Madison Square Garden Sports Corp. (NYSE:MSGS) stock rose Thursday after the company reported fiscal fourth-quarter results that topped Wall Street expectations, helped by the New York Knicks’ NBA championship run.

For the fiscal fourth quarter ended June 30, Madison Square Garden Sports reported diluted earnings of $1.16 per share, beating the 59-cent analyst estimate. Revenue totaled $278.75 million, above the $221.26 million estimate.

The company delivered a sharp fourth-quarter improvement as the Knicks’ 2025-26 NBA championship drove playoff revenue higher. Revenue increased 37% from $203.96 million a year earlier, while the company swung to an operating profit.

Championship Run Lifts Quarterly Revenue

Playoff-related revenue increased by $66.9 million, primarily because the Knicks generated higher average revenue per playoff game and stronger merchandise sales during their championship run. In the prior-year quarter, the Knicks advanced to the Eastern Conference Finals.

On the earnings call, management said playoff revenue reached $182 million, up from $115.2 million a year earlier. The Knicks hosted nine playoff games in both periods, but average revenue reached about $20.2 million per game this year, including the benefit of strong non-game-day merchandise sales.

Event-related revenue, which primarily includes ticket, food, beverage and merchandise revenue, rose 43% to $200.7 million. Suites, sponsorship and signage revenue increased 23% to $39.1 million. National and local media rights fees totaled $27.7 million and were essentially unchanged year over year.

League distribution revenue increased by $7.2 million, helped by higher national media rights fees under the NBA’s new agreements. Sponsorship and signage revenue increased by $1.7 million, while food, beverage and merchandise sales rose by $1.5 million on higher average per-game revenue.

Local media rights fees declined by $3.5 million after amendments to the Knicks’ and New York Rangers’ agreements with MSG Networks and fewer games aired exclusively on the network.

Madison Square Garden Sports Operating Profit Rebounds Sharply

Madison Square Garden Sports reported operating income of $32.2 million, improving by $54.7 million from an operating loss of $22.6 million a year earlier. Adjusted operating income reached $39.6 million, compared with an adjusted operating loss of $16.8 million.

Net income totaled $28.3 million, compared with a net loss of $1.8 million in the year-ago quarter.

Higher revenue drove the improvement, although expenses also increased. Direct operating expenses rose 3% to $159.5 million. The increase included $49.2 million in higher playoff-related expenses, as well as increases in team personnel compensation and other team operating costs.

Selling, general and administrative expenses increased 21% to $85.4 million. That included $13.4 million in higher playoff-related expenses and $2.9 million in costs tied to the proposed Rangers spin-off.

Championship Momentum Could Carry Into 2027

The Knicks set new NBA records for per-game gate revenue during the playoffs. The team also recorded its highest-ever single day of merchandise sales within 24 hours of winning the NBA title.

Management said sponsorship revenue more than doubled year over year during the postseason. The company expects the Knicks’ championship to help it sell more sponsorships in fiscal 2027.

Madison Square Garden Sports expects revenue growth across all in-arena categories in fiscal 2027. However, management also expects higher team compensation, NBA luxury tax and revenue-sharing expenses.

Rangers Spin-Off Targeted For October

The company continues to move forward with its proposed spin-off of the Rangers business from the Knicks business. Madison Square Garden Sports expects to complete the transaction by the end of October, subject to conditions including board approval.

Management said the separation would create two publicly traded companies and give each business greater strategic and financial flexibility. The company also said it would not rule out a future minority stake sale in either team, although it has nothing to report currently.

For fiscal 2026, revenue increased 11% to $1.154 billion. Operating income rose 95% to $28.9 million, while adjusted operating income increased 54% to $58.7 million.

The company ended June with $164.5 million in cash and cash equivalents and $258.5 million in total debt. Net cash provided by operating activities totaled $62.7 million for fiscal 2026.

Madison Square Garden Sports Price Action

MSGS Price Action: Madison Square Garden Sports shares were up 2.93% at $426.25 at the time of publication on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data.

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