Company Exploring Potential Separation of
Businesses into Two Distinct Public Companies Would Separate
Live Entertainment and MSG Networks Businesses from MSG Sphere and
Tao Group Hospitality
Madison Square Garden Entertainment Corp. (NYSE: MSGE) (“MSG
Entertainment”) today reported financial results for the fourth
quarter and fiscal year ended June 30, 2022. While the Company
completed the acquisition of MSG Networks on July 9, 2021, MSG
Networks’ results are included on a combined basis with the Company
for all periods presented.
The fiscal 2022 fourth quarter was highlighted by a robust
calendar of events at the Company’s performance venues, including
the conclusion of the New York Knicks (“Knicks”) and New York
Rangers (“Rangers”) 2021-22 seasons at the Madison Square Garden
Arena (“The Garden”). At the same time, MSG Networks concluded full
regular season coverage of its five NBA and NHL professional sports
teams followed by extensive programming around the Rangers’
postseason run, including telecasts of all first-round playoff
games. In addition, Tao Group Hospitality benefited from ongoing
demand in its key markets – led by Las Vegas and New York – leading
to its highest quarter of revenue since capacity restrictions were
broadly lifted last summer.
For fiscal 2022, the Company reported revenues of $1.7 billion
as compared to revenues of $814.2 million in the prior year. In
addition, the Company had an operating loss of $102.7 million and
adjusted operating income of $133.6 million in fiscal 2022,
compared to an operating loss of $188.2 million and adjusted
operating income of $40.2 million in the prior year.(1)
For the fiscal 2022 fourth quarter, the Company reported
revenues of $453.5 million as compared to $260.6 million in
revenues in the prior year quarter. In addition, the Company had an
operating loss of $56.8 million and adjusted operating income of
$0.7 million in the fiscal 2022 fourth quarter, compared to an
operating loss of $44.0 million and adjusted operating income of
$2.5 million in the prior year quarter.(1)
Executive Chairman and CEO James L. Dolan said, “The past year
demonstrated the resiliency of our business and the robust demand
for our portfolio of live experiences. We continue to make
significant progress on the construction of MSG Sphere in Las
Vegas, which remains on track to open in the second half of
calendar 2023. We are also now exploring a potential separation of
our live entertainment and MSG Networks businesses from MSG Sphere
and Tao Group Hospitality, which we believe would best position the
two companies to drive long-term value for shareholders.”
Segment Results for the Quarters and Years Ended June 30,
2022 and 2021:
(In millions)
Three Months Ended
Twelve Months Ended
June 30,
Change
June 30,
Change
2022
2021
$
%
2022
2021
$
%
Revenues:
Entertainment
$
179.0
$
31.1
$
147.9
NM
$
655.4
$
82.3
$
573.1
NM
MSG Networks
139.1
166.1
(26.9
)
(16)%
608.2
647.5
(39.4
)
(6)%
Tao Group Hospitality
139.8
69.7
70.2
101%
484.9
100.2
384.8
NM
Other(2)
(4.4
)
(6.2
)
1.8
30%
(23.9
)
(15.7
)
(8.1
)
(52)%
Total Revenues
$
453.5
$
260.6
$
192.9
74%
$
1,724.6
$
814.2
$
910.4
112%
Operating Income (Loss):
Entertainment
$
(82.5
)
$
(103.2
)
$
20.7
20%
$
(250.6
)
$
(391.0
)
$
140.3
36%
MSG Networks
26.7
58.4
(31.7
)
(54)%
131.0
262.0
(131.0
)
(50)%
Tao Group Hospitality
7.5
2.9
4.6
160%
37.3
(29.4
)
66.7
NM
Other(2)
(8.5
)
(2.1
)
(6.3
)
NM
(20.4
)
(29.8
)
9.5
32%
Total Operating Loss
$
(56.8
)
$
(44.0
)
$
(12.8
)
(29)%
$
(102.7
)
$
(188.2
)
$
85.5
45%
Adjusted
Operating Income (Loss):
Entertainment
$
(51.3
)
$
(75.0
)
$
23.7
32%
$
(118.4
)
$
(238.8
)
$
120.4
50%
MSG Networks
35.4
67.0
(31.7
)
(47)%
185.8
291.5
(105.7
)
(36)%
Tao Group Hospitality
17.0
10.6
6.4
60%
67.2
(11.5
)
78.7
NM
Other(2)
(0.3
)
(0.1
)
(0.2
)
(145)%
(1.0
)
(0.9
)
(0.1
)
(12)%
Total Adjusted Operating Income
$
0.7
$
2.5
$
(1.8
)
(72)%
$
133.6
$
40.2
$
93.4
NM
Note: Does not foot due to rounding (1)
See page 4 of this earnings release for
the definition of adjusted operating income (loss) included in the
discussion of non-GAAP financial measures.
