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MSG Sports is splitting the Knicks and Rangers into two stocks, and history says spin-offs tend to beat IPOs. 1 hour ago 31 Investors are watching how the New York Knicks perform today on two very different courts: the hardwood at Madison Square Garden, and the floor of the New York Stock Exchange farther downtown. The Knicks tip off their drought-ending NBA championship defense tonight against LeBron James, who makes his debut with his new team, the Philadelphia 76ers. Resale tickets have averaged about $2,600 apiece on SeatGeek as fans clamor to see the team raise its first championship banner in 53 years. (The Knicks beat the San Antonio Spurs in five games in June - a title run worth at least $380 million to New York City.) Meanwhile, the team's parent company, Madison Square Garden Sports (NYSE: MSGS), is making its own spin move. It's breaking up the title-winning franchise - at least as far as investors are concerned. MSG Sports is spinning off its New York Rangers hockey business from the Knicks. The Rangers are chasing an end to their own drought: The Broadway Blueshirts haven't won the Stanley Cup since 1994. The two businesses will be renamed and trade independently after the spin-off, a structure that could make it easier to sell either team separately down the road - or simply give investors better visibility into what each is worth. Investors and sports fans can now take their shot at becoming partial owners of one or both teams through pure-play sports stocks, or just pass. There are headwinds: Higher inflation could stymie revenue growth, regional cable fees are shrinking, and valuations look stretched after the shares have gained more than 50% this year. The parent company's stock hit all-time highs on a heater of its own during the Knicks' run to the title, and it has stayed near those levels since the board approved final terms of the split, which MSG Sports announced on Sept. 30. Why spin-offs tend to beat IPOs. Jay Ritter, a finance professor at the University of Florida and director of The IPO Initiative, told Fortune that buyers invest in sports teams for a financial return but also for other perks, such as rubbing elbows with celebrities and earning bragging rights for bringing a championship to their hometown. For individual investors eyeing the spin-off, Ritter offered a measured outlook. "I would expect that most publicly traded sports teams will be priced to offer investors a competitive financial return," he said. "There is less chance of a complete failure (compared to IPOs), but also less chance of huge upside potential than is true with other businesses - especially compared to the pharmaceutical business or tech." New products in those industries can boost revenue and profits "enormously," he noted, in a way sports teams are unlikely to replicate. Ritter also shared data exclusively with Fortune showing that, from 1980 to 2024, stocks spun out of parent companies performed better on average than IPOs over their first three years of trading. Spun-off stocks beat the total return of the Morningstar value-weighted market index by 6% over that three-year period, while the average IPO trailed the market by 4.6% from its offer price. That gives spin-offs, on average, a 10.6-percentage-point edge. Ritter found that spin-off shares often notch much of their outperformance relative to the broader market on their first day of trading on their own. One big factor behind that outperformance, he said, is size and stability: Spin-offs tend to be established businesses, while IPOs are often nascent growth companies with riskier profiles. In his study, 70% of spin-offs had inflation-adjusted sales of $100 million or more, compared with just 41.4% of IPOs. What the Knicks and Rangers are worth. MSG Sports has a market capitalization of roughly $9.8 billion - a steep discount to estimated values of its two New York teams. Sportico values the Knicks at $12.8 billion, nearly twice the NBA average of $6.64 billion, and the Rangers at $4.15 billion. Both rank second in their respective leagues, behind the Golden State Warriors and the Toronto Maple Leafs. Those aren't official price tags, but bankers and buyers quickly point out that the supply of teams for sale is finite and demand easily outstrips it, especially in the Big Four leagues: the NFL, NBA, MLB, and NHL. Franchise valuations have been climbing across the board, with record-setting deals in the NFL - the Khosla family's $9.612 billion purchase of the Super Bowl champion Seattle Seahawks, which closed in September - and