We came across a bullish thesis on Madison Square Garden Sports Corp on Open Insights's Substack. As of 19ᵗʰ September, Madison Square Garden Sports Corp's share was trading at $213.62. MSGS's forward P/E was 133.51 according to Yahoo Finance. NBA, NBA 2k, Kobe, Basketball Photo by Ramiro Pianarosa on Unsplash The Los Angeles Lakers were bought in 1979 for $67.5M and sold 46 years later for $10B, representing an average annual appreciation of 11.5% in value. Similarly, an investment in Madison Square Ga ...

NEW YORK--(BUSINESS WIRE)--Madison Square Garden Sports Corp. (NYSE: MSGS) ("MSG Sports†) today announced a landmark partnership with GAME 7, naming the multi-platform sports and entertainment brand the first-ever jersey patch partner of the New York Rangers. Beginning with the upcoming Rangers centennial season in 2025-26, the two companies will kick off a multifaceted partnership that will provide GAME 7 with year-round exposure across MSG's unrivaled set of sports and entertainment propertie. ...

Group 1 - The New York Knicks and New York Rangers are well-known franchises in the NBA and NHL respectively [1] - The author has a background in Finance and Accounting, with experience in financial advisory [1] - The investment approach focuses on long-term conviction holdings and tactical sector rotations, emphasizing the importance of making money rather than just being right [1] Group 2 - The article does not provide any specific investment recommendations or advice [2][3] - There is a disclosure stating that the author has no current stock or derivative positions in the companies mentioned [2] - The views expressed in the article are personal opinions and do not reflect the views of Seeking Alpha as a whole [3]

Madison Square Garden Sports Corp. (NYSE:MSGS) perked up in early trading on Tuesday after Citi started off coverage on the media and entertainment stock with a Buy rating. Analyst Steven Sheeckutz and his team think investors may be underestimating the ...

Group 1 - Madison Square Garden (MSGS) reported revenue of $203.96 million for the quarter ended June 2025, a decrease of 10.3% year-over-year, with an EPS of -$0.07 compared to $1.06 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $165.69 million by 23.1%, and the EPS surprised by 83.33% against the consensus estimate of -$0.42 [1] - The stock has returned -4.3% over the past month, underperforming the Zacks S&P 500 composite's +3.1% change, and currently holds a Zacks Rank 5 (Strong Sell) [3] Group 2 - Total revenues from event-related contracts were $140.32 million, surpassing the average estimate of $88.37 million, but reflecting a year-over-year decline of 7.8% [4] - League distributions and other revenues totaled $3.99 million, below the average estimate of $5.08 million, marking a significant year-over-year decrease of 66.8% [4] - Sponsorship, signage, and suite licenses generated $31.88 million, slightly above the estimated $29.22 million, but down 8.2% compared to the previous year [4] - Media rights revenues were reported at $27.77 million, slightly below the estimated $28.38 million, with a year-over-year decline of 2.3% [4]

PART I [Business](index=4&type=section&id=Item%201.%20Business) MSG Sports owns and operates the New York Knicks (NBA) and New York Rangers (NHL), leveraging strong market presence and partnerships to drive revenue - MSG Sports owns and operates the New York Knicks (NBA) and New York Rangers (NHL), along with development league teams (Hartford Wolf Pack, Westchester Knicks)[17](index=17&type=chunk) - The company's strategy focuses on developing championship-caliber teams, maximizing live sports content value through media rights, and driving sponsorship and suite sales via integrated marketing with MSG Entertainment and Sphere Entertainment[19](index=19&type=chunk) - Local media rights agreements with MSG Networks for the Knicks and Rangers were amended in June 2025, reducing fees and shortening terms to expire after the 2028-29 seasons[19](index=19&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) MSG Sports faces significant risks including intense competition, dependence on team popularity, financial volatility, economic downturns, and reliance on affiliated entities - The company's financial results are substantially dependent on the continued popularity and competitive success of the Knicks and Rangers, which cannot be assured[55](index=55&type=chunk) - Local media rights revenue, a significant stream, decreased by **$17.9 million** in fiscal year 2025 due to amendments with MSG Networks, which reduced fees (Knicks **28%**, Rangers **18%**) and shortened contract terms to 2028-29[67](index=67&type=chunk) - The Dolan Family Group controls approximately **70.7%** of the total voting power, enabling them to prevent a change in control and elect directors, and potentially leading to conflicts of interest due to shared officers and directors with affiliated entities[123](index=123&type=chunk)[126](index=126&type=chunk)[133](index=133&type=chunk) [Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC [Cybersecurity](index=25&type=section&id=Item%201C.%20Cybersecurity) MSG Sports maintains a comprehensive cyber risk management program with Audit Committee oversight, including testing, incident response, and training - The company's cyber risk management program includes regular system security testing, a cybersecurity incident response policy, periodic employee security awareness training, comprehensive vulnerability analysis, and network activity monitoring[137](index=137&type=chunk)[141](index=141&type=chunk) - The Chief Security Officer (CSO), shared with MSG Entertainment, leads the tactical incident response team and reports annually to the Audit Committee on cybersecurity risks[139](index=139&type=chunk)[140](index=140&type=chunk)[144](index=144&type=chunk) - A past payment card issue in November 2016 at MSG Entertainment venues, including The Garden, highlights the ongoing nature of cybersecurity threats[145](index=145&type=chunk) [Properties](index=26&type=section&id=Item%202.