Townsquare Media Gets A Shake Of MSG
Townsquare Media has added a little MSG to its ownership plate.
Madison Square Garden Company, owner of some of the nation’s top entertainment venues and three pro sports teams, has acquired an approximately 12 percent common equity stake in Townsquare, the owner of 310 radio stations, 325 local websites, a digital marketing solutions company and a digital advertising network focused on music and entertainment.
The MSG brand is widely known across the New York Tri-State area. Unrelated to MSG Networks, the pay TV sports entertainment channels focused on New York-area teams spun off in 2015, Madison Square Garden Co. owns New York’s Madison Square Garden arena and theater, in addition to Radio City Music Hall and live music venue Beacon Theatre.
MSG Co. is also the owner of the recently renovated Forum in Inglewood, Calif., home of the iHeartRadio Music Awards; the Chicago Theatre; and the Wang Theatre in Boston.
MSG Co. also owns the NBA’s New York Knicks, the WNBA’s New York Liberty, and the NHL’s New York Rangers. All three teams play their home games at Madison Square Garden.
Furthermore, the Radio City Rockettes Christmas Spectacular and New York Spectacular are properties owned by MSG Co., and it enjoys 50% ownership of Tribeca Enterprises, best known for the acclaimed Tribeca Film Festival.
The Boston Calling Music Festival is also an MSG Co. event.
That could be key to understanding why MSG Co. purchased approximately 3.2 million shares of Townsquare from GE Capital in a private transaction, which the Wall Street Journal values at $30 million. Townsquare’s market value is roughly $230 million. Its market cap stands at $168.8 million.
On its surface, the transaction appears to be squarely focused on MSG’s desire to become the key music and live event player in New England and the New York metropolitan area, rather than Townsquare’s radio stations.
In a statement released this morning, MSG and Townsquare “will seek to utilize their shared experience in music and live events to explore bookings, sponsorship and marketing opportunities, as well as the potential expansion of Townsquare’s live offerings.”
MSG’s investment in Townsquare also provides MSG with additional insight into the festival business, which MSG has been exploring as part of a larger goal to strengthen and expand its position in the live experience space.
Townsquare’s live offerings include approximately 550 events in the U.S. and Canada that attract nearly 18 million attendees each year. These events include Mountain Jam, a four-day music festival featuring folk and Adult Alternative acts, and the Taste of Country Music Festival–both held at New York’s Hunter Mountain; and the WE Fest, billed as the largest country music and camping festival, staged at the Soo Pass Ranch in Detroit Lakes, Minn.
Townsquare is also the company behind unique lifestyle and entertainment events such as the America on Tap craft beer festival series. Fairs and festivals are also staged through Townsquare’s ownership of North American Midway Entertainment, North America’s largest mobile amusement company.
David O’Connor, President/CEO of The Madison Square Garden Co., commented, “Using its diversified portfolio of radio stations, digital assets and live events, Townsquare creates compelling content that brings people together and builds communities. We understand and share their belief in the value of exceptional, live experiences, and look forward to working together through this new partnership, which is another opportunity that our partner, Irving Azoff, brought to our attention–to drive additional value and growth for both businesses.”
If the Azoff name is familiar to you, but you can’t recall its significance, he’s the heralded artist representation executive behind such contemporary and classic recording acts as Maroon 5, Christina Aguilera, Eagles and Bon Jovi. He entered into a joint venture with MSG Co. in September 2013, creating Azoff MSG Entertainment, of which he serves as Chairman/CEO. Before that, he was Chairman/CEO of Ticketmaster Entertainment and Executive Chairman of Live Nation Entertainment.
“I have had the opportunity to work with Steven and the Townsquare team closely this past year,” Azoff said. “These guys really excel and are a perfect complement to what we are building at Azoff MSG Entertainment. When this opportunity presented itself, my partners at MSG enthusiastically invested. I look forward to deepening our relationship and working on both existing and new projects with Townsquare and MSG.”
In addition to MSG’s share purchase, Townsquare Chairman and CEO Steven Price is purchasing 50,000 shares of GE Capital’s Class C Common Stock, which will also convert to Class A shares. This transaction is valued at $1,324,500, based on GEH shares’ value at the opening bell August 17.
As news of MSG’s equity stake reached shareholders, the reaction was swift and positive: Just after the opening bell, shares in TSQ were up 11.6%, to $9.40. At the closing bell, Townsquare stock finished up 15.4%, at $9.72.
It’s the highest share price for Townsquare since May, when its stock slid from $10.70 a share on May 2 to $8.18 on May 19.