Madison Square Garden Sports Corp. Reports Fiscal 2026 First Quarter Results

NEW YORK--( BUSINESS WIRE)--Madison Square Garden Sports Corp. (NYSE: MSGS) today reported financial results for the fiscal first quarter ended September 30, 2025.

This month, the New York Knicks (“Knicks”) and New York Rangers (“Rangers”) began their 2025-26 regular seasons at the Madison Square Garden Arena (“The Garden”). Recent Company operating highlights include:

For the fiscal 2026 first quarter, the Company generated revenues of $39.5 million, a decrease of $13.9 million, or 26%, as compared to the prior year period. In addition, the Company reported an operating loss of $27.4 million, an increase of $19.2 million, and an adjusted operating loss of $20.8 million, an increase of $18.5 million, both as compared to the prior year period. (1)

Madison Square Garden Sports Corp. Executive Chairman and CEO James L. Dolan said, “With the new seasons underway, we are seeing strong ongoing demand for the Knicks and Rangers to start the fiscal year. We remain confident in the value of owning these two marquee professional sports franchises and our ability to generate long-term shareholder value.”

Financial Results for the Three Months Ended September 30, 2025 and 2024:

Three Months Ended

September 30,

Change

$ millions

2025

2024

Revenues

39.5

53.3

(13.9

)

(26)%

Operating loss

(27.4

)

(8.3

)

(19.2

)

Adjusted operating loss (1)

(20.8

)

(2.3

)

(18.5

)

Note: Does not foot due to rounding. NM – Percentage is not meaningful.

See page 3 of this earnings release for the definition of adjusted operating income (loss) included in the discussion of non-GAAP financial measures.

Summary of Financial Results

For the fiscal 2026 first quarter, revenues of $39.5 million decreased $13.9 million, or 26%, as compared to the prior year period. This primarily reflected lower revenues from league distributions of $11.4 million, mainly due to a decrease in certain league distributions unrelated to national media rights fees. In addition, local media rights fees decreased $2.3 million as compared to the prior year period, primarily due to the impact of amendments to the Knicks' and Rangers' local media rights agreements with MSG Networks entered into in the fiscal 2025 fourth quarter.

Direct operating expenses of $8.3 million increased $0.1 million, or 1%, as compared to the prior year period. This was primarily driven by higher net provisions for certain team personnel transactions of $1.5 million as well as other cost increases, mostly offset by lower net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax of $2.4 million.

Selling, general and administrative expenses of $57.8 million increased $5.2 million, or 10%, as compared to the prior year period. This increase was primarily driven by (i) higher costs related to the Company's services agreement with Madison Square Garden Entertainment Corp. of $1.6 million, (ii) higher operating lease costs of $1.2 million, (iii) higher employee compensation and related benefits of $1.0 million, and (iv) higher other general and administrative expenses.

Operating loss of $27.4 million increased $19.2 million and adjusted operating loss of $20.8 million increased $18.5 million, both as compared to the prior year period, primarily due to the decrease in revenues and higher selling, general and administrative expenses.

About Madison Square Garden Sports Corp.

Madison Square Garden Sports Corp. (MSG Sports) is a leading professional sports company, with a collection of assets that includes the New York Knicks (NBA) and the New York Rangers (NHL), as well as two development league teams – the Westchester Knicks (NBAGL) and the Hartford Wolf Pack (AHL). MSG Sports also operates a professional sports team performance center – the MSG Training Center in Greenburgh, NY. More information is available at www.msgsports.com.

Non-GAAP Financial Measures

We define adjusted operating income (loss), which is a non-GAAP financial measure, as operating income (loss) excluding (i) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits, (iv) gains or losses on sales or dispositions of businesses, (v) the impact of purchase accounting adjustments related to business acquisitions, and (vi) gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan. Because it is based upon operating income (loss), adjusted operating income (loss) also excludes interest expense (including cash interest expense) and other non-operating income and expense items. We believe that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of our business without regard to the settlement of an obligation that is not expected to be made in cash. In addition, we believe that the exclusion of gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan provides investors with a clearer picture of the Company’s operating performance given that, in accordance with U.S. generally accepted accounting principles (“GAAP”), gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan are recognized in Operating income (loss) whereas gains and losses related to the remeasurement of the assets under the Company’s Executive Deferred Compensation Plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recognized in Miscellaneous income (expense), net, which is not reflected in Operating income (loss).

We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of our Company. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and adjusted operating income (loss) as the most important indicators of our business performance, and evaluate management’s effectiveness with specific reference to these indicators. Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. For a reconciliation of operating income (loss) to adjusted operating income (loss), please see page 5 of this earnings release.

Forward-Looking Statements

This press release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments and events may differ materially from those in the forward-looking statements as a result of various factors, including financial community and rating agency perceptions of the Company and its business, operations, financial condition and the industry in which it operates, and the factors described in the Company’s filings with the Securities and Exchange Commission, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein. The Company disclaims any obligation to update any forward-looking statements contained herein.

