Jim Dolan Signs New Contracts with Sphere, MSG Companies.

By Chanak Maduranga

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Jim Dolan Signs New Contracts with Sphere, MSG Companies.
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James Dolan isn’t going anywhere.

The sports and music mogul has signed three-year contract extensions with the companies he and his family control: MSG Sports, MSG Entertainment, and Sphere Entertainment. All three companies disclosed the new deals over the past few weeks, with Sphere filing the extension just before the July 4 holiday.

MSG Sports owns the New York Knicks NBA team (where Dolan is occasionally vilified by its fan base over the team’s performance) and the New York Rangers NHL Team; MSG Entertainment operates New York’s Madison Square Garden, Radio City Music Hall, The Beacon Theater and other entertainment venues; Sphere owns and operates the Sphere in Las Vegas, and also owns the MSG Networks cable channels, which televise Knicks and Rangers games.

According to the SEC filings, Dolan will collect a salary of just over $3.3 million across the three companies, with MSG Sports accounting for $1.6 million of that total, MSG Entertainment $1.5 million, and Sphere $230,000.

He will also have an annual target bonus of $6.6 million, or 200 percent of his salary across the three companies. And his deal includes participation in long term incentive plans (LTIPs) across MSG Sports and Entertainment, including $8.6 million from MSG Entertainment, and $7.8 million from MSG Sports.

Dolan’s contract with Sphere will also either include nearly 2.8 million performance vesting options in the company (this would require shareholders to approve a new employe stock plan at its upcoming annual meeting) or an LTIP valued at $11.77 million if they do not approve the new plan.

The total annual value of the three deals is about $37.5 million, if Dolan receives the LTIP from Sphere. If he receives the performance options, the value of the package could go into the nine figures, depending on the value of Sphere’s stock at the time.

Dolan and his family, of course, control all three companies, with more than 70 percent of the voting shares in each of them (the economic exposure is substantially less, owing to the dual-class voting structure of the companies). Dolan also controls and serves as chairman of AMC Networks, where his wife Kristin Dolan is CEO.

All of the companies were spun out of the Dolan family’s cable business Cablevision, which they sold to the European telecom giant Altice in 2016 for $17.7 billion.

Dolan has spent the last few years restructuring the businesses, in part to help launch the Sphere, which is his passion project. The moves included separating the sports business from the venue business (the value of pro sports teams has skyrocketed in recent years).

And placing MSG Networks inside Sphere also provides a reliable stream of cash to the business, even as the RSN business continues its slow decline.

A musician himself (he is the frontman for the band JD & The Straight Shot), Dolan spent $2.3 billion to construct the initial Sphere in Las Vegas, with plans to build others around the world.

Sphere’s MSG Networks division is providing much of the company’s profits, but the venue has found success with acts like U2 and Dead & Company, in addition to its first original film, Darren Aronofsky’s Postcard From Earth.

While live events like concerts and the upcoming UFC fight night are the biggest breadwinners, Sphere has been able to generate substantial recurring revenue from the film and a marketing business (companies are eagerly snapping up sponsorships projected onto the “Exosphere” that has become a Las Vegas tourist attraction in its own right).

Sphere recently tapped former Warner Bros. COO Carolyn Blackwood to run Sphere Studios, where she will develop new original programming for the venue, and to work with artists as they figure out how to utilize the massive screens inside the building.

Chanak Maduranga

passionate journalist behind 'USA News Now 24', dedicated to delivering timely and accurate updates on US affairs. Committed to journalistic integrity and informing audiences with credible news coverage.

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