MADISON SQUARE GARDEN ENTERTAINMENT CORP. REPORTS FISCAL 2025 FIRST QUARTER RESULTS
NEW YORK, Nov. 8, 2024 /PRNewswire/ -- Madison Square Garden Entertainment Corp. (NYSE:MSGE) ("MSG Entertainment" or the "Company") today reported financial results for the fiscal first quarter ended September 30, 2024.
Since the start of fiscal 2025, the Madison Square Garden Arena ("The Garden") has hosted a record number of concerts for a fiscal first quarter and, last month, welcomed back the New York Knicks ("Knicks") and the New York Rangers ("Rangers") for the start of their 2024-25 regular seasons at The Garden. Later today, the Christmas Spectacular production kicks off its 2024 holiday season at Radio City Music Hall with 199 performances currently on sale as compared to 193 shows in fiscal 2024. In addition, new sales and renewal activity in the Company's premium hospitality business remains strong, while the Company also recently announced new multi-year sponsorship deals with Lenovo and its subsidiary Motorola Mobility and the Department of Culture and Tourism, Abu Dhabi, as well as a multi-year extension of its sponsorship deal with Verizon.
For the fiscal 2025 first quarter, the Company reported revenues of $138.7 million, a decrease of $3.5 million, or 2%, as compared to the prior year quarter. In addition, the Company reported an operating loss of $18.5 million, an improvement of $14.9 million, or 45%, and adjusted operating income of $1.9 million, an increase of $2.1 million, both as compared to the prior year quarter.(1)
Executive Chairman and CEO James L. Dolan said, "With fiscal '25 underway, we expect our portfolio of assets and brands to continue benefiting from demand for shared experiences, including this year's Christmas Spectacular production. Looking ahead, we remain confident in the strength of our Company and believe we are well positioned to generate long-term value for our shareholders."
Results for the Three Months Ended September 30, 2024 and 2023:
Three Months Ended
September 30,
Change
$ millions
2024
2023
$
%
Revenues
$ 138.7
$ 142.2
$ (3.5)
(2) %
Operating Loss
$ (18.5)
$ (33.4)
$ 14.9
45 %
Adjusted Operating Income (Loss)(1)
$ 1.9
$ (0.2)
$ 2.1
NM
Note: Amounts may not foot due to rounding. NM - Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are not considered meaningful.
(1)
See page 3 of this earnings release for the definition of adjusted operating income (loss) ("AOI") included in the discussion of non-GAAP financial measures. During the fiscal 2024 third quarter, the Company amended this definition so that the non-cash portion of operating lease revenue related to the Company's Arena License Agreements with Madison Square Garden Sports Corp. ("MSG Sports") is no longer excluded in all periods presented. For the three months ended September 30, 2024 and the three months ended September 30, 2023, the non-cash portion of operating lease revenue was $0.5 million.
Entertainment Offerings, Arena License Fees and Other LeasingFiscal 2025 first quarter revenues from entertainment offerings of $115.1 million decreased $1.4 million, or 1%, as compared to the prior year period, primarily due to lower event-related revenues.
Event-related revenues decreased $1.5 million, primarily due to lower revenues from concerts. This reflects lower per-concert revenues primarily due to a shift in the mix of events at The Garden from promoted events to rentals and a decrease in the number of concerts at the Company's theaters, partially offset by an increase in the number of concerts at The Garden.
Fiscal 2025 first quarter arena license fees and other leasing revenues of $4.7 million increased $2.2 million, or 90%, as compared to the prior year period, due to an increase in other leasing revenues.
Fiscal 2025 first quarter direct operating expenses associated with entertainment offerings, arena license fees and other leasing of $86.5 million decreased $4.1 million, or 5%, as compared to the prior year quarter, primarily due to lower event-related expenses of $3.5 million. The decrease in event-related expenses was primarily due to lower expenses from concerts, mainly driven by lower per-concert expenses due to a shift in the mix of events at The Garden from promoted events to rentals, partially offset by an increase in the number of events at The Garden.
