MSG corporate revamping no hurdle for Sphere project

Article posted by Coliseum, November 20^th, 2019

Image: Populous / MSG

The Madison Square Garden Company will spin off its entertainment business from its sports business. This will be done to generate cash for a second MSG Sphere project in London.

The above step has been initiated as there is a huge delay in the planning application and design process in London.

The revamping move will not affect the MSG Sphere at The Venetian project.

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“We are now pursuing a full spin-off of our entertainment business from our sports business,” MSG Vice-President Gregg Seibert said during the company’s conference call with investors.

“As a result of this new structure, the entertainment company will not retain any equity interest in the sports company. We believe that the entertainment company will have sufficient financial flexibility to pursue its venue expansion plans without the need for the retained interest. As a result, we think this new structure makes the most sense for our shareholders,” Seibert further shared.

Initially, the company visualized the entertainment company keeping a stake in sports.

The New York Knicks basketball team and the New York Rangers hockey team is owned by the MSG’s sports company. Both teams play in Madison Square Garden.

Initially, the officials had hoped that the London Sphere would open a year after the Las Vegas project. As the same will not materialize, executives feel that with the new timeline, London designers will be able to take a leaf out of the book of the Las Vegas construction project.

The MSG Sphere at The Venetian in Las Vegas will go on stream in 2021 and it is in a class by itself. The 17,000-seat entertainment venue under construction just east of The Venetian, Palazzo and Sands Expo & Convention Center, is expected to become a widely utilized entertainment venue in the Madison Square Garden portfolio when it finally becomes operational.

The sphere-shaped architectural marvel will boast massive video screens in the interior. The exterior will be 366 feet tall — about 100 feet shorter than the Palazzo Tower at The Venetian — and 516 feet wide at its broadest point.

Spread on 18 acres off Sands Avenue between Manhattan Street and Koval Lane, it will be connected to The Venetian and Palazzo at the Sands Expo & Convention Center with a 1,000-foot pedestrian bridge.

Near the Sands Avenue and Koval Lane, a new Las Vegas Monorail stop will come up.

“We expect MSG Sphere to change how we think about the entertainment experience — which is why we anticipate the Las Vegas Sphere becoming the most highly utilized venue in our portfolio,” MSG President Andy Lustgarten remarked during the conference call.

Lustgarten pointed out that there are four reasons why he expects the Las Vegas venue to be a roaring success.

“First, as a leader in live entertainment, we’ve directly experienced the growing demand for immersive, shared experiences,” he said.

“Unlike any other venue that exists today, MSG Sphere will be uniquely suited to deliver on this trend,” he further pointed out.

“Second, we believe Las Vegas … as one of the world’s top entertainment destinations with over 40 million visitors annually … is the ideal market to introduce the first MSG Sphere,” he further stated to buttress his point.

Lustgarten termed the company’s partnership with Las Vegas Sands as an “extremely beneficial relationship for both companies as we help drive each other’s business.”

He informed that the company has brought together a team of experts who will devise strategies to make it a numero uno venue with design, construction, ticketing, sponsorships and suite sales.

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