Madison Square Garden Sports 8K The Madison Square Garden Company Reports | MSGS 16 Aug 18

Exhibit 99.1

LOGO

THE MADISON SQUARE GARDEN COMPANY REPORTS

FOURTH QUARTER AND FISCAL 2018 RESULTS

NEW YORK, N.Y., August 16, 2018 – The Madison Square Garden Company (NYSE: MSG) today reported financial results for the fourth quarter and fiscal year ended June 30, 2018.

For fiscal 2018, the Company generated revenues of approximately $1.6 billion, which represents an increase of 18% as compared to the prior year. In addition, the Company generated operating income of $18.9 million, an increase of $79.2 million, and adjusted operating income (“AOI”) of $193.8 million, an increase of $96.2 million, both as compared to the prior year⁽¹⁾⁽²⁾. For comparative purposes, please note that fiscal 2018 results include a full year of TAO Group results (as compared with two months for fiscal 2017), as well as $27.5 million in net provisions for team personnel transactions. In addition, fiscal 2017 results include $30.5 million innon-recurring NHL and NBA distributions, $42.3 million in net provisions for team personnel transactions and a $33.6 millionnon-cashwrite-off.

For the fiscal 2018 fourth quarter, the Company generated revenues of $318.0 million, an increase of 4% as compared to the prior year quarter. In addition, the Company generated an operating loss of $45.4 million and an adjusted operating loss of $2.5 million, which represent improvements of 51% and 94%, respectively, both as compared to the prior year quarter. For comparative purposes, please note that fiscal 2018 fourth quarter results include $17.5 million in net provisions for team personnel transactions, as well as a full quarter of TAO Group results (versus two months of TAO Group results in the prior year quarter). In addition, fiscal 2017 fourth quarter results include $15.0 million innon-recurring NHL and NBA distributions, $35.2 million in net provisions for team personnel transactions and a $33.6 millionnon-cashwrite-off.

Executive Chairman and CEO Jim Dolan said, “We had a solid fiscal 2018, driven by the performance of our bookings business, the Christmas Spectacular and sponsorships. This past year we also took important steps to position the Company for continued growth as we unveiled our plans to buildstate-of-the-art venues – called MSG Sphere – in Las Vegas and London, and announced the exploration of a potential separation of our entertainment and sports businesses. Looking ahead, we believe that our commitment to delivering premium live experiences for our customers and partners will continue to create long-term value for our shareholders.”

Results from Operations

Segment results for the quarters ended June 30, 2018 and 2017 are as follows:


	Revenues								Operating Income (Loss)									Adjusted Operating Income (Loss)
*$ millions*	F’Q4 2018			F’Q4 2017		% Change			F’Q4 2018			F’Q4 2017			% Change			F’Q4 2018			F’Q4 2017			% Change
MSG Entertainment	$	185.6		$	125.9		47	%	$	(0.4	)	$	(46.1	)		99	%	$	7.7		$	(39.2	)		NM
MSG Sports		132.5			179.6		(26	)%		4.5			9.8			(54	)%		10.1			14.5			(30	)%
Corporate and Other⁽³⁾		(0.2	)		—		NM			(43.9	)		(44.2	)		1	%		(20.3	)		(18.9	)		(8	)%
Purchase Accounting Adjustments		—			—		NM			(5.5	)		(11.9	)		54	%		—			—			NM

Total Company	$	318.0		$	305.6		4	%	$	(45.4	)	$	(92.5	)		51	%	$	(2.5	)	$	(43.6	)		94	%

Note: Does not foot due to rounding

(1)

See page 5 of this earnings release for the definition of adjusted operating income (loss) included in the discussion ofnon-GAAP financial measures.

