The Madison Square Garden Company confirmed that it will split its regional sports networks from pro sports teams the New York Knicks and Rangers.
The move had been in the works since at least last summer, when the company announced that it would explore the breakup to better showcase the value of specific operations.
Insiders say the sale of the Los Angeles Clippers NBA franchise for $2 billion to former Microsoft (NASDAQ: MSFT) chief Steven Ballmer influenced the decision. The thinking there: If a franchise as moribund as the NBA's Clippers is valued so high, what would a marquee team like the Knicks be worth?
Under terms of the tax-free spinoff, the new live sports and entertainment business will include not just the Knicks and Rangers, but also the WNBA's New York Liberty, the Westchester Knicks of the NBA Development League and the Hartford Wolf Pack of the American Hockey League.
The Madison Square Garden arena and theater, Radio City Music Hall, the Beacon Theater, the Forum in Inglewood, Calif., the Chicago Theater and Wang Theater in Boston will also be included.
The remaining company will consist of media operations such as MSG Network and MSG+, a conglomerate of RSNs. The Knicks and the Rangers will continue to run on these RSNs as part the agreement.
The management situation remains a little unclear. Earlier this month, Cablevision (NYSE: CVC) CEO James Dolan assumed day-to-day control of MSG following the exit of Tad Smith.
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