Food, Beverage and MerchandiseFiscal 2025 first quarter food, beverage and merchandise revenues of $19.0 million decreased $4.3 million, or 18%, as compared to the prior year period. This was primarily due to lower food and beverage sales at concerts held at the Company's venues as compared to the prior year quarter, primarily due to lower per-concert food and beverage revenues and, to a lesser extent, the decrease in the number of events at the Company's theaters, partially offset by the increase the number of events at The Garden.
Fiscal 2025 first quarter food, beverage and merchandise direct operating expenses of $11.2 million increased $0.1 million, or 1%, as compared to the prior year period.
Selling, General and Administrative ExpensesFiscal 2025 first quarter selling, general and administrative expenses of $45.7 million decreased $3.1 million, or 6%, as compared to the prior year period. The decrease was primarily due to (i) lower professional fees, mainly due to the absence of non-recurring costs incurred by the Company in the prior year period in connection with the registration and sale of the Company's Class A common stock by Sphere Entertainment Co.; (ii) a decrease in employee compensation and benefits; and (iii) lower other costs, all as compared to the prior year period. These decreases were partially offset by higher rent expense as compared to the prior year period.
Operating Loss and Adjusted Operating Income (Loss)Fiscal 2025 first quarter operating loss of $18.5 million improved $14.9 million, or 45%, as compared to the prior year period, primarily due to lower restructuring charges and, to a lesser extent, the decrease in direct operating expenses and selling, general and administrative expenses, partially offset by the decrease in revenues. Fiscal 2025 first quarter adjusted operating income of $1.9 million increased $2.1 million as compared to the prior year quarter, primarily due to lower direct operating expenses and selling, general and administrative expenses (excluding merger, spin-off and acquisition-related costs), partially offset by the decrease in revenues.
About Madison Square Garden Entertainment Corp.Madison Square Garden Entertainment Corp. (MSG Entertainment) is a leader in live entertainment, delivering unforgettable experiences while forging deep connections with diverse and passionate audiences. The Company's portfolio includes a collection of world-renowned venues, New York's Madison Square Garden, The Theater at Madison Square Garden, Radio City Music Hall, and Beacon Theatre; and The Chicago Theatre, that showcase a broad array of sporting events, concerts, family shows, and special events for millions of guests annually. In addition, the Company features the original production, the Christmas Spectacular Starring the Radio City Rockettes, which has been a holiday tradition for more than 90 years. More information is available at www.msgentertainment.com.
Non-GAAP Financial MeasuresDuring the fiscal 2024 third quarter the Company amended its definition of adjusted operating income so that the impact of the non-cash portion of operating lease revenue related to the Company's Arena License Agreements with MSG Sports is no longer excluded in all periods presented.
We define adjusted operating income (loss), which is a non-GAAP financial measure, as operating income (loss) excluding (i) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits, (iv) merger, spin-off, and acquisition-related costs, including merger-related litigation expenses, (v) gains or losses on sales or dispositions of businesses and associated settlements, (vi) the impact of purchase accounting adjustments related to business acquisitions, (vii) amortization for capitalized cloud computing arrangement costs and (viii) gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan. We believe that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the various operating units of our business without regard to the settlement of an obligation that is not expected to be made in cash. We eliminate merger, spin-off, and acquisition-related costs, when applicable, because the Company does not consider such costs to be indicative of the ongoing operating performance of the Company as they result from an event that is of a non-recurring nature, thereby enhancing comparability. In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan, provides investors with a clearer picture of the Company's operating performance given that, in accordance with U.S. generally accepted accounting principles, gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan are recognized in Operating (income) loss whereas gains and losses related to the remeasurement of the assets under the executive deferred compensation plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recognized in Other income (expense), net, which is not reflected in Operating income (loss).
We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of the Company on a consolidated and combined basis. Adjusted operating income (loss) and similar measures with similar titles are common ...
