Madison Square Garden Sports Corp
For the period ended Dec 31, 2024. Filed Feb 4, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 4, 2025
MSGS$384.39-1.1%Stored close · as of Oct 26, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-01.
0001636519-24-000027
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-04.
0001636519-25-000006
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 122 previous paragraphs and 139 current paragraphs.
91 unchanged; 23 reworded; 24 added; 8 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
Revenues increased $30,861, or 9%, to $357,759 for thethree months ended December 31, 2024 as compared to the prior year period. Revenues increased $41,122, or 11%, to $411,066 for the six months ended December 31, 2024 as compared to the prior year period.
Current report
The net increases were attributable to the following:
Current report
The increases in pre/regular season ticket-related revenues for the three and six months ended December 31, 2024 were primarily due to the Knicks and the Rangers playing a combined 3 additional home games at The Garden during the current year periods as compared to the prior year periods and higher average per-game revenue. The Knicks played 17 games at The Garden during the three and six months ended December 31, 2024 as compared to 15 games during the prior year periods. The Rangers played 18 games at The Garden during the three months ended December 31, 2024 and 20 games at The Garden during the six months ended December 31, 2024 as compared to 17 and 19 games, respectively, during the prior year periods.
Current report
The increases in suite revenues for the three and six months ended December 31, 2024 were primarily due to the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods and higher net sales of suite products.
Current report
The increases in sponsorship and signage revenues for the three and six months ended December 31, 2024 were primarily due the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods and higher net sales of existing sponsorship and signage inventory.
Current report
The increases in pre/regular season food, beverage, and merchandise sales for the three and six months ended December 31, 2024 were primarily due to higher average per-game revenue and the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods, partially offset by lower online sales of merchandise.
Current report
The increases in revenues from local media rights fees for the three and six months ended December 31, 2024 were primarily due to contractual rate increases, partially offset by a reduction in rights fees due to a decrease in the number of games exclusively available to MSG Networks during the current fiscal year as compared to the prior fiscal year.
Current report
Direct operating expenses increased $43,528, or 19%, to $275,753 for thethree months ended December 31, 2024 as compared to the prior year period. Direct operating expenses increased $48,219, or 20%, to $283,964 for thesix months ended December 31, 2024 as compared to the prior year period.
Current report
The net increases were attributable to the following:
Current report
The increases in team personnel compensationfor the three and six months ended December 31, 2024 were primarily due to changes in the Knicks roster.
Current report
The actual net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for the 2024-25 seasons may vary significantly from the recorded provisions based on actual operating results for each league and all teams within each league for the season and other factors.
Current report
The increases in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden for the three and six months ended December 31, 2024 were a result of the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods.
Current report
Other team operating expenses primarily consist of expenses associated with day-to-day operations, including variable day-of-event costs incurred at The Garden, team travel, player insurance, and league assessments. The increases in other team operating expenses for the three and six months ended December 31, 2024 were primarily due to the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods and higher average per-game expenses.
Current report
The increases in pre/regular season expense associated with merchandise sales for the three and six months ended December 31, 2024 were primarily related to higher merchandise sales as a result of higher average per-game revenue and the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods, partially offset by lower online sales of merchandise.
Current report
Selling, general and administrative expenses for the three months ended December 31, 2024 increased $2,834, or 4%, to $67,900 as compared to the prior year period driven by higher operating lease costs of $3,613 and higher professional fees of $2,713, partially offset by lower employee compensation and related benefits of $2,648 and lower other general and administrative expenses.
Current report
Operating income
Current report
Operating income for the three months ended December 31, 2024 decreased $15,502, or 54%, to $13,315 as compared to the prior year period primarily due to higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, partially offset by higher revenues.
Current report
Operating income for the six months ended December 31, 2024 decreased $8,951, or 64%, to $5,042 as compared to the prior year period primarily due to higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, partially offset by higher revenues.
Current report
Interest income for the three months ended December 31, 2024 increased $71, or 11%, to $690 as compared to the prior year period primarily due to higher average cash balances in the current year period, partially offset by lower average interest rates.
