Madison Square Garden Co. shares continued to rise Friday – by more than 3% – as the sports teams and concert promoters approaching a potential split.
Madison Square Garden shares had risen 3.4% ($ 10.36 per share) to $ 313.65 on Friday afternoon, their second day of profits according to the company's board of directors said that there is a possible breakdown of its professional Sports teams – including the New York Knicks, New York Rangers and New York Liberty – into a separate company. The stock has risen nearly 18% from its $ 266.23 level before the June 27 announcement.
The Madison Square Garden, headed by former Cablevision Systems CEO James Dolan, has been on this road once before. In 2010, MSG, including the teams, venues and regional sports channels of MSG Networks, was spun off Cablevision Systems. In 2015, the company parted with Madison Square Garden Co., which also included sports teams and concert venues such as Radio City Music Hall and MSG Networks, which include the regional sports channels MSG and MSG-Plus.
Related: MSG moves with split plans
The Dolan family sold Cablevision to Altice NV in 2016.
"We believe that this proposed transaction would provide each company with greater strategic flexibility, its own defined business focus, and a clear investment strategy," Dolan said in a statement.
Any separation would be a tax-exempt spin-off, with shareholders of MSG ordinary shares receiving a pro-rata distribution equal to a two-thirds share of pure sports. The remaining third would be withheld by the live entertainment company. Dolan would be the managing chairman and CEO of both companies.
"We are exploring the potential to add value by separating our businesses into two separate companies," Dolan said in a statement. "A company would be a leader in live entertainment with a growing portfolio of assets incorporating state-of-the-art music and entertainment venues – called MSG Sphere." The other company would be a pure sports company driven by the strong financial performance of the well-known franchise company Knicks We believe that this proposed transaction would provide each company with increased strategic flexibility, a defined business focus, and clear investment features.
The pure sports company would consist of:
- The New York Knicks professional NBA sports Franchise and her development team, Westchester Knicks;
- The New York Rangers professional NHL sports franchise and its development team, the Hartford Wolf Pack;
- The New York Liberty professional WNBA sports franchise, for which the company has one Sale explores;  A prof Essential Sports Team Training Center in Greenburgh, NY.
The live entertainment company would include:
- New York's Madison Square Garden live venues, the Hulu Theater at Madison Square Garden, Radio City Music Hall and Beacon Theater; the forum in Inglewood, CA; The Chicago Theater; and the Wang Theater in Boston;
- MSG Bookings, in which books live sports events such as college basketball and professional boxing;
- MSG Productions, which includes the Radio City Rockettes and the Christmas Gala;
- Majority interests in the hospitality group's TAO Group and Boston Calling Events, producer of New England's Boston Calling Music Festival;
- Entertainment Joint Ventures – Azoff-MSG Entertainment and Tribeca Enterprises;
- One third of the economic interest in pure game sports company; and
- $ 1 billion in cash.
The live entertainment company will continue to move forward with plans to create state-of-the-art venues – called MSG Sphere. The goal is to open the first MSG Sphere in Las Vegas by the end of 2020, followed by a second MSG Sphere in London about a year later.
J.P.. Morgan and PJT Partners serve as financial advisors and Sullivan & Cromwell LLP as legal advisers.