| Small & micro cap project / Activism insight

MSG Networks Inc.: Owner-operator

by | Apr 9, 2020

The Dolan family controls 70% of total voting rights through the ownership of Class B shares.

CONCERNS

#1 Family relationship: 7 out of 12 board members belong to the Dolan family

  • James L. Dolan is the executive chairman of the board, and six of his family members also serve on the board.
  • James L. Dolan is the spouse of Kristin A. Dolan (director), son of Charles F. Dolan (director), the father of Quentin F. Dolan (director), the brother of Thomas C. Dolan (director), the brother-in-law of Brian G. Sweeney (director) and the cousin of Paul J. Dolan (director).

 

 #2 Executives of the company also serve in executive positions at Madison Square Garden Company

The “executives” of the company also serve in executive position at Madison Square Garden (“MSG”), and six of the company’s director nominees (including James L. Dolan) also serve as directors of MSG. Moreover, six directors also serve as directors of AMC Networks.

The company acknowledges the apparent conflict of interest. For example, there is the potential for a conflict of interest when the company and MSG and/or AMC Networks look at certain acquisitions and other corporate opportunities that may be suitable for more than one of the companies.

  • The company’s executive chairman, James L. Dolan, also serves as the executive chairman and chief executive officer of Madison Square Garden (“MSG”). In FY 2019, Dolan’s salary at The Madison Square Garden was $54.1 million.
  • Vice chairman, Gregg G. Seibert, also serves as vice chairman of MSG and AMC Networks.
  • Executive vice president and general counsel, Lawrence J. Burian, also serves as executive vice president and general counsel of MSG
  • Secretary, Mark C. Cresitello, also serves as senior vice president, associate general counsel and secretary of MSG.

#3 Related party transactions

The company has plenty of related party transactions through several agreements.

#4 Huge compensations; perks include aircraft, car, car driver and executive security

The company’s executives are not only well paid, but pampered with lavish perks that include aircraft, cars, car drivers, and private security guards.

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