News Details

View all news

Madison Square Garden Entertainment Corp. Reports Fiscal 2022 Second Quarter Results

02/09/2022

FY2022 Second Quarter Results Reflect Continued Ramp-up of Live Events at Company's Performance Venues

Tao Group Hospitality's Results Reflect Ongoing Robust Demand in Las Vegas and New York Markets

NEW YORK--(BUSINESS WIRE)-- Madison Square Garden Entertainment Corp. (NYSE: MSGE) ("MSG Entertainment") today reported financial results for the fiscal second quarter ended December 31, 2021. 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.

During the fiscal 2022 second quarter, events at the Company’s performance venues continued to ramp up, highlighted by a busy schedule of concerts, New York Knicks ("Knicks") and New York Rangers ("Rangers") home games at The Garden, and the return of the Christmas Spectacular to Radio City Music Hall. In addition, MSG Networks commenced full regular season telecast schedules for its five professional teams across the NBA and NHL, while Tao Group Hospitality continued to benefit from strong consumer demand led by the Las Vegas and New York markets. The emergence of the Omicron variant impacted some of the Company’s operating momentum late in the quarter, most notably leading to the Christmas Spectacular production concluding its 2021 holiday season run earlier than anticipated, as well as the postponement or cancellation of a number of other events.

For the fiscal 2022 second quarter, the Company reported revenues of $516.4 million, an increase of $347.7 million as compared with the prior year quarter. In addition, the Company reported operating income of $35.4 million and adjusted operating income of $76.1 million for the fiscal 2022 second quarter, as compared to an operating loss of $46.8 million and adjusted operating income of $9.8 million in the prior year quarter.(1)

Executive Chairman and CEO James L. Dolan said, “The fiscal second quarter reflected the ramp up of live events at our venues, as well as continued activity in marketing partnerships and strong performance at Tao Group Hospitality. Looking ahead, we believe the positive momentum being generated across our business and the ongoing construction progress of MSG Sphere in Las Vegas position us well to create long-term shareholder value.”

Segment Results for the Three and Six Months Ended December 31, 2021 and 2020:

 

Three Months Ended

Six Months Ended

 

December 31,

Change

December 31,

Change

$ millions

2021

2020

$

%

2021

2020

$

%

Revenues

 

 

 

 

 

 

 

 

Entertainment

$

247.6

 

$

12.7

 

$

234.9

 

 

NM 

$

281.8

 

$

20.2

 

$

261.6

 

 

NM 

MSG Networks

 

160.0

 

 

146.2

 

 

13.7

 

 

9 %

 

301.5

 

 

303.6

 

 

(2.1

)

 

(1 )%

Tao Group Hospitality

 

117.1

 

 

10.5

 

 

106.6

 

 

NM 

 

236.6

 

 

17.7

 

 

218.8

 

 

NM 

Other(2)

 

(8.2

)

 

(0.6

)

 

(7.6

)

 

NM 

 

(8.9

)

 

(2.2

)

 

(6.7

)

 

NM 

Total Revenues

$

516.4

 

$

168.8

 

$

347.7

 

 

NM 

$

810.9

 

$

339.3

 

$

471.7

 

139%

Operating Income (Loss)

 

 

 

 

 

 

 

 

Entertainment

$

(10.3

)

$

(97.1

)

$

86.8

 

 

89 %

$

(125.0

)

$

(207.7

)

$

82.8

 

 

40 %

MSG Networks

 

35.1

 

 

65.7

 

 

(30.6

)

 

(47) %

 

58.4

 

 

133.6

 

 

(75.3

)

 

(56 )%

Tao Group Hospitality

 

16.7

 

 

(11.2

)

 

27.9

 

 

NM 

 

26.8

 

 

(22.4

)

 

49.2

 

 

NM 

Other(2)

 

(6.2

)

 

(4.3

)

 

(2.0

)

 

(46) %

 

(8.2

)

 

(9.0

)

 

0.7

 

 

8 %

Total Operating Income (Loss)

$

35.4

 

$

(46.8

)

$

82.2

 

 

NM 

$

(48.0

)

$

(105.5

)

$

57.5

 

 

55 %

Adjusted Operating Income (Loss)

 

 

 

 

 

 

 

 

Entertainment

$

15.0

 

$

(55.3

)

