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Madison Square Garden Sports (MSGS)
NYSE:MSGS
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Madison Square Garden Sports
(NYSE:MSGS)
58Neutral
Positive Factors
Franchise Value
Pro sports franchises, especially in major markets like the Knicks and Rangers, are expected to continue to compound in value over time.
Market Valuation
MSG shares trade at an approximately 50% discount to private market value, limiting downside risk.
Revenue Growth
YoY growth in average per-game revenues (ticketing, sponsorship and premium hospitality) was encouraging, with no sign of slowing consumer spending.
Negative Factors
Future Earnings Impact
The 50% reduction in rights fees in FY26 will lower FY26 AOI by 50% as well and leave forecasting a business only modestly FCF positive.
Media Rights Revenue
The reduction in media rights revenues accepted by the Knicks and Rangers was necessary to prevent MSG Networks from going into restructuring, which could have led to greater downside risk to the teams' local rights revenues.
Operating Income
The F2Q revenue and adj OI were negatively impacted by the previously announced reduction in local media rights with MSG Networks.
Madison Square Garden Sports (MSGS) vs. S&P 500 (SPY)
Market Cap
$4.58B
Dividend YieldN/A
Average Volume (3M)165.69K
Price to Earnings (P/E)968.6
Beta (1Y)0.83
Revenue Growth14.64%
EPS Growth-79.70%
CountryUS
Employees533
SectorCommunication Services
Sector Strength81
IndustryEntertainment
Share Statistics
EPS (TTM)-0.59
Shares Outstanding19,488,096
10 Day Avg. Volume159,684
30 Day Avg. Volume165,686
Financial Highlights & Ratios
PEG Ratio-0.75
Price to Book (P/B)-16.05
Price to Sales (P/S)0.00
P/FCF Ratio30.27
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$237.25Price Target Upside23.70% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Madison Square Garden Sports Business Overview & Revenue Model
Company DescriptionMadison Square Garden Sports (MSGS) is a leading sports entertainment company that operates and manages professional sports teams and events. The company is primarily involved in the ownership and management of iconic sports franchises, including the New York Knicks (NBA) and the New York Rangers (NHL). MSGS is committed to delivering memorable experiences to fans and fostering strong team performance through strategic management and fan engagement initiatives.
How the Company Makes MoneyMadison Square Garden Sports generates revenue through multiple streams primarily centered around its professional sports franchises. Key revenue streams include ticket sales for home games, which are bolstered by the loyalty and large fan bases of the New York Knicks and the New York Rangers. Additionally, the company earns significant revenue from broadcasting rights, as these teams attract substantial viewership, leading to lucrative television and digital media contracts. Sponsorship and advertising partnerships also contribute to earnings, with brands eager to associate with high-profile teams and events. Merchandise sales, including team apparel and memorabilia, further enhance revenue, driven by fan enthusiasm and brand affinity. These diverse revenue streams are supported by the company's strategic focus on enhancing fan engagement and leveraging its iconic sports franchises.
Madison Square Garden Sports Financial Statement Overview
Summary
Madison Square Garden Sports demonstrates notable revenue growth and operational improvements, yet faces significant balance sheet challenges due to high debt and negative equity. Focus on leveraging free cash flow for debt reduction could enhance financial stability.Income Statement
Madison Square Garden Sports shows a strong recovery in revenue, with a revenue growth rate of approximately 20.8% in the TTM, driven by increased gross profit margins of 37.6%. The TTM net profit margin stands at 5.3%, indicating moderate profitability improvement. However, the EBIT margin of 12.8% suggests room for efficiency improvements.75
Positive
Balance Sheet
The balance sheet reflects a significant leverage challenge with a negative stockholders' equity and a high debt-to-equity ratio, indicating financial instability. The equity ratio is negative due to negative equity, highlighting potential risk in financial structure.40
Negative
Cash Flow
Cash flow analysis shows improvement in operating cash flow, with a strong operating cash flow to net income ratio of approximately 2.6 in the TTM. Free cash flow growth is positive, reflecting effective cash management, although high leverage remains a concern.70
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.06B | 1.03B | 887.45M | 821.35M | 415.72M | 603.32M | Gross Profit |
| 384.49M | 410.63M | 338.64M | 320.79M | 133.83M | 243.35M | EBIT |
| 89.69M | 146.04M | 85.17M | 86.08M | -78.44M | -93.87M | EBITDA |
| 71.86M | 136.42M | 116.38M | 90.71M | -73.18M | -76.05M | Net Income Common Stockholders |
| 65.85M | 58.77M | 47.79M | 51.13M | -15.90M | -118.64M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 0.00 | 89.14M | 40.40M | 91.02M | 64.90M | 77.85M | Total Assets |
| 0.00 | 1.35B | 1.32B | 1.30B | 1.31B | 1.23B | Total Debt |
| 1.17B | 1.11B | 1.12B | 993.29M | 1.12B | 1.07B | Net Debt |
| 1.17B | 1.02B | 1.08B | 902.27M | 1.05B | 990.33M | Total Liabilities |
| 1.79B | 1.61B | 1.65B | 1.45B | 1.51B | 1.44B | Stockholders Equity |
| -283.45M | -266.31M | -337.23M | -147.09M | -204.31M | -206.99M |
| Cash Flow | Free Cash Flow | ||||
| 149.87M | 90.68M | 151.29M | 177.12M | -35.79M | -358.91M | Operating Cash Flow |
| 150.24M | 92.13M | 152.47M | 178.06M | -35.33M | 3.57M | Investing Cash Flow |
| -8.56M | -8.90M | -17.76M | -2.93M | -466.00K | -514.86M | Financing Cash Flow |
| -81.42M | -28.79M | -185.27M | -156.14M | 17.16M | -520.59M |
Madison Square Garden Sports Technical Analysis
Positive
191.80
Price Trends
192.32
Negative
204.29
Negative
208.66
Negative
Market Momentum
-0.49
Negative
50.71
Neutral
54.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSGS, the sentiment is Positive. The current price of 191.8 is above the 20-day moving average (MA) of 190.75, below the 50-day MA of 192.32, and below the 200-day MA of 208.66, indicating a neutral trend. The MACD of -0.49 indicates Negative momentum. The RSI at 50.71 is Neutral, neither overbought nor oversold. The STOCH value of 54.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MSGS.