(2)
Includes inter-segment eliminations and,
for operating income (loss), purchase accounting adjustments.
Entertainment For the fiscal
2022 fourth quarter, the Entertainment segment generated revenues
of $179.0 million, an increase of $147.9 million as compared to the
prior year period. Event-related revenues increased $75.5 million,
venue-related sponsorship and signage increased $14.7 million and
suite license fee revenues increased $6.8 million, all primarily
due to the return of live events at the Company’s performance
venues during the current year quarter as compared to limited
events in the prior year period as a result of the COVID-19
pandemic. Revenues related to the Company’s arena license
agreements with Madison Square Garden Sports Corp. (“MSG Sports”)
increased $33.1 million, primarily as a result of the elimination
of capacity restrictions that were in place at The Garden in the
prior year period, partially offset by the impact of fewer Knicks
and Rangers home games as compared to the prior year period due to
the compressed timing of the 2020-21 NBA and NHL regular seasons.
In addition, revenues from the Boston Calling Music Festival held
in May 2022 increased $18.3 million as compared to the prior year
period in which the event was cancelled as a result of the COVID-19
pandemic.
Fiscal 2022 fourth quarter direct operating expenses of $126.0
million increased $94.6 million as compared to the prior year
period. Event-related expenses increased $40.3 million primarily
due to the return of live events at the Company’s performance
venues during the current year quarter as compared to limited
events in the prior year period. Direct operating expenses
associated with revenue or profit sharing under the arena license
agreements with MSG Sports increased $23.3 million as a result of
the elimination of capacity restrictions that were in place during
the prior year period. In addition, direct operating expenses
associated with the Boston Calling Music Festival increased $19.2
million as compared to the prior year period in which the event was
cancelled.
Fiscal 2022 fourth quarter selling, general and administrative
expenses of $115.5 million increased $32.4 million as compared to
the prior year period. This increase primarily reflected higher net
employee compensation and related benefits of $30.8 million,
inclusive of increased costs related to the Company’s MSG Sphere
initiative.
Fiscal 2022 fourth quarter operating loss improved by $20.7
million to an operating loss of $82.5 million and adjusted
operating loss improved by $23.7 million to an adjusted operating
loss of $51.3 million. The improvements in operating loss and
adjusted operating loss primarily reflect the increase in revenues,
partially offset by higher direct operating expenses and, to a
lesser extent, higher selling, general and administrative
expenses.
MSG Networks For the fiscal
2022 fourth quarter, MSG Networks generated total revenues of
$139.1 million, a decrease of $26.9 million, as compared to the
prior year quarter. Affiliation fee revenue decreased $18.3
million, primarily due to the impact of the non-renewal of MSG
Networks’ carriage agreement with Comcast as of October 1, 2021 and
a decrease in subscribers of approximately 8% (excluding the impact
of the non-renewal with Comcast). These decreases were partially
offset by the absence of unfavorable affiliate adjustments of $5.8
million recorded in the prior year quarter and the impact of higher
affiliation rates.
Fiscal 2022 fourth quarter advertising revenue decreased $8.3
million as compared with the prior year period, primarily due to
the impact of fewer live professional sports telecasts as compared
to the prior year period as a result of the timing of the 2020-21
NBA and NHL regular seasons. The decrease was partially offset by
the impact of higher per-game advertising sales from the telecast
of live professional sports programming for MSG Networks’ NBA and
NHL teams.