MADISON SQUARE GARDEN SPORTS CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Three Months Ended

September 30,

2025

2024

Revenues

39,454

53,307

Direct operating expenses

8,279

8,211

Selling, general and administrative expenses

57,789

52,587

Depreciation and amortization

811

782

Operating loss

(27,425

)

(8,273

)

Other income (expense):

Interest income

578

864

Interest expense

(5,591

)

(6,055

)

Miscellaneous income (expense), net

15,085

(1,126

)

Loss before income taxes

(17,353

)

(14,590

)

Income tax benefit

8,555

7,048

Net loss

(8,798

)

(7,542

)

Basic loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders

(0.37

)

(0.31

)

Diluted loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders

(0.37

)

(0.31

)

Basic weighted-average number of common shares outstanding

24,116

24,049

Diluted weighted-average number of common shares outstanding

24,116

24,049

MADISON SQUARE GARDEN SPORTS CORP.

ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO

ADJUSTED OPERATING INCOME (LOSS)

(In thousands)

(Unaudited)

The following is a description of the adjustments to operating loss in arriving at adjusted operating loss as described in this earnings release:

Three Months Ended

September 30,

2025

2024

Operating loss

(27,425

)

(8,273

)

Depreciation and amortization

811

782

Share-based compensation

4,844

4,268

Remeasurement of deferred compensation plan liabilities

963

965

Adjusted operating loss

(20,807

)

(2,258

)

MADISON SQUARE GARDEN SPORTS CORP.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

September 30,

2025

June 30,

2025

ASSETS

Current Assets:

Cash and cash equivalents

48,634

144,617

Restricted cash

8,642

8,571

Accounts receivable, net of allowance for doubtful accounts of $0 as of September 30, 2025 and June 30, 2025

42,618

25,855

Net related party receivables

26,684

3,582

Prepaid expenses

102,500

43,417

Other current assets

17,615

25,053

Total current assets

246,693

251,095

Property and equipment, net of accumulated depreciation and amortization of $54,446 and $53,635 as of September 30, 2025 and June 30, 2025, respectively

28,728

28,962

Right-of-use lease assets

758,422

760,456

Indefinite-lived intangible assets

103,644

Goodwill

226,523

Investments

73,515

54,720

Deferred tax assets, net

43,268

34,821

Other assets

36,609

12,753

Total assets

1,517,402

1,472,974

MADISON SQUARE GARDEN SPORTS CORP.

CONSOLIDATED BALANCE SHEETS (continued)

(In thousands, except per share data)

(Unaudited)

September 30,

2025

June 30,

2025

LIABILITIES AND EQUITY

Current Liabilities:

Accounts payable

5,201

9,336

Net related party payables

4,394

4,807

Debt

24,000

Accrued liabilities:

Employee-related costs

56,551

98,924

League-related accruals

156,564

196,567

Other accrued liabilities

5,794

13,093

Operating lease liabilities, current

54,233

52,618

Deferred revenue

330,587

164,178

Total current liabilities

637,324

563,523

Long-term debt

267,000

Operating lease liabilities, noncurrent

829,365

841,050

Other employee-related costs

77,257

82,178

Deferred revenue, noncurrent

634

662

Total liabilities

1,811,580

1,754,413

Commitments and contingencies

Madison Square Garden Sports Corp. Stockholders’ Equity:

Class A Common Stock, par value $0.01, 120,000 shares authorized; 19,530 and 19,488 shares outstanding as of September 30, 2025 and June 30, 2025, respectively

204

Class B Common Stock, par value $0.01, 30,000 shares authorized; 4,530 shares outstanding as of September 30, 2025 and June 30, 2025

Preferred stock, par value $0.01, 15,000 shares authorized; none outstanding as of September 30, 2025 and June 30, 2025

—

Additional paid-in capital

4,403

15,348

Treasury stock, at cost, 918 and 960 shares as of September 30, 2025 and June 30, 2025, respectively

(151,524

)

(158,543

)

Accumulated deficit

(146,410

)

(137,596

)

Accumulated other comprehensive loss

(896

)

(897

)

Total equity

(294,178

)

(281,439

)

Total liabilities and equity

1,517,402

1,472,974

MADISON SQUARE GARDEN SPORTS CORP.

SELECTED CASH FLOW INFORMATION

(In thousands)

(Unaudited)

Three Months Ended

September 30,

2025

2024

Net cash used in operating activities

(84,954

)

(26,158

)

Net cash used in investing activities

(1,848

)

(1,163

)

Net cash used in financing activities

(9,110

)

(9,502

)

Net decrease in cash, cash equivalents and restricted cash

(95,912

)

(36,823

)

Cash, cash equivalents and restricted cash at beginning of period

153,188

94,907

Cash, cash equivalents and restricted cash at end of period

57,276

58,084