MSGE - Earnings call transcript Q4 2024 | Madison Square Garden Entertainment Corp.

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Operator

Good morning. Thank you for standing by, and welcome to the Madison Square Garden Entertainment Corp. Fiscal 2020 Fourth Quarter and Year-End Earnings Conference Call. I would now like to turn the call over to Ari Danes, Senior Vice President, Investor Relations and Treasury. Please go ahead.

Ari Danes

you. Thank welcome Conference Fiscal Call. and and Fourth MSG Earnings Year-End to morning, XXXX Entertainment's Quarter Good the review On and quarter. will on Chief call, Financial operations today's Mike Officer, provide Grau, an for financial results our our EVP company's the and update our open the questions. we call will remarks, prepared for After up

copy If Investors corporate our section a earnings it of you do not is release, of website. today's have available the in

for Securities meaning Litigation discussion Today's Act involve from Please discussion uncertainties. and could take results of those that cause contain of statements such the refer within the Private not and forward-looking materially future Any the note SEC differ XXXX. Please statements. may to the filings a are guarantees Reform and in company's forward-looking risks to risks of following. actual statements uncertainties performance the of results forward-looking of or the with

to And call the with over I'll now that, Mike. turn

Michael Grau

a full Spectacular performance entertainment businesses, Ari, our reflecting XXXX strong bookings, as across Fiscal and good offerings. hospitality premium with and results company, Christmas the year everyone. Thank including you, morning, our our standalone production our marked first live

high year. $XXX of increase of experienced In led with to 'XX momentum end during our full our million, And $XXX.X in million of the the fact, our guidance came we throughout revenues and above us adjusted twice income the operating positive fiscal operating results year ranges.

and us remain on low deliver Spectacular focused live look with Christmas increase the in robust event adjusted double-digit entertainment operating 'XX. a strategy, executing our high of premium hospitality offerings strategy on demand ongoing we along we to increasing fiscal businesses. We expanding for believe growing on percentage fiscal success 'XX, income and in venue single this per building As our to positions sponsorship profitability, ahead to of our utilization, the that

to and that year for generate So business is behind with for positioned confident remain us well our year our ahead, shareholders. a we outlook strong long-term positive a the value

some fiscal highlights now year. from key full and Let's our review operational fourth quarter

year hosted for busy majority another our live of the robust versus the million was were we events. of prior we XXXX guests venues events as events where held our in business these saw X.X by events driven of Fiscal number at our growth bookings at over The XXX year. approximately venues

a first This The the and also by on the year number the strong Garden to note, experiences. a concepts growth Knick demonstrate increase their growth reflects concerts and was Consumer year on driven with our for for Concert the This playoff number show are success record window famous Music in headlining to growth well City the included to customers and world's family particularly that the helped the within our the willingness Radio utilization Garden in venue ended categories in drive this high both as the efforts as acts Rangers robust Hall. at and year-over-year spend fourth arena attracting most demand as of the at of quarter. time. continue in

concerts were out fourth in quarter. of once majority the again venues, our Across sold the

cap prior the spending compared as year and period. higher fourth the saw on also in We quarter beverage per concerts at to overall merchandise food,

by venues and we expect family special Looking increase of in calendar growth up, our continues ahead, concerts, to our events. fill number 'XX, shows events in fiscal bookings and at the to driven again primarily

Spectacular the production. Christmas now Turning to

the new record across During in for revenue, X fiscal 'XX, beloved $XXX tickets million its and we performances sold XXth season. a in production nearly generated over million XXX

revenue the We show higher to as for of growth season be revenue. by are the currently per holiday sale by production on driven well shows with shows XXXX for number expect increased XXX as the and

to ways and regular quarter. season immersive technology to exciting prior home In compared and our explore the production for their Garden guests. XX fiscal finished new fourth games they year additional and to our U.S. will run. the mix both experience This as Rangers quarter, as at -- continue the enhance playoff feature the elements In total, we played

for through of be the terms our $XX In cash we that we'll license and grow the million, with agreements XXXX. X% to arena MSG of receive fiscal each Sports, 'XX, fees will component approximately continue year fiscal

both at with positive performance to revenue tailwinds Nick the beverage season, of Given this food, expect arrangements in see games. and 'XX. share home Rangers profit of That fiscal and and across suites and included MSG past strong signage our we Sports teams our sharing merchandise