$

70.3

 

 

NM 

$

(56.4

)

$

(113.5

)

$

57.1

 

 

50 %

MSG Networks

 

43.8

 

 

73.8

 

 

(29.9

)

 

(41 )%

 

99.6

 

 

148.2

 

 

(48.5

)

 

(33 )%

Tao Group Hospitality

 

17.5

 

 

(8.4

)

 

25.9

 

 

NM 

 

43.7

 

 

(17.5

)

 

61.2

 

 

NM 

Other(2)

 

(0.2

)

 

(0.3

)

 

0.1

 

 

26 %

 

(0.5

)

 

(0.5

)

 

 

 

%

Total Adjusted Operating Income

$

76.1

 

$

9.8

 

$

66.3

 

 

NM 

$

86.4

 

$

16.6

 

$

69.8

 

 

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 second quarter, the Entertainment segment generated revenues of $247.6 million, an increase of $234.9 million as compared with the prior year period. Event-related revenues increased $80.0 million, suite license fee revenues increased $13.1 million and venue-related sponsorship and signage increased $4.6 million, all primarily due to the return of live events to the Company's performance venues during the current year quarter, as compared to no events in the prior year period as a result of the COVID-19 pandemic. The current year quarter also included an increase in revenues of $71.6 million ($26.3 million of which was due to higher arena license fees) related to the Company’s Arena License Agreements with Madison Square Garden Sports Corp. ("MSG Sports") due to the Knicks and Rangers playing a combined 35 pre/regular season home games at The Garden without any capacity restrictions in the current period as compared to four Knicks home games without fans in attendance due to government-mandated assembly restrictions in the prior year period. In addition, revenues from the Christmas Spectacular production increased $55.3 million compared to the prior year period in which the entire 2020 production was canceled as a result of the COVID-19 pandemic.

Fiscal 2022 second quarter direct operating expenses of $147.3 million increased $123.9 million, as compared with the prior year quarter. Event-related expenses increased $41.8 million primarily due to the return of live events to the Company’s performance venues during the current year quarter, as compared to no events in the prior year period due to the COVID-19 pandemic. Direct operating expenses associated with the Christmas Spectacular increased $38.9 million compared to the prior year period in which the 2020 production was canceled as a result of the COVID-19 pandemic. In addition, direct operating expenses associated with revenue or profit sharing under the Arena License Agreements with MSG Sports increased $32.7 million due to the Knicks and Rangers playing a combined 35 pre/regular season home games at The Garden without any capacity restrictions in the current year period as compared to four Knicks home games with no fans in attendance in the prior year period.

Fiscal 2022 second quarter selling, general and administrative expenses of $91.5 million increased $25.8 million, as compared with the prior year quarter. This increase primarily reflects higher employee compensation and related benefits of $14.1 million (which is net of a decrease in share-based compensation of $6.2 million), as well as higher professional fees of $7.8 million, which includes costs for MSG Sphere development.

Fiscal 2022 second quarter operating loss improved by $86.8 million to a loss of $10.3 million and adjusted operating income improved by $70.3 million to $15.0 million, both as compared with the prior year quarter. The improvements in operating loss and adjusted operating income were primarily due to the increase in revenue, offset by higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses.

MSG Networks
For the fiscal 2022 second quarter, the MSG Networks segment generated total revenues of $160.0 million, an increase of $13.7 million as compared with the prior year period. Affiliation fee revenue decreased $16.1 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 7% (excluding the impact of the non-renewal with Comcast). These decreases were partially offset by the impact of higher affiliation rates and a decrease in net unfavorable affiliate adjustments of $3.1 million.

Fiscal 2022 second quarter advertising revenue increased $28.3 million, as compared with the prior year period, primarily reflecting a greater number of NBA and NHL telecasts in the current year period as compared with the prior year period. As a result of the delayed start to the 2020-21 NBA and NHL seasons due to the COVID-19 pandemic, MSG Networks telecast nine NBA games and no NHL games in the prior year period, as compared with a regular NBA and NHL telecast schedule in the current year period.