Fiscal 2022 fourth quarter direct operating expenses of $78.8
million increased $12.4 million as compared to the prior year
quarter. The increase primarily reflects higher rights fees expense
of $12.2 million mainly due to the impact of lower media rights
fees in the prior year period as a result of fewer NBA and NHL
games made available for exclusive broadcast by MSG Networks during
the NBA and NHL’s shortened 2020-21 regular seasons, as well as
annual contractual rate increases in the current year period. These
increases were partially offset by the impact of the compressed
timing of the shortened 2020-21 NBA and NHL regular seasons.
Fiscal 2022 fourth quarter selling, general and administrative
expenses of $29.6 million decreased $9.8 million as compared to the
prior year quarter. The decrease primarily reflects lower employee
compensation and related benefits of $5.0 million, lower
advertising and marketing expenses of $3.5 million and lower
advertising sales commissions of $1.4 million.
Fiscal 2022 fourth quarter operating income of $26.7 million
decreased $31.7 million and adjusted operating income of $35.4
million decreased $31.7 million both as compared to the prior year
quarter, primarily due to the decrease in revenues and the increase
in direct operating expenses, partially offset by the decrease in
selling, general and administrative expenses.
Tao Group Hospitality For
the fiscal 2022 fourth quarter, the Tao Group Hospitality segment
generated revenues of $139.8 million as compared to $69.7 million
in the prior year period. Revenues at venues subject to capacity
restrictions or temporarily closed in the prior year period as a
result of the COVID-19 pandemic increased $44.4 million and $3.9
million, respectively. In addition, Tao Group Hospitality acquired
Hakkasan Group on April 27, 2021 and, as a result, revenues in the
current year quarter reflect an additional $16.2 million from
Hakkasan Group as compared to the prior year quarter, reflecting
results for the month of April 2022. Other revenues increased $5.6
million, primarily due to the impact of new venues.
Fiscal 2022 fourth quarter direct operating expenses of $78.9
million increased $43.6 million as compared to the prior year
quarter. The cost of food, beverage and venue entertainment
increased $16.4 million, while employee compensation and related
benefits increased $10.8 million, primarily reflecting a staffing
increase following the easing of government-mandated capacity
restrictions, both as compared to the prior year period. The
current year quarter included an additional $9.2 million in direct
operating expenses from Hakkasan Group, as compared to the prior
year quarter, reflecting results for the month of April 2022. In
addition, rent expense increased $4.3 million.
Fiscal 2022 fourth quarter selling, general and administrative
expenses of $45.8 million increased $19.6 million as compared to
the prior year quarter. This primarily reflects a $7.2 million
increase in employee compensation and related benefits; a $5.7
million increase in restaurant expenses as well as supplies,
utilities, general liability insurance, pre-opening expenses and
repairs and maintenance; $5.6 million in additional expenses
related to Hakkasan Group, as compared to the prior year quarter,
reflecting results for the month of April 2022; and a $2.8 million
increase in marketing costs.
Fiscal 2022 fourth quarter operating income increased $4.6
million to $7.5 million and adjusted operating income increased by
$6.4 million to $17.0 million, both as compared to the prior year
quarter. This primarily reflects the increase in revenues,
partially offset by higher direct operating expenses and, to a
lesser extent, higher selling, general and administrative expenses.
The increase in operating income was also partially offset by an
increase in depreciation and amortization of $1.7 million.
Other Matters Yesterday, the
Company announced that its board of directors authorized the
exploration of a potential spin-off that would separate the
Company's traditional live entertainment business and MSG Networks
from the Company’s MSG Sphere and Tao Group Hospitality
businesses.
The Company has made significant progress on construction of MSG
Sphere in Las Vegas, with substantial portions now complete,
including the completion of primary structural work on the venue in
May 2022. The Company anticipates that it will spend fiscal 2023
finishing construction of the venue, with work over the year to
include completion of the venue’s LED exterior, buildout of the
interior spaces and installation of the venue’s immersive
technologies. The Company remains on track to open MSG Sphere at
The Venetian in the second half of calendar 2023.
The Company has conducted an extensive review of the project’s
costs and, as a result, has adjusted its construction cost
estimate, inclusive of core technology and soft costs, to
approximately $2 billion, from its prior estimate of $1.865
billion. The increase in the construction cost estimate primarily
reflects the impact of inflation and global supply chain pressures.
Actual construction costs incurred through June 30, 2022 were
approximately $1.53 billion, which was net of $65 million received
from The Venetian Resort, and which includes approximately $190
million of accrued expenses that were not yet paid as of June 30,
2022.
