By Robb M. Stewart

Madison Square Garden Sports was squeezed by a jump in operating expenses in the latest quarter despite the professional sports company benefiting from a rise in ticket and merchandise sales and the New York Knicks' and New York Rangers' early-season roster.

MSG Sports, whose assets the Westchester Knicks and Hartford Wolf Pack development-league teams, reported second-quarter net income of $1.1 million, or 5 cents a share, down sharply from $14.2 million, or 59 cents, a year earlier. Analysts polled by FactSet had penciled in earnings of 31 cents a share.

Still, revenue was 9.4% higher at $357.8 million for the three months to Dec. 31, beating the $351.5 million mean estimate of analysts.

The company saw an increase in direct operating expenses thanks to a rise in lease costs and increased professional fees. It also faced higher selling, general and administrative expenses in the latest quarter.

Direct operating expenses were up 19% on the same period last year as team personnel compensation climbed and net provisions for league revenue sharing expense rose and it absorbed a National Basketball Association luxury tax of $14.9 million.

Suite revenue, sponsorship and signage revenue, and food, beverage and merchandise sales were all up for the quarter. Pre- and regular-season ticket-related revenue increased as the Knicks and Rangers played three additional games at Madison Square Garden Arena than the year before and higher average Knicks and Rangers per-game sales.

Chairman and Chief Executive James Dolan said fan enthusiasm and robust corporate demand helped drive growth in per-game revenue across all key areas of MSG Sports' business.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

February 04, 2025 08:15 ET (13:15 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.