Fiscal 2022 second quarter direct operating expenses of $85.9 million increased $28.9 million, as compared with the prior year quarter, primarily due to higher rights fees expense of $20.4 million and, to a lesser extent, an increase in other programming and production-related costs of $8.3 million. The increase in rights fees expense was primarily due to the impact of lower media rights fees in the prior year period as a result of rights fee reductions related to the shortened 2020-21 NHL season, the impact of the delayed start of the 2020-21 NBA and NHL regular seasons in the prior year period and annual contractual rate increases.

Fiscal 2022 second quarter selling, general and administrative expenses of $37.2 million increased $15.5 million, as compared with the prior year quarter. The increase primarily reflects higher advertising and marketing expenses of approximately $7.0 million and higher advertising sales commissions of approximately $6.4 million.

Fiscal 2022 second quarter operating income of $35.1 million decreased $30.6 million and adjusted operating income of $43.8 million decreased $29.9 million, both as compared with the prior year quarter. The decreases in operating income and adjusted operating income were primarily due to the increases in direct operating expenses and selling, general and administrative expenses, partially offset by the increase in revenue.

Tao Group Hospitality
For the fiscal 2022 second quarter, the Tao Group Hospitality segment generated revenues of $117.1 million as compared with $10.5 million in the prior year period. Tao Group Hospitality acquired Hakkasan Group on April 27, 2021 and, as a result, revenues in the current year quarter reflect $51.6 million from Hakkasan Group. The portfolio of venues operated by Tao Group Hospitality prior to the acquisition of Hakkasan Group (which the Company refers to as the “legacy venues”) generated $65.5 million in revenues in the current year quarter as compared with $10.5 million in the prior year period, which primarily reflects the easing of government-mandated capacity restrictions.

Fiscal 2022 second quarter direct operating expenses of $60.9 million increased $49.9 million, as compared with the prior year quarter. The current year quarter included $24.6 million in direct operating expenses from Hakkasan Group. In addition, employee compensation and related benefits at legacy venues increased $11.6 million, primarily reflecting a staffing increase following the easing of government mandated capacity restrictions, while the cost of food, beverage and venue entertainment at legacy venues increased $10.9 million. Rent expense increased $2.6 million, primarily due to rent concessions in the prior year period resulting from the COVID-19 pandemic.

Fiscal 2022 second quarter selling, general and administrative expenses of $40.7 million increased $31.6 million as compared with the prior year quarter. This primarily reflects $16.0 million in selling, general and administrative expenses from Hakkasan Group; a $6.5 million increase in employee compensation and related benefits; a $4.5 million increase in professional fees, restaurant expenses and supplies, utilities, general liability insurance, pre-opening expenses and repairs and maintenance; and a $2.4 million increase in marketing.

Fiscal 2022 second quarter operating income improved by $27.9 million to $16.7 million while adjusted operating income improved by $25.9 million to $17.5 million, both as compared with the prior year quarter. The improvements in operating income and adjusted operating income primarily reflect the increase in revenues, partially offset by an increase in direct operating expenses and, to a lesser extent, an increase in selling, general and administrative expenses.

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, and (viii) the impact of purchase accounting adjustments related to business acquisitions. 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 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 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.

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 and events may differ materially from those in the forward-looking statements as a result of various factors, including financial community and rating agency 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 833-420-0364 / Conference ID Number 9077917
Conference call replay number is 855-859-2056 / Conference ID Number 9077917 until February 16, 2022

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

 

 

Three Months Ended

 

Six Months Ended

 

 

December 31,

 

December 31,

 

 

2021

 

2020

 

2021

 

2020

Revenues

 

$

516,439

 

 

$

168,752

 

 

$

810,949

 

 

$

339,298

 

Direct operating expenses

 

 

296,258

 

 

 

92,497

 

 

 

462,019

 

 

 

191,728

 

Selling, general and administrative expenses

 

 

162,277

 

 

 

96,018

 

 

 

337,116

 

 

 

177,675

 

Depreciation and amortization

 

 

30,533

 

 

 

25,677

 

 

 

59,963

 

 

 

54,087

 

Impairment and other (gains) loss, net

 

 

(7,979

)

 

 

 

 

 

(161

)

 

 

 

Restructuring charges

 

 

 

 

 

1,372

 

 

 

 

 

 

21,299

 

Operating income (loss)

 

 

35,350

 

 

 

(46,812

)

 

 

(47,988

)

 

 

(105,491

)

Other income (expense):

 

 

 

 

 

 

 

 

Loss in equity method investments

 

