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With Nelson Peltz on Board, Madison Square Gardens May Split Up

Simon Wiesenthal Center Honors Rupert Murdoch

The Dolan family, owners of Madison Square Gardens, has been pondering since July splitting up MSG into a combined sports and cable business and a separate company for its real estate assets and concert and entertainment business, Bloomberg reports. This move can potentially unlock value for MSG’s sports teams; one inspiration for the demerger is Steve Ballmer’s $2 billion purchase of the Los Angeles Clippers, quadruple the previous highest amount paid for an NBA team.

Activist investor Nelson Peltz of Trian Fund, Scott Sperling and Thomas Lee Partners will join Madison Square Gardens’ board. Trian doesn’t own a stake in MSG; the Dolan family owns 69% of the company. Mario Gabelli, who owns 7% of MSG’s outstanding shares said the buyer of the sports teams would be getting the Knicks for free, given the sky high valuation commanded by the Clippers. MSG also instituted a buyback of $500 million shares. Albert Fried & Company estimated that the Knicks could be “intrinsically worth” 50% more than the Clippers, which would bring MSG’s valuation to $6 billion. The stock rose 14% on the announcement of the possible breakup.

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