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Madison Square Garden Set for Almost Billion-Dollar Facelift
By Alex Finkelstein | March 16, 2011 9:00 AM ET
It's true. They seldom do anything small in the Big Apple. Madison Square Garden (MSG), often called the most famous sports and entertainment arena in the world, is getting ready for a $977 million renovation, its first in 43 years.
The Garden's current location at 4 Pennsylvania Plaza (8th Avenue & 33rd Street), Manhattan, opened Feb. 11, 1968.
The first tenants, who call the Garden home to this day, were the New York Knicks of the National Basketball Association and the New York Rangers of the National Hockey League.
The renovation is expected to begin this year during the off-seasons of the Knicks and Rangers.
The Garden had other locations, no longer standing, in1879, 1890 and 1925, according to Wikipedia. Madison Square Garden Inc. is the current owner.
The company reported a 40% rise in fourth-quarter profit.
In a prepared statement Garden CEO Hank Ratner said it would be "imprudent" at this time to forecast the total final cost of the long-awaited renovation of Madison Square Garden.
However, he said the company is budgeting for more than $977 million. Previously, MSG had pegged the total cost of the renovation at between $775 million and $850 million.
Ratner said the company, once part of Cablevision Systems Corp., had moved up some construction plans, making them a bit more costly. He added that the project overall is proceeding as expected.
Ratner also said MSG is weighing an option to acquire the L.A. Forum, former home of the Los Angeles Lakers. That arena is owned by Forum Enterprises, the for-profit arm of Faithful Central Bible Church. The price MSG is considering paying for the Forum has been estimated at $25 million.
Cablevision spun off MSG last year to separate its cash-rich cable businesses from its more financially volatile entertainment properties.
The family of Cablevision Chief Executive Jim Dolan remains the controlling shareholder of MSG.
The renovation is expected to modernize the arena by adding more amenities, including luxury suites that will be located closer to performances.
The Knicks recently basketball stars Carmelo Anthony and Chauncey Billups for its roster, but MSG said it doesn't expect to pay a so-called luxury tax to the National Basketball Association this year, which has been a concern for investors, according to Nat Worden of Dowjones.com.
MSG posted a fourth-quarter profit of $32.7 million, or 42 cents a share, up from $23.4 million, or 32 cents a share, a year earlier. Revenue rose 5% to $432.7 million. Analysts polled by Thomson Reuters expected a profit of 43 cents a share on revenue of $435 million.
Revenue at MSG Media, the company's largest segment, rose 12%. The segment, which includes MSG Networks and the music network Fuse, drew in more from both affiliate fees and advertising sales in 2010.
MSG's entertainment business, which presents live productions including the Radio City Christmas Spectacular, recorded flat revenue and higher costs.
Revenue increased 4.1% in the sports segment on higher team ticket sales and increased league distribution, sponsorship and signage revenue.