Madison Square Garden Q4 2025 Earnings Call Transcript

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Provided by Quartr
August 12, 2025

Key Takeaways

  • Negative Sentiment: MSG Sports reported fiscal 2025 revenues of $1.04 billion and adjusted operating income of $38.2 million, but Q4 revenues fell to $204 million (from $227.3 million) with an adjusted operating loss of $16.8 million due to higher operating expenses and fewer home and playoff games.
  • Positive Sentiment: The Knicks’ run to the Eastern Conference finals generated the highest per-game gate in team history, driving a combined 90% season-ticket renewal rate, higher food and beverage per-cap spending, and 775,000 net new social media followers.
  • Neutral Sentiment: New NBA national media agreements (with Disney, NBCUniversal, Amazon) and the NHL’s Canadian deal will boost shared league revenues in fiscal 2026, while amended local rights with MSG Networks cut annual fees by 28% and 18% yet still leave overall media rights revenue poised to grow.
  • Positive Sentiment: Premium hospitality delivered record suite revenues in fiscal 2025, backed by expanded and renovated club space, and MSG secured new sponsorships with Abu Dhabi and Lenovo alongside renewals with Verizon, Pepsi, and Benjamin Moore.
  • Positive Sentiment: With approximately $145 million in cash, $291 million in debt, and $250 million of revolver capacity available, management highlights strong liquidity and financial flexibility and did not rule out future minority-stake sales.
AI Generated. May Contain Errors.
Earnings Conference Call
Madison Square Garden Q4 2025
00:00 / 00:00

Transcript Sections

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Operator

Good morning. Thank you for standing by, and welcome to the Madison Square Garden Sports Corp. Fiscal twenty twenty five Fourth Quarter and Year End Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' remarks, there will be a question and answer session.

Operator

I would now like to turn the call over to Ari Daines, Investor Relations. Please go ahead.

Ari Danes
Ari Danes
Investor Relations at Madison Square Garden Sports

Thank you. Good morning, welcome to MSG Sports fiscal twenty twenty five fourth quarter and year end earnings conference call. Our Chief Operating Officer, Jamal Asain, will begin this morning's call with an update on the company's strategy and operations. This will be followed by a review of our financial results with Victoria Mink, our EVP, Chief Financial Officer and Treasurer. After our prepared remarks, we will open up the call for questions.

Ari Danes
Ari Danes
Investor Relations at Madison Square Garden Sports

If you do not have a copy of today's earnings release, it is available on the Investors section of our corporate website. Please take note of the following. Today's discussion may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Please refer to the company's filings with the SEC for a discussion of risks and uncertainties.

Ari Danes
Ari Danes
Investor Relations at Madison Square Garden Sports

The company disclaims any obligation to update any forward looking statements that may be discussed during this call. On Pages four and five of today's earnings release, we provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income or AOI, a non GAAP financial measure. And with that, I'll now turn the call over to Jamal.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

Thank you, Ari, and good morning, everyone. Today, MSG Sports reported fiscal twenty twenty five full year results with revenues of more than $1,000,000,000 and adjusted operating income of $38,000,000 Driven by sustained consumer and corporate demand for the Knicks and Rangers, we saw increases in key in game revenue categories including ticketing, sponsorship and suites. This year's results also reflect the partial year impact of our recently amended local media rights agreements with MSG Networks as well as our investment in our teams. And as we look ahead with the company's marquee assets and strong business fundamentals, we believe we are well positioned to drive long term value for our shareholders. Now let's discuss our operations in more detail.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

The Knicks capped off their season with a run to the Eastern Conference finals, which generated the highest per game gate revenues in team history. Since then, the team has welcomed two time NBA coach of the year, Mike Brown. On the hockey side, the rangers have also had a productive all season, including naming two time Stanley Cup winner, Mike Sullivan, as head coach. We are looking forward to the twenty five, twenty six seasons for both teams. Supporting the Knicks and Rangers along the way has been their loyal fans.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

This past regular season, both combined average ticket yield and average paid attendance were up, which helped drive growth in ticketing revenue. And for the upcoming 02/2520 six seasons, the average combined season ticket renewal rate is currently at approximately 90%. I would note that while we made the decision to not raise season ticket prices for the Rangers as the team did not qualify for the playoffs, we did raise season ticket prices for the Knicks. In addition, we continue to optimize pricing and mix of individual and group sales to maximize revenues in the year ahead. Fan enthusiasm also translated into higher food and beverage per cap spending at the arena for fiscal twenty five as compared to the prior year.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

