MSGS - Earnings call transcript Q1 2022 | Madison Square Garden Sports Corp.

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Operator

Good morning. Thank you for standing by, and welcome to the Madison Square Garden Sports Corp. Fiscal 2022 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s remarks, there will be a question-and-answer session. now Investor turn Relations. would to call I Danes, Ari Instructions] like the to over [Operator Please ahead. go

Ari Danes

Thank you, operator. Sports Fiscal Good morning and First Earnings welcome Quarter Conference Call. XXXX to MSG

this the After CEO, our Financial Lustgarten up on and will EVP, for company's will of Chief a This our Officer we followed operations. with open with our President Our financial the will begin results prepared an questions. morning's remarks, Andy call update by review Treasurer. be and call Victoria Mink,

not we any Andy. performance future consolidated a of you various XXXX. On And the to forward-looking and events with earnings may this statements include guarantees that Please statements community in the Today's from disclaims of If today's Securities Management's of and Condition that therein. The forward-looking or measure. now Private and the operating during the perceptions are financial our factors. I'll and financial statements AOI, actual Factors those contained Investors Exchange Securities Analysis copy release, following. its results, may to operates, financial it any as results earnings to the have Act that contain in are of uncertainties, with cautioned website. do filings entitled reconciliation not and non-GAAP result of statements Results risks and a obligation operating update income section well and constitute industry as a Litigation Risk and Reform of company it of forward-looking call. and is in which operations, take Operations corporate Investors developments, materially turn that of involve forward-looking described the of and the may Commission, today's adjusted note condition, company's statements, pages business, as income company the These of such of a the available factors differ Discussion X any that, statements of discussed within in over operations discussion meaning sections and of Financial including call the X and the provide or release, the be

Andy Lustgarten

thank Good and you for morning us. joining

know, stand-alone announced became the you we keeping As that would of quarters company, conduct the a earnings we our when cadence fiscal in fourth sports second we for only. calls and with business

shift being number improve continuing this through per areas. take driven a forward, our provide the we're the thought given While is due reflected we marketing year. you which results going include business, tickets, fluid will of on I'll caps fiscal to be the balance in we This beverage the operating consumer season demand, company, that some an food pandemic, to update positive including remains but expect merchandise, and by is to which suites partnerships. details over in important our was corporate more our and environment across shortly, for signs plan and positive areas, still it both of seeing these

not select the out pandemic of softness the yet. areas of effects There and are business. We the woods lingering in of remain

iconic At However, assets the fundamentals the are that fan valuable back and bases tremendously we franchises largest of our play we on confident two dedicated in in the as world. are the normal that both in with all, are and market to as path it media operations. Knicks the ever, Rangers, center

our market Lakers across with several Los discussed no These that have precedent $X.X the on of have the State valuations involving robust include spoke there and of our transactions been league recently the sales, minority valuations, Last company. we we at Forbes been our liquidity, there leading call, value since month, team and Angeles Knicks of last annual teams. NBA specifically quarter, with last for list And reported As professional above. billion. its the public published points, leagues highlight earnings $X sports Golden billion at stake additional Warriors data

NHL at recently the to enormous valuations, $X are value second the its of and obviously Rangers assets. untapped addition of billion. still over In listing our marquee excess combined most two the $X.X of valuable nearly our team well enterprise and when in as current Sportico, just released billion, valuations, These value speak franchise

from and seasons direction year the to been new NBA our signed After seasons and contracts. Mika Let's the extremely teams both happy having underway The to the at rosters and this business long-term Adam disappointment key shortened includes and of our the call our the players response number our last of the Garden now no restrictions tremendous. turn to reaching Since regular pandemic both Fox. our Rangers this to with has are NHL the with The -- teams. with Rangers Zibanejad both scheduled due play operations. seasons XXXX-XXXX a and fans of of with Knicks composition of extensions full capacity are two We're

of with which we we New on York expected Closer a effect packages. January. low will sales. past recent And the the tourism by to lingering this the X.X individual hopeful the and effect still while increased for pandemic's into a for is survey also tickets Office improve in which City, has, ticket season impact have overall occupancy York and of teams home, City We're be season our up this for of for to months. international new minority substantially The the restrictions very to international by possible loosening We in ticket travel according customer mitigated tailwinds has group the season The major sold see XX% by of however, other employers pleased on week. US, city ticket majority our New extremely both significantly sales partnership tickets, combined took of make had sales. a are where and experienced have Knicks significant a on are is ticket renewal tickets, Rangers. which rate strong

