3:40pm PT by Ashley Cullins
Madison Square Garden CEO Settles Antitrust Suit
Madison Square Garden CEO James Dolan has agreed to pay more than $600,000 to settle an antitrust lawsuit filed by the Federal Trade Commission, although MSG says it's an outside law firm who will end up footing the bill.
The lawsuit, filed contemporaneously with the settlement, alleges that Dolan failed to timely report his acquisition of voting shares in the company.
Under the Hart-Scott-Rodino Act, certain people are required to notify the Department of Justice and the FTC and observe a waiting period before acquiring voting securities or assets. In 2017, the requirements apply to transactions of more than $80.8 million and those in which the acquirer would hold voting shares in excess of $161.5 million.
In September 2017, Dolan acquired 591 shares of MSG in the form of vesting restricted stock units as part of his compensation package, the value of which pushed his votings securities above $161.5 million mark. He made a corrective filing in November, but was in violation of the act until the waiting period expired just before the end of the year.
According to the complaint, Dolan had previously violated the HSR act in 2010 when he acquired voting shares of Cablevision Systems that resulted in holdings exceeding the threshold.
The Madison Square Garden Company on Thursday sent The Hollywood Reporter a statement in response to the settlement: “Any shareholder whose stockholdings exceed certain thresholds is required to make an HSR filing. Debevoise & Plimpton is the law firm responsible for making timely HSR filings relating to Jim Dolan’s MSG stock. Debevoise inadvertently missed a required HSR filing deadline, for a second time, which resulted in a fine by the FTC. Debevoise agreed to pay the fine as a result of their mistake.”