Madison Square Garden Company may split in two

GMT 00:36 2014 Wednesday ,29 October

Arab Today, arab today Madison Square Garden Company may split in two

Madison Square Garden in New York
New York - AFP

The Madison Square Garden Company announced late Monday that it may split itself into separate companies, with one division focusing on entertainment and the other on media and sports.
The board of MSG "approved a plan to explore a possible spin-off" into two publicly traded companies, MSG said, adding that no final decision had been taken.
MSG, with $1.6 billion in annual revenues, owns the iconic Madison Square Garden Arena near Times Square, as well as television networks and MSG Entertainment, which presents concerts at its namesake arena and other venues.
If the company goes through with the split, the live entertainment business would include MSG productions, such as the annual Radio City Christmas Spectacular with the Rockettes. The sports and media segment would include the New York Rangers hockey team and the New York Knicks basketball franchise.
The live entertainment division would focus on growth opportunities, while the sports and media company would enjoy steady growth and high cashflow, according to MSG chief executive Tad Smith.
"Investors favor companies with greater strategic focus on their core businesses," Smith said.
The company appointed a pair of new board members: Nelson Peltz, a well known activist investor who has pressed for split-ups at other companies, and Scott Sperling, a co-president of Thomas H. Lee Partners, a private equity fund.
MSG reported net income of $115.1 million on $1.6 billion in revenues for the fiscal year ended June 30.
The possible split follows recent announcements by eBay, Hewlett-Packard and others to hive off key operations into separate companies.
Other large companies, including PepsiCo and DuPont, have resisted pressure from activist investors to split up.
MSG also announced that its board of directors approved a repurchase of up to $500 million in stock, helping send its shares up 9.7 percent to $72.15 in pre-market trade.

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