Pro Sports Investing Is Becoming an Asset Class for All Investors

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For 2026, one of the new storylines we added to the Stock Picker’s Corner (SPC) universe was the Sports Asset Class.

It’s been a market most investors have historically overlooked because it’s been tightly controlled and the investable opportunities have been scarce. But as we said at the start of the year, that’s starting to change.

New laws are making it easier for owners to cash in on record team valuations, allowing them to sell partial stakes while maintaining franchise control. Some owners are content to completely cash out.

One of the ways to invest we’ve been tracking since November 2024: Madison Square Garden Sports $MSGS ( ▼ 0.94% ) .

In a classic “special-situation” move, Madison spun off its entertainment division — Madison Square Garden Entertainment $MSGE ( ▼ 1.6% ) — back in 2020 to focus on its sports assets, the New York Knicks, New York Rangers, and two development teams.

According to Forbes, the Knicks are the third-most-valuable NBA team at $9.7 billion, while CNBC says the Rangers are the second-most-valuable NHL team at $3.8 billion.

What’s been holding shares back from really taking off has been tepid investor sentiment stemming from what some refer to as the “Dolan Discount,” which is based on CEO James Dolan’s refusal to sell any of Madison’s assets.

If he did, he could unlock shareholder value.

When I shared our update on Madison to start the year, I noted Jon Boyar, president of the research and investment advisory firm Boyar Value Group, believed the shares were worth $500, according to Barron’s. At the time that was about 96% higher than where they were trading.

Now, we’re seeing the first signs of that value being unlocked.

On February 18, the company said its board of directors had unanimously agreed to study a breakup that would separate the New York Knicks and New York Rangers into independent public companies.

Management believes the contemplated separation would give shareholders a clearer view of each franchise’s assets, performance, and long‑term growth potential.

That’s something we believed as well since we’ve been following the company.

The Power of Splits

Stock splits can offer outsized gains in a compressed time frame, which is a catalyst we watch for within our Special-Situation Portfolio.

The Statista data below shows stocks often outperform the S&P 500 after a split is announced but before it takes effect.

We’re taking a careful look at whether Madison will earn a spot in our Special‑Situation Portfolio.

For now, it’s a clear example of the momentum building within Sports as an Asset Class.

Take care,