About Madison Square Garden Entertainment Corp. Madison
Square Garden Entertainment Corp. (MSG Entertainment) is a leader
in live entertainment. The Company presents or hosts a broad array
of events in its diverse collection of venues: New York’s Madison
Square Garden, Hulu Theater at Madison Square Garden, Radio City
Music Hall and Beacon Theatre; and The Chicago Theatre. MSG
Entertainment is also building a new state-of-the-art venue in Las
Vegas, MSG Sphere at The Venetian. In addition, the Company
features the original production – the Christmas Spectacular
Starring the Radio City Rockettes – and through Boston Calling
Events, produces the Boston Calling Music Festival. The Company’s
two regional sports and entertainment networks, MSG Network and
MSG+, deliver a wide range of live sports content and other
programming. Also under the MSG Entertainment umbrella is Tao Group
Hospitality, with entertainment dining and nightlife brands
including: Tao, Marquee, Lavo, Beauty & Essex, Cathédrale,
Hakkasan and Omnia. More information is available at
www.msgentertainment.com.
Non-GAAP Financial Measures We define adjusted operating
income (loss), which is a non-GAAP financial measure, as operating
income (loss) before (i) adjustments to remove the impact of
non-cash straight-line leasing revenue associated with the arena
license agreements with MSG Sports, (ii) depreciation, amortization
and impairments of property and equipment, goodwill and other
intangible assets, (iii) amortization for capitalized cloud
computing arrangement costs, (iv) share-based compensation expense
or benefit, (v) restructuring charges or credits, (vi) merger and
acquisition-related costs, including litigation expenses, (vii)
gains or losses on sales or dispositions of businesses and
associated settlements, (viii) the impact of purchase accounting
adjustments related to business acquisitions, and (ix) gains and
losses related to the remeasurement of liabilities under the
Company’s Executive Deferred Compensation Plan (which was
established in November 2021). We believe that given the length of
the arena license agreements and resulting magnitude of the
difference in leasing revenue recognized and cash revenue received,
the exclusion of non-cash leasing revenue provides investors with a
clearer picture of the Company's operating performance. 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 and acquisition-related costs 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
Company’s Executive Deferred Compensation Plan, which are included
for the first time this period, provides investors with a clearer
picture of the Company’s operating performance given that, in
accordance with GAAP, gains and losses related to the remeasurement
of liabilities under the Company’s Executive Deferred Compensation
Plan are recognized in Operating (income) loss whereas gains and
losses related to the remeasurement of the assets under the
Company’s 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 Miscellaneous
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 our business
segments and the Company on a consolidated basis. Adjusted
operating income (loss) and similar measures with similar titles
are common performance measures used by investors and analysts to
analyze our performance. Internally, we use revenues and adjusted
operating income (loss) as the most important indicators of our
business performance, and evaluate management’s effectiveness with
specific reference to these indicators. Adjusted operating income
(loss) should be viewed as a supplement to and not a substitute for
operating income (loss), net income (loss), cash flows from
operating activities, and other measures of performance and/or
liquidity presented in accordance with U.S. generally accepted
accounting principles (“GAAP”). Since adjusted operating income
(loss) is not a measure of performance calculated in accordance
with GAAP, this measure may not be comparable to similar measures
with similar titles used by other companies. For a reconciliation
of operating income (loss) to adjusted operating income (loss),
please see page 6 of this release.
Forward-Looking Statements This press release may contain
statements that constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that any such forward-looking statements
are not guarantees of future performance or results and involve
risks and uncertainties, and that actual results, developments or
events may differ materially from those in the forward-looking
statements as a result of various factors, including financial
community perceptions of the Company and its business, operations,
financial condition and the industries in which it operates, the
impact of the COVID-19 pandemic and the factors described in the
Company’s filings with the Securities and Exchange Commission,
including the sections titled “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” contained therein. The Company disclaims any obligation
to update any forward-looking statements contained herein.
Conference Call Information: The conference call will be
Webcast live today at 10:00 a.m. ET at
investor.msgentertainment.com Conference call dial-in number is
888-660-6386 / Conference ID Number 8020251 Conference call replay
number is 800-770-2030 / Conference ID Number 8020251 until August
26, 2022
MADISON SQUARE GARDEN
ENTERTAINMENT CORP.
