MSG Sports, the publicly traded company run by Jim Dolan that owns the NBA’s New York Knicks and the Rangers of the NHL, reported solid results for the second quarter of fiscal 2023 and said it would be open to the sale of minority stakes in the teams.

The company generated revenues of $353.7 million for the three months ending December 2022, an increase of $64.1 million, or 22%, compared with the same period a year ago. MSG Sports generated operating income (in essence, earnings before interest, taxes, depreciation and amortization and other non-cash expenses) of $76.6 million, an increase of $21 million, or 38%, versus a year ago.

The Knicks and Rangers play in Madison Square Garden, which is owned by publicly traded MSG Entertainment, also run by Dolan. The teams have lease agreements with MSG Entertainment that designate the percentage of revenue that goes to them. The Knicks get to keep 35% of suite and club seat revenue while the Rangers get 32.5%. The increase in revenue was primarily due to higher pre- and regular season ticket-related revenue, suite license fee revenue, sponsorship and signage revenue, food, beverage and merchandise sales, local media-rights fees and league distribution revenue. Also, the Rangers played six more regular season home games at the Garden in the current-year period as compared with the prior-year period.

MSG Sports president David Hopkinson said on the earnings call Tuesday that the company has no current plans to sell the teams. However, due to a recent change in NBA rules to allow private equity and sovereign wealth funds to invest, “we would certainly not rule out the possibility of selling a minority stake in the Knicks or the Rangers.”

Wall Street is clearly skeptical. MSG Sports has an enterprise value of $5.3 billion. But we figure it would be worth $7.84 billion in an arms-length transaction. Shares of MSG Sports are up just 0.25% versus 0.5% for the S&P 500.