MSG Rangers, MSG Knickerbockers spinoff seen unlocking shareholder value

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MSG Rangers, Knicks spinoff

Highlights

Guggenheim Securities initiated MSG Rangers with a buy rating and $278 target (57% upside), and MSG Knickerbockers at buy with a $445 target (46% upside).
MSG Knickerbockers could gain $450 million to $700 million from potential NBA expansion fees in Las Vegas and Seattle, adding $13–$20 per share.
MSG Rangers' spinoff offers tax benefits and strategic flexibility for stake sales ahead of Section 162m tax code changes anticipated for fiscal 2028.

Guggenheim outlines valuation upside after split

As reported by CNBC, citing Guggenheim Securities, the spinoff of MSG Rangers from MSG Knickerbockers creates multiple avenues to raise value for shareholders in both companies.

The investment firm initiated coverage of MSG Rangers with a buy rating and a $278 price target, implying nearly 57% upside from Tuesday's close. It also started coverage of MSG Knickerbockers with a buy rating and a $445 price target, suggesting 46% upside from the last close.

Analyst Curry Baker said in a Tuesday note to clients that there are multiple paths to unlock further value for both stocks. MSG Rangers was spun off from MSG Knickerbockers, formerly Madison Square Garden Sports, late Monday.

Strategic catalysts differ for each franchise

Shares of the hockey team fell nearly 7% on Tuesday to close at $177.61, while the Knicks rose nearly 6% to $305.42. Their separation comes after the Knicks won their first National Basketball Association championship in 53 years, while the Rangers have struggled this year.

Baker said the standalone structure opens several catalysts for MSG Knickerbockers. He estimated that potential NBA expansion in Las Vegas and Seattle could yield $450 million to $700 million for the Knicks, or about $13 to $20 a share, with possible additional benefit from NBA expansion in Europe.

For MSG Rangers, Baker pointed to possible tax benefits and greater flexibility to pursue strategic action. He said the split increases optionality, including a potential outright sale or the sale of a minority stake, while a looming tax code change under Section 162m starting in fiscal 2028 could add pressure to consider such moves.

In our earlier article on activist pressure on Big Yellow, we covered how two hedge funds disclosed sizeable stakes and urged the UK self-storage group to review strategic options, including a potential sale, arguing the shares were undervalued. We also noted that the company was trading near multi-year lows despite solid results, with renewed takeover speculation against a backdrop of consolidation across UK listed real estate.

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