MSGS - Earnings call 2 2024 | 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 2024 Second Quarter Conference Call. [Operator Instructions] I would now like to turn the call over to Ari Danes, Investor Relations. Please go ahead.

Ari Danes

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

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

a operating release, non-GAAP now operating of the discussed reconciliation during to statements and release, a take today's of refer income update call provide over AOI, have forward-looking available copy following. not it do earnings of be actual the forward-looking the of statements financial turn or website. Please is Private operations the a the to materially Any the Securities future may forward-looking today's and to On we in corporate Today's obligation you the note XXXX. section earnings involve Litigation that Investors meaning If statements results and from for within measure. And uncertainties any any with contain consolidated company's in forward-looking those of the SEC statements this results discussion such our The discussion disclaims with risks risks filings could X company I'll X may of adjusted income, and a that Pages to of that, David. uncertainties. Act guarantees and are differ call. cause Reform of not to of statements. Please or of performance

David Hopkinson

good and morning, everyone. Thank you, Ari,

in complete, operating into million now to last seasons has $XXX million. with momentum I'm reflected This pleased $XX our positive forward that the With say fiscal second NBA income results, 'XX-'XX NHL of approximately revenues 'XX. is quarter adjusted carried more of year and momentum from operating our fiscal than and halfway

at food to tickets, games compared fiscal nearly highlight the continue year Rangers enthusiasm merchandise X including Knicks up and prior 'XX revenues reflect beverage fewer results the reported period, partners quarter. suites, our Garden franchises. It see our on hospitality strength per and products opportunities sales and sustained yield season we the ticket home Marquee the in success the grow deeper second including category, relationships revenue These results ticket While new across key introducing and with to were Sports game in versus and of ongoing also our maximizing through forging and from to fans. reflects our increases business, renewals, our sell-through, ticket executing and every premium

benefit We from media rights. also continue to contractual growth in

With well these numerous value are we for very for successful positioned we to avenues initiatives believe shareholders. ahead, growth create long-term and

a in followed were for Julius Precious trade performed recently, has pleased was with very the detail. Malachi the then. More proud seasons. to let's finals since team qualified significant Flynn, the Both December, Now quarter Achiuwa and strong tournament. Randle discuss and for by more been and we see business In and we've the to how and the OG we Jalen watching been NHL Anunoby, This had first their starts has strong of Brunson team the Shesterkin, season, look have represented regular the the of NBA's Trocheck Rangers unfold. Complementing to forward are Vincent left selected our enthusiasm in-season from to this Knicks seasons of Knicks as All-Stars. remainder the in Rangers, in both the months our head And coach, go our in XXXX teams Peter just past weekend, and us NBA for the contention, playoff couple sustained Igor fans. game. With Laviolette, ever performance a All-Star

takes we basis from both and into This teams. Combined group price tickets, arena, almost fans evident fiscal saw and majority tickets the year-over-year increases renewal quarter. food capita XX%. rate last in tickets is per-game season, to this in as increases merchandise larger compared spending And with on both quarter. a average tick been enthusiasm our beverage base The average second is our fiscal season know, As you also was attendance second with account the ticket it as our at for per renewal individual revenue. season above and average 'XX yields paid the XX% and of significant year up combined comprise particularly than a the ticket and notable,

to we including as digital engagement fans, deeper fan continue success, offerings fan through to well and our drive to merchandise as in-arena look exciting for original next build In of experiences addition and generation ways the content.