%20Properties) MSG Sports licenses Madison Square Garden Arena, owns a training center, and subleases office space from MSG Entertainment - The Knicks and Rangers play home games at Madison Square Garden Arena, licensed from MSG Entertainment[146](index=146&type=chunk) - The company owns the **114,000 square-foot** Madison Square Garden Training Center in Greenburgh, NY[146](index=146&type=chunk) - Administrative and executive offices are located at Two Pennsylvania Plaza, New York City, under a sublease agreement with MSG Entertainment[147](index=147&type=chunk) [Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) MSG Sports is a defendant in various lawsuits, but management does not anticipate a material adverse effect from their resolution - The company is involved in various lawsuits, but management believes their resolution will not have a material adverse effect[148](index=148&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Madison Square Garden Sports Corp PART II [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20the%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A Common Stock is listed on the NYSE, with an ongoing share repurchase program and a special cash dividend paid in October 2022 Stock Performance Comparison (June 30, 2020 - June 30, 2025) | Index | 6/30/20 | 6/30/21 | 6/30/22 | 6/30/23 | 6/30/24 | 6/30/25 | | :--------------------------------- | :------ | :------ | :------ | :------ | :------ | :------ | | Madison Square Garden Company Sports Corp. | $100.00 | $117.48 | $102.80 | $134.02 | $134.08 | $148.92 | | Russell 3000 Index | $100.00 | $144.16 | $124.18 | $147.71 | $181.87 | $209.69 | | Bloomberg Americas Entertainment Index | $100.00 | $230.15 | $121.64 | $144.03 | $145.28 | $155.90 | - As of June 30, 2025, approximately **$185 million** remained under the **$525 million** Class A Common Stock share repurchase program. No share repurchase activity occurred during the three months ended June 30, 2025[158](index=158&type=chunk) - A special cash dividend of **$7.00 per share** was declared on October 6, 2022, and paid on October 31, 2022[156](index=156&type=chunk) [Item 6. [Reserved]](index=28&type=section&id=Item%206.%20[Reserved]) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes MSG Sports' financial condition and results for fiscal years 2025 and 2024, reporting a net loss of **$22.4 million** in 2025 due to higher direct operating expenses Key Financial Highlights (Years Ended June 30, in thousands) | Metric | 2025 | 2024 | Change (Amount) | Change (%) | | :------------------------------------- | :--------- | :--------- | :-------------- | :--------- | | Revenues | $1,039,220 | $1,027,149 | $12,071 | 1% | | Direct operating expenses | $755,118 | $616,514 | $138,604 | 22% | | Selling, general and administrative expenses | $266,076 | $261,433 | $4,643 | 2% | | Operating income | $14,808 | $146,038 | $(131,230) | (90)% | | Net (loss) income | $(22,438) | $58,771 | $(81,209) | NM | | Adjusted operating income | $38,156 | $172,242 | $(134,086) | (78)% | - The decrease in operating income and net income was primarily driven by a significant increase in direct operating expenses, including higher NBA luxury tax expense and team personnel transaction costs[226](index=226&type=chunk)[217](index=217&type=chunk) - Local media rights fees decreased by **$17.9 million** in fiscal year 2025 due to a **28%** reduction for the Knicks and an **18%** reduction for the Rangers, effective January 1, 2025, as a result of amendments to agreements with MSG Networks[214](index=214&type=chunk)[208](index=208&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) MSG Sports' primary market risk is interest rate exposure on variable-rate borrowings, with a 100 basis point increase raising annual interest expense by **$2.7 million** - The company's primary market risk is interest rate exposure on variable-rate borrowings under credit facilities[280](index=280&type=chunk) - As of June 30, 2025, **$267 million** was outstanding under credit facilities. A hypothetical **100 basis point** increase in floating interest rates would increase annual interest expense by approximately **$2.7 million**[281](index=281&type=chunk) [Financial Statements and Supplementary Data](index=46&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item incorporates by reference the audited consolidated financial statements and supplementary data, which begin on page F-1 - The financial statements and supplementary data are incorporated by reference and begin on page F-1[282](index=282&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=46&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with accountants on accounting and financial disclosure [Controls and Procedures](index=46&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of June 30, 2025 - The company's disclosure controls and procedures were effective as of June 30, 2025[285](index=285&type=chunk) - Management concluded that internal control over financial reporting was effective as of June 30, 2025, based on the COSO framework[288](index=288&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[290](index=290&type=chunk) [Other Information](index=47&type=section&id=Item%209B.