Decks have been cleared for the Madison Square Garden Company to separate its entertainment business and sports business interests.
The Madison Square Garden Company (MSG) board of directors has approved the spin-off of its entertainment businesses from its sports businesses. The exercise can be completed in within a fortnight, MSG has announced in a Press release.
Upon completion of the spin-off transaction, MSG will be a pure-play sports company and will change its name to Madison Square Garden Sports Corp (MSG Sports), while the newly-formed entertainment company will be named Madison Square Garden Entertainment Corp. (MSG Entertainment).
“While our industry is currently going through a difficult period, we are confident in the enduring strength and value of our businesses. Today’s approved spin-off is the result of many months of preparation, and we believe it will set the stage for long-term success for both MSG Sports and MSG Entertainment,” said James L. Dolan, MSG’s Executive Chairman and Chief Executive Officer.
The spin-off has been structured to qualify as a tax-free distribution to MSG stockholders and MSG for the US federal income tax purposes. MSG stockholders are urged to consult with their tax advisors with respect to the U.S. federal, state, local and foreign tax consequences of the spin-off.
Beginning on April 9, 2020, and continuing until the occurrence of the distribution, MSG expects that its common stock will trade in two markets on the NYSE: in the “regular way” market under the symbol “MSG” and under the current name, “The Madison Square Garden Company”, and in the “ex-distribution” market under the symbol “MSGS WI” and under the new name “Madison Square Garden Sports Corp.
The completion of the spin-off is subject to statutory approvals and consents.
In the new set up James Dolan is expected to serve as Executive Chairman of MSG Sports and as Executive Chairman and Chief Executive Officer of MSG Entertainment. Andrew Lustgarten is expected to serve as President and Chief Executive Officer of MSG Sports and as President of MSG Entertainment.