The New York Knicks tip off their 2025-26 season Wednesday night, riding a wave of momentum after reaching the Eastern Conference Finals last season for the first time in 25 years. The team has the fourth-best odds to win the 2026 NBA title and second-best in their conference behind the Cleveland Cavaliers.

Yet, investors are still not jumping on the bandwagon. The stock price of Madison Square Garden Sports, which owns the Knicks and the NHL’s Rangers, is up only 3.4% over the past 12 months, versus 15.1% for the S&P 500. Over the past five years, the broader market has doubled the 51% gain of MSGS shares.

Meanwhile, the value of sports teams has soared, expanding the gap between the clubs’ private market value and public one. The Knicks ($9.85 billion) and Rangers ($3.65 billion) are worth a combined $13.5 billion, per Sportico’s team valuations. MSGS’s current enterprise value is $6.6 billion, a 51% discount.

“We remain as confident as ever in the value of our teams,” Jamaal Lesane, Madison Square Garden Sports COO, said during their fourth quarter conference call in August.“We don’t think that value is appropriately reflected in our current stock price. … We would never rule out the possibility of a minority stake sale, but as I said, we also have nothing to report at this time.”

In June, Los Angeles Dodgers owner and Guggenheim Partners CEO and co-founder Mark Walter agreed to buy the Los Angeles Lakers at a $10 billion valuation, or 16x revenue. The Lakers have the richest local TV deal in the sport at nearly $200 million for the 2024-25 season and the second-most NBA titles at 18—the Knicks have two.

The Lakers are a reasonable comp for the Knicks—only the Golden State Warriors rank higher than both teams at $11.3 billion in the NBA. The Knicks were hit by a 28% cut to their local TV rights fee from MSG Networks as part of the RSN’s debt reorganization. Yet, the club still nipped the Lakers on 2024-25 revenue, $620 million to $618 million, thanks to the playoff run—the Lakers lost in the first round. The Knicks grossed $115 million from hosting nine playoff games. Sportico’s revenue estimates are net of regular-season revenue sharing and the NBA’s 25% share of playoff ticket revenue.

The value of the Knicks rose 81% and the Rangers more than doubled during the past five years. The average league values have risen even faster, as smaller market clubs benefitted from increased shared revenues via league media deals, and investors prioritized a “slot value” in both the NBA and NHL.

MSG watchers point to a “Dolan discount” in reference to the controlling shareholder of MSG Sports, James Dolan. The reality is that sports teams have historically traded at steep discounts to what they might fetch in a private transaction. The Boston Celtics and Cleveland Indians were publicly traded in the 1990s at major discounts to private values, and only jumped when they were taken private.

More recently, Jim Ratcliffe bought 25% of Manchester United’s common stock at $33 per share, implying a valuation of at least $6 billion. The stock promptly sank back to its historical level of $13 to $16 before a recent gain to $18. United shares are up just 27% over five years.

There are a couple of strikes working against publicly traded sports teams. Soaring valuations are partly driven by scarcity value, and there is no scarcity value as a publicly traded stock. There are 8,000 securities traded on U.S. stock exchanges, including exchange traded funds, yet just 124 teams in the four biggest U.S. sports leagues, which have added only three new franchises during the past 20 years.

The other issue with sports teams is that they are not great businesses by themselves. Sports teams open doors for other investment opportunities and are a great tax break when you buy them, but there is reason that investment bankers started valuing teams on revenue multiples—still the standard today—instead of earnings ones, like most companies with a price-to-earnings ratio. Sports teams historically lost money, and while today’s collective bargaining agreements are more owner-friendly and TV deals have soared, teams still have low profit margins or can lose money, with the exception of the NFL.

The Knicks and Rangers lost a combined $22 million after taxes and interest during the 2024-25 fiscal year, per Madison Square Garden Sports’ financial filings, despite the Knicks’ deep playoff run. Operating income was a scant $14 million. Every NBA team will get a $40 million bump this season to $143 million on their national TV money, but the Knicks are also on track for a $50 million luxury tax bill on their payroll, up from $38 million.

The eight Wall Street analysts who cover MSGS lean positive on the stock, with three hold ratings, four buys and one strong buy, according to Yahoo Finance—sell ratings are exceedingly rare from analysts. MSGS shareholders invest with the idea that the gap in private and public valuations will shrink, and the Holy Grail option is a sale of the franchises. Sentiment is building that the Atlanta Braves could be sold during the next couple of years, which partly explains their small 10% discount between the share price and $3.71 billion valuation by Sportico.

MSGS shares closed Tuesday at $224, but team value transactions suggest a price between $417 and $425, per an August analyst note from Seaport Research Partners. That would be based on a control transaction, versus the limited partnership stake sometimes floated for MSGS’ teams

“We do not think such an [LP] transaction is likely given that any interested party could start accumulating public shares that are at possibly a 55% discount to NAV—and then move from there,” Seaport analyst David Joyce wrote. “Bottom line, there is a lot of intrinsic value in the shares, but one has to believe in the when, not if, scenario [on selling].”

Dolan doesn’t sound like someone looking to sell. “The Knicks, the Rangers, the Garden: These are one-of-a-kind assets,” Dolan said in March on Roommates Show, a podcast hosted by Knicks stars Jalen Brunson and Josh Hart. “My hope is that my kids grow up and take my place, just like I did with my dad.