MSG Networks stock fell hard Wednesday after the regional sports network said subscribers dropped 6.5% in the fiscal fourth quarter.

MSG Networks, which includes New York area RSNs MSG and MSG +, said its subscriber base fell more than 6.5% in the period, resulting in a $3.3 million decline in affiliate fee revenue. Overall revenue was down 2% to $168.4 million in the quarter. MSG said in a press release that the affiliate fee decline was also due partly to the absence of a favorable $1.2 million affiliate adjustment recorded in the prior year.

RELATED: Cord Cutting Will Decelerate in Q3, Analyst Predicts

MSG shares dropped as much as 14.2% ($2.39 each) to $14.46 per share in early trading Wednesday. The stock was priced at $14.72 each (down 12.7%, or $2.14 each) by 11:42 a.m. Aug. 21.

RELATED: Cord Cutting Starts to Pinch Affiliate Fees

The subscriber decline seemed to validate concerns that regional sports networks are losing favor with distributors as their monthly affiliate fee prices rise and more and more over-the-top service providers offer packages light on sports programming. Also during the day, Sinclair Broadcast Group, which earlier this year agreed to pay nearly $10 billion for 21 former Fox Sports RSNs, saw its stock fall as much as 5.6% ($2.47 each) to $42 per share in early trading Wednesday. Sinclair shares were priced at $43.22 each (down 2.8%) as of 11:47 a.m. on Aug. 21.

MSG Networks has been speculated in the past as a possible future target for Sinclair, in that it would fill out a hole the broadcaster has in the New York market. 

Cord-cutting was on a torrid pace in the third quarter, reaching about 5.5% in the period according to some analysts.

MSG Networks problems also are exacerbated by the performance of its teams — last season, the NBA New York Knicks finished last in the league’s Eastern Conference and the NHL New York Rangers finished seventh out of eight teams in the Metropolitan Division. MSG airs games from the NHL New York Islanders (finished second in the Metropolitan Division), New Jersey Devils (finished last in the Metropolitan Division) and the Buffalo Sabres (finished sixth in the Atlantic Division) and other content from the NFL New York Giants (last in the NFC East) and Buffalo Bills (third in the AFC East).

In a note to clients Wednesday, Evercore ISI Group media analyst David Joyce wrote that the subscriber loss was nearly double his estimate of a 3.7% decline, and dramatically lower than the 3.9% decline MSGN reported in fiscal Q3. Joyce noted that RSN losses have been abnormally high in the most recent period, mainly due to the expiration of promotional offers, meaning that he does not expect the heavy declines to continue. But he added that the “the underperformance experienced by MSGN vs. the broader industry is concerning.”

As a result he lowered his rating on the stock from "in-line" to "underperform" and dropped his 12-month price target on the shares from $22 to $18.

Despite the losses Joyce said MSGN continues to be a strong generator of free cash flow -- at $63 million in the period that segment was up by 45%, but still about $6 million below his estimates on the affiliate revenue decline and increased expenses.

“This cash flow should help de-risk the balance sheet and counter some of the business model risk,” Joyce wrote. “We also think it is possible that the company could allocate some of its [free cash flow] to share buybacks to signal comfort in the business model.”

On a conference call with analysts to discuss results, MSG Networks CEO Andrea Greenberg said the declines were primarily related to two unnamed distributors, one who has said publicly that it is being impacted by a roll-off of promotional customers. Both said they experienced overall subscriber growth in the prior year period, which resulted in difficult year-over-year comparisons.

“Subscriber declines are aspects of the business we continue to monitor closely, and we continue to pursue new distribution outlets for our networks,” Greenberg said.

MSGN EVP, Business Affairs Adam Levine said on the call that the company is focused on all opportunities for incremental distribution with existing and new distributors, and expects its networks to be available on a new pay TV broadband offering from an existing partner scheduled for later this year or early next year, and is discussing new potential content offerings with new and existing partners.