CONSOLIDATED AND COMBINED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
Twelve Months Ended
June 30,
June 30,
2022
2021
2022
2021
Revenues
$
453,542
$
260,597
$
1,724,618
$
814,213
Direct operating expenses
284,750
133,033
1,009,245
434,783
Selling, general and administrative
expenses
187,082
143,255
681,796
424,355
Depreciation and amortization
36,027
28,301
124,629
121,999
Impairment and other (gains) losses,
net
2,435
—
(3,045
)
—
Restructuring charges
—
—
14,690
21,299
Operating loss
(56,752
)
(43,992
)
(102,697
)
(188,223
)
Other income (expense):
Loss in equity method investments
(518
)
(1,280
)
(5,027
)
(6,858
)
Interest income
1,888
821
4,210
3,222
Interest expense
(3,909
)
(3,385
)
(27,155
)
(20,423
)
Loss on extinguishment of debt
(35,815
)
—
(35,815
)
—
Other income (expense), net
(21,352
)
(2,444
)
(49,448
)
51,488
Loss from operations before income
taxes
(116,458
)
(50,280
)
(215,932
)
(160,794
)
Income tax benefit (expense)
17,253
9,990
25,785
(5,725
)
Net loss
(99,205
)
(40,290
)
(190,147
)
(166,519
)
Less: Net income (loss) attributable to
redeemable noncontrolling interests
3,327
(2,178
)
7,739
(16,269
)
Less: Net income (loss) attributable to
nonredeemable noncontrolling interests
(2,589
)
151
(3,491
)
(2,099
)
Net loss attributable to Madison Square
Garden Entertainment Corp.’s stockholders
$
(99,943
)
$
(38,263
)
$
(194,395
)
$
(148,151
)
Basic loss per common share attributable
to Madison Square Garden Entertainment Corp.’s stockholders
$
(3.00
)
$
(1.12
)
$
(5.77
)
$
(4.60
)
Diluted loss per common share attributable
to Madison Square Garden Entertainment Corp.’s stockholders
$
(3.00
)
$
(1.12
)
$
(5.77
)
$
(4.60
)
Basic weighted-average number of common
shares outstanding
34,331
34,062
34,255
34,077
Diluted weighted-average number of common
shares outstanding
34,331
34,062
34,255
34,077
_________________
Note:
For all periods presented, the net assets
of MSG Networks have been combined with those of the Company at
their historical carrying amount. All prior periods balances in
these consolidated financial statements (including share
activities) have been retrospectively adjusted as if both companies
had been operating as a single company.
MADISON SQUARE GARDEN
ENTERTAINMENT CORP.
ADJUSTMENTS TO RECONCILE
OPERATING INCOME (LOSS) TO
ADJUSTED OPERATING INCOME
(LOSS)
(Unaudited)
The following is a description of the adjustments to operating
income (loss) in arriving at adjusted operating income (loss) as
described in this earnings release:
- Non-cash portion of arena license fees
from MSG Sports. This adjustment removes the impact of
non-cash straight-line leasing revenue associated with the Arena
License Agreements with MSG Sports.
- Share-based compensation. This
adjustment eliminates the compensation expense relating to
restricted stock units and stock options granted under the MSG
Entertainment Employee Stock Plan, MSG Sports Employee Stock Plan,
MSG Networks Employee Stock Plan, as amended and assumed by MSG
Entertainment, MSG Entertainment Non-Employee Director Plan and MSG
Networks Non-Employee Director Plan in all periods.
- Depreciation and amortization.
This adjustment eliminates depreciation and amortization of
property and equipment and intangible assets in all periods.
- Restructuring charges. This
adjustment eliminates costs related to termination benefits
provided to employees as part of the Company's full-time workforce
reductions.
- Impairment and other (gains) losses,
net. This adjustment eliminates non-cash impairment charges
and the impact of gains or losses from the disposition of assets or
businesses in all periods.
- Merger and acquisition related
costs. This adjustment eliminates costs related to mergers
and acquisitions, including litigation expenses, in all
periods.
