Madison Square Garden to spin out Sports and Entertainment business

The Madison Square Garden Company has filed to separate its New York-based business into two publicly-traded companies – which would see its Sports & Entertainment business spun out as a standalone entity.

The company has filed an initial Form 10 Registration Statement with the U.S. Securities and Exchange Commission and hopes to complete the move later this year.

The planned separation would be structured as a tax-free spin-off of the sports and entertainment business to MSG shareholders on a pro rata basis. That would leave the company’s media business standing on the stock exchange as a separate company.

MSG’s Board Of Directors says the move will “further enhance the long-term value-creation potential of both businesses”.

In a statement, it said: “While the companies would continue to benefit from commercial arrangements between them, the separation would provide each company with increased strategic flexibility to pursue its own distinctive business plan and allow each to have a capital structure and capital return policy that is appropriate for its business. Upon completion of the spin-off, MSG shareholders would own shares in both companies and have the ability to evaluate each company’s current business and future prospects in making investment decisions.”

The live sports and entertainment company would comprise a portfolio of venues, sports teams and entertainment productions including:

  • Professional sports franchises: the New York Knicks, the New York Rangers and the New York Liberty, along with development teams: the Hartford Wolf Pack and the Westchester Knicks
  • Venues including Madison Square Garden Arena, The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theater, the Forum in Inglewood, CA, The Chicago Theater, and the Wang Theater in Boston
  • Live productions, including the Radio City Christmas Spectacular, the nation’s #1 live holiday family show featuring the legendary Rockettes, and New York Spring Spectacular, a new large scale theatrical production that officially debuted on March 26
  • MSG’s venue management capabilities and industry-leading expertise in bookings, as well as its sponsorship, marketing, ticketing and promotional expertise and platforms
  • MSG’s strategic entertainment joint ventures
  • MSG’s interest in Fuse Media, the parent company of NUVOtv and Fuse networks

The media company would continue to distribute sports and entertainment content across multiple platforms, including its duo of regional sports and entertainment networks, MSG Network and MSG+.

In connection with the separation, the companies expect to enter into long-term media rights agreements that will ensure MSG Network and MSG+ continue to serve as the exclusive local broadcast home of the Knicks and Rangers.

MSG posted a 1% increase in profits for the three months to end of 2014. Its total net income in the period stood at US $61m.Music Business Worldwide

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