Madison Square Garden Co. said late Wednesday that the board approved plans to examine spinning-off its sports businesses that include the New York Knicks and New York Rangers into a separate publicly traded company. Madison Square Garden stock is up 1.8% in the extended session after closing down 2% to $266.23 during regular trading. “We are exploring the opportunity to further create value by separating our businesses into two distinct companies,” Chief Executive James Dolan and is expected to be executive chairman and CEO of both organizations, the company said in a statement. “We believe this proposed transaction would provide each company with enhanced strategic flexibility, its own defined business focus and clear investment characteristics.” The company said the transaction would be tax-free for shareholders, who would receive proportional distribution expected to be equivalent to two-thirds of the sports spin-off. The live entertainment company is expected to include venues such as New York’s Madison Square Garden, its sports bookings unit, a one-third interest in the sports spin-off and about $1 billion in cash on hand. Madison Square Garden shares are up 26% this year, as the S&P 500 index has gained 1%.