- Amortization for capitalized cloud
computing arrangement costs. This adjustment eliminates
amortization of capitalized cloud computing arrangement costs.
- Purchase accounting adjustments.
This adjustment eliminates the impact of various purchase
accounting adjustments related to business acquisitions, primarily
favorable / unfavorable lease agreements of the acquiree.
- Remeasurement of deferred compensation
liabilities. This adjustment eliminates the impact of gains
and losses related to the remeasurement of liabilities under the
Company's executive deferred compensation plan.
Three Months Ended June 30,
Twelve Months Ended June 30,
2022
2021
2022
2021
Operating loss
$
(56,752
)
$
(43,992
)
$
(102,697
)
$
(188,223
)
Non-cash portion of arena license fees
from MSG Sports
(3,792
)
(4,286
)
(27,754
)
(13,026
)
Share-based compensation
14,820
13,163
72,552
70,584
Depreciation and amortization (1)
36,027
28,301
124,629
121,999
Restructuring charges
—
—
14,690
21,299
Impairment and other (gains) losses,
net
2,435
—
(3,045
)
—
Merger and acquisition related costs
6,481
8,739
48,764
24,220
Amortization for capitalized cloud
computing costs
95
—
271
—
Other purchase accounting adjustments
1,354
599
6,099
3,334
Remeasurement of deferred compensation
plan liabilities
46
—
46
—
Adjusted operating income
$
714
$
2,524
$
133,555
$
40,187
_________________
Note:
For all periods presented, the
net assets of MSG Networks have been combined with those of the
Company at their historical carrying amount. All prior periods
balances in these consolidated financial statements (including
share activities) have been retrospectively adjusted as if both
companies had been operating as a single company.
(1)
Includes depreciation and
amortization related to purchase accounting adjustments.
MADISON SQUARE GARDEN
ENTERTAINMENT CORP.
SEGMENT RESULTS
(Dollars in thousands)
(Unaudited)
BUSINESS SEGMENT
RESULTS
Three Months Ended June 30,
2022
Entertainment
MSG Networks
Tao Group Hospitality
Other(2)
Total
Revenues
$
178,958
$
139,132
$
139,825
$
(4,373
)
$
453,542
Direct operating expenses
125,972
78,757
78,885
1,136
284,750
Selling, general and administrative
expenses
115,470
29,603
45,836
(3,827
)
187,082
Depreciation and amortization
19,975
4,077
6,910
5,065
36,027
Impairment and other (gains) losses,
net
—
—
730
1,705
2,435
Restructuring charges
—
—
—
—
—
Operating income (loss)
$
(82,459
)
$
26,695
$
7,464
$
(8,452
)
$
(56,752
)
Reconciliation to adjusted operating
income (loss):
Non-cash portion of arena license fees
from MSG Sports
(3,792
)
—
—
—
(3,792
)
Share-based compensation
11,116
1,802
1,902
—
14,820
Depreciation and amortization(1)
19,975
4,077
6,910
6,419
37,381
Restructuring charges
—
—
—
—
—
Impairment and other (gains) losses,
net
—
—
730
1,705
2,435
Merger and acquisition related costs
3,739
2,742
—
—
6,481
Amortization for capitalized cloud
computing costs
50
45
—
—
95
Remeasurement of deferred compensation
plan liabilities
46
—
—
—
46
Adjusted operating income (loss)
$
(51,325
)
$
35,361
$
17,006
$
(328
)
$
714
Three Months Ended June 30,
2021
Entertainment
MSG Networks
Tao Group Hospitality
Other(2)
Total
Revenues
$
31,100
$
166,055
$
69,664
$
(6,222
)
$
260,597
Direct operating expenses
31,421
66,362
35,303
(53
)
133,033
Selling, general and administrative
expenses
83,039
39,377
26,275
(5,436
)
143,255
Depreciation and amortization
19,801
1,872
5,216
1,412
28,301
Operating income (loss)
$
(103,161
)
$
58,444
$
2,870
$
(2,145
)
$
(43,992
)
Reconciliation to adjusted operating
income (loss):
Non-cash portion of arena license fees
from MSG Sports
(4,286
)
—
—
—
(4,286
)
Share-based compensation
8,027
3,450
1,686
—
13,163
Depreciation and amortization(1)
19,801
1,872
5,216
2,011
28,900
Merger and acquisition related costs
4,601
3,264
874
—
8,739
Adjusted operating income (loss)
$
(75,018
)
$
67,030
$
10,646
$
(134
)
$
2,524
_________________
(1)
Depreciation and amortization includes
other purchase accounting adjustments of $1,354 and $599 for the
three months ended June 30, 2022 and 2021, respectively.
