Madison Square Garden plans to split into two separate publicly traded companies later this year, spinning off the sports and entertainment side from the media business. As previously reported, MSG had been exploring the possible separation, but filed the proper forms with the SEC on Friday.
The split is structured as a tax-free spinoff that will automatically invest shareholders equally in both companies. The maneuvering is subject to regulatory conditions.
MSG’s Board of Directors believe that the split will “further enhance the longterm value-creation potential of both businesses,” they said on Friday.
“While the companies would continue to benefit from commercial arrangements between them, the separation would provide each company with increased strategic flexibility to pursue its own distinctive business plan and allow each to have a capital structure and capital return policy that is appropriate for its business,” the media release read.
The live sports and entertainment company will comprise a portfolio of venues, sports teams and entertainment productions, including:
- Professional sports franchises: the New York Knicks, the New York Rangers and the New York Liberty, along with development teams: the Hartford Wolf Pack and the Westchester Knicks
- Venues including Madison Square Garden Arena, The Theater at Madison Square Garden, Radio City Music Hall, theBeacon Theater, the Forum in Inglewood, California, The Chicago Theater and the Wang Theater in Boston
- Live productions, including the Radio City Christmas Spectacular and New York Spring Spectacular
- MSG’s venue management capabilities and expertise in bookings, as well as its sponsorship, marketing, ticketing and promotional expertise and platforms
- MSG’s strategic entertainment joint ventures
- MSG’s interest in Fuse Media, the parent company of NUVOtv and Fuse networks
The media company will distribute sports and entertainment content across multiple platforms, including MSG Network and MSG+. In connection with the separation, the companies expect to enter into longterm media rights agreements that will ensure MSG Network and MSG+ continue to serve as the exclusive local broadcast home of the Knicks and Rangers.
J.P. Morgan and LionTree Advisors are acting as financial advisors to MSG for the spinoff; Sullivan & Cromwell LLP is acting as legal advisor.