Turning to business. Partnerships Marketing our

Group's last a sales we to strong of our know, we pleased start terms I'm collection. you in As Crown sponsorship to transitioned 'XX deals. fiscal are to off Oakview year, Properties that effort to new say

We the expect year. this have positioned to to share weeks business coming believe this more in growth for and is

introduced 'XX, strong fiscal given event Along the renovating saw revenue suite level our the continuing those number luxury will drive this our of fiscal event a suite of are we level space. An level we premium are space. of capacity the level club year. offerings, process and we events During including earlier new suites, to the And anticipate in incremental club we demand, in lines, we which expand [indiscernible] also our event demand products hospitality the year. X this and for

expect area look year 'XX, we we to business another well. pleased our say I'm of to as in So growth as of fiscal this

quarter comparability. couple fiscal and have of our regarding Before points I results, discuss presentation I a financial fourth

First, to license you I'd like MSG it with that quarter, we last Sports. our operating arena definition adjusted remind revised fees relates of as to the income

reconciliation portion presented. financial are all income, in reflected is removing fees operating which arena license the of results income in to noncash longer our today reported the the operating for adjusted of We we no periods

recognized agreements, a that life the XX-year approximately equates a You fees the may recall Arena year. to basis on $XX straight-line the are of license which over million

revenue and of million noncash $XX For fiscal million revenue. cash was XXXX, comprised this $XX of $XX million of approximately

of its completed the Second, Entertainment April XX year. on company spin-off Sphere last from

fiscal carve-out first therefore, not reflect the and result, have stand-alone quarter fully a not quarter year-over-year expenses been of we XX of As are prior all days last a April, comparable fourth public Results we for our basis. the are for accounting results entire based the a year quarter on SG&A for company incurred period. year's results had would fourth the do on

Turning now financial to our results.

merchandise food, arena compared quarter in increase year license in The offerings concerts our revenue XXXX, the the prior from reflected fiscal revenues period. the of This at year fourth Xth entertainment fees. we across garden XX% million, beverage offerings, categories: prior revenues of reported our increase more primarily entertainment For reflected quarter, as to and period. and an the compared to growth X $XXX.X

higher year expenses primarily period. prior $X.X in These year arena the expenses. to The The results the the increase merchandise sporting events direct year at additional Fourth Knick operating well noncash revenues, impact the food, and operating at income $XX.X of as as and, AOI prior at in revenues in our concerts increased by and current increase in venues. license beverage million quarter by games sales include adjusted AOI Garden primarily versus Rangers an increase million partially extent, reflects offset entertainment SG&A quarter, the the quarter higher as year prior fees to higher a quarter. compared compared and reflected of lesser $X.X other to and in million of million as live $XX.X

not expenses basis. quarter a on mentioned And as fourth I SG&A comparable earlier, are fully year-over-year

to balance sheet. Turning our

while June we of As balance cash, $XXX $XX million. approximately of million was XX, had unrestricted our approximately debt

to cash million totaled substantial expect high increase have 'XX. Looking currently free fiscal single of which in ahead income, another net $XX the year adjusted by interest a underscored to properties payments related to company to national percentage fiscal flow following double-digit low our 'XX, This in is our operating we generation. debt ongoing expectations:

Our Christmas taxpayer and include current expenditures, cash I both well the spend maintenance enhancements Garden, Spectacular of renovations related suite at status some as as which and a capital both to discussed earlier. will which as incremental CapEx minimal

In remain debt. and of we shareholders returning paying to priorities terms our of capital dual capital focused opportunistically down on allocation,

XXXX remaining to 'XX, In as year. continue the summary, our we to fiscal approximately and well AOI growth positioned for for repurchase strength As we saw a believe we million reminder, robust current authorization. we robust $XXX the are of our business demand assets. we to deliver look under the fiscal have our reflected share And

that, now turn will I call With the back to Ari. over

Ari Danes

up for Thank call can questions? open we the you, Mike. Operator,

Operator

Your first Henderson from of Instructions] Peter line [Operator comes America. question of the from Bank

