Madison Square Garden Entertainment Revises Spinoff Plan

Madison Square Garden Entertainment Revises Spinoff Plan

James Dolan has had a busy week, and it’s only Tuesday.

A day after taking over day-to-day control of AMC Networks, as the cable company seeks a permanent CEO, Dolan on Tuesday revealed a revised spinoff plan for his Madison Square Garden Entertainment business.

MSG Entertainment announced in August plans to spin off its namesake arena, Radio City Music Hall, the Radio City Rockettes and Christmas Spectacular, and the MSG regional sports networks, with Dolan’s MSG Sphere project and Tao Group Hospitality forming their own project.

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Under the new plan, the RSNs will be part of a new company housing the MSG Sphere and Tao (to be called MSG Sphere Corp.), with the arena, entertainment venues and Rockettes business forming the basis of a new live entertainment company.

The MSG Sphere, set to open next year in Las Vegas, is Dolan’s big bet on the next generation of live entertainment, but it is expensive, and the cashflow from the RSNs could help support that new business line.

Meanwhile, the arenas and entertainment venues will be able to take advantage of the continued demand for live events, as well as long-term deals with the New York Knicks and New York Rangers, which Dolan also controls through his MSG Sports Corp.

“We believe the revised spin-off structure best positions these two companies for long-term success. One would be a pure-play live entertainment company driven by the strong financial profile of our iconic venues and the Christmas Spectacular production. The second company, comprised of MSG Sphere, MSG Networks and Tao Group Hospitality, would have enhanced flexibility to execute its business strategy and pursue global growth opportunities.”