Madison Square Garden Sports Corp. reported financial results for its fiscal third quarter ended March 31, 2025, on May 2, 2025. Revenues decreased by 1%, or $5.8 million, to $424.2 million compared to the prior year period.
Operating income saw a significant decline of 59%, or $47.4 million, to $32.3 million, while adjusted operating income decreased by 58%, or $51.8 million, to $36.9 million. This reduction in profitability was primarily due to lower local media rights fees and increased direct operating expenses.
Local media rights fees decreased by $18.6 million, reflecting expected reductions for the 2024-25 season due to proposed amendments to agreements with MSG Networks. Direct operating expenses increased by $43.3 million, or 16%, driven by higher net provisions for league revenue sharing, NBA luxury tax of $33.8 million, and team personnel compensation of $14.7 million.
On April 24, 2025, the Knicks and Rangers entered a Transaction Support Agreement with MSG Networks, agreeing to amendments effective January 1, 2025. These amendments include a 28% reduction in annual rights fees for the Knicks and an 18% reduction for the Rangers, the elimination of annual escalators, and a contract term ending after the 2028-29 seasons. The agreement also contemplates the issuance of penny warrants to MSGS for 19.9% of MSG Networks' equity interests.
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