Madison Square Garden Sports (MSGS) - 2025 Q2 - Quarterly Report

Revenue Performance - Revenues increased by $30,861, or 9%, to $357,759 for the three months ended December 31, 2024, and by $41,122, or 11%, to $411,066 for the six months ended December 31, 2024 compared to the prior year periods [151]. - The increase in revenues from league distributions for the three months ended December 31, 2024 was primarily due to increased national media rights fees, contributing to a total increase of $2,649 [155]. - The increase in sponsorship and signage revenues for the three months ended December 31, 2024 was primarily due to additional home games and higher net sales of existing inventory, totaling an increase of $3,082 [154]. - The increase in revenues from local media rights fees was primarily due to contractual rate increases, totaling $1,666 for the three months ended December 31, 2024 [157]. - The increase in pre/regular season ticket-related revenues was $14,339 for the three months ended December 31, 2024, attributed to higher average per-game revenue [152]. Expense Analysis - Direct operating expenses rose by $43,528, or 19%, to $275,753 for the three months ended December 31, 2024, and by $48,219, or 20%, to $283,964 for the six months ended December 31, 2024 compared to the prior year periods [158]. - Team personnel compensation increased by $15,248 for the three months ended December 31, 2024, primarily due to changes in the Knicks roster [158]. - Selling, general and administrative expenses for the three months ended December 31, 2024 increased by $2,834, or 4%, to $67,900 compared to the prior year period [167]. - Net provisions for league revenue sharing expense for the three months ended December 31, 2024 were $38,457, an increase of $14,873 from the prior year period [159]. Income and Loss - Operating income decreased by $15,502, or 54%, to $13,315 for the three months ended December 31, 2024, and by $8,951, or 64%, to $5,042 for the six months ended December 31, 2024 compared to the prior year periods [151]. - Net income for the three months ended December 31, 2024 was $1,111, a decrease of $13,113, or 92%, compared to the prior year period, and for the six months ended December 31, 2024, net loss was $6,431, a decrease of $1,834, or 40% [151]. - Adjusted operating income for the three months ended December 31, 2024 decreased by $16,777, or 45%, to $20,239 compared to the prior year period, driven by higher direct operating expenses and higher selling, general and administrative expenses [183]. - Miscellaneous (expense) income, net for the three months ended December 31, 2024 reflected a net expense of $6,609, a decrease from net income of $2,991 in the prior year period [174]. Cash Flow and Financing - Net cash provided by operating activities improved by $55,878 million to $35,621 million for the six months ended December 31, 2024, primarily due to changes in working capital [196]. - Net cash used in investing activities decreased by $2,936 million to $2,302 million compared to the prior year period [198]. - Net cash used in financing activities was $12,373 million for the six months ended December 31, 2024, compared to net cash provided of $26,268 million in the same period of 2023 [199]. - As of December 31, 2024, the company had $107,823 in cash and cash equivalents and $250,000 of additional available borrowing capacity under existing credit facilities [191]. - As of December 31, 2024, total borrowings outstanding under credit facilities amounted to $275 million [210]. Assets and Liabilities - The company's deferred revenue obligations as of December 31, 2024 were $222,146, net of billed but not yet collected deferred revenue, primarily related to tickets and suites [189]. - Deferred revenue increased by $29,563 million due to higher collections of ticket, sponsorship, and suite sales [197]. - The carrying amount of goodwill as of December 31, 2024 was $226,523 million, with no impairment identified during the annual testing [203]. - Identifiable indefinite-lived intangible assets totaled $103,644 million as of December 31, 2024, with no impairments identified [205]. Future Outlook - The company expects adjusted operating income for fiscal year 2025 to reflect higher team personnel compensation and corresponding NBA luxury tax due to the Knicks' 2024-25 season roster [185]. - A hypothetical 100 basis point increase in floating interest rates would increase interest expense by approximately $2.8 million [210]. - The company relies on revenues from NBA and NHL teams, earning a disproportionate share of revenues in the second and third quarters of the fiscal year [200].