MSG May Sell Live Nation Holding, Stifel Nicolaus Says

Madison Square Garden Co., controlled by the Dolan family, may sell its Live Nation Entertainment Inc. stake after its chairman resigned from the concert promoter’s board, a Stifel Nicolaus & Co. analyst said.

MSG’s 3.9 million Live Nation shares, representing about 2 percent of the company’s stock, are worth about $40 million before taxes, Ben Mogil, an analyst at Stifel Nicolaus, wrote today in a report.

James Dolan’s resignation, which was announced in a filing by Live Nation today, follows Irving Azoff’s decision to step down as chairman of the company in December. MSG, based in New York, acquired its stake as part of a transaction Live Nation completed in February 2011, when it bought the remaining 25 percent of Azoff’s Front Line Management Group that it didn’t already own.

“For MSG shareholders, this may accelerate the possibility that the company looks to divest all/part of their Live Nation stake,” Mogil wrote in the report, referring to Dolan’s resignation. Mogil has a buy rating on MSG and a hold recommendation on Live Nation.

Stacey Escudero, a spokeswoman for MSG in New York, declined to comment by e-mail.

Live Nation has traded an average 757,000 shares a day for the past three months, based on data compiled by Bloomberg. The MSG stake equals about five days of trading on average.

The Dolan family controls almost 70 percent of the voting power in MSG, according to an Oct. 12 filing.

MSG climbed as much as 1.2 percent to $55.80 in extended trading today, after slipping 1.4 percent to $55.15 at the close in New York. Beverly Hills, California-based Live Nation was unchanged in late trading after advancing 0.2 percent to $10.32 at the close.

The Dolan family also controls Cablevision Systems Corp., where James Dolan, 57, is chief executive officer, and AMC Networks Inc., where his father, Charles Dolan, 86, is chairman.

(Updates with trading volume in sixth paragraph.)
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