Four Firms Help Reconnect Madison Square Garden, Cable Network

March 29, 2021, 10:55 AM

Debevoise & Plimpton is advising the Dolan family, which owns Madison Square Garden Entertainment Corp., on the company’s plan to buy back the cable network that broadcasts New York Knicks games.

Davis Polk & Wardwell is advising a board of directors special committee for the cable operator, MSG Networks Inc.

The all-stock purchase announced March 26 partly reverses Knicks owner James Dolan’s spinoff a few years ago of the Madison Square Garden Co. into a handful of smaller companies. Dolan is the leader of the family that owns Madison Square Garden Entertainment.

The transaction is expected to be tax-free for both companies and their stockholders, according to a statement. The recombined company would be worth about $3.26 billion, a person close to the deal estimated.

Wachtell, Lipton, Rosen & Katz is advising a board of directors special committee for Madison Square Garden Entertainment. Paul, Weiss is advising Moelis & Company LLC, which, with The Raine Group, is giving financial advice to the committee.

Madison Square Garden Entertainment, which owns other venues including Radio City Music Hall, had a net operating loss of $250 million for fiscal 2020. That was mainly due to the pandemic-imposed shutdown of the venues, the statement said.

The cable operator, MSG Networks also owns outlets that broadcast Rangers, New York Islanders and other sports teams’ games, as well as other entertainment. It had $321.4 million in adjusted income, on $685.8 million in revenues.

The recombined company would be stronger and more flexible financially, and also better positioned to capture emerging revenue opportunities linked to the expected expansion of legalized sports gaming, the statement said.

Madison Square Garden Entertainment “is actively executing a plan designed to grow the company beyond its established collection of assets into one that is pioneering the next generation of entertainment,” the company’s president, Andrew Lustgarten, said.

To contact the correspondent on this story: Rick Mitchell in Paris at rmitchell@correspondent.bloomberglaw.com
To contact the editor on this story: Chris Opfer in New York at copfer@bloomberglaw.com; John Hughes in Washington at jhughes@bloombergindustry.com

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