MSG Networks Considering Rejoining With MSG Entertainment
(Bloomberg) -- MSG Networks Inc., which owns the cable channel that airs New York Knicks basketball games, is considering a merger with Madison Square Garden Entertainment Corp., according to people familiar with the matter, potentially recombining two pieces of the Dolan family entertainment empire.
MSG Networks is working with advisers to explore a merger with the owner of the iconic Madison Square Garden arena in New York City, said the people, who asked to not be identified because the matter isn’t public.
Deliberations are in early stages and may not lead to a deal.
The deal would mark a turnabout for Jim Dolan, who has spent years splitting up his family’s holdings in a bid to extract more value. He is chairman of both companies and chief executive officer of MSG Entertainment, which was spun off last year by Madison Square Garden Sports Corp., his sports-team affiliate.
The logic behind the potential tie-up: While MSG Networks makes a lot of cash, it has uncertain future prospects as consumers increasingly abandon cable TV for streaming. MSG Entertainment has a brighter outlook but needs lots of cash.
A representative for MSG Networks and MSG Entertainment declined to comment.
MSG Networks rose about 12% in after-market trading Wednesday on the news. The stock closed down 0.6% to $19.13, giving the company a market value of about $1.1 billion. MSG Entertainment fell 0.6% to close at $116.00, giving it a market value of about $2.8 billion.
MSG Networks owns and operates its namesake regional sports network as well as MSG+, which broadcast live coverage of New York-area sports teams in basketball, hockey, football and soccer. It was the first regional sports network in the U.S., debuting in 1969, according to its annual report.
MSG Entertainment owns the Garden, one of the world’s preeminent sports and concert venues. It also leases marquee properties including Radio City Music Hall and has a hospitality arm that manages venues in New York City, Los Angeles, Las Vegas and elsewhere.
MSG Sports is the parent of the Knicks and New York Rangers hockey team.
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