the NBA, where Bob Iger and Josh Kushner agreed in August to buy the Los Angeles Lakers for $12.5 billion, pending league approval. Private equity's entry into ownership groups has also helped underpin record prices, and private capital is reshaping the sports business more broadly. The Ross-Arctos Sports Franchise Index, which tracks franchise values across the Big Four leagues, has risen sharply since the pandemic. Franchise values have compounded at 13% a year for more than six decades as team ownership evolved from a vanity project into an asset class. How the Knicks-Rangers split works. MSG Sports will be renamed MSG Knickerbockers Corp., or MSG Knicks (new NYSE ticker: MSGK), and will hold the defending NBA champions and the G League's Westchester Knicks. The spun-off MSG Rangers Corp. (new NYSE ticker: MSGR) will hold the NHL's Rangers, the American Hockey League's Hartford Wolf Pack, and the MSG Training Center in Greenburgh, N.Y. In the intended tax-free distribution, MSG Sports shareholders of record as of the close of trading today, Oct. 20, will receive one share of MSG Rangers for every two MSG Sports shares they own. The distribution is set for Oct. 26, subject to final league approval and other conditions, and both companies are scheduled to begin regular-way trading under their new tickers on Oct. 27. When-issued trading in MSG Rangers begins tomorrow under the symbol "MSGR WI." Shareholders will keep the same number of shares in the renamed MSG Knicks. James Dolan will serve as executive chairman and CEO of both companies, and the Dolan family will retain control of both. * Homepage * Fortune Magazine * MSG Sports is splitting the Knicks and Rangers into two stocks, and history says spin-offs tend to beat IPOs.

MSG Sports approves spinoff of Rangers business from Knicks. September 30, 2026 5:39pm The board of Madison Square Garden Sports has approved the tax-free spinoff of the New York Rangers business from its New York Knicks business. The transaction is expected to be completed on Oct. 26, and the sports teams will trade on the New York Stock Exchange under the MSGK (Knicks) and MSGR (Rangers) symbols. MSG Sports will be renamed MSG Knickerbockers and will include the NBA team and the G League's Westchester Knicks. In addition to the NHL team, MSG Rangers will also count the AHL's Hartford Wolf Pack and the MSG Training Center. James Dolan will be CEO and chairman of the new entity and continue in those roles for the newly branded MSG Knicks. In February, the board originally approved a plan to explore a split. "We believe this proposed transaction would provide each company with enhanced strategic flexibility, its own defined business focus and clear characteristics for investors," Dolan said when announcing the news. The move is the latest in a long line of spinoffs orchestrated by the Dolan family. Dolan family patriarch Charles founded Cablevision, the cable TV company, which acquired 50% of the Knicks, Rangers and related businesses in 1994 and the rest of the MSG properties three years later. In 2010, Madison Square Garden was spun off from Cablevision into its own publicly traded company. In 2015, James Dolan split MSG in two with the sports teams and venues (Madison Square Garden, Beacon Theater, Radio City Music Hall and Chicago Theater) in one and Madison Square Garden Network (MSGN) in the other. The next machination was to split the teams and venues in 2020 under MSGS and Madison Square Garden Entertainment. This transaction forced the Knicks and Rangers to sign leases with their new landlords, MGSE. Meanwhile, Dolan launched his Sphere business at MSGN and renamed the company Sphere Entertainment in 2023. The current enterprise value of MSG Sports is $11 billion and has soared, with the stock up 79% during the past year. But that is still a discount to the private market valuations of the combined NBA and NHL teams. Sportico's NHL valuations published Tuesday had the Rangers at $4.15 billion, second in the NHL behind the Toronto Maple Leafs. Sportico's year-old NBA valuations had the Knicks at $9.85 billion, but the Los Angeles Lakers, who are a close comp to the Knicks, are being sold to Josh Kushner and Bob Iger for $12.5 billion. J.P. Morgan is serving as financial advisor on the spinoff, while Sullivan & Cromwell LLP is serving as legal advisor. The Rangers tipped off their season Tuesday night with a 3-0 loss to the Boston Bruins. The Knicks are playing on the NBA's opening night, Oct. 20, when they will raise their championship banner ahead of a game against the new-look Philadelphia 76ers with LeBron James.