Madison Square Garden Entertainment, the venue-owning arm of the Dolan family sports empire, is in talks to sell part of the Manhattan MSG property to a developer for about $1 billion, according to a report in Crain’s New York Business Wednesday night.
According to the report, the Theater at Madison Square Garden, which sits below the main arena where the Knicks and Rangers play, as well as an alleyway, would be sold to ASTM Group, an Italian developer. ASTM wants to renovate Penn Station, which is beneath MSG, and would demolish the 5,500-seat theater to expand the long-criticized rail hub.
“With regard to the theater, we would always consider options that make strategic and financial sense to our company, but we have nothing more to share today,” said CFO David Byrnes on an earnings call with analysts Thursday morning. In a statement provided by MSG, the company added: “As we’ve said, we are always open to discussions. As invested members of our community, we are deeply committed to improving Penn Station and the surrounding area, and we continue to collaborate closely with a wide range of stakeholders to advance this shared goal.”
The potential sale helped propel MSGE shares up as much as 26% in trading in the New York Stock Exchange Thursday. Changing hands at $38.70, it would be the highest price for MSG Entertainment shares in 13 months, although officially MSGE’s trading history is now connected to Sphere Entertainment, which was split from MSGE last month. Thursday’s prices put shares at their highest level in the five-week trading history of the revamped Entertainment business, above the $35 value set on the business on April 17.
MSG Entertainment reported its third quarter results Thursday as well, besting consensus expectations compiled by S&P Global Intelligence for revenue, which came in at $201.2 million, and earnings per share, at 42 cents. Results in the period, ended March 31, were helped by stronger concessions and suite revenue sharing with the Knicks and Rangers, which are owned by sister company Madison Square Garden Sports. The company noted the two teams will play at the arena until at least 2055.
For the full year, Entertainment expects revenue of up to $845 million. The business owns the Manhattan arena, as well as New York’s Radio City Music Hall and Beacon Theatre, and the Chicago Theatre in Illinois. It split from the MSG regional sports network and a Las Vegas venue business known as Sphere Entertainment last month.
(This article has been updated to clarify the relationship between MSG Entertainment and Sphere Entertainment in the final paragraph.)