Current report
Miscellaneous (expense) income, net
Current report
Miscellaneous (expense) income, net for the three months ended December 31, 2024 reflected net expense of $6,609 and Miscellaneous (expense) income, net for the three months ended December 31, 2023 reflected net income of $2,991. The decrease in Miscellaneous (expense) income, net as compared to the prior year period was primarily due to the recognition of unrealized losses in the current year period as compared to unrealized gains in the prior year period related to the Company’s investments in Xtract One common stock and warrants.
Current report
Adjusted operating income
Current report
For the six months ended December 31, 2024, adjusted operating income decreased $9,050, or 33%, to $17,981 as compared to the prior year period. The decrease in adjusted operating income was primarily due to higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, partially offset by higher revenues.
Current report
On January 3, 2025, the Company made a principal repayment of $6,000 under the Rangers NHL Advance Agreement and on January 23, 2025, the Company made a principal repayment of $8,000 under the Knicks Revolving Credit Facility.
Removed paragraphs (8)
Previous report
Revenues increased $10,261, or 24%, to $53,307 for the three months ended September 30, 2024 as compared to the prior year period. The net increase was attributable to the following:
Previous report
Direct operating expenses increased $4,691 to $8,211 for the three months ended September 30, 2024 as compared to the prior year period. The net increase was attributable to the following:
Previous report
Depreciation and amortization
Previous report
Depreciation and amortization for thethree months ended September 30, 2024 decreased $12, or 2%, to $782 as compared to the prior year period.
Previous report
Operating loss
Previous report
Operating loss for thethree months ended September 30, 2024 decreased $6,551, or 44%, to $8,273 as compared to the prior year period primarily due to higher revenues and, to a lesser extent, lower selling, general and administrative expenses, partially offset by higher direct operating expenses.
Previous report
Miscellaneous expense, net
Previous report
Adjusted operating loss
Reworded paragraphs (23)
Previous wording
•developments affecting the regional sports network industry, including the effects of such developments on MSG Networks Inc.’s (“MSG Networks”) solvency and ability to perform its obligations under its local media rights agreements with us;
Current wording
•developments affecting the regional sports network industry, including the effects of such developments on MSG Networks Inc.’s (“MSG Networks”) solvency, its ability to perform its obligations under its local media rights agreements with us and our ability to broadcast the games of our teams if MSG Networks ceases to perform its obligations under its local media rights agreements with us;
Previous wording
•activities or other developments that discourage or may discourage congregation at prominent places of public assembly, including Madison Square Garden Arena (“The Garden”) where the home games of the New York Knickerbockers (the “Knicks”) and the New York Rangers (the “Rangers”) are played;
Current wording
•activities or other developments, such as the domestic terrorism recently experienced in New Orleans, that discourage or may discourage congregation at prominent places of public assembly, including Madison Square Garden Arena (“The Garden”) where the home games of the New York Knickerbockers (the “Knicks”) and the New York Rangers (the “Rangers”) are played;
Previous wording
•the impact of governmental regulations or laws, including changes in how those regulations and laws are interpreted and the continued benefit of certain tax exemptions (including for The Garden) and the ability for us and Madison Square Garden Entertainment Corp. (“MSG Entertainment”) to maintain necessary permits or licenses;
Current wording
•the impact of governmental regulations or laws, including potential legislation related to ticketing, changes in how those regulations and laws are interpreted and the continued benefit of certain tax exemptions (including for The Garden) and the ability for us and Madison Square Garden Entertainment Corp. (“MSG Entertainment”) to maintain necessary permits or licenses;
Previous wording
Results of Operations. This section provides an analysis of our unaudited results of operations for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Current wording
Results of Operations. This section provides an analysis of our unaudited results of operations for the three and six months ended December 31, 2024 compared to the three and six months ended December 31, 2023.
Previous wording
Liquidity and Capital Resources. This section focuses primarily on (i) the liquidity and capital resources of the Company, (ii) an analysis of the Company’s cash flows for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, and (iii) certain contractual obligations.
