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Bailey McCann, Opalesque New York:

In August, John Thaler's JAT Capital started pushing Madison Square Garden to find new ways to "create value," after SEC filings showed that the hedge fund took a 6.7% stake in the company. New York-based Madison Square Garden Company owns both the New York Knicks basketball team and New York Rangers hockey team, and announced late yesterday that it plans to explore the possible spin off of its live entertainment business from the sports franchise business.

A statement from MSG said that it would explore creating two distinct and publicly traded entities. If the company proceeds with the spin-off transaction, it would be structured as a tax-free pro rata spin-off to all MSG shareholders. Upon completion of the contemplated spin-off, MSG shareholders would own shares in both of the new companies, which would provide shareholders with the ability to more clearly evaluate each company's businesses and prospects.

MSG said it had been considering the split since July.

The company also announced a $500 million buyback plan and new board appointments.

In an emailed statement, JAT Capital said: "We are very pleased that MSG’s board of directors and management have committed to pursue a plan to enhance value for all MSG shareholders through the combination of a share repurchase program and contemplated business spin-off. We also commend MSG for adding two new independent directors to its board, Messrs. Pelt......................

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