Will Molson $550M buy of 'Le Canadiens' help Dolans tap into MSG value?

Cablevision’s Madison Square Garden division—which includes the New York Rangers, the New York Knicks, Radio City Music Hall, the MSG cable network, the FUSE cable network, the Madison Square Garden arena, and more—has been spin-off bait for nearly a year, as the cableco has looked for ways to pacify uneasy investors and raise cash. Surprisingly, reports The New York Times, the $550 million purchase of the Montreal Canadiens by the Molson family may help open the taps for Cablevision.

Activist investors last August began pushing hard for CEO James Dolan and the Dolan family—which owns 70 percent of Cablevision’s voting shares—to offload the MSG division. But after three-days of dog and pony shows for investors on Wall Street, it became clear nothing was going to happen in the near term. The Dolans and Cablevision would stand pat.

Much of that may have been due to difficulty in valuing the assets. As the Times points out, sports teams aren’t often on the block, and fewer actually are sold, so it's hard to get a reading of how much they're actually worth. The Rangers—because of the New York market—are likely to have a bigger price tag than the Canadiens, and that’s good news for Cablevision, which must have toasted the $550 million price tag. After all, analysts had valued the entire MSG division at just $750 million to $1.5 billion. Now, one analyst is saying the two teams alone could be worth $1.5 billion or more. Add in the value of the Manhattan real estate--less the $500 million to $700 million in debt due in the next four years following the renovations done on Madison Square Garden--as well as the value of the MSG and FUSE cable networks, and the MSG division gets a little shine.

But it's unclear whether the Dolans--with a suddenly shiny penny--would be willing to part with any of their properties. After all, it wasn't that long ago they tried to take the whole shebang private. The Molson family's buy of the Canadiens may have made the Dolan family's decision to keep all of their toys a little easier.

For more:
- see the Times article

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