Madison Square Garden Sports is one of my highest conviction investment ideas. It is the company that owns NBA’s New York Knicks and NHL’s New York Rangers. The companies are valued at $10.1b and $3.8b respectively by CNBC. Yet, the company has a market capitalization of $9.2b as of Friday’s (7/10/26) close. If we account for debt, the Enterprise Value is $10.2b. This is still a steep discount to $13.9b, which represents the company’s SOTP (sum-of-the-parts) valuation.
I think this discount will shrink when Rangers are spun out of MSGS later this year. This will crystallize the value of both teams and will pave the way for private equity or other investors to acquire minority interests in the teams directly, pushing both Knicks’ and Rangers’ valuations even higher.
US professional sports teams represent a unique and very scarce asset class. MSGS is the only publicly traded security that allows public market investors to benefit from the multi-year valuations growth, driven in large part by continuously rising price for media broadcasting rights. The deal to acquire NFL’s Seattle Seahawks at $9.6b from Paul Allen’s estate announced last Friday represents a massive 37% premium to CNBC’s $7b valuation prior to the deal’s announcement. I think this trend will continue and will only get stronger since the leagues have recently started allowing private equity and other investors to acquire minority interests in teams.