MSG Networks restructures debt to avoid bankruptcy
MSG Networks has reached a deal to restructure its debt, according to an SEC filing on Friday morning, allowing it to avoid bankruptcy and potentially become a more attractive target for sale.
As part of the agreement with lenders, MSG Networks will reduce the rights fees it pays to carry Knicks games by 28% and Rangers games by 18%. MSG Networks had been paying approximately $187 million this season to carry the two teams’ games, according to the company's recent quarterly report.
Sphere Entertainment, the parent company of MSG Networks, saw its stock rise more than 10% when the market opened on Friday.
MSG Networks was carrying roughly $800 million in debt since October as it negotiated several extensions with lenders, according to public financial records.
Sphere Entertainment and MSG Sports, parent of the Knicks and Rangers, are separate public companies. Both are controlled by MSG Sports executive chairman James L. Dolan.
Neither MSG Networks nor MSG Sports would comment beyond what is in the SEC filing.
The financial situation for MSG Networks grew more dire during a seven-week carriage dispute earlier this year with Altice, parent company of Optimum TV. Altice pulled MSG Networks from its lineup, which meant about 1 million homes — many of them on Long Island — could not watch the Knicks, Rangers or Islanders.
The refinancing agreement left the network with a new loan of $210 million which will mature in December of 2029, according to the filing. Sphere and MSG Networks also will make an $80 million cash payment to lenders as part of the deal, the filing said.
The SEC filing said that MSG Networks’ rights agreements with the Knicks and Rangers now will expire after their 2028-29 seasons rather than in 2035.
If Sphere chooses to put MSG Networks up for sale, one possible merger partner is the YES Network, which already has joined with MSGN on the Gotham Sports App. The Gotham app carries live streams of Yankees, Nets, Knicks, Rangers, Islanders and Devils games.
Neil Best first worked at Newsday in 1982, returned in 1985 after a detour to Alaska and has been here since, specializing in high schools, college basketball, the NFL and most recently sports media and business.
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