In terms of merchandise, while in arena per cap spending was up modestly in fiscal twenty five, overall merchandise revenues, including online sales, did not reach last year's levels, which had included the positive impact of two New Jersey launches for the Rangers as compared to none in the current year. That said, we introduced several unique offerings this past season that resonated with fans, including exclusive merchandise drops with existing partners such as New York or Nowhere and Siegelman Stable. In fact, with the team's postseason performance, in arena single game Knicks merchandise sales hit new highs during the Eastern Conference finals. Beyond the arena, the thrill of the Knicks playoff run could be felt across the city where we hosted a number of special programs for our fans. That included numerous watch parties at various locations, including the Garden And Radio City Music Hall, as well as outdoor venues such as Central Park and the Fan Plaza outside the arena.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

Throughout the playoffs, we also continued our efforts to deliver compelling content on social media, which helped drive over 775,000 net new followers across the Knicks and Rangers throughout the year. The team's combined following was almost 20,000,000 as of the end of fiscal twenty five. This year, we are gearing up for the Rangers one hundredth anniversary season and have special offerings and initiatives planned throughout the season to celebrate the team's centennial year. This is one way we will continue to forge stronger connections with our fans in the year ahead. Turning to media rights.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

As a reminder, the NBA's new national media deals with Disney, NBCUniversal, and Amazon begin this upcoming season and will be reflected in our fiscal twenty six results. The NHL also recently announced a new twelve year agreement with Rogers Communications for the league's Canadian national media rights, which will start with the twenty sixth, twenty seventh season. In addition, at the June, our local media rights partner, MSG Networks, completed a restructuring of its credit facilities. As part of that restructuring, the Knicks and Rangers amended their respective local media rights agreements, which reflects ongoing changes across the RSN landscape. Those amendments included 2818% reductions in annual rights fees payable to the Knicks and Rangers respectively, effective 01/01/2025, along with an elimination of annual rights fee escalators.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

They also include a shortening of the contract expirations to the end of the 02/2829 seasons. Turning to marketing partnerships. This past year, we welcomed several new marketing partners. That included Abu Dhabi's Department of Culture and Tourism and its Experience Abu Dhabi brand as the official patch partner of the Knicks as well as Lenovo and its subsidiary, Motorola. In addition, we reached multiyear renewals with Verizon, Pepsi, and Benjamin Moore.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

As we look to fiscal twenty six, we believe we are well positioned to drive growth in this area of our business. In terms of our premium hospitality business, we saw another year of record suite revenues in fiscal twenty five. We benefited from the expanded event level club space as well as a number of event and Lexus level suites that were renovated ahead of the seasons. On the heels of this successful initiative, several more suites are in the process of being renovated, which we believe will again drive incremental revenue for our business in fiscal twenty six. So in summary, we are pleased with how our business has performed this past fiscal year.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

And with recently announced franchise transactions at record level valuations across the professional sports landscape, we remain as confident as ever in the value of owning two iconic sports franchises. With that, I'll now turn the call over to Victoria.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

Thank you, Jamal, and good morning, everyone. For fiscal twenty five, we generated total revenues of 1,040,000,000 and adjusted operating income of $38,200,000 Our results for the fiscal twenty twenty five fourth quarter reflected strong consumer and corporate demand for our teams as they completed their twenty four-twenty five regular seasons, followed by an extended playoff appearance from the Knicks. Our results also reflected a combined one fewer Knicks and Rangers regular season home game and six fewer playoff home games in our fourth quarter as compared to the prior year period. As a result, total revenues for the quarter were $2.00 $4,000,000 as compared to $227,300,000 in the prior year period. Event related revenues of $140,300,000 which mainly consists of ticket, food, beverage and merchandise revenues, inclusive of the playoffs, decreased 8% year over year.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