In nearly approval And in XX% now New games. York vaccination addition, of to CDC's rising. could vaccinations dose recent of the percentage is children bring for received that have and at back one adults State families more least the

we seeing think other are particular pointing strengths And the signs we're in all right in direction. also areas. So

For has And only, enthusiasm our to to to early suite-holders amount example, they're person excitement we've an seen seen entertain enthusiasm again the in this started incredible their from the in have they hospitality who increases to percentage to it's fans watch Not per eager bringing F&B Garden, still merchandise to of strong been The The spending. while corporate team terrific. been has have levels. at as We've season in pre-pandemic compared also this double-digit caps Garden. led and extend are

usage also the activity and Knicks suite suite XX% to is hospitality helped average of season around this far so corporate nearly and historical renewals levels. new This accelerate back in fact has for Rangers renewed In sales. interest

hard to team been on that say return has basis, we've rate goal. to go-forward that Our revenue suite and a working achieved we're run to pleased pre-pandemic levels

partnerships to make partners. Another adding point over seeing new find also XX confidence past we're normal existing operations, ones. are to proof pleased been as marketing corporate we And to of months. the has way while the readiness They've back embrace our we engagement by supportive extremely been our

services. number existing also our we partnership marquee marketing also we our successfully Since and a As earnings call, leader in to partner global digital with Anheuser-Busch we've partners; a roster deals new last with our on adding this then, JPMorgan renewed of Lexus, mentioned Squarespace, our a past renewed while signature Chase. Infosys, summer signature

announcement continue to we marketing and of the complete for and joined their our In efforts addition, marketing introduce as extension other opportunities. recent deals, has the partnership NBA ongoing including Benjamin Rangers. to applaud partner an helmet official that our Moore with We and new partnership Kia important NHL sponsor

actively for sports for embracing the while new of next of patch a sponsorship the In league's addition has in brought team on have, practice such patch NHL international as NHL. expanded now for the market on has sponsorship and rights, number sponsors NHL The the a inventory. jersey for starting to NBA court extend and of much the also increasing introduction can year the the last season. virtual categories NBA NBA helmet teams the signage efforts also gaming. We're ice new The approved the also second to this jersey sponsor,

most we beginning. sports category. gaming agreement mobile BetMGM related this with integration in New Just across in Entertainment's notably is at partnership just completed this is includes significant first an as BetMGM, State. well with sponsor in MSG this the our expansive to Arena. week, partnership which Most multiyear portfolio, Entertainment announcement first the World's with And This major deep Famous represents was important York and our done the Knicks Rangers, MSG which as deal

for be this partner, to opportunity, to them company. our tremendous our space expect this we Although, we begin don't represents as realize only

strong you customers As are the and momentum, experiencing real to see, desire by assets we can other. of with with driven our our engage our and fully each across partners business,

substantial games opportunities we time. long-term strongly unique energy as performance to our our of I'll shareholders. confident with fans in the over this that, on-ice their brands, challenges value continue excitement and believe ability improve our the call also over while in our connection of to and We the we navigate our on-court for incredible our value upside and revenue lines, drive nearly all across see of and major environment, franchises remain and our as And to enduring are Victoria. the And between turn we

Victoria Mink

by I'll quarter prior revenues first good year million, Andy, on morning everyone. to in you, touching start $XX.X million briefly Total the were quarter $XX Thank for compared very and results. as the fiscal our quarter.

the of $XX.X period. the an generated fiscal that for adjusted loss also and We NBA's to return comparability prior a compared year-over-year of note first by million, play NHL the would $XX.X I quarter in year with prior period. year operating as impacted the in million was loss

caused first on can games quarter preseason XXXX XX-Q, close. the year current we two none XXXX-'XX to delayed in held quarter the results Form return we last financial after play period, yesterday also found detail be prior to the Additionally, market the filed seasons. as in our in which year More starts versus our

continue terms sheet. liquidity, our In manage to we prudently of balance

As million. equivalents quarter total existing capacity of under debt had of outstanding our $XXX credit liquidity, And at $XXX.X cash of September XX, comprised facilities. our was cash million available end and we and borrowing

have the reflect revenue business. and for levels run a sponsorship sales suites momentum fiscal go-forward and seasons Looking primarily returned financial the Knicks as And essentially line rate results basis. food, will are year seeing ahead, strong, while across balance beverage have pre-pandemic Rangers. discussed, our Ticket, the we XXXX-'XX to on the the every and virtually merchandise Andy of been of the revenue positive of

turn agreements with a on trajectory revenue year NHL With result national will rights to side feel a fiscal and fiscal of I new remainder is company the business rights path In on Disney this of as believe normalized call over media our the addition, league's good I In our that, the increase Ari. will results. reflect now about the for very of WarnerMedia. media the XXXX we summary, back and significant back to the

