News

The Madison Square Garden Company Reports Fourth Quarter and Fiscal 2018 Results


New York, N.Y., August 16, 2018 – The Madison Square Garden Company (NYSE: MSG) today reported financial results for the fourth quarter and fiscal year ended June 30, 2018.

For fiscal 2018, the Company generated revenues of approximately $1.6 billion, which represents an increase of 18% as compared to the prior year.  In addition, the Company generated operating income of $18.9 million, an increase of $79.2 million, and adjusted operating income (“AOI”) of $193.8 million, an increase of $96.2 million, both as compared to the prior year(1)(2). For comparative purposes, please note that fiscal 2018 results include a full year of TAO Group results (as compared with two months for fiscal 2017), as well as $27.5 million in net provisions for team personnel transactions. In addition, fiscal 2017 results include $30.5 million in non-recurring NHL and NBA distributions, $42.3 million in net provisions for team personnel transactions and a $33.6 million non-cash write-off.

For the fiscal 2018 fourth quarter, the Company generated revenues of $318.0 million, an increase of 4% as compared to the prior year quarter. In addition, the Company generated an operating loss of $45.4 million and an adjusted operating loss of $2.5 million, which represent improvements of 51% and 94%, respectively, both as compared to the prior year quarter.  For comparative purposes, please note that fiscal 2018 fourth quarter results include $17.5 million in net provisions for team personnel transactions, as well as a full quarter of TAO Group results (versus two months of TAO Group results in the prior year quarter). In addition, fiscal 2017 fourth quarter results include $15.0 million in non-recurring NHL and NBA distributions, $35.2 million in net provisions for team personnel transactions and a $33.6 million non-cash write-off.

Executive Chairman and CEO Jim Dolan said, “We had a solid fiscal 2018, driven by the performance of our bookings business, the Christmas Spectacular and sponsorships. This past year we also took important steps to position the Company for continued growth as we unveiled our plans to build state-of-the-art venues – called MSG Sphere – in Las Vegas and London, and announced the exploration of a potential separation of our entertainment and sports businesses. Looking ahead, we believe that our commitment to delivering premium live experiences for our customers and partners will continue to create long-term value for our shareholders.”

MSG Entertainment
For the fiscal 2018 fourth quarter as compared to the prior year period, MSG Entertainment revenues of $185.6 million increased 47%. The increase was primarily due to higher event-related revenues and a full quarter of operating results for TAO Group. The increase in event- related revenues was primarily due to higher revenues at The Garden, the Forum and Radio City Music Hall.

Fiscal 2018 fourth quarter operating loss of $0.4 million improved by $45.7 million and adjusted operating income of $7.7 million improved by $46.9 million. The improvement in operating income and adjusted operating income primarily reflects the increase in revenues, 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 a full quarter of TAO Group operating results, partially offset by other net expense decreases. The increase in direct operating expenses primarily reflects higher overall event-related expenses at the Company’s venues and a full quarter of TAO Group’s operating results, as well as higher other net expenses, offset by the absence of a

$33.6 million write-off of the remaining deferred production costs for the New York Spectacular production recorded in the prior year quarter.

MSG Sports
For the fiscal 2018 fourth quarter as compared to the prior year period, MSG Sports revenues of $132.5 million decreased 26%.  The decrease in revenues was primarily due to the absence of playoff-related revenues and, to a lesser extent, lower league distributions, mainly the result of the absence of $15.0 million in non-recurring NHL and NBA distributions.  In addition, professional sports teams’ regular- season ticket-related revenue and food, beverage and merchandise sales decreased, which includes the combined impact of three fewer Knicks and Rangers home games versus the prior year quarter. This was partially offset by higher sponsorship and signage revenues, local media rights fees from MSG Networks Inc., and suite rental fee revenue.

Fiscal 2018 fourth quarter operating income decreased by $5.2 million to $4.5 million and adjusted operating income decreased by $4.4 million to $10.1 million. The decrease in operating income and adjusted operating income was primarily due to lower revenues, offset by lower selling, general and administrative expenses and direct operating expenses.

The decrease in selling, general and administrative expenses primarily reflects the absence of severance-related costs associated with the separation agreement with a team executive recorded in the prior year quarter. The decrease in direct operating expenses was primarily due to lower playoff-related expenses and other net expense decreases.

Corporate and Other
For the fiscal 2018 fourth quarter, Corporate and Other operating loss of $43.9 million improved by $0.2 million, primarily d ue to lower depreciation and amortization expense, offset by higher selling, general and administrative expenses. Fiscal 2018 fourth quarter adjusted operating loss of $20.3 million increased by $1.4 million, primarily due to higher selling, general and administrative expens es, mainly a result of higher professional fees, employee compensation and related benefits, the inclusion of Obscura Digital expenses associated with the Company’s business development initiatives and other net cost increases, partially offset by certain favorable adjustments related to contingent payments for the Company’s business acquisitions.

Purchase Accounting Adjustments
For the fiscal 2018 fourth quarter as compared to the prior year period, operating expenses related to purchase accounting ad justments decreased $6.4 million, primarily due to the absence of expense related to the step-up in value of TAO Group’s inventory.

Other Items
On June 27, 2018, the Company announced that its board of directors authorized the exploration of a possible spin -off that would separate the Company’s sports businesses from its entertainment businesses.

Click here to view the full press release.

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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