Madison Square Garden Sports, the parent company of the New York Knicks and New York Rangers, has reported a 28% decline in fourth quarter revenue to $127 million in fiscal year 2023. The decrease is attributed to fewer home NBA and NHL playoff games at The Garden and the timing of the NHL regular season, with more hockey games taking place in April 2022 compared to 2023.
Despite this decline, Madison Square Garden Sports had a record year overall, with revenue reaching $887 million, an increase of 8% compared to the previous 12 months. James Dolan, Madison Square Garden Sports executive chairman, expressed confidence in the company’s ability to generate long-term shareholder value, stating, “Our strong financial results in fiscal 2023 reflect the robust ongoing demand from our fans and corporate partners for the Knicks and Rangers.”
During the fourth quarter, the Knicks and Rangers played only five regular season home games combined, down from 13 in 2022. Although both teams made the playoffs and hosted a total of eight home games, it was a decrease from the prior year when the Rangers reached the Eastern Conference Finals. As a result, revenue from tickets, suites, sponsorships, signage, and local media were all lower for the quarter.
The company posted an operating loss of $12.2 million for the quarter, compared to a $23.7 million profit in 2022. However, for the full year, Madison Square Garden Sports achieved an operating profit of $89.9 million, a 22% increase, with net income reaching $45.6 million.
In addition to the Knicks and Rangers, MSG Sports also owns the Westchester Knicks (part of the NBA’s developmental G League) and the Hartford Wolf Pack (part of the AHL).
Despite the decline in revenue, MSG Sports’ stock price has risen by 12% this year, and the current enterprise value is $6 billion. The market values the Knicks at $6.58 billion, making them the second most valuable NBA team, and the Rangers at $2.01 billion, the second most valuable NHL team.
During a previous earnings call, David Hopkinson, the company’s president and chief operating officer, mentioned the possibility of selling a minority stake in one of the franchises. While there are no current plans to sell either team, Hopkinson acknowledged the potential for new pools of capital, such as private equity and sovereign wealth funds, to invest in NBA franchises.
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