Tuesday, Cablevision Systems Corp. (CVC) said that its board of directors have approved the spin off of its Madison Square Garden business to Cablevision shareholders.
The company said that the distribution would take place on February 9 to Cablevision shareholders of record as of the close of business on January 25. For the distribution, each Cablevision Class A stockholder will receive one share of Madison Square Garden Class A common stock for every four shares of Cablevision Class A common stock held as of the record date.
Each Cablevision Class B stockholder will receive one share of Madison Square Garden Class B common stock for every four shares of Cablevision Class B common stock held as of the record date.
Cablevision President and CEO James Dolan said, "We are now one step closer toward our goal of creating two distinct companies for investors, each leaders in their industry with their own defined business focus and clear investment characteristics.
MSG joined the Cablevision family of companies nearly 15 years ago and today houses one of the world's most dynamic collection of sports, entertainment and programming properties."
Dolan believes Cablevision has developed a portfolio of industry-leading telecommunications services, strong programming and content offerings that have made it one of the nation's leading media and telecommunications companies.
Fractional shares of MSG common stock will not be distributed to Cablevision stockholders, but would be aggregated and sold in the public market. The net proceeds from sale of fractional shares would distributed pro rata in the form of cash payments to stockholders who otherwise would be entitled to a fractional share of MSG common stock.
According to Cablevision no action or payment is required by Cablevision stockholders to receive the shares of MSG common stock. Stockholders who hold Cablevision common stock as of the record date will receive a book-entry account statement reflecting their ownership of MSG common stock or their brokerage account will be credited with the MSG shares. An Information Statement containing details regarding the distribution of the MSG common stock and MSG's business and management following the MSG spin-off will be mailed to Cablevision stockholders prior to the distribution date.
The MSG spin-off has been structured to qualify as a tax-free distribution to Cablevision stockholders for United States federal income tax purposes. Cash received in lieu of fractional shares, however, will generally be taxable.
Shares of Cablevision Class A common stock will continue to trade "regular way" on the New York Stock Exchange under the symbol "CVC" through the distribution date of February 9 and thereafter.
Cablevision added that any holders of Cablevision Class A common stock who sell Cablevision shares regular way on or before February 9 will also be selling their right to receive shares of MSG Class A common stock.
MSG Class A common stock is expected to begin trading on a "when-issued" basis on Nasdaq under the symbol "MSGNV" beginning January 25. On February 10, "when-issued" trading of MSG Class A stock will end and "regular-way" trading under the symbol "MSG" will begin. MSG's Class B common stock will not be listed on a securities exchange. MSG will be controlled by the Dolan family through their ownership of Class B shares.
Madison Square Garden unit includes regional and national programming networks, professional sports franchises and MSG Entertainment. The unit also operates WaMu Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre.
CVC closed Tuesday's last trade at $25.92, down $0.37 or 1.41%, on a volume of 858 thousand shares on the New York Stock Exchange.
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