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Undervalued Sports and Entertainment Mecca a Slam-Dunk Investment

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With lucrative and coveted broadcast deals either signed or in the pipeline, the Madison Square Garden Co. is positioned to perform like a champ.

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Along with its ownership of the Rang-ers, the company also owns the Madison Square Garden network, which airs the team's games. Without hockey games, ratings and revenue plummet.

Madison Square Garden relies on ticket sales, advertising revenue, con-cessions, and merchandise throughout the hockey season. However, investors may forget that the health of Madison Square Garden rests more on ironclad broadcast rights than the vicissitudes of its teams. The company recently inked a 14-year deal with CBS (NYSE:CBS) and the NCAA worth $10.8 billion, to show March Madness and other college basketball programming.

Madison Square Garden also signed a $15.2 billion deal with Disney (NYSE:DIS) and the NFL to extend ESPN's Monday Night Football programming through 2021. In August, MSG Networks and ESPN New York 98.7FM agreed to a multi-year exten-sion that allows 98.7FM to continue as the radio broadcast home of the New York Knicks and New York Rangers.

Moreover, Madison Square Gar-den has embarked on an ambitious growth strategy to extend its opera-tions far beyond New York, particu-larly into the sports and entertainment mecca of California. The company and CBS are currently discussing a new media rights deal with the Los Ange-les Dodgers, whose owners are in a spending mood to build up the team.

In May, Madison Square Garden an-nounced that it would pay the Faithful Central Bible Church $23.5 million for the historic Forum in Inglewood, California. Home to musical acts over the years such as Elvis Presley, Jimi Hendrix and Nirvana, the Forum is Madison Square Garden's first West Coast property. The company plans to spend $50 million this year to reno-vate the property.
No positions in stocks mentioned.
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