Transaction overview
October 26, 2022, Madison Square Garden monosodium glutamate Entertainment Corp. (NYSE: MSGE , $45.50, market cap: $1.6 billion) announced that it has confidentially filed a pre-registration statement on Form 10 with the United States Securities and Exchange Commission (“SEC”), its traditional for live entertainment. spin-off proposal. and MSG.Network Business. In the first phase of the transaction, registered holders of MSGE’s Class A and Class B common stock will receive an expected pro rata distribution equal to approximately two-thirds of the economic interest in the entertainment and media company. Which will be called Madison Square Garden Entertainment Corp (SPINCO). The remaining approximately one-third in SpinCo will be retained by the current parent company, which will be renamed MSG Sphere Corp. The retained shares will then be available as MSG Sphere Corp. part of a tax-free exchange offer for common stock. for the purpose of raising capital for general business purposes and may be used for further pro rata distribution to the shareholders of MSG Sphere. Society
Previously, on Aug. 18, MSGE announced that its board of directors had authorized company management to explore the possibility of spinning off MSG’s entertainment programming and network operations into a separate public company. As previously announced, the proposed spin-off will be structured as a tax-free distribution to all MSGE shareholders. However, the completion of the transaction is still subject to various conditions, including the filing of a Form 10 registration statement, the approval of certain leagues, the receipt of a tax opinion from an attorney and the final approval of the board of directors. .
On November 4, MSGE announced that it will report first quarter 2023 results and hold a conference call to discuss first quarter 2023 results on Wednesday, November 9, 2022 at 10:00 a.m. ET.
Following the spin-off, Madison Square Garden Entertainment Corporation (SPINCO) will include:
• A diverse collection of venues: Madison Square Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall, Beacon Theater and Chicago Theatre;
• The Company’s entertainment and sports business, which offers a diverse mix of sporting events as well as concerts, family events and special events to millions of guests each year;
• The Radio City Rockettes and their production of the Christmas Play, a holiday tradition for 88 years;
• Valuable long-term franchise agreements with the New York Knicks and New York Rangers, who play their home games exclusively at Madison Square Garden; as well as
• MSG Network, which has two regional sports and entertainment networks, MSG Network and MSG Sportsnet (formerly MSG+), as well as the additional streaming service MSG GO, and offers exclusive live broadcasts of local NBA and NHL sports. 5 of the franchises.
Following the spin-off of MSG Sphere Corp. (Parent Card), shall include:
• MSG Sphere. a state-of-the-art space where cutting-edge technology will combine with multi-sensory storytelling to deliver an immersive experience on an unprecedented scale. MSG’s first arena is currently under construction in Las Vegas and is scheduled to open in 2H23.
• controlling interest in Tao Group Hospitality, a global entertainment and nightclub provider with more than 70 branded establishments in more than 20 markets on five continents;
• About a third of businesses have interests in entertainment and media companies, holding most of the company’s cash.
MSG Entertainment is a global leader in live entertainment, and the company has a collection of unique and world-class entertainment assets that are currently undervalued by investors. Therefore, the proposed spin-off aims to address this valuation mismatch and create shareholder value for MSGE shareholders over the long term. It should be noted that MSG Entertainment was exempt from Madison Square Garden corporate tax on April 17, 2020. The proposed split into two companies will allow shareholders to evaluate each company’s business and future prospects.
Likewise, both companies will be able to pursue their business strategies and capital allocation policies separately. MSG Entertainment has a growing portfolio of assets, including state-of-the-art music and entertainment venues MSG Sphere and Tao Hospitality Group, two companies with global brands and significant long-term growth opportunities. MSG’s first arena is currently under construction in Las Vegas and is slated to open in the second half of the 2023 calendar year. In addition, MSG Entertainment (to be renamed MSG Sphere) will hold approximately one-third of Live Entertainment’s economic interest. and media companies that will enable them to raise capital in the future.
The entertainment and media company (to be renamed MSG Entertainment), which has valuable portfolio businesses such as Madison Square Garden, Christmas Spectacular Productions and MSG Network, is expected to generate significant free cash flow and benefit from an attractive growth profile. Live entertainment activities.
who are we
Madison Square Garden Entertainment Corporation (parent company to be renamed MSG Sphere Corporation)
Madison Square Garden Entertainment Corporation (MSGE) is a live entertainment provider offering venues, leading entertainment brands, regional sports and entertainment chains, restaurants, nightclubs and music festivals. The company was spun off from Madison Square Garden Company on April 17, 2020. The company’s segments include Entertainment, MSG Networks and Tao Group Hospitality. The entertainment division includes a portfolio of venues such as Madison Square Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall, Beacon Theater and Chicago Theatre. MSG Entertainment is also developing a new state-of-the-art facility at The Venetian in Las Vegas, MSG Sphere. In addition, the company produces original productions, a Christmas play featuring the Radio City Rockettes and the Boston Calling Music Festival through Boston Calling Events. The MSG Network segment consists of the company’s regional sports and entertainment networks, MSG Network and MSG+, an additional streaming application, MSG GO and other digital assets. The company’s two regional sports and entertainment networks, MSG Network and MSG Sportsnet, offer a wide variety of live sports content and other programming. The Tao Group Hospitality segment owns a controlling interest in Tao Group Hospitality, a hospitality group with entertainment, restaurant and nightclub brands including Tao, Marquee, Lavo, Beauty & Essex, Cathedral, Hakkasan and Omnia. The company reported revenue of $1.7 billion for the year ended June 30, 2022. After the spin-off, RemainCo will be renamed MSG Sphere Corp., with MSG Sphere and Tao Group Hospitality owning a majority stake. It will also hold approximately one-third of its economic interests in the entertainment and media company (the subsidiary).
Live Entertainment and Media Company (to be renamed Madison Square Garden Entertainment Corporation)
The live entertainment and media company (spin-off) will include a large collection of venues including Madison Square Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall, Beacon Theater and Chicago Theatre, with productions from The Farm and New York. Knicks and New York Rangers. It will also include Radio City Rockets, Christmas Spectacular Productions and MSG Networks, which own two regional sports and entertainment networks, MSG Network and MSG +, as well as a companion streaming app, MSG GO. The company’s two regional sports and entertainment networks, MSG Network and MSG Sportsnet, offer a wide variety of live sports content and other programming.
