MSG Entertainment board approves revised plan for potential spin-off

Madison Square Garden Entertainment Corp. announced that its board of directors has approved a revised plan for the proposed separation of the Company’s businesses. The Company is now exploring a potential spin-off of its traditional live entertainment business, which includes a diverse collection of performance venues, entertainment and sports bookings and the Christmas Spectacular production. The proposed transaction would separate this business from the Company’s MSG Sphere, MSG Networks and Tao Group Hospitality businesses. The Company had previously been exploring a potential spin-off of the traditional live entertainment and MSG Networks businesses from the MSG Sphere and Tao Group Hospitality businesses. However, after thorough evaluation, the Company believes the revised plan is optimal for maximizing shareholder value, while providing both companies with enhanced strategic and financial flexibility to drive long-term growth. The revised transaction would be structured as a tax-free spin-off to all MSGE shareholders. In the first step of the transaction, record holders of MSGE Class A and Class B common stock would receive a pro-rata distribution expected to be equivalent, in aggregate, to an approximately two-thirds economic interest in the live entertainment company, which would take on the name Madison Square Garden Entertainment Corp. The remaining approximately one-third economic interest in the live entertainment company would be retained by the current parent company, which would be renamed MSG Sphere Corp. Those retained shares would then be available for use in a tax-free exchange offer for the common stock of MSG Sphere Corp., to raise capital for general corporate purposes, and/or for use in a follow-on pro-rata spin-off to shareholders of MSG Sphere Corp. Completion of the transaction would be subject to various conditions, including effectiveness of the Form 10 Registration Statement, certain league and other approvals, receipt of a tax opinion from counsel and final Board approval.