For most of their history, the Knicks and Rangers have been cozy bedfellows, with a shared owner, arena, training facility, and the same balance sheet. Now James Dolan is making moves to break them up.
On Friday, Madison Square Garden Sports publicly filed paperwork with the Securities and Exchange Commission outlining its proposed separation of the Knicks and Rangers businesses. From Financial Times:
MSG Sports currently expects to complete the spin-off by the end of October 2026. There can be no assurance that the proposed transaction will be completed in the manner described above, or at all. Completion of the transaction remains subject to various conditions, including any required league approval, receipt of a tax opinion from counsel and Company board approval.
MSG Sports first announced in February that it was exploring a separation. The new filing lays out how the businesses would actually be divided, with the company targeting completion by the end of October. If completed, MSG Sports would become MSG Knickerbockers Corp., containing the New York Knicks and Westchester Knicks. A new publicly traded MSG Rangers Corp. would contain the Rangers, Hartford Wolf Pack, and MSG Training Center in Greenburgh.
Dolan is expected to remain executive chairman and CEO of both companies. Existing MSG Sports shareholders would receive proportional shares in the new Rangers company, leaving investors with stakes in two separate businesses instead of one containing both teams. The key difference is that investors could value and invest in the Knicks and Rangers independently. The timing of this is no surprise: the proposed separation comes on the heels of the Knicks winning their first championship in 53 years and producing record business results.
In July, Dolan’s 32-year-old son, Quentin Dolan, stepped into day-to-day operational control of the New York Rangers as the team’s new President, Chief Operating Officer, and Alternate Governor. Under the new hierarchy, Rangers General Manager Chris Drury continues to oversee hockey operations while reporting directly to Quentin, who will also retain his role heading the organization’s sports science and analytics department. The move allows Dolan to step back from hands-on oversight of the Rangers while maintaining direct control over the Knicks, aligning with the corporate effort to divide the two franchises into distinct business entities.
MSG Sports reported $278.7 million in fiscal fourth-quarter revenue, up 37% from a year earlier, and nearly $1.154 billion for the full fiscal year. The Knicks generated approximately $182 million in playoff-related revenue during their championship run, compared with $115.2 million the previous postseason, despite playing nine home playoff games in both years. Average playoff revenue reached a company-record $20.2 million per home game, with record playoff ticket and merchandise sales. Even the MTA got a boost! The Knicks’ historic championship run drove staggering transit surges across their network, setting multi-year post-pandemic ridership records at 34th St–Penn Station and pushing single-day subway travel past 4.3 million trips. Expanded subway and commuter rail services accommodated over one million fans during the June 18 ticker-tape parade.
The $12.5 billion sale of the Lakers last week was just another reminder of how valuable NBA franchises have become. MSG Sports shares have also roughly doubled over the past year. Separating the teams gives the Knicks their own corporate identity and stock price, while investors would no longer have to determine how much of MSG Sports’ value comes from basketball and how much comes from hockey.
As noted above, the MSG Training Center in Greenburgh, which the Knicks and Rangers both use, would belong to MSG Rangers Corp. That doesn’t necessarily mean the Knicks would need a new practice facility; the Rangers company could play landlord while the ‘Bockers continued using it through some sort of agreement. There is a similar arrangement at Madison Square Garden already. MSG Sports owns the teams, while the arena is operated by the separately traded Madison Square Garden Entertainment.
Management says the split will give each business more strategic and financial flexibility, and it leaves the door open to selling a minority stake in either team down the road.
In a nutshell, the split gives investors the ability to evaluate the Knicks as a standalone business right when the ‘Bocker business is booming. If everything goes according to plan, by the end of October the Knicks will have their own, publicly traded corporate home: MSG Knickerbockers Corp. Try putting that on a jersey.
Knicks in five.
