How Much are the Knicks Worth?
Success in the win column and the trophy case doesn’t necessarily make your franchise the most valuable in your sport. In some cases, winning isn’t even a prerequisite for having a valuable franchise. The New York Knicks have been proving that for years. The Knicks have just one playoff series win during the first 20 years of the 21st century and have struggled to get to the playoffs during that time. However, Knicks tickets remain in high demand, and the franchise remains the most valuable in the NBA and one of the most expensive in American pro sports. But how is that possible, and how much are the New York Knicks actually worth? Let’s take a closer look at how valuable the Knicks are and how they became so.
The Magic Number
For the Knicks, the magic number is $5 billion. The most recent estimates have the Knicks being valued at around $5 billion. This estimate is up from roughly $4 billion just two years ago. Even in the past decade, the value of the New York Knicks has skyrocketed, as the franchise was worth an estimated $665 million a decade ago in 2011. During the 2019-20 season, the Knicks generated $421 million in revenue despite the season being interrupted by the COVID-19 pandemic and finished months later inside a proverbial bubble in Orlando.
The Knicks are officially owned by the Madison Square Garden Sports Corporation and managed by James Dolan. Dolan serves as the company's executive chairman and is in charge of day-to-day operations for both the Knicks and the NHL’s New York Ranges.
Comparing Apples to Oranges
For the sake of comparisons, the Knicks are valued at $5 billion, while the average value of an NBA franchise is $2.2 billion - a sum that’s up from $1.9 billion in 2019. Only the Los Angeles Lakers and Golden State Warriors are valued at more than $4 billion, while the Chicago Bulls and Boston Celtics round out the top-five NBA franchises in terms of value at $3.3 billion and $3.2 billion, respectively. Much like the Knicks, the other four NBA teams with the highest value are located in major cities. In the broader scope, the Dallas Cowboys are the only professional sports franchise in North America that has a higher value than the Knicks.
Location, Location, Location
The biggest reason the Knicks are worth so much is that they are located in the most populated city in the country. The same can be said of the Lakers, Warriors, Bulls, and Celtics, but not to the extent of New York City. Of course, while the Brooklyn Nets are also located in New York, the Knicks play their home games at Madison Square Garden, which is located in the heart of Manhattan, making it accessible to a higher volume of fans.
Madison Square Garden is another huge reason for the Knicks being worth $5 billion. For starters, MSG is arguably the most iconic sports and entertainment venue in the world. It’s famous for all of the right reasons, with sports fans everywhere viewing it as a bucket-list venue. That helps attracts fans to Knicks games regardless of any other factors, including the success of the team and the players on the court.
Meanwhile, MSG is just a decade removed from a $1 billion renovation that has made the venue even more appealing for fans while also generating more revenue. Combined with a lucrative TV deal, which also relates to the size of the team’s fanbase in New York, the Knicks are capable of generating more revenue than any other NBA team. The team’s home court and TV deal are considered fixed revenue streams that are largely unaffected by the Knicks’ performance.
“The stadiums are like amusement parks, and there’s such an atmosphere to go to it, that they’ve made it so, that wins, and gate revenue are increasingly have a smaller and smaller link,” explains sports economist David Berri. “Fixed revenues are revenues not linked to wins. Fixed revenues in sports have gotten bigger, and bigger, and bigger over time. So a fixed revenue is your national broadcasting deal. It’s not related to wins.”
Don’t Let Losses Get in the Way
In so many ways, it’s beyond stunning that the Knicks continue to be the most valuable team in the NBA despite a profound lack of winning for the last two decades. Keep in mind that the Knicks haven’t won a championship since 1973 and haven’t been to the NBA Finals since 1999. They’ve endured close to a dozen coaching changes since that NBA Finals appearance and have lost close to 70% of their games over the last half a dozen years. The 2012-13 season was the last time the Knicks had a winning season or won a playoff series. Of course, all of this makes the Knicks the perfect example of modern sports economics, as we are living in a world in which winning games and competing for championships is less tied to winning than ever before.