MADISON SQUARE GARDEN SPORTS CORP. REPORTS FISCAL 2025 FIRST QUARTER RESULTS

Rhea-AI Summary

Madison Square Garden Sports Corp. (NYSE: MSGS) reported financial results for Q1 FY2025. Revenue increased 24% to $53.3 million, primarily driven by a $9.7 million increase in league distributions. Operating loss improved 44% to $8.3 million, while adjusted operating loss improved 77% to $2.3 million. The company achieved a 97% season ticket renewal rate for Knicks and Rangers. Notable developments include new marketing partnerships with Abu Dhabi Tourism (Knicks patch sponsor), Lenovo/Motorola, and renewals with Verizon and Benjamin Moore. The suites business showed strong performance with successful renewals and expanded event-level club space.

Positive

• Revenue increased 24% YoY to $53.3 million
• Operating loss improved 44% to $8.3 million
• Adjusted operating loss improved 77% to $2.3 million
• High season ticket renewal rate of 97% for Knicks and Rangers
• New significant sponsorship deals secured with Abu Dhabi Tourism, Lenovo/Motorola
• Strong suite renewals and sales performance

Negative

• Company still operating at a loss ($8.3 million)
• Direct operating expenses increased by $4.7 million
• Higher provisions for league revenue sharing expense and NBA luxury tax

Insights

Financial Analyst

The Q1 FY2025 results show solid operational improvements, with revenues increasing by 24% to $53.3 million. The operating loss narrowed significantly by 44% to $8.3 million, while adjusted operating loss improved by 77% to $2.3 million. Key revenue drivers include:

• Strong season ticket renewal rates at 97% for both Knicks and Rangers
• New high-value sponsorship deals with Abu Dhabi Tourism, Lenovo/Motorola
• Renewal of major partnerships with Verizon and Benjamin Moore
• Expanded suite business with successful event-level club space

The $9.7 million increase in league distributions (unrelated to media rights) significantly boosted the quarter's performance. However, this was partially offset by $4.1 million in higher net provisions for league revenue sharing and NBA luxury tax.

NEW YORK, Nov. 1, 2024 /PRNewswire/ -- Madison Square Garden Sports Corp. (NYSE: MSGS) today reported financial results for the fiscal first quarter ended September 30, 2024.  

Last month, the New York Knicks ("Knicks") and New York Rangers ("Rangers") began their 2024-25 regular seasons at the Madison Square Garden Arena. Recent Company operating highlights include:

• The combined average season ticket renewal rate for the Knicks and Rangers is approximately 97% for the 2024-25 seasons;
• The Company announced a new multi-year marketing partnership with the Department of Culture and Tourism – Abu Dhabi that includes naming 'Experience Abu Dhabi' as the Official Patch Partner of the New York Knicks;
• The Company also recently signed a new multi-year sponsorship deal with Lenovo and its subsidiary Motorola Mobility, as well as multi-year sponsorship renewals with Verizon and Benjamin Moore; and
• The suites business continues to benefit from strong renewals and new sales activity, including the event-level club space, which was introduced during the 2023-24 seasons and was recently expanded.

In the fiscal 2024 first quarter, the Company generated revenues of $53.3 million, an increase of $10.3 million, or 24%, as compared to the prior year period. In addition, the Company reported an operating loss of $8.3 million, an improvement of $6.6 million, or 44%, and an adjusted operating loss of $2.3 million, an improvement of $7.7 million, or 77%, both as compared to the prior year period.⁽¹⁾

Madison Square Garden Sports Corp. Executive Chairman and CEO James L. Dolan said, "The new fiscal year already includes several operational highlights across our key revenue categories, including in ticketing, sponsorships and suites. We look forward to continuing this momentum through the Knicks' and Rangers' seasons and remain confident that we are well-positioned to generate long-term shareholder value."

Financial Results for the Three Months Ended September 30, 2024 and 2023: 

		Three Months Ended
		September 30,				Change
$ millions		2024		2023		$		%
Revenues		$       53.3		$       43.0		$       10.3		24 %
Operating loss		$       (8.3)		$     (14.8)		$         6.6		44 %
Adjusted operating loss(1)		$       (2.3)		$     (10.0)		$         7.7		77 %

Note: Does not foot due to rounding

1.     See page 3 of this earnings release for the definition of adjusted operating income (loss) included in the discussion of non-GAAP financial measures.

Summary of Financial Results
For the fiscal 2025 first quarter, revenues of $53.3 million increased $10.3 million, or 24%, as compared to the prior year period. This increase primarily reflects higher revenues of $9.7 million due to an increase in certain league distributions unrelated to national media rights fees.

Direct operating expenses of $8.2 million increased $4.7 million as compared to the prior year period. This increase primarily reflects higher net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax of $4.1 million due to the net impact of adjustments to prior seasons' revenue sharing expense (net of escrow).

