Investors flee James Dolan decision to merge MSG’s owner with its cable network

Billionaire James Dolan is merging the company that owns the Madison Square Garden arena with the cable network that broadcasts New York Knicks games to local fans — and investors are running for the exits.

Madison Square Garden Entertainment — which in addition to the Garden owns Radio City Music Hall and the Tao restaurant and nightclub chain — on Friday announced it will buy MSG Networks for about $900 million in stock. Shares of the companies — both of which are controlled by Dolan, who also owns the Knicks and the New York Rangers — tanked on the news, with MSGE closing down 9.9 percent at $84.67, and MSGN tumbling 7.6 percent to $16.06.