Investors cheer Madison Square Garden’s spin-off plans

Fortune

Madison Square Garden said it plans to separate the company’s live entertainment business from its sports related properties including the New York Knicks basketball team and New York Rangers hockey team.

The plan to separate the two businesses, along with the announcement of a plan to buy back up to $500 million in Class A shares, sent Madison Square Garden’s [fortune-stock symbol=”MSG”] stock up as much as 17% in premarket trading.

Madison Square Garden had been pushed to consider strategic alternatives since at least this summer, when hedge fund JAT Capital Management LP took a stake in the company. At the time, it was speculated the company’s sports assets had more value than the market had given the entire Madison Square Garden company when all assets were combined.

Under the proposed separation, which Madison Square Garden said it has been mulling since July, one portfolio will consist of the…

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