%20Other%20Information) The company reported no other information required under this item [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=47&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to Madison Square Garden Sports Corp PART III [Directors, Executive Officers and Corporate Governance](index=48&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 proxy statement - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 proxy statement[295](index=295&type=chunk) [Executive Compensation](index=48&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation details are incorporated by reference from the company's 2025 annual meeting proxy statement - Executive compensation details are incorporated by reference from the 2025 proxy statement[296](index=296&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=48&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information for beneficial owners and management is incorporated by reference from the 2025 proxy statement - Security ownership information is incorporated by reference from the 2025 proxy statement[297](index=297&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=48&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Details on related party transactions and director independence are incorporated by reference from the 2025 proxy statement - Details on related party transactions and director independence are incorporated by reference from the 2025 proxy statement[298](index=298&type=chunk) [Principal Accountant Fees and Services](index=48&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the 2025 proxy statement - Information on principal accountant fees and services is incorporated by reference from the 2025 proxy statement[299](index=299&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=49&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the 10-K report, including various agreements and certifications - The report includes financial statements, Schedule II – Valuation and Qualifying Accounts, and a comprehensive list of exhibits[302](index=302&type=chunk) - Exhibits include distribution agreements, articles of incorporation, bylaws, registration rights agreements, employee matters agreements, credit agreements, arena license agreements, and sponsorship sales agreements[302](index=302&type=chunk)[304](index=304&type=chunk)[306](index=306&type=chunk) - Certain confidential information has been omitted from exhibits, and some exhibits are furnished rather than filed, affecting their liability under the Securities Exchange Act of 1934[310](index=310&type=chunk) [Form 10-K Summary](index=56&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has elected not to provide a Form 10-K summary - The company has elected not to provide summary information for its Form 10-K[309](index=309&type=chunk) [Report of Independent Registered Public Accounting Firm](index=61&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) [Opinion on the Financial Statements](index=61&type=section&id=Opinion%20on%20the%20Financial%20Statements) Deloitte & Touche LLP issued an unqualified opinion, stating the consolidated financial statements present fairly the financial position, results, and cash flows in conformity with GAAP - Deloitte & Touche LLP provided an unqualified opinion on the consolidated financial statements for the periods ended June 30, 2025, 2024, and 2023[325](index=325&type=chunk) [Opinion on Internal Control over Financial Reporting](index=63&type=section&id=Opinion%20on%20Internal%20Control%20over%20Financial%20Reporting) Deloitte & Touche LLP also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of June 30, 2025 - Deloitte & Touche LLP issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of June 30, 2025[336](index=336&type=chunk) [Critical Audit Matter](index=61&type=section&id=Critical%20Audit%20Matter) The evaluation of related parties and related party transactions was a critical audit matter due to complex relationships and significant auditor judgment - The evaluation of related parties and related party transactions was identified as a critical audit matter due to the high degree of auditor judgment required[331](index=331&type=chunk) - The Dolan Family Group is the majority beneficial owner of the Company and several related entities, leading to numerous related party transactions[330](index=330&type=chunk) - Audit procedures included testing internal controls, inquiries with management, reviewing agreements, analyzing general ledger, and obtaining confirmations from related parties[332](index=332&type=chunk) [Consolidated Financial Statements](index=64&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=64&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$1.47 billion** in 2025 from **$1.35 billion** in 2024, with a total equity deficit of **$(281.4) million** Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Total assets | $1,472,974 | $1,346,292 | | Total liabilities | $1,754,413 | $1,612,602 | | Total equity | $(281,439) | $(266,310) | | Cash and cash equivalents | $144,617 | $89,136 | | Right-of-use lease assets | $760,456 | $694,566 | | Operating lease liabilities, noncurrent | $841,050 | $749,952 | | League-related accruals | $196,567 | $120,876 | [Consolidated Statements of Operations](index=66&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a net loss of **$22.4 million** in 2025, a significant decline from 2024, primarily due to a **22%** increase in direct operating expenses Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | 2025 | 2024 | 2023 | | :---------------------------------------------------- | :--------- | :--------- | :--------- | | Revenues | $1,039,220 | $1,027,149 | $887,447 | | Direct operating expenses | $755,118 | $616,514 | $548,811 | | Operating income | $14,808 | $146,038 | $85,174 | | Net (loss) income | $(22,438) | $58,771 | $45,628 | | Basic (loss) earnings per common share | $(0.93) | $2.45 | $1.90 | | Diluted (loss) earnings per common share | $(0.93) | $2.44 | $1.89 | - Revenues from related parties amounted to **$177.4 million** in 2025, **$197.6 million** in 2024, and **$190.0 million** in 2023[348](index=348&type=chunk) - Direct operating expenses include net charges from related parties of **$102.3 million** in 2025, **$104.6 million** in 2024, and **$100.5 million** in 2023[348](index=348&type=chunk) [Consolidated Statements of Comprehensive (Loss) Income](index=67&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) The company reported a comprehensive loss of **$(22.4) million** in 2025, a decline from comprehensive income in 2024, primarily due to the net loss Consolidated Statements of Comprehensive (Loss) Income (in thousands) | Metric | 2025 | 2024 | 2023 | | :---------------------------------------------------------------- | :--------- | :--------- | :--------- | | Net (loss) income | $(22,438) | $58,771 | $45,628 | | Other