Current wording
Liquidity and Capital Resources. This section focuses primarily on (i) the liquidity and capital resources of the Company, (ii) an analysis of the Company’s cash flows for the six months ended December 31, 2024 compared to the six months ended December 31, 2023, and (iii) certain contractual obligations.
Previous wording
Comparison of the three months ended September 30, 2024 versus the three months ended September 30, 2023
Current wording
Comparison of the three and six months ended December 31, 2024 versus the three and six months ended December 31, 2023
Previous wording
The increase in revenues from league distributions for the three months ended September 30, 2024 was primarily due to an increase in certain league distributions unrelated to national media rights fees.
Current wording
The increase in revenues from league distributions for the three months ended December 31, 2024 was primarily due to increased national media rights fees in the current year period. The increase in revenues from league distributions for the six months ended December 31, 2024 was primarily due to an increase in certain league distributions unrelated to national media rights fees and increased national media rights fees in the current year period.
Previous wording
The increase in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for thethree months ended September 30, 2024 was due to the net impact of adjustments to prior seasons’ revenue sharing expense (net of escrow).
Current wording
The increases in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for thethree and six months ended December 31, 2024 were primarily due to higher estimated NBA luxury tax expense, partially offset by lower provisions for league revenue sharing expense (net of escrow and excluding playoffs). The increases in estimated NBA luxury tax expense were the result of the expectation that the Knicks will be a significant luxury tax payer for the 2024-25 season based on their roster as of December 31, 2024, whereas the Knicks were not a luxury tax payer for the 2023-24 season. The Knicks received an equal share of the portion of luxury tax receipts that were distributed to non-paying teams for the 2023-24 season.
Previous wording
Net provisions for certain team personnel transactionsfor thethree months ended September 30, 2024 reflect provisions recorded for waiver/contract terminations of$833.
Current wording
Net provisions for certain team personnel transactions for the three and six months ended December 31, 2024 reflect provisions recorded for player trades of $7,586. In addition, for the six months ended December 31, 2024, net provisions for certain team personnel transactions reflect provisions for waiver/contract terminations of $833.
Previous wording
Selling, general and administrative expenses for the three months ended September 30, 2024 decreased $969, or 2%, to $52,587 as compared to the prior year period driven by (i) lower sales and marketing costs of $744, (ii) lower employee compensation and related benefits of $617, and (iii) lower other general and administrative expenses, partially offset by higher professional fees of $1,181.
Current wording
Selling, general and administrative expenses for the six months ended December 31, 2024 increased $1,865, or 2%, to $120,487 as compared to the prior year period driven by higher professional fees of $3,901 and higher operating lease costs of $3,764, partially offset by (i) lower employee compensation and related benefits of $3,278, (ii) lower sales and marketing costs of $1,406, and (iii) lower other general and administrative expenses.
Previous wording
Interest income for the three months ended September 30, 2024 increased $411, or 91%, to $864 as compared to the prior year period primarily due to higher average cash balances in the current year period.
Current wording
Interest income for the six months ended December 31, 2024 increased $482, or 45%, to $1,554 as compared to the prior year period primarily due to higher average cash balances in the current year period.
Previous wording
Interest expense for the three months ended September 30, 2024 decreased $874, or 13%, to $6,055 as compared to the prior year period primarily due to lower average borrowings under the Rangers Revolving Credit Facility in the current year period, partially offset by higher average borrowings under the Knicks Revolving Credit Facility in the current year period.
Current wording
Interest expense for the three months ended December 31, 2024 decreased $1,832, or 25%, to $5,587 as compared to the prior year period primarily due to lower average borrowings under the Rangers Revolving Credit Facility in the current year period and lower average interest rates under the Knicks Revolving Credit Facility in the current year period.
Previous wording
Miscellaneous expense, net for thethree months ended September 30, 2024 decreased $11,539, or 91%, to $1,126 as compared to the prior year period primarily due to lower unrealized losses in the current year period related to the Company’s investments in Xtract One common stock and warrants.
