Jim Dolan, the controlling shareholder of Madison Square Garden Sports and Madison Square Garden Entertainment, has gotten a big raise for 2022.
Dolan likely more than doubles his annual compensation to $26 million—or more—in his role as executive chairman of both publicly traded Sports, the parent of the Knicks and Rangers, and Entertainment, the owner of the Manhattan arena and other properties where he also holds the CEO title. The executive signed new employment agreements for 2022 and the following two years with both organizations, according to filings with the Securities and Exchange Commission.
Under the contracts, Dolan gets a base salary of $1.25 million for running MSG Sports and $2 million for helming MSG Entertainment, up from $880,000 and $1.78 million last year, respectively. More significantly, the executive will be eligible for equity or cash grants of at least $6.15 million from the sports team group and $12 million from the arena-owning business. Between the two MSG entities, he collected a total of $13.8 million and $14.2 million the past two years, according to the two companies’ proxy statements. Dolan also can receive an annual bonus of 200% of his base salary at each company with the current contracts.
The new deals cover Dolan through fiscal 2024, which ends June 30 that year. His prior employment contracts with both companies expired last summer, but the new agreements were only signed in December. As part of the current year’s compensation, Dolan received $5.1 million in bonuses, evenly split between the entities, according to the contract filing.
As publicly traded businesses, the Madison Square Gardens have compensation committees that determine the level of bonuses Dolan receives, and it is possible he could be awarded more than the combined $26 million-plus he is eligible for. The new contract specifies that the compensation committee will base Dolan’s compensation in part by comparison to peer businesses, as required by the SEC. However, last year the company said there is a lack of publicly traded business comparable to the MSG businesses. In the unlikely event he is fired or quits, he’d be paid $8,400 a day for consultations.
Dolan is the controlling shareholder of each Madison Square Garden company, controlling enough votes in the Dolan family trusts to veto any going private transaction in either business. The stock market values MSG Sports at a $3.86 billion market cap. In a private transaction, the Knicks would be worth $6.12 billion and the Rangers $1.87 billion, according to Sportico’s most recent team valuations.
The Dolan family, as a group, control nearly 71% of the voting power of the Knicks and Rangers and nearly 73% of MSG Entertainment. Jim Dolan, son of the New York cable system entrepreneur and HBO founder Charles Dolan, has been criticized for his pay packages in the past. For 2019, Jim Dolan voluntarily relinquished millions of dollars in grants after a lawsuit over total compensation of more than $54 million that year, which was prior to Madison Square Garden being reorganized into what are now two publicly traded companies.
Last year, a third publicly traded business, Madison Square Garden Networks, was merged by Entertainment in an all-stock transaction that came at a discount to Networks’ share price, a rarely seen arrangement, since healthy publicly traded businesses typically are acquired at a premium to their share price.
An email to an MSG spokesperson for comment was not immediately returned.