Cablevision Systems Corporation (NYSE:CVC) today announced that its board of directors has authorized the company’s management to move forward with the spin-off of the Madison Square Garden (MSG) business to Cablevision stockholders. The transaction would be structured as a tax-free pro rata spin-off to Cablevision’s existing shareholders and is expected to be completed by year-end 2009, subject to necessary approvals.

Once the spin-off is complete, Cablevision shareholders would own shares in both Cablevision and the new MSG, which would allow shareholders to more clearly evaluate each of the separate company’s assets and future potential. It is anticipated that the spin-off would be in the form of a pro rata distribution to all shareholders of Cablevision, with holders of Class A common stock receiving Class A shares in Madison Square Garden and holders of Class B common stock receiving Class B shares in Madison Square Garden. Both Cablevision and the new MSG would be controlled by the Dolan family through their ownership of Class B shares. Cablevision also reiterated that it is not considering the sale of MSG, any of MSG’s businesses or any other Cablevision business at this time.

The new MSG’s assets will include:

- Media properties, including the MSG, MSG Plus and Fuse networks, as well as MSG Interactive’s collection of online assets

- Sports teams – including the Knicks and Rangers franchises

- A live entertainment portfolio, including the Radio City Christmas Spectacular, featuring the world-famous Radio City Rockettes, as well as concerts, family shows and special events

- Leading venues, highlighted by Madison Square Garden and Radio City Music Hall

Completion of the spin-off is subject to receipt of a favorable ruling from the IRS and the filing and effectiveness of a Form 10 with the Securities and Exchange Commission (SEC), as well as final approval by Cablevision’s board of directors.

InsideHoops.com editor says: This basically means that Madison Square Garden, the Knicks, Rangers, etc. will become a separate company, which Cablevision owns. Rather than being part of the same company of Cablevision. This doesn’t really affect random people/fans out there. It does make it easier to see which parts of the giant business are performing well and which are not. It also probably makes it easier to sell parts or all of the spun-off company in the future, should that become the game-plan.