Current wording
Miscellaneous (expense) income, net for the six months ended December 31, 2024 reflected net expense of $7,735 and Miscellaneous (expense) income, net for the six months ended December 31, 2023 reflected net expense of $9,674. The decrease in Miscellaneous (expense) income, net as compared to the prior year period was primarily due to lower unrealized losses in the current year period related to the Company’s investments in Xtract One common stock and warrants.
Previous wording
The following are the reconciliations of operating loss to adjusted operating loss for the three months ended September 30, 2024 and 2023:
Current wording
The following are the reconciliations of operating income to adjusted operating income for the three and six months ended December 31, 2024 and 2023:
Previous wording
(a)Adjusted operating loss includes operating lease costs which is comprised of a contractual cash component plus or minus a non-cash component for each period presented. Pursuant to GAAP, recognition of operating lease costs is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement. Adjusted operating loss includes operating lease costs of (i) $854 and $829 of expense paid in cash for the three months ended September 30, 2024 and 2023, respectively, and (ii) a non-cash expense of $457 and $482, for the three months ended September 30, 2024 and 2023, respectively.
Current wording
(a)Adjusted operating income includes operating lease costs which is comprised of a contractual cash component plus or minus a non-cash component for each period presented. Pursuant to GAAP, recognition of operating lease costs is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement. Adjusted operating income includes operating lease costs of (i) $17,447 and $18,301 of expense paid in cash for the three and six months ended December 31, 2024, respectively, and $15,409 and $16,238 of expense paid in cash for the three and six months ended December 31, 2023, respectively, and (ii) a non-cash expense of $9,334 and $9,791 for the three and six months ended December 31, 2024, respectively, and $8,953 and $9,435 for the three and six months ended December 31, 2023, respectively.
Previous wording
For the three months ended September 30, 2024, adjusted operating loss decreased $7,727, or 77%, to $2,258 as compared to the prior year period. The decrease in adjusted operating loss was primarily due to higher revenues and, to a lesser extent, lower selling, general and administrative expenses, partially offset by higher direct operating expenses.
Current wording
For the three months ended December 31, 2024, adjusted operating income decreased $16,777, or 45%, to $20,239 as compared to the prior year period. The decrease in adjusted operating income was primarily due to higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, partially offset by higher revenues.
Previous wording
Adjusted operating income (loss) for fiscal year 2025 is expected to reflect higher team personnel compensation and corresponding NBA luxury tax due to Knicks 2024-25 season roster.
Current wording
Adjusted operating income for fiscal year 2025 is expected to reflect higher team personnel compensation and corresponding NBA luxury tax due to Knicks 2024-25 season roster.
Previous wording
As of September 30, 2024, we had$52,252 in Cash and cash equivalents. In addition, as of September 30, 2024, the Company’s deferred revenue obligations were $272,957, net of billed, but not yet collected deferred revenue. This balance is primarily comprised of obligations in connection with tickets, suites, and local media rights.
Current wording
As of December 31, 2024, we had$107,823 in Cash and cash equivalents. In addition, as of December 31, 2024, the Company’s deferred revenue obligations were $222,146, net of billed, but not yet collected deferred revenue. This balance is primarily comprised of obligations in connection with tickets and suites.
Previous wording
We believe we have sufficient liquidity, including approximately $52,252 in Cash and cash equivalents as of September 30, 2024, along with $250,000 of additional available borrowing capacity under existing credit facilities, to fund our operations and satisfy any obligations for the foreseeable future. If MSG Networks were to experience a bankruptcy or insolvency event (as set forth in each of the credit facilities), we would be prevented, absent a cure or waiver, from making borrowings under our revolving credit facilities. The Rangers Credit Agreement also includes an event of default that is implicated by a bankruptcy or insolvency event with respect to a material media rights counterparty, including MSG Networks. There were no borrowings under the Rangers Revolving Credit Facility as of September 30, 2024.
