Rangers Stock Up 28% in First 8 Days Since Split From Knicks

The New York Knicks and New York Rangers reported first-quarter financial results Friday morning for the first time since the NHL team was spun off from the renamed MSG Knickerbockers (MSGK).

MSGK’s stock is up 4.6% since the split was completed on Oct. 27, while the newly issued MSG Rangers shares have soared 28%, as investors see the NHL team as a more likely target for a transaction that would unlock full value. Knicks and Rangers combined revenue was $45.5 million, with the Rangers’ share of revenue at $14.1 million. The combined operating loss was $25.5 million.

The three months through Sept. 30 are a blip on the Knicks’ and Rangers’ overall business, with no regular-season home games during the period; for comparison, Q1 of last year was 3.4% for the teams.

The two teams still trade at massive discounts to their private-market valuations. MSGK’s enterprise value is $8.64 billion, 33% lower than the Knicks’ $12.8 billion figure in Sportico’s NBA team valuations. MSGR’s EV is $2.5 billion, 40% below the $4.15 billion Sportico valued the Rangers in its NHL rankings.

“The real upside scenario for MSGR is a company sale or take-private,” Wolfe Research analyst Peter Supino wrote in a report this week. “While we think the odds of a change of control are incredibly low (if not zero), the odds of a take-private seem higher than ever since the tax changes mentioned above only apply to public companies.”

Supino sees the Dolan family as the most likely buyer, based on James Dolan‘s 2025 comments that he could “never walk away” from the Knicks and Rangers and hopes his kids take his place, as he did from his father.

In January, the tax code will limit the tax deduction expense to $1 million for the five highest-paid employees, outside of the C-suite—the limit already exists for the top five executives. Sports teams will feel the effects, with Supino estimating the Rangers’ additional annual tax bill at $17 million, and he thinks the Rangers will “continue to burn cash each year.”

Sports teams are lobbying for an exemption. “We continue to have very positive discussions on both sides of the aisle, and really in all branches of the government,” Mike Plant, Braves Development Company CEO, said this week during the Atlanta Braves earnings call. “We’re very confident that there is a legislative or regulatory fix, because everyone we talk to continues consistently to say the same thing: This was a total unintended consequence of the bill that was presented in 2021.”

Source: www.sportico.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.