MSGE - Madison Square Garden Entertainment revises venue spin-off plan

Madison Square Garden Entertainment ( NYSE: MSGE ) has set up a revised plan for separating its traditional live entertainment businesses from its venues.

It had been exploring spinning off live entertainment and its MSG Networks business from MSG Sphere and Tao Group Hospitality.

"However, after thorough evaluation, the Company believes the revised plan is optimal for maximizing shareholder value, while providing both companies with enhanced strategic and financial flexibility to drive long-term growth," MSGE says.

The proposed transaction aims to separate traditional live entertainment - a collection of performance venues, entertainment and sports bookings and the Christmas Spectacular production - from MSG Sphere, MSG Networks and Tao Group Hospitality.

It's now planned as a tax-free spin-off to all shareholders in MSG Entertainment ( MSGE ). A first step would mean record holders of MSGE Class A and B common shares would receive a pro rata distribution expected to equal about two-thirds of the live entertainment company, to be called Madison Square Garden Entertainment.

The remaining one-third economic interest would be retained by the current parent, which would be renamed MSG Sphere.

“We believe the revised spin-off structure best positions these two companies for long-term success," Executive Chairman/CEO Jim Dolan says. "One would be a pure-play live entertainment company driven by the strong financial profile of our iconic venues and the Christmas Spectacular production. The second company, comprised of MSG Sphere, MSG Networks and Tao Group Hospitality, would have enhanced flexibility to execute its business strategy and pursue global growth opportunities.”

MSGE stock is -1.4% after hours.

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