James Dolan on Monday agreed to sell the Tao Group to PokerStars co-founder Mark Scheinberg in a deal that values the high-end restaurant business at $550 million.
Dolan’s Madison Square Garden Entertainment bought Tao in 2017 for $181 million and will receive $300 million of net proceeds in the sale, MSGE said in a press release.
MSGE owns a 67% stake in Tao, which has an outstanding $90 million loan that will be reduced from Dolan’s share of the proceeds.
The Tao founders — Marc Packer, Rich Wolf, Noah Tepperberg and Jason Strauss — are keeping their stakes in the business.
Tao’s pricey clubs have long been playgrounds for Wall Street financiers and celebrities like Leonardo DiCaprio, Bella Hadid and Justin Bieber.
A Morgan Stanley analyst calculated in December that Tao — which operates 32 New York City restaurants and clubs like Beauty & Essex, Lavo and Bar Moxy, as well as dozens of other venues in London, Singapore and Dubai — was worth $524 million.
The Post broke the news in January that Dolan, who also owns the Knicks and Rangers, was selling Tao and hopes to use the proceeds to finish the building of the Las Vegas Sphere Arena at the Venetian. The Sphere’s budget has ballooned from $1.2 billion to $2.2 billion. It is expected to open this fall.
MSGE does not have the funds to run new Tao restaurants or night clubs and secure management contracts for new venues, a source who is close to the chain said.
That should now change with Scheinberg, owner of the realty-focused investment firm Mohari Hospitality, the source added.
“For the Tao founders, they now have a partner who wants to expand so this is great for them,” the source said.
The move comes as MSG Entertainment completes a re-organization plan, which will see it split off its live entertainment business into a new entity.
As per the plan, which is expected to be formally completed by Thursday, the current company will be renamed Sphere Entertainment Co and will comprise its Las Vegas music arena Sphere and TV unit MSG Networks.
The new company, which will retain the name Madison Square Garden Entertainment Corp, will include venues such as Radio City Music Hall, the Beacon Theatre and the Chicago Theatre along with the entertainment and sports bookings business.
Scheinberg and his father in 2014 sold online gambling company PokerStars to Amaya Gaming for $4.9 billion.
[Written in collaboration with other media outlets with information from the following sources]
