TIVP001: Madison Square Garden Sports (MSGS): Buying the Knicks & Rangers w/ Shawn O’Malley

The Intrinsic Value Podcast - The Investor’s Podcast Network

The Investor's Podcast Network

Business, Education, Investing

4.6 • 592 Ratings

🗓️ 5 January 2025

⏱️ 56 minutes

🔗️ Recording | iTunes | RSS

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Summary

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! Prefer to watch? Click here to watch this episode on YouTube. 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. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members. Sign up for The Intrinsic Value Newsletter. $MSGS pitch on the Value Investor’s Club forum. Follow Vince Pagano on social media. Check out Aswath Damodaran on sports franchises. Check out the books mentioned in the podcast here. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Browse through all our episodes (complete with transcripts) here. Try Shawn's favorite tool for picking stock winners and managing our portfolios: TIP Finance. Enjoy exclusive perks from our favorite Apps and Services. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: TurboTax Airbnb Public Bluehost Connect with Shawn: Twitter | LinkedIn | Email HELP US OUT! Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP.
0:02.8	Welcome to the first ever episode of the Intrinsic Value Podcast, a new show presented by
0:08.8	The Investors Podcast Network.
0:11.0	I'm your host, Sean O'Malley.
0:13.1	Each week, I'll be breaking down the business model of a different publicly listed company
0:17.0	in hopes of estimating its intrinsic value to long-term stock investors. If you followed
0:22.4	our millennial investing podcast, you'll recognize me from there, where for the last six months,
0:27.6	I've broken down companies like Spotify and Universal Music Group, shared lessons from iconic
0:32.3	investors like Howard Marks, Peter Thiel, and Manish Pabry, and reviewed classic investing books like The Intelligent
0:38.5	Investor and Poor Charlie's Ammanac.
0:41.3	I think you'll love this new show as we study fascinating businesses together and look
0:45.3	for long-term investment opportunities.
0:47.8	Today, I'll break down Madison Square Garden Sports Corporation, ticker MSGS, a holding company
0:53.4	that owns both the New York Knicks, one of the
0:55.4	NBA's most valuable franchises, and the New York Rangers, one of the NHL's most valuable
1:00.5	franchises.
1:01.7	It's extremely uncommon for everyday investors to have the chance to directly own stakes in
1:06.9	major sports teams, and that is definitely what caught my eye here with MSGS. Even more interesting
1:12.6	is that the stock trades at a 40 to 50% discount to third-party estimates of the combined
1:18.2	values of the Knicks and Rangers, potentially creating a situation where you could buy a dollar
1:22.9	of intrinsic value for just 50 cents. I'll go over the business model, financial situation, management, growth outlook, risks, and more, and then at the end of the episode, I'll go over the business model, financial situation, management, growth outlook,
1:29.2	risks, and more.
	...

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