Executive Summary
Executive Highlights: MSGS delivered a strong Q4 2024 accompanied by a record FY2024 with total revenues of about $1.0 billion and adjusted operating income (AOI) of $172.2 million, driven by robust demand for the Knicks and Rangers, higher in-arena spend, and stronger merchandise activity. The quarter’s revenue of $227.3 million surged 79% year over year, aided by playoff-related events and an expanded playoff slate, though sequential QoQ momentum softened into Q4 as playoff depth was lapping a lighter prior-year quarter. Net income of $25.5 million and EPS of $1.06 in the quarter reflect the leverage of a high-visibility sports property with a diversified monetization mix encompassing tickets, F&B, merchandise, suites, sponsorship, and media rights. Management underscored the enduring appeal of live sports, banner-season ticket renewals (about 94% combined renewal rate for Knicks and Rangers), and ongoing capital allocation discipline, including debt paydown and opportunistic share repurchase. Looking forward, MSGS anticipates organic ticket revenue growth in fiscal 2025 through pricing tactics on new tickets and flexible plans, while the NBA’s national media rights deals are expected to lift national rights fees starting in 2025–26; however, reductions in local live telecasts under MSG Networks could partially offset that uplift. Management also highlighted capacity expansions in premium hospitality and suite renovations to drive incremental monetization, alongside continued emphasis on fan engagement across digital platforms. The balance sheet remains highly leveraged with total debt around $1.105B and negative stockholders’ equity, though operating cash flow remained strong at $108.4 million for the year, underpinning free cash flow of about $108.0 million in the period.
Key Performance Indicators
QoQ: -47.15% | YoY:79.05%
QoQ: -23.97% | YoY:155.07%
QoQ: -34.41% | YoY:528.82%
QoQ: -32.70% | YoY:375.37%
QoQ: -32.91% | YoY:371.79%
Key Insights
Revenue: Q4 2024 $227.25M vs Q4 2023 $126.92M; YoY +79% (per metrics). QoQ -47.15%. Gross profit: $118.72M; gross margin 52.24%; YoY +155.07%, QoQ -23.97%. Operating income: $52.30M; margin ~23.0%; YoY +528.82%, QoQ -34.41%. Net income: $25.49M; margin ~11.2%; YoY +375.37%, QoQ -32.70%. EPS: $1.06 (diluted $1.06); YoY +371.79%, QoQ -32.91%. AOI: $56.50M; AOI margin not disclosed but AOI rose by $64.3M year over year for the quarter. Cash flow: Net cash from operating activities $108.35M; free ca...
Financial Highlights
Revenue: Q4 2024 $227.25M vs Q4 2023 $126.92M; YoY +79% (per metrics). QoQ -47.15%. Gross profit: $118.72M; gross margin 52.24%; YoY +155.07%, QoQ -23.97%. Operating income: $52.30M; margin ~23.0%; YoY +528.82%, QoQ -34.41%. Net income: $25.49M; margin ~11.2%; YoY +375.37%, QoQ -32.70%. EPS: $1.06 (diluted $1.06); YoY +371.79%, QoQ -32.91%. AOI: $56.50M; AOI margin not disclosed but AOI rose by $64.3M year over year for the quarter. Cash flow: Net cash from operating activities $108.35M; free cash flow $107.98M; capex $-0.37M; cash at period end $94.91M; net debt $1,010.31M (cash $94.91M; total debt $1,105.21M). Balance sheet health: Total assets $1,441.85M; total liabilities $1,708.16M; total stockholders’ deficit $(266.31)M; current ratio 0.413, quick ratio 0.413; long-term debt $1,024.95M; cash flow and liquidity supported by strong operating performance despite leverage. Key ratios: EBITDA $52.99M; EBITDA margin ~23.32%; cash conversion cycle ~23.51 days; cash flow to debt ~0.098; payout ratio effectively minimal (~0.07%).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
227.25M |
79.05% |
-47.15% |
| Gross Profit |
118.72M |
155.07% |
-23.97% |
| Operating Income |
52.30M |
528.82% |
-34.41% |
| Net Income |
25.49M |
375.37% |
-32.70% |
| EPS |
1.06 |
371.79% |
-32.91% |
Key Financial Ratios
operatingProfitMargin
23%
operatingCashFlowPerShare
$4.51
freeCashFlowPerShare
$4.49
dividendPayoutRatio
0.07%
Management Commentary
Theme: Strategy and Media Landscape - Management emphasized evolving sports media rights with NBA national deals, noting that starting in 2025–26 the league’s national rights will rise in value and escalators, but local rights may be offset by fewer exclusive telecasts to MSG Networks. Quote: "These NBA national media rights agreements may result in a reduction in the number of exclusive live telecast made available to MSG Networks, and we will actively evaluate the potential impact on MSG Networks and our local rights revenue." -- Jamaal Lesane. Theme: Fan and Ticketing Strategy - Renewal discipline and demand, with ongoing opportunistic pricing for new season tickets and flexible tickets; 94% renewal rate; potential for modest ticket revenue growth in fiscal 2025. Quote: "average combined season ticket renewal rate for the Knicks and Rangers at approximately 94%". Theme: Playoffs and Revenue Levers - Playoffs generated incremental revenue and fan engagement; the Q4 playoff slate comprised 15 games vs 8 last year, driving higher per-game and ancillary spend. Quote: "Playoff tickets are priced at a premium to regular season games and increase each incremental round". Theme: Capital Allocation and Leverage - Balance sheet remains leveraged; debt repayments on the Rangers facility were $55M in Q4; opportunistic buybacks discussed; management reaffirmed discipline and flexibility in capital deployment. Theme: Long-Term Value - Management reinforced confidence in the enduring value of the Knicks and Rangers franchises and in the growth trajectory from on-ice/on-court performance, media rights, and fan engagement across digital platforms.
These NBA national media rights agreements may result in a reduction in the number of exclusive live telecast made available to MSG Networks, and we will actively evaluate the potential impact on MSG Networks and our local rights revenue.
— Jamaal Lesane
Playoff tickets are priced at a premium to regular season games and increase each incremental round.
— Victoria Mink
Forward Guidance
Outlook and Assessment: MSGS anticipates continued revenue growth in fiscal 2025 driven by ticketing demand, sponsorship renewals, premium hospitality, and the expansion of the Event Level Club space at The Garden, along with renovations of Event/Lexus level suites. The NBA’s 2025–26 national media rights uplift should bolster national rights fees shared league-wide, supporting aggregate top-line growth. However, local media rights revenues could face offset risk given the NBA’s new rights framework that redistributes live-game availability away from RSNs; MSG Networks’ refinancing uncertainty adds another layer of balance-sheet risk. Management highlighted opportunities from new and renewed sponsorship deals (e.g., Beyond Meat, Pfizer, NEXEN TIRE, Oura Ring) and continued strong ticketing demand, implying modest revenue growth in 2025. Investment considerations: monitor the net effect of national-rights gains versus local-rights declines, the timing and execution of MSG Networks refinancing, the pace of stadium/suite renovations, live-event momentum, and the trajectory of debt levels and liquidity. Core targets to watch include: (1) incremental ticket yield and capacity additions from new premium spaces, (2) renewal rates stability and ticket-pack demand for flexible options, (3) local and national media rights contributions and potential offsets, and (4) progress on repurchases within the remaining $185M authorization; all of which influence the earnings trajectory and valuation.”