Executive Summary
Madison Square Garden Sports Corp (MSGS) reported a solid QQ2 2025 topline driven by stronger fan demand for its Knicks and Rangers franchises. Revenue reached approximately $357.8 million, up 9.4% year over year, with adjusted operating income (AOI) of about $20.2 million, reflecting ongoing investments in player personnel, premium experiences, and partnerships. The quarter benefited from more home games (35 pre-/regular season vs 32 a year ago), which amplified per-game revenue across ticketing, suites, sponsorship, and in-arena sales. Management emphasized strong demand across revenue lines, 97% season-ticket renewal rate, and continued sponsorship momentum, including Lenovo/Motorola, Verizon, Benjamin Moore, and the Abu Dhabi patch partnership. In spite of the robust top line, net income was modest at $1.1 million due to higher direct operating costs and non-cash arena license expenses, underscoring MSGS’s discipline on investment in marquee assets and growth initiatives.
A key overhang remains the evolving RSN ecosystem. MSG Networks is pursuing a refinancing plan and has discussed renegotiating local rights fees, and the Optimum/Altice disruption has highlighted the risk of RSN revenue variability. Management’s stance is to maximize shareholder value while remaining adaptable: monetizing franchise value through sponsorship, hospitality, and ticketing upside, while actively evaluating alternative right-structure options if needed. The company ended QQ2 with healthy liquidity (~$108 million cash) and a strong balance-sheet foundation, including $275 million revolver capacity and $30 million NHL advance, providing ample financial flexibility to navigate RSN headwinds and potential liquidity needs.
Overall, MSGS offers a favorable blend of enduring asset value (Knicks/Rangers) and improving operating momentum, tempered by short-term RSN headwinds and a levers-rich balance sheet. The investment thesis rests on continued per-game revenue growth, disciplined capital allocation, and potential upside from distribution of expansion fees and sponsorship upgrades, against ongoing RSN-related uncertainty and industry dynamics.
Key Performance Indicators
QoQ: 85.06% | YoY:-13.38%
QoQ: 260.95% | YoY:-53.79%
QoQ: 114.73% | YoY:-92.19%
QoQ: 116.13% | YoY:-91.53%
Key Insights
Revenue: $357.759 million in QQ2 2025; YoY +9.44%, QoQ +571.13% (driven by 35 home games vs 32 last year)
GrossProfit: $82.006 million; YoY -13.38%, QoQ +85.06%
OperatingIncome: $13.315 million; YoY -53.79%, QoQ +260.95%
EBITDA: $8.187 million; EBITDA margin ~2.29%
AOI (Adjusted Operating Income): $20.2 million; QoQ decline of $16.8 million vs prior period due to higher direct operating expenses and SG&A, partially offset by higher revenues
NetIncome: $1.111 million; YoY -92.19%, QoQ +11...
Financial Highlights
Revenue: $357.759 million in QQ2 2025; YoY +9.44%, QoQ +571.13% (driven by 35 home games vs 32 last year)
GrossProfit: $82.006 million; YoY -13.38%, QoQ +85.06%
OperatingIncome: $13.315 million; YoY -53.79%, QoQ +260.95%
EBITDA: $8.187 million; EBITDA margin ~2.29%
AOI (Adjusted Operating Income): $20.2 million; QoQ decline of $16.8 million vs prior period due to higher direct operating expenses and SG&A, partially offset by higher revenues
NetIncome: $1.111 million; YoY -92.19%, QoQ +114.73%
EPS (diluted): $0.05; YoY -91.53%, QoQ +116.13%
CashFlow: Net cash provided by operating activities $61.779 million; Free cash flow $61.246 million
Liquidity/Balance Sheet: Cash $107.823 million; Total debt $1,102.407 million; Net debt $994.584 million; Total assets $1,412.448 million; Total liabilities $1,685.584 million; Total stockholders’ equity negative $273.136 million
Liquidity Ratios: Current ratio 0.491; Quick ratio 0.493; Cash ratio 0.179
Profitability/Margins: Gross margin 22.9%; Operating margin 3.72%; Net margin ~0.31%; Payout ratio 14.4%
Capital Allocation: Dividends paid and share repurchases modest; net share repurchase of $2.711 million noted; capital expenditure modest at $0.533 million; free cash flow yield (FCF/Sales) ~17% (per reported ratios)
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
357.76M |
9.44% |
571.13% |
| Gross Profit |
82.01M |
-13.38% |
85.06% |
| Operating Income |
13.32M |
-53.79% |
260.95% |
| Net Income |
1.11M |
-92.19% |
114.73% |
| EPS |
0.05 |
-91.53% |
116.13% |
Key Financial Ratios
operatingProfitMargin
3.72%
operatingCashFlowPerShare
$2.56
freeCashFlowPerShare
$2.54
dividendPayoutRatio
