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MSG Company plans to spin-off entertainment business, as London venue plans delayed
By Andy Malt | Published on Tuesday 12 November 2019
The Madison Square Garden Company has announced that it plans to fully spin off its entertainment business from its sports business, after losses were higher than expected in its latest quarterly figures.
The company had planned a partial spin off – with the entertainment business retaining a third of the shares in the sports business – but now says a full separation is necessary. The announcement comes as the deadline for building a new venue in London slips backwards.
The company is currently working on two ambitious new venue projects, one in Las Vegas and one in London. The Sphere venues will be covered in video screens on the inside, promising all sorts of video, VR and AR stuff, plus super high quality sound. The smaller of the two venues, the one in Las Vegas, is set to open in 2021, as planned.
However, says the company, with the London venue in the old Olympic Park looking unlikely to get planning approval before next year, it is not likely to meet its planned open date of 2022. In fact, it’s so unlikely that the company is now not willing to commit to an opening date at all.
“We are now pursuing a full spin-off of our entertainment business from our sports business”, said MSG Vice President Gregg Seibert in an investor call. “As a result of this new structure, the entertainment company will not retain any equity interest in the sports company. We believe that the entertainment company will have sufficient financial flexibility to pursue its venue expansion plans without the need for the retained interest. As a result, we think this new structure makes the most sense for our shareholders”.
Putting a further positive spin on it all, it was said on the conference call that delaying the London project would allow designers in the UK to learn from the Las Vegas development.
The restructuring plans for the company still need approval from shareholders.
