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MSG spin-off expected to be completed in March

Madison Square Garden Entertainment filed plans for the spin-off with the US Securities and Exchange Commission in November last year

By James Hanley on 17 Jan 2023

MSG Entertainment's Madison Square Garden, New York

Madison Square Garden (MSG) Entertainment says it expects to complete its proposed spin-off its live entertainment and MSG Networks divisions by the end of March.

Structured as a tax-free spin-off to all MSGE shareholders, the move would separate those businesses from the firm’s MSG Sphere and Tao Group Hospitality businesses, creating a separately-traded public company.

MSG filed plans for the spin-off with the US Securities and Exchange Commission in November last year.

Alongside New York City’s 20,000-cap Madison Square Garden, the live entertainment and media firm is expected to include The Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre and The Chicago Theatre, along with the firm’s entertainment and sports bookings business and long-term arena licence agreements with the New York Knicks and New York Rangers.

MSG previously completed the spin-off of its entertainment businesses from its sports company in 2020.

MSG Entertainment would then comprise the MSG Sphere venues, a majority interest in TAO Group Hospitality, an approximately one-third economic interest in the live entertainment and media company; and the majority of the company’s cash on hand.

In the first step of the transaction, which remains subject to various conditions, record holders of MSGE Class A and Class B common stock would receive a pro-rata distribution expected to be equivalent, in aggregate, to an approximately 67% economic interest in the live entertainment company, which would take on the name Madison Square Garden Entertainment Corp. The remaining 33% economic interest would be retained by the current parent firm, which would be renamed MSG Sphere Corp.

MSG previously completed the spin-off of its entertainment businesses from its sports company in 2020.

Last month, it was revealed that Madison Square Garden Company is using facial recognition technology to prevent anyone who works for a firm that is suing it from entering its venues.

The ban covers venues including Madison Square Garden, Radio City Music Hall, the Beacon Theatre and the Chicago Theatre, reported Rolling Stone.

 


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