MANHATTAN (CN) – Madison Square Garden says a journalist leaked the financial details of a massive renovation project, jeopardizing its procurement of a multimillion-dollar construction loan. The Garden claims an unidentified bank agent involved in the loan negotiations gave critical internal projections to SportsBusiness Journal editor Daniel Kaplan, who published the confidential data.
Madison Square Garden, which owns the NHL Rangers and the NBA Knicks, held a conference call with potential lenders on Nov. 6 to discuss the proposed renovation. Less than a day later, it claims, Kaplan sent an email seeking an interview about the construction loan negotiations.
In his email, Kaplan cited figures he had obtained from a bank agent participating in the conference call, the Garden claims.
The Garden says it warned Kaplan that his source had signed a nondisclosure agreement, and that all revenue projections and debt figures discussed were confidential.
Kaplan published the article anyway on Nov. 16, under the headline, “MSG Looks to Borrow for Refurb.”
In its complaint in New York County Court, the Garden claims Kaplan’s article included sensitive financial details. Citing anonymous sources, he wrote that the Garden was seeking up to $500 million for the renovation, and that post-construction cash flow could double, growing by $130 million.
The Garden challenges those numbers.
The Garden claims that Kaplan’s disregard for the privacy of the financial data constitutes tortious interference. Kaplan knew the information was confidential and strived to conceal the identities of his sources for that reason, the Garden says.
It claims that Kaplan’s article “[made] candid communications directed to the proposed financing transaction more difficult, time-consuming, and costly.”
It adds that Kaplan’s “conduct has created unnecessary disruption and confusion for [Madison Square Garden] in the otherwise orderly processes of obtaining the new financing and spinning off from its parent company [Cablevision Systems Corp.].”
New York State has a shield law that protects journalistic sources, which may complicate the Garden’s pursuit of unspecified monetary damages.
Also named as a defendant is American City Business Journals.
The Garden is represented by Abigail Diaz-Pedroso with Kirkland & Ellis.