Dolan’s MSG Networks Nears Bankruptcy As Cord-Cutting Surges

A key part of the James Dolan sports empire is teetering toward bankruptcy.

MSG Networks, the regional sports networks that are part of the Dolan-controlled Sphere Entertainment Co., is likely just weeks away from needing to file for Chapter 11 bankruptcy protection. The RSNs have $804 million in debt that is currently due on March 26. That debt was originally due last October, but it has been in forbearance for roughly the last five months as extensions were granted on that due date. 

The company, however, remains unable to pay the debt amid accelerating cord-cutting throughout the media industry that is hitting many RSNs particularly hard. Without a further extension or restructuring of the debt, the bankruptcy filing is almost certainly imminent. 

“If MSG Networks is not successful in negotiating a refinancing or work-out of its indebtedness, the company believes it is probable that MSG Networks and/or its subsidiaries would seek bankruptcy protection or the lenders would foreclose on the MSG Networks collateral securing the credit facilities,” the company said in a filing with the U.S. Securities and Exchange Commission.

Divergent Paths

Dolan historically has controlled one of the most prominent and powerful portfolios in sports, combining the NBA’s Knicks, NHL’s Rangers, two developmental teams, the iconic Madison Square Garden in New York, the Sphere in Las Vegas, and the RSNs in a series of companies.

In some respects, those assets are still performing well. MSG Sports Corp., the corporate parent company of the teams, raised revenue 9% in its most recent quarter to $357.8 million. The high-tech Sphere itself continues to draw raves while it pared its operating losses somewhat in the most recent quarter to $142.9 million. 

MSG Networks, which shows the Knicks and Rangers, is grappling with both the broader media industry turbulence and the NBA’s new national media contracts that could claim more game inventory. Dolan has long complained about those deals, even as they greatly increased revenues across the league, and those objections were renewed in the latest SEC filings.

“Our affiliation agreements generally require us to meet certain content criteria, such as minimum thresholds for professional event telecasts throughout the calendar year on our networks,” Sphere Entertainment Co. said in the filing. “The impacts of the NBA and NHL national broadcast agreements, including the new NBA agreements that are scheduled to begin with the 2025–2026 NBA season, could result in fewer professional event telecasts of our teams made available to us for broadcast and impact our ability to meet these criteria. If we do not meet these criteria, remedies may be available to our distributors, such as fee reductions, rebates, or refunds.”

Dolan’s RSN situation, meanwhile, also resembles the saga of Main Street Sports, another RSN operator that went through a lengthy reorganization. That company at several points was potentially headed toward a dissolution, but now has a more solid footing with a new name and pared-down rights portfolio.