MSG’s History of Value-Creating Splits Bodes Well
Apr 9, 2020
Madison Square Garden Co.’s combined financials are likely to take a near-term hit due to the ban on large public gatherings and the suspension of the NBA season, but its history of value-creating splits bodes well for the coming spin off of its entertainment business from its sports team franchise over the longer-term, analysts said. The split — its fourth in a decade — will create Madison Square Garden Entertainment Corp., retaining the Garden as well as the Las Vegas Sphere. The leftover business will be renamed Madison Square Garden Sports Corp., the first publicly listed company of its kind with a portfolio of high-value teams including the New York Knicks and the New York Rangers.
MSG’s hiring of industry veteran Jennifer Vogt, a former executive at Walt Disney Co., signaled “management’s efforts to ensure the successful launch of MSG Sphere in 2021, which will potentially boost the top line of MSGE,” analysts at The Edge Consulting Group wrote in a note to clients. “MSGS will be an ever-increasing valuation story with its trophy assets in play, particularly due to the brand value and limited supply of sports teams”