Fri, May 2, 8:18 PM (9 days ago)
**Madison Square Garden Sports Corp. (MSGS) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** Q1 2025 revenue was $424.2 million, a 1% decrease from Q1 2024. For the nine months ended March 31, 2025, revenue increased by 4% to $835.3 million. - **Profit Margins:** Operating income decreased by 59% to $32.3 million in Q1 2025 compared to Q1 2024. For the nine months, operating income decreased by 60% to $37.4 million. - **Net Income:** The company reported a net loss of $14.2 million for Q1 2025, compared to a net income of $37.9 million in Q1 2024. For the nine months, net loss was $20.7 million compared to a net income of $33.3 million. - **Cash Flow:** Net cash provided by operating activities improved by $58.1 million to $41.9 million for the nine months ended March 31, 2025. **Key Metrics and Trends:** - **Revenue Changes:** Decreases in local media rights fees and pre/regular season food, beverage, and merchandise sales were offset by increases in sponsorship, suite revenues, and league distributions. - **Operating Expenses:** Direct operating expenses increased by 16% in Q1 2025 and 18% for the nine months, driven by higher league revenue sharing expenses and team personnel compensation. - **Interest Income/Expense:** Interest income increased by 68% for the nine months, while interest expense decreased by 22%. - **Miscellaneous Expense:** Increased by 22% for the nine months due to unrealized losses on investments. **Uncertainties and Future Operations:** - **Media Rights Agreements:** Proposed amendments to media rights agreements with MSG Networks include reductions in annual rights fees and changes in contract expiration dates. - **Seasonality:** The company's revenue is heavily dependent on the performance of its NBA and NHL teams, with a disproportionate share earned in the second and third quarters. - **Liquidity:** The company has $96.5 million in cash and cash equivalents and additional borrowing capacity under existing credit facilities. **Management Discussion:** - **Revenue Impact:** The decrease in revenue was primarily due to reductions in local media rights fees and lower game-related sales. - **Operating Income:** The decrease was driven by higher direct operating expenses, partially offset by higher revenues. - **Cash Flow:** Improvements were due to changes in working capital assets and liabilities. **Risk Factors:** - **Media Rights Revenue:** Decreases in local media rights revenue could adversely affect the company's financial performance. - **MSG Networks:** Financial difficulties or bankruptcy of MSG Networks could impact the company's revenue and liquidity. **Conclusion:** Madison Square Garden Sports Corp. faced challenges in Q1 2025 with decreased revenue and operating income, primarily due to reductions in local media rights fees and higher operating expenses. The company's liquidity remains strong, but future performance will depend on the resolution of media rights agreements and the financial health of MSG Networks.