Live sports and entertainment group Madison Square Garden Company (MSG) has revealed plans to spin off its sports assets and create a dedicated arm for its music and entertainment-focused venues.
MSG’s board of directors yesterday (Wednesday) authorised the US company’s management to explore a venture that would create a separately-traded public company comprised of its sports businesses, including NBA basketball team the New York Knicks and NHL ice hockey franchise New York Rangers.
The live entertainment company, entitled MSG Sphere, is expected to include MSG’s portfolio of venues such as New York’s Madison Square Garden (pictured); The Hulu Theater at Madison Square Garden; Radio City Music Hall and Beacon Theatre; the Forum in Inglewood, California; The Chicago Theatre and the Wang Theatre in Boston.
It would also encompass MSG Bookings, which effectively fills MSG’s venues with entertainment events. This business is expected to 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 sports segment.
Falling under the MSG Sphere banner would also be majority interests in hospitality venture TAO Group and Boston Calling Events, producer of New England’s Boston Calling Music Festival; and strategic entertainment joint ventures Azoff-MSG Entertainment and Tribeca Enterprises. MSG Sphere would have an approximately one-third economic interest in the pure-play sports company.
The live entertainment company will also continue to move forward with plans to create state-of-the-art venues – called MSG Sphere. The goal is to open the first MSG Sphere in Las Vegas by the end of 2020, followed by a second MSG Sphere in London approximately one year later.
MSG said the proposed separation of the sports and entertainment businesses would enable shareholders to more clearly evaluate each company’s assets and future potential, while allowing both companies to pursue their own distinct business strategy and capital allocation policy.
James Dolan is expected to be the executive chairman and chief executive of both companies.
Dolan said: “We believe this proposed transaction would provide each company with enhanced strategic flexibility, its own defined business focus and clear investment characteristics.”
Image: Anthony Quintano