 

(1,774

)

 

 

(1,568

)

 

 

(2,981

)

 

 

(3,264

)

Interest income

 

 

773

 

 

 

837

 

 

 

1,548

 

 

 

1,609

 

Interest expense

 

 

(8,167

)

 

 

(5,262

)

 

 

(17,415

)

 

 

(10,535

)

Miscellaneous income (expense), net

 

 

(17,100

)

 

 

(7,568

)

 

 

(19,647

)

 

 

26,449

 

Income (loss) from operations before income taxes

 

 

9,082

 

 

 

(60,373

)

 

 

(86,483

)

 

 

(91,232

)

Income tax benefit (expense)

 

 

(4,063

)

 

 

298

 

 

 

14,847

 

 

 

(9,159

)

Net income (loss)

 

 

5,019

 

 

 

(60,075

)

 

 

(71,636

)

 

 

(100,391

)

Less: Net income (loss) attributable to redeemable noncontrolling interests

 

 

2,642

 

 

 

(3,342

)

 

 

4,854

 

 

 

(7,231

)

Less: Net income (loss) attributable to nonredeemable noncontrolling interests

 

 

106

 

 

 

(902

)

 

 

471

 

 

 

(1,532

)

Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders

 

$

2,271

 

 

$

(55,831

)

 

$

(76,961

)

 

$

(91,628

)

Basic earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders

 

$

0.07

 

 

$

(1.64

)

 

$

(2.25

)

 

$

(2.70

)

Diluted earnings (loss) per common share attributable to The Madison Square Garden Company’s stockholders

 

$

0.07

 

 

$

(1.64

)

 

$

(2.25

)

 

$

(2.70

)

Basic weighted-average number of common shares outstanding

 

 

34,278

 

 

 

34,021

 

 

 

34,186

 

 

 

33,961

 

Diluted weighted-average number of common shares outstanding

 

 

34,436

 

 

 

34,021

 

 

 

34,186

 

 

 

33,961

 

_________________

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.
  • Amortization for capitalized cloud computing arrangement costs. This adjustment eliminates amortization of capitalized cloud computing arrangement costs.
  • Merger and acquisition related costs. This adjustment eliminates costs related to mergers and acquisitions, including litigation expenses, in all periods.
  • Impairment and other (gains) loss, 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.
  • Restructuring charges. This adjustment eliminates costs related to termination benefits provided to employees as part of the Company's full-time workforce reductions.
  • 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.

 

 

Three Months Ended

 

Six Months Ended

 

 

December 31,

 

December 31,

 

 

2021

 

2020

 

2021

 

2020

Operating income (loss)

 

$

35,350

 

 

$

(46,812

)

 

$

(47,988

)

 

$

(105,491

)

Non-cash portion of arena license fees from MSG Sports

 

 

(11,346

)

 

 

(1,176

)

 

 

(11,889

)

 

 

(1,176

)

Share-based compensation

 

 

24,171

 

 

 

29,828

 

 

 

43,699

 

 

 

45,984

 

Depreciation and amortization(1)

 

 

30,533

 

 

 

25,677

 

 

 

59,963

 

 

 

54,087

 

Amortization for capitalized cloud computing costs

 

 

10

 

 

 

 

 

 

95

 

 

 

 

Merger and acquisition related costs

 

 

2,331

 

 

 

 

 

 

39,523

 

 

 

 

Impairment and other (gains) loss, net

 

 

(7,979

)

 

 

 

 

 

(161

)

 

 

 

Restructuring charges

 

 

 

 

 

1,372

 

 

 

 

 

 

21,299

 

Other purchase accounting adjustments

 

 

3,038

 

 

 

924

 

 

 

3,123

 

 

 

1,848

 

Adjusted operating income

 

$

76,108

 

 

$

9,813

 

 

$

86,365

 

 

$

16,551

 

_________________

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 December 31, 2021

 

 

Entertainment

 

Networks

 

Tao Group Hospitality

 

Other(2)

 

Total

Revenues

 

$

247,610

 

 

$

159,981

 

$

117,086

 

 

$

(8,238

)

 

$

516,439

 

Direct operating expenses

 

 

147,343

 

 

 

85,924

 

 

60,880

 

 

 

2,111

 

 

 

296,258

 

Selling, general and administrative expenses

 

