MSG Entertainment Eyeing Spinoff Of Assets Including Madison Square Garden, More – Deadline

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The board of Madison Square Garden Entertainment said today that it is considering a spinoff of its live entertainment business that would include MSG Networks and NYC’s Madison Square Garden, Radio City Music Hall and Beacon Theatre, among other assets.

A deal would be would be structured as a tax-free spinoff to all MSGE shareholders, the company said.

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

“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 on the company’s website. “The live entertainment and media company would include Madison Square Garden, the 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 be focused on unique shared experiences, innovation and global opportunities for growth.”

Beacon Theatre in Manhattan
Getty Images

Here are the details, per MSG Entertainment:

The live entertainment and media company is expected to include:

  • A diverse collection of venues: Madison Square Garden, The Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre and The Chicago Theatre;
  • The Company’s entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually;
  • The Radio City Rockettes and the Christmas Spectacular production, which has been a holiday tradition for 88 years;
  • Valuable long-term Arena License Agreements 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 a companion streaming app, MSG GO, and features exclusive live local games of 5 NBA and NHL sports franchises.After the proposed spin-off of 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 expected to open in the second half of calendar 2023;
  • Majority interest in TAO Group Hospitality, a global entertainment dining and nightlife provider, with over 70 branded locations within 60 venues in more than 20 markets across 5 continents;
  • An approximately one-third economic interest in the live entertainment and media company; and
  • The majority of the Company’s cash on hand.

Dade Hayes contributed to this report.

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