Egyptian magnate picks up stake in MSG Sports

Article posted by Coliseum, December 31^st, 2020

Image: MSG

A five percent stake in Madison Square Garden Sports Corp. has been acquired by Egyptian billionaire Nassef Sawiris.

Madison Square Garden Sports Corp. is the holding company that owns the National Basketball Association’s (NBA’s) New York Knicks (American professional basketball team based in New York City) and National Hockey League’s (NHL’s) New York Rangers (American professional ice hockey team based in New York City).

Madison Square Garden Sports Corp. is an American sports holding company based in New York City. MSG Sports manages professional sports teams.

Apart from the Knicks and Rangers, MSG’s sports holdings include the NBA G League Westchester Knicks (American professional basketball team), the American Hockey League’s Hartford Wolf Pack (professional ice hockey team based in Hartford, Connecticut), and two esports entities.

As per media reports, NNS Holding, the investment office of the Sawiris family, will grow its stake to around 6.3 percent by March 2021 which would make the Egyptian tycoon the third-largest shareholder.

The financial terms of the deal were not disclosed, but media reports further stated that Sawiris’ investment company NNS Holding views MSG Sports and its sport franchises as being undervalued.

The investment is Sawiris’ latest foray into sports. He secured a six percent stake in German sportswear brand Adidas in 2015 and purchased a 55 percent controlling stake in English top-flight soccer club Aston Villa in 2018.

NNS Holding also has a stake in Bruin Sports Capital, the private equity firm founded by former IMG and National Association for Stock Car Auto Racing (NASCAR) executive George Pyne.

MSG, which confirmed the decision to separate its sports and entertainment business in April this year, has seen shares in MSG Sports plummet almost 15 percent this year due to the ruinous impact of COVID-19. Revenue for the fiscal third quarter of 2020 came to US$424 million, down 18 percent compared to 2019, as the pandemic threw the sporting calendar out of gear and forced the NBA and NHL to finish their seasons behind closed doors.

As a result, Q3 also saw MSG Sports post an operating loss of US$135.2 million, a fall of US$173.7 million compared to the same period last year. It also recorded an adjusted operating income of $11.6 million, representing a decrease of $72.5 million on 2019.

Future revenue is also set to be affected, with the NBA starting its 2020-21 campaign on December 22^nd with a truncated 72-game regular season with limited or no in-person attendance. Though few NHL teams are welcoming fans back to their arenas for the new season but they are going in for a reduced 56-game schedule beginning on January 13^th.

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