In a story from Newsday (which is owned by Cablevision) that reads much like a press release, Cablevision is reportedly spinning off it’s MSG unit. The superficial article notes that the new, publicly-traded entity will include the New York knicks, the New York Rangers, and Radio City Music Hall. It’s unclear whether or not the new company will include fuse (music network), Madison Square Garden (arena), MSG Entertainment (event promotion company), MSG Media (MSG Network and MSG Plus), the Hartford Wolfpack, or the New York Liberty. It’s likely since the previously mentioned businesses are all owned by Madison Square Garden, L.P. The New York Times reports the new company could be worth as much as $1.5 billion. One analyst labeled the spin-off as “ill-timed” for Cablevision.
Here's another "business decision" that James Dolan made
The goal is for Cablevision to separate its entertainment entities since they are more volatile investments — specifically live events. It’s interesting that they noted they won’t be selling any of their properties. The move also comes at a time where a couple of MSG properties will take on big changes in the new few years. First, Madison Square Garden will undergo $500 million worth of renovations which will include a “supersuite” the size of 10 regular suites. Second, the Knicks are likely to make a run at big free agent signings (and, hopefully, relevancy) before the 2010 season.
Via Newsday:
Cablevision Systems Corp. will move forward with spinning off its Madison Square Garden unit into a separate public company, the company announced Thursday morning.
After the transaction is complete, Cablevision investors would own shares in both Cablevision and the new MSG, the Bethpage-based company said, allowing “shareholders to more clearly evaluate each of the separate company’s assets and future potential.”
The assets of the new MSG will include the New York Knicks basketball team, the New York Rangers hockey team and Radio City Music Hall.
The Dolan family, which controls Cablevision, would also control the new MSG through its ownership of shares.
Cablevision’s chief executive, James Dolan, would continue in that role and become executive chairman of the new Madison Square Garden. Cablevision vice chairman Hank Ratner would remain in that position and become the president and chief executive of Madison Square Garden. Charles Dolan would remain Cablevision chairman.
James Dolan said in a statement, “This spin-off will create two distinct companies, each with enhanced strategic flexibility, its own defined business focus and clear investment characteristics. The new MSG will be an attractive combination of sports, entertainment and programming properties, while Cablevision will continue to house a portfolio that includes industry-leading telecommunications services and popular programming networks. We believe that the combined value of these assets has not been fully realized, and that this transaction will be beneficial to shareholders as both Cablevision and MSG freely pursue their own individual business plans.”
The company hopes the spin-off, which must be given final approval by its board and approved by the Internal Revenue Service, will be completed by the end of the year.
The spin-off would be structured as a “pro rata” distribution to all Cablevision shareholders.
Ratner said in a statement, “Madison Square Garden is one of the world’s leading sports, entertainment and media companies made up of strong brands that will work together to drive the new company’s overall business. We are confident that MSG’s assets and integrated approach will continue to set the company apart in the industry and will position it for long-term success as a public company.”
Cablevision, which owns Newsday, added that it is not currently considering the sale of MSG or its businesses.
Tags: 2b, cablevision, james dolan, msg, new york knicks, new york rangers
In your first sentence, you mean Newsday, not Newsweek, which is owned by the Washington Post Company.