Madison Square Garden Entertainment is exploring a sale of its stake in Tao Group Hospitality.
MSG Entertainment acquired its stake in the restaurant group in 2017 and is says it “believes that now is the appropriate time to explore a potential sale of its interest in Tao Group Hospitality.” The company paid paid $181 million for a 62.5 percent stake in the company, which now has more than 70 locations across four continents. The stake has now grown to 67 percent ownership.
As it explores the sale, MSG Entertainment will also lift its policy of banning attorneys involved in active litigation related to Tao from entering its venues.
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“As a result of MSG Entertainment’s exploration of a potential sale of its majority interest in Tao Group Hospitality, effective immediately, the Company has lifted the adverse attorney policy for any litigation currently pending with Tao entities. Accordingly, all attorneys employed at the firms involved may attend events at MSG Entertainment’s venues, and those firms will all be notified. The policy remains in place for all other firms pursing active litigation against the Company,” the company said in a statement.
MSG Entertainment, which owns several venues in New York City, including Madison Square Garden, Radio City Music Hall and the Beacon Theatre, has recently come under fire for using facial recognition technology to bar attorneys who work at firms involved in litigation with the company from attending events.
In early December, the company had put forward a plan spin off its live entertainment venues and to create a new company comprised of its new venture, the MSG Sphere, which is set to open in Las Vegas in 2023, as well as its regional sports networks MSG Networks and Tao Group Hospitality. MSG Entertainment did not provide further commentary on that plan Monday, but said the potential sale of Tao Group Hospitality came as the company “regularly evaluates ways to maximize shareholder value.”
In its last earnings report, from the three months ended Sept. 20, 2022, MSG reported growing revenues for Tao Group, up 11 percent year-over-year, as the company opened new venues. However, costs also grew due to increased staffing, higher rent and the increased cost of food and beverages.
MSG Entertainment reports second-quarter earnings on Thursday.
