Madison Square Garden Company, which owns US regional pay-television channels MSG Network and MSG Plus along with major league franchises the New York Knicks and the New York Rangers, has approved a spin-off of its sports and entertainment businesses from its media division.
MSG’s board of directors in October unanimously approved a plan to explore a possible spin-off after considering the move since July 2014. The board has now approved the process. Upon completion of the transaction, MSG will be a standalone media company and will change its name to MSG Networks. The newly formed sports and entertainment company will be called The Madison Square Garden Company.
Upon completion of the spin-off, MSG's current repurchase programme, through which $241m (€215.2m) of MSG Class A common stock has already been purchased, will be terminated and the new Madison Square Garden Company will have in place new board authorisation to repurchase up to $525m of its Class A common stock.
Doc O'Connor, president and chief executive of MSG, said: “We are now one step closer toward our goal of creating two distinct, focused companies for investors. The live sports and entertainment company will comprise a portfolio of celebrated venues, legendary sports teams and exclusive entertainment productions, while the media company will continue to own and operate award-winning regional networks that deliver compelling sports and entertainment content.
“We are confident that this transaction will further enhance the long-term value potential of both companies as each continues to build on its considerable record of achievement."
The Madison Square Garden Company currently comprises three business segments – MSG Sports, MSG Media and MSG Entertainment. MSG Sports owns and operates NBA basketball team the New York Knicks, NHL ice hockey franchise the New York Rangers and women’s basketball team the New York Liberty, along with development teams: the Hartford Wolf Pack and the Westchester Knicks. MSG Sports also features the presentation of a wide variety of live sporting events including professional boxing, college basketball, bull riding and tennis.
MSG Media’s television networks consist of regional sports networks, MSG Network and MSG Plus, collectively referred to as MSG Networks. MSG has also announced key executive appointments for what will be the new pure play media company, MSG Networks Inc., once the transaction is complete.
Following the spin-off, which is expected to occur on September 30, Andrea Greenberg will become president and chief executive of MSG Networks Inc., while Bret Richter will join the company as chief financial officer.
MSG Network and MSG Plus are home to eight professional sports teams. Along with the New York Knicks, Rangers, Liberty and Westchester Knicks, the networks also hold local rights to NHL franchises the New York Islanders, New Jersey Devils and Buffalo Sabres, along with Major League Soccer’s New York Red Bulls.