Peter Henderson

with opportunities for Can an Spectacular? the us on production, you the just et provide show including And growth cetera. for overall sales count, also pricing, ticket just Christmas the update discuss advanced

James Dolan

for Peter. question. Sure, Thanks the

pacing, in around ticket sale So currently versus holiday that July. sales season that's we're in in, year's regarding XXX shows, XXX with late on and marketing the last kicked advanced

date rate, to volume, our days. early goal. little up full and advanced what in say encouraged about ticket point certainly versus year, same of a more of sales. very half growth seeing We're we're the way last sales, XX% say year XX% I'd towards it's the we're than that's course, we're group half I'd of individual across terms by revenue, reflects So

are So encouraging. again, the days, but early signs very early

question opportunities, think of in Christmas and about second show the growth X the for As really for areas, X mean, around part them. we of all opportunity I in growth see your I talked we

shows certainly In add to terms dependent from edges the more around We room of XXX show growing demand. the have are XXX. count, we shows to on

peak show last that we volume year, to years and recall, a we're certainly may relative You at do not did past.

count. Broadway seen we year successful call have ticket healthy show average. prior we've in on opportunity what remain Pricing, on discount but yields We've we pretty to in So seeing entertainment dynamic been options I'd the very than this comparable with we better pricing. are year,

And in around more think was that of past. ticket sell-through last with mid-XXs show And That for yield. but call considerably seasons year, show terms above that. in I seasons the the We've opportunity it, was had from, sell-through in there's includes the our so prior, year seasons right still in from on peak volume. And down up with sell-through, XX%. then

So all longer -- could pricing current or the and I on all think we growth of factors or these these any the and of for even also across haul see sell-through. season, over any

Operator

comes of Stephen Our the Goldman next Lasz Sachs. line from question from

Stephen Laszczyk

For you be leverage then runs Rangers out, in expansion a remarks some think the that think, business? biggest just XXXX? think should this would And how we about see of in could Knicks the could to that momentum you operating and on on extent as which see what any And drivers Mike, benefit we able prepared season, about could quarter post what much from you you called for unpack XXXX. saw you mean the the and post-season how to maybe that margin you for through flow the of ahead talk of your I

Michael Grau

question. Thank Sure, for Thanks Stephen. the

the about terms single In high overall. double-digit certainly talked of AOI do margins growth some in 'XX. anticipate in margin, in growth we to AOI low We've percentage

takes will a expansion. Some of of by see we be around additional I There this upfront. I'd think expansion. over margin couple fueled out puts are and that on haul, And the margin longer that lay opportunities

business, the ticket One, promotions, tends in a Bookings will and rentals events be equal, rental promotion. in be the the these than and promoter, promotions revenue just there straight on costs, straight a a the as else a we but we margin all being all to the booked the a on artist mix whereas rental margin roughly for rent. same, book AOI for The the to better that as is will falls between well

to So there's element an that.

the bit out in little as we around will year the I past, new half to we've the well, a then on the SG&A more have mention And year-over-year half our of year. based start a the rent, comps called expenses in first create the the of headwind would of anniversary that lease office as back incremental in corporate so we which

see that, and fiscal Despite we expansion definitely 'XX in margin beyond.

premium about revenue in revenue streams. all coming in marketing the think bookings, streams our are these all you high-margin see and -- streams, of year. these the we revenue Show, growth Christmas If partnerships,

And so I think that will expansion. create some margin

this think forward. infrastructure support growth more then equally overhead important, and adequate we growth to is And going and our

fruit on a reduction effort opportunities. We lot to In that. in efficiency. some of we cost the and execute fact, a future bear We around there's think of process, budget more rocks I those identified recent turned had concentrated started in on and some probably our to over real

