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 in the arena and cable television network in April 2020.
“With the company on solid footing and the NBA and NHL seasons starting soon, now 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 President and COO of MSG Sports.
“Andy’s leadership in 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 many strategic initiatives to grow and diversify our companies.”
Lustgarten, who has been in an MSG leadership role since 2014 and helped shape the spin-out, will join the MSG sports board at the end of the year as a director.
“We have no doubt, as he begins his next chapter, this is just the beginning of what he will accomplish,” Dolan said.
Lustgarten’s father, Mark, was chairman of Dolan-controlled Cablevision’s MSG from 1997 until his death in 1999. Mark had worked for the Dolans in other capacities over the years.
MSG Sports posted record profits last quarter, and Lustgarten oversaw strategic moves such as selling the Forum Arena in Los Angeles for $400 million and MSG’s acquisition of Tao Hospitality Group, MSG said.
Lustgarten expressed dismay at MSG Sports’ share price that was $161.15 at the time of the spin-off and closed Friday, 30 months later, at $159.54.
Adding in net debt, MSG Sports is valued at $4.7 billion, while the Knicks and Rangers could receive a combined $7 billion if sold, investment bankers said.
That means the stock is trading at a 33% discount to the team’s valuations.
There was speculation that Dolan would reunite MSG Sports and MSG Entertainment but that now appears to be off the table.
MSG Entertainment is instead exploring the possibility of splitting its business into two parts, one with MSG Arena and the cable television network and the other with Las Vegas Sphere and Tao, as it seeks to boost its share price.
Internal NBA numbers show the Knicks had the third-highest average gate for the 2021-22 season, at $2.98 million per game. It has increased by 9.2 percent compared to the last non-Covid season of 2018-19.
That’s in line with the league average increase of 10.2 percent, according to confidential NBA data.
According to a ticket industry source, the Knicks are adding 24 seats this year that are part of the scorer’s table for many games, with tickets selling between $5,000 and $15,000 depending on the opponent.
If tickets sell for an average of $5,000 each, that alone can increase net gate revenue by 3 percent.
A Knicks playoff run, like the Rangers last year, will go some way to boosting the bottom line.