The Madison Square Garden Co. filed its Form 10 Registration Statement with the Securities and Exchange Commission Tuesday, the latest step in its plans to spin off its entertainment business into a separate publicly traded entity next year.
MSG has said the proposed separation of the sports and entertainment business would be structured as a tax-free spin-off to all MSG shareholders. After the deal is closed, holders of MSG common stock would maintain their current economic interest in both the sports and entertainment businesses.
MSG announced the intention to split last year and the separation is expected to unlock value for shareholders by creating a steady, stable pure-play sports company and an entertainment company that would capitalize on growth opportunities, mainly through venue expansion. The Dolan family would maintain majority voting control of both the sports and entertainment companies through their ownership of Class B shares.
According to MSG, the pure-play sports company would include:
• The New York Knicks professional NBA franchise and its development team, the Westchester Knicks;
• The New York Rangers professional NHL franchise and its development team, the Hartford Wolf Pack;
• Knicks Gaming, the official NBA 2K esports franchise of the New York Knicks, and a majority interest in Counter Logic Gaming, a leading North American esports organization;
• MSG’s professional sports team Training Center in Greenburgh, NY.
The entertainment company would include the Madison Square Garden arena, Hulu Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre in New York; the Forum in Inglewood, California; and The Chicago Theatre.
The company is also currently building a new venue -- MSG Sphere -- in Las Vegas, expected to open in 2021. A second MSG Sphere is slated for London.
The entertainment company would also include MSG’s bookings business; productions, which includes the Radio City Rockettes and the Christmas Spectacular; majority interests in Tao Group Hospitality and Boston Calling Events; and about $1 billion in cash.
J.P. Morgan Securities LLC and PJT Partners LP continue to serve as financial advisors and Sullivan & Cromwell LLP continues to serve as legal advisor.