(2)

The Company records TAO Group’s operating results in its consolidated statements of operations on a three-month lag basis. Fiscal 2018 fourth quarter financial results include TAO Group’s operating results for the period from January 1, 2018 to April 1, 2018 and fiscal 2017 fourth quarter financial results include TAO Group’s operating results for the period from February 1, 2017 to March 26, 2017 due to the timing of the acquisition. In addition, fiscal 2017 fourth quarter operating results did not include Counter Logic Gaming and Obscura Digital, which the Company acquired on July 28, 2017 and November 20, 2017, respectively. Accordingly, the Company’s results for fiscal 2018 are not directly comparable to fiscal 2017 results.

(3)

Corporate and Other primarily consists of unallocated corporate general and administrative costs (including costs associated with business development initiatives) and unallocated venue-related depreciation and amortization expense, as well as inter-segment eliminations.

MSG Entertainment

For the fiscal 2018 fourth quarter as compared to the prior year period, MSG Entertainment revenues of $185.6 million increased 47%. The increase was primarily due to higher event-related revenues and a full quarter of operating results for TAO Group. The increase in event-related revenues was primarily due to higher revenues at The Garden, the Forum and Radio City Music Hall.

Fiscal 2018 fourth quarter operating loss of $0.4 million improved by $45.7 million and adjusted operating income of $7.7 million improved by $46.9 million. The improvement in operating income and adjusted operating income primarily reflects the increase in revenues, partially offset by higher selling, general and administrative expenses and direct operating expenses.

The increase in selling, general and administrative expenses was primarily due to a full quarter of TAO Group operating results, partially offset by other net expense decreases. The increase in direct operating expenses primarily reflects higher overall event-related expenses at the Company’s venues and a full quarter of TAO Group’s operating results, as well as higher other net expenses, offset by the absence of a $33.6 millionwrite-off of the remaining deferred production costs for theNew York Spectacularproduction recorded in the prior year quarter.

MSG Sports

For the fiscal 2018 fourth quarter as compared to the prior year period, MSG Sports revenues of $132.5 million decreased 26%. The decrease in revenues was primarily due to the absence of playoff-related revenues and, to a lesser extent, lower league distributions, mainly the result of the absence of $15.0 million innon-recurring NHL and NBA distributions. In addition, professional sports teams’ regular-season ticket-related revenue and food, beverage and merchandise sales decreased, which includes the combined impact of three fewer Knicks and Rangers home games versus the prior year quarter. This was partially offset by higher sponsorship and signage revenues, local media rights fees from MSG Networks Inc., and suite rental fee revenue.

Fiscal 2018 fourth quarter operating income decreased by $5.2 million to $4.5 million and adjusted operating income decreased by $4.4 million to $10.1 million. The decrease in operating income and adjusted operating income was primarily due to lower revenues, offset by lower selling, general and administrative expenses and direct operating expenses.

The decrease in selling, general and administrative expenses primarily reflects the absence of severance-related costs associated with the separation agreement with a team executive recorded in the prior year quarter. The decrease in direct operating expenses was primarily due to lower playoff-related expenses and other net expense decreases.

Corporate and Other

For the fiscal 2018 fourth quarter, Corporate and Other operating loss of $43.9 million improved by $0.2 million, primarily due to lower depreciation and amortization expense, offset by higher selling, general and administrative expenses. Fiscal 2018 fourth quarter adjusted operating loss of $20.3 million increased by $1.4 million, primarily due to higher selling, general and administrative expenses, mainly a result of higher professional fees, employee compensation and related benefits, the inclusion of Obscura Digital expenses associated with the Company’s business development initiatives and other net cost increases, partially offset by certain favorable adjustments related to contingent payments for the Company’s business acquisitions.

Purchase Accounting Adjustments

For the fiscal 2018 fourth quarter as compared to the prior year period, operating expenses related to purchase accounting adjustments decreased $6.4 million, primarily due to the absence of expense related to thestep-up in value of TAO Group’s inventory.

Other Items

On June 27, 2018, the Company announced that its board of directors authorized the exploration of a possiblespin-off that would separate the Company’s sports businesses from its entertainment businesses.