Ari Danes

we you, to would open Thank call Victoria. Operator, now questions. the for like

Operator

Your first the Instructions] David line JPMorgan. from comes with question [Operator Karnovsky of

David Karnovsky

one. consider light just I update provide share any there you need you. have allocation? Thank Where of you. some Thank is you the of thinking to business on to today, the In be about can capital your repurchases? better would outlook

Victoria Mink

the and Victoria. We've ensure company of health course, number one a bit it's Thanks Dave, Hi before. And is about our question. of assets. our protect priority this to our talked the to for

outlook. strengthen know, seeing pay encouraged liquidity that we near we'll more down But is positive And we utilizing time, you down confident took our as business look now paying we've the our year a debt free considering all are to signs corner, term. in additional feel our on business. bit So, And looking really But our debt options started ahead, about long-term flow. last for the that do across position. we at we're we're cash to our very over by the and turning

David Karnovsky

you. Thank Okay.

Operator

Our the line next Stanley. Morgan Swinburne from Ben question of with comes

Ben Swinburne

there. Do bit do little sort and as term, about of you've to Good marquee Andy, see the sports about franchises and evolving of signed BetMGM it for part an of a bigger term? with maybe crack in then Not a leagues this business or any the of reticent sort we taking role becomes just And sports and betting? think business? of are sheet. a level what that this Thank on framework the bigger you involved business betting over for this longer the last the this I opportunity profile historically approving your could of two about could balance kind to there? kind at capital of least sort think for teams Thanks. a you there been to revenue bit the space just play have as could quick know morning. like leverage don't the embracing a know but I you up if pick a structure talk question. relates Is looking there's for – you have right optimal longer leagues at But think another just debt you. the the

Andy Lustgarten

Ben. Well, let's start question. with Thanks, sports gaming your

prices as two, because reflects every gaming points: start or sports what us me This and engagement I'll off long I And with do term start through time today by comment with So deals. and ticket and think it's adoption important. and – what and – Viewership longer tomorrow. we're the eventually term take super some drive today; our with is mean sponsors pays I continues – media to gaming will long to with able viewership I our to sports with and same one, even but engagement. that gaming it two

in of engagement inventory for driving an and So the very valuable a sport. it's enthusiasm tool

today. Second,

partner us today really the is feel about BetMGM York operators first nine licenses. partnership. We that their granted just obviously, we So opened good mentioned. our New as

have ability revenue to a sports we of of that partners. team, those out lots sports of As – drive

rotation. Sports, So on teams signage, here been on-ice, on-court, so all have specifically premium MSG at two the courtside

assets So that and control patches, Some of et all we those right? helmets, our are assets other own. stickers, cetera, premium

cetera venue official relationships partner more the both direct value even interest even on international gaming That and access who be Second, consumers through our us both market in depending operators the thing even But be tremendous has in of database. seems amount digitally, to in and our to driving is could through designations. et value. – our and that

game surprisingly the are gamer the a who hence most of that's likely of So of and people company. a group course gaming largest – most of likely not interested to the people the – so – most

of drive also the Entertainment, with lots MSG opportunities Through right share in at there's unique arena. So here sports for to our we exposure team revenue. relationship our

shared package network, as to well fixed we're anybody to to Entertainment a arena very it's the larger be all between Entertainment. else and MSG between offering offer it's can to largest market. nobody arena you, remind interest again, much being And deliver MSG an to to in we're can. and able So to what represent and are robustly across like we're partner to because Entertainment Sports two signage else MSG all be entitlements able the the category And than forecasted able in believe Sports, entities our as MSG I going market be reflected the largest or going able this the in customers generate MSG

remaining off our partners in a So in And gaming opportunity eight is as be other interest we've as big I of a we company, the long-term. to going we a the really we've near – been think think start. that's this why seen as lot for We've both said, well the had from term fast licensors. to or

Ben Swinburne

Got it.