 

91,516

 

 

 

37,192

 

 

40,685

 

 

 

(7,116

)

 

 

162,277

 

Depreciation and amortization

 

 

19,024

 

 

 

1,756

 

 

6,243

 

 

 

3,510

 

 

 

30,533

 

Impairment and other (gains) loss, net

 

 

 

 

 

 

 

(7,443

)

 

 

(536

)

 

 

(7,979

)

Operating income (loss)

 

$

(10,273

)

 

$

35,109

 

$

16,721

 

 

$

(6,207

)

 

$

35,350

 

Reconciliation to adjusted operating income (loss):

 

 

 

 

 

 

 

 

 

 

Non-cash portion of arena license fees from MSG Sports

 

 

(11,346

)

 

 

 

 

 

 

 

 

 

 

(11,346

)

Share-based compensation

 

 

16,155

 

 

 

6,058

 

 

1,958

 

 

 

 

 

 

24,171

 

Depreciation and amortization(1)

 

 

19,024

 

 

 

1,756

 

 

6,243

 

 

 

6,548

 

 

 

33,571

 

Amortization for capitalized cloud computing costs

 

 

(34

)

 

 

44

 

 

 

 

 

 

 

 

10

 

Merger and acquisition related costs

 

 

1,456

 

 

 

875

 

 

 

 

 

 

 

 

2,331

 

Impairment and other (gains) loss, net

 

 

 

 

 

 

 

(7,443

)

 

 

(536

)

 

 

(7,979

)

Adjusted operating income (loss)

 

$

14,982

 

 

$

43,842

 

$

17,479

 

 

$

(195

)

 

$

76,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2020

 

 

Entertainment

 

Networks

 

Tao Group Hospitality

 

Other(2)

 

Total

Revenues

 

$

12,669

 

 

$

146,239

 

$

10,491

 

 

$

(647

)

 

$

168,752

 

Direct operating expenses

 

 

23,409

 

 

 

57,033

 

 

10,980

 

 

 

1,075

 

 

 

92,497

 

Selling, general and administrative expenses

 

 

65,730

 

 

 

21,692

 

 

9,131

 

 

 

(535

)

 

 

96,018

 

Depreciation and amortization

 

 

19,246

 

 

 

1,802

 

 

1,563

 

 

 

3,066

 

 

 

25,677

 

Restructuring charges

 

 

1,372

 

 

 

 

 

 

 

 

 

 

 

1,372

 

Operating income (loss)

 

$

(97,088

)

 

$

65,712

 

$

(11,183

)

 

$

(4,253

)

 

$

(46,812

)

Reconciliation to adjusted operating income (loss):

 

 

 

 

 

 

 

 

 

 

Non-cash portion of arena license fees from MSG Sports

 

 

(1,176

)

 

 

 

 

 

 

 

 

 

 

(1,176

)

Share-based compensation

 

 

22,374

 

 

 

6,266

 

 

1,188

 

 

 

 

 

 

29,828

 

Depreciation and amortization(1)

 

 

19,246

 

 

 

1,802

 

 

1,563

 

 

 

3,990

 

 

 

26,601

 

Restructuring charges

 

 

1,372

 

 

 

 

 

 

 

 

 

 

 

1,372

 

Adjusted operating income (loss)

 

$

(55,272

)

 

$

73,780

 

$

(8,432

)

 

$

(263

)

 

$

9,813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

_________________

(1) Depreciation and amortization includes other purchase accounting adjustments of $3,038 and $924 for the three months ended December 31, 2021 and 2020, 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)

 

 

Six Months Ended December 31, 2021

 

 

Entertainment

 

MSG Networks

 

Tao Group Hospitality

 

Other(2)

 

Total

Revenues

 

$

281,849

 

 

$

301,454

 

$

236,550

 

 

$

(8,904

)

 

$

810,949

 

Direct operating expenses

 

 

183,645

 

 

 

154,347

 

 

121,973

 

 

 

2,054

 

 

 

462,019

 

Selling, general and administrative expenses

 

 

184,478

 

 

 

85,167

 

 

74,779

 

 

 

(7,308

)

 

 

337,116

 

Depreciation and amortization

 

 

38,680

 

 

 

3,553

 

 

12,621

 

 

 

5,109

 

 

 

59,963

 

