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The Madison Square Garden Co. said Wednesday it will explore spinning off its sports businesses, including the New York Knicks NBA team and New York Rangers NHL team, into a separately traded company.
The plan calls for a tax-free transaction for MSG shareholders, who would get two-thirds of the sports company while the other third would remain with the live-entertainment company.
James Dolan would be CEO and executive chairman of both companies.
In addition to the Knicks and Rangers, the sports spinoff would include a professional sports training center in Greenburgh, New York; Knicks Gaming, the official NBA 2K sports franchise of the Knicks; and majority interest in Counter Logic Gaming, an e-sports organization.
The sports company would also include the New York Liberty WNBA franchise, which MSG may be selling.
The live-entertainment company would include Madison Square Garden, Radio City Music Hall, the Forum in Los Angeles and other venues. It would also include MSG Bookings and MSG Productions, about $1 billion in cash and joint ventures Azoff-MSG Entertainment and Tribeca Enterprises.
It would also include upcoming state-of-the art venues called MSG Sphere, the first of which is scheduled to open in Las Vegas by the end of 2020 and the second to open in London a year later.
“We believe this proposed transaction would provide each company with enhanced strategic flexibility, its own defined business focus and clear investment characteristics,” Dolan said.
Shares of MSG were down 2 percent during the regular session Wednesday, but rose 8 percent after the closing bell when the company announced its plan.
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