Suites, sponsorship and signage revenues, also inclusive of the playoffs, were $31,900,000 a decrease of 8% year over year. In addition, national and local media rights fees of $27,800,000 decreased 2%, which included the impact of our amended local media rights agreements with MSG Networks. Adjusted operating income decreased $73,300,000 to an adjusted operating loss of $16,800,000 primarily due to higher direct operating expenses and to a lesser extent the decrease in revenues. AOI for our fiscal twenty twenty five fourth quarter includes $2,100,000 of non cash Arena operating lease costs as compared to $2,400,000 in the prior year period. The increase in direct operating expenses primarily reflected higher net provisions for certain team personnel transactions, higher team personnel compensation and corresponding luxury tax, as well as higher revenue sharing expenses net of escrow.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

These increases were partially offset by lower playoff related expenses as well as other cost decreases. As we look ahead, we believe our business is poised to deliver revenue growth across all in arena categories in fiscal twenty twenty six. In addition, our results will reflect the impact of the NDA's new national media rights deals, a full year of our amended local media rights agreements as well as our continued investment in our teams. Turning to our balance sheet. At the end of the quarter, our cash balance was approximately $145,000,000 and our debt balance was $291,000,000 This was comprised of $267,000,000 under the NICS senior secured revolving credit facility and $24,000,000 advanced from the NHL.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

So in summary, we are pleased with the strong demand we continue to see for our teams and remain confident in our ability to drive long term value for our shareholders. I will now turn the call back over to Ari.

Ari Danes
Ari Danes
Investor Relations at Madison Square Garden Sports

Operator, can we now open the line for questions?

Operator

Certainly. We will now begin the question and answer session. Your first question today comes from the line of Brandon Ross from LightShed Partners. Your line is open.

Brandon Ross
Partner, Media & Technology Analyst at LightShed Partners

Good morning. Thanks for taking the questions. Two for me. First, with the rework of the MSG Networks media rights, just wanted to see if that will mean anything for capital returns going forward. And then secondly, you alluded in the prepared, but last week, the bears sold a minority stake, I think, at an 8 plus billion dollar valuation.

Brandon Ross
Partner, Media & Technology Analyst at LightShed Partners

And your closest comp, the Lakers, sold for $10,000,000,000 And wondering if that now it makes sense for MSGS to look to sell some small minority stakes in the Knicks or the Rangers? Thank you.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

Hi, Brandon. Thanks for the questions. I think I'll start. I'll take the capital returns and then, maybe pass it over to Jamal on the second part of your question. So first, let me start by saying that we believe our liquidity position is strong.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

We ended the fiscal year with approximately $145,000,000 in cash on hand. I would note that we have a number of scheduled payments in the first quarter, including payroll and luxury tax. So that'll all be reflected in our cash balance at September 30. You know, but in addition to our cash on hand, we have the Nixon Rangers revolving credit facilities in place with $250,000,000 in borrowing capacity currently available on the Rangers revolver. So we believe we have substantial financial flexibility.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

And in terms of capital allocation, our long term priorities remain the same. You know, the first is to maintain appropriate liquidity to fund our operations and invest in our core business. And second, we wanna make sure we have a strong balance sheet. And third, we plan to be opportunistic about other uses of our cash. Yeah.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

So right now, we do have greater clarity. We can make our near term capital allocation decisions, you know, with the amendments to our local media rights agreements being completed. Know, but we wouldn't rule out a return of a capital program in the future.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

Hey, Brandon. Great. Okay. In response to your question then, as as I mentioned earlier, we we remain as confident as ever in the value of our teams, but the the short answer is we don't have anything to report. You know, you you mentioned the two recent transactions, but it's not just those two.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

There have been several other recent transactions, both rumored, early stage, recently finalized that demonstrate that these are scarce valuable assets. And in the case of MSG Sports, we don't think that that value is appropriately reflected in our current stock price. We we just don't. And so we would never rule out the possibility of a minority stake sale. But as I said, we also have nothing to report at this time.

Brandon Ross
Partner, Media & Technology Analyst at LightShed Partners

Thank you.

Operator

Your next question comes from the line of Peter Cipino from Wolfe Research. Your line is open.

Peter Supino
MD & Senior Analyst - Media & Entertainment, Cable & Telecom at Wolfe Research, LLC

Hello, good morning. A question about the NBA's current looking for a national, RSN possibility, one that might include several different or many teams. We're wondering if you'd be open to participating in something like this once your deal with MSG Networks expires, or how else do you see the RSN business evolving over the long term?

