The New York Knicks kick off the 2026 Eastern Conference Finals against the Cleveland Cavaliers on Tuesday night, eight wins away from winning its first NBA Championship in 53 years.

Strong seasons and postseasons for the Knicks and the NHL's New York Rangers have sometimes boosted the share price of parent company Madison Square Garden Sports Corp (NYSE:MSGS).

Win or lose, Madison Square Garden Sports shares could be ready to break out with the company considering a major move.

• Madison Square Garden stock is showing upward bias. What should traders watch with MSGS?

New York Knicks, New York Rangers Ownership Split

Madison Square Garden Sports, which is controlled by the James Dolan family, has owned the NBA's Knicks, NHL's Rangers and several other sports assets for years. The company is considering splitting off these ownership stakes into two companies.

Announced months ago that the company was exploring a move, Madison Square Garden Sports provided an update on its progress this week.

The spin-off would see the New York Rangers and New York Knicks split into two publicly traded companies. The Rangers and minor league hockey team, the Hartford Wolf Pack, would be one of the companies. The Knicks and NBA G League affiliate Westchester Knicks would be the other.

The move is expected to be structured as a tax-free spin-off. Madison Square Garden Sports said the deal is being done for investors to "evaluate each company's assets and growth prospects" and also to provide "strategic and financial flexibility."

Investors looking at the math of a potential spin-off and team valuations should be excited.

Why Investors Are Looking At

The New York Rangers were last valued at $4 billion by Forbes. Part of that valuation includes the iconic Madison Square Garden Arena, which is owned by the separate Madison Square Garden Entertainment Corp (NYSE:MSGE) public entity.

Stripping out that arena valuation, the Rangers are worth $2.8 billion.

The New York Knicks are valued at $9.75 billion by Forbes. This valuation consists of the following:

• Sport: $2.312 billion
• Market: $4.161 billion
• Stadium: $1.865 billion
• Brand: $1.412 billion

Stripping out the stadium value, the Knicks are valued at ~ $7.85 billion

Taken together, the Knicks and Rangers are valued at $10.65.

Madison Square Garden Sports has a market capitalization of $8.47 billion and an enterprise value of $9.53 billion.

While the Dolan family will still own a controlling stake, this separation could make it easier and more likely that interested parties could accumulate minority stakes or seek to acquire one of the iconic New York sports franchises outright.

NBA teams have been in demand recently and breaking valuation records, with the Los Angeles Lakers recently valued at $10 billion and the Boston Celtics valued at $6.1 billion.

The timing of the separation is interesting, with Dolan previously saying he was against selling the Knicks. The move could be setting up for selling the Rangers instead, and/or for the Knicks to take on minority owners.

Either of these outcomes could boost the current valuation of Madison Square Garden Sports stock.

The biggest negative here is that neither public entity will own its own stadium, which could make payments for leases and operations become a potential logistics struggle. The lease on Madison Square Garden is also up in 2028. The arena previously had a 50-year lease that expired in 2013, which was followed by a 10-year lease and, most recently, a five-year lease.

The 2028 lease expiration coincides with the planned renovation of Penn Station, which is located below the sports arena. Without a renewal or plans for a new arena, interested ownership parties may stay away for now.

Madison Square Garden Sports Stock

Madison Square Garden Sports stock closed at $353.16 on Tuesday versus a 52-week trading range of $186 to $360.45. Shares are up 36.54% year-to-date in 2026 and up over 77% over the last 52 weeks.

Photo: Shutterstock