Victoria Mink

it's Victoria. Ben,

Let me on there. of part follow second your your up question

incur of we I is closely the leagues. So going reminder, I near-term sort down we me of first just think, debt looking first business in leverage second the guidance provide of the we're the as perform. just paying points. as two That's continues that capped And is mean track the are you at we of how on can point. not remind amount a just to some point the to debt let the target. the all, by But just quick

Ben Swinburne

you. Thank it. Got

Operator

comes Partners. question with the LightShed Brandon Your line next of Ross from

Brandon Ross

over morning. there what the Hi. you where models. are your is lot MSG And wanted dispute your specifically do but lots impact takes business RSN the with I ecosystem And the you the discussed out with on goals to years MSG RSNs RSN in And rhetoric as we've overarching several scenario teams? a how out more a with I models? new -- now on this Good e-call, next ask local broadcast yesterday deal know, and alternative think with playing be all leagues the and to there's going of on potential Andy Comcast see the networks? needing with the you the and renegotiate then what see you will your especially

Andy Lustgarten

Brandon. right. Thanks, All

So let's start the at top.

utmost distribution strong with changes So let's both our Networks' have a media view, sports drive which believe macro local on of say, lay professional contract So the Taking are from the We at step to we I very we subject back MSG back, in annual long-term content, and Rangers. distribution, partner point of taking and the we to a think point premium any drive strongly some value, just ability economic simple right? the have value facts, step like that right? sports think, team teams are based content confidence that's right? And Knicks a not so a I'd for view. in in escalators, especially, of

deal of the very asset again And the of just long-term look NHL. we those look latest rights, own. take being long-term out take you investment over some the in NHL great hiccups history sports you've great granter an the in It's rights. been you investor great a sustained a time make a media take point you've Sure. view a have strong succeeded. been rights sports now to holds the any about who of is there period short a Right I created, but rights since any it have media are in Can order? those be any time. about of at long-term point love if to the partner If investment deal been when what But you it when

very NBA out strong a their expect of come up. rights deal We when the

having And exploit rights ability than so there's noise the landscape to market there's right monetize enough is and yes, the our some be But it to content. in now. the more evolving. Yes ways those to going

feel your about how and say And would what that drive by I very is about your how obviously very about maximize tickets feel we to the distribution a owning strong to Knicks would me to to it. about question again, On question good feel rights. so Rangers sponsorship our one see start about let feel get it renegotiation, of I so here revenue drives. we -- look we goal we distribution it about the the value saying

secondly, the that's independent But about changes terms or would our renegotiate thinking not to that a go go first first and point. So go ability through just contract our in have to -- any leagues then through of the renegotiate to remember Board.

also So feel speak -- say very NHL's there we RSNs on includes leagues, feel which other both ecosystem that are of very path in and strong for to very here have our view and of good for understanding leagues, confident while focused speak the can't the is think I overall teams finding this fees. the rights about a very both the that our NBA and we we networks. recognition I rights would their and protect forward a And importance and the I

very good to holder a So we conclude I think this feel about rights just Brandon. -- being

Brandon Ross

Thanks. more. just And one

think good I teams most you if For off tickets or really performance the are buckets for financial team remind to the the well? first help locked Rangers upside in. time could teams of bulk of from But in And accelerate time other sold the that playing what sponsorships but the and about know -- advance buckets starts. are in are was a from and good performance. financial the I could the really wondering Knicks us long both us

Andy Lustgarten

having of question split So with I'm in relationship high Brandon parts: -- into sellers. the we're the volume your Short-term, going focused going a talked after long-term. our two short-term, on to about there's past, customer we've direct in always -- and that as very

tickets. independent sell do much we very price So, and those tickets we variably

what take upside could what in independent season. single sustained team -- how individual team I macro is impact would impact there look any So as that tickets question But So of point positively it -- let's of because and a just start. like let's our performance, in view is think more right? and tickets value, really that's performs your

long-term set mentioned both leagues network, we categories you remind and also have sponsorship focus find We've to number or those me about our escalators, that ability sponsorships, there's our open our with -- -- media the are are or sell signed new us. Let our MSG from leagues set locked Obviously, assets and suite sell. the escalators. revenue are streams a of how assets and or new up contractual: ones set and rights, on incremental fixed new new releasing for locked to currently

go historically, go you ticket but those revenue and would playoffs incremental monetize that order guess has that year's pieces So you short gate. because prices only we team obviously by again, very increase from impact, you valuable benefits -- is again, it's that during impacted a say, I And Playoffs But incremental ticket deeper increasing we're able from are there's as and know, renewals. performance. time you playoff earn run. team of reevaluate also in And only and have if will you not in performance in to I playoffs. and performance over as be playoff, actually, the terms after the the do follow-on season of long-term but big a playoff

So upside as further perform. teams again,

new us both different or same. that's the well, -- say, I'd over to drive affect when renewals both prices come sponsorship sales. club is today place either both The or long-term memberships deals through suite of we're types as individual the up, our sales in of -- licenses those those through other But suite able

feel business. this conclude, very a -- to this look, I'd about business strong we've got say So of number we

certainly for over revenue given ballast sustained revenue have this time, for a -- in accelerate revenue think new any really provide streams performance a fixed could But number strong year. company. of growth our performance company a team that growth I its We with and

Brandon Ross

Thanks so Great. much.