So beyond. should expansion drive 'XX all margin and fiscal of these in factors

season certainly In license are second the us. remind listen, across question we to beneficial regular terms amortize I'll your you, games of around Arena playoff games. playoff, fees home

on really Arena in single there's shared suite do event fees nothing license merchandise So revenue with around food and revenues. playoff attaching MSG to incremental But terms have around streams games. Sports, of beverage, we

food The saw beverage beverage increase year-over-year. quarter beverage. you food revenues the fourth in is in revenues and food of fact, the largest games from probably the and In and the overall playoff driver

games playoff on So stand-alone a the profitable are basis. very

make success The would incremental. We've windows. other playoff it's point in a all that concerts I booking pretty had much is in lot of

not So regard. other preempting events we're that in

Look, may the up have scripted think both mix spoke comments. I year the the double-digit percentages runs playoff fourth noted, versus were You ranges. the extended quarter, in our Arena we concerts and from prior about despite

ranges So extension, teams, profitability incremental that these last for games. and harder of but this from or all certain same playoff a fiscal those your listen, we'll I the again, creates to into tailwind the To definitely quantify, shared that streams. it's think is to the mix of do point, by momentum from success 'XX revenue benefit

Operator

Perm Morgan Cameron of line the Stanley. from comes question next Manson Your from

Unknown Analyst

if can. Two, I

just could how should business, you which today? And us pacing see? and venues how in opportunity? venue the fiscal in that opportunity as improvement do about Second, And is utilization across we the think you earnings give visibility then for How forward you here venue front? activity the push elaborate presentation. where you have the more that you the Bookings improvement color First, you portfolio, much called for less booking just see on really or some we to on of terms out on runway or sitting do additional 'XX on look utilization, on Could

Michael Grau

thank for Sure, questions. Cameron, you and the

I year a Billy we're the pacing to of relative of of tough have residency. basically who same of It's -- entered would at terms kind prior look comp time. pacing the In we We bit Joel, that of one this. ways to do we're has at flat just his this say bookings, year looking a little

we're fiscal show to shows So year. over fiscal going from year X XX

flat If the at we Despite that, year. here. same versus time which I were the driver in pacing zoom essentially are is biggest we where last on Garden, again, the

Last Dave to be versus and quarter, the year to as against quarter For host comp. we prior That that, first think expect had residencies events. in some Summer, compared first this X we is number a Fish well year. X in last events couple year. the Chappelle, terms we shows Despite of do up than from will tough more I as modestly of this year a [indiscernible] did the

with pipeline. quarters, we again are this terms X have second at third of pretty And For the and events quarter, slightly confident fill in that number we're that the next fourth we then do time. booked pace quarter of we strong on probably last can We're year gap. quarter, but behind, a

goal. towards 'XX. record and across increase pretty right of I shape. about this, the a the that, we're happy comfortable and that expect say to record Radio we our talked number do would with at host in that at pacing manner Garden We we're now we're So very and which in coming in this events of we're year. year we the venues, Yes, City a number good fiscal Despite off concerts

your utilization, good strong. about listen, is a around story second very the question utilization in utilization sense In terms that it's of

fiscal of events theaters all load out from XX theaters, utilization, all Christmas across Radio a to XXX little factor opportunity We the plenty in continue time, showings. year-over-year. We're events. in to includes ceiling no 'XX, At plus and modestly in respect. load up XXX translates growth. you Rangers. prior that the in -- Yet XX% the same the hosted improve any the we days, there's When about a regard. we year. for against At Knicks the Garden, -- north at that That a There's not hosted in the up City of constraints the

So ample there's opportunity plenty here. of

industry live and iconic Right continue I capitalize entertainment these growth well a mean very utilization. I positioned, increase right and think, is to now, we're venues. now, to that have we

We industry. have the great across relationships

utilization continue We some our year-over-year, bookings to grow we've I where have continues see we to to able is and really think utilization could execution an sports increase different be area couple or runs, on a team, marquee things our residencies year. of special reach that increased events, multi-night division strong whether this their have been to

doing The And runs no continue and going -- won't that, against think utilization, at We're well about playoff to strong there's will ceilings point. this I again, already track we're also around talked continue. think and forward. is record during reason that we very really up not that any

Operator

next comes Brandon of question Liteshed. from Your from the line Ross

Brandon Ross

guess us understand year were for sponsorship renewal you forward? and I of year MSDS you a the entering they help is premium call, sponsorships just at think they kind renewal cadence hinted for the and up marketing this prepared. how how in strong going said to the On the much or same about Can very opportunities