Madison Square Garden Sports Risk Analysis
Madison Square Garden Sports disclosed 34 risk factors in its most recent earnings report. Madison Square Garden Sports reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Madison Square Garden Sports Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $31.64B | 46.74 | 827.53% | ― | -2.92% | 166.63% | |
70 Outperform | $2.50B | ― | -5.94% | ― | 3.45% | 75.21% | |
66 Neutral | $1.72B | 13.24 | 1222.83% | ― | 5.81% | 133.05% | |
60 Neutral | $13.44B | 7.15 | -2.73% | 3.79% | 2.11% | -39.64% | |
58 Neutral | $4.58B | 968.65 | -20.85% | ― | 14.64% | -79.70% | |
52 Neutral | $2.44B | ― | -92.34% | ― | -11.35% | -837.48% | |
52 Neutral | $1.17B | ― | -14.67% | ― | 29.49% | -184.23% |
* Communication Services Sector Average
Performance Comparison
MSGS
Madison Square Garden Sports
191.80
6.76
3.65%
LYV
Live Nation Entertainment
136.52
40.93
42.82%
MANU
Manchester United
14.30
-1.73
-10.79%
SPHR
Sphere Entertainment
32.51
-6.05
-15.69%
MSGE
Madison Square Garden Entertainment Corp.
36.18
-0.25
-0.69%
BATRA
Atlanta Braves Holdings Inc Class A
43.49
2.67
6.54%
Madison Square Garden Sports Earnings Call Summary
Earnings Call Date:May 02, 2025
(Q2-2025)
| % Change Since: -0.54%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth, particularly in ticket sales and sponsorships, reflecting robust demand and fan engagement. However, concerns regarding local media rights negotiations and potential impacts from MSG Networks' financial issues posed significant challenges. Despite an impressive revenue increase, operating income declined due to higher expenses. The overall sentiment is balanced with both positive achievements and notable challenges.Q2-2025 Updates
Positive Updates
Revenue Growth
MSG Sports generated revenues of approximately $358 million for the fiscal 2025 second quarter, reflecting an increase from $326.9 million in the prior year period.
Strong Ticket Sales
Average combined season ticket renewal rate was approximately 97%, with year-over-year increases in both average ticket yield and average paid attendance.
Sponsorship Success
The company secured new multiyear sponsorships with Lenovo, Motorola, and a significant agreement with Abu Dhabi's Department of Culture and Tourism.
Merchandise and In-Arena Spending
In arena spending on food, beverage, and merchandise per cap was up compared to the fiscal 2024 second quarter, driven by innovative merchandise offerings and collaborations.
Negative Updates
Adjusted Operating Income Decline
Adjusted operating income decreased by $16.8 million to $20.2 million due to increased direct operating expenses and higher selling, general, and administrative expenses.
Challenges in Local Media Rights
MSG Networks approached the company to renegotiate local media rights agreements, including a potential reduction in rights fee amid a challenging RSN industry environment.
Potential Impact of MSG Networks Bankruptcy
Concerns were raised about the company's liquidity position in the event of a network and MSG Networks bankruptcy, requiring waivers from lenders to borrow additional funds.
Company Guidance
During the Madison Square Garden Sports Corp. fiscal 2025 second quarter earnings call, several key metrics were highlighted. The company reported total revenues of approximately $358 million and an adjusted operating income of about $20 million for the quarter. This growth was attributed to strong demand across key revenue areas, including ticketing, suites, sponsorship, and food, beverage, and merchandise, with pre-game revenues up compared to the fiscal 2024 second quarter. The Knicks and Rangers' season ticket renewal rate was approximately 97%, with increased demand for flexible ticket plans contributing to year-over-year increases in average ticket yield and average paid attendance per game. Event-related revenues rose 14% year-over-year to $139.4 million, while suites and sponsorship revenues grew by 15% to $79.4 million. Despite facing challenges in the media rights sector, including negotiations with MSG Networks and a blackout with Altice USA, the company remains confident in the long-term value of its marquee sports franchises.Madison Square Garden Sports Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
MSG Sports Amends Media Rights Agreements
Neutral
Apr 25, 2025
On April 24, 2025, Madison Square Garden Sports Corp.’s subsidiaries, the New York Knicks and New York Rangers, entered into a Transaction Support Agreement with MSG Networks to amend media rights agreements and restructure debt. The amendments, effective January 1, 2025, include significant reductions in annual rights fees and changes to contract expiration dates, aimed at facilitating MSG Networks’ debt restructuring and ensuring continued game availability for fans. The transactions are expected to be completed by June 27, 2025.
Spark’s Take on MSGS Stock
According to Spark, TipRanks’ AI Analyst, MSGS is a Neutral.
Madison Square Garden Sports shows strengths in revenue growth and operational performance, particularly in ticket sales and sponsorships. However, high leverage and negative equity create financial risks. The stock’s technicals suggest bearish momentum, and its high P/E ratio raises valuation concerns.
To see Spark’s full report on MSGS stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.