Billionaire James Dolan is merging the company that owns Madison Square Garden Arena with a cable network that broadcasts New York Knicks games to local fans – and investors are preparing to exit.
Madison Square Garden Entertainment – which owns Radio City Music Hall and the Tao restaurant and nightclub chain in addition to the garden – announced Friday that it will buy MSG Networks in a stock of around MS 900 million.
Shares of companies – both controlled by Dolan, which also owns the Knicks and New York Rangers – MSGE fell 9.9 percent to 6 84.67 and MSGN fell 7.6 percent to .0 16.06.
It is on top of ste bho drops as the deal was first reported on March 10, when MSGE’s takeout offer offered a 4 per cent premium for shares of MSG Network that day, with investors alleging on Friday that their combined market prices had already almost sunk. Is. 50 750 million.
Part of Wall Street. The alliance will be feared as MSG Entertainment, after losing more than 250 250 million in epidemics, is moving ahead with its controversial plan to build its precious, ball-shaped sphere across the country. To some, Friday’s deal looks like a signal that MSG Entertainment needs the MSG network as a source of cash.
“The question for shareholders is if this is an indicator that there are lending challenges on MSGE,” a miffed shareholder told The Post, during a conference call on Friday, officials said the two businesses could do better than what they could do together. Is. What they can do separately. “
In a written statement, MSG Entertainment said the new company would be in a better position to expand legal gambling. MSG Networks owns two regional sports and entertainment channels as well as a streaming service in the New York area.
The new company will also enjoy tax effectiveness and “increase financial relief to fund existing development initiatives, including its planned state-of-the-art venue in Las Vegas.” [the] At MSG Sphere Venetian, ”said MSG Entertainment.
Dolan was not on call Friday, and company officials declined to answer several questions about the MSGE development project. It includes whether the merger will accelerate the opening time of the London sphere. MSG’s Las Vegas Sphere is set to open in 2023, the company said.
The merger similarly disappointed some MSGE shareholders as it changed the rationale for buying the stock.
“The thesis on MSGE is live entertainment – restarting the game of the economy,” Miffd caught the shareholder. “Buying a cable network makes the story humble.”
In 2015, Madison Square Guard cut its sports and entertainment businesses from its media business, making MSG Networks the sole media company. Last year, Madison Square Garden acquired its MSG Entertainment from Madison Square Garden Sports, which is owned by Knicks and Rangers.
MSG Entertainment officials declined to comment further on Friday.
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