What Is Jeremy Lin Worth?

Yes, Madison Square Garden's stock is way up. But Lin's fortunes have little to do with MSG's share price and everything to do with Baidu.

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Reuters

Here's a one-month look at the stock of Madison Square Garden, Inc. Can you guess when Jeremy Lin, the New York Knicks' unlikely new star, began his remarkable streak?

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That would be February 6. In the last week, the market cap of MSG, Inc., which owns Madison Square Garden and other sports venues, has added $71 million. "Because of Jeremy Lin," Steven Kiel wrote Tuesday, before Lin hit a game winning shot against Toronto, "shares hit a new 52-week high of $32.30. With 62.08 shares outstanding, today's move up of $1.15 means the market thinks Jeremy Lin's weekend success is worth $71.4 million."

I don't know what Jeremy Lin is "worth." Statistically, he has performed better this year than Kobe Bryant, Derrick Rose, and Dwight Howard, if you go by ESPN's advanced Hollinger algorithm. On the other hand, he's a historical reject, cut by various teams and demoted even by the Knicks this year. This is nothing like Tim Tebow, a college star whose adaptation to the NFL surprised scouts, or Tom Brady, who was a very capable college quarterback whose talent didn't shine in combines. It's more like a Single-A baseball player who's called up to the majors to fill in at left field and hits 10 home runs in the next five games. Impressive? Certainly. But the unromantic recesses of your brain have to be screaming, "Statistical anomaly! Sample size!"

If Lin's talent turns out to be more than a freak anomaly, he'll make many millions of dollars for reasons that have little to do with MSG stock and more to do with Baidu. On China's biggest search engine, Lin is the most-searched term. This is modern superstar economics in a nutshell. The reason today's athletes (and musicians, and movie stars) are paid higher salaries, and indeed deserve much higher salaries than they received even 40 years ago, is that technology and globalization expand the scope of their fame. Chinese people can watch Lin live, and read about him instantly, and order his jersey shipped in a box across the ocean, which will enrich not only Lin but also his managers and team. If Lin could only be seen by the people inside Madison Square Garden, he would have the chance to be a star. That Lin can be see by billions of people outside the Garden gives him the chance to be a superstar, and a fabulously wealth one at that. If he keeps hitting his threes.


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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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