The live entertainment company will break away from Sphere, MSG Networks and Tao Group Hospitality on April 20.
Madison Square Garden
James Leynse/Corbis via GI
Madison Square Garden Entertainment finalized plans to spin off its live entertainment business, the company announced Thursday (March 30). That will separate the pure-play live music business from MSG Entertainment’s state-of-the-art venue in Las Vegas, sports television network and hospitality businesses.
The transaction is expected to be complete on April 20 and is subject to “certain conditions, approvals, and consents, including final NBA league approval and receipt of a tax opinion from counsel,” according to the company’s statement.
Following the spin-off, the current parent company will be renamed Sphere Entertainment Co. and will include the Sphere, MSG Networks and Tao Group Hospitality. The live entertainment company will assume the name Madison Square Garden Entertainment and be comprised of venues such as Madison Square Garden, the entertainment and sports booking business, and the Christmas Spectacular Starring the Radio City Rockettes production.
MSG Entertainment shareholders of record on April 14 will receive a distribution of one Class A or Class B share of the new live entertainment company for each share off the company’s Class A or Class B common stock. The distribution will amount to about 67% of the the new company’s outstanding shares. Sphere Entertainment Co. will own the remaining 33% of the live entertainment company’s outstanding shares.
“With today’s announcement, we are one step closer toward our goal of creating two distinct companies, each well positioned to generate long-term value for our shareholders,” MSGE executive chairman and CEO James Dolan said in a statement.
When MSG Entertainment first announced it was considering a spin-off in Aug. 2022, the plan was to separate two high-growth divisions — the Sphere business with Tao Group Hospitality — from the more mature, stable live events business and MSG Networks. In December, the company updated the spin-off plans to the same structure announced Thursday.
Sphere, a 17,000-seat venue with a 160,000-square foot LED media plane, is set to launch this fall with concerts by U2. MSG Entertainment announced in February it is exploring a potential sale of its majority interest in Tao Group Hospitality, a collection of dining and nightlife brands including Tao, Hakkasan, Omnia, Marquee and Lavo. The company paid $181 million for a 62.5% stake in the hospitality group in 2017.
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Source : Billboard