Responsive. Diligent. Effective.

Merger of companies involved with New York Knicks stokes concern

| Apr 26, 2021 | Business Law

In New York and across the nation, business and sports have become increasingly intertwined with team ownership rapidly changing from families to corporations. That has raised attention to business law issues that many laypersons might not have focused on in the past. When major decisions are made regarding complex stock transfers and mergers and they involve prominent brands, it can spark controversy from investors and observers alike. These issues could serve as a guideline to those who are in business themselves and are considering similar financial maneuvers. In these circumstances, having guidance intersecting business and the law can be imperative.

Knicks owner merges companies he controls in potential cash boost

Recently, the oft-embattled owner of the New York Knicks, James Dolan, made a series of financial moves with companies he controls in what is believed to be an attempt to raise cash for a future business plan. The merger involves the company that owns Madison Square Garden and its network. There are many notable properties in addition to the Knicks, the arena and the network under the control of Madison Square Garden Entertainment including Radio City Music Hall and others. The stock price teetered at the news, but this appears to be a means to an end for Mr. Dolan as he plans to build a series of arenas throughout the nation.

Mr. Dolan has been under less scrutiny over his on-court and on-ice management of the sports teams he owns – the New York Knicks and New York Rangers – as both appear to be on the rise in their respective leagues. The simultaneously ubiquitous and thin-skinned owner is known as a savvy businessman and this series of moves is said to be potentially lucrative when sports gambling is legalized and it can adapt to the rise of streaming services. There have been significant losses of $250 million stemming from the pandemic, but this has not dissuaded Mr. Dolan’s plans for expansion. The merger is a turnaround from the decision in 2015 to split the sports entity from its media partner.

For companies thinking about their future, business legal help may be key

Sports is big business and vice versa. Although people in other businesses might not follow sports or believe there is a connection between high-level deals and the supposed “fun” of big time athletics, it is important to understand the overlap in the context of business law. This is evidenced by the maneuvering of Mr. Dolan and others. For companies that are looking to access capital, change their strategy, move forward with a merger or acquisition, buy hardware, address disputes and more, it is useful to have an experienced legal advocate to navigate the process and assist with achieving a successful outcome. Consulting with those experienced in all areas of business may be beneficial for the present and future.

 

Archives