Selling, general and administrative expenses of $52.6 million decreased $1.0 million, or 2%, as compared to the prior year period.

Operating loss of $8.3 million improved $6.6 million, or 44%, and adjusted operating loss of $2.3 million improved $7.7 million, or 77%, both as compared to the prior year period, primarily due to the increase in revenues and, to a lesser extent, lower selling, general and administrative expenses, partially offset by higher direct operating expenses.

About Madison Square Garden Sports Corp.
Madison Square Garden Sports Corp. (MSG Sports) is a leading professional sports company, with a collection of assets that includes the New York Knicks (NBA) and the New York Rangers (NHL), as well as two development league teams – the Westchester Knicks (NBAGL) and the Hartford Wolf Pack (AHL). MSG Sports also operates a professional sports team performance center – the MSG Training Center in Greenburgh, NY. More information is available at www.msgsports.com.

Non-GAAP Financial Measures
We define adjusted operating income (loss), which is a non-GAAP financial measure, as operating income (loss) excluding (i) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits, (iv) gains or losses on sales or dispositions of businesses, (v) the impact of purchase accounting adjustments related to business acquisitions, and (vi) gains and losses related to the remeasurement of liabilities under the Company's Executive Deferred Compensation Plan. Because it is based upon operating income (loss), adjusted operating income (loss) also excludes interest expense (including cash interest expense) and other non-operating income and expense items. We believe that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of our business without regard to the settlement of an obligation that is not expected to be made in cash. In addition, we believe that the exclusion of gains and losses related to the remeasurement of liabilities under the Company's Executive Deferred Compensation Plan provides investors with a clearer picture of the Company's operating performance given that, in accordance with U.S. generally accepted accounting principles ("GAAP"), gains and losses related to the remeasurement of liabilities under the Company's Executive Deferred Compensation Plan are recognized in Operating (income) loss whereas gains and losses related to the remeasurement of the assets under the Company's Executive Deferred Compensation Plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recognized in Miscellaneous income (expense), net, which is not reflected in Operating income (loss).

We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of our Company. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and adjusted operating income (loss) as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators. Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. For a reconciliation of operating income (loss) to adjusted operating income (loss), please see page 5 of this earnings release.

Forward-Looking Statements
This press release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments and events may differ materially from those in the forward-looking statements as a result of various factors, including financial community and rating agency perceptions of the Company and its business, operations, financial condition and the industry in which it operates, and the factors described in the Company's filings with the Securities and Exchange Commission, including the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein. The Company disclaims any obligation to update any forward-looking statements contained herein.  

Contacts:
Ari Danes, CFA
Investor Relations and Financial Communications
(212) 465-6072

Justin Blaber
Financial Communications
(212) 465-6109

Grace Kaminer
Investor Relations
(212) 631-5076

MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)
		Three Months Ended
		September 30,
		2024		2023
Revenues		$       53,307		$       43,046
Direct operating expenses		8,211		3,520
Selling, general and administrative expenses		52,587		53,556
Depreciation and amortization		782		794
Operating loss		(8,273)		(14,824)
Other income (expense):
Interest income		864		453
Interest expense		(6,055)		(6,929)
Miscellaneous expense, net		(1,126)		(12,665)
Loss before income taxes		(14,590)		(33,965)
Income tax benefit		7,048		15,144
Net loss		$       (7,542)		$     (18,821)
Basic loss per common share attributable to Madison Square Garden Sports Corp.'s      stockholders		$         (0.31)		$         (0.79)
Diluted loss per common share attributable to Madison Square Garden Sports Corp.'s      stockholders		$         (0.31)		$         (0.79)
Basic weighted-average number of common shares outstanding		24,049		23,971
Diluted weighted-average number of common shares outstanding		24,049		23,971

MADISON SQUARE GARDEN SPORTS CORP.
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO
ADJUSTED OPERATING INCOME (LOSS)
(In thousands)
(Unaudited)

The following is a description of the adjustments to operating loss in arriving at adjusted operating loss as described in this earnings release:

• Depreciation and amortization. This adjustment eliminates depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets in all periods.
• Share-based compensation. This adjustment eliminates the compensation expense related to restricted stock units and stock options granted under the Company's employee stock plan and non-employee director plan in all periods.
• Remeasurement of deferred compensation plan liabilities. This adjustment eliminates the impact of gains and losses related to the remeasurement of liabilities under the Company's executive deferred compensation plan.

