What You Need To Know About The Madison Square Garden Spin-Off

Jefferies on Monday issued a company note on The Madison Square Garden Co (NASDAQ: MSG) after the company filed a form detailing its plans for a tax free spin-off of its media segment. Jefferies rates Madison Square Garden as a Hold with an $85 price target.Analysts John Janedis and Jaime Morris wrote, "As we expected, MSG intends to spin the media segment; leaving the sports franchises, entertainment segment (including the Christmas and Spring Spectaculars), and joint ventures/ unconsolidated assets with the remaining SportCo. These resulting structures still allow MSG to benefit from its strong intersegment relationships, but serve to unlock the intrinsic value of its assets. We think the media segment would attract interest from multiple parties, if it were to be put up for sale."Prior to the spin-off of the media segment, management expects to sign a long-term rights deal between the Knicks/Rangers and MSG Networks. While the deal in all likelihood will be lucrative for both parties, it should not approach anywhere near the $4 billion, 20-year deal that the Los Angeles Lakers signed in 2011.Shares of The Madison Square Garden Co closed Friday at $80.73.