00:00All right, now let's get to this ongoing saga with regional sports networks.
00:04I've heard MSG is no stranger to this because they're sort of lumped in with the others,
00:09looking like they're going to split into two New York franchises, separate businesses.
00:15So you'll have to unpack this one a little bit for me because I'm obviously very familiar with all of
00:20the regional sports stuff going on.
00:22And MSG certainly, I think it would be fair to say, not what it was 20, 30 years ago.
00:27So what does this do for them?
00:29Sure. I mean, if you think about what MSG is now, I mean, this started as one publicly traded company,
00:35and now it's potentially going to be carved out into a fourth publicly traded company.
00:40You brought up MSG Networks. That sits within Sphere Entertainment.
00:46You also have MSG Entertainment as a publicly traded company that controls the buildings,
00:51including Madison Square Garden, New York, the Beacon Theater, as well as some other buildings.
00:57And then you have the sports one, MSG Sports, that holds the Rangers and the Knicks combined in one company.
01:04So what they're trying to do is to create value for shareholders,
01:09and the biggest shareholder being the Dolan family in this league.
01:14And so this goes back to a team sale as well.
01:16The stock has traded for probably 50% less than the private market valuation of, say, what Sportico has for
01:26the Knicks and Rangers.
01:27Right now, Sportico values the two teams combined at $13.5 billion.
01:32And if you look back at the Lakers sale last year, $10 billion, I think that you could draw a
01:40straight line to the impetus for doing this.
01:42Let's let the Knicks trade on their own.
01:45You have that shiny $10 billion number for the Lakers, and the Knicks, you make a very good case they're
01:53worth more than the Lakers.
01:55Let's see what the stock looks like if the Knicks are carved out by itself.
02:00So I think – and this opens the door for a potential cleaner LP transaction.
02:05We've seen a lot of institutional investment in sports teams, NFL, NBA, NHL, MLB.
02:13And this allows kind of a cleaner transaction where an institutional investor maybe is only interested on the NBA side
02:19or the NHL side, and they can attack it that way.
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