Madison Square Garden Sports (MSGS)·Q2 2026 Earnings Summary

MSG Sports Q2 2026: Operating Income Jumps 67% as NBA Media Deal Delivers

February 5, 2026 · by Fintool AI Agent

Madison Square Garden Sports Corp. (NYSE: MSGS), owner of the New York Knicks (NBA) and New York Rangers (NHL), reported fiscal Q2 2026 results that demonstrated strong momentum across all in-game revenue categories. Revenue increased 13% year-over-year to $403.4 million, while operating income surged 67% to $22.2 million.

The quarter benefited from four additional home games at The Garden, the NBA's new national media rights deals, and robust consumer and corporate demand for premium experiences. CEO James L. Dolan noted the company remains "well-positioned to drive long-term shareholder value."

Did MSG Sports Beat Earnings?

The company delivered a significant turnaround from a challenging first half, with net income swinging to $8.2 million from essentially breakeven levels in the prior year. The improvement was driven by higher revenues across nearly all categories, partially offset by increased team personnel costs and league-related expenses.

What Drove the Revenue Growth?

Revenue increased $45.7 million year-over-year, driven by multiple factors:

Positive Contributors:

• Ticket-Related Revenue: +$25.6M — The Knicks and Rangers played 4 additional games at The Garden during Q2, combined with higher average per-game revenue
• League Distributions: +$18.6M — Higher national media rights fees from the NBA's new agreements that began with the 2025-26 season
• Suite Revenue: +$11.8M — Higher net sales of suite products and additional home games
• Sponsorship & Signage: +$7.2M — Higher net sales of existing inventory plus additional game nights
• F&B and Merchandise: +$4.0M — Online merchandise growth and new Rangers jersey launches

Headwind:

• Local Media Rights Fees: -$21.9M — Impact of amended MSG Networks agreements entered in Q4 2025

What Changed From Last Quarter?

The first half of fiscal 2026 showed continued momentum despite seasonal variability:

The six-month decline in adjusted operating income reflects the timing of games within the fiscal year and higher operating costs. However, management emphasized that Q2's strong results demonstrate the underlying strength of the business fundamentals.

Key operational highlights:

• 94% season ticket renewal rate for both Knicks and Rangers 2025-26 seasons
• All in-game revenue categories increased on a per-game basis
• Rangers' centennial season features curated theme nights and new merchandise collections, including a centennial jersey and Winter Classic jersey
• Game 7, co-founded by Rangers legend Mark Messier, became the first-ever jersey patch partner in team history
• Knicks won the NBA Cup in December; Jalen Brunson and Karl-Anthony Towns will participate in the 2026 NBA All-Star Game

How Did Expenses Trend?

Direct operating expense increases:

• Team personnel compensation: +$18.8M
• League revenue sharing and NBA luxury tax: +$13.0M
• Partially offset by absence of $7.6M in team personnel transactions from prior year

SG&A drivers:

• Higher employee compensation: +$2.1M
• MSG Entertainment services agreement: +$1.4M
• Sales and marketing: +$1.2M
• Offset by lower operating lease costs (-$2.2M) and professional fees (-$2.1M)

How Did the Stock React?

MSGS stock has been on a strong run heading into earnings:

Values retrieved from market data

The stock traded up modestly following the earnings release, continuing its strong upward trend. The stock is now trading near its 52-week high, reflecting investor optimism around the NBA's new media rights deal and the value of the Knicks and Rangers franchises.

What's the Beat/Miss History?

MSG Sports has demonstrated a pattern of beating expectations in recent quarters, particularly in the typically weaker Q1 and Q4 periods when NBA and NHL seasons are just beginning or ending.

What Does the Balance Sheet Look Like?

Cash declined $63M during the first half, driven by:

• Net cash used in operations: $(52.5M) vs. +$35.6M prior year
• Investing activities: $(2.7M)
• Financing activities: $(16.6M)

The increase in deferred revenue ($85M) reflects strong season ticket sales for the 2025-26 seasons, supporting the company's outlook.

Credit Facility Refinancing: In November, the company refinanced both the Knicks and Rangers senior secured revolving credit facilities, improving borrowing rates and extending maturity to November 2030. The Knicks facility capacity was increased by $150 million to $425 million, in keeping with the NBA's recent increase to team debt limits.

Forward Catalysts

1. NBA Media Rights Tailwind — The NBA's new national media deals with Disney, NBCUniversal, and Amazon will continue to benefit league distributions throughout the season

2. Playoff Potential — The Knicks are carrying momentum from last year's playoff run and their NBA Cup victory in December

3. Premium Demand — 94% season ticket renewal rate, strong suite renewals, and renovated Lexus-level suites driving incremental revenue

4. New Sponsorships — Recent partnerships with PwC, Polymarket, and Game 7 (Rangers' first jersey patch), plus multi-year renewals with Anheuser-Busch and Infosys

5. Rangers Centennial — 100th-anniversary capstone game scheduled for November, with merchandise sales among highest in team history

Risks to Monitor

• Local Media Rights Headwind — Amended MSG Networks agreements include 28% reduction for the Knicks and 18% for the Rangers, effective January 2025, with elimination of annual escalators. Agreements run through 2028-2029 seasons.
• Rangers Playoff Concerns — The Rangers have struggled on the ice this season. Management noted two impacts from missing playoffs: loss of incremental home games and historically not raising season ticket prices if a team misses the postseason.
• Cost Inflation — Player personnel costs and luxury tax exposure could compress margins
• Tax Changes — Changes to compensation deductibility become effective for MSG Sports in the year ending June 30, 2028
• Negative Equity — The company operates with negative book equity, though franchise valuations far exceed balance sheet values

What Did Management Say About Capital Allocation?

CFO Victoria Mink outlined the company's capital allocation priorities on the call:

1. Maintain appropriate liquidity to fund operations and invest in the core business
2. Maintain a strong balance sheet — demonstrated by the recent credit facility refinancings
3. Opportunistic capital returns — "I would not rule out a return of capital program in the future"

When asked about a potential minority stake sale, COO Jamaal Lesane stated: "We are confident in the value of our teams. We are cognizant of recent reported transactions in the marketplace, and those transactions serve as confirmation of our belief that these are scarce, valuable assets, and we don't think that that value is appropriately reflected in our current stock price. We would never rule out the possibility of a minority stake sale, but we have nothing to report at this time."

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Data sources: Company 8-K filing dated February 5, 2026; Earnings call transcript dated February 5, 2026; S&P Global Capital IQ; Market data as of February 5, 2026.

Related: MSGS Company Profile | Q1 2026 Earnings | Earnings Transcript