Ari Danes

last Operator, have time we one for Brandon. Thanks, caller.

Operator

comes question the last Your Research. of with line John from Janedis Wolfe

John Janedis

Andy, this the comments can you're where but be for given you And more here? there And underpenetrated? would about potentially somewhat Thank any on the could next from Moore. give Rangers? marketing categories opportunity season? that meaningful upside color your Benjamin related jersey you. how You Are partners, revenue talked other maybe head patch on new

Andy Lustgarten

Sure.

So there's in let's -- a there. few questions

I and it want through -- John, them I to to let missed in on. know. just think I in move me jump try a one answer If

actual time Let's or what a able into single the the with partnership. the about with some start NHL any your great it's league any in It's What's opens whole up able NHL what revenue patch, or only because drive type question I that new ties categories. an inventory, think you're inventory. it patch you're opportunities to from -- to our about are any that premium not asset do --

of there. a So, number our through nice Squarespace but a through and patch, I'll and assets -- patch. -- it the a give us open partner both drive signature the other a whole jersey and rate able to example the have generate sell of whole up card category, new partnership nice a patch sale to of We're the Knicks the or enabled

that have is to only we go about inventory. the not premium inventory. premium what find inventory, to with new the you're able It's able ownership based partnerships create and inventory. do it's what of So, when you around the you're about And actual

selling there online year a this our next be patch, patch when assets through earlier up out big But comes opens we how asset. year, it there. I'm because this category NHL be reach around maximize year. that place into to to will want figure that it drive expectation piece do opportunity the promising maximize it is will season, revenue next it, could not and the the start but we'll when get some year, Obviously going some partner selling that. and that year. of to reach the next We So to time we're we is

take to assets think that it. to about not have do to there's be will also don't we because from -- what or want other a that we assets will else patient, when of of a partnerships, market a we we we point premium marketing correctly, little patient, rush But to is revenue think have, categories lot macro drive you maximum view the want types understand we them more sell upside So we be you still. you of go

business number I we ourselves proud category think and are it's focused There tapped I marketing measure all such been yet it's they're pre-pandemic see and a to took level. Both and betting of into -- significant we these partnership exceeding reach Fitbit tap go-forward mean been we're very a where against see mentioned, now. to leagues at already. already Peloton customers We're certain different to all the Miami. we're Fitness in as our back we're improvements able on or people we categories, one spending. categories pre-pandemic is levels across customers. our our are metrics that looking companies Health insurance, to us are reached big Cryptocurrency, have categories, health very of Sports we When a haven't opportunity. home a to into. have basis. yet. sports already certain There's pretty on teams. a partner right naming rights it's is really

for to we We think signed upside just as way have we realize. there's to market, maximized recently there big teams what have sell the patch seems in arenas, upside comes we the across a NHL about I'll partner market -- in and being premium have there We haven't drive think huge partner a to a our the that in we go to with NBA well. of able able being as NBA a the that the the holistic be the also there's already across for international deals, that's to current when for a sell huge we networks, to partner, big believe across patch coming our provide solution to they MSG space teams. provide but able terms in advantage asset, been really to assets, the talked assets. And move And teams and to for -- number both sports have yet. across being in while the mention market, of of able some to what in rights patch revenues We fixed premium us Entertainment there's and a enables able across fully

a it's great we So think here. opportunity

so where we about to where feel is. are good really the we better think, we really And feel future but reiterate, we just even about

John Janedis

you. Thank right. All

Operator

for like to Ari call any I'd turn remarks. closing the over Danes, back to now

Ari Danes

for to joining us. great day. a speaking on next look with We earnings you you Thank Have all forward call. our

Operator

call. gentlemen, conference Goodbye. concludes for your you and Ladies We participation. thank this today's

You now disconnect. may

Madison Square Garden Sports (MSGS) 10 Nov 212022 Q1 Earnings call transcript