MSG Networks (MSGN), the regional TV broadcaster owned by entertainment and sports venue Madison Square Garden, has reduced its media rights fees for the NBA basketball’s New York Knicks and NHL ice hockey’s New York Rangers after restructuring its debt deal to avoid bankruptcy.
MSGN is part of a group of regional sports networks (RSNs) housed under the publicly traded Sphere Entertainment Co. (SEC), the company of Knicks and Rangers owner James Dolan, that had accumulated $804 million in debt.
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That debt, held by a group of lenders with financial services giant JPMorgan Chase acting as the lead bank, was originally due to creditors last October, and the company entered into several forbearance agreements to extend the deadline, with the latest ending April 24.
JPMorgan is one of the biggest sponsors of Madison Square Garden.
However, to avoid MSGN filing for Chapter 11 bankruptcy protection, the debt has now been restructured, with MSGN to pay $65 million and SEC paying $15 million.
The new loan has been set at $210 million, meaning the lenders have forgiven $514 million of the debt.
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By GlobalDataAs part of the restructuring, the Knicks will take a 28% cut in their rights fees for the 2024-25 season, while the Rangers will take an 18% reduction, according to a filing with the US Securities and Exchange Commission.
The concessions will increase the network’s ability to make its interest payments.
Neither team will receive media rights increases for the remainder of their deals, which will now expire at the end of the 2028-29 season rather than after the 2034-35 season.
In return, the separately traded Madison Square Garden Sports, parent company of the Knicks and Rangers, also led by Dolan, gains a 19.9% stake in MSG Networks.
During the 2023-24 season, MSGN paid around $175 million to air both Knicks and Rangers games, broken down to Knicks costing around $135 million and Rangers costing roughly $40 million.
The network also serves as the broadcast home to three other NHL teams – the Buffalo Sabres, New Jersey Devils, and New York Islanders, as well as American soccer’s Gotham FC. All those teams will also be subject to “rights fees concessions,” which are yet to be agreed on.
According to the SEC filing, all “consenting stakeholders have agreed to implement the transactions by June 2025, which date may be extended or waived.”
The cable network’s debt woes come amid increased ‘cord-cutting,’ which has seen consumers drop their cable network subscriptions in favor of streaming services.
Moreover, the rights fees to broadcast Knicks and Rangers games cost MSG Networks $187 million in 2025, much more than other networks would have paid on the open market due to cord-cutting.
