NBA and NHL team heading for $13bn divorce as joint owner gets ready to cash in
The New York Knicks and Rangers are heading for divorce in a move that could net their owners billions.
Madison Square Garden Sports Corp. owns both franchises under the same umbrella, but is planning to split them into separate publicly traded entities.
Per Yahoo Sports, analysts have predicted that the plan could add billions of dollars to valuations of the NBA and NHL teams, which form part of an empire with CEO James Dolan at its head.
Forbes values the Knicks at $9.75 billion and Rangers at $4 billion.
The Knicks are heading to the NBA Finals for the first time since 1999 after sweeping the Cleveland Cavaliers in the Eastern Conference Finals.
Jalen Brinson has led an incredible postseason with New York yet to lose a game.
The defending champion Oklahoma City Thunder hold a 3-2 lead of the San Antonio Spurs in the Western Conference.
If San Antonio mounts a fightback, the Finals would be a repeat of 1999, where the Knicks lost.
When did the Knicks last win a title?
The franchise’s last title was in 1973, although the franchise did win the NBA Cup earlier this season.
Madison Square Garden Sports Corp. has filed an initial Form 10 registration statement with the U.S. Securities and Exchange Commission, aiming for a tax-free spin-off to split the businesses.
The Knicks and G League affiliate Westchester Knicks would be packaged together, as would the Rangers and Hartford Wolf Pack.
Ramapo College sports economist Alex Olbrecht believes the Knicks will be traded first after recent on-court successes.
“This is just another way for Dolan to make money,” he said. “They’re going to be able to sell shares in the Knicks and the Rangers.
“That will push up the value — potentially astronomically — of the two teams.”
Dolan hopes that splitting the sports teams from real estate like Madison Square Garden will help all the individual pieces thrive.
In February, he said the move “would provide each company with enhanced strategic flexibility, its own defined business focus, and clear characteristics for investors.”
“The real estate is different than the sports teams,” said Victor Matheson, a sports economist at the College of the Holy Cross in Massachusetts. “You have that group doing the real estate on one side and then you have the teams on the other side.”
Selling pieces of individual teams is a far easier proposition than leaving them as one entity.
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“Then you have to get the OK of the NBA and NHL and you have to find a buyer who’s interested in being a basketball guy and a hockey guy as well,” Matheson added.
For now, all eyes will be on learning which team will stand between the Knicks and ending a five-decade drought.
Game 6 between OKC and the Spurs is Thursday night with a potential decider Saturday.
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