The Madison Square Garden Company Files Initial Form 10 Registration Statement for Proposed Spin-Off of Sports Business
Proposed transaction is expected to be completed during the first half of calendar 2019
The proposed separation of the sports and entertainment businesses would enable investors to more clearly evaluate each company’s assets and future potential, while providing both companies with increased strategic flexibility to pursue their own distinctive business plan and capital allocation policy.
The proposed separation 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 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 would be retained by the live entertainment company and is expected to be used to raise capital and/or exchange for the common stock of the entertainment company. The Dolan family would maintain majority voting control of both companies through their ownership of Class B shares. The proposed transaction is currently expected to be completed during the first half of calendar 2019, subject to certain conditions.
The pure-play sports company would include:
New York Knicksprofessional NBAfranchise and its development team, the Westchester Knicks;
New York Rangersprofessional NHLfranchise and its development team, the Hartford Wolf Pack;
New York Libertyprofessional WNBA 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 would include:
- World-class 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;
- Our bookings business, which fills MSG’s venues with a wide variety of the most exciting and unforgettable entertainment events. This business would 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 MSG Sports segment;
- Productions, which includes the Radio City Rockettes and the Christmas Spectacular, the nation’s number one live family holiday show;
- 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 would also continue to move forward with plans to create state-of-the-art venues – called MSG Sphere. The first MSG Sphere is expected to open in
Completion of the transaction remains subject to various conditions, including completion and effectiveness of the Form 10 Registration Statement, certain league approvals, a private letter ruling from the
This press release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments and events may differ materially from those in the forward-looking statements as a result of various factors, including financial community and rating agency perceptions of the Company and its business, operations, financial condition and the industry in which it operates and the factors described in the Company’s filings with the
|Ari Danes, CFA
Source: The Madison Square Garden Company