No owner of a National Basketball Association franchise has done less with more than Cablevision, proprietor of the New York Knicks.
Start with one of the most recognizable brands in the business. An arena that humbly describes itself as the world’s most famous. A home in the biggest media market in the country. A hungry, loyal fan base beguiled by the team’s history and tradition.
A perfect scenario, it seems, to build value.
Yet almost every move made by Knicks’ executives in the past few years has chipped away at the franchise’s reputation and fans’ goodwill. Fodder for tabloids and late-night comedians, the New York Knicks have officially become the biggest punch line in American sports.
Start with how management deals with labor costs. The franchise is paying tens of million of dollars to a former coach (Larry Brown) and one-time players (such as Jalen Rose) not to work, and giving almost $20 million to guard Stephon Marbury, who is best known these days for having sex with a Madison Square Garden intern. The Knicks spent about $120 million – most in the NBA – on their languid players last season, nearly $4 million per win. During the 2004-2005 campaign, New York handed guard Allan Houston one of the top 10 salaries in the NBA at $17.5 million – and he responded by averaging 11.9 points per game. They blow through the salary cap (about $53 million this season) without a care.
Success on the court might mitigate the irrational spending, but the fact is the Knicks are facing their seventh consecutive season without a playoff berth. In a nationally televised contest last month, they were pounded 104-59 by the Boston Celtics. They sit last in the Atlantic Division with little hope of exiting the cellar.
Despite his championship rings as a player, Isiah Lord Thomas III, coach of the aimless team, has a long history of management failures. He led the Continental Basketball Association when, in 2001, it declared bankruptcy. He was fired as the Indiana Pacers coach. Since he’s joined the Knicks, the team has engaged in one of the bigger brawls in NBA history against the Denver Nuggets. Thomas also lost a sexual-harassment suit — whose court battle sparked horrendous national publicity — before a settlement this week for $11.5 million ended the pain. Yet the Knicks refuse to fire him, blithely paying him millions annually as the reputation of the franchise sinks.
Then there is Cablevision, ringmaster of the bumbling show. Though they run an arena in the shadow of Fortune 500 headquarters, they have never secured a naming-rights deal. Television ratings for the first half dozen Knick games this season on Cablevision-owned MSG Network dropped more than 25 percent. In a recent survey on the state of the sports industry, Knicks owner James Dolan – whose family runs Cablevision – was voted the least effective NBA owner. Beat writers are miserable, according to an article in the New York Observer. Writer John Koblin noted that within MSG there are “layers of institutional paranoia; public relations officials who openly eavesdrop on private conversations with executives and players; the threat – and implementation – of cutting off reporters who are perceived to be critical of the team.” Amid the gloom, Cablevision posted a quarterly loss of about $80 million in November.
Amazingly, bright spots exist. The Knicks have been tabbed by Forbes as the most valuable franchise in the NBA for the past three seasons, with a worth topping $600 million, double what Cablevision paid for the team a decade ago. They sold out six of their first nine home contests (and drew nearly 19,000-per-game for the non-sellouts) despite a losing record and an average ticket price topping $70.
But both the value of the franchise and the huge crowds are due to slide. The Knicks’ valuation increased only 3 percent during the 2006-2007 season, according to Forbes, after a 9 percent jump during the previous year. Their league-high $196 million in revenue during the 2006-2007 season was offset by a league-worst number in operating income. Expect season-ticket holders to bolt if Thomas and his misfit crew stay.
Back in 1970, Willis Reed limped onto the court during Game 7 of the NBA Finals to inspire the New York Knicks to a title. The only thing limping around Madison Square Garden today is a broken franchise.