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Madison Square Garden Sports (MSGS)
NYSE:MSGS
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Madison Square Garden Sports
(NYSE:MSGS)55Neutral
Positive Factors
Marketing Partnerships
MSG also struck a multi-year marketing partnership with the Abu Dhabi Dept of Culture and Tourism, which will see 'Experience Abu Dhabi' as the official Knicks uniform patch.
Strategic Partnerships
Recent strategic partnerships have opened new revenue opportunities for the company.
Negative Factors
Media Rights Fees
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.
Madison Square Garden Sports (MSGS) vs. S&P 500 (SPY)
Market Cap
$4.76B
Dividend YieldN/A
Average Volume (3M)115.99K
Price to Earnings (P/E)83.5
Beta (1Y)0.91
Revenue Growth21.45%
EPS Growth47.50%
CountryUS
Employees983
SectorCommunication Services
Sector Strength85
IndustryTraditional Media
Share Statistics
EPS (TTM)2.36
Shares Outstanding19,480,345
10 Day Avg. Volume121,632
30 Day Avg. Volume115,993
Financial Highlights & Ratios
PEG Ratio1.76
Price to Book (P/B)N/A
Price to Sales (P/S)4.46
Price to Cash Flow (P/CF)19.30
P/FCF Ratio19.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$242.50Price Target Upside23.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
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 shows strong revenue growth and operational improvements but faces significant balance sheet challenges due to high debt and negative equity. Effective cash management is noted, with a focus on using free cash flow for debt reduction to 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 | ||||
| 1.07B | 1.03B | 887.45M | 821.35M | 415.72M | 603.32M | Gross Profit |
| 401.18M | 410.63M | 338.64M | 320.79M | 133.83M | 243.35M | EBIT |
| 137.09M | 146.04M | 85.17M | 86.08M | -78.44M | -93.87M | EBITDA |
| 133.87M | 136.42M | 116.38M | 90.71M | -73.18M | -76.05M | Net Income Common Stockholders |
| 56.94M | 58.77M | 47.79M | 51.13M | -15.90M | -118.64M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 107.82M | 89.14M | 40.40M | 91.02M | 64.90M | 77.85M | Total Assets |
| 1.41B | 1.35B | 1.32B | 1.30B | 1.31B | 1.23B | Total Debt |
| 1.07B | 1.11B | 1.12B | 993.29M | 1.12B | 1.07B | Net Debt |
| 994.58M | 1.02B | 1.08B | 902.27M | 1.05B | 990.33M | Total Liabilities |
| 1.69B | 1.61B | 1.65B | 1.45B | 1.51B | 1.44B | Stockholders Equity |
| -273.14M | -266.31M | -337.23M | -147.09M | -204.31M | -206.99M |
| Cash Flow | Free Cash Flow | ||||
| 146.66M | 90.68M | 151.29M | 177.12M | -35.79M | -358.91M | Operating Cash Flow |
| 148.01M | 92.13M | 152.47M | 178.06M | -35.33M | 3.57M | Investing Cash Flow |
| -5.96M | -8.90M | -17.76M | -2.93M | -466.00K | -514.86M | Financing Cash Flow |
| -67.43M | -28.79M | -185.27M | -156.14M | 17.16M | -520.59M |
Madison Square Garden Sports Technical Analysis
Negative
196.84
Price Trends
212.67
Negative
218.73
Negative
208.27
Negative
Market Momentum
-4.34
Positive
30.39
Neutral
24.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSGS, the sentiment is Negative. The current price of 196.84 is below the 20-day moving average (MA) of 204.27, below the 50-day MA of 212.67, and below the 200-day MA of 208.27, indicating a bearish trend. The MACD of -4.34 indicates Positive momentum. The RSI at 30.39 is Neutral, neither overbought nor oversold. The STOCH value of 24.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $423.04M | 85.58 | 1.73% | 0.55% | -1.53% | -80.10% | |
61 Neutral | $29.40B | ― | -0.43% | ― | 12.23% | -110.37% | |
61 Neutral | $35.41B | ― | -54.81% | ― | 30.07% | 39.93% | |
60 Neutral | $8.33B | 19.93 | 42.87% | 0.36% | 11.07% | 3.32% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
55 Neutral | $4.76B | 83.45 | -20.85% | ― | 21.45% | 47.50% | |
46 Neutral | $2.39B | ― | -92.34% | ― | -11.35% | -837.48% |
* Communication Services Sector Average
Performance Comparison
MSGS
Madison Square Garden Sports
196.84
11.96
6.47%
CHDN
Churchill Downs
112.00
-0.59
-0.52%
RICK
RCI Hospitality Holdings
46.66
-8.40
-15.26%
MANU
Manchester United
13.92
-0.28
-1.97%
FWONK
Liberty Media Liberty Formula One
89.26
17.99
25.24%
DKNG
DraftKings
39.41
-2.21
-5.31%
Madison Square Garden Sports Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -9.80% | Next Earnings Date: May 1, 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.Highlights
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.
Lowlights
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
Executive/Board Changes
Madison Square Garden Sports Signs New CFO Agreement
Positive
Jan 8, 2025
Madison Square Garden Sports Corp. has entered into a new employment agreement with Victoria M. Mink, their Executive Vice President, Chief Financial Officer, and Treasurer, effective from January 1, 2025, to January 1, 2028. The agreement includes a base salary of no less than $1,000,000 and annual incentives valued at not less than $1,500,000, reflecting the company’s commitment to retain key leadership amid competitive industry dynamics.
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.