“There’s no shortage of interest in sports content, especially live professional sports content,” Levine said. “As exclusive rights holders for live games for seven local professional teams, we’re going to continue to explore all opportunities that properly value our content and make sense for our business.”

MSGN’s 10-year carriage deal with Altice USA’s Optimum unit expires in about three months. On the call, Levine and Greenberg said they are confident a favorable deal can be reached.

“We have multifaceted relationships with virtually all of our distributors, and we expect that to continue with Altice,” Greenberg said. 

MSG Networks stock rose more than 8% Tuesday after a report in the New York Post said the sports network's chief, James Dolan, was "sounding out" possible buyers, a list that could include Verizon Communications.

MSG Networks, which includes regional sports channels MSG Networks and MSG Plus, carries games from the NBA's New York Knicks and NHL’s New York Rangers, New Jersey Devils and New York Islanders. In a report Tuesday, the Post, citing unnamed sources, said Dolan was “gauging interest” in a possible sale with some of his friends, including Guggenheim Partners executive chairman Alan Schwartz, a noted media dealmaker who also sits on the board of Madison Square Garden Co., the arena where the Knicks and Rangers play. Dolan, executive chairman of MSG Networks, also serves as executive chairman of Madison Square Garden Co.

The Post said there was no guarantee a deal would happen, but named Verizon Communications as a possible suitor.

Verizon could be on the hunt for content assets as its chief telecom rival, AT&T, moves closer to cementing its $108.7 billion purchase of Time Warner Inc. The Post said AT&T also is looking for RSN properties to add to the five it already owns, but may want to hold off until after its Time Warner deal closes.

The news sent MSG Networks stock skyward. Shares traded as high as $24.85 each (up 8.3% or $1.90 each) in earlier trading Tuesday and closed at $24.40 per share, up 6.3% or $1.45 each.

A sale of the networks wouldn’t be out of the question. Many analysts speculated that the MSG channels could go up for sale after the company was split in 2015. In that deal, MSG was split into MSG Networks and the Madison Square Garden Co., which houses the sports teams, the Madison Square Garden arena, and other venues like Radio City Music Hall, The Forum and The Chicago Theater.

The Madison Squarer Garden Co. has named Jordan Solomon as executive vice president for MSG Sports, effective Feb. 11.

Reporting to MSG president and CEO David O’Connor, Solomon will focus on the Garden’s professional sports teams – the New York Knicks, New York Rangers and New York Liberty – as well as its development league franchise the Westchester Knicks.

“Few companies anywhere have the breadth and depth of passion, loyalty and tradition that our sports teams have built,” O’Connor said in a statement. “As we look to the future, we need visionary and fearless leaders like Jordan who readily embrace all of the possibilities inherent in today’s frenetic environment – so we can ensure we’re using all available tools to maximize our relationships with fans, partners, leagues and athletes, and best position ourselves for long-term success. Jordan is a perfect fit and we look forward to his arrival at MSG, and his immediate impact on our operations.”

Solomon joins MSG from the National Basketball Association, where he served as vice president, Team Marketing and Business Operations since 2014. In this role, he led the organization’s strategy and analytics group, which provides NBA teams with financial, marketing and consumer analysis. He also advised teams on all elements of their business operations and strategy, including ticket sales and service, sponsorship, marketing, and analytics.

Among Solomon’s responsibilities at MSG will be developing the overall commercial strategy and goals for the franchises’ businesses; daily oversight of financial and operational matters; and identifying and building key strategic relationships. In addition he will be responsible for the in-game experience, as well as working with colleagues across the company to create marketing, sales, and sponsorship plans, along with fan development and community relations events and programs that strengthen the teams’ brands.

“I am thrilled and honored to become a part of The Madison Square Garden Company, and look forward to supporting Doc and my new colleagues in driving innovation and performance,” Solomon said in a statement. “There is no greater stage than Madison Square Garden and no bigger names in sports – I cannot wait to join the talented staff at MSG and collectively accomplish even greater success in the days to come.”