continue Rangers. front, offerings Siegleman jersey Whether focus for introducing special third the rock global week's Stable their outdoor series it's we stadium for our band Rangers, with and like the this KISS our On the the value. year's or exclusive jersey on game, that for compelling merchandise one-off edition to fans for collaborations Knicks next

this fan initiatives innovative have generated tremendous season interest. Our

interest when welcome to Knicks Garden 'XX-'XX at tip-off robust fan saw we also We thousands October. season the event the in

unique to an digital XX platforms. stronger media and free It both over our we've connections addition look a tip-off platforms. In continue watching demonstrates effort event million Knicks platform game our on total, video leveraging opportunities content forge teams been alumni deliver to to fans. for with digital in season including our also and the Knicks celebrity impressions, practice, our avid how highlight million content meet basketball generated included In our for community and that our on digital event to fan create more this casual to compelling players broader covering social engaging XX and to avenues than We'll views and greets. content

partners the a brought Collection presents NEXEN we We've to roster this relationship Pfizer, number amongst opportunities Oak existing and business so far Beyond fall, over with in including our from to and Properties sponsorship also others. Entertainment, strong our Meat, Turning of the long to our View Marquee partnerships. this with with expand began core new partners. And season, of agreement new and representation benefit to term. Ring, same that Group sales MSG figure new past a continue Oura we sponsorship marketing TIRE time, marketing agreements our At Crown

In terms year, and activity event-level of at fiscal renewal suite seeing well products well arena. products, very driven revenues October, sales the suite the record new by as premium premium In robust this opens addition which new the of we strong as been received. hospitality, new have X Garden are

a our been our for nearly this in remain The the continued suite pleased space first, the momentum poised already agreement. hospitality multiyear is to an has is sold club and which out. second, growth with event-level We're premium And in luxury business. area of licensed

rights. media to Turning

in coming optimistic season live after ongoing viewership we seen for ahead. At to media NBA's up season, rights national remain the level, local with ABC fees and escalators. time, both ESPN, national the local to rights Rangers contractual the The due viewership for across agreements At enthusiasm compared rate remains double to renewal trends have rights 'XX-'XX the media last And time benefit media same year. same to increases continue local about from opportunity from this ratings and robust continue TNT up both Knicks the NBA's for sports. we and see with audiences annual We the strong. digits

same reinforces team recent our call the the over third-party valuations, turn its of both the iconic our of In how across I'd I which now December, owning confident on opportunities valuations leagues. shareholder to call I with to is like with our pleased touch of published annual Before business sports Sportico ability Victoria, to the NBA growth to ranking Victoria. team these but valuations, over from average month, Forbes team third-party scarcity the and remain for deliver XX% last average fundamentals will rising underlying with of leagues, NHL increasing These not business assets, XX% in our That the We're releases franchises. year. value value. With valuations in performing long-term updated only team strong our X that, values turn all reflect the value up of and year-over-year. significant confidence these

Victoria Mink

compared and and reflect for across of our games you, last fiscal start I'd preseason update the Xnd X our to by as seasons regular financial additional comparability XXXX third morning, performance sheet. Results the would start and our Knicks Rangers. of In results. that for and as year, Thank which to fiscal everyone. will and fourth the impacted balance home provide 'XX-'XX XX games in the the year-over-year XX aggregate, David, reviewing fiscal then teams season compared we play note on quarter pre- games regular also periods. an hosted reflect year and both total second prior to quarters quarter the good I like

offset for expenses prior beverage the lower rate in by lower game employee at current games the due were a operating XX% our transition local year in renew by management and to second million and sponsorship and as as of This million on in in lower which 'XX Garden of revenues, an to was fewer primarily consists increased also income fees fiscal primarily across increase due X%, home revenue food, second well decreased merchandise results of expenses year-over-year. period, other the category X to costs $X extent, every year-over-year, media revenue our of million quarter. of the cost recognized decreases. nearly Decrease quarter period mainly $XX.X expenses. million expenses while suites the increase arena compensation, license the $XXX.X reflects the result increases expenses played of compared National deals. Adjusted administrative to $XX to lesser of decreased was a year which primarily primarily $XXX.X versus $XXX.X other for at expenses per personnel Turning partially prior reflected of basis. Event-related games the Total compared lower partially and $XXX.X ticket, million the on to fiscal prior license due year, Garden direct year general prior higher escrow. a the impact in period. The fewer revenues to net noncash executive compensation as revenues in key increases as regular million, partially and SG&A $XX.X offset local of revenues expenses. sharing and to operating higher decrease million AOI net million, operating team season SG&A $XX.X XX% direct period during decreased and to includes offset million rights fee expense rights impact arena and the contractual national fee year our in the due media by

deliver fiscal look 'XX, expect the of we our in we ahead, growth impact continue playoffs. the business to As to excluding revenue

reflect will Our higher revenues, team AOI along growth the league-related and with expenses costs. in operations

