MSG Sports Stocks Skyrocket Following Knicks-Rangers Spinoff Proposal
Madison Square Garden Sports Corp. witnessed a record surge in its shares on Wednesday, with a leap of over 16% to close at $341.76. This followed the announcement of a unanimous board approval to explore the division of the New York Knicks and New York Rangers franchises into two separate publicly traded companies.
The proposed tax-free spinoff aims to provide shareholders with a clearer evaluation of each franchise’s assets and growth prospects. Additionally, it would grant both companies increased strategic and financial flexibility. Post-separation, the Knicks company would encompass the NBA franchise and its G League affiliate, the Westchester Knicks. Conversely, the Rangers company would comprise the NHL team, currently marking its 100th anniversary, and its AHL affiliate, the Hartford Wolf Pack.
CEO Jim Dolan highlighted the prestige of both teams, noting their storied histories and passionate fan bases. However, the company clarified that there is no guarantee the transaction will be finalized and no timeline has been established. The completion of this transaction would necessitate various approvals, including those from the NBA and NHL, a favorable tax opinion, and final board authorization.
This announcement marks the highest daily percentage gain on record for Madison Square Garden Sports shares.
Source: Business Wire