The recently announced spin off of Cablevision's Madison Square Garden unit, which includes the all the sports teams, the arena, the MSG network, and various other live entertainment properties, makes perfect sense. Media companies have become so diversified that it's almost impossible for investors to compare "apples-to-apples". How do you compare the stock value of Cablevision against one it's major competitors in the TV business, Verizon? How much of the stock value is attributable to their entertainment properties? Of course, the opposite is also true of the entertainment properties. The split creates two entities with separate financials.
This news has many Rangers fans salivating at the prospect of new ownership. Don't get your hopes up. The Rangers are, and will always be, viewed by investors as content for the MSG network. Any sale of the MSG unit would be predicated, primarily, on the value of the network. The value of the network is determined by it's ability to generate revenue which, in turn, is determined by it's programming. First and foremost, the Rangers are "programming". They've always been programming. In 1925, the New York Americans were such a success playing at the Garden that then Garden President, Tex Rickard, wanted a wholly owned team for the Garden (the Rangers entered the league in 1926). They weren't brought into existence out of some rich cultural imperative or out of some love of the game. They were created to capitalize on the latest craze (did we really need N'Sync after we experienced New Kids on the Block? Sorry, I digress....). Granted, all professional sports organizations are "for profit". In New York, and other large markets as well (and perhaps in all markets with a that there intranet thing....), this "programming" is competing for the increasingly decreasing attention span of consumers. Thus the need to always be "sexy"...or an attempt to be. Either they succeed (far too rarely) or it's a train wreck. I don't know about you, but I've always been drawn to a good train wreck. So, you can see the rationale for the perpetual "win now" mode the Rangers always seem to be in.
In 1926, Rickard brought in Conn Smythe to essentially run the Rangers (Conn Smythe...yes...that Conn Smythe...of the Conn Smythe trophy.) Smythe, the eventual hall of fame team builder, didn't even make it to the beginning of the Rangers' first season. He just wouldn't buy in (he didn't mesh with the Rickard's other hand picked hockey man, Col. Hammond). Clearly...Slats has bought in. This simply must be the case. How else to explain the complete reversal of philosophy that Slats brought to the Rangers? Was this his philosophy to begin with but never had the budget to carry it out? Was his commentary about free-spending teams like the Rangers (when he was running the Oilers) just sour grapes? Was he accidentally lobotomized during a routine teeth cleaning in 2000? To his credit, he has been far more protective of the franchise's future than most of his predecessors....which isn't saying a great deal. There will never be a true rebuilding effort as long as the team is packaged with the MSG network.
I admire what Brian Burke is trying to do in Toronto. Although, it's yet to be seen for how long he stays the course. So what makes Toronto different? Why does Maple Leafs Sports & Entertainment (Burke's bosses) believe that Leafs fans will tolerate a drastic rebuilding period? I'm not sure. I think the Leafs have more fans per square unit of attention span (or disposable time and money) than the Rangers and that they'll pay up even to watch a sub-par product. They must have a team of actuaries that have devised a formula that estimates how long the team's fan base will put up with various levels of losing. I also think part of it is cultural. A larger percentage of the market needs an NHL fix (even though the Canadian markets are flooded with other levels of pro, semi-pro and amateur hockey) than in the U.S. For example, the NBA's Raptors aren't a suitable alternative to the Leafs (fill in your own Knicks joke here). In New York, basketball is part of the fabric of the city in the same way that hockey is in Toronto. So while it is probably true that a rebuilding period for the Rangers will not alienate the core fans, there are just less of them, proportionately.
The franchise will stay the course regardless of who owns them. In this case, you cannot make more money with a flop than with a success (don't tell me you haven't seen The Producers....not that musical nonsense....the 1968 film.).