Madison Square Garden Co. is looking to spin off its sports franchises, including the New York Knicks and New York Rangers, a bet that it can wring more value from the iconic teams if they’re an independent business.

The proposal would split off the sports teams from MSG’s live-entertainment operations and be structured as a tax-free deal, the company said on Wednesday. The move sent shares up as much as 7.8 percent to $287 in late trading.

Shareholders would receive a two-thirds economic interest in the Knicks and Rangers, as well as the New York Liberty, a women’s basketball team that the company has been trying to sell.

The live-events company would keep famous venues such as Madison Square Garden and Radio City Music Hall, as well as a hospitality group, a music festival producer and about $1 billion in cash. The New York-based company plans to open new venues in Las Vegas and London in coming years.

James L. Dolan is expected to be executive chairman and chief executive officer of both companies. The split will let MSG shareholders better evaluate each set of assets while allowing them to pursue their separate strategies, the company said.

The new entity would be publicly traded and serve as “a pure-play sports company driven by the strong financial performance of the storied Knicks and Rangers franchises,” Dolan said in a statement.

The proposed split marks the latest shake-up in the Dolan empire. Last fall, David “Doc” O’Connor stepped down as CEO of Madison Square Garden. In 2015, the company separated its regional sports networks from its live sports and entertainment businesses.

Madison Square Garden’s stock has climbed in the past year, partly due to the rising valuation of the Knicks. Other NBA teams, such as the Houston Rockets, have changed hands in multibillion-dollar deals, bringing a brighter halo to the rest of the league.