Madison Square Garden Sports Corp. Q2 FY2025 earnings call

• Knicks and Rangers seasons in full swing; Knicks traded for Karl-Anthony Towns, both Towns and Brunson selected for 2025 NBA All Star Game; Rangers signed Igor Shesterkin extension and players to participate in NHL 4 Nations Face Off Tournament.
• Average combined season ticket renewal rate was ~97%; year-over-year increases in average ticket yield and paid attendance in fiscal second quarter.
• Food, beverage, and merchandise per cap spending up; innovative merchandise partnerships (Knicks with KISS, New York or Nowhere; expanded to Rangers) led to high single-game sales.
• Held Knicks Homecoming weekend.
• Media rights: NBA new deals impact RSNs; MSG Networks pursuing refinancing, Optimum blackout challenges RSN industry.
• Marketing partnerships: New deals with Abu Dhabi's Department of Culture and Tourism, Lenovo, Motorola; renewals with Verizon and Benjamin Moore.
• Premium hospitality: Strong sales and renewals for suites, including renovated event level club space.

For the fiscal '25 second quarter, MSG Sports generated revenues of approximately $358 million. Event-related revenues (ticketing, food, beverage, merchandise) were $139.4 million, representing a 14% year-over-year increase. Suites and sponsorship revenues were $79.4 million, up 15% year-over-year. National and local media rights fees were $126.9 million, up 4% primarily due to contractual rate increases but partially offset by fewer games exclusively available to MSG Networks. Adjusted operating income was approximately $20.2 million, down $16.8 million from the prior year period due to increased direct operating expenses and SG&A expenses, partially offset by revenue growth.

• Fiscal '25 second quarter results reflect strong overall demand; confident in long-term business outlook.
• Fiscal third and fourth quarters will have three fewer regular season home games compared to the prior year period.

• Industry-wide pressure on local media rights, including MSG Networks potentially negotiating a reduction in rights fees and Optimum blacking out MSG Networks, which could impact local rights revenue.

Q: Concerns about local rights revenue reduction and potential distribution alternatives like broadcast/streaming A: Focus is on maximizing shareholder value and maintaining connection with local fans; actively assessing best path forward for the business Q: Liquidity position if there's a pause in local rights payments or significant reduction in rights fees A: Strong liquidity with ~$108 million cash at quarter end; $250 million borrowing capacity on Rangers revolver; substantial financial flexibility to borrow if needed Q: Impact of NBA expansion on P&L and potential minority stake sale A: NBA expansion fee divided equally among 30 teams, drops to bottom line; not ruling out minority stake sale but no concrete plans; can't speculate on tax implications of hypothetical sale Q: Sponsorship outlook and ticket pricing A: Sponsorship category on track for solid growth in fiscal '25; season ticket pricing managed to balance relationships with holders and maximize long-term value; on track for modest overall ticket revenue growth this fiscal year