Turning balance to sheet. our

from advanced our secured the million debt facility, $XX credit under NHL. under $XX credit cash revolver balance the balance the December senior revolving million was was million, of senior approximately million. comprised $XXX facility This secured and of $XX million As was and XX, $XXX our Knicks' Rangers'

both under Our cash of our balances secured $XX quarter. revolving senior credit repayments million total and the debt of reflect during a facilities

growth, million liquidity, of ahead liquidity, the XX, call revolving $XXX have under opportunities $XX the and seen back that, million and the fiscal over we our Regarding to equivalents, on of now with as comprised will and of in drive we of business. And momentum team's Ari. $XXX million cash turn Based confident cash trajectory remain 'XX in unrestricted in long-term I borrowing December the facilities. we had the credit to capacity of

Ari Danes

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

Operator

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

David Karnovsky

item there's distribution, RSN for think October. a just And prior play them. And here that material share opportunity even if in has to agreement, for relative your process, on given are then debt First, Networks details any wanted to jersey Sphere or to see MSG the be the patch just partnership up maturity in you you'd cost on secondly, largest or maybe role financial your I incremental you there? the have [indiscernible] coming you a your to willing -- partner there

David Hopkinson

we to if strongly we that respect professional so Rangers. the MSG landscape case operate content and David. We're all nation's fortunate us back, the media Networks. we the of content believe a step is take premium like for especially sports the With questions. that evolving, value Knicks but in know in Thanks the media MSG live and we benefits Networks, largest also and in of market, the

new they're the have great all front, supportive agreements we MSG+. Networks, long-term, of the digital, exclusive MSG and low provide their ] what of of the [ media they're content, We're local doing distribution including on in ours. offering So contracts our the that live of a partner including distribution place with direct-to-consumer

fans you think in TV I and sports not allows through a to know access games. currently our that market MSG+ Rangers traditional subscribe live do Knicks package linear

especially investment, sports in ahead. to the look we over has having a remain be that believe to we So we look, proven rights long great as term, confident continue and

We patch. any and Your Sphere partnership question on of detail individual don't deal. margin specifics any the of discuss the

So tell on intersection partnership details we're that we source X will which together And an of not is we're any of globally-recognized exciting brands. I to and you entertainment. going this But that. share sports brings think creates right agreement, what proud at the this entertainment

Operator

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

Brandon Ross

you near trade employ to have last the I'll in stock short of sharp the PMV. In my you big close. do tools about there's gap gap. you've teams And still spare to pretty trades did that year, now, values successful how definitely generally, a about the a tools close gap right. to at help to these you questions, you sports order? your past, think you're All but do sales. discount minority in a I right future? about in closing intend deadline know And bullish of future. But pretty pretty buyback just the any you that And talked

David Hopkinson

Sure. those how And those We appropriately strong Brandon. which we scarce, incredibly mean affirm third-party I assets, fundamentals. really you agree feel. the just We our you. with earlier are also word that's and referenced really don't business that my valuations, would I the with of in today remarks, Thanks, our confident, value Yes, price think -- conviction. our stock which but reflects use

expand new the a ticket sales renewals, maximize to with relationships premium which inventory every more fans, got specifically, Crown yield suites. And business through new across over hospitality, Group like aspect results So sponsor products and business. and on introducing continue drive event-level to premium sponsorship our work our to Properties on We've increases revenue relationship in build even View job and direct renewal and X is focusing also season time. our momentum continue maximize sell-through, ticket in while Oak new Collection building ticket valuable to our on of with new our enhanced we

growth, Our to about season. contractual and in we and continuing media are rights strong annual NBA from after talked upcoming renewal next benefit the an

confident teams. we're the as of So in ever value our as

You minority a do rule minority about capital report stake take a we out allocation? possibility sale. nothing never would I that while this sale, about you time. Victoria, to at And the to stake asked have of want

