In the latest move in executive chairman and CEO James Dolan’s saga to generate revenue from MSG Networks, Madison Square Garden Entertainment has agreed to acquire the cable and satellite television network and radio service in an all-stock deal, which would recombine the two entities following their separation in 2015.

Following the 2015 spin-off, Madison Square Co. rebranded last year as Madison Square Garden Sports, further spinning off its entertainment division as MSG Entertainment. Dolan put MSG Networks up for sale in 2017 but potential buyers felt it wasn’t worth what Dolan was asking. At the time, JPMorgan cited concerns about the sale, including lower advertising revenue because of the New York Knicks’ ongoing issues and lower subscriber fees due to skinny streaming services and outright cord-cutting. The assumption at the time was that if he couldn’t find a buyer, Dolan would recombine the companies. And now he has.

According to a press release, the deal would allow MSGE to “capture more of the emerging revenue opportunity related to the potential expansion of legalized sports gaming in its market.” Furthermore, “the combination of the companies’ media, digital, and venue assets creates a powerful platform for potential sports gaming partners, which is expected to generate significant incremental revenue in the years ahead.”

“This transaction would create a leading entertainment and media company with a more diversified revenue base that would be well-positioned to deliver innovative experiences across all of its assets,” the statement read. “In addition, the new company would have enhanced 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.”

Investors apparently weren’t as excited about the arrangement as the company hoped. According to the NY Post, shares of the companies dropped, with MSGE falling almost 10 percent at $84.67, and MSGN down 7.6 percent to $16.06. The aforementioned sphere venue also appears to be a source of concern for investors, with the move signaling that MSG Entertainment is in desperate need of cash to continue forward. The company has also reportedly lost more than $250 million in the pandemic.

Not that MSG Networks are flying high either. That company saw a 6.5 percent subscriber drop in the middle of 2019, which led to its biggest stock plunge ever. They also saw another eight percent decline in subscribers in the third quarter of 2020. The Knicks might not be the dumpster fire they once were, but there’s only so much they can do about the existential threats facing RSNs and cable operators like MSG.

The old-new MSG company is banking on having “enhanced financial flexibility” and taking advantage of “meaningful tax efficiencies” as part of their new arrangement. So much has been trending in the wrong direction for them in recent years, so it will be worth watching to see if this deal does anything to stem the tide.

[Hollywood Reporter, NY Post]

About Sean Keeley

Along with writing for Awful Announcing and The Comeback, Sean is the Editorial Strategy Director for Comeback Media. Previously, he created the Syracuse blog Troy Nunes Is An Absolute Magician and wrote 'How To Grow An Orange: The Right Way to Brainwash Your Child Into Rooting for Syracuse.' He has also written non-Syracuse-related things for SB Nation, Curbed, and other outlets. He currently lives in Seattle where he is complaining about bagels. Send tips/comments/complaints to