comprehensive income, net of income taxes | $55 | $57 | $177 | | Comprehensive (loss) income attributable to Madison Square Garden Sports Corp.'s stockholders | $(22,383) | $58,828 | $47,970 | [Consolidated Statements of Cash Flows](index=68&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities remained stable at **$91.6 million** in 2025, with an overall increase in cash, cash equivalents, and restricted cash by **$58.3 million** Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | 2025 | 2024 | 2023 | | :------------------------------------------ | :--------- | :--------- | :--------- | | Net cash provided by operating activities | $91,607 | $92,131 | $152,473 | | Net cash used in investing activities | $(6,920) | $(8,898) | $(17,759) | | Net cash used in financing activities | $(26,406) | $(28,785) | $(185,273) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $58,281 | $54,448 | $(50,559) | | Cash, cash equivalents and restricted cash at end of period | $153,188 | $94,907 | $40,459 | - Changes in working capital assets and liabilities significantly impacted operating cash flow, driven by increased accruals for NBA luxury tax, revenue sharing, and league assessments, and higher deferred revenue[245](index=245&type=chunk) - Financing activities in 2025 saw lower repayments under credit facilities compared to 2024, and principal repayments under the Rangers NHL Advance Agreement[248](index=248&type=chunk) [Consolidated Statements of Equity](index=70&type=section&id=Consolidated%20Statements%20of%20Equity) The total equity deficit increased to **$(281.4) million** in 2025, primarily due to the net loss incurred in fiscal year 2025 Consolidated Statements of Equity Highlights (in thousands) | Metric | June 30, 2025 | June 30, 2024 | June 30, 2023 | | :---------------------------------------------------- | :------------ | :------------ | :------------ | | Total Equity | $(281,439) | $(266,310) | $(337,234) | | Accumulated deficit | $(137,596) | $(115,139) | $(173,910) | | Share-based compensation | $17,935 | $21,291 | $25,203 | | Tax withholding associated with shares issued for equity-based compensation | $(10,662) | $(9,195) | $(17,897) | [Notes to Consolidated Financial Statements](index=73&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1. Description of Business and Basis of Presentation](index=73&type=section&id=Note%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) This note describes MSG Sports' core business, corporate history, and its operation as a single segment with a fiscal year ending June 30 - MSG Sports owns and operates the New York Knicks (NBA) and New York Rangers (NHL), along with development league teams[368](index=368&type=chunk) - The company completed its conversion from a Delaware to a Nevada corporation on June 10, 2025[374](index=374&type=chunk) - The company operates and reports financial information in one segment, with its Executive Chairman and CEO serving as the Chief Operating Decision Maker[369](index=369&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=73&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note details significant accounting policies, including revenue recognition, direct operating expenses, income taxes, and recently adopted accounting pronouncements - The company's critical accounting policies involve significant judgment and estimates, particularly in areas like valuation of goodwill, intangible assets, investments, deferred tax assets, and revenue recognition for multi-year sponsorship agreements[377](index=377&type=chunk)[257](index=257&type=chunk)[260](index=260&type=chunk) - The NBA CBA includes a luxury tax for teams exceeding salary thresholds, with rates increasing for repeat taxpayers. The Knicks were a luxury tax payer for the 2024-25 season[387](index=387&type=chunk) - The company adopted ASU No. 2023-01 (Leases: Common Control Arrangements) and ASU No. 2023-07 (Segment Reporting) in fiscal year 2025, with the latter applied retrospectively[428](index=428&type=chunk)[431](index=431&type=chunk) [Note 3. Revenue Recognition](index=80&type=section&id=Note%203.%20Revenue%20Recognition) This note outlines revenue recognition policies, detailing sources like event-related income, media rights, and sponsorships, and highlights amended local media rights agreements Revenues by Type of Goods or Services (in thousands) | Revenue Type | 2025 | 2024 | 2023 | | :-------------------------------- | :--------- | :--------- | :--------- | | Event-related | $462,533 | $458,213 | $362,527 | | Media rights | $285,566 | $297,756 | $288,965 | | Sponsorship, signage and suite licenses | $230,184 | $210,742 | $196,483 | | League distributions and other | $60,937 | $60,438 | $39,472 | | **Total revenues** | **$1,039,220** | **$1,027,149** | **$887,447** | - Local media rights fees for the Knicks and Rangers were reduced by **28%** and **18%** respectively, effective January 1, 2025, and the contract expiration date was changed to the end of the 2028-29 season[454](index=454&type=chunk) - MSG Networks issued penny warrants to the Company, exercisable for **19.9%** of its equity interests, concurrent with the media rights amendments[448](index=448&type=chunk) [Note 4. Computation of (Loss) Earnings per Common Share](index=84&type=section&id=Note%204.%20Computation%20of%20(Loss)%20Earnings%20per%20Common%20Share) This note provides the calculation of basic and diluted EPS, reporting a loss of **$(0.93)** per share for 2025 due to the net loss Earnings Per Common Share (EPS) (in thousands, except per share data) | Metric | 2025 | 2024 | 2023 | | :---------------------------------------------------------------- | :--------- | :--------- | :--------- | | Net (loss) income allocable to common shares | $(22,457) | $58,771 | $45,751 | | Weighted-average shares for basic EPS | 24,089 | 24,011 | 24,090 | | Basic (loss) earnings per common share | $(0.93) | $2.45 | $1.90 | | Diluted (loss) earnings per common share | $(0.93) | $2.44 | $1.89 | - Common stock equivalents were anti-dilutive in 2025 due to the net loss, resulting in basic and diluted EPS being the same[406](index=406&type=chunk) [Note 5. Team Personnel Transactions](index=84&type=section&id=Note%205.