14.4%
priceEarningsRatio
1223.87
Management Commentary
Themes and management context drawn from QQ2 2025 earnings call:
- Strategy/Performance: MSGS highlighted robust demand across ticketing, suites, sponsorship, and in-arena sales. The Knicks/Rangers seasons are off to a strong start with per-game revenue increases and a 97% season-ticket renewal rate, contributing to higher per-game ticket yield and attendance. Quote: 'The Knicks and Rangers 2024-25 seasons are in full swing... average combined season ticket renewal rate was approximately 97%.' (Jamaal Lesane)
- Media Rights and RSN Environment: Management cited near-term risks from RSN transitions and local rights fee renegotiations; NBA national deals next year offer a potential ARPU uplift but come with reduced RSN exclusivity. Quote: 'There has been industry-wide pressure on local media rights... renegotiate our local media rights agreements, including a potential reduction in our rights fee.' (Jamaal Lesane)
- Balance Sheet/ Liquidity: Victoria Mink emphasized strong liquidity with cash around $108M and revolver capacity of $250M for the Knicks/Rangers facilities; potential waivers would be required to borrow beyond current capacity if MSGN situation worsens. Quote: 'Our liquidity position is strong... ended the calendar year with over $100 million of cash on hand.' (Victoria Mink)
- Sponsorship & Partnerships: Management underscored momentum in sponsorship and premium hospitality; notable deals include Lenovo, Motorola, Verizon, Benjamin Moore, and Abu Dhabi patch partner Experience Abu Dhabi; jersey patch considered premium inventory with high demand. Quote: 'The Jersey patch... is real premium inventory, and we are pleased with this deal.' (Victoria Mink)
- Ticketing and Merchandising: Per-game demand and fan engagement initiatives (homecoming events, new merchandise lines with KISS and New York or Nowhere) contributed to higher in-arena spending and merchandise sales.
- Guidance and Outlook: Management framed QQ2 as a period reflecting preseason and the start of the regular season; anticipates modest ticket revenue growth and ongoing evaluation of long-term rights strategy. Quote: 'We are on track to drive modest overall ticket revenue growth this fiscal year.' (David Joyce/Q&A)
Our average combined season ticket renewal rate was approximately 97%.
— Jamaal Lesane
The Jersey patch, we believe, is real premium inventory, and we are pleased with this deal.
— Victoria Mink
Forward Guidance
Assessment of near-term and longer-term outlook:
- Near-term monetization: Expect continued ticket yield improvement and higher attendance per game, supported by renewed fan interest and innovative merchandising. Management noted a outlook of modest ticket revenue growth for the current fiscal year and ongoing pricing optimization for new season-ticket packages, suggesting a cautious but constructive approach to pricing.
- RSN rights environment: The NBA’s national deals next year are anticipated to lift national rights value but will reduce the number of exclusive live telecasts available to RSNs, potentially compressing local rights cash flows. MSG Networks’ refinancing process and Optimum removal of MSG Networks underline continued industry headwinds. The company plans to assess the best path forward, including potential rights-structure changes, while preserving fan engagement.
- Long-term franchise value: The Knicks and Rangers remain scarce, high-quality assets with healthy fan and corporate demand. Any expansion-related fees in the NBA would be distributed pro rata to existing teams, with league distributions thereafter, offering a potential tailwind to future results.
- Liquidity and capital allocation: MSGS maintains substantial liquidity (>$100M cash) and revolver capacity of $250M, with flexibility to access other sources of capital if needed. Monitoring obligations from lenders (waivers, covenants) and the evolving RSN environment will be key.
- Monitoring factors for investors: (1) Evolution of MSG Networks’ refinancing and rights-fee negotiations; (2) NBA/NHL league expansion or new distributions; (3) sponsorship pipeline execution and ticket yield optimization; (4) trajectory of free cash flow and debt levels relative to equity positioning and potential minority stake transactions. Overall, the investment thesis remains supported by enduring asset value and operating momentum, offset by RSN-related tailwinds/risks and a leverage-sensitive balance sheet.