Capital New York reports that CEO Tad Smith confirmed on last Friday’s earnings conference call that the company has not yet decided which new company will own the iconic Madison Square Garden.
On its quarterly earnings call Friday morning, Madison Square Garden Company C.E.O. Tad Smith said the company has not decided whether the Garden, and its potentially lucrative air rights, would become part of the proposed venues and live events business, which would also include Radio City Music Hall, or its proposed sports and entertainment business, which would include MSG Network, the Knicks and the Rangers.
“We haven’t really sorted that one out,” Smith said, when asked which company the Garden would live in. “It is a matter that the board will consider very seriously and carefully.”
Crain’s New York suggests that although the Dolan family will control both companies, it is possible that James Dolan will focus on his music interests, becoming a passive investor in the sports franchises.
But it’s worth noting that Mr. Dolan’s interests lie primarily with music, not sports, and a joint venture he has with concert promoter Irving Azoff would be hived off from the sports teams under the proposed breakup plan. Fans who blame Mr. Dolan for the Knicks’ poor performance over the years may be hoping that a split would turn him into a passive investor in his sports franchises, allowing him to devote his time to MSG’s music-related enterprises instead.
Only time will answer these and other questions about structure, but these answers will be critical to determining the value of each new company.
Disclosure: The author holds shares in MSG