Shares in the Madison Square Garden Co. gained more than 2% today to reach a new record high and have risen 17% since Wednesday’s news that MSG plans to spin off the New York Knicks and Rangers sports franchises. The stock ended the trading day at $312.92, on more than triple the average trading volume, at one point spiking to a new 52-week high of $321.92. Long-suffering Knicks and Rangers fans hope the spinoff augurs a change of ownership, with James Dolan recently sending signals he is more committed to his burgeoning blues-rock career than pro sports. But that’s the sports talk-radio angle — plus, the company tamped down that speculation by issuing an unambiguous statement: “There are no plans to sell the Knicks or the Rangers.” Related Story Madison Square Garden Entertainment Acquires MSG Networks Sibling In All-Stock Deal Wall Street, meanwhile, sees the spinoff as unlocking more value for both the teams and the venues. The Knicks and Rangers can take advantage of soaring franchise valuations and legalized sports betting, and MSG, which owns its namesake arena and several others, becomes more of a pure play. Already the investment thesis was simplified in 2015 by separating the TV and digital networks business from the venues. Many analysts have applauded the latest spinoff. In a research report this morning titled “Never Too Late to the Game,” Macquarie’s Amy Yong upgraded MSG to “outperform,” asserting a 12-month price target of $350, up from $302. The spinoff “should narrow the private-public market valuation and allow sports/entertainment to pursue unique strategies/options.” On the venue side, MSG is building two strikingly designed, globe-shaped Sphere arenas in London and Las Vegas, which are both expected to be marquee attractions. The sports teams, meanwhile, are a conundrum, throwing off a reliable source of cash despite the uneven performance on the court and on the ice. NBA superstar LeBron James, who is exploring new teams as a free agent, has never seriously considered suiting up for the underachieving Knicks. Rather than championships Dolan’s tenure instead has been marked by turmoil, despite two trips to the NBA Finals since 1993. There was the disastrous run of Isaiah Thomas as team president. The team settled a case brought by team executive Anucha Browne Sanders alleging sexual harassment by Thomas. And more recently, there was Dolan’s ejection of ex-Knick Charles Oakley from the Garden in handcuffs after a fracas with security guards during a game. The Rangers have fared much better, but have won the Stanley Cup just once (in 1994) over the past 58 years. In 2014, Dolan oversaw the sale of Cablevision, the major U.S. cable provider founded by his father, Charles Dolan, to Altice. Its TV network holdings, now known at AMC Networks, became their own separate public company, though the Dolans remain major shareholders.<doc-sep>The Madison Square Garden Company is moving to split up its sports and entertainment businesses. Madison Square Garden, or MSG, on Wednesday said its board of directors gave the green light to explore a possible spin off that would create a separately-traded public entity comprised of its sports businesses, including the New York Knicks and the New York Rangers. "We are exploring the opportunity to further create value by separating our businesses into two distinct companies," James Dolan, MSG's chairman and CEO, said in a statement. "We believe this proposed transaction would provide each company with enhanced strategic flexibility, its own defined business focus and clear investment characteristics." One company would be focused on live entertainment and music events, while the other would be a sports company, "driven by the strong financial performance of the storied Knicks and Rangers franchises," noted Dolan, expected to be executive chairman and CEO of both companies. The proposed sports entity would include the New York Knicks NBA basketball team and the New York Rangers NHL hockey team. MSG is exploring a sale of the New York Liberty professional WNBA sports franchise. MSG Sphere would oversee a collection of famous venues that include New York's Madison Square Garden and Radio City Music Hall, as well as the Forum in Inglewood, California, the Chicago Theatre and the Wang Theater in Boston.<doc-sep>
The Madison Square Garden Company announced on Wednesday it would explore a possible spinoff to create a separate, public company for its sports franchises, including the New York Knicks and New York Rangers. Shares of Madison Square Garden jumped nearly 10 percent in the premarket Thursday. The proposed spinoff would allow both the entertainment and sports companies to pursue separate business strategies and capital allocation policies, as well as give shareholders the opportunity to evaluate each company's assets and future potential, according to a statement. Madison Square Garden Company CEO James Dolan is expected to be CEO and executive chairman of both companies. "We believe this proposed transaction would provide each company with enhanced strategic flexibility, its own defined business focus and clear investment characteristics," Dolan said in a statement. The new entity will be entirely sports focused, "driven by the strong financial performance of the storied Knicks and Rangers franchises." It will also include the New York Liberty women's basketball team and a training center in Greenburgh, New York. The existing company will focus on becoming "a leader in live entertainment with a growing portfolio of assets that will include state-of-the-art music and entertainment-focused venues" that Dolan referred to as "MSG Sphere." The entertainment company aims to open the first MSG Sphere in Las Vegas by the end of 2020, followed by one in London a year later. Madison Square Garden emphasized there is no guarantee the deal will move forward as planned and did not set a time frame for the process.