News

The Madison Square Garden Company Reports Fiscal 2018 Third Quarter Results

Fiscal 2018 third quarter revenue of $459.6 million, up 19% versus prior year period
Fiscal 2018 third quarter operating income of $7.3 million, up 9% versus prior year period
Fiscal 2018 third quarter adjusted operating income of $49.1 million, up 13% versus prior year period

New York, N.Y., May 2, 2018 – The Madison Square Garden Company (NYSE: MSG) today reported financial results for the third quarter ended March 31, 2018.

For the fiscal 2018 third quarter, the Company generated revenues of $459.6 million, an increase of 19% as compared with the prior year period. In addition, the Company generated fiscal 2018 third quarter operating income of $7.3 million and adjusted operating income of $49.1 million, which represent increases of 9% and 13%, respectively, both as compared to the prior year third quarter.

Executive Chairman and CEO Jim Dolan said, “For the fiscal 2018 third quarter, we generated strong growth in revenues and adjusted operating income, a reflection of our ongoing success in delivering exceptional live experiences.  Our ability to provide unmatched value for our customers and partners will become even more significant as we move forward with expanding our venue footprint. We have made important progress on our plans to build state-of-the-art venues in Las Vegas, where we expect to break ground this summer, and in London, where we are working with stakeholders to make the city home to our first international music and entertainment venue. As we look ahead, we remain confident that our Company is uniquely positioned to deliver ongoing growth and value creation for our shareholders.”

MSG Entertainment
For the fiscal 2018 third quarter as compared to the prior year period, MSG Entertainment revenues of $159.6 million increased 106%. The increase was primarily due to the inclusion of operating results for TAO Group and higher overall event-related revenues at the Company’s venues, slightly offset by a decrease in revenues for the Christmas Spectacular Starring the Radio City Rockettes production. The increase in event-related revenues was primarily due to higher revenues at The Garden, Radio City Music Hall and The Hulu Theater at Madison Square Garden.   The decrease in revenues for the Christmas Spectacular production was primarily due to lower ticket-related revenue, mainly as a result of fewer scheduled performances as compared to the prior year period.

Fiscal 2018 third quarter operating income of $2.1 million improved $9.6 million and adjusted operating income of $9.4 million improved

$10.9 million, both as compared to the prior year period. The improvement in operating income reflects the increase in revenues, partially offset by higher direct operating expenses and selling, general and administrative expenses and, to a lesser extent, higher d epreciation and amortization expense. The improvement in adjusted operating income reflects the increase in revenues, partially offset by the increase in direct operating expenses and selling, general and administrative expenses. The increase in direct operating expenses was primarily due to the inclusion of TAO Group’s operating results and higher overall event-related expenses at the Company’s venues. 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).

MSG Sports
For the fiscal 2018 third quarter as compared to the prior year period, MSG Sports revenues of $300.1 million decreased 3%. The decrease in revenues was due to lower league distributions, event-related revenues from other live sporting events and professional sports teams’ food, beverage and merchandise sales, partially offset by higher professional sports teams’ sponsorship and signage revenues, suite rental fees, regular season ticket-related revenue, local media rights fees from MSG Networks Inc. and other net increases. The decrease in league distributions reflects the absence of $15.5 million in non-recurring NHL expansion fee revenue recorded during the prior year third quarter.

Third quarter operating income of $53.0 million and adjusted operating income of $58.6 million both decreased 11%, as compared to the prior year period.  The decrease in operating income primarily reflects lower revenues, partially offset by decreases in depr eciation and amortization expense and direct operating expenses. The decrease in adjusted operating income primarily reflects lower revenue, partially offset by the decrease in direct operating expenses. The decrease in direct operating expenses was primarily due to lower net provisions for NBA and NHL revenue sharing expense and NBA luxury tax, event-related expenses for other live sporting events and team personnel compensation, offset by higher net provisions for certain team personnel transactions and other team operating expenses.

Excluding the impact of the $15.5 million in non-recurring NHL expansion fee revenue recorded during the prior year quarter, fiscal 2018 third quarter MSG Sports revenues and adjusted operating income increased 2% and 16%, respectively, both as compared to the prior year period.

Corporate and Other
For the fiscal 2018 third quarter as compared to the prior year period, Corporate and Other’s operating loss of $41.6 million and adjusted operating loss of $18.9 million both improved 9%, reflecting lower professional fees and the impact of a management fee earned for providing management and strategic services to TAO Group, partially offset by the inclusion of Obscura Digital expenses associated with the Company’s business development initiatives.  The improvement in Corporate and Other’s operating loss also reflects a decrease in depreciation and amortization expense.

Purchase Accounting Adjustments
For the fiscal 2018 third quarter as compared to the prior year period, operating expenses related to purchase accounting adjustments of $6.2 million increased $6.0 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 Hulu Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre; the Forum in Inglewood, CA; The Chicago Theatre; and the Wang Theatre in Boston. Other MSG properties include legendary sports franchises: the New York Knicks (NBA), the New York Rangers (NHL) and the New York Liberty (WNBA); two development league teams — the Westchester Knicks (NBAGL) and the Hartford Wolf Pack (AHL); and one of the leading North American esports organizations, Counter Logic Gaming. In addition, the Company features the popular original production – the Christmas Spectacular Starring the Radio City Rockettes – and through Boston Calling Events, produces New England’s preeminent Boston Calling Music Festival.  Also under the MSG umbrella is TAO Group, a world-class hospitality group with globally-recognized entertainment dining and nightlife brands: Tao, Marquee, Lavo, Avenue, The Stanton Social, Beauty & Essex and Vandal. More information is available at www.themadisonsquaregardencompany.com.

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