MSG Entertainment to Buy MSG Networks In Sports Betting Play

EmpireStakes.com

By Lou Monaco

The “World’s Most Famous Arena” is making some internal moves that could pay major dividends in the future — especially when online sports betting is legalized in New York.

Madison Square Garden Entertainment and MSG Networks have announced they’ve reached an agreement for MSG Entertainment to acquire MSG Networks.

The all-stock deal would create a huge entertainment and media company with a more diversified revenue base, according to a news release. It would be well-positioned to deliver innovation across its platforms to support its live entertainment business, which following the coronavirus shutdown of its venues, is slowly on a path back to normal operations.

But the “big fish in the sea” that MSG Entertainment anticipates it would capture is more of the emerging revenue opportunity related to the potential expansion of legalized sports betting, the release said. The combination of the companies’ platforms creates an opportunity for potential sports gaming partners.

To be added if NY legalizes online sports betting:

The state of New York announced historic and significant mobile sports betting legislation at the end of March when budget plans were announced for fiscal year 2022.

“MSG Entertainment is actively executing a plan designed to grow the Company beyond its established collection of assets into one that is pioneering the next generation of entertainment,” MSG Entertainment President Andrew Lustgarten said in a news release when the deal was announced in late March. “We have always believed in the value of live sports and look forward to welcoming MSG Networks back into the fold as part of a transaction that we are confident would enhance our financial flexibility and set the stage for continued growth and value creation.”

The transaction, subject to closing conditions, is expected to be completed during the third quarter this year. Upon the closing, a current director of MSG Networks elected by the holders of its Class A common stock would be appointed as a director of MSG Entertainment, the release said.

Merged Company Would Have Financial Flexibility

The merged company potentially would have financial flexibility to fund current growth initiatives, including its planned state-of-the-art venue in Las Vegas — MSG Sphere at The Venetian — as well as future opportunities across both entertainment and media.

The merger is expected to be tax-free for both MSG Entertainment and MSG Networks and their stockholders, the release said. Upon the closing of the transaction, MSG Networks stockholders would receive 0.172 shares of MSG Entertainment Class A or Class B common stock for each share of MSG Networks Class A or Class B common stock they own.

“We anticipate significant benefits from rejoining MSG Entertainment, including creating a combined company with greater diversification and resources,” Andrea Greenberg, president and CEO of MSG Networks, said in the release. “This would, in turn, help drive new innovative opportunities across both the entertainment and media businesses, ultimately creating significant value for our collective shareholders.”

The media company’s two networks, MSG Network and MSG+, operate in the nation’s top media market, as well as in other parts of New York, New Jersey, Connecticut and Pennsylvania. The networks offer live local games of the New York Knicks, New York Rangers, New York Islanders, New Jersey Devils and Buffalo Sabres, as well as extensive coverage of the New York Giants and Buffalo Bills.

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WRITTEN BY
EmpireStakes.com
Lou Monaco
Lou Monaco had been East Coast Scene columnist for Gaming Today in Las Vegas since June 2019, covering the East Coast sportsbook scene with emphasis on NJ and PA. He also currently is a part-time writer for the high school sports department for NJ Advanced Media (NJ.com) in Iselin, NJ. Lou has over 30 years sports experience with previous stints at ESPN SportsTicker, Daily Racing Form and Oddschecker.
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Lou Monaco had been East Coast Scene columnist for Gaming Today in Las Vegas since June 2019, covering the East Coast sportsbook scene with emphasis on NJ and PA. He also currently is a part-time writer for the high school sports department for NJ Advanced Media (NJ.com) in Iselin, NJ. Lou has over 30 years sports experience with previous stints at ESPN SportsTicker, Daily Racing Form and Oddschecker.
... Read More