Prior to the NBA, Solomon was with McKinsey & Company for seven years, where he held a number of positions with increasing responsibility, including his last role as Associate Principal. During this time, he advised an extensive array of media and entertainment, gaming, and financial services clients in the areas of sales and marketing strategy, pricing, and customer experience. Mr. Solomon began his professional career at Silicon Valley Bank, where as part of the company’s Venture Capital Group, he led due diligence, recommended investments and advised senior management of early-stage technology companies.

Madison Square Garden Co., said it has named Donna Coleman executive vice president and chief financial officer. Coleman had been serving as interim CFO since May, after former CFO Sean Creamer resigned.  She will report directly to MSG president and CEO David O’Connor.

Madison Square Garden split its sports teams, entertainment venues and regional sports networks earlier this month in a transaction that created two separate publicly traded entities. Madison Square Garden includes professional sports teams the New York Knicks, The New York Rangers and the New York Liberty as well as noted entertainment venues like Madison Square Garden, Radio City Music Hall and The Beacon Theater. MSG Networks includes regional sports networks MSG Network and MSG Plus.

Coleman had previously served as executive vice president of corporate financial planning and control at Cablevision Systems for more than 15 years before retiring in December 2014. Prior to that she served as  senior vice president of corporate financial planning and control from 2011 to 2012, after serving as senior vice president of planning and operations for more than 10 years.

“We are extremely pleased that Donna has agreed to stay at MSG,” O’Connor said in a statement. “Over the last five months, Donna has proven to be an invaluable member of the team, helping to guide the company through our recent spin-off. With her considerable financial and operating experience, we are confident that she is the ideal executive to help lead the company as we implement our ambitious plans to build on our tremendous legacy."

Coleman will be responsible for strategic financial insight on all facets of the business, helping prioritize opportunities and drive value creation. Additionally, she oversees all of MSG’s financial and accounting matters, including forecasting, budgeting and financial planning and analysis, as well as the company’s treasury, investor relations, tax and risk management functions.

“I am thrilled to be at MSG during such an important time for the company,” Coleman said in a statement. “We have worked hard over the last several months to position MSG for its next chapter. I look forward to working with the management team and employees across the company to ensure we continue to deliver excellence across our operations, and pursue strategic growth initiatives that will allow us to expand our leadership position and create long-term shareholder value.”

Madison Square Garden Co. said its board of directors has approved the long-awaited split of its sports and entertainment assets, creating a media company dubbed MSG Networks Inc. and a sports and entertainment unit that will retain the Madison Square Garden Co. name.

The distribution will take place on Sept. 30 to MSG shareholders of record as of Sept. 21.

Madison Square Garden first announced its intention to split the company in October.  As part of the split, its cable sports networks MSG Network, MSG + would be housed in the MSG Networks unit while its professional sports teams (including the New York Knicks and New York Rangers) and entertainment venues like Madison Square Garden, Radio City Music Hall, The Forum and the Chicago Theater would remain in the Madison Square Garden Co.

For the distribution, each MSG Class A common stockholder will receive one share of the new Madison Square Garden Company Class A common stock for every three shares of MSG Class A common stock held as of the record date. Each MSG Class B common stockholder will receive one share of the new Madison Square Garden Company Class B common stock for every three shares of MSG Class B common stock they hold as of the record date.

“We are now one step closer toward our goal of creating two distinct, focused companies for investors, said MSG CEO Doc O’Connor in a statement. “The live sports and entertainment company will comprise a portfolio of celebrated venues, legendary sports teams and exclusive entertainment productions, while the media company will continue to own and operate award-winning regional networks that deliver compelling sports and entertainment content. We are confident that this transaction will further enhance the long-term value potential of both companies as each continues to build on its considerable record of achievement.”

