THE MADISON Square Garden Company (MSGC) has approved a plan to fully spin-off its entertainment business from its sports interests, because of higher than expected losses in its third fiscal quarter.
MSGC initially intended to partially spin-off its entertainment business while keeping a third of the shares in the sports sector, which includes several basketball teams, a majority stake in Counter Logic Gaming and the company’s professional sports team Training Center.
An independent entertainment division would include Madison Square Garden (cap. 20,789), Hulu Theater at Madison Square Garden (5,600), Radio City Music Hall (6,015) and the Beacon Theater (2,894) in New York, the Forum (17,505) in Los Angeles and the Chicago Theatre (3,600).
Among other interests are MSG production the Christmas Spectacular, majority interests in hospitality form TAO Group and Boston Calling Music Festival producer Boston Calling Events, and approximately $1 billion in cash reserves.
“The spin-off would create two distinct companies for MSG shareholders, each with a defined business focus and clear investment characteristics,” say MSGC executive chairman James Dolan and CEO (and son) James L Dolan in a statement.
Restructuring plans will need approval from shareholders.
It is understood that MSGC’s two Sphere arena projects, initially scheduled to open in Las Vegas in 2021 and London a year later, face significant delay – see news story on pages 6-7.