The Madison Square Garden Company (NYSE: MSG)announcedWednesday that the Board of Directors has approved the exploration of a possible sports spin-off, separating the sports businesses from live entertainment businesses. This move would create a separately traded public company, consisting of the Company’s sports businesses, including its professional sports franchises, the New York Knicks, New York Rangers, the franchises’ development teams, and its professional WNBA sports franchise, the New York Liberty.
In a press release, the Company said the separation between its entertainment and sports businesses would allow “shareholders to more clearly evaluate each company’s assets and future potential, while allowing both companies to pursue their own distinct business strategy and capital allocation policy.”
James Dolan, Madison Square Garden CEO, is expected to be CEO and Executive Chairman of both companies if the spin-off occurs. “We are exploring the opportunity to further create value by separating our businesses into two distinct companies. One company would be a leader in live entertainment with a growing portfolio of assets that will include state-of-the-art music and entertainment-focused venues – called MSG Sphere. The other entity would be a pure-play sports company driven by the strong financial performance of the storied Knicks and Rangers franchises. We believe this proposed transaction would provide each company with enhanced strategic flexibility, its own defined business focus and clear investment characteristics” said Dolan in a statement.
The entertainment business is expected to include Madison Square Garden, The Hulu Theater at Madison Square Garden, Radio CIty Music Hall, Beacon Theatre, The Forum in Inglewood, California; The Chicago Theatre, and Wang Theatre in Boston.
Madison Square Garden is looking forward to opening its first state of the art venue, called MSG Sphere, in Las Vegas by the end of 2020, and another in London a year later.