The owners of New York's famed Madison Square Garden on Tuesday added the Los Angeles Lakers' old stomping grounds, the Fabulous Forum, to its stable of entertainment properties in a $23.5 million deal.
The Madison Square Garden Co. will soon start on a reported $50 million renovation of the building, which opened in Inglewood in 1967 as the home of the NBA's Lakers and the NHL's Kings (those teams fled for downtown's Staples Center in 1999). The new owners are aiming to turn the Forum into a top-flight concert destination that rivals the likes of AEG's Staples.
Among those who played the 17,000-seat Forum during its heyday were The Rolling Stones, Eric Clapton and Van Halen. The building still hosts the occasional concert (Prince played a memorable 21-date run there last year) while retaining a soft spot in the hearts of veteran music fans in the area.
"We are honored to be adding the Forum to our iconic list of venues and to call Inglewood our West Coast home," MSG executive chairman James Dolan said. "We look to building on the Forum's outstanding legacy in music and to utilizing our expertise to ensure it once again becomes a thriving destination for both artists and music fans, as well as an active member of the Inglewood community."
MSG president and CEO Hank Ratner noted that the addition of the Forum enhances Fuse, the company's national music network, "by providing access to top performers from our iconic venues on both coasts."
MSG first revealed its interest in the Forum during a first-quarter earnings call in December. It acquired the arena in a deal with the City of Inglewood and the Faithful Central Bible Church.
MSG has guaranteed Inglewood that it will receive a minimum of $675,000 in ticket, parking and concession taxes annually from the Forum, a number based on the sale of 300,000 tickets, the Los Angeles Times reported. If sales fall below that number, MSG must pay Inglewood the difference.
In addition to Madison Square Garden - now in the midst of a multiyear $1 billion upgrade - the company owns Radio City Music Hall and the Beacon Theater, two other New York entertainment landmarks, and the iconic Chicago Theatre. It also books the Wang Theatre in Boston.
In a research note, analyst Benjamin Mogil of Stifel Nicolaus wrote Tuesday that he had been "wary" of this deal since the possibility of it surfaced last year.
"While the Los Angeles market has considerable capacity given that the Staples Center has three major sports teams as tenants and therefore has limited concert availability," he wrote, "we remain concerned about the scope of the project given the lack of any major tenants." He said he expects Live Nation to book the facility.
Shares of MSG fell 0.9 percent to $36.76 in regular trading Tuesday.