Madison Square Garden Sports Corp. (NYSE: MSGS) has reported its financial results for the fiscal second quarter ending December 31, 2024. The company generated revenues of $357.8 million, representing a 9% increase from the prior year period. However, operating income decreased by 54% to $13.3 million, and adjusted operating income decreased by 45% to $20.2 million compared to the same period last year.
The increase in revenues was primarily due to higher ticket-related revenues, suite revenues, sponsorship and signage revenues, league distributions, food, beverage, and merchandise sales, as well as local media rights fees. Pre/regular season ticket-related revenues increased by $14.3 million, while suite revenues increased by $7.0 million. Sponsorship and signage revenues increased by $3.1 million, and revenues from league distributions increased by $2.6 million. Pre/regular season food, beverage, and merchandise sales also saw an increase of $2.1 million, and local media rights fees increased by $1.7 million compared to the prior year period.
However, direct operating expenses increased by 19% to $275.8 million, primarily driven by higher team personnel compensation and higher net provisions for league revenue sharing expense and NBA luxury tax. Selling, general, and administrative expenses also increased by 4% to $67.9 million.
The company's executive chairman and CEO, James L. Dolan, expressed confidence in the business fundamentals and its ability to drive long-term shareholder value despite the decrease in operating income.
Madison Square Garden Sports Corp. is a leading professional sports company with a collection of assets that includes the New York Knicks (NBA), the New York Rangers (NHL), the Westchester Knicks (NBAGL), the Hartford Wolf Pack (AHL), and the MSG Training Center in Greenburgh, NY.
The company defines adjusted operating income (loss) as operating income excluding certain items. Adjusted operating income (loss) is used by investors and analysts to analyze the company's performance and is considered an appropriate measure for evaluating its operating performance. However, it should be viewed as a supplement to, and not a substitute for, operating income, net income, cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Following these announcements, the company's shares moved -1.8%, and are now trading at a price of $214.34. For more information, read the company's full 8-K submission here.
