Madison Square Garden Entertainment's Board Reaches $85M Deal to Settle Shareholder Suit

Madison Square Garden Entertainment’s board has agreed to settle for $85 million a shareholder suit accusing it of failing to protect stockholders’ interests when it merged with MSG Networks. The deal will be covered by the board’s insurers, according to a securities form filed on Wednesday. There was no admission of wrongdoing. The suit filed in 2021 accused the Dolan family of engineering the merger, “overpaying for MSGN and diluting MSGE’s public stockholders,” to further their own interests and enhance their voting stake. Shareholders alleged that the deal was meant to fund, among other projects, the $1.9 billion MSG Sphere project in Las Vegas, which is set to open this year. They also claimed that the deal was consummated at an unfair price because it took advantage of the pandemic’s impact on MSGE’s business, which primarily consists of hosting live events. Three suits were filed in Delaware Chancery court and later consolidated. The merger was completed in March 2021 in an all-stock transaction. The Dolan family controls over 70 percent of the voting power of MSGE. The company’s board, led by chief executive James Dolan, violated their fiduciary duties when they leveraged their control of both companies to complete a
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