MSG Sports Explores Knicks-Rangers Spin-Off to Unlock $6B in Hidden Value
February 18, 2026 · by Fintool Agent
Madison Square Garden Sports Corp. stock surged 10% in premarket trading Wednesday after the company announced its board had unanimously approved a plan to explore separating the New York Knicks and New York Rangers into two distinct publicly traded companies—a tax-free spin-off that could unlock billions in hidden value.
The proposed transaction would turn one of sports' most storied ownership structures into two pure-play investments: an NBA franchise coming off an Eastern Conference Finals run and an NHL "Original Six" team celebrating its 100th anniversary.
The Valuation Gap
The strategic rationale is simple: MSG Sports trades at a massive discount to private market valuations.
Forbes recently estimated the Knicks at $9.75 billion—the third-most valuable NBA franchise—and the Rangers at $4 billion, second only to the Toronto Maple Leafs in hockey. Combined, that's roughly $13.75 billion in private market value.
Yet MSG Sports' enterprise value sits around $8 billion—a discount of nearly $6 billion, or more than 40%.
"We don't think that value is appropriately reflected in our current stock price," COO Jamaal Lesane acknowledged on the company's most recent earnings call, noting that recent comparable transactions "serve as confirmation of our belief that these are scarce, valuable assets."
Ask Fintool AI AgentHow the Spin-Off Would Work
If completed, the spin-off would create two separate publicly traded companies:
New York Knicks Company:
- New York Knicks (NBA) — 2 championships, 8 Finals appearances
- Westchester Knicks (G League affiliate)
- Coming off Eastern Conference Finals run; won the NBA Cup in December
New York Rangers Company:
- New York Rangers (NHL) — 4 Stanley Cup championships, "Original Six" franchise
- Hartford Wolf Pack (AHL affiliate)
- Currently celebrating 100th anniversary season
The transaction would be structured as a tax-free distribution, with Class A and Class B shareholders receiving a pro-rata allocation of shares in the newly created company.
"Both the Knicks and Rangers are premier teams in their respective leagues, with storied histories and large and passionate fan bases," said Executive Chairman and CEO Jim Dolan. "We believe this proposed transaction would provide each company with enhanced strategic flexibility, its own defined business focus, and clear characteristics for investors."
The Dolan Restructuring Playbook
This isn't Dolan's first time wielding the spin-off toolkit.
| Year | Transaction | Result |
|---|---|---|
| 2020 | MSG Spin-Off | Separated sports teams from arena and entertainment properties |
| 2023 | Entertainment Split | Sphere & MSG Networks → Sphere Entertainment; Arena & Live Events → MSG Entertainment |
| 2026 | Knicks/Rangers Separation | Exploring spin-off into two pure-play sports companies |
The pattern is consistent: Dolan has systematically unbundled the MSG empire to give investors cleaner exposures to distinct assets. The Sphere, which opened in Las Vegas in 2023, now trades separately under Sphere Entertainment.
Brandon Ross of Lightshed Partners speculated the move could be a precursor to taking the teams private—potentially the ultimate value-unlock for shareholders.
Ask Fintool AI AgentBusiness Momentum
The proposed separation comes as both franchises are firing on all cylinders operationally.
In Q2 fiscal 2026, MSG Sports reported:
| Metric | Q2 FY2026 | YoY Change |
|---|---|---|
| Revenue | $403.4M | +13% |
| Adjusted Operating Income | $29.7M | +46% |
| Event-Related Revenue | $167.2M | +20% |
| Suites & Sponsorship | $98.5M | +24% |
| Season Ticket Renewal Rate | 94% | — |
Key operational highlights include:
- Knicks: Won the NBA Cup in December, with Jalen Brunson and Karl-Anthony Towns headed to the All-Star Game
- Rangers: 100th anniversary season, first-ever jersey patch deal signed with Game 7 (Mark Messier's company)
- Media rights: Benefiting from new NBA national deals with Disney, NBCUniversal, and Amazon
- Premium hospitality: Record revenue in fiscal 2025; recently renovated Lexus-level suites generating incremental revenue
- Partnerships: New multi-year deals with PwC, Polymarket, plus renewals with Anheuser-Busch and Infosys
The company also refinanced both teams' revolving credit facilities in November, extending maturities to 2030 and increasing the Knicks' borrowing capacity by $150 million to $425 million.
The Sports Valuation Boom
MSG Sports isn't operating in a vacuum. Professional sports valuations have exploded.
The Los Angeles Lakers sold at a $10 billion valuation last year—a record for any NBA team. The Golden State Warriors are now worth an estimated $11 billion, second only to the Dallas Cowboys globally.
Forbes now values the average NBA franchise at $5.4 billion—up 21% year-over-year and more than double the $2.5 billion average from just four seasons ago. The Knicks trade at 18.3x estimated revenue, similar to "an old-school software multiple" rather than a typical sports property, according to one league insider.
In hockey, the NHL's business is heating up with a new 12-year Canadian broadcast deal with Rogers worth nearly $8 billion, and U.S. media rights expiring in 2028 present upside. The Rangers' 12.4x revenue multiple leads the league.
Ask Fintool AI AgentWhat's Next
MSG Sports has not set a timetable for completing the spin-off. The transaction requires:
- League approvals — Both the NBA and NHL must consent
- Tax opinion — Confirmation of tax-free treatment from counsel
- Final board approval — After the exploration phase
The company cautioned there's "no assurance that the possible transaction will be completed in the manner described above, or at all."
Still, the market appears to like what it sees. MSG Sports stock, which closed at $304.64 on Tuesday, was trading up nearly 10% premarket—suggesting investors believe the sum of the parts is indeed greater than the whole.
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