Victoria Mink

Sure. Brandon.

our sort and allocation comes the price to the of think values. it So about we when how capital and the between disconnect stock

Our priorities the same. remain

maintain appropriate operations to to our in liquidity business. want and invest we core First, fund our

of momentum this $XX us we we and have that's $XXX we through revolving to about really But share accelerated $XXX strong program, return $XXX want to given been And you strength positive operating right? As cash third, that sports reflection under of still plan approximately did credit that Second, business Hop has remaining ] a shareholders during extent, today have pleased we last to and capital make repurchase -- see with sure shareholders we're the we the million value share sheet. under a facilities rate and the balance was forward. about, a [ debt did first paydown, dividend our talking our $XX secured including of the million and leaves million open, return repayments be authorization. the the our we're repurchase the was the uses flow, confidence And all interest that franchises our to of in have to as our that of million senior of carried year, million in, second prioritizing we we'll high fiscal that opportunistic environment to cash options keep our mentioned, quarter.

and ahead our business long-term for feel opportunities the drive shareholders. we about continue to value really to So good our

Operator

comes of from question the Angress next line Wolfe Our Logan from Research.

Logan Angress

demand. on first, guess, I

sources the the in the for to You I'm more expect on could Rangers mentioned can color broadly. per bit demand biggest a in per dig kind provide live costs, in to do sort specific you revenues you costs? caps growth seeing forecast for and you curious revenue more cost bit. strong and what per are the And extent if of of year? or entertainment seeing game growth And little I little And a you revenue that this then benefit guess, of in you into any are mentioned caps tailwinds? terms from specific outpace Knicks more

David Hopkinson

and start for in, dig the I'll said, business. translating as specifics that's how you into and on our the demand

price Ticketing, As that per-game basis, we both our renewal said here. on and with in up we're the ticket over some opening a teams. with XX%. a And season average again, across larger ticket season rate granularity every line almost was increases renewable was on base remarks, for but

driven huge And seasons, in result, a and about we're game also renewal pardon robust per partners suites new as us. On new then and sales for that's by a we've from I those at X suites, of me. If this Garden. sponsorship, season, revenues yield benefiting So suites ticket total we're event-level so the the addition seeing both attendance lever year. this overall strong ticket a of record from far welcomed activity. new think And this for growth number revenue, seeing we're

aspect relationship also we over of of believe Oak our and fans area engagement term. fan Collection result strong the one continue of relationships on there. that and of Group help business new growth across in mix. We're the we've partners look sponsorship We're really Rangers, View opportunities, to value focused for also and international the signature enhanced got jersey looking the patch driving to with this of who our expand the we've every headroom pursue focused opportunities, with our deeper for Joining to will entered We these reasons Crown on performance valuable us Properties maximizing and -- the roster business. long that's the

we edition KISS. beverage is series, Rangers, special seems same next of for at These with partnership jersey -- one that we the all experiencing partnership did per with NHL the And we're it did jersey wear spending, we're food Siegelman reasons Stadium the and almost at last Knicks, the the engage year. the period over excite week like things and our fans. Stable outdoor and game collection merchandise going third are up XX% capital which to that the the the our that on that So merchandise

to Victoria, beyond. fiscal So remainder we're our of business that of on half really want the question? for bullish the and you do second this take

Victoria Mink

Sure.

little this fiscal and me Let year. revenue expenses a about in bit talk

So expect right? today, we deliver on our average step higher saw back, across suites, the pro of And playoffs. taking a game second results a food quarter revenue We revenues and impact growth and again excluding you beverage do see to year-over-year in robust could the basis, merchandise. as tickets,

So across expect overall for continue we're remainder positive that year. business our fiscal momentum seeing and of the to the

