James Dolan open to selling minority stakes in Knicks, Rangers: MSG exec

Controversial Knicks and Rangers owner James Dolan is open to selling minority stakes in either sports franchise, his company revealed during an earnings call Tuesday.

Dolan — who has come under fire for using facial recognition technology to ban perceived legal enemies from his venues — has long rejected calls to sell his controlling interest in the prized teams, which are part of Madison Square Garden Sports.

However, during the earnings call, an analyst asked whether the Knicks and Rangers parent had considered taking advantage of the ongoing boom in team valuations – most recently evidenced by the NBA record $4 billion sale of the Phoenix Suns.  

“We have no plans to sell either team and – you suggested the Knicks – no current plans there, but we would certainly not rule out the possibility of selling a minority stake in the Knicks or the Rangers,” MSG Sports president and COO David Hopkinson said.

Hopkinson referenced a recent Knicks valuation released by Sportico, which estimated the team’s worth at roughly $6.6 billion – an increase of 8% compared to the previous year and the second-highest among NBA franchises.

Separately, Forbes ranked the Rangers as the NHL’s most valuable team, with an estimated worth of $2.2 billion, up 10% year-over-year.

Despite persistent rumors, Dolan, who serves as executive chairman of both MSG Sports and the separately-held Madison Square Garden Entertainment, has been adamant for years that he will not give up control of either sports franchise.

Dolan, 67, reiterated his stance during an interview on WFAN last month.

“I have no plans whatsoever to sell at this point,” Dolan said. “I’m not retiring anytime soon. It’s a family-controlled asset, so someone in the family will eventually own it.”

While he plans to retain control of the teams, Dolan acknowledged during an October interview with Barron’s that he would consider taking on a minority partner.

“We won’t rule it out,” Dolan said.

During the call, Hopkinson noted recent changes in the NBA’s ownership rules have cleared the way for private equity firms and sovereign wealth funds to acquire stakes in franchises.

“These are incredibly scarce assets, they’ve got strong business fundamentals that we just reviewed and we believe they’ve got significant opportunities for long-term growth,” Hopkinson said.

The company also owns the Westchester Knicks, which is the team’s NBA G League affiliate, and the Rangers’ American Hockey League affiliate, the Hartford Wolf Pack.

Hopkinson stated that the value of MSG Sports shares continued to run far below the estimated values of its properties. As of Tuesday, the company’s market valuation was $4.37 billion. Shares of the publicly-traded company were down $1.13, to $178.60, after the earnings call.

“We remain encouraged by the continued increases in estimated team valuations, along with the transactions that continue to come in well above those estimates,” Hopkinson said.

“Our recent share buyback program is a demonstration of that confidence – recognizing the gap that persists between the current trading price of our stock relative to the intrinsic value of our marquee sports franchises,” he added.

MSG Sports’ revenue rose 22% to $353.7 million in the second quarter, according to the earnings release. Operating income jumped 43% to $51.5 million.

“Our second quarter results reflect ongoing positive momentum across all key areas of our business following last year’s robust financial performance.  We are confident in the strength of our sports franchises and our ability to generate long-term value for shareholders,” Dolan said in a statement.