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MSGE Weighs Spin-Off Of Key Entertainment Assets Including Madison Square Garden Into A Stand-Alone Company

MSG
MSG (Shutterstock)
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NEW YORK (CelebrityAccess) — On Thursday, Madison Square Garden Entertainment Corp. announced that the company’s board of directors are weighing a potential spin-off that would create a publicly-traded standalone company for its live entertainment business, portfolio of performance venues, sports bookings and the Christmas Spectacular production – and the MSG Networks business.

The potential spin-off would separate the entertainment segments of MSGE’s business from its MSG Sphere and Tao Group Hospitality businesses.

According to MSGE, the spin-off would increase “investor choice and visibility into each company’s businesses and growth prospect” while allowing for greater flexibility in capital allocation strategies.

“This potential transaction would create two companies, each with a distinct value proposition for investors. 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.”

As of yet, the proposed separation is still under consideration and no timeline for a completion date, if any, has been announced.

Following the proposed spin-off, the live entertainment and media company would include:

  • Madison Square Garden, The Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre and The Chicago Theatre.
  • MSGE’s entertainment and sports bookings business, including its portfolio of concerts, family shows, sports and special events.
  • The Radio City Rockettes and the Christmas Spectacular production
  • Arena License Agreements with the New York Knicks and New York Rangers at Madison Square Garden
  • MSG Networks, which includes two regional sports and entertainment networks – MSG Network and MSG+, as well as a companion streaming app, MSG GO and includes exclusive local live games for five NBA and NHL franchises.

After the proposed spin, MSGE would include:

  • The MSG Sphere, a state-of-the-art arena, the first of which is currently under construction in Las Vegas.
  • A majority stake in the international nightlife brand Tao Group Hospitality
  • A stake in the live entertainment and media company
  • The lion’s share of available cash on hand.
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