out of 14 in 2010 with Raymond Felton, the Knicks market cap increased by $187m! So Raymond Felton is way more valuable than the Jeremy Lin who only increased value by a measly $70m.
This market cap stuff is not a good way to judge Jeremy Lin’s value. The market cap moves by tens of millions every day. A $50m swing is not that rare.
As we saw when the Knicks won 13 of 14 in 2010, winning seems to do more to increase the market cap, than any one player.