About The Madison Square Garden Company

The Madison Square Garden Company (MSG) is a world leader in live sports and entertainment experiences. The company presents or hosts a broad array of premier events in its diverse collection of iconic venues: New York’s Madison Square Garden, The Hulu Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre; the Forum in Inglewood, CA; The Chicago Theatre; and the Wang Theatre in Boston. Other MSG properties include legendary sports franchises: the New York Knicks (NBA), the New York Rangers (NHL) and the New York Liberty (WNBA); two development league teams – the Westchester Knicks (NBAGL) and the Hartford Wolf Pack (AHL); and one of the leading North American esports organizations, Counter Logic Gaming. In addition, the Company features the popular original production – the Christmas Spectacular Starring the Radio City Rockettes – and through Boston Calling Events, produces New England’s preeminent Boston Calling Music Festival. Also under the MSG umbrella is TAO Group, a world-class hospitality group with globally-recognized entertainment dining and nightlife brands: Tao, Marquee, Lavo, Avenue, The Stanton Social, Beauty & Essex and Vandal. More information is available at www.themadisonsquaregardencompany.com.

Non-GAAP Financial Measures

We define adjusted operating income (loss), which is anon-GAAP financial measure, as operating income (loss) before 1) depreciation, amortization and impairments of property and equipment and intangible assets, 2) share-based compensation expense or benefit, 3) restructuring charges or credits, 4) gains or losses on sales or dispositions of businesses and 5) the impact of purchase accounting adjustments related to business acquisitions. Because it is based upon operating income (loss), adjusted operating income (loss) also excludes interest expense (including cash interest expense) and othernon-operating income and expense items. We believe that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the various operating units of our business without regard to the settlement of an obligation that is not expected to be made in cash.

We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of our business segments and the Company on a consolidated basis. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and adjusted operating income (loss) measures as the most important indicators of our business performance, and evaluate management’s effectiveness with specific reference to these indicators. Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. For a reconciliation of adjusted operating income (loss) to operating income (loss), please see page 5 of this release.

Forward-Looking Statements

This press release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments and events may differ materially from those in the forward-looking statements as a result of various factors, including financial community and rating agency perceptions of the Company and its business, operations, financial condition and the industry in which it operates and the factors described in the Company’s filings with the Securities and Exchange Commission, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein. The Company disclaims any obligation to update any forward-looking statements contained herein.

# # #

Contacts:

Kimberly Kerns

Chief Communications Officer

The Madison Square

Garden Company

(212)465-6442

Ari Danes, CFA

Senior Vice President, Investor Relations

The Madison Square

Garden Company

(212)465-6072

Conference Call Information:

The conference call will be Webcast live today at 10:00 a.m. ET atwww.themadisonsquaregardencompany.com

Conference calldial-in number is877-347-9170 / Conference ID Number 2061378

Conference call replay number is855-859-2056 / Conference ID Number 2061378 until August 23, 2018

THE MADISON SQUARE GARDEN COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended June 30,						Twelve Months Ended June 30,
	2018			2017			2018			2017
Revenues	$	317,957		$	305,574		$	1,559,095		$	1,318,452
Direct operating expenses		209,179			230,593			945,428			861,381
Selling, general and administrative expenses		123,199			138,674			472,305			410,039
Depreciation and amortization		30,967			28,777			122,486			107,388

Operating income (loss)		(45,388	)		(92,470	)		18,876			(60,356	)
Other income (expense):
Loss in equity method investments		(9,209	)		(1,475	)		(7,770	)		(29,976	)
Interest income		6,594			3,740			21,582			11,836
Interest expense		(3,941	)		(2,457	)		(15,415	)		(4,189	)
Miscellaneous income		—			51			303			1,492

Income (loss) from operations before income taxes		(51,944	)		(92,611	)		17,576			(81,193	)
Income tax benefit		1,454			5,158			116,872			4,404

Net income (loss)		(50,490	)		(87,453	)		134,448			(76,789	)

Less: Net income (loss) attributable to nonredeemable noncontrolling interests		(3,287	)		1,195			(6,518	)		304
Less: Net loss attributable to redeemable noncontrolling interests		(1,150	)		(4,370	)		(628	)		(4,370	)

