MSG Entertainment Considers Asset Spinoffs Including Madison Square Garden, More – Deadline

Madison Square Garden Entertainment’s board of directors said today it is considering a spinoff from its live entertainment business that would include MSG Network and New York’s Madison Square Garden, Radio City Music Hall and Beacon Theater , among other assets.

A deal would separate the live entertainment and MSG Networks businesses from MSG Sphere and Tao Group Hospitality to create two public companies, MSG said. No timetable for a possible transaction has been set.

Shares of Madison Square Garden Entertainment jumped 6% in after-hours trading on the news.

Radio City Music Hall in Midtown Manhattan
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The Dolan family, which controls MSG, previously oversaw a spin-off of its entertainment and sports assets in 2020, and MSG Sports and MSG Entertainment have negotiated separately since. Cable television was the family’s longtime focus until it sold Cablevision for $17.7 billion to French conglomerate Altice in 2016.

In 2020, MSG also struck a $400 million deal with Los Angeles Clippers owner and former Microsoft CEO Steve Ballmer to buy the Forum in the Los Angeles suburb of Inglewood. The deal removed a big hurdle in Ballmer’s plans to build a new arena for his NBA team, which has shared Arena (fka Staples Center) with the Lakers since the building opened in 1999.

“This potential transaction would create two companies, each with a distinct value proposition for investors,” Executive Chairman and CEO James L. Dolan said in a statement posted on the company’s website. “The live entertainment and media company would include Madison Square Garden, Christmas Spectacular production and MSG Networks and would generate substantial free cash flow. The second company, comprised of MSG Sphere and Tao Group Hospitality, would focus on unique shared experiences, innovation and global growth opportunities.

The Dolan clan also controls Madison Square Garden’s major tenants: the NBA’s Knicks and the NHL’s Rangers. Today’s announcement does not mention either team. His holdings also include the Radio City Rockettes, Hulu Theater at Madison Square Garden, and Windy City’s Chicago Theatre. The company is building a new venue in Las Vegas – MSG Sphere at the Venetian – and has announced plans to build a second MSG Sphere in London.

Beacon Theater in Manhattan
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Here are the details, per MSG Entertainment:

The live entertainment and media company should include:

  • A diverse collection of venues: Madison Square Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall, Beacon Theater and Chicago Theater;
  • The company’s entertainment and sports booking business, which presents a wide range of exciting concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests every year ;
  • The Radio City Rockettes and the Christmas Spectacular production, which has been an 88-year holiday tradition;
  • Valuable long-term arena licensing deals with the New York Knicks and New York Rangers, both of which play their home games exclusively at Madison Square Garden; and
  • MSG Networks, which owns two regional sports and entertainment networks, MSG Network and MSG+, as well as an associated streaming application, MSG GO, and offers exclusive live local games from 5 NBA and NHL sports franchises .After the proposed spin-off from the live entertainment and media company, MSG Entertainment is expected to include:
  • MSG Sphere – state-of-the-art venues that will combine cutting-edge technology with multi-sensory storytelling to deliver immersive experiences on an unparalleled scale. The first MSG Sphere is currently under construction in Las Vegas and is expected to open in the second half of the 2023 schedule;
  • Majority stake in TAO Group Hospitality, a global provider of entertainment and nightlife restaurants, with more than 70 branded locations in 60 locations in more than 20 markets on 5 continents;
  • An economic interest of approximately one-third in the live entertainment and media business; and
  • Most of the Company’s cash.

Dade Hayes contributed to this report.

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