The board of Madison Square Garden Sports Corporation has approved a plan to explore the possibility of separating the basketball team New York Knicks from the hockey team New York Rangers. The transaction aims to create two independent public companies, which, according to the corporation's management, would allow investors to more precisely value each asset. News of the potential split has sparked enthusiasm in financial markets, driving the MSGS stock price to record levels.

Plans to Split Knicks and Rangers

The board of Madison Square Garden Sports has approved a plan to explore the possibility of splitting the company into two independent public companies for basketball and hockey.

Record Stock Market Gains

Shares of MSGS rose over 16%, reaching their highest valuation in history following the announcement of the planned restructuring.

Unlocking Business Value

The coherent strategy is intended to allow investors to separately assess the financial performance of the NBA's New York Knicks and the NHL's New York Rangers.

The board of Madison Square Garden Sports Corp. (MSGS) has officially announced the commencement of an analysis of a plan that envisions the complete operational and capital separation of New York's two most recognizable sports brands. According to the proposal, the New York Knicks (NBA) along with their G League team would form one public company, while the New York Rangers (NHL) along with their minor league affiliate would form a second. This decision is motivated by the desire to unlock the value of both clubs, which the board believes are currently undervalued by the market within a single structure. Investors reacted to this news with great optimism. The stock price of MSGS rose over 16% on Wednesday, reaching a historic high. Analysts indicate that the separation will allow for more transparent financial reporting and the tailoring of business strategies to the specifics of different sports. Majority owner James Dolan has for years sought ways to optimize his sports and entertainment portfolio, and this step could be a milestone in the history of Madison Square Garden. Madison Square Garden Sports was formed in 2020 as a result of splitting MSG Company into two parts: sports and entertainment (MSG Entertainment), which aimed to separate the management of the arena from the teams themselves. Currently, fans and shareholders are closely following the next steps, as the spinoff process is legally and tax-wise complex. „Both the Knicks and the Rangers are leading teams in their leagues, and their separation will allow the market to better appreciate their unique value.” — James Dolan Although the board has approved the plan to study the split, there is no guarantee the transaction will ultimately be completed. Nevertheless, the dynamics of the stock market growth suggest that pressure to implement this scenario will be significant. Stock price increase: 16, Daily gain: 14.06, Record valuation: 10016% — was the jump in MSGS stock after the split plans were announcedLiberal-leaning media emphasize the potential benefit for shareholders and the financial transparency resulting from splitting the giant. | Conservative business outlets focus on the history of the Dolan family and speculation about a possible future sale of one of the teams.

Mentioned People

  • James Dolan — Chairman of the board of Madison Square Garden Sports and majority owner of the Knicks and Rangers teams.
  • Randall Williams — Bloomberg Deals reporter covering MSG's corporate plans.