The Madison Square Garden Company said Tuesday it has notified the SEC of its plan to spin off its entertainment business and tighten its corporate focus on sports.
In a press release, the company said it expects to complete the spinoff by the first quarter of 2020. The Dolan family, which has run MSG Co. for decades, will continue to control both entities after the transaction closes.
A New York mainstay, MSG owns the NBA’s New York Knicks and the NHL’s New York Rangers. Its entertainment portfolio includes Madison Square Garden and the adjacent Hulu Theatre, both of which have year-round entertainment bookings, as well as fabled Manhattan venues like Radio City Music Hall and the Beacon Theatre.
The Dolans rose to prominence by running Cablevision, for decades a top cable distributor that became a force in real estate and sports. Over time, it also owned Newsday and also the Clearview movie theater chain. In 2015, Cablevision was acquired by French telecom giant Altice for $17.7 billion. At one point, the Dolans also operated the Rainbow Media cable network portfolio, but it was rebranded as AMC Networks and spun off as a separate public company in 2011. MSG Networks, meanwhile, is a separate, publicly traded company that owns regional sports networks.
The latest spinoff, which has been expected, is to be structured as a tax-free spinoff for MSG shareholders. Owners of MSG common shares would continue to hold stakes in both the sports and entertainment entities.
As previously announced, the proposed separation of the sports and entertainment business would be structured as a tax-free spin-off to all MSG shareholders. Upon completion of the transaction, record holders of MSG common stock would continue to maintain their current economic interest in both the sports and entertainment businesses. Shares in MSG rallied on the news and were trading at about $276 a share midway through the trading day.
In addition to the Knicks and Rangers, the sports-centric company’s portfolio would also include Knicks Gaming, the official NBA 2K esports franchise of the New York Knicks, and a majority interest in Counter Logic Gaming, a leading North American esports organization; and the company’s pro sports team Training Center in Greenburgh, NY, north of the city.
On the entertainment side would be, in addition to the New York City assets, LA’s Forum in Inglewood, the Chicago Theatre and a Las Vegas venue still under construction called the MSG Sphere. Also in the mix would be productions like the Radio City Rockettes.