Upon completion of the spin-off, MSG’s current repurchase program, through which $241 million of MSG Class A common stock has already been purchased, will be terminated and the new Madison Square Garden Company will have in place new Board authorization to repurchase up to $525 million of its Class A common stock.

 “Our anticipated stock buyback program for the new sports and entertainment company is a reflection of our confidence in the strength of those businesses, and of our continued desire to generate greater value for stockholders,” O’Connor said in a statement.

Statement containing details regarding the distribution of the new Madison Square Garden Company common stock and the new Madison Square Garden Company’s business and management following the spin-off will be mailed to MSG stockholders prior to the distribution date.

The spin-off has been structured to qualify as a tax-free distribution to MSG stockholders for U.S. federal income tax purposes. Cash received in lieu of fractional shares, however, will generally be taxable. MSG stockholders are urged to consult with their tax advisors with respect to the U.S. federal, state, local and foreign tax consequences of the spin-off.

Beginning on Sept. 17, and continuing until the occurrence of the distribution, MSG expects that its common stock will trade in two markets on the New York Stock Exchange: In the “regular way” market under the symbol “MSG” and under the current name, “The Madison Square Garden Company”, and in the "ex-distribution" market under the symbol "MSGN WI" and under the new name “MSG Networks Inc.”

The new Madison Square Garden Company Class A common stock is expected to begin trading on a “when-issued” basis on the NYSE under the symbol “MSG WI” and under the name “The Madison Square Garden Company” beginning on Sept. 17. "When issued" trading of the new Madison Square Garden Company Class A common stock will continue until the distribution occurs.

The completion of the spin-off is subject to the effectiveness of MSG’s Form 10, funding of the debt financing at MSG Networks and the new Madison Square Garden Company common stock being authorized for listing on the NYSE, as well as certain approvals and consents.   

Madison Square Garden Co. said Tuesday that it plans to transfer the listing of its Class A common stock to the New York Stock Exchange (NYSE) from the NASDAQ Global Market, beginning on July 27.

The stock will trade on the NYSE under its current symbol “MSG” and will continue to trade on the NASDAQ Exchange until the transfer is complete.

 “We are pleased to be joining the NYSE’s lineup of world-class companies as we continue to pursue opportunities to generate value for our shareholders,” said MSG chief financial officer Dnna Coleman in a statement. “This includes our proposed spin-off of our sports and entertainment businesses from our media business, which we expect to complete in 2015.”

MSG plans to spin off its sports businesses –including the New York Knicks, the New York Rangers, the New York Liberty, Westchester Knicks (NBADL) and the Hartford Wolf Pack (AHL) – and its entertainment assets – including Madison Square Garden Arena, Radio City Music Hall, The Beacon Theater, The LA Forum and others – from its media assets MSG Networks and MSG-Plus. The spin is expected to be completed later this year.  

 “We look forward to a long-term relationship with The Madison Square Garden Company,” said NYSE president Tom Farley in a statement. “With a portfolio of legendary brands and a reputation for creating world-class experiences, MSG is a great addition to our community of leading companies and we welcome the opportunity to support MSG’s continued growth.”

While fans can only hope that Santa leaves them a win under the tree when their team square off against the Washington Wizards on Christmas Day, MSG Network is bringing back “Knicksmas” for a third year.

Tipping off at noon on Dec. 24, the stunt, featuring 24-hours of non-stop New York Knicks programming, is hosted by Walt “St. Knick” Frazier.  Shot in his New York City apartment, brimming with holiday trimmings and graced with a roaring fireplace, Frazier will share the spirit of  the season with a local children’s choir and the Knicks City Dancers.

The programming ranges from Knicks seasons, championships and great games past -- plus a few from the current campaign -- and profiles of present and former players, including "Santa Clyde" himself. 

Click here at MSG.com to hear Christmas“Clyde-isms” at the site's new holiday soundboard.

The programming serves as a lengthy lead-in to the Knicks' pregame show on MSGN at 11:30 p.m.; ESPN will cover the contest from MSG, as the Knicks play for a 67th time on Christmas.

