MSG Sphere, the long-awaited, world-class venue built in Las Vegas, promises to revolutionize the concert-going experience. Before opening, however, MSG Sphere is changing its maker’s corporate strategy.
On Monday, MSG Entertainment announced new plans for an upcoming spin-off that will separate MSG Sphere, the next-generation music venue under construction in Las Vegas, from the rest of its music business. alive.
The latest version of the commercial results is expected to be a pure music company under the corporate name MSG Entertainment that includes venues such as Madison Madison Square Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall , the Beacon Theater and The Chicago Theatre. . MSG Entertainment also includes the entertainment and sports marketing businesses, the Radio City Rockettes and the Christmas Spectacular production, and long-term arena licensing agreements with the New York Knicks and New York Rangers, who play their home games at Madison Square Garden.
The spin-off’s first appearance was in the live music business with MSG Networks, a local sports network that carries live games of the Knicks, Rangers, New York Giants, New Jersey Devils, New York Islanders and Buffalo Sabres. That will put the company’s two largest divisions under one roof, separate from MSG Sphere and Tao Group Hospitality, which operates restaurants and nightclubs. But MSG Entertainment will combine the Sphere program with the fixed income of MSG Networks, which had $608.2 million in revenue and $131 million in net income in the year ended June 30, 2022. The new strategy “is better for increasing shareholder value, while providing both companies with increased strategic and financial resources to drive long-term growth, “said the company in a statement.
The new spin-off project includes MSG Networks including MSG Sphere and Tao Group Hospitality. The spin-off company will take the name MSG Sphere Corp and “increase flexibility to implement its business strategy and explore global growth opportunities,” the director and CEO said. James L. Dolan said in a sentence.
The proposed transaction will be structured as a tax-free spin-off to all MSGE shareholders. Holders of MSGE Class A and Class B shares will receive a pro-rata share estimated to be equal to a two-thirds equity interest in MSG Entertainment, the live entertainment company. The parent company, MSG Sphere, holds a one-third interest in MSG Entertainment.
The $1.8 billion MSG Sphere at The Venetian is slated to open in 2023 with a U2 residency. The spherical venue will provide a multi-sensory experience of sounds and images for 20,000 standing spectators or 17,500 seated guests. It has 160,000 square feet of video surveillance and an outdoor exosphere with programmable LED technology.