		Three Months Ended
		September 30,
		2024		2023
Operating loss		$            (8,273)		$          (14,824)
Depreciation and amortization		782		794
Share-based compensation		4,268		4,149
Remeasurement of deferred compensation plan liabilities		965		(104)
Adjusted operating loss(1)		$            (2,258)		$            (9,985)

____________________

(1)

Adjusted operating loss includes operating lease costs which is comprised of a contractual cash component plus or minus a non-cash component for each period presented. Pursuant to GAAP, recognition of operating lease costs is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement. Adjusted operating loss includes operating lease costs of (i) $854 and $829 of expense paid in cash for the three months ended September 30, 2024 and September 30, 2023, respectively, and (ii) a non-cash expense of $457 and $482 for the three months ended September 30, 2024 and September 30, 2023, respectively.

 

MADISON SQUARE GARDEN SPORTS CORP CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) (Unaudited)
		September 30, 2024		June 30, 2024
ASSETS
Current Assets:
Cash and cash equivalents		$             52,252		$             89,136
Restricted cash		5,832		5,771
Accounts receivable, net of allowance for doubtful accounts of $0 as of September 30,      2024 and June 30, 2024		45,302		33,781
Net related party receivables		26,018		32,255
Prepaid expenses		84,260		30,956
Other current assets		22,116		25,043
Total current assets		235,780		216,942
Property and equipment, net of accumulated depreciation and amortization of $51,199 and      $52,281 as of September 30, 2024 and June 30, 2024, respectively		28,282		28,541
Right-of-use lease assets		692,412		694,566
Indefinite-lived intangible assets		103,644		103,644
Goodwill		226,523		226,523
Investments		64,450		62,543
Other assets		22,206		13,533
Total assets		$        1,373,297		$        1,346,292

 

MADISON SQUARE GARDEN SPORTS CORP CONSOLIDATED BALANCE SHEETS (continued) (In thousands, except per share data) (Unaudited)
		September 30, 2024		June 30, 2024
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable		$                5,334		$                9,900
Net related party payables		4,658		6,718
Debt		30,000		30,000
Accrued liabilities:
Employee related costs		68,766		133,930
League-related accruals		98,215		120,876
Other accrued liabilities		11,064		21,613
Operating lease liabilities, current		49,799		50,267
Deferred revenue		306,839		148,678
Total current liabilities		574,675		521,982
Long-term debt		275,000		275,000
Operating lease liabilities, noncurrent		738,555		749,952
Defined benefit obligations		4,104		4,103
Other employee related costs		47,580		43,493
Deferred tax liabilities, net		9,792		16,925
Deferred revenue, noncurrent		1,120		1,147
Total liabilities		1,650,826		1,612,602
Commitments and contingencies
Madison Square Garden Sports Corp. Stockholders' Equity:
Class A Common Stock, par value $0.01, 120,000 shares authorized; 19,465 and 19,423      shares outstanding as of September 30, 2024 and June 30, 2024, respectively		204		204
Class B Common Stock, par value $0.01, 30,000 shares authorized; 4,530 shares outstanding      as of September 30, 2024 and June 30, 2024		45		45
Preferred stock, par value $0.01, 15,000 shares authorized; none outstanding as of      September 30, 2024 and June 30, 2024		—		—
Additional paid-in capital		8,353		19,079
Treasury stock, at cost, 983 and 1,025 shares as of September 30, 2024 and June 30, 2024,      respectively		(162,504)		(169,547)
Accumulated deficit		(122,689)		(115,139)
Accumulated other comprehensive loss		(938)		(952)
Total equity		(277,529)		(266,310)
Total liabilities and equity		$        1,373,297		$        1,346,292

 

MADISON SQUARE GARDEN SPORTS CORP SELECTED CASH FLOW INFORMATION (In thousands) (Unaudited)
		Three Months Ended
		September 30,
		2024		2023
Net cash used in operating activities		$          (26,158)		$          (54,141)
Net cash used in investing activities		(1,163)		(1,729)
Net cash (used in) provided by financing activities		(9,502)		67,830
Net (decrease) increase in cash, cash equivalents and restricted cash		(36,823)		11,960
Cash, cash equivalents and restricted cash at beginning of period		94,907		40,459
Cash, cash equivalents and restricted cash at end of period		$           58,084		$           52,419

 

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SOURCE Madison Square Garden Sports Corp.

FAQ

What was Madison Square Garden Sports (MSGS) revenue in Q1 2025?

Madison Square Garden Sports reported revenue of $53.3 million in Q1 FY2025, representing a 24% increase from the prior year period.

What is the season ticket renewal rate for MSGS teams in 2024-25?

The combined average season ticket renewal rate for the Knicks and Rangers is approximately 97% for the 2024-25 seasons.

Who is the new patch sponsor for the New York Knicks?

Experience Abu Dhabi, part of the Department of Culture and Tourism – Abu Dhabi, is the new Official Patch Partner of the New York Knicks.

How much did MSGS reduce its operating loss in Q1 2025?

MSGS improved its operating loss by $6.6 million or 44%, from $14.8 million to $8.3 million compared to the prior year period.