The New York Knicks kicked off their preseason last week at home, and Madison Square Garden (NYSE: MSG) is gearing up for another sold-out season (with the team's loyal, but impatient fans praying for a few more wins this year). Its parent company, named after the iconic stadium, is also looking forward to its most profitable quarter. Along with the Knicks, Madison Square Garden also owns the New York Rangers hockey team, the New York Liberty women's basketball team, and produces the ever-popular (and always sold out) Radio City Music Hall Christmas Spectacular.

Making smart plays
With so much excitement this time of year focused on the teams who call the Garden home, it's not surprising that the company's top priority is sprucing up the aging venue with shiny new luxury suites, upgraded food and beverage offerings, and a new upper deck. The plan is that the roughly $800 million renovation will drive incremental revenue without, management promises, adding any debt. That's appealing, sure, but what many investors may not realize is that MSG, which is a Hidden Gems portfolio candidate, could be missing out on an even bigger opportunity -- cable.

The bulk of MSG's revenue doesn't actually come from its famous stadium and beleaguered basketball team, but from MSG Networks, a group of cable channels that make their money primarily from the fees big players like Comcast (Nasdaq: CMCSA), Cox, and Verizon (NYSE: VZ) pay to carry their programming. Cable-related revenues are 42% of MSG's total earnings (sports teams bring in 33% and venues and live entertainment represent 25%). Of course, with local rights to Knicks and Rangers games, plus a handful of other area teams, it's no surprise that these channels are valuable properties.

Currently aired primarily in the Northeast, there's a lot of room to expand. Now that fans are more likely to be scattered around the country -- and cable companies carry a seemingly limitless selection of channels -- MSG should be able to find audiences for its teams outside the NYC area. Plus, given the company's demonstrated excellence in programming, it could easily add more channels to the current lineup, perhaps through securing rights to more games or by continuing to expand its programming into other types of sports and entertainment. The Rockettes Channel, anyone?

Keeping your head in the game
There are a lot of opportunities ahead for MSG, which has only existed independently for about a year. Management just needs to stay focused on the big payoffs and resist smaller distractions to ensure continued success. So while Knicks fans cheer on a relatively young, up-and-coming roster this season, MSG shareholders can do the same for a business that is still very much in the first quarter of what could be a high-scoring game.

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Robyn Gearey does not own shares of any company mentioned here. The Fool owns shares of Madison Square Garden. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.