Madison Square Garden Plans to Separate Knicks and Rangers Companies

Madison Square Garden Sports is weighing a big structural change that could shake up both the New York Knicks and Rangers. The board’s signed off on a plan to look into spinning the basketball and hockey franchises into separate publicly traded companies.

Right now, it’s still early days. The idea is to create two distinct businesses, each with its own focus and more flexibility for investors. If it goes through, the Knicks and their G League affiliate, the Westchester Knicks, would make up one company. The Rangers and their minor league partner, the Hartford Wolf Pack, would form another.

This possible split fits a pattern for MSG Sports CEO James Dolan. He’s known for restructuring his holdings, always looking for ways to boost shareholder value.

The Proposed Split: Knicks and Rangers

So, here’s how it would work: the Knicks and Westchester Knicks would be bundled together as one company. On the other side, the Rangers and Hartford Wolf Pack would stand as their own entity.

The goal? Let each franchise zero in on its own business operations and chase its own strategic goals. Investors might see this as a chance for increased value, though it’s hard to say for sure until more details come out.

Strategic Flexibility and Business Focus

James Dolan says the main reason for the split is to create more value for shareholders by giving each team more strategic freedom and a sharper business focus. Both the Knicks and Rangers have deep histories and massive, loyal fan bases. If they split, each team could run independently and tailor its approach to its own sport and market.

Approval and Timeline

The board has agreed to explore the split, but there’s no set timeline. It’s not a done deal. The NBA and NHL still need to approve it, and there are plenty of other hurdles to clear.

They’ll need to talk things through with a lot of different stakeholders. It’s all about making sure the move lines up with the long-term vision for both teams and their leagues, which sounds simple, but rarely is.

Previous Financial Transactions by James Dolan

This isn’t Dolan’s first rodeo when it comes to big financial moves. Back in 2020, he separated his sports teams from the Madison Square Garden arena and other entertainment stuff. Then, in 2023, he split things again, putting the Sphere and MSG Networks under Sphere Entertainment Co., while the arena and live entertainment business landed in another public company.

Potential Implications for Investors

Brandon Ross from Lightshed Partners has floated the idea that this could be a step toward MSG taking the two teams private. Dolan’s track record with financial maneuvers makes that theory plausible. If the teams did go private, Dolan would have more direct control, which could mean quicker, more decisive management.

Enhanced Investor Characteristics

For investors, splitting the teams would make things a bit clearer. Each company would have its own business model and revenue streams, letting people size up performance and growth potential separately. That could help investors decide which risk and reward profile suits them best.

Historical Context and Future Prospects

The Dolan family started as minority owners of the Knicks and Rangers back in 1994 and soon took over as majority owners. They’ve been open to selling minority stakes, but there’s never been a clear sign of a big sale on the horizon.

This proposed split just continues their habit of financial restructuring. Whether it pays off for shareholders or changes the fate of the franchises—well, that’s the big question.

Conclusion

The proposed plan to split the New York Knicks and Rangers into separate publicly traded companies could shake things up for Madison Square Garden Sports. If they go through with it, each team would stand on its own, giving investors a clearer picture of what they’re buying into.

This idea is still in the early stages. It needs sign-off from a bunch of stakeholders before anything actually happens.

James Dolan seems determined to keep tweaking his sports empire. Maybe he’s hoping to get more out of these franchises, or maybe he just likes changing things up—hard to say for sure.

For more details, you can check out the full article on The New York Times.