Net income (loss) attributable to The Madison Square Garden Company’s stockholders	$	(46,053	)	$	(84,278	)	$	141,594		$	(72,723	)

Basic earnings (loss) per common share attributable to The Madison Square Garden Company’s stockholders	$	(1.94	)	$	(3.58	)	$	5.99		$	(3.05	)
Diluted earnings (loss) per common share attributable to The Madison Square Garden Company’s stockholders	$	(1.94	)	$	(3.58	)	$	5.94		$	(3.05	)
Basic weighted-average number of common shares outstanding		23,686			23,559			23,639			23,853
Diluted weighted-average number of common shares outstanding		23,686			23,559			23,846			23,853

THE MADISON SQUARE GARDEN COMPANY

ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO

ADJUSTED OPERATING INCOME (LOSS)

The following is a description of the adjustments to operating income (loss) in arriving at adjusted operating income (loss) as described in this earnings release:

•

Share-based compensation expense. This adjustment eliminates the compensation expense relating to restricted stock units and stock options granted under our employee stock plan andnon-employee director plan in all periods.

•

Depreciation and amortization. This adjustment eliminates depreciation, amortization and impairments of property and equipment and intangible assets in all periods.

•

Purchase accounting adjustments. This adjustment eliminates the impact of various purchase accounting adjustments related to business acquisitions, primarily fair value adjustments to inventory in fiscal 2017 and favorable / unfavorable lease agreements of the acquiree.


	Three Months Ended June 30,						Twelve Months Ended June 30,
	2018			2017			2018		2017
Operating income (loss)	$	(45,388	)	$	(92,470	)	$	18,876	$	(60,356	)
Share-based compensation		10,671			10,664			47,563		41,129
Depreciation and amortization⁽¹⁾		30,967			28,777			122,486		107,388
Other purchase accounting adjustments		1,222			9,466			4,858		9,466

Adjusted operating income (loss)	$	(2,528	)	$	(43,563	)	$	193,783	$	97,627

⁽¹⁾

Includes depreciation and amortization related to purchase accounting adjustments.

THE MADISON SQUARE GARDEN COMPANY

CONSOLIDATED OPERATIONS DATA

(Dollars in thousands)

(Unaudited)

REVENUES


	Three Months Ended June 30,
	2018			2017		% Change
MSG Entertainment	$	185,643		$	125,937		47	%
MSG Sports		132,485			179,637		(26	)%
Inter-segment elimination		(171	)		—		NM

Total Madison Square Garden Company	$	317,957		$	305,574		4	%


	Twelve Months Ended June 30,
	2018			2017		% Change
MSG Entertainment	$	780,726		$	506,468		54	%
MSG Sports		778,653			811,984		(4	)%
Inter-segment elimination		(284	)		—		NM

Total Madison Square Garden Company	$	1,559,095		$	1,318,452		18	%

OPERATING INCOME (LOSS) AND ADJUSTED OPERATING INCOME (LOSS)


	Operating Income (Loss)									Adjusted Operating Income (Loss)
	Three Months Ended June 30,									Three Months Ended June 30,
	2018			2017			% Change			2018			2017			% Change
MSG Entertainment	$	(437	)	$	(46,137	)		99	%	$	7,736		$	(39,153	)		NM
MSG Sports		4,515			9,762			(54	)%		10,076			14,482			(30	)%
Corporate and Other⁽¹⁾		(43,922	)		(44,156	)		1	%		(20,340	)		(18,892	)		(8	)%
Purchase accounting adjustments		(5,544	)		(11,939	)		54	%		—			—			NM

Total Madison Square Garden Company	$	(45,388	)	$	(92,470	)		51	%	$	(2,528	)	$	(43,563	)		94	%


