Madison Square Garden Entertainment (MSGE) Provides Update on Potential Spin-Off Transaction

Madison Square Garden Entertainment Corp. (NYSE: MSGE) (“MSG Entertainment”) today 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.

Executive Chairman and CEO James L. Dolan said “We believe the revised spin-off structure best positions these two companies for long-term success. One would be a pure-play live entertainment company driven by the strong financial profile of our iconic venues and the Christmas Spectacular production. The second company, comprised of MSG Sphere, MSG Networks and Tao Group Hospitality, would have enhanced flexibility to execute its business strategy and pursue global growth opportunities.”

The live entertainment company is expected to include:

• A diverse collection of venues: Madison Square Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre and The Chicago Theatre;
• The Company’s entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually;
• The Radio City Rockettes and the Christmas Spectacular production, which has been a holiday tradition for 89 years; and
• Valuable long-term Arena License Agreements with the New York Knicks and New York Rangers, both of which play their home games exclusively at Madison Square Garden.

After the proposed spin-off, MSG Sphere Corp. is expected to include:

• MSG Sphere – state-of-the-art venues that will combine cutting-edge technology with multi-sensory storytelling to deliver immersive experiences on an unparalleled scale. The first MSG Sphere is currently under construction in Las Vegas and expected to open in the second half of calendar 2023;
• MSG Networks, which owns two regional sports and entertainment networks, MSG Network and MSG Sportsnet (formerly MSG+), as well as a companion streaming service, MSG GO, and features exclusive live local games of 5 NBA and NHL sports franchises;
• Majority interest in Tao Group Hospitality, a global entertainment dining and nightlife provider, with over 70 branded locations in more than 20 markets across 4 continents; and
• An approximately one-third economic interest in the live entertainment company.

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.

A registration statement on Form 10 relating to the proposed spin-off of MSG Entertainment’s traditional live entertainment business is expected to be filed with the SEC. Securities of MSG Entertainment’s traditional live entertainment business may not be sold, nor may offers to buy be accepted, prior to the time the Form 10 is filed and becomes effective. This release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities of MSG Entertainment’s traditional live entertainment business in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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