%20Team%20Personnel%20Transactions) Net provisions for team personnel transactions significantly increased to **$49.1 million** in 2025, reflecting substantial activity in player management Net Provisions for Team Personnel Transactions (in thousands) | Transaction Type | 2025 | 2024 | 2023 | | :------------------------------------- | :--------- | :--------- | :--------- | | Waivers/contract terminations | $39,215 | $(332) | $2,000 | | Player trades | $9,800 | $(1,500) | $2,000 | | Season-ending player injuries | $133 | $2,613 | $412 | | **Net provisions** | **$49,148** | **$781** | **$4,412** | - The significant increase in net provisions for team personnel transactions in 2025 was primarily due to higher costs from waivers/contract terminations and player trades[220](index=220&type=chunk) [Note 6. Cash, Cash Equivalent and Restricted Cash](index=84&type=section&id=Note%206.%20Cash,%20Cash%20Equivalent%20and%20Restricted%20Cash) Cash and cash equivalents increased to **$144.6 million** in 2025, with restricted cash primarily held in escrow per the NHL CBA Cash, Cash Equivalents and Restricted Cash (in thousands) | Metric | June 30, 2025 | June 30, 2024 | June 30, 2023 | | :------------------------------------------ | :------------ | :------------ | :------------ | | Cash and cash equivalents | $144,617 | $89,136 | $40,398 | | Restricted cash | $8,571 | $5,771 | $61 | | **Total cash, cash equivalents and restricted cash** | **$153,188** | **$94,907** | **$40,459** | - Restricted cash primarily consists of amounts withheld from player salaries and deposited into an escrow account as required by the NHL CBA[408](index=408&type=chunk) [Note 7. Leases](index=86&type=section&id=Note%207.%20Leases) This note details operating leases for the Madison Square Garden Arena and corporate offices, with a weighted average remaining lease term of **28.1 years** Right-of-Use Assets and Lease Liabilities (in thousands) | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Operating leases ROU assets | $760,456 | $694,566 | | Operating lease liabilities, current | $52,618 | $50,267 | | Operating lease liabilities, noncurrent | $841,050 | $749,952 | | **Total lease liabilities** | **$893,668** | **$800,219** | - The Arena License Agreements for The Garden have a term through June 30, 2055, with fixed payments increasing by **3%** annually[477](index=477&type=chunk) - As of June 30, 2025, the weighted average remaining lease term for operating leases was **28.1 years**, and the weighted average discount rate was **7.05%**[485](index=485&type=chunk) [Note 8. Property and Equipment](index=89&type=section&id=Note%208.%20Property%20and%20Equipment) Total property and equipment, net, was **$29.0 million** in 2025, with depreciation and amortization expense of **$3.2 million** for the year Property and Equipment, Net (in thousands) | Asset Category | June 30, 2025 | June 30, 2024 | | :----------------------- | :------------ | :------------ | | Land | $5,153 | $5,153 | | Buildings | $51,713 | $51,645 | | Equipment | $21,957 | $22,878 | | Leasehold improvements | $658 | $564 | | Furniture and fixtures | $2,841 | $555 | | Construction in progress | $275 | $27 | | Less accumulated depreciation and amortization | $(53,635) | $(52,281) | | **Total property and equipment, net** | **$28,962** | **$28,541** | - Depreciation and amortization expense on property and equipment was **$3.2 million** for the year ended June 30, 2025[487](index=487&type=chunk) [Note 9. Goodwill and Intangible Assets](index=89&type=section&id=Note%209.%20Goodwill%20and%20Intangible%20Assets) Goodwill remained at **$226.5 million** and indefinite-lived intangible assets totaled **$103.6 million** in 2025, with no impairments identified Goodwill and Indefinite-Lived Intangible Assets (in thousands) | Asset Category | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Goodwill | $226,523 | $226,523 | | Sports franchises | $102,564 | $102,564 | | Photographic related rights | $1,080 | $1,080 | | **Total indefinite-lived intangible assets** | **$103,644** | **$103,644** | - No impairment of goodwill or identifiable indefinite-lived intangible assets was identified during the annual impairment tests in the first quarter of fiscal year 2025[488](index=488&type=chunk)[490](index=490&type=chunk) [Note 10. Investments](index=90&type=section&id=Note%2010.%20Investments) Total investments decreased to **$54.7 million** in 2025, including equity method investments, equity investments with readily determinable fair values, and derivative instruments Investments (in thousands) | Investment Category | June 30, 2025 | June 30, 2024 | | :---------------------------------------------------------------- | :------------ | :------------ | | Equity method investments (NRG, Other) | $11,028 | $12,574 | | Equity investments with readily determinable fair values (Xtract One, Deferred Comp Plan) | $32,826 | $36,217 | | Equity investments without readily determinable fair values | $9,262 | $6,757 | | Derivative instruments (Xtract One warrants) | $1,604 | $6,995 | | **Total investments** | **$54,720** | **$62,543** | - The company received penny warrants exercisable for **19.9%** of MSG Networks' equity interests as part of the media rights agreements amendments, accounted for as an equity method investment[497](index=497&type=chunk) - Unrealized losses on Xtract One common stock and warrants, along with losses from the NRG investment, contributed to a decrease in investment value[499](index=499&type=chunk)[494](index=494&type=chunk) [Note 11. Fair Value Measurements](index=92&type=section&id=Note%2011.