(2)
Includes inter-segment eliminations and,
for operating income (loss), purchase accounting adjustments.
MADISON SQUARE GARDEN
ENTERTAINMENT CORP.
SEGMENT RESULTS
(Continued)
(Dollars in thousands)
(Unaudited)
Year Ended June 30,
2022
Entertainment
MSG Networks
Tao Group Hospitality
Other(2)
Total
Revenues
$
655,392
$
608,155
$
484,947
$
(23,876
)
$
1,724,618
Direct operating expenses
420,305
320,278
264,641
4,021
1,009,245
Selling, general and administrative
expenses
394,551
147,007
160,991
(20,753
)
681,796
Depreciation and amortization
77,177
9,394
26,021
12,037
124,629
Impairment and other (gains) losses,
net
(245
)
—
(3,969
)
1,169
(3,045
)
Restructuring charges
14,238
452
—
—
14,690
Operating income (loss)
$
(250,634
)
$
131,024
$
37,263
$
(20,350
)
$
(102,697
)
Reconciliation to adjusted operating
income (loss):
Non-cash portion of arena license fees
from MSG Sports
(27,754
)
—
—
—
(27,754
)
Share-based compensation
47,813
17,092
7,647
—
72,552
Depreciation and amortization(1)
77,177
9,394
26,021
18,136
130,728
Restructuring charges
14,238
452
—
—
14,690
Impairment and other (gains) losses,
net
(245
)
—
(3,969
)
1,169
(3,045
)
Merger and acquisition related costs
20,834
27,683
247
—
48,764
Amortization for capitalized cloud
computing costs
95
176
—
—
271
Remeasurement of deferred compensation
plan liabilities
46
—
—
—
46
Adjusted operating income (loss)
$
(118,430
)
$
185,821
$
67,209
$
(1,045
)
$
133,555
Year Ended June 30,
2021
Entertainment
MSG Networks
Tao Group Hospitality
Other(2)
Total
Revenues
$
82,281
$
647,510
$
100,166
$
(15,744
)
$
814,213
Direct operating expenses
103,089
262,859
66,591
2,244
434,783
Selling, general and administrative
expenses
268,705
115,339
54,034
(13,723
)
424,355
Depreciation and amortization
80,142
7,335
8,955
25,567
121,999
Restructuring Charges
21,299
—
—
—
21,299
Operating income (loss)
$
(390,954
)
$
261,977
$
(29,414
)
$
(29,832
)
$
(188,223
)
Reconciliation to adjusted operating
income (loss):
Non-cash portion of arena license fees
from MSG Sports
(13,026
)
—
—
—
(13,026
)
Share-based compensation
47,633
17,667
5,284
—
70,584
Depreciation and amortization(1)
80,142
7,335
8,955
28,901
125,333
Restructuring charges
21,299
—
—
—
21,299
Merger and acquisition related costs
16,080
4,502
3,638
—
24,220
Adjusted operating income (loss)
$
(238,826
)
$
291,481
$
(11,537
)
$
(931
)
$
40,187
_________________
Note:
For all periods presented, the net assets
of MSG Networks have been combined with those of the Company at
their historical carrying amount. All prior periods balances in
these consolidated financial statements (including share
activities) have been retrospectively adjusted as if both companies
had been operating as a single company.
(1)
Depreciation and amortization includes
other purchase accounting adjustments of $6,099 and $3,334 for the
years ended June 30, 2022 and 2021, respectively.
(2)
Includes inter-segment eliminations and,
for operating income (loss), purchase accounting adjustments.