“KNICKSMAS” ON MSG NETWORK

12:00PM         KNICKS IN 60: KNICKS VS. CHARLOTTE (11/2/14)

1:00PM           THE GAME: 365: WALT FRAZIER: WINING AND DINING

1:30PM           MSG COUNTDOWN: 21ST CENTURY KNICKS

2:00PM           KNICKS IN 60: KNICKS VS. DENVER (11/16/14)

3:00PM           BEGINNINGS: MICHEAL RAY RICHARDSON

3:30PM           PROFILES: CARMELO ANTHONY

4:00PM           BEGINNINGS: IMAN SHUMPERT

4:30PM           THE GAME 365: CLYDE’S ISLAND OASIS

5:00PM           KNICKS IN 60 #3: KNICKS VS PHILADELPHIA

6:00PM           LOST AND FOUND: THE ’73 CHAMPIONSHIP KNICKS

7:00PM           PROFILES: PHIL JACKSON 

7:30PM           PROFILES: AMAR’E STOUDEMIRE

8:00PM           KNICKS IN 60 : KNICKS VS. CELTICS  

9:00PM           BEGINNINGS: J.R. SMITH

9:30PM           PROFILES: CARMELO ANTHONY

10:00PM         KNICKS IN 60

11:00PM         FOUR COURSES S1 # 1 (LJ, SALLEY, FRIEDLANDER, TARIQ)

11:30PM         FOUR COURSES S2 #5 (STARKS, MACCHIO, NORTON, CENAK)

12:00AM         KNICKS IN 60: KNICKS VS. CHARLOTTE (11/2/14)

1:00AM           BEGINNINGS: IMAN SHUMPERT

1:30AM           3-60s: BERNARD KING’S 60-PT. GAME

2:30AM           3-60s: CARMELO’S 62-PT. GAME

3:30AM           BEGINNINGS: MICHEAL RAY RICHARSON

4:00AM           KNICKS IN 60 #2: KNICKS VS. DENVER (11/16/14)

5:00AM           KNICKS IN 60 #3: KNICKS VS. PHILADELPHIA

6:00AM           THE GAME 365: J.R. SMITH

6:30AM           BEGINNINGS: J.R. SMITH 

7:00AM           BEGINNINGS: WALT “CLYDE” FRAZIER

7:30AM           THE GAME 365: CLYDE’S ISLAND OASIS

8:00AM           KNICKS IN 60: KNICKS VS. CELTICS

9:00AM           FOUR COURSES S1 #2 (LJ, SALLEY, FRIEDLANDER, BREUER)

9:30AM           FOUR COURSES S2 #4 (MASON, CARTER, SCOTT, FRIEDLANDER)

10:00AM         BEGINNINGS: MICHEAL RAY RICHARDSON

10:30AM         KNICKS IN 60 #5

11:30AM         KNICKS PREGAME

 The Madison Square Garden Co. said it has named former National Basketball Association executive Andrew Lustgarten executive vice president, corporate development and strategy, effective Nov. 18.

In his new role, Lustgarten will work closely with the executive management team to identify and develop strategic business opportunities and partnerships that continue to drive the overall advancement of the company. He will be responsible for developing both internal and external opportunities that further enhance the Company's key growth initiatives, maintaining key industry and strategic alliances, and overseeing its involvement in new strategic transactions. In addition, Lustgarten will be responsible for identifying emerging technologies and market trends that benefit the Company and its shareholders.

"Andrew brings considerable experience in developing strategic relationships and new opportunities that help create shareholder value," said Madison Square Garden CEO Tad Smith in a statement. "We look forward to having him as a part of our leadership team and are confident that his ability to foster both internal and external growth will prove valuable as we continue to evolve and explore opportunities to strengthen our sports, media and entertainment businesses."

