MSG Entertainment is looking to spin off two of its most iconic properties — New York’s Madison Square Garden and Radio City Music Hall, as well as its regional sports channels — in a bid to provide cash and new options for its MSG Sphere project, which is set to open next year in Las Vegas.
The company in a statement Thursday outlined its spinoff plan, which it says was approved by MSG Enetertainment’s board of directors.
Under the plan being considered, the iconic New York arena (home to concerts, live events and New York Knicks and Rangers games), Radio City Music Hall, the Beacon Theatre and the Chicago Theatre, as well as those venues’ entertainment and sports booking businesses, would be spun out into a new live entertainment and media company.
Also part of the new company would be the MSG Networks’ RSN business, the arena rights deals with the Knicks and Rangers, and the Radio City Rockettes and their Christmas Spectacular show.
Meanwhile, MSG Entertainment would retain the MSG Sphere venues, the company’s majority interest in TAO Group Hospitality, as well as a one-third stake in the new live entertainment company, and substantially all of the company’s current cash on hand.
The move would take the legacy MSG businesses (which still generate a ton of cashflow) and move them into one company, with what the company sees as its growth businesses (the Sphere and Tao) into another.
“This potential transaction would create two companies, each with a distinct value proposition for investors,” executive chairman and CEO James Dolan said in the statement. The live entertainment and media company would include Madison Square Garden, the Christmas Spectacular production and MSG Networks and would generate substantial free cash flow. The second company, comprised of MSG Sphere and Tao Group Hospitality, would be focused on unique shared experiences, innovation and global opportunities for growth.”
The Dolan family controls MSG Entertainment, as well as MSG Sports, which owns the Knicks and Rangers.
The $1.8 billion MSG Sphere has become a top priority for Dolan, who has plans to open other locations in the future. The Hollywood Reporter’s Carolyn Giardina was on hand earlier this year as the project committed to its 2023 opening.
The company also launched MSG Sphere Studios in Burbank, with ambitions to create a wide array of content to be featured in the venue.