Potential Separation of Knicks and Rangers: A Strategic Move by Madison Square Garden Sports
Madison Square Garden Sports Corp. has recently made a significant announcement. The board of directors has unanimously approved a plan to explore the possibility of spinning off the New York Knicks and New York Rangers into two separate publicly traded companies.
The proposed transaction aims to separate the NBA franchise and its G League affiliate, the Westchester Knicks, from the NHL team and its minor league affiliate, the Hartford Wolf Pack. The spin-off, if completed, would be structured as a tax-free distribution to all shareholders. Record holders of Class A and Class B common stock would receive a pro-rata distribution of 100% of the new company’s stock.
“We are exploring the opportunity to further create value for our shareholders by separating our two professional sports franchises into distinct companies,” – CEO James Dolan
The strategic move is expected to enable shareholders to more clearly evaluate each company’s assets and growth prospects while providing enhanced strategic and financial flexibility.
Following the announcement, shares of Madison Square Garden Sports surged approximately 13%, reaching new 52-week highs. According to Sportico, the Knicks are valued at $9.85 billion, making it the third most valuable NBA franchise. However, the completion of the transaction would be subject to various conditions. These include required NBA and NHL approvals, receipt of a tax opinion from counsel, and final board approval. The company has not yet set a timetable for completion.
Source: Business Wire