Sphere Entertainment And MSG Networks Announce Debt Restructuring: What's Going On?

Sphere Entertainment Co SPHR shares are trading higher by 8.8% to $28.83 during Friday’s session. On Thursday Sphere Entertainment and its subsidiary MSG Networks reached a Transaction Support Agreement with lenders and Madison Square Garden Sports subsidiaries, including the Knicks and Rangers, to restructure MSG Networks’ debt and amend media rights deals.

What To Know: Key terms include a $15 million capital contribution by Sphere, replacing MSG Networks' existing credit facilities with a $210 million term loan maturing in 2029, and initial lender repayments of $80 million.

Interest on the new loan will be secured overnight financing rate + 5.00%, with quarterly amortization of $10 million and mandatory use of excess cash flow for repayments.

Media rights agreements for the Knicks and Rangers will see rights fees reduced by 28% and 18%, respectively, with escalators eliminated and contracts extended through the 2028–29 season.

MSG Sports will receive warrants for 19.9% of MSG Networks’ equity, and additional lender payments may follow full loan repayment. The deal is expected to close by June 27.

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How To Buy SPHR Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Sphere Entertainment’s case, it is in the Communication Services sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

According to data from Benzinga Pro, SPHR has a 52-week high of $50.88 and a 52-week low of $23.89.