The Madison Square Garden Company (MSGC) board has approved a plan to fully spin-off its entertainment business from its sports business, because of higher than expected losses in the the quarter.
The entertainment company would include New York’s Madison Square Garden (cap. 20,789), Hulu Theater at Madison Square Garden (5,600), Radio City Music Hall (6,015) and Beacon Theater (2,894).
It also has the Forum (17,505) in Inglewood (Los Angeles), the Chicago Theatre (3,600), stage productions Radio City Rockettes and the Christmas Spectacular, a majority stake in hospitality TAO, festival organiser Boston Calling Events and approximately $1 billion in cash.
“The spin-off would create two distinct companies for MSG shareholders, each with a defined business focus and clear investment characteristics,” says a joint statement from executive chairman James Dolan and (son) CEO James L Dolan.
“One company would be a leader in live entertainment that would take advantage of significant opportunities to grow rapidly within the changing entertainment landscape. The other entity would be a sports company with marquee assets that would enjoy steady growth and strong free cash flow.”
Restructuring plans will need approval from shareholders.
MSG’s first Sphere venue is on schedule to open in Las Vegas in 2021, while its plan for a similar UK venue in London has been put on indefinite hold.
The sports business would include NBA New York Knicks and its development team, the Westchester Knicks; NHL New York Rangers and its development team, the Hartford Wolf Pack; Knicks Gaming; majority interest in Counter Logic Gaming, and the company’s professional sports team Training Center.