MADISON SQUARE GARDEN
ENTERTAINMENT CORP.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except per
share data)
(Unaudited)
June 30,
2022
2021
ASSETS
Current Assets:
Cash and cash equivalents
$
828,540
$
1,516,992
Restricted cash
17,470
22,984
Accounts receivable, net
216,652
184,613
Net related party receivables
32,541
31,916
Prepaid expenses and other current
assets
123,453
116,231
Total current assets
1,218,656
1,872,736
Investments in nonconsolidated
affiliates
43,804
49,221
Property and equipment, net
2,939,052
2,156,292
Right-of-use lease assets
446,499
280,579
Amortizable intangible assets, net
164,084
198,274
Indefinite-lived intangible assets
63,801
63,801
Goodwill
500,181
502,195
Other assets
146,083
166,781
Total assets
$
5,522,160
$
5,289,879
_________________
Note:
For all periods presented, the net assets
of MSG Networks have been combined with those of the Company at
their historical carrying amount. All prior periods balances in
these consolidated financial statements (including share
activities) have been retrospectively adjusted as if both companies
had been operating as a single company.
MADISON SQUARE GARDEN
ENTERTAINMENT CORP.
CONSOLIDATED BALANCE SHEETS
(Continued)
(In thousands, except per
share data)
(Unaudited)
June 30,
2022
2021
LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS AND EQUITY
Current Liabilities:
Accounts payable
$
31,980
$
26,644
Net related party payables, current
38,576
23,173
Current portion of long-term debt, net of
deferred financing costs
73,843
53,973
Accrued and other current liabilities
518,690
343,006
Operating lease liabilities, current
65,310
73,423
Deferred revenue
228,032
209,651
Total current liabilities
956,431
729,870
Long-term debt, net of deferred financing
costs
1,669,245
1,650,628
Operating lease liabilities,
non-current
427,971
233,556
Deferred tax liabilities, net
163,441
200,325
Other liabilities
145,496
157,260
Total liabilities
3,362,584
2,971,639
Commitments and contingencies
Redeemable noncontrolling interests
184,192
137,834
Madison Square Garden Entertainment Corp.
Stockholders’ Equity:
Class A common stock, par value $0.01 ,
120,000 shares authorized; 27,368 and 27,093 shares outstanding as
of June 30, 2022 and 2021, respectively
273
271
Class B common stock, par value $0.01,
30,000 shares authorized; 6,867 shares outstanding as of June 30,
2022 and 2021
69
69
Preferred stock, par value 0.01, 15,000
shares authorized; none outstanding as of June 30, 2022 and
2021
—
—
Additional paid-in capital
2,301,970
2,294,775
Accumulated deficit
(290,736
)
(96,341
)
Accumulated other comprehensive loss
(48,355
)
(30,272
)
Total Madison Square Garden Entertainment
Corp. stockholders’ equity
1,963,221
2,168,502
Nonredeemable noncontrolling interests
12,163
11,904
Total equity
1,975,384
2,180,406
Total liabilities, redeemable
noncontrolling interests and equity
$
5,522,160
$
5,289,879
_________________
Note:
For all periods presented, the net assets
of MSG Networks have been combined with those of the Company at
their historical carrying amount. All prior periods balances in
these consolidated financial statements (including share
activities) have been retrospectively adjusted as if both companies
had been operating as a single company.
MADISON SQUARE GARDEN
ENTERTAINMENT CORP.
SELECTED CASH FLOW
INFORMATION
(Dollars in thousands)
(Unaudited)
Twelve Months Ended
June 30,
2022
2021
Net cash provided by (used in) operating
activities
141,340
(58,694
)
Net cash used in investing activities
(804,164
)
(123,183
)
Net cash provided by (used in) financing
activities
(30,392
)
592,685
Effect of exchange rates on cash, cash
equivalents and restricted cash
(750
)
8,027
Net increase (decrease) in cash, cash
equivalents and restricted cash
(693,966
)
418,835
Cash, cash equivalents and restricted cash
at beginning of period
1,539,976
1,121,141
Cash, cash equivalents and restricted cash
at end of period
$
846,010
$
1,539,976
_________________
Note:
For all periods presented, the net assets
of MSG Networks have been combined with those of the Company at
their historical carrying amount. All prior periods balances in
these consolidated financial statements (including share
activities) have been retrospectively adjusted as if both companies
had been operating as a single company.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220819005046/en/
Ari Danes, CFA Senior Vice President, Investor Relations,
Financial Communications & Treasury Madison Square Garden
Entertainment Corp. (212) 465-6072
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