NEWS

The Madison Square Garden Company Reports Fiscal 2018 First Quarter Results

New York, NY (November 3, 2017) - The Madison Square Garden Company (NYSE:MSG) today reported financial results for the first quarter ended September 30, 2017.

 

For the fiscal 2018 first quarter, the Company generated revenues of $245.0 million, an increase of 35% as compared with the prior year period. In addition, the Company generated fiscal 2018 first quarter operating loss of $15.7 million and adjusted operating income of $29.0 million, which represent improvements of $17.2 million and $27.4 million, respectively, both as compared to the prior year first quarter.

 

President and CEO David O'Connor said, "We are pleased with our start to fiscal 2018, as we remain committed to pursuing opportunities to drive both internal and external growth. We continue to attract an increasing number of premium events to our venues and have had early successes that demonstrate the value of a combined MSG and TAO Group offering. The enduring strength of our assets and brands has also led to the recent renewal of several Signature marketing partnerships, as well as a new partnership that includes the Knicks' first-ever jersey sponsorship. In addition, we continue to build our portfolio of live offerings and see the expansion of our music and entertainment-focused venues as the centerpiece of our growth strategy. As we look ahead, we remain confident that our Company's singular focus on providing the very best in live experiences positions us to drive long-term growth and value creation for our shareholders."

 

MSG Entertainment
For the fiscal 2018 first quarter as compared to the prior year period, MSG Entertainment revenues of $164.1 million increased 48%.  The increase was primarily due to the inclusion of operating results for TAO Group and, to a lesser extent, higher overall event-related revenues at the Company's venues.  This was partially offset by the absence of revenues for the New York Spectacular Starring the Radio City Rockettes production and, to a lesser extent, lower sponsorship and signage revenues.  The increase in event-related revenues was primarily due to higher event-related revenues at Radio City Music Hall, The Chicago Theatre and The Garden, partially offset by lower event-related revenues at the Forum and The Theater at Madison Square Garden.  The decrease in revenues for the New York Spectacular Starring the Radio City Rockettes production was a result of no scheduled performances in the fiscal 2018 first quarter as compared to 56 shows in the prior year period.

 

Fiscal 2018 first quarter operating income of $9.7 million increased by $16.8 million and adjusted operating income of $17.8 million increased by $18.8 million, both as compared to the prior year period.  The increase in operating income and adjusted operating income as compared to the prior year period primarily reflects the increase in revenue, 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 the inclusion of TAO Group's operating results (including a management fee incurred by TAO Group payable to the Company) and, to a lesser extent, higher corporate general and administrative costs and professional fees.  The increase in direct operating expenses was primarily due to the inclusion of TAO Group's operating results and, to a lesser extent, higher overall event-related expenses at the Company's venues, partially offset by the absence of costs associated with the presentation of the New York Spectacular Starring the Radio City Rockettes production.

 

MSG Sports
For the fiscal 2018 first quarter as compared to the prior year period, MSG Sports revenues of $80.9 million increased 14%.  The increase in revenues was primarily due to higher league distributions, professional sports teams' pre-season ticket-related revenue and local media rights fees from MSG Networks Inc.  The increase in professional sports teams' pre-season ticket-related revenue was primarily due to one additional pre-season game and higher average per-game revenue, as compared to the prior year period.

 

First quarter operating income of $19.7 million increased by $10.4 million and adjusted operating income of $25.8 million increased by $10.4 million, both as compared to the prior year period.  The increase in operating income and adjusted operating income primarily reflects the increase in revenues and, to a lesser extent, lower direct operating expenses, partially offset by an increase in selling, general and administrative expenses.

 

The decrease in direct operating expenses was primarily due to lower net provisions for certain team personnel transactions, partially offset by higher team personnel compensation, other team operating expenses, and net provisions for NBA and NHL revenue sharing expense.  The increase in selling, general and administrative expenses was primarily due to higher corporate general and administrative costs and employee compensation and related benefits, slightly offset by other net cost decreases.

 

Corporate and Other
For the fiscal 2018 first quarter as compared to the prior year period, Corporate and Other's operating loss of $39.7 million and adjusted operating loss of $14.6 million increased by $4.8 million and $1.9 million, respectively, primarily due to an increase in employee compensation and related benefits and, to a lesser extent, higher professional fees (mainly related to the Company's business development initiatives), partially offset by the management fee from TAO Group.

 

Purchase Accounting Adjustments
For the fiscal 2018 first quarter as compared to the prior year period, operating expenses related to purchase accounting adjustments of $5.4 million increased $5.1 million, primarily due to the amortization of intangible assets and expense related to the step-up in value of leases for TAO Group.

 

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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 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 outdoor festivals, including 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.

 

 

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