--MSG net gains on higher games revenue, affiliate fees
--Shares jump more than 7% as earnings beat estimates
--Entertainment unit books operating loss
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By William Launder and Anna Prior
Madison Square Garden Co.'s (MSG) fiscal fourth-quarter earnings
soared as its sport division hosted more games, in part due to the
New York Knicks and Rangers making the playoffs and the timing of
the 2012 basketball season.
The media and sports entertainment company also benefited from
higher affiliate revenue in its entertainment business, suggesting
a new programming deal struck with Time Warner Cable (TWC) in
February is paying off.
Shares rose 7.6% to $43.28 as earnings surpassed expectations.
The stock is up more than 51% this year.
Spun off from Cablevision Systems Corp. (CVC) in 2010, MSG has
continued to post profits since going public, and is using excess
cash to modernize its namesake arena in renovations dubbed "the
transformation." The company also operates Radio City Music Hall
and the Beacon Theatre, both in New York City.
Revenue at MSG's sports business jumped 74%, while its operating
income rose to $16 million from a year-earlier loss of $5 million.
In addition to more game-related revenue from the Knicks and
Rangers playoff games, the delayed start of the National Basketball
Association's 2012 season resulted in a higher number of games
compared to the year-earlier period. The so-called transformation
is also helping revenue.
Revenue at MSG Media, which includes MSG Networks, rose 20%, as
operating profit increased 15%. This was the first, full fiscal
quarter that MSG benefited from its new programming deal with Time
Warner Cable, which it reached in the middle of the prior quarter
in order to end of a seven-week blackout of MSG channels.
Meanwhile, the company's entertainment business saw revenue rise
41%, while its operating loss narrow to $8.7 million from $14.5
million a year earlier due. MSG attributed the loss in part to
higher expenses.
For the quarter ended June 30, MSG reported a profit of $28.6
million, or 37 cents a share, up from $8.5 million, or 11 cents, a
year earlier. Revenue rose 42% to $332.9 million.
Analysts surveyed by Thomson Reuters recently forecast earnings
of 22 cents.
In June, the company paid $23.5 million to acquire the Forum, an
aging arena near Los Angeles that once served as home to the Lakers
and Kings and that MSG hopes to turn into a top-tier concert
site.
Write to William Launder at william.launder@dowjones.com and
Anna Prior at anna.prior@dowjones.com
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