Madison Square Garden Sports Corp.

What they do

The Company owns the Knicks and Rangers professional sports franchises, which play home games at Madison Square Garden Arena, and also operates the Hartford Wolf Pack (AHL) and Westchester Knicks (NBA G League) development teams. It generates revenue primarily from ticket sales, suite licenses, sponsorship and signage, food, beverage and merchandise sales, and media rights fees, including local telecast rights agreements with MSG Networks and national media rights deals.

Revenue drivers

• Ticket and suite sales — Largest single source of revenue; depends on team popularity and competitiveness; average per-game revenues increased across all in-arena categories in fiscal 2026.
• Media rights fees — Includes local telecast rights fees from MSG Networks (reduced 28% for Knicks and 18% for Rangers as of January 1, 2025) and national media rights fees from new NBA deals that began in fiscal 2026.
• Sponsorship and signage — Corporate sponsorships and venue signage at The Garden; increased in fiscal 2026 fourth quarter due to higher playoff-related demand.
• Food, beverage and merchandise sales — In-arena sales during home games; fiscal 2026 fourth quarter saw higher merchandise revenues from the Knicks' NBA Championship run.

Recent performance

Fiscal 2026 revenues were $1,153.8 million, up 11% from $1,039.2 million in fiscal 2025, driven by the Knicks winning the NBA Championship and higher average per-game revenues across all categories. Operating income rose to $28.9 million from $14.8 million, and adjusted operating income was $58.7 million, up 54%. Net income was $7.8 million, compared to a net loss of $22.4 million in fiscal 2025, with diluted EPS of $0.32 versus a loss of $0.93. In the fiscal 2026 fourth quarter, revenues increased 37% to $278.7 million, with playoff-related revenues up $66.9 million.

Strategy

Management is focused on the proposed spin-off of the Rangers business into a separate public company, expected to be completed by the end of October 2026, subject to conditions including board and league approval. The Company expects to maintain its current operating structure and report the Rangers business in continuing operations until the spin-off is complete. It continues to invest in player talent and team competitiveness, as evidenced by significant player-related costs and the pursuit of playoff success. The Company also benefits from amended local telecast rights agreements with MSG Networks and the new NBA national media rights deals.

Risks

• Media rights dependence — Reduced local telecast fees from MSG Networks (28% for Knicks, 18% for Rangers) could lower future revenue, and MSG Networks' financial condition could affect its ability to perform under the agreements.
• Team performance and player costs — Declines in Knicks or Rangers popularity or competitiveness would reduce ticket and other in-arena revenue, while high player salaries, luxury tax and injury costs could pressure margins.
• Spin-off execution — The proposed Rangers Distribution may not be completed as described or at all, and could face conditions including board approval, league approval, tax opinion, and SEC Form 10 effectiveness.
• Economic and seasonal volatility — Dependence on the New York City metropolitan area economy and seasonal home game schedules contribute to substantial quarterly fluctuations and vulnerability to downturns.

Outlook

Management expects the Rangers spin-off to be completed by the end of October 2026, subject to approvals. They anticipate continued benefits from the Knicks' championship and strong consumer and corporate demand, but local telecast rights fees will reflect the reduced rates going forward. The Company will continue to report the Rangers business in continuing operations until the distribution is complete.