Madison Square Garden Company (MSG) CEO David O’Connor has stepped down without warning or public explanation, effective immediately. The announcement’s timing is surprising, with the stock is up 30% YTD and the company having just announced Q1 ’18 revenue rose 35% YOY. Rumors are circling that that O’Connor was ousted after losing a power struggle to Azoff MSG Entertainment Chairman Irving Azoff. Executive Chairman James Dolan is set to take over as Madison Square Garden CEO. In an unrelated story, MSG has announced that it is selling its WNBA franchise, the New York Liberty. The company is said to be seeking a buyer that will immediately take over control of the team’s operations.
Howie Long-Short: If you value the Knicks at the same 10.8x multiple the Clippers sold for, based on ’16-’17 revenues, the Knicks are worth $4.06 billion. In ’16, Forbes valued the Rangers at $1.25 billion. The total current market cap of the company is $5.28B. Wall Street isn’t giving MSG any credit for the Arena (tax assessment valued it at $1.25 billion), the Liberty, an AHL team, Counter Logic Gaming or their entertainment portfolio. While it won’t be much, proceeds from the Liberty sale should be all profit for MSG shareholders.
Fan Marino: Dolan’s inability to win isn’t limited to the Knicks and Rangers, as the Liberty failed to win a championship in their 21 years under his watch. This past season, despite finishing with the regular season with the best record in the Eastern Conference, the team lost in the first round of the WNBA playoffs. Of course, you can’t mention the Liberty without mentioning that Dolan hired Isiah Thomas to be the Team President after paying out $11.6 million in a sexual harassment lawsuit, on Thomas’ behalf, during his time in the Knicks front office.
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