Madison Square Garden Entertainment is likely to split itself into two business: one that consists of the regional sports networks, Madison Square Garden itself and other venues, and another that holds the eagerly anticipated Las Vegas Sphere, according to a filing made by the company Friday evening.
The split isn’t a done deal yet. Publicly traded MSG Entertainment filed with the Securities and Exchange Commission that its board of directors has approved exploration of the split, indicating the action would be contingent on league approvals and indications the transaction would be a tax-free spin-off to shareholders. A sister company, Madison Square Garden Sports, owns the NBA’s Knicks and the NHL’s Rangers. Both companies are controlled by the Dolan family through their ownership of supervoting shares, and as such the family has the ability to make the split happen.
According to the filing, the existing MSG Entertainment business would hold the Sphere and any future MSG spheres to be developed; the majority interest in Tao Hospitality, which owns venues and restaurants in major cities around the world; as well as one-third of the ownership of the newly created entity. The MSG Sphere in Las Vegas in being built adjacent to the Venetian Casino and is said to be the largest sphere in the world, being built at a cost of $1.8 billion. Irish rock band U2 reportedly will open the venue when it makes its debut next year.
In addition to the MSG Networks and the “world’s most famous arena,” the spun-off company would hold MSG’s sports and entertainment bookings arm, Radio City Music Hall and the Rockettes, and other concert venues.
The transaction, if it occurs, would be yet another reorganization of MSG properties. Last year, MSG Entertainment merged with publicly traded Madison Square Garden Network in expectation of finding sports betting synergies.
A spokesperson for MSG Entertainment didn’t immediately respond to a request for comment.