x

The latest industry news to your inbox.


I'd like to hear about marketing opportunities

    

I accept IQ Magazine's Terms and Conditions and Privacy Policy

MSG Entertainment spin-off approved by board

Madison Square Garden (MSG) Entertainment’s board of directors has approved the spin-off of its live entertainment and MSG Networks divisions, which is expected to be complete on 20 April.

The move will see the current parent company rebranded Sphere Entertainment Co. and will be comprised of the Sphere, MSG Networks and Tao Group Hospitality businesses.

The newly formed live entertainment company will take on the name Madison Square Garden Entertainment Corp and will include New York City’s 20,000-cap Madison Square Garden, 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.

“Each [company] will be well positioned to generate long-term value for our shareholders”

“With today’s announcement, we are one step closer toward our goal of creating two distinct companies, each well positioned to generate long-term value for our shareholders,” says MSGE executive chairman and CEO James Dolan.

Shareholders of record as of 14 April will receive a distribution of one Class A or Class B share of the new company for every share of common stock held, representing 67% of the new company’s outstanding shares. Sphere Entertainment will own the remainder.

The company’s board of directors also authorised a $250 million share repurchase program for the new live entertainment company’s Class A common stock following the completion of the spin-off.

The company expects the common stock to trade in two markets on the New York Stock Exchange: in the “regular way” market under the company’s current name, Madison Square Garden Entertainment Corp., and under the current ticker symbol, MSGE, and in the “ex-distribution” market under the new name, Sphere Entertainment Co., and under the symbol SPHR WI.

 


Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.

MSG moves forward with ents spin-off

The Madison Square Garden Company (MSG) has announced that it has reached a “significant milestone” in the proposed spin-off of its entertainment business, set to take place in the first three months of 2020.

The venue giant filed an initial form 10 registration statement with US regulator the Securities and Exchange Commission (SEC) yesterday (3 December), detailing the terms of the spin-off, which would split MSG into two distinct companies – one focused on sports and the other on entertainment.

Structured as a tax-free spin-off to all MSG shareholders, those directly holding shares of common stock would maintain economic interest in both businesses, with MSG executive chairman and CEO James Dolan and his family retaining majority voting control of both companies.

MSG hopes the spin-off will enable investors to evaluate the assets and opportunities of each company more clearly, with the entertainment business in particular offering chances for growth through venue expansion.

MSG hopes the spin-off will enable investors to evaluate the assets and opportunities of each company more clearly

The entertainment company would feature venues including New York’s Madison Square Garden (20,789-cap.); Hulu Theater (5,600-cap.); Radio City Music Hall (6,015-cap.); the Forum in Inglewood (17,505-cap.); and The Chicago Theatre (3,600-cap.); as well as the state-of-the-art MSG Sphere venue in Las Vegas, due to open in 2021, and a second planned Sphere in London.

In addition to its venue portfolio, the post spin-off ents business would include MSG’s booking company, which will also programme sports events; the productions sector, which includes the Radio City Rockettes and the Christmas Spectacular; and majority interests in hospitality group Tao Group Hospitality and Boston Calling Events, which organises the Boston Calling Music Festival.

The New York Knicks (basketball) and Rangers (ice hockey) sports franchises, and the Knicks Gaming esports franchise, would make up the pure-play sports company.

MSG had previously explored a spin-off which would see the entertainment company retain a one-third stake in MSG sports, but later decided there was sufficient financing for venue expansion on the entertainment side without support from the sports division.

The completion of the spin-off remains subject to conditions including final MSG board approval.

 


Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.