Lustgarten joins MSG after seven years at the NBA, where he most recently served as senior vice president, global strategy, and before that, special assistant to the Commissioner.

At the NBA, Lustgarten played a key role in the negotiation of the league's media rights deals earlier this year and its current collective bargaining agreement. In his most recent position as senior vice president of global strategy, he oversaw the NBA's global strategy group, which focuses on the league's global initiatives, media opportunities, and new ventures, including equity investment structuring. While at the league, Lustgarten was also involved in numerous strategic initiatives, including the league's current Revenue Sharing Plan and the formation of the $253 million external investment in NBA China.

Prior to joining the NBA, Lustgarten held various positions, including vice president, finance at MSG ‘s former parent Cablevision Systems, and as a financial analyst in the Media and Entertainment Investment Banking Group of Bear Stearns & Co.

In March, Mr. Lustgarten was named to Sports Business Journal's Forty Under 40 list of the most influential executives in sports under 40 years old.  Lustgarten is on the board of directors of the Lustgarten Foundation for Pancreatic Cancer Research, the nation's largest private supporter of pancreatic cancer research. Lustgarten’s father, the late Marc Lustgarten, (for whom the Lustgarten Foundation is named) died in 1999 after a bout with Pancreatic cancer. He was the former chairman of MSG.

"I'm thrilled to be joining The Madison Square Garden Company. My experience working with David Stern and Adam Silver will be invaluable to me as we look for ways to enhance MSG's position as a leader in media, sports and entertainment," Lustgarten said in a statement. "I'm looking forward to working with the management team and staff to continue to grow this iconic company."

In the long tradition of band leaders and kazoo masters like Spike Jones, Freddy Mercury and Frank Zappa, Cablevision Systems CEO and JD & the Straight Shot front man Jim Dolan is offering a unique twist on the popular ALS “Ice Bucket Challenge,” passing out thousands of kazoos at Madison Square Garden Thursday night in an effort to raise $100,000 for the charitable organization.

Dolan, who also serves as executive chairman of Madison Square Garden Co., will attempt to break the world record for largest kazoo ensemble, set in 2011 by the BBC at Royal Albert Hall. At that record-setting performance, 5,190 kazooists (as they are called) played Wagner’s Ride of the Valkyries and Eric Coates’ Dambusters March at Royal Albert Hall. Dolan will pass out about 6,000 kazoos (emblazoned with his band’s logo) and will be joined by several celebrity guests as he attempts to soundly break the record.

Dolan and his band are scheduled to be the opening act for The Eagles at The Garden on Thursday, Sept. 18. They are expected to hit the stage at 7:15 p.m. The kazooing will commence with the song “Governor’s Blues,” which includes a kazoo solo by Dolan.

Dolan and his band performed Tuesday on Fox station WNYW’s Good Day New York morning program to help prmote the effort. Here’s a clip.

JD & The Straight Shot, which just released its latest CD – Where I’ve Been – would be the latest in a long line of Rock N’ Roll kazooists. Several top rock acts have used the instrument – or its cheaper comb-and-tissue paper equivalent – including Jimi Hendrix (in Crosstown Traffic); Frank Zappa (in Hungry Freaks, Daddy) Queen’s Freddy Mercury and Roger Taylor (in Seaside Rendezvous) and Pink Floyd (in Corporal Clegg).

The ALS ice bucket challenge has been a runaway Internet hit for the ALS Association. As of Sept. 16, more than 3 million people have taken the challenge – posting videos on Facebook dumping ice water over their heads and asking friends to do the same or donate to ALS – and have raised an estimated $113.6 million for the organization which funds research and provides assistance to people with Amyotrophic Lateral Sclerosis, also known as Lou Gehrig’s Disease.

Dolan is no stranger to raising money for good causes. He is on the board of directors of The Lustgarten Foundation, an organization he founded and wich is dedicated to finding a cure for Pancreatic Cancer, a disease that claimed his friend and mentor, former Cablevision vice chairman, in 1999.