Michael Grau

question. I stronger not being the is dollars, get different a whether which for freeing partner this Sure, fiscal I'm or Brandon. mean but 'XX. always sponsorship revenue. a a around Thanks the category are to that existing I'd year the in perhaps create player. upselling some opportunities renewals, up renewal it large say as specifics for going there into

an growth. that's for always opportunity So

mean view the of X I with into a sponsorship just it. We're in feeling bullish year wider general, taking about we're Group. Oakfield partnership pretty

of in able year that partners we're some capitalize think our well learnings investments the of I people the made on infrastructure. and as as X So some to

at I and we've the think I mean the we're the concepts ranges, Garden. well now. many of pretty and how between showing the success the the success had positioned right -- mix we're

higher. arrangements future. now for are the at approach access the partners this spend and who expiring us even tickets we're premium, the never quality is those seeing to the looking a anecdotally are both Garden, which to as proactively a to to early events of in the MSG partner well in desirable kind area We're pretty and right been cachet money as hosting that of of actually renew general just the couple has probably some

I we're in we're that to this this specific have not-too-distant a something pointing offer, to hoping regard. but I have in signs what think strong are all But I off to have arena. So real specific good start. the probably to that anything able year in think future. to around a don't be And we'll

mentioned, demand, the right strong. experiences listen, shared now, for mean, experiences very is demand think I I I as or live I Sure. think

old again, and And in And this village so more be booked promotions was likely will deal the deal revenue rentals. we promoted I ticket than accounting by difference Those rentals. the around the artist costs. a straight mentioned replaced and iterate the so not and

a creates but that So profitability, to not as earlier. little of does revenue headwind bit a I translate discussed

outside sheer seeing growth average little growth revenue But year, a fuel Still should point the bit we events an versus Christmas in revenue. increase continued of just sales project same but business. continue advanced in we number the higher Bookings to already. Spectacular, per to in to that, of spoke tourism XX% of the last York a City, store New return ticket early,

revenue So growth the Christmas we in Show. see

in Premiums. comments. Talked our about this little prepared bit a

event-level of which just in number are the that the current range premium around for concerts, the events our year mix renovating and space of incremental demand a the club demand. We're and revenue. level added drive about expanding Talked meet last success launching will We also suites, success products. which to we our and Lexus drives tailwind

about Sponsorship business. response year to And business then Premium your we're talked growth deliver across I in So first the Hospitality expecting of question. to another

with and positioned also those success teams should streams And had. Knicks just have Rangers shared for those be given then the growth lastly, that revenue

streams go of across different So we're at really we into broad-based 'XX. growth revenue fiscal all looking as our

Operator

Karnovsky of comes JPMorgan. next line the from Your question David from

David Karnovsky

in caps? on potentially in you've buyback? capital consumer volatile you're environment, conditions seen forward or it's asking either first, bookings Just signs thinking allocation, or how right kind macro per there I resuming worth current then about any on given your And figured weakening of separately any of if the for update the

Michael Grau

the Thank Sure, David. for you questions.

a narrative I slowdown I demand. And at there, out It don't but all. same in our the specifically. We're aware and is see responses. some the So that consumer peer live listen, companies very seeing question similar for of we're a consumer entertainment pretty that, not most know confronted -- demand in experiences, feels slowdown it

We advanced show growth the talked about which seeing in speaks there, think the sales Radio we're I for and itself. City Christmas

that's versus Bookings, look almost or comps. of In fourth quarter, last first course, we the really terms In either against our year-over-year. different on of tough venues. look all time the I same at in sell-through year, par If in every year-over-year instance, at some of and sell-through we're the quarter better,

fourth or at was our little fact, XX%. look in approaching north overall, of mean, just I quarter sell-through a

not have announced we in around demand selling bookings. add out We after acts we're So consumer actually certain initially lagging the any that seeing shows. will -- shows

