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A share that allows us to invest in sport.

Monday Dayton
15. 5. 2023
5 min read

A few days ago I raised the topic related to the World Cup, whether it might be possible to invest in this sector. It was quite an interesting topic and so I thought, thanks to the advice and subtopics here, I'd take a closer look. I want to say up front, I was looking specifically after hockey. I also found football clubs, then I came across wrestling, formula, horse racing.

As in the previous post around sports we listed some companies that were more in the fashion industry, like Nike, Adidas, Puma, Under Armour. There would also be other companies, business, branded, that are big sellers of sporting goods. But since these products are used by the general public for everyday use, I wouldn't consider it as closely related to professional sports.

What I want to look at in this article, however, is the "mecca" of two popular sports not only in the US, namely Madison Square Garden. It won't be that easy though, as there are more stocks to invest in under this holding.

Under this holding, run by one of the Dolan family's sons, James Lawrence Dolan. The companies were formed by a spin-off from the Dolan Companies. Cablevision and HBO. (It was a cable TV company.) Subsequently, in 2015, the company was spun off from the sports and entertainment division into a separate company (Madison Square Garden Company) and the original company was renamed MSG Networks. Then in 2020, MSG Company split off the Madison Square Garden Sports and Entertainment division of Madison Square Garden Entertainment. (To make matters worse, MSQ Entertainment was also split off that year, more on that as we go along)

Madison Square Garden Sports $MSGS+0.0%

Under this symbol are the large professional clubs. The New York Rangers in the NHL (one of the oldest and richest clubs) and the Hartford Wolf Pack farm in the AHL. Also sharing the arena are the NBA basketball team the New York Knickerbockers aka Knicks and their farm the Westchester Knicks. This stock allows us to invest directly in the clubs.

MSGS
$191.15 -$0.50 -0.26%
1 Day
+0%
5 Days
+0.25%
1 Month
+1.53%
6 Months
+9.04%
YTD
+5.98%
1 Year
-0.39%
5 Years
+32.4%
Max.
+49.27%

Capital Structure

Market Cap
4.60B
Enterpr. Val.
4.83B
Revenue
879.61M
Shares Out.
23.95M
Debt/Capital
1.42
FCF Yield
2.66%

Valuation / Dividends

P/E
119.98
EPS
1.60
P/S
4.23
P/B
-13.57
Div. Yield
-
Div. Payout
2.30%

Capital Eff. / Margins

ROIC
1.85%
ROE
-11.26%
ROA
2.82%
Gross
36.88%
Operating
6.59%
Net Profit
4.38%
0
1
2
3
4
5
6
7
8
9

Now we'll take a look at the other sectors of this holding. This year, a planned split took place. $MSGE+0.0% (Madison Square Garden Entertainment Corp) hereafter referred to as MSG Entertainment (formerly MSGE Spinco) and SPHR (Sphere Entertainment)

Thefirst company, Sphere Entertainment Company , will include Sphere in Las Vegas ( a giant ball-shaped arena scheduled to open in September 2023), MSG Networks and Tao Group Hospitality (TGH). The second company will be Madison Square Garden Entertainment, which will manage the company's live music, entertainment and sports booking business, Christmas Spectacular (Radio City Rockettes), arena licensing agreements and performance venues, which include Madison Square Garden and Radio City Music.

Honestly, I'm a bit of a mess with these two companies right now, as I see both of them with my broker so far, which should be the case, as they have reportedly split operations. However, from what I'm reading at the broker, whoever owned MSGE stock should just change the ticker to SPHR. So I can find both stocks in a search when I enter both tickers. So I would certainly for my part wait in buying until there is more information on this or how the recent spin-off will play out.

Anyway, summing up these Dolan family companies. We'll see how it all sits as this sector has been affected by the Covid-19 pandemic. Whether it be the lockdown of the concourses to the delay in the construction of the Las Vegas concourse that is set to open this September. It is set to be sold out by bands such as U2. I've added these companies to my watchlist and since I'm a hockey and NHL fan, I'll give it some thought.

But what I would like to add to this article is Disney $DIS+0.0% We all know this company by now and they recently announced their 1Q 2023 results where their numbers weren't too bad, some sectors saw declines but otherwise the overall impression of the company I think is positive.

DIS

Disney

DIS
$107.77 $0.13 +0.12%
1 Day
+0%
5 Days
-3.91%
1 Month
+14.79%
6 Months
+25.41%
YTD
+18.66%
1 Year
+5.81%
5 Years
-5.24%
Max.
+115,756.55%

The Walt Disney Company has become one of the largest Hollywood studios (Walt Disney Pictures, Pixar, Marvel, Lucasfilm and 20th Century Fox) and owns several TV stations including ABC and ESPN.

Under ESPN, Disney has entered into a historic and innovative seven-year agreement with the National Hockey League for television, streaming and media rights through the 2027-28 season.

This deal isn't exactly the newest, it's from the 2021-22 season. Both sides are praising this, and I believe this too will prove to be the case over time, as the post-Covid-19 era has seen a resurgence of interest in the sport and those who can't get directly to the arenas for games are more eager to cheer on TV than when the games were played with restrictions and no spectators for one time.

I like the direction Disney is going and not just because of this. Plus, now we have this company at a good price. I personally don't miss them in my portfolio.

DISCLAIMER: I am not a financial advisor, and this material does not serve as a financial or investment recommendation. The content of this material is purely informational.


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