Madison Square Garden to Explore Splitting Into Two Companies

Madison Square Garden
2 min read
This story originally appeared on Reuters

Madison Square Garden Co, which owns the New York Knicks and New York Rangers, said Monday it is considering a plan to separate its entertainment business from its media and sports business to create two publicly traded companies.

Shares of the company rose 14 percent in after-market trade.

The company said the live entertainment division would be an event and venue management company, while the sports and media unit would run sports teams and regional sports television networks.

"Investors favor companies with greater strategic focus on their core businesses," Chief Executive Officer Tad Smith said in a statement.

Madison Square Garden said its shareholders would own shares in both the new companies if it goes ahead with the spin-off. The company said the idea had been under consideration internally since July.

The company also said its board authorized a plan to buy back Class A shares of up to $500 million.

"We are very pleased that MSG's board of directors and management have committed to pursue a plan to enhance value for all MSG shareholders through the combination of a share repurchase program and contemplated business spin-off...We look forward to the full and timely implementation of these plans," JAT Capital Management LP said in an email to Reuters.

JAT has a 9.36 percent stake in the company as of Sept. 22.

The company said it has not set a timetable for the completion of the potential spin-off.

Madison Square Garden hired LionTree Advisors as financial adviser for the separation.

Madison Square Garden also nominated activist investor Nelson Peltz of Trian Fund management LP and Scott Sperling of private equity firm Thomas H. Lee Partners LP to join its board.

Madison Square Garden shares closed at $65.78 on the Nasdaq on Monday.

(Reporting by Soham Chatterjee in Bangalore and Greg Roumeliotis in New York; Editing by Cynthia Osterman)

More from Entrepreneur

Elizabeth's expertise can help you scale your business, build a personal brand and focus on being a value-driven CEO.
Book Your Session

In as little as seven months, the Entrepreneur Authors program will turn your ideas and expertise into a professionally presented book.
Apply Now

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.