MSG Entertainment Explores Tao Group Sale, Fertitta the Rumored Buyer: Report

Madison Square Garden Entertainment Corp. (NYSE:MSGE) has hired Goldman Sachs to explore a cut-rate sale of its controlling involvement in the Tao Group nightclub and eating house empire, according to a study inward the New York Post. The money is needful to offset the ballooning construction cost of the MSG Sphere in Las Vegas, according to the report. And the rumored frontrunner to trot upwardly is Tilman Fertitta.

The Post‘s report, which relies on entropy from ii anonymous insiders, said the billionaire hospitality titan – whose empire includes Golden Nugget casinos inward Nevada, Louisiana, Mississippi, and New Jersey, as fountainhead as the NBA’s Samuel Houston Rockets –  is rumored to feature already submitted a first-round Tao Group bid.

Last month, a Sir Henry Morgan Sir Henry Morton Stanley analyst valued the Tao Group at $524 million. By that estimate, MSGE’s 67% post would be worth $274 million – after subtracting Tao’s $85 one thousand thousand inwards debt. However, the Post’s sources said that MSGE’s owner, billionaire James IV Dolan, wants nearly $800 million as the Tao Group expands beyond its Las Vegas and New House of York City base of operations to the Middle East. (In Apr 2021, Tao acquired Hakkasan Group, which operates iv venues there, for $99 million.)

According to the Post’s sources, Dolan is do-or-die(a) to close a $600 meg gap caused by overruns in the twist budget for the MSG Sphere. The pricetag for the spherical Las Vegas entertainment venue – slated to clear inwards the secondment half of 2023 behindhand the Venetian, perchance with U2 as its 1st residency – has nearly doubled to $2.175 billion.

Trouble inward the Garden

In 2017, MSGE acquired its controlling interest group inward Tao for $181 million, with Tao founders Noah Tepperberg, Jason Strauss, Marc Packer, and Rich Hugo Wolf retaining a nonage post inwards the business. Tao Group’s Sin City venues include Asian and Italian restaurants, namesake twenty-four hour period clubs, and the nightclubs Hakkasan, Marquee Nightclub, OMNIA Nightclub, and the Wet Republic Ultra Pool. The bulk of those venues are set at Strip resorts.

Even before the pandemic shutdown, however, Tao Group brought trouble to the Garden. In 2019, it risked defaulting on its debt when its revenue halved and Tao lender JPMorgan refused to rove o'er its $100 gazillion loan into a new one. So MSG stepped up to loan Tao $49 million, according to the Post article.

On Dec. 6, MSGE proclaimed it would separate its unrecorded amusement business – including its eponymic arena, Radio City Music Hall, and the Beacon Theatre in New York City – from the MSG Sphere and Tao Group, which would live rolling along with MSG Networks into a single, publicly traded company to be known as MSG Sphere Corp. (MSG Networks owns ii regional and subject entertainment networks, as comfortably as a related streaming service, and exclusively carries live local games from quintuplet NBA and NHL franchises.)

On Dec. 22, the MSG Sphere contrive proclaimed it had borrowed $275 zillion from a JPMorgan-led loaner group.

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