%20Fair%20Value%20Measurements) This note details fair value measurements of assets, categorized into a three-level hierarchy, with Level III inputs including Xtract One warrants valued using Black-Scholes Assets Measured at Fair Value (in thousands) | Asset Category | Fair Value Hierarchy | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------------- | :------------ | :------------ | | Money market accounts | I | $95,367 | $37,594 | | Time deposits | I | $48,263 | $49,510 | | Equity investments | I | $32,826 | $36,217 | | Warrants | III | $1,604 | $6,995 | | **Total assets measured at fair value** | | **$178,060** | **$130,316** | - Level III assets, primarily Xtract One warrants, are valued using the Black-Scholes option pricing model with key assumptions including expected term (**1.30 years**), expected volatility (**70.78%**), and risk-free interest rate (**3.85%**) as of June 30, 2025[504](index=504&type=chunk) - The fair value of the company's debt (current and long-term) is classified within Level II and is consistent with its carrying amount due to variable interest rates[506](index=506&type=chunk)[508](index=508&type=chunk) [Note 12. Commitments and Contingencies](index=93&type=section&id=Note%2012.%20Commitments%20and%20Contingencies) The company's contractual obligations and off-balance sheet arrangements totaled **$3.7 billion** as of June 30, 2025, with **$438.2 million** due in fiscal year 2026 Contractual Obligations and Off-Balance Sheet Arrangements (in thousands) | Period | Off-Balance Sheet Commitments | Contractual Obligations reflected on the Balance Sheet | Total | | :-------------------------- | :---------------------------- | :----------------------------------- | :--------- | | Fiscal year ending June 30, 2026 | $291,215 | $68,584 | $359,799 | | Fiscal year ending June 30, 2027 | $278,966 | $15,239 | $294,205 | | Fiscal year ending June 30, 2028 | $198,390 | $15,498 | $213,888 | | Fiscal year ending June 30, 2029 | $73,421 | $3,875 | $77,296 | | Fiscal year ending June 30, 2030 | $40,083 | $1,840 | $41,923 | | Thereafter | $42,635 | $7,358 | $49,993 | | **Total** | **$924,710** | **$112,394** | **$1,037,104** | - Off-balance sheet commitments primarily consist of obligations under employment agreements for professional sports teams' personnel[509](index=509&type=chunk) - Legal matters are not expected to have a material adverse effect on the company[511](index=511&type=chunk) [Note 13. Debt](index=94&type=section&id=Note%2013.%20Debt) The company's debt includes **$267 million** outstanding on the Knicks Revolving Credit Facility and **$24 million** from the Rangers NHL Advance Agreement as of June 30, 2025 Debt Balances (in thousands) | Debt Facility | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Knicks Revolving Credit Facility | $267,000 | $275,000 | | Rangers Revolving Credit Facility | $0 | $0 | | Rangers NHL Advance Agreement | $24,000 | $30,000 | | **Total Debt** | **$291,000** | **$305,000** | - The Knicks Revolving Credit Facility had an outstanding balance of **$267 million** as of June 30, 2025, with an interest rate of **5.68%**[515](index=515&type=chunk) - The Rangers NHL Advance Agreement had an outstanding balance of **$24 million** as of June 30, 2025, bearing interest at **3.00%** per annum and payable upon demand by the NHL[532](index=532&type=chunk) [Note 14. Benefit Plans](index=96&type=section&id=Note%2014.%20Benefit%20Plans) This note details the company's defined benefit pension plans, defined contribution plans, multiemployer plans, and the Executive Deferred Compensation Plan Net Periodic Benefit Cost for Pension Plans (in thousands) | Component | 2025 | 2024 | 2023 | | :-------------------------- | :--- | :--- | :--- | | Interest cost | $251 | $272 | $239 | | Recognized actuarial loss | $81 | $37 | $18 | | Settlement loss recognized | $437 | $30 | $30 | | **Net periodic benefit cost** | **$769** | **$339** | **$287** | - The company contributes to multiemployer defined benefit pension plans, including the National Basketball Association Players' Pension Plan (Yellow Zone as of 2/2/2024) and the National Hockey League Players' Retirement Benefit Plan (Green Zone as of 4/30/2024)[553](index=553&type=chunk) - The Executive Deferred Compensation Plan's liability and corresponding assets held in trust are remeasured at fair value, with compensation expense of **$2.2 million** and offsetting gains of **$2.2 million** recognized in 2025[556](index=556&type=chunk) [Note 15. Share-based Compensation](index=101&type=section&id=Note%2015.%20Share-based%20Compensation) Share-based compensation expense was **$17.9 million** in 2025, with **$20.6 million** of unrecognized cost remaining for unvested awards - Share-based compensation expense was **$17.9 million** for the year ended June 30, 2025, recognized as a component of selling, general and administrative expenses[566](index=566&type=chunk) - As of June 30, 2025, **$20.6 million** of unrecognized compensation cost related to unvested RSUs and PSUs is expected to be recognized over a weighted-average period of approximately **1.8 years**[567](index=567&type=chunk) Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) Activity (in thousands, except per share data) | Metric | RSUs (Number) | PSUs (Number) | Weighted-Average Fair Value Per Share At Date of Grant | | :-------------------------------- | :------------ | :------------ | :------------------------------------------------------- | | Unvested award balance as of June 30, 2024 | 105 | 153 | $170.61 | | Granted | 56 | 48 | $207.32 | | Vested | (64) | (59) | $174.98 | | Forfeited | (2) | (3) | $173.51 | | Unvested award balance as of June 30, 2025 | 95 | 139 | $184.56 | [Note 16. Stock Repurchase Program](index=103&type=section&id=Note%2016.%20Stock%20Repurchase%20Program) Approximately **$184.6 million** remained available under the **$525 million** Class A Common Stock share repurchase program as of June 30, 2025 - As of June 30, 2025, **$184.6 million** remained under the **$525 million** Class A Common Stock share repurchase program[576](index=576&type=chunk) - No shares were repurchased under the program during the year ended June 30, 2025[576](index=576&type=chunk) - A **$75 million** accelerated share repurchase (ASR) program was completed on January 31, 2023, with an average purchase price of **$164.31 per share**[574](index=574&type=chunk) [Note 17. Related Party Transactions](index=104&type=section&id=Note%2017.