MSG shares drop after LeBron James spurns New York Knicks

Shares of Madison Square Garden Inc, which owns the New York Knicks, dropped nearly 4 percent early on Friday, the day after superstar LeBron James spurned the basketball team to sign with the Miami Heat. 

James announced on Thursday evening that he would join the Heat in his quest to win a National Basketball Association title, leaving his hometown Cleveland Cavaliers. However, the Knicks had cleared salary-cap space on its roster in the hopes of attracting James, who has twice won the most valuable player award. 

There had been reports that the Knicks, in the team's presentation to James, had said the player could earn $100 million in the New York market through marketing opportunities. 

After the free-agent signing period opened on July 1, MSG shares rose as much as 11 percent as investors speculated "King James," as LeBron is nicknamed, would be attracted to the big stage of the New York market. 

However, as reports centered on the Heat late on Thursday ahead of the announcement special on Walt Disney Co''s ESPN sports network, shares of MSG, which also owns the National Hockey League's New York Rangers, fell back to $20.38 on the Nasdaq market.

In trading before the market opened on Friday, the stock was down 3.8 percent at $19.60.