Madison Square Garden Sports (MSGS) is in focus after announcing plans to separate the New York Knicks and New York Rangers into two publicly traded companies, shortly after the Knicks secured their first NBA championship since 1973.

The share price reaction has been mixed in the short term, with Madison Square Garden Sports down over the past week but showing a 4.8% 30 day share price return and a 20.4% 90 day share price return. The 1 year total shareholder return of 93.7% and 3 year total shareholder return of 105.1% point to strong momentum that has built around the Knicks title, the planned franchise split and heightened interest in sports assets, despite recent headlines around data breaches and valuation concerns.

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With Madison Square Garden Sports now trading at around US$370, close to analyst targets but flagged by some models as expensive relative to intrinsic value, the key question is whether there is still upside here or if the market is already pricing in future growth.

Most Popular Narrative: 6.2% Overvalued

At around $370 per share versus a narrative fair value of $348.60, Madison Square Garden Sports is framed as slightly ahead of where the most followed model places it, with that gap tied directly to specific earnings and media rights assumptions rather than short term trading swings.

The upcoming ramp up in high value national media rights fees for the NBA (beginning in fiscal '26) will offset the recent step down in local media rights, positioning MSG Sports for an overall increase in recurring media revenue and supporting both revenue growth and higher net margins over the next several years.

Want to understand why this narrative still points to a premium valuation even with modest revenue assumptions and lower margin inputs, and how a very rich future earnings multiple completes the picture?

Result: Fair Value of $348.60 (OVERVALUED)

However, there are still clear pressure points for Madison Square Garden Sports, including structurally lower local media rights fees and rising player and tax costs that could squeeze margins.

Next Steps

With sentiment on Madison Square Garden Sports clearly mixed, with both risks and rewards in play, it makes sense to look at the underlying data yourself and move quickly to shape your own view with the help of 1 key reward and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.