%20Related%20Party%20Transactions) This note details extensive related party transactions with Dolan Family Group-controlled entities, including arena licensing, media rights, and business services - The Dolan Family Group controls approximately **70.7%** of the company's aggregate voting power and also controls Sphere Entertainment, MSG Entertainment, and AMC Networks Inc[579](index=579&type=chunk) - Key related party agreements include Arena License Agreements, media rights agreements with MSG Networks, Sponsorship Sales and Service Representation Agreements, and a Services Agreement with MSG Entertainment[581](index=581&type=chunk)[580](index=580&type=chunk) Revenues and Operating Expenses (Credits) from Affiliates (in thousands) | Metric | 2025 | 2024 | 2023 | | :---------------------------------------------------------------- | :--------- | :--------- | :--------- | | Revenues | $177,389 | $197,640 | $190,000 | | Expense pursuant to the Services Agreement | $36,491 | $37,346 | $36,458 | | Operating lease expense associated with the Arena License Agreements | $67,619 | $67,619 | $67,619 | | Costs associated with the Sponsorship Sales and Service Representation Agreements | $20,876 | $19,319 | $19,329 | | Other operating (credits) expenses, net | $(2,127) | $(1,867) | $84 | [Note 18. Income Taxes](index=106&type=section&id=Note%2018.%20Income%20Taxes) Income tax expense was **$5.2 million** in 2025, with a net deferred tax asset of **$34.8 million**, and the company is evaluating the OBBBA tax reform Income Tax Expense (Benefit) (in thousands) | Component | 2025 | 2024 | 2023 | | :-------------------------- | :--------- | :--------- | :--------- | | Current expense | $56,935 | $54,032 | $29,271 | | Deferred (benefit) expense | $(51,769) | $(7,135) | $15,022 | | **Income tax expense** | **$5,166** | **$46,897** | **$44,293** | Net Deferred Tax Asset (Liability) (in thousands) | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------ | | Total deferred tax assets | $146,952 | $99,718 | | Less valuation allowance | $(4,337) | $(4,160) | | Total deferred tax liabilities | $(107,794) | $(112,483) | | **Net deferred tax asset (liability)** | **$34,821** | **$(16,925)** | - The effective tax rate for 2025 was **(30)%**, differing from the statutory federal rate primarily due to nondeductible officers' compensation and state and local tax expense[230](index=230&type=chunk)[589](index=589&type=chunk) [Note 19. Additional Financial Information](index=108&type=section&id=Note%2019.%20Additional%20Financial%20Information) Prepaid expenses totaled **$43.4 million** in 2025, with MSG Networks accounting for **15%** of revenues and **11.4%** of the workforce being unionized Prepaid Expenses (in thousands) | Category | June 30, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------ | | Prepaid employee-related costs | $34,850 | $25,134 | | Other prepaid expenses | $8,567 | $5,822 | | **Total prepaid expenses** | **$43,417** | **$30,956** | - MSG Networks accounted for **15%** of the company's consolidated revenues for the year ended June 30, 2025[599](index=599&type=chunk) - Approximately **11.4%** of the company's workforce (115 full-time and part-time employees) is subject to collective bargaining agreements[600](index=600&type=chunk) [Note 20. Segment Information](index=109&type=section&id=Note%2020.%20Segment%20Information) The company operates as a single operating segment, with the CODM reviewing consolidated net (loss) income for performance assessment and resource allocation - The company operates as one operating segment, and its CODM reviews consolidated net (loss) income for performance assessment and resource allocation[602](index=602&type=chunk) Selected Financial Information by Segment (in thousands) | Expense Category | 2025 | 2024 | 2023 | | :---------------------------------------------------------------- | :--------- | :--------- | :--------- | | Ticketing and sponsorship sales related expenses | $(64,272) | $(62,347) | $(62,651) | | Marketing & event-related expenses | $(58,037) | $(65,993) | $(60,392) | | Corporate & administrative | $(113,142) | $(102,482) | $(92,071) | | Operating lease expenses and other rental expenses associated with the Arena License Agreements | $(69,337) | $(69,288) | $(69,749) | | Team operating expenses | $(508,295) | $(380,027) | $(365,016) | | Other segment items | $(208,111) | $(197,810) | $(148,817) |

Financial Performance - Madison Square Garden (MSGS) reported a quarterly loss of $0.07 per share, significantly better than the Zacks Consensus Estimate of a loss of $0.42, representing an earnings surprise of +83.33% [1] - The company posted revenues of $203.96 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 23.10%, although this is a decline from year-ago revenues of $227.25 million [2] - Over the last four quarters, Madison Square Garden has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance and Outlook - Madison Square Garden shares have declined approximately 10.3% since the beginning of the year, contrasting with the S&P 500's gain of 8.4% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is -$1.01 on revenues of $56.2 million, and for the current fiscal year, it is $0.79 on revenues of $1.04 billion [7] Industry Context - The Leisure and Recreation Services industry, to which Madison Square Garden belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Madison Square Garden's stock performance [5]

Madison Square Garden Sports Corp. (NYSE:MSGS) Q4 2025 Earnings Conference August 12, 2025 10:00 AM ET Company Participants Ari Danes - Senior Vice President of Investor Relations & Treasury Jamaal T. Lesane - Chief Operating Officer Victoria M. Mink - Executive VP, CFO & Treasurer Conference Call Participants Brandon A Ross - LightShed Partners, LLC David Carl Joyce - Seaport Research Partners Joseph Robert Stauff - Susquehanna Financial Group, LLLP, Research Division Peter Lawler Supino - Wolfe Research, ...