	Operating Income (Loss)									Adjusted Operating Income (Loss)
	Twelve Months Ended June 30,									Twelve Months Ended June 30,
	2018			2017			% Change			2018			2017			% Change
MSG Entertainment	$	86,019		$	(3,692	)		NM		$	117,034		$	21,970			NM
MSG Sports		126,564			119,134			6	%		149,543			143,001			5	%
Corporate and Other⁽¹⁾		(170,715	)		(163,180	)		(5	)%		(72,794	)		(67,344	)		(8	)%
Purchase accounting adjustments		(22,992	)		(12,618	)		(82	)%		—			—			NM

Total Madison Square Garden Company	$	18,876		$	(60,356	)		NM		$	193,783		$	97,627			98	%

⁽¹⁾

THE MADISON SQUARE GARDEN COMPANY

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)


	June 30, 2018			June 30, 2017
ASSETS
Current Assets:
Cash and cash equivalents	$	1,225,638		$	1,238,114
Restricted cash		30,982			34,000
Accounts receivable, net		100,725			102,085
Net related party receivables		567			2,714
Prepaid expenses		28,761			23,358
Other current assets		28,996			49,458

Total current assets		1,415,669			1,449,729
Investments and loans to nonconsolidated affiliates		209,951			242,287
Property and equipment, net		1,253,671			1,159,271
Amortizable intangible assets, net		243,806			256,975
Indefinite-lived intangible assets		174,850			166,850
Goodwill		392,513			380,087
Other assets		45,713			57,554

Total assets	$	3,736,173		$	3,712,753

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current Liabilities:
Accounts payable	$	28,939		$	24,084
Net related party payables		13,675			17,576
Current portion of long-term debt, net of deferred financing costs		4,365			—
Accrued liabilities:
Employee related costs		123,992			138,858
Other accrued liabilities		180,272			191,344
Deferred revenue		414,262			390,180

Total current liabilities		765,505			762,042
Long-term debt, net of deferred financing costs		101,335			105,433
Defined benefit and other postretirement obligations		49,240			52,997
Other employee related costs		53,501			47,913
Deferred tax liabilities, net		78,968			196,436
Other liabilities		56,905			47,441

Total liabilities		1,105,454			1,212,262

Commitments and contingencies
Redeemable noncontrolling interests		76,684			80,630
The Madison Square Garden Company Stockholders’ Equity:
Class A Common stock, par value $0.01, 120,000 shares authorized; 19,136 and 19,014 shares outstanding as of June 30, 2018 and 2017, respectively		204			204
Class B Common stock, par value $0.01, 30,000 shares authorized; 4,530 shares outstanding as of June 30, 2018 and 2017		45			45
Preferred stock, par value $0.01,15,000 shares authorized; none outstanding as of June 30, 2018 and 2017		—			—
Additionalpaid-in capital		2,817,873			2,832,516
Treasury stock, at cost, 1,312 and 1,433 shares as of June 30, 2018 and 2017, respectively		(223,662	)		(242,077	)
Accumulated deficit		(11,059	)		(148,410	)
Accumulated other comprehensive loss		(46,918	)		(34,115	)

Total The Madison Square Garden Company stockholders’ equity		2,536,483			2,408,163
Nonredeemable noncontrolling interests		17,552			11,698

Total equity		2,554,035			2,419,861

Total liabilities, redeemable noncontrolling interests and equity	$	3,736,173		$	3,712,753

THE MADISON SQUARE GARDEN COMPANY

SELECTED CASH FLOW INFORMATION

(Dollars in thousands)

(Unaudited)


	Twelve Months Ended June 30,
	2018			2017
Net cash provided by operating activities	$	220,647		$	216,623
Net cash used in investing activities		(182,357	)		(264,301	)
Net cash used in financing activities		(51,097	)		(158,525	)
Effect of exchange rates on cash and cash equivalents		331			—

Net decrease in cash and cash equivalents		(12,476	)		(206,203	)
Cash and cash equivalents at beginning of period		1,238,114			1,444,317

Cash and cash equivalents at end of period	$	1,225,638		$	1,238,114

Madison Square Garden Sports (MSGS) 8-KThe Madison Square Garden Company Reports