In today’s episode, Shawn O’Malley (@Shawn_OMalley_) breaks down Madison Square Garden Sports Corp., ticker: MSGS, which is the holding company that owns the NBA’s New York Knicks and NHL’s New York Rangers. MSGS is one of the few publicly-traded equities that allows retail investors to directly own professional sports teams, and few franchises are of a higher profile than the Knicks and Rangers.
Shawn covers the business model of professional sports teams, why sports franchises are trophy assets for billionaires, the driving factor behind the rapid appreciation in the value of professional sports teams, why investors in MSGS are effectively getting ownership in the Knicks and Rangers at a 50% discount, estimates for the intrinsic value per share of MSGS, plus so much more!
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IN THIS EPISODE, YOU’LL LEARN
00:00 - Intro
02:59 - How MSGS gives retail investors a chance to own two of the most valuable sports franchises in the world
04:02 - Why purchase prices for sports teams have appreciated so dramatically in recent years
16:06 - How to think about MSGS’s valuation and its discount to NAV
20:55 - How league structure affects the Knicks and Rangers differently
27:19 - What is the biggest cost for sports teams
29:57 - Why the business of pro sports teams isn’t as good as you’d think
30:17 - How a tax break incentivizes billionaires to buy sports teams
32:24 - The bear case against investing in MSGS
33:28 - Shawn’s estimate of MSGS’s intrinsic value and decision on whether to add it to The Intrinsic Value Portfolio
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
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$MSGS pitch on the Value Investor’s Club forum.
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