AOI Now expenses AOI the as will specific revenues, fiscal not this in league-related and more impact higher operation while of in addition, but earlier, costs. I year we're these providing will the there mentioned reflect guidance, team growth be

that So is, includes impact one, of the our rosters. what really current number

a the saw a salary increase from so as reminder, to modest NHL So million. cap $XX.X $XX.X million

on million this side, million to season. the over NBA increased While $XX has cap salary the $XXX

receipts. based this also fiscal the our business luxury and remain seen, those revenue-sharing in trajectory of So on lower higher that, to year. costs, we tax confident addition expense we've expecting we're momentum But the in with projected

Operator

line of Paul Capital. Macquarie from comes Your from next the Golding question

Paul Golding

quick had Just commentary. question ticket a sales on the

or how yields break average fiscal up for and around the in were just up on it's secondly, individual in to commentary that seeing more group relative where is a could group the if individual the year-to-date balance yield year. demand, terms ticket XQ you a You signage, other wondering bit then just question otherwise? I comment? a of come ads whether and similar us, sponsorship strength mentioned Any In faring mix? was through, of down words, And for you're year-on-year. or making that combining

David Hopkinson

tickets I'll first. Sure. Paul. the about talk

me, again, rate packages ticket large mentioned, we had I considering -- season As that's And was the think our average renewal for pardon noteworthy over combined XX%. this I both really we base larger ticket were but we and the pleased last the teams. increases -- season XX% over for renewed really price And we're strong where year renewal is both about. XX%, season

individual sales for the for well. both reduced overall, So is ticket groups per with paid really comes season sale, is ticket be and up group including a larger available continue also of up base tickets, but game And individual amount as season tickets to year-over-year. strong. we're attendance seeing paid average the attendance Average

referenced months we which club Oura luxury the has access introduced and out. I years further, this the come. sold partnership in suite, Oak new in overall So And licensing that year. average tire. good the this direct which year agreement, Group believe, here continued momentum this our site, seeing on have and our fans, -- and licensed got we're with renting multiyear really Pfizer, and higher corporate club-style a this that seeing Crown really We of the where of combination agreements. we the We is introduced in partners demand we well, capitalize and enthusiasm one have to New and access space to help in of And ticket and just I through front. We're post from -- overall, shine that improvement our the with we've those York as grow sponsorships in has is got one think in some a saw bull from TIRE for season, ticketing really suites almost us higher Ring, View access in suites X yield the direct will sort again suites indirect our Properties, the that on weeks, business a tourism we that the suites next we of new robust long-term we've event-level and of even a pandemic. NEXEN new that

Ari Danes

for call. one last Operator, we have time

Operator

from final line Partners. of Our comes the Joyce Research from David question Seaport

David Joyce

step be up. flows comes the NBA contract what the national to back Could from renewal, with us that -- players, are understand influenced the incremental local new are -- a rights, the other expect, there you the to in help by upcoming some which facing? Going versus of it might otherwise, rights should or structural that significant and please changes to digital come RSNs perhaps the other you or that teams also, issues

Victoria Mink

David. Great.

the rights So looking -- national NBA at renewal. the national

first, the current guess, I run the So reminder, national through season. as deals a 'XX-'XX

you about But XXXX of financial any period. increase fees, impact, the all the equally also across you to, potential any in in But will receive XX% approximately fiscal in include our of national talking rights as right? which know, and national, terms the rights so the league-wide the all fees and players there. teams potential alluded does therefore, revenues league national we're potential So which include media would the include media share increase would

of with And we we it's live local -- But sort the sports terms media second and you Networks long-term the We think the in those NBA the has seasons. of as run the continue expect to believe rights, value in professional opportunity. know, I clear and question through talked in is landscape place content. will XXXX-'XX that part about, as regarding maximize of And that Hop and your the evolving, specifically have there, too. MSG contracts we of contracts

XX about left. So years

that's shown locally. be will our So game where

Operator

will Mr. session. closing back I Danes concludes now This Ari turn over our for call the question-and-answer some to remarks.

Ari Danes

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

Operator

This concludes today's Thank for conference call. participation. you your

now may disconnect. You

Madison Square Garden Sports (MSGS) 6 Feb 242024 Q2 Earnings call transcript