What Traders And Investors Should Know About The Utah Jazz Sale

The Utah Jazz and Vivint Smart Home Arena are being sold to lifelong fan and Qualtrics founder Ryan Smith.

The sale could be a boost to a publicly-traded company that owns several sports teams, including the New York Knicks.

What Happened: ESPN reported a sale price of $1.66 billion for the Jazz. The founder of Qualtrics sold his company for $8 billion to SAP (NYSE: SAP) in 2018.

The deal price is higher than current valuations for the Jazz from Forbes. The Jazz were last valued at $1.55 billion, ranking 21st for NBA teams.

Related Link: MLB Playoffs, New York Mets Sale Could Boost Atlanta Braves Stock

Why It’s Important: The New York Knicks are the most valuable team for the last five years in Forbes annual rankings. The team is assigned a valuation of $4.6 billion.

The team is owned by publicly traded Madison Square Garden Sports Corp (NYSE: MSGS), whose shares have fallen as the sports world tries to figure out how to complete seasons with the rising COVID-19 cases. Teams and leagues are seeing big losses from shortened seasons with no fans.

Shares of Madison Square Garden Sports have fallen from about 50% from highs of $225.62 in February and are now valued with a market cap of $3.5 billion.

The company’s enterprise value of $4.5 billion is lower than the current Forbes valuation. Also keep in mind that Madison Square Garden Sports owns the NHL’s New York Rangers, WNBA team New York Liberty and some esports assets.

Forbes values the New York Rangers at $1.65 billion, ranking first for NHL teams. Part of the valuation includes Madison Square Garden, which is also included in the Knicks valuation. Without the stadium value, the Rangers are still worth over $1 billion by Forbes.

There are minimal options for publicly traded sports teams. A number of deals have been completed this year that could boost the values of public sports teams like Liberty Braves Group (NASDAQ: BATRA) and Manchester United (NYSE: MANU).

New SPAC Redball Acquisition Corp (NYSE: RBAC) from Billy Beane was rumored to be purchasing MLB's Boston Red Sox and soccer team Liverpool, giving investors, which would give investors another pure-play public sports investment.