Cable and satellite television network MSG Networks on Friday reported fiscal third-quarter earnings of $46.3 million, reporting earnings for the first time since the pause on the 2019/20 NBA and NHL seasons on March 12.
Live sports, like many other things, have been negatively affected by COVID-19, but the pandemic proved especially damaging to affiliate and advertising revenue.
On Friday, the network said that since the COVID-19 pandemic began, the focus has turned to content that enables viewers to stay connected with the network. To offset declines, the network has supplemented game content with insights and interviews from key players and participants.
“We have also seen high levels of engagement on our social platforms compared to an average week during the regular seasons as we focused on delivering light-hearted and interactive team-related content,” said Andrea Greenberg, president and CEO at MSG.
During MSG’s fiscal third quarter 2020, the network generated $185 million in revenue -- down 5% compared with the prior year -- and $79 million in adjusted operating income.
Total revenue of $185 million fell 5% to $10.1 million, compared with the prior-year period, driven by $6.6 million decrease in affiliate revenue. This reflected the impact of the decline in subscribers, partially offset by higher affiliate rates.
Affiliate revenue fell 8% in subscribers, with a year-over-year decline. A portion of the impact from lower subscribers was offset by higher average affiliate rates.
Advertising revenue fell $3.5 million year-over-year, due to lower sales related to live professional sports telecasts, partially offset by other net advertising increases. The decrease in sales is the result of fewer games compared with the prior year, with the pause in the NBA and NHL seasons.
Operating expenses rose $1.7 million to $83.8 million compared with the same quarter in the prior year, primarily due to higher rights fees as a result of contractual rate increases.
The company said declines were partially offset by other programming-related cost decreases, which includes the impact of fewer live sports telecasts in the quarter.