The past year has been tough for Madison Square Garden Sports, but Wall Street analysts are confident the future is bright. The New York Knicks and New York Rangers parent company amassed $415.7 million in revenues for the fiscal year ending in June. That mark caused them to operate at a loss of $78.4 million.
It wasn’t all bad news as their final quarter of fiscal revenues came in at $146.9 million, a big jump from negative $7 million in the same quarter the year before. According to the report, “higher league distributions, local media rights fees from MSG Networks, sponsorships and signage revenues,” drove the increase.
MSG Sports CEO, Jamie Lustgarten, portrayed a confident stance that the worst of the pandemic’s financial impact is behind the company.
“We are not completely out of the woods, but we are confident,” Lustgarten said on the earnings call. “New York has the highest vaccination rates, and our fans are comfortable attending games with vaccination mandates,” he added. “The company expects all their 82 games to take place in full capacity.”
Lustgarten recognizes the impact of sports betting on the current sports media climate and welcomes gambling’s ability to strengthen fan bases.
“We love sports betting for what it does for fan engagement,” he said. “It is great for the consumer experience, sponsorship value, and marketing.”
On Wall Street, analysts are scratching their heads as to why the company is trading lower than the valuations of their sports franchises would indicate. They estimate MSGS is trading at a “38% discount to the private market value of its marquee franchises.”
Lightshed Partners Brandon Ross discussed the numbers over the phone with Sportico.
“I don’t think anyone can argue with the fact that MSG Sports own the premier sports franchises,” Ross told Sportico. “The biggest risk facing the future of sports teams is the ability to get high valuations on their media rights. And it so happens that both the Knicks and Rangers, are locked into very long-term local sports rights deals. And there’s still some time left on national sports rights deals.”