Sphere Entertainment shares drop after Q4 results, MSG Networks bankruptcy risk

Shares of Sphere Entertainment (SPHR) dropped after the company reported Q4 results that were lower year-over-year and below consensus expectations. Total revenues for the quarter were $308.3M, down 2% from $314.2M in the same period a year ago, while adjusted operating income was $32.9M, down 36% from $51.4M last year. The company reported Q4 EPS of ($3.49) compared to ($4.91) in the same period last year. Analysts were expecting Sphere to report Q4 revenue of $287.5M on EPS of ($4.91), according to Bloomberg. Revenue for the Sphere business rose 1% year-over-year, while revenue in the MSG Networks unit fell 5%. Meanwhile, the company flagged a potential bankruptcy risk for MSG Networks, saying that if the business 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. Shares of Sphere Entertainment are down 10.3% in afternoon trading.