The Madison Square Garden Company today announced the sale of all of its approximately 3.9 million shares of Live Nation Entertainment stock, valued at approximately $44 million. The move is not unexpected, following the Feb. 22 resignation of James Dolan, executive chairman of the Madison Square Garden Company and president/CEO of MSG owner Cablevision, from the Live Nation board of directors.
Both Live Nation and MSG reps declined to comment. Meanwhile, Live Nation is now trading at a 52-week high in the wake of what Wall Street apparently felt was a promising Feb. 26 Q4/’12 earnings report (in which revenue increased by 8% and Adjusted Operating Income by 4.8%), and stock is up 25% for the year, according to a spokesperson for the company.
The MSG stock sale is presumably related to Dolan’s departure from the board, which in turn was related to Dolan’s connection with former Live Nation chairman Irving Azoff, who resigned that position New Year’s Eve. “The relationship was always with Irving,” a source told Billboard.biz at the time, “not the people at Live Nation.”
With no Azoff at the helm, apparently Dolan’s direct interest LN waned, and the strategy of a company that owns and operates “open shop” venues like the Garden, Radio City Music Hall and the Beacon Theater in New York and the Los Angeles Forum, which MSG bought last year and is currently renovating, owning a significant amount of stock in a concert promotion company became less palatable. MSG’s best-case scenario in churning profits is by working with all promoters and taking bids from all ticketing companies. Just as Dolan serving on the LN board could present a potential conflict of interest or create perception issues when seeking the best promoter options for MSG venues, so could MSG’s investment in LN. That said, MSG is still very much in business with Live Nation, hosting numerous Live Nation events and, LN division Ticketmaster handles ticketing at the Garden, for example.
In fact, it was by way of Ticketmaster that MSG wound up with so much LN stock and Dolan found his way to the LN board in the first place. In June of 2008, MSG bought a minority stake in Front Line, the aligned management companies led by Azoff that was then partially held by former Ticketmaster parent IAC (Billboard.biz, June 11, 2008); by October of that year, IAC had spun off Ticketmaster, and the latter acquired a majority stake in Front Line, with Azoff assuming the CEO role in what was then known as Ticketmaster Entertainment (Billboard.biz, Oct. 23, 2008). Then in 2010, Live Nation and Ticketmaster merged to create Live Nation Entertainment, with Azoff as chairman and Dolan on the LNE board.
The 3.9 million sold shares, to put the sale in perspective, represents roughly 2% of all Live Nation stock which last week traded some 9 million shares. Live Nation currently has a market capitalization of $2.23 billion, while MSG has a market cap of $4.23 billion.