MSG Sports, in part following activist shareholder pressure, is exploring a spin-off of the NBA’s Knicks and NHL’s Rangers into two separate, publicly traded companies.
The James Dolan-led entity said Wednesday that it is looking into the move and whether it would provide “enhanced strategic and financial flexibility,” though there is no certainty it will happen and no defined timetable for a decision.
“Both the Knicks and Rangers are premier teams in their respective leagues, with storied histories and large and passionate fan bases,” Dolan, MSG Sports executive chairman and CEO, said in a statement. “We believe this proposed transaction would provide each company with enhanced strategic flexibility, its own defined business focus, and clear characteristics for investors.”
Minor league franchises for each team that are also owned by MSG Sports—the G League’s Westchester Knicks and American Hockey League’s Hartford Wolf Pack—would go along with each parent organization in a split.
Long Time Coming
The formal exploration of the spin-off arrives nearly eight months after activist investor Boyar Value Group pressured MSG Sports to do this, arguing that the full value of the Knicks was particularly trapped in the current corporate structure.
The Lakers sold last year at a record $10 billion valuation, but the whole of MSG Sports had an enterprise value of $5 billion then, and it’s more than $8 billion now. Given that both NBA and NHL franchise values are soaring to unprecedented levels—also reaffirmed by the recent $1.7 billion sale of the Penguins—that figure is almost certainly still well below the true value of the Knicks and Rangers.
Forbes recently estimated the value of the Knicks at $9.75 billion, third-highest in the NBA, and the Rangers at $4 billion, second-highest in the NHL.
Similarly, Boyar Value Group said last June that, “the Lakers sale highlights how cheap MSG Sports is relative to the value of its assets.” Now, Boyar president Jonathan Boyar says he’s happy that Dolan is “taking shareholder concerns into consideration,” even though there was no engagement between his firm and MSG Sports.
“It’s better late than never,” Boyar told Front Office Sports. “I woke up to some good news. Pretty good way to start the day.”
He also noted that the potential split makes it easier for Dolan to take minority investment in either the Knicks or Rangers, or even potentially sell one of the teams.
“Whenever people say Dolan will never sell the team, I point to Mark Cuban,” Boyar said. “People said the same thing about him, and if anything, he was even more identified with the Mavericks than Dolan is with the Knicks.”
Dolan Knows His Splits
Under Dolan’s leadership, MSG Sports and its two sister entities, Sphere Entertainment Co. and MSG Entertainment Corp., are no strangers to spin-offs very similar to what’s currently under consideration.
Sphere Entertainment, which oversees the highly successful Sphere in Las Vegas and the MSG Networks, split from MSG Entertainment in 2023. That latter company, which oversees Dolan’s interests in a series of major venues including Madison Square Garden and Radio City Music Hall, also split from MSG Sports in 2020.
If the two sports teams complete the split under consideration, Dolan’s holdings that had originally been in one publicly traded company would reside in four.
