As was announced back on February 18th, MSG plans on spinning off both the New York Rangers and New York Knicks into separate companies. Reports yesterday gave some further color to the move, with the new Rangers corporation targeted to be called MSG Rangers Corp.
Not so imaginative really, and seems ripe for a change at some time in the future.
If you’d forgotten why James L. Dolan had set this thread in motion, well it would enable shareholders to more clearly evaluate each company’s assets and growth prospects, while providing both companies with enhanced strategic and financial flexibility according to the official release. The theory I imagine for Dolan and his lead investors, is that the two companies separately will be worth more than the combined organization.
NO PLACE LIKE HOME-LESS
Back in April of 2020, the two sports franchises were spun off from MSG proper in a transaction that separated them from the ownership of the Arena – which ultimately was renamed to Sphere Entertainment and includes management or ownership variously of MSG, Raido City Music Hall, the Sphere in Las Vegas and MSG Networks.
In that split, the Knicks and Rangers both became tenants of MSG – the World’s Most Famous Arena, but remained as a joint company that was still headed up by the same guy who headed them up through MSG: James L. Dolan, heir to the Cablevision company that bought the Rangers back in 1994.
THEY’RE WORTH HOW MUCH?
Well according to Forbes, around $3.8-$4.0B as of last year. That’s about a fourfold increase over the purchase price of $1.075B back in 1994 when they were sold by Viacom. While a ~400% increase sounds like a lot, it’s not a huge return when you factor that it was over 30 years ago now – 32, but I mean who’s counting.
The new company – and that of the equally creatively named MSG Knickerbockers Inc will continue to be headed up by one James L. Dolan. Who will also continue to head up Sphere Entertainment as well.
OCTOBER SURPRISE
In addition to naming the new organizations, we also get a proposed timeframe. The official conclusion of the spin-offs is expected to come “by the end of October” this year, meaning the Rangers will be officially divorced from their Basketball brethren about a month into the season.
The new MSG Rangers are planned to be a traded equity, and you’d have to imagine their stock symbol would be NYR – at least if they’re listed on the NYSE. The new company would also include the Hartford Wolf Pack, and the MSG Training Center in Greenburgh, NY.
In the short term, there’s little effect we’re likely to see on the Rangers and how we view them. MSG Network owns the rights to broadcast the team through the end of the 2028-29 season. With James L. Dolan continuing to lead both companies – and his son recently appointed to head up the Rangers – there appears to be little short term change on the horizon.
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