The team announced Friday that MSG Sports President and CEO Andrew Lustgarten will be stepping down at the end of the year.
Lustgarten, 45, a childhood friend of MSG CEO James Dolan, has run the business side of the Knicks and Rangers since MSG separated ownership of sports teams from Arenas and the cable TV network in April 2020.
“With the company on a firm footing and the NBA and NHL seasons starting soon, now is the time for me to pursue other opportunities,” Lustgarten said in a written statement.
MSG said Dolan will continue to oversee the operations of the Knicks and Rangers team. David Hopkinson will be promoted to President and COO of MSG Sports.
“Andy’s leadership in both our sports and leisure businesses has helped establish MSG as an industry leader,” Dolan said in a written statement.
“He has successfully led several strategic initiatives to grow and diversify our companies.”
Lustgarten, who has been in MSG leadership positions since 2014 and helped shape the program, will join the MSG Sports Board as director at the end of the year.
“We have no doubts, as he embarks on the next chapter, that this is just the beginning of what he will accomplish,” Dolan said.
Lustgarten’s father, Mark, was president of what was Dolan-controlled Cablevision’s MSG from 1997 until his death in 1999. Mark worked in other positions for Dolans over many years.
MSG Sports posted record profits last quarter, and Lustgarten oversaw strategic moves such as the $400 million sale of Forum Arena in Los Angeles and MSG’s acquisition of Tao Hospitality Group.
Lustgarten expressed frustration with MSG Sports’ stock price which at the time of the spin-off was $161.15 and closed Friday, 30 months later, at $159.54.
Investment bankers said MSG Sports’ value when adding its net debt is $4.7 billion, while the Knicks and Rangers if sold would likely bring in a combined around $7 billion.
This means that the stock is trading at a discount of 33% of the team’s values.
There has been speculation that Dolan may combine MSG Sports and MSG Entertainment again but it seems that this is not on the table now.
Instead, MSG Entertainment is exploring the possibility of splitting its business in two, with MSG Arena and the cable television network in one company, and Las Vegas Sphere and Tao in another, as it is also trying to increase its share price.
Internal NBA numbers show that in the 2021-22 season the Knicks had the third highest average gate, $2.98 million per game. This represents an increase of 9.2 per cent over the previous season, which was not accompanied by Covid in 2018-2019.
That’s in line with the league’s average rise of 10.2 percent, according to confidential NBA data.
Knicks this year Adding about 24 seats to replace what was previously part of the scorers table for many games that sell tickets For between $5,000 and $15,000 depending on the discount, according to a ticket industry source.
This could increase the gate’s net revenue by 3 percent on its own if tickets were sold at an average of $5,000 each.
A playoff round at the Knicks, as the Rangers did last year, will go a long way in boosting the bottom line.