MSG Sports President and CEO Andrew Lustgarten will step down at the end of the year, the team announced Friday.
Lustgarten, 45, a childhood friend of MSG Executive Chair James Dolan, has run the business side for the Knicks and Rangers since MSG split ownership of the sports teams from arenas and the cable television network in April 2020.
“With the company on firm footing and the NBA and NHL seasons to start soon, this is the right time for me to pursue other opportunities,” Lustgarten said in a written statement.
Dolan will continue to oversee team operations for the Knicks and Rangers, MSG said. David Hopkinson will be promoted to become president and COO of MSG Sports.
“Andy’s leadership at both our sports and entertainment companies has helped solidify MSG’s position as an industry leader,” Dolan said in a written statement.
“He has successfully driven several strategic initiatives to grow and diversify our companies.”
Lustgarten, who has been in MSG leadership roles since 2014 and helped shape the spin-out, will join the MSG Sports Board as a director at the end of the year.
“We have no doubt, as he embarks on his next chapter, that this is just the beginning of what he will accomplish,” Dolan said.
Lustgarten’s father, Marc, was chair of what was Dolan-controlled Cablevision’s MSG from 1997 until he passed away in 1999. Marc had worked in other capacities for the Dolans over many years.
MSG Sports posted record profits in the last quarter, and Lustgarten has overseen strategic moves like selling the Forum Arena in Los Angeles for $400 million and MSG’s acquisition of the Tao Hospitality Group, MSG said.
Lustgarten has expressed frustration at MSG Sports’ share price that at the time of the spin-off was $161.15 and closed Friday, 30 months later, at $159.54.
The value of MSG Sports when adding its net debt is $4.7 billion, while the Knicks and Rangers if they were sold would likely fetch around a combined $7 billion, investment bankers said.
That means the stock is trading at a 33% discount to the team’s values.
There has been speculation that Dolan might combine MSG Sports and MSG Entertainment again but that now appears to be off the table.
MSG Entertainment is instead exploring the possibility of splitting its business into two, with the MSG Arena and cable television network in one company, and Las Vegas Sphere and Tao in the other, as it also tries to boost its share price.
Internal NBA numbers show the Knicks in the 2021-22 season had the third-highest average gate, $2.98 million per game. That is an increase of 9.2 percent from the last non-COVID season of 2018-19.
That is in line with the league average of 10.2 percent rise, according to confidential NBA data.
The Knicks this year are adding about 24 seats replacing what used to be part of the scorer’s table for many games selling tickets for between $5,000 and $15,000 depending on the opponent, according to a source in the ticket industry.
That could raise net gate revenue by 3 percent on its own if the tickets were sold for an average of $5,000 each.
A Knicks playoff run, as the Rangers had last year, would also go some distance in boosting the bottom line.