NEW YORK, Sept. 11, 2015 (GLOBE NEWSWIRE) — The Madison Square Garden Company (NYSE:MSG) (“MSG”) today announced that its board of directors has approved the spin-off of its sports and entertainment businesses from its media business. Upon completion of the transaction, MSG will be a standalone media company and will change its name to MSG Networks Inc. (“MSG Networks”) and the newly formed sports and entertainment company will be called The Madison Square Garden Company (“Madison Square Garden Company”).
The distribution will take place on September 30, 2015 to MSG stockholders of record as of the close of business on September 21, 2015. For the distribution, each MSG Class A common stockholder will receive one share of the new Madison Square Garden Company Class A common stock for every three shares of MSG Class A common stock held as of the record date. Each MSG Class B common stockholder will receive one share of the new Madison Square Garden Company Class B common stock for every three shares of MSG Class B common stock they hold as of the record date.
Doc O’Connor, president and CEO of MSG said, “We are now one step closer toward our goal of creating two distinct, focused companies for investors. The live sports and entertainment company will comprise a portfolio of celebrated venues, legendary sports teams and exclusive entertainment productions, while the media company will continue to own and operate award-winning regional networks that deliver compelling sports and entertainment content. We are confident that this transaction will further enhance the long-term value potential of both companies as each continues to build on its considerable record of achievement.”
Upon completion of the spin-off, MSG’s current repurchase program, through which $241 million of MSG Class A common stock has already been purchased, will be terminated and the new Madison Square Garden Company will have in place new Board authorization to repurchase up to $525 million of its Class A common stock.
Mr. O’Connor continued: “Our anticipated stock buyback program for the new sports and entertainment company is a reflection of our confidence in the strength of those businesses, and of our continued desire to generate greater value for stockholders.”
Fractional shares of the new Madison Square Garden Company’s common stock will not be distributed to MSG stockholders. Instead, they will be aggregated and sold in the public market, with the net proceeds distributed pro rata in the form of cash payments to stockholders, who would otherwise be entitled to a fractional share of the new Madison Square Garden Company common stock.
No action or payment is required by MSG stockholders to receive the shares of the new Madison Square Garden Company common stock. Stockholders who hold MSG common stock as of the record date will receive a book-entry account statement reflecting their ownership of new Madison Square Garden Company common stock or their brokerage account will be credited with the new Madison Square Garden Company shares. An Information Statement containing details regarding the distribution of the new Madison Square Garden Company common stock and the new Madison Square Garden Company’s business and management following the spin-off will be mailed to MSG stockholders prior to the distribution date.
The spin-off has been structured to qualify as a tax-free distribution to MSG stockholders for U.S. federal income tax purposes. Cash received in lieu of fractional shares, however, will generally be taxable. MSG stockholders are urged to consult with their tax advisors with respect to the U.S. federal, state, local and foreign tax consequences of the spin-off.
Beginning on September 17, 2015, and continuing until the occurrence of the distribution, MSG expects that its common stock will trade in two markets on the NYSE: In the “regular way” market under the symbol “MSG” and under the current name, “The Madison Square Garden Company”, and in the “ex-distribution” market under the symbol “MSGN WI” and under the new name “MSG Networks Inc.”
Any holders of MSG Class A common stock who sell shares regular way on or before September 30, 2015, will also be selling their right to receive Class A common stock of the new Madison Square Garden Company. Investors are encouraged to consult with their financial advisers regarding the specific implications of buying or selling MSG Class A common stock on or before the distribution date. MSG’s Class B common stock is not listed on a securities exchange.
The new Madison Square Garden Company Class A common stock is expected to begin trading on a “when-issued” basis on the NYSE under the symbol “MSG WI” and under the name “The Madison Square Garden Company” beginning on September 17, 2015. “When issued” trading of the new Madison Square Garden Company Class A common stock will continue until the distribution occurs. The CUSIP number for the new Madison Square Garden Company Class A stock will be 55825T 103. The new Madison Square Garden Company’s Class B common stock will not be listed on a securities exchange.
The completion of the spin-off is subject to the effectiveness of MSG’s Form 10, funding of the debt financing at MSG Networks and the new Madison Square Garden Company common stock being authorized for listing on the NYSE, as well as certain approvals and consents.
The Madison Square Garden Company is currently comprised of three business segments: MSG Sports, MSG Media and MSG Entertainment and is built on a foundation of iconic venues and compelling content that the company creates, produces, presents and/or distributes through its programming networks and other media assets. MSG Sports owns and operates the following sports franchises: the New York Knicks (NBA), the New York Rangers (NHL), the New York Liberty (WNBA), the Westchester Knicks (NBADL) and the Hartford Wolf Pack (AHL). MSG Sports also features the presentation of a wide variety of live sporting events including professional boxing, college basketball, bull riding and tennis. MSG Media is a leader in production and content development for multiple distribution platforms, including content originating from the Company’s venues. MSG Media’s television networks consist of regional sports networks, MSG Network and MSG+, collectively referred to as MSG Networks. MSG Entertainment is one of the country’s leaders in live entertainment. MSG Entertainment creates, produces and/or presents a variety of live productions, including the Radio City Christmas Spectacular and the New York Spring Spectacular, both featuring the Rockettes. MSG Entertainment also presents or hosts other live entertainment events such as concerts, family shows and special events in the Company’s diverse collection of venues. These venues consist of Madison Square Garden, The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, the Forum in Inglewood, CA, The Chicago Theatre, and the Wang Theatre in Boston, MA. More information is available at www.themadisonsquaregardencompany.com.
This press release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments and events may differ materially from those in the forward-looking statements as a result of various factors, including financial community and rating agency perceptions of the Company and its business, operations, financial condition and the industry in which it operates and the factors described in the Company’s filings with the Securities and Exchange Commission, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein. The Company disclaims any obligation to update any forward-looking statements contained herein.
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