The Madison Square Garden Company Board of Directors Unanimously Approves Plan to Explore Possible Spin-Off
Would Separate Sports Businesses from Live Entertainment Businesses
to Create Two Distinct Public Companies
Proposed Spin-Off Would Further Highlight Unique Value of Company’s
Live Sports and Entertainment Assets and Brands
The proposed separation of the sports and entertainment businesses would enable 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.
If the Company proceeds with the spin-off, it would be structured as a tax-free transaction to all MSG shareholders. Upon completion of the contemplated separation, record holders of MSG common stock would receive a pro-rata distribution, expected to be equivalent, in aggregate, to an approximately two-thirds economic interest in the pure-play sports company. The remaining common stock, expected to be equivalent to an approximately one-third economic interest in the sports company, would be retained by the live entertainment company. These shares are expected to be used to raise capital and/or exchange for the common stock of the entertainment company. James L. Dolan is expected to be the Executive Chairman and Chief Executive Officer of both companies.
Mr. Dolan said, “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
The pure-play sports company is expected to include:
New York Knicksprofessional NBAsports franchise and its development team, the Westchester Knicks;
New York Rangersprofessional NHLsports franchise and its development team, the Hartford Wolf Pack;
New York Libertyprofessional WNBA sports franchise, for which the Company is exploring a sale;
- Knicks Gaming, the official
NBA2K esports franchise of the New York Knicks, and a majority interest in Counter Logic Gaming, a leading North American esports organization; and
- A professional sports team Training Center in Greenburgh, NY.
The live entertainment company is expected to include:
- A diverse collection of iconic venues: New York’s
Madison Square Garden, The Hulu Theaterat Madison Square Garden, Radio City Music Halland Beacon Theatre; the Forum in Inglewood, CA; The Chicago Theatre; and the Wang Theatrein Boston;
- MSG Bookings, an established industry leader, which effectively fills MSG’s venues with a wide variety of the most exciting and unforgettable entertainment events. This business is expected to also include the Company’s bookings of live sporting events such as college basketball and professional boxing, the results of which are currently reported as part of the Company’s Sports segment. In fiscal 2017, the entertainment and sports bookings businesses attracted more than 800 events, which drew nearly 4 million people to MSG’s venues;
MSG Productions– which includes the Radio City Rockettes and the Christmas Spectacular, the nation’s number one live family holiday show with over 1 million tickets sold this past holiday season;
- Majority interests in
TAO Group, a world-class hospitality group, and Boston Calling Events, producer of New England’s preeminent Boston Calling Music Festival;
- Strategic entertainment joint ventures --
Azoff-MSG Entertainmentand Tribeca Enterprises;
- An approximately one-third economic interest in the pure-play sports company; and
$1 billionin cash on hand.
The live entertainment company will also continue to move forward with plans to create state-of-the-art venues – called MSG Sphere. The goal is to open the first MSG Sphere in
There can be no assurance that the proposed transaction will be completed in the manner described above, or at all. The Company has not set a timetable for completion of this process. Completion of the transaction would be subject to various conditions, including certain league approvals, a private letter ruling from the
The Madison Square Garden Company
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Source: The Madison Square Garden Company