Madison Square Garden Co. confirmed on Friday that it "will break itself up," dividing the Knicks and NHL Rangers from the company’s RSNs, according to Michael de la Merced of the N.Y. TIMES. The move "comes five months after the company announced plans to explore such a breakup" in order to "slim down and become more focused." The company by splitting itself up is "betting that shareholders will appreciate having two investment choices." The sports and live entertainment business, which "will be spun off to existing shareholders, is seen within the company as a producer of huge cash flow that could potentially support attractive dividend payouts." It will include the Knicks, Rangers and WNBA Liberty, along with the company’s namesake arena and Radio City Music Hall. The remaining business "will be made up of the company's media operations, including MSG Network and MSG+." The corporate breakup is "expected to be completed by the end of the year" (NYTIMES.com, 3/27).
SPLITTING TO SELL? In N.Y., Claire Atkinson cited analysts as saying that MSG is "clearing a path for a potential sale" of its RSNs, as the slimmed down media business "makes it easier to sell the sports networks." BTIG media analyst Brandon Ross said, "We still believe they’ll sell the RSNs in the near term with Comcast and 21st Century Fox the most likely bidders." He added, "They’re spinning out sports from media and that will allow them to sell the RSN tax free" (N.Y. POST, 3/28). MSG said that it would "set long-term TV rights deals" for the Knicks and Rangers with its RSNs "as part of the spinoff" (VARIETY.com, 3/28). At presstime, shares of MSG were trading at $85.08, up 5.39% from the close of business on Friday (THE DAILY).
