Value investor on Knicks championship, MSG spin-off, and Sphere (with Romain Bostick, Katie Greifeld)

John Rogers (Ariel Investments) says the Knicks championship excitement is already partially priced into MSG stocks. He strongly supports splitting MSGS into two companies (Knicks/WNBA and Rangers/minor league) to make private equity investment easier and facilitate a potential sale at all-time highs. He notes the 'Dolan discount' has flipped to a 'Dolan premium' for Sphere, which has executed beautifully and is expanding globally. Ariel scales back positions when value is realized.

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Ariel Investments 6.0
Asset Manager $16.00B
John Rogers 8.5

Value investor on Knicks championship, MSG spin-off, and Sphere (with Romain Bostick, Katie Greifeld)

Asks if the Knicks championship excitement will increase the value of MSG Sports (MSGS).

Romain Bostick
John Rogers

Markets are efficient; a lot of the good news is already incorporated in the price. Stocks have made new highs as the team came together.

There will still be more good news, but much is priced in.
Asks if splitting MSGS into two stocks (Knicks/WNBA and Rangers/minor league) is a good idea now.

Romain Bostick
John Rogers

Excellent idea—it makes it easier for private equity to invest and for Jim Dolan to sell one or both at all-time highs. Valuations may never be higher.

The Knicks are rumored to be worth $10-12B, potentially the highest priced basketball team ever.
Asks if investors would welcome a sale by Jim Dolan, given the 'Dolan discount.'

Romain Bostick
John Rogers

Investors would love it—the stocks have never reflected the true underlying asset value of the franchises. This is the right time to realize value.
Asks how Sphere Entertainment fits into the portfolio.

Katie Greifeld
John Rogers

Sphere was spun out and got extremely cheap due to the 'Dolan discount' (cost overruns). Now it's over $150—the discount became a premium. Execution has been beautiful; they are expanding globally.

The Wizard of Oz movie using AI is spectacularly successful.
Asks how Ariel manages winners like Sphere (+61% YTD) and MSG positions—do they scale back?

Katie Greifeld
John Rogers

These have been some of our largest holdings. When value is realized, it's prudent to scale back. We don't like any single company to be more than 6% of the Ariel Fund portfolio.

As stocks get more expensive and more people realize the economic value, it's time to lighten up.
Asks if the Knicks championship is a one-off or the start of a multi-year run.

Romain Bostick
John Rogers

Very optimistic—people want to play in NYC. Jalen Brunson is arguably the best player in the world. Expect multiple championships and more value for the Garden and the sports.

Friends with Bill Bradley (last Knicks championship star).

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