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MSG - The Madison Square Garden Company


saltybit

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Fenway Group, owner of Red Sox and Liverpool, going public through RBAC. Valuation will be $8B based on deal, and as much as $11B taking into account A/H movement, granted announcement came at 7:50 pm on a Friday before a holiday weekend and volume was light.

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  • 3 weeks later...

 

In fairness to that comp, this price includes the arena. So to make it apples to apples you'd want to include the $400 MM Balmer paid for the Forum and whatever it costs him to build.

 

Or for the team by itself just subtract the building from the $1.66B.

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I think the biggest thing to take from this is the premium to a preCOVID Forbes valuation. Utah is a total no name team, 20th in terms of valuation.

 

I dont know if the Forum's $400M proceeds are comparable simply because the Forum isn't a basketball venue and Balmer only bought it because Dolan was using it to prevent him from building the Clippers a new stadium in that area. As for MSG, there is an added layer to this as the arena is in the (E) entity, which was just written up on VIC, whereas the teams are in the (S). But nonetheless, Precovid, Jazz were at $1.55B so this is in excess of that and further validation that there is zero reason to think MSGS has been effected by any of this, on a private market valuation basis.

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I think the biggest thing to take from this is the premium to a preCOVID Forbes valuation. Utah is a total no name team, 20th in terms of valuation.

 

I dont know if the Forum's $400M proceeds are comparable simply because the Forum isn't a basketball venue and Balmer only bought it because Dolan was using it to prevent him from building the Clippers a new stadium in that area. As for MSG, there is an added layer to this as the arena is in the (E) entity, which was just written up on VIC, whereas the teams are in the (S). But nonetheless, Precovid, Jazz were at $1.55B so this is in excess of that and further validation that there is zero reason to think MSGS has been effected by any of this, on a private market valuation basis.

 

The fact that the teams are bound to a lease to MSGS and the broadcast rights to MSG  in my opinion is worth a significant discount. Maybe it doesn’t matter, the real question is if and when is Dolan selling.

 

Utah may  be a no name team, but is less affected by COVID-19 than NYC teams. It is also a state with population growth, the Mormons make sure of that.

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  • 1 month later...

 

Egyptian Billionaire Builds Stake in Owner of Knicks, Rangers

 

 

The family office of Egyptian billionaire Nassef Sawiris disclosed that it has a 5% stake in Madison Square Garden Sports Corp., the holding company that owns the New York Knicks and Rangers.

 

NNS Holding disclosed the passive stake in a regulatory filing Thursday. The filing also said that the position will grow to roughly 6.3% by March, making Sawiris one of the three largest owners of the stock.

 

 

https://www.bloomberg.com/news/articles/2020-12-11/billionaire-sawiris-builds-stake-in-owner-of-knicks-rangers?srnd=premium

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  • 2 months later...

MSGE to acquire MSGN.

 

https://www.sec.gov/Archives/edgar/data/1795250/000119312521095299/d155974dex991.htm

 

The merger is expected to be tax-free for both MSG Entertainment and MSG Networks and their stockholders. 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. The exchange ratio is approximately 4% above the ratio of the unaffected closing stock prices of the two companies on March 10, 2021, the last trading day before a press report speculated on a potential transaction.

 

wabuffo

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Its funny but recently I was talking with a fellow investor in the E and S entities and it was  a bit perplexing how brutally MSGE was trading of late. So on $120 to $105/110 it was like "yea, people are selling the rumor because its definitely possible"...but then down to 90 I was like "ok so either this isnt the reason for the sell off and perhaps theres other reasons, or there is some massive insider trading going on here"...guess it was indeed the later although I dont really have a problem at all with the ratio/all stock aspect.

 

Over the years if theres one thing to have learned here is that nothing with these entities actually stays confidential.

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Its funny but recently I was talking with a fellow investor in the E and S entities and it was  a bit perplexing how brutally MSGE was trading of late. So on $120 to $105/110 it was like "yea, people are selling the rumor because its definitely possible"...but then down to 90 I was like "ok so either this isnt the reason for the sell off and perhaps theres other reasons, or there is some massive insider trading going on here"...guess it was indeed the later although I dont really have a problem at all with the ratio/all stock aspect.

 

Over the years if theres one thing to have learned here is that nothing with these entities actually stays confidential.

 

Putting MSGE and MSGN together again makes sense and isn't surprising. Even a casual observer like me could quickly see that the split didn't create any value.

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Putting MSGE and MSGN together again makes sense ...

 

It doesn't make sense to me.  I would think that the better combo would've been MSGS buying MSGN.  RSNs need to be joined at the hip with the local sports franchises.  I don't get it.

 

If at some point MSGS gets sold so that some rich guy can buy the Knicks/Rangers, the new owner will put the regional sports broadcast rights up for bid.  What's the value of MSGN then?

 

It'll be interesting if other large holders like Gabelli weigh in on the deal.

 

wabuffo

 

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I'd personally lean towards saying it doesnt "really" matter all "that" much. The pressing need right now for E is cash to build the Sphere. You can use the N cashflows and also DTA to accomplish that.

 

Ideally, yea N belongs with S....but thats really for sale purposes. Which the first thought often is that all these spins complicate eventual asset sales. But I think thats overthinking it. If Dolan wanted to offload the Rangers with the RSN, different public entities really wouldnt effect that. He controls them all and the bankers IMO would likely just divvy up the cash based on valuations ascribed to the assets from an accounting standpoint.

 

Dolan is probably not a great owner of the franchises from a fans POV. But as a shareholder I think he's been reasonable if not pretty good. But these spins(and now mergers) honestly resemble a spoiled child just chaotically utilizing dad's various businesses with little regard for the ownership details. "I'll have this here, oh and some of that. Put this there, and ah, that over there. And yea, Janice!, go figure out how to fix the books to reflect it all!"...

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Dolan: MY companies!

 

GC: Yes Mr. Dolan but there are procedures, laws, and code of ethics.

 

Dolan: Theyre Mine!

 

GC: Yes but you have shareholders.

 

Dolan: But I own the companies.

 

GC: You do, but there's rules you have to follow. You cant just take from Peter to pay Paul

 

Dolan: But I'm the owner

 

GC: Janice call Goldman and have them put together a merger agreement.

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Putting MSGE and MSGN together again makes sense ...

 

It doesn't make sense to me.  I would think that the better combo would've been MSGS buying MSGN.  RSNs need to be joined at the hip with the local sports franchises.  I don't get it.

 

If at some point MSGS gets sold so that some rich guy can buy the Knicks/Rangers, the new owner will put the regional sports broadcast rights up for bid.  What's the value of MSGN then?

 

It'll be interesting if other large holders like Gabelli weigh in on the deal.

 

wabuffo

 

You are right! I got confused with the tickers. MSGS and MSGN should merge. MSGE and MSGN makes absolutely no sense.

 

The only way it makes sense is Dolan really wants to ensure his goddamn Sphere's can get financed.

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