We're of You up the digits per fourth at actually your in food, across caps spending double We cap concerts. per cited question. the and combined seeing beverage were cap in per merchandise higher our quarter. in spending, terms

not extent in seeing the the So those slowdown a lines. been one was has I the seen pretty to marketplace, venues anything in we've we're mindful we not date, bullish of in iconic approaching well think say, to positioned date, New that resiliency have. consumer everything really, terms very a I we're but even would to But it, We're so there of along demand. anything far. of slowdown York

around second capital shareholders question priorities around and debt talked changing allocation. to not We've really historically opportunistically paydown. dual your And about and to capital the returning today

flow to the to fiscal quarters cash unrestricted quarter. we and year with in fiscal third the substantial of busiest 'XX, $XX about and our ended in Just generate set expect free do million seasonally stage, the second We were cash.

what currently around have our XX% said approved share a about buybacks. to Class we A we of get where build when to the public levels to becoming shares . capacity start evaluate $XXX we we And capital reiterate We're million do company We million. we what we'll about -- that $XXX stand-alone to up back question that's to a point, bought returning have to since we more I address have our comments, to do shareholders. left, So anticipate would of in [indiscernible] this once little and cash have prepared

to course, AOI respect based our quarterly million our paydown, growth our on With debt, is I continue the , ahead. -- which the to about mandatory business expectations should current expectation of think on payments debt per is in delever, the we'll naturally quarter. But principal $X of years

to on to paydown repurchases. advance and share continue both positioned well debt we're So

other I The shouldn't needed anything short on no any thing We reinvestment no the regard. M&A that There's the just renovations change business. for in on substantial are plans current in horizon. major There's this have don't our venues.

We will do event are investments, some of and and experience. of talked one These time opportunities caller. all that to at but and some enhance club of advantage we most guest renovation about Christmas Spectacular the smaller very ROI for we in Really, think, smart the edges, last suites high-return introduced investments will level expanding things we around take Garden level about last that I the smart event well. Operator, Lexus high as have really year, the and already. talking we space this the of capital the

Operator

from final Your Peter comes line of question Wolf Research. the Supino from

Peter Supino

event the how follow next And or I prior changing Garden. the on to wanted concerts growth into question year. the a and dig theaters revenue versus specifically, about XXXX between mix you up see

think mean help what us margins you about If for those they could in and trends just XXXX? might

Michael Grau

of family we for we Knicks kind special shows, question. categories. use marquee talk of about and Rangers. thank the which look and Peter, about we it is any couple internally across of the then in sporting Sure, events When a events, of concerts, what We and sports, terms events the beyond at for you talk

where year it, play kind expect level For success new 'XX. acts we growth point around in had event to and have arena, runs. this acts to multi-night concerts, year the new I introduced to of We've the watching arena introducing against ready or fiscal acts latter success. success really, our some some We've do had we in call record-setting news some with the up they're shows

a facing to talked bit concerts. how number goal pacing we're well of I the increase our very this versus little about year,

well positioned there. So I we're think

gets family even our the for way of theater our show more holiday terms XX% annual announced goal we of shows recently That of Theater. that In and and a us category, profitability at Anni than shows as plus at XX really about perspective. Chicago MSG family in terms the

anecdotally Westminster Garden. well. mentioned the We're Dog to as welcoming back show the I

I think before we hosted pandemic. the last 'XX February that just in of

we're So renew to with them. excited that partnership

fiscal Look, takes a that quarter. early It's events. lot here. in fourth Special of a the little business place

We are some to things, have along something to in Marquee not-too-distant sports. to we future. encouraging and a Sports, trends, we'll And in some the lines of announce college hope then do those seeing business lot in continue

the We relationships great with Big John's with East. St. have

versus the I is think Illinois we just announced at Duke which a Garden, certainly high-profile game.

really the that some group returning events around of then Championship, riding, other the of to expanding category. of events boxing, -- bull the in other the range sports some all that explore Darts that And the events that, books those would anticipate and looking

one we in fiscal we think positioned strong be at those very in as to look to grow the year 'XX able we're categories, fiscal versus a count each of very, look, So it, event 'XX.

Operator

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

Ari Danes

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

Operator

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

disconnect. now may You

Madison Square Garden Entertainment (MSGE) 16 Aug 242024 Q4 Earnings call transcript