Cablevision to spin-off Madison Square Garden into separate company



In what can be called a widely-anticipated move, Cablevision Systems Corp. announced on Thursday that its board has approved a tax-free spin-off of its Madison Square Garden (MSG) business - the owner of the New York Knicks and the Rangers - into a stand-alone enterprise. As per the proposed plan, the Garden unit will be spun off to the current shareholders by this year's end.

However, the Bethpage, New York-based Cablevision - which boasts of a fairly diverse portfolio including cable systems and channels; the Newsday newspaper; and various sports and entertainment properties - clarified in the announcement that "at this time" it was not considering selling the Garden or any of its assets.

The control of the new, separate Garden entity will be retained by the Dolan family that controls Cablevision by way of a special class of shares. Moreover, the separate company will continue to be managed by James L. Dolan and Hank Ratner - the Cablevision executives who presently oversee the Garden business.

It is being assumed that the Cablevision decision to spin-off MSG apparently results from its objective to showcase its robust cable system, telecommunications and programming assets disjointedly from the Garden's less-valuable businesses.

Commenting on the move, Craig Moffett, an analyst at Sanford C. Bernstein, said that "the separation of MSG removes a harder-to-value collection of assets from an overly complex balance sheet."

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