Financial Data and Key Metrics Changes - For fiscal year 2025, the company reported revenues exceeding $1 billion and adjusted operating income of $38 million, driven by strong demand for the Knicks and Rangers [6][15] - The fourth quarter revenues were $204 million, a decrease from $227.3 million in the prior year, with event-related revenues down 8% year over year [16][18] - Adjusted operating income for the fourth quarter decreased to an operating loss of $16.8 million, primarily due to higher direct operating expenses [17][18] Business Line Data and Key Metrics Changes - Ticketing revenue increased due to higher average ticket yield and attendance, with a combined average season ticket renewal rate of approximately 90% [8][15] - Merchandise revenues, including online sales, did not reach last year's levels, attributed to the absence of New Jersey launches for the Rangers [9] - Suite revenues reached record levels, benefiting from expanded event-level club space and renovated suites [13] Market Data and Key Metrics Changes - The Knicks' playoff run to the Eastern Conference finals generated the highest per game gate revenues in team history [7] - The company expects an increase in overall media rights revenue in fiscal 2026, despite a $24 million decrease in local media rights fees due to amended agreements [40] Company Strategy and Development Direction - The company aims to drive long-term value for shareholders through its marquee assets and strong business fundamentals [6][14] - There is a focus on enhancing fan engagement through tailored local content and marketing partnerships, with several new partnerships established [12][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the value of owning two iconic sports franchises and noted that recent franchise transactions indicate strong market valuations [14][28] - The company anticipates revenue growth across all in-arena categories in fiscal 2026, supported by new national media deals and continued investment in teams [18][40] Other Important Information - The company ended the fiscal year with approximately $145 million in cash and $291 million in debt, indicating a strong liquidity position [18][24] - The NBA's new national media deals are expected to positively impact revenues starting in the upcoming season [11][40] Q&A Session Summary Question: Impact of MSG Networks media rights on capital returns - Management indicated a strong liquidity position and potential for future capital returns, but no immediate plans were disclosed [23][26] Question: Potential for minority stake sales in Knicks or Rangers - Management acknowledged the value of the teams but stated there are no current plans for minority stake sales [27][28] Question: Participation in NBA's national RSN possibilities - Management is monitoring changes in media rights but did not comment on hypothetical scenarios [31][32] Question: Financial impact of Knicks playoff games - Playoff runs significantly increase demand for tickets and corporate partnerships, with a notable increase in social media engagement [42][43] Question: Outlook on operating expenses and team compensation - Higher team operating expenses are expected due to increased personnel compensation and luxury tax, with the NBA salary cap also rising [50][51] Question: Sponsorship growth outlook - Management is optimistic about marketing partnerships and expects continued growth following a successful fiscal year [52][53]

Financial Data and Key Metrics Changes - For fiscal year 2025, the company reported total revenues exceeding $1 billion and adjusted operating income of $38 million, driven by strong demand for the Knicks and Rangers [5][15] - The fourth quarter revenues were $204 million, a decrease from $227.3 million in the prior year, primarily due to fewer home games [15][16] - Adjusted operating income for the fourth quarter decreased to an operating loss of $16.8 million, down from a profit of $56.5 million in the prior year [16][17] Business Line Data and Key Metrics Changes - Ticketing revenue increased due to higher average ticket yield and attendance, with a combined average season ticket renewal rate of approximately 90% [7][15] - Event-related revenues, including ticket, food, beverage, and merchandise, decreased by 8% year-over-year to $140.3 million [15][16] - Merchandise revenues did not reach last year's levels, impacted by the absence of new product launches compared to the previous year [8][15] Market Data and Key Metrics Changes - The Knicks' playoff run generated the highest per game gate revenues in team history, contributing to increased fan engagement and merchandise sales during the playoffs [6][9][45] - The company anticipates an increase in overall media rights revenue in fiscal 2026, despite a $24 million decrease in local media rights fees due to amended agreements [39][40] Company Strategy and Development Direction - The company is focused on leveraging its marquee assets and strong business fundamentals to drive long-term shareholder value [5][14] - Plans for fiscal 2026 include continued investment in teams and optimizing pricing strategies for ticket sales and hospitality offerings [7][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for their teams and the potential for revenue growth across all in-arena categories in fiscal 2026 [17][18] - The company is monitoring changes in the media rights landscape and believes local media coverage remains valuable for fan engagement [31][32] Other Important Information - The company ended the fiscal year with approximately $145 million in cash and $291 million in debt, indicating a strong liquidity position [17][23] - New marketing partnerships were established, including deals with Abu Dhabi's Department of Culture and Tourism and Lenovo, alongside renewals with existing partners [12][51] Q&A Session Summary Question: Impact of MSG Networks media rights rework on capital returns - Management indicated a strong liquidity position and potential for future capital return programs, but no immediate plans were disclosed [22][25] Question: Potential for minority stake sales in Knicks or Rangers - Management acknowledged the value of their teams but stated there are no current plans for minority stake sales [26][27] Question: Participation in NBA's national RSN possibilities - Management is monitoring changes in media rights but did not commit to any specific actions regarding future participation [30][31] Question: Financial impact of Knicks playoff games - Playoff runs significantly increase demand for tickets and merchandise, with the Knicks' playoff performance leading to record revenues [42][45] Question: Outlook on operating expenses and team compensation - Higher team operating expenses are expected due to increased personnel compensation and luxury tax, with the NBA salary cap also rising [49][50] Question: Sponsorship growth outlook - Management is optimistic about marketing partnerships and expects continued growth in fiscal 2026 following a successful prior year [51][52]