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

Good morning, Peter, and thanks thanks for that question. You know, media rights are certainly a complex ecosystem. And while we aren't going to comment on hypotheticals, we continue to monitor the changes, and those changes are impacting both national and local rights. With respect to national rights, the NBA's new national media deals are scheduled to begin this upcoming season. And then on the hockey side, the NHL's Canadian media deals run through the 2526 season, and they also recently announced the new twelve year agreement starting thereafter.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

And then their US national media deals run through the 2728 season. And then there are there are the local rights, which includes regional sports networks. And the RSN industry just continues to evolve. That said, we continue to believe that local media coverage is a valuable part of our ecosystem and that RSNs drive enhanced fan engagement through content that is tailored for local markets. And in our case, we are a rights holder for two marquee sports franchises.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

So from that standpoint, we will continue to monitor the changes, but from that position as a rights holder for two marquee sports franchises.

Peter Supino
MD & Senior Analyst - Media & Entertainment, Cable & Telecom at Wolfe Research, LLC

Alright. Thank you. And then a second question, if I may. There are some scheduled changes to, the tax deductibility of compensation for 2027. Could you help us think about that for earnings purposes, Chris?

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

Yeah. Hi, Peter. You know, so we're assessing the impact of these changes in tax regulations. You know, just to be clear for our company, you know, those changes would become effective for our year ended 06/30/2028. So at this time, we just have nothing further to share on that front.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

All right. Thank you.

Operator

Your next question comes from the line of David Joyce from Seaport Research Partners. Your line is open.

David Joyce
Senior Equity Analyst - Media Sector at Seaport Research Partners

Thank you. A little bit more on the rights front, please. Could you remind us of the net financial impact of the national deal versus the local deal in terms of the cadence of how the NBA revenues would be reflecting throughout the year? And what is changing in the availability of games on either of those platforms? And then if you could also delve into more to the impact of the Knicks Playoffs games from a financial perspective. Thanks.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

Sure. Hi, David. Yeah. So taking a step back, right, as you know, all NBA teams, share equally in national media rights fees. And at the league level, players receive about 50 percent of the league wide revenues, including from the national media rights fees.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

Right? So starting with the upcoming season, the NBA will see a step up in the average annual value for its national media rights as well as increased escalators thereafter. So in turn, we will see an increase in our National Meteorites revenue. Now fiscal twenty six will also reflect the full run rate impact of lower local media rights fees or about a $24,000,000 decrease in our contractual fees year over year. However, you know, even taking into account local you know, lower local media rights, we still expect an increase in our overall media rights revenue in fiscal twenty six.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

You know, what I would note, right, that our local rights agreements include thresholds around the number of live game telecast to be exclusively provided to MSG Networks, you know, such as a minimum number of total regular season games. So if certain of those thresholds aren't met as a result of the new NBA national deals, our local rights agreements would provide for a further reduction in our local media rights fees.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

And then I will happily talk about the playoffs. I mean, my gosh. What what a thrill ride that was for for this entire city. I mean, wow. And and what a run like that does is it results in several benefits to our business.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

From a ticketing standpoint, a playoff run usually increases demand across all of our offerings, whether it's season ticket renewals, sales to new members, or individual and group ticket sales. As I mentioned earlier, our average combined renewal rate for season ticket packages is already approximately 90%, and that reflects Nick's season ticket price increases given the team's strong performance. From a fan engagement standpoint, it also drives new fans. I mentioned the 775,000 net new social media followers that we added in fiscal twenty five. Of those new followers, almost half were added during that playoff run.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

And then that increased demand also extends to the corporate side of our business, which allows us to sell more premium hospitality and more marketing partnerships. So we are already seeing the momentum from the playoffs carry forward as we approach next season. I'll let Victoria talk about the financial impact in a little bit more detail.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

Sure. Yeah. Let me, provide a little bit more color here. So the playoffs result in significant incremental business for our company, you know, depending on the length of the playoff run, yeah, as you can see in our results today. So, you know, in general, playoff tickets are priced at a premium to regular season games and increase each round.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

And as noted earlier, the Knicks Eastern Conference finals run generated the highest per game gate in team history. And food and beverage and merchandise per cap spending typically runs above regular season averages. Now so this past quarter, we hosted nine playoff games at The Garden as compared to 15 last year. Alright. And as a result, our playoff related revenues for the fourth quarter were a $115,200,000, as compared to a 128,000,000 in the prior year period.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

This this translates to about, $12,800,000 in average per game revenues. In addition, there were approximately 5,800,000.0 in average per game direct operating expenses as well as we incur some additional marketing and administrative costs, in connection with the overall playoff participation. You know? But as Jamal mentioned, you know, we expect to see the positive impact of the playoffs this past season across our entire business in fiscal 'twenty six.

