James Dolan moves to split Knicks, Rangers into – Business News
Madison Square Garden Sports has moved to split the New York Knicks and New York Rangers into two separate, publicly traded firms — a transfer analysts say may lastly unlock billions in trapped franchise worth tied up below James Dolan’s sprawling sports activities empire.
MSG Sports mentioned it confidentially filed an initial Form 10 registration assertion with the Securities and Exchange Commission on Monday because it advances a proposed tax-free spin-off that may separate the Knicks business from the Rangers business.
The Knicks entity would come with the NBA franchise and the Westchester Knicks G League affiliate, whereas the Rangers company would home the NHL membership and the Hartford Wolf Pack.
James Dolan’s MSG Sports filed to split the Knicks and Rangers into separate publicly traded firms. James Keivom for NY Post
“This move has been a long time in coming,” Derek Reisfield, co-founder of MarketWatch and a former CBS govt who labored on NFL rights negotiations, advised The Post.
“There has been a persistent gap in the stock value of MSG Sports to the private market value,” Reisfield mentioned.
Forbes valued the Knicks at $9.75 billion final yr, whereas CNBC lately pegged the franchise above the $10 billion mark amid hovering NBA media-rights expectations.
The Rangers, in the meantime, had been valued by Forbes at $4 billion — making them the NHL’s second-most precious franchise behind solely the Toronto Maple Leafs.
The Knicks have been valued close to or above $10 billion by main sports activities finance shops. Knicks star OG Anunoby is seen above during his workforce’s playoff sequence towards Paul George (8) and VJ Edgecombe of the Philadelphia 76ers. Charles Wenzelberg / New York Post
MSG Sports, nonetheless, at present carries a public market valuation of roughly $8.5 billion — far beneath the mixed estimated private-market worth of the Knicks and Rangers.
Investors have long argued that Dolan’s difficult company construction obscured the true worth of the groups.
MSG Sports mentioned the transaction, if accomplished, would create two separate publicly traded firms. The company cautioned there’s no guarantee the separation will probably be accomplished.
Still, the submitting instantly fueled hypothesis over whether or not Dolan may finally money out of one or each franchises after many years of insisting the groups weren’t for sale.
The Rangers could be housed in a separate public company below MSG Sports’ proposed spin-off. Robert Sabo for NY Post
“Will one of the teams get sold, that’s not clear,” Reisfield mentioned. “But having separate entities will either allow partial sales of individual teams to raise money, or the entire sale of one of the teams.”
Sports franchise valuations have exploded lately as billionaires and personal equity companies pour money into scarce marquee belongings. Reisfield famous that the groups’ ties to MSG stay a complicating issue as a result of the sector’s working allow expires in 2028.
“The arena is a huge component of a sports franchise’s value and cash driver,” he mentioned. “Many of the sports teams are really two businesses now, a sports team and a real estate development company.”
The Garden is owned individually by means of Sphere Entertainment — a construction that has long raised questions amongst buyers over lease agreements, shared bills and how money flows between Dolan-controlled entities.
Madison Square Garden is a key piece of the valuation puzzle as MSG Sports moves to split the Knicks and Rangers. Christopher Sadowski for NY Post
MSG Sports touted the split as a method for buyers to “more clearly evaluate each company’s assets and growth prospects” whereas offering “enhanced strategic and financial flexibility.”
Shares of MSG Sports had been trading at round 0.75% greater as of 2 p.m. Eastern Time on Monday. Sphere Entertainment’s stock price was down practically 2%.
An MSG spokesperson declined to remark additional past the company’s assertion.