Current wording
We believe we have sufficient liquidity, including approximately $107,823 in Cash and cash equivalents as of December 31, 2024, along with $250,000 of additional available borrowing capacity under existing credit facilities (as of December 31, 2024), to fund our operations and satisfy any obligations for the foreseeable future. If MSG Networks were to experience a bankruptcy or insolvency event (as set forth in each of the credit facilities), we would be prevented, absent a cure or waiver, from making borrowings under our revolving credit facilities. The Rangers Credit Agreement also includes an event of default upon a bankruptcy or insolvency event with respect to a material media rights counterparty, including MSG Networks. There were no borrowings outstanding under the Rangers Revolving Credit Facility as of December 31, 2024.
Previous wording
The following table summarizes the Company’s cash flow activities for the three months ended September 30, 2024 and 2023:
Current wording
The following table summarizes the Company’s cash flow activities for the six months ended December 31, 2024 and 2023:
Previous wording
Net cash used in operating activities for the three months ended September 30, 2024 decreased by $27,983 to $26,158 as compared to the prior year period. The decrease was primarily due to changes in working capital assets and liabilities and the decrease in net loss adjusted for non-cash items. The changes in working capital assets and liabilities were primarily driven by (i) a higher increase in deferred revenue of $25,806 primarily due to higher collections of ticket, suites, and sponsorship sales in advance of recognition, (ii) a lower decrease in accrued and other liabilities of $10,914 primarily due to lower payments related to employee compensation in the current year period, and (iii) a lower decrease in net related party receivables of $8,552 primarily due to primarily due to the timing of collections related to the Company’s arena license agreements. These changes were partially offset by (i) an increase in accounts receivable, net of $16,851 primarily due to higher receivables related to league distributions in the current year period and (ii) a higher increase in prepaid expenses and other assets of $5,034 primarily due to higher prepayments related to team personnel compensation in the current year period.
Current wording
Net cash provided by (used in) operating activities for the six months ended December 31, 2024 improved by $55,878 to $35,621 as compared to the prior year period. The improvement was primarily due to changes in working capital assets and liabilities, partially offset by the decrease in net income (loss) adjusted for non-cash items. The changes in working capital assets and liabilities were primarily driven by (i) a higher increase in deferred revenue of $29,563 primarily due to higher collections of ticket, sponsorship, and suite sales in advance of recognition, (ii) a lower decrease in accrued and other liabilities of $26,020 primarily due to increased accruals for NBA luxury tax in the current year period and lower payments related to employee compensation in the current year period, (iii) a decrease in net related party receivables of $13,626 primarily due to primarily due to the timing of collections related to the Company’s arena license agreements and sponsorship sales and service representation agreements, and (iv) a lower increase in prepaid expenses and other assets of $6,213 primarily due to lower contract assets, current in the current year period and higher collections of other receivables in the current year period. These changes were partially offset by a higher increase in accounts receivable, net of $13,085 primarily due to higher receivables related to league distributions in the current year period.
Previous wording
Net cash used in investing activities for the three months ended September 30, 2024 decreased by $566 to $1,163 as compared to the prior year period primarily due to lower purchases of investments in the current year period.
Current wording
Net cash used in investing activities for the six months ended December 31, 2024 decreased by $2,936 to $2,302 as compared to the prior year period primarily due to lower purchases of investments in the current year period.
Previous wording
Net cash used in financing activities for the three months ended September 30, 2024 was $9,502 as compared to net cash provided by financing activities for the three months ended September 30, 2023 of $67,830. This was primarily due to additional borrowings under the Company’s credit facilities in the prior year period.
Current wording
Net cash used in financing activities for the six months ended December 31, 2024 was $12,373 as compared to net cash provided by financing activities for the six months ended December 31, 2023 of $26,268. This was primarily due to additional borrowings under the Company’s credit facilities in the prior year period partially offset by higher principal repayments in the prior year period.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Interest expense for the six months ended December 31, 2024 decreased $2,706, or 19%, to $11,642 as compared to the prior year period primarily due to lower average borrowings under the Rangers Revolving Credit Facility in the current year period and lower average interest rates under the Knicks Revolving Credit Facility in the current year period, partially offset by higher average borrowings under the Knicks Revolving Credit Facility in the current year period.