David Joyce
Senior Equity Analyst - Media Sector at Seaport Research Partners

Great. Thank you very much.

Operator

Your final question today comes from the line of Joseph Stauff from Susquehanna. Your line is open.

Joseph Stauff
Senior Equity Research Analyst at Susquehanna International Group

Thank you. Good morning. Wondering if you could talk about your OpEx outlook and upcoming season, in particular, how to think about team comp and other relevant inputs? And then for my second question, kind of given the success of the season last year, Jamal, you had mentioned a number of the sponsorship renewals and relationships that you have. What's the right way to think about sponsorship growth, in the upcoming season, please?

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

Hi, Joe. So regarding operating expenses, so while we're not providing specific guidance, we expect our results for fiscal twenty six to reflect those higher team operating expenses. And that's gonna include higher team personnel compensation and luxury tax with the next current roster above the threshold. Now as you may know, the NBA salary cap increased from a $140,600,000 a $104,600,000 for the 2526 season. And the NHL salary cap increased, from $88,000,000 to $95,500,000.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

Now in addition, the NBA luxury tax threshold for the 2526 season, it increased to a 187,900,000, which is up from a $170,800,000 this past season, which is measured by the roster at the end of the season. But I'd also remind you that in fiscal twenty five, our results included expenses for certain team personnel transactions. So we would also expect the know, that to impact our year over year comparison in fiscal twenty six.

Jamaal Lesane
Jamaal Lesane
COO at Madison Square Garden Sports

Morning, Joan. Thanks thanks for the question. We're seeing good momentum in marketing partnerships, and that that's following a year of growth in in fiscal twenty five. Just to look back once more on on fiscal twenty five, you know, I mentioned the the multiyear extensions with Verizon and Benjamin Moore and the the new multiyear deal with Lenovo and subsidiary Motorola and the the partnership with Abu Dhabi's Department of Culture and Tourism and Experience Abu Dhabi becoming a global marketing partner and the official patch partner of the Knicks. So as we sit here today and, you know, coming off that extended Knicks playoff run, which as we discussed earlier, will allow us to sell more marketing partnerships and to capitalize on a number of opportunities, including renewals and premium available inventory. So when you take all that and as we look ahead to fiscal twenty six, while as Victoria mentioned, we are not providing specific guidance, we believe we are well positioned to drive another year of growth in fiscal twenty six.

Joseph Stauff
Senior Equity Research Analyst at Susquehanna International Group

If I could have a quick follow-up, like prior to the season or right before the season, is there a way to think about how much of those larger sponsorship deals are locked one would think most of it, but I was just curious to think about what that actual percentage is.

Victoria Mink
Victoria Mink
EVP, CFO & Treasurer at Madison Square Garden Sports

Yeah. Sure. As a follow-up there. Yeah. I mean, we have a number of multiyear deals, and, you know, this is how we like to position ourselves with our marketing partners is to always have sort of a continuing pipeline of partners under contract and then, you know, new partnership opportunities that we can pursue.

Joseph Stauff
Senior Equity Research Analyst at Susquehanna International Group

Got it. Thanks a lot.

Operator

And that concludes our question and answer session. I will now turn the call back over to Ari Daines for closing remarks.

Ari Danes
Ari Danes
Investor Relations at Madison Square Garden Sports

Thank you all for joining us. We look forward to speaking with you on our next earnings call. Have a good day.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Executives
    • Ari Danes
      Ari Danes
      Investor Relations
    • Jamaal Lesane
      Jamaal Lesane
      COO
    • Victoria Mink
      Victoria Mink
      EVP, CFO & Treasurer
Analysts
    • Brandon Ross
      Partner, Media & Technology Analyst at LightShed Partners
    • Peter Supino
      MD & Senior Analyst - Media & Entertainment, Cable & Telecom at Wolfe Research, LLC
    • David Joyce
      Senior Equity Analyst - Media Sector at Seaport Research Partners
    • Joseph Stauff
      Senior Equity Research Analyst at Susquehanna International Group
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