Madison Square Garden Sports announced its board of directors has unanimously approved a plan to explore a potential spin-off that would separate its New York Knicks business from its New York Rangers business, creating two distinct publicly traded companies.
The company said the potential transaction is intended to allow shareholders to more clearly evaluate each entity’s assets and growth prospects, while giving both businesses greater strategic and financial flexibility.
If the company proceeds, the transaction is expected to be structured as a tax-free spin-off to all shareholders. Upon completion, record holders of the company’s Class A and Class B common stock would receive a pro-rata distribution of 100% of the common stock in the newly formed public company.
Following the separation, the Knicks-focused company is expected to include the New York Knicks, an original franchise of the National Basketball Association with eight NBA Finals appearances and two championships, as well as the Westchester Knicks, its exclusive NBA G League affiliate.
The Rangers-focused company is expected to include the New York Rangers, one of the National Hockey League’s “Original Six” franchises with four Stanley Cup championships and currently celebrating its 100th anniversary. It would also include the Hartford Wolf Pack, the Rangers’ top affiliate in the American Hockey League.
There can be no assurance that the transaction will be completed as described or at all. The company has not set a timetable for the process. Completion would be subject to various conditions, including required league approvals, receipt of a tax opinion from counsel and final board approval.
Madison Square Garden Sports Corp. is a professional sports company whose portfolio includes the Knicks and Rangers, along with their respective development league teams. The company also operates the MSG Training Center in Greenburgh, New York.
KEY QUOTE:
“We are exploring the opportunity to further create value for our shareholders by separating our two professional sports franchises into distinct companies. Both the Knicks and Rangers are premier teams in their respective leagues, with storied histories and large and passionate fan bases. We believe this proposed transaction would provide each company with enhanced strategic flexibility, its own defined business focus, and clear characteristics for investors.”
Jim Dolan, Executive Chairman And Chief Executive Officer, Madison Square Garden Sports
