Billionaire James Dolan has quietly moved to auction the high-end nightclub and restaurant chain Tao – a move that insiders say looks like a desperate bid to fund an expensive project elsewhere in his entertainment empire, The Post has learned.
Madison Square Garden Entertainment, a Recent York City-owned conglomerate that owns not only the landmark Recent York Knicks and Rangers but additionally Radio City Music Hall and the Rockettes, amongst others, has hired Goldman Sachs to investigate the Tao Group sale, sources close to the situation say .
First round bids for Tao – whose expensive clubs have long been the playgrounds of Wall Street financiers and celebrities like Leonardo DiCaprio, Bella Hadid and Justin Bieber – are actually being made, two sources acquainted with the situation say.
According to one source, Houston Rockets and Golden Nugget Casino owner Tilman Fertitta is reportedly a Tao candidate.
![James Dolan](https://nypost.com/wp-content/uploads/sites/2/2023/01/dolan-sale-01.jpg?w=1024)
Last month, Morgan Stanley analyst calculated that Tao – which runs 32 Recent York restaurants and clubs resembling Beauty & Essex, Lavo and Bar Moxy, in addition to dozens of other hotspot establishments resembling London, Singapore and Dubai – was value $524 million dollars. .
According to this estimate, MSGE’s 67% stake in Tao can be value $274 million, net of $85 million in Tao’s debt. Insiders say that is a sum that would help Dolan close a $600 million budget gap to construct the MSG Sphere, a state-of-the-art entertainment venue he’s constructing in Las Vegas that has nearly doubled to $2.2 billion.
Nevertheless, insiders say Dolan wants a better price well above Morgan Stanley’s valuation as Tao expands beyond its base in Recent York and Las Vegas into the Middle East and Miami.
![Bella Hadid](https://nypost.com/wp-content/uploads/sites/2/2023/01/bella-hadid.jpg?w=1024)
“Jim is 12x Ebitda,” said a source with intimate knowledge of the sale, which might total nearly $800 million. “It’s probably value seven to eight.”
“Many rents on Tao’s properties will increase over the subsequent five years,” the source added, explaining why the multiple needs to be single digits. “You furthermore mght have to consistently reinvest.”
The source believes that Dolan needs the cash to fund the Sphere, he may accept a more reasonable price, although the source added that Dolan has a history of discovering and then canceling auctions.
![Building the Sphere in Las Vegas](https://nypost.com/wp-content/uploads/sites/2/2023/01/msg-sphere-vegas.jpg?w=1024)
MSGE said it was company policy not to comment on rumors or speculation, a spokesman said.
In 2017, Madison Square Garden acquired a controlling interest in Tao for $181 million, with Tao founders Marc Packer, Wealthy Wolf, Noah Tepperberg, and Jason Strauss retaining a minority stake within the business.
Tao recently recovered from business troubles that began before the pandemic. The corporate was facing debt default in 2019 after its revenues fell by half. MSG stepped in and lent Tao $49 million after Tao’s lender, JPMorgan, refused to transfer the total $100 million loan, the sources said.
![Houston Rockets owner Tilman Fertitta](https://nypost.com/wp-content/uploads/sites/2/2023/01/tilman-fertitta.jpg?w=1024)
Last 12 months, Tao Group paid $99 million to acquire Hakkasan Group – a worldwide chain of high-end restaurants and clubs with outlets in London, Las Vegas, the Middle East and Asia – a deal widely seen as shrewd and lucrative, sources say.
Sources say the Tao sale looks like a key source of money for Dolan looking to raise money for MSG Sphere. On December 22, the project announced that it had borrowed $275 million from a bunch of lenders led by JPMorgan.
On December 6, MSGE announced that it intended to spin off the sector of the identical name together with Radio City Music Hall, Radio City Rockettes and Christmas Spectacular and other live entertainment venues this spring right into a separate publicly traded company. According to analysts, the proceeds from this spin-off could reach almost $600 million if successful.
Meanwhile, MSG Networks – the so-called Regional Sports Networks, or RSNs, which carry local cable television broadcasts of Knicks games in addition to the NHL Rangers, Recent York Islanders and Recent Jersey Devils – will remain with the parent company, which currently houses the Tao Group and MSG Sphere.