Impairment and other (gains) loss, net

 

 

 

 

 

 

 

375

 

 

 

(536

)

 

 

(161

)

Operating income (loss)

 

$

(124,954

)

 

$

58,387

 

$

26,802

 

 

$

(8,223

)

 

$

(47,988

)

Reconciliation to adjusted operating income (loss):

 

 

 

 

 

 

 

 

 

 

Non-cash portion of arena license fees from MSG Sports

 

 

(11,889

)

 

 

 

 

 

 

 

 

 

 

(11,889

)

Share-based compensation

 

 

26,298

 

 

 

13,532

 

 

3,869

 

 

 

 

 

 

43,699

 

Depreciation and amortization(1)

 

 

38,680

 

 

 

3,553

 

 

12,621

 

 

 

8,232

 

 

 

63,086

 

Amortization for capitalized cloud computing costs

 

 

7

 

 

 

88

 

 

 

 

 

 

 

 

95

 

Merger and acquisition related costs

 

 

15,448

 

 

 

24,075

 

 

 

 

 

 

 

 

39,523

 

Impairment and other (gains) loss, net

 

 

 

 

 

 

 

375

 

 

 

(536

)

 

 

(161

)

Adjusted operating income (loss)

 

$

(56,410

)

 

$

99,635

 

$

43,667

 

 

$

(527

)

 

$

86,365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended December 31, 2020

 

 

Entertainment

 

MSG Networks

 

Tao Group Hospitality

 

Other(2)

 

Total

Revenues

 

$

20,224

 

 

$

303,602

 

$

17,712

 

 

$

(2,240

)

 

$

339,298

 

Direct operating expenses

 

 

47,024

 

 

 

122,105

 

 

20,808

 

 

 

1,791

 

 

 

191,728

 

Selling, general and administrative expenses

 

 

118,380

 

 

 

44,219

 

 

16,734

 

 

 

(1,658

)

 

 

177,675

 

Depreciation and amortization

 

 

41,260

 

 

 

3,630

 

 

2,609

 

 

 

6,588

 

 

 

54,087

 

Restructuring charges

 

 

21,299

 

 

 

 

 

 

 

 

 

 

 

21,299

 

Operating income (loss)

 

$

(207,739

)

 

$

133,648

 

$

(22,439

)

 

$

(8,961

)

 

$

(105,491

)

Reconciliation to adjusted operating income (loss):

 

 

 

 

 

 

 

 

 

 

Non-cash portion of arena license fees from MSG Sports

 

 

(1,176

)

 

 

 

 

 

 

 

 

 

 

(1,176

)

Share-based compensation

 

 

32,807

 

 

 

10,893

 

 

2,284

 

 

 

 

 

 

45,984

 

Depreciation and amortization(1)

 

 

41,260

 

 

 

3,630

 

 

2,609

 

 

 

8,436

 

 

 

55,935

 

Restructuring charges

 

 

21,299

 

 

 

 

 

 

 

 

 

 

 

21,299

 

Adjusted operating income (loss)

 

$

(113,549

)

 

$

148,171

 

$

(17,546

)

 

$

(525

)

 

$

16,551

 

 

 

 

 

 

 

 

 

 

 

 

_________________

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 $3,123 and $1,848 for the six months ended December 31, 2021 and 2020, respectively.
(2) Includes inter-segment eliminations and, for operating income (loss), purchase accounting adjustments.

 

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

December 31,
2021

 

June 30,
2021

ASSETS

 

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents

 

$

1,258,105

 

 

$

1,516,992

 

Restricted cash

 

 

23,914

 

 

22,984

Accounts receivable, net

 

 

190,491

 

 

 

184,613

 

Net related party receivables

 

 

48,929

 

 

 

31,916

 

Prepaid income taxes

 

 

1,850

 

 

 

12,772

 

Prepaid expenses

 

 

69,476

 

 

 

67,445

 

Other current assets

 

 

42,637

 

 

 

36,014

 

Total current assets

 

 

1,635,402

 

 

 

1,872,736

 

Investments in nonconsolidated affiliates

 

 

46,412

 

 

 

49,221

 

Property and equipment, net

 

 

2,474,693

 

 

 

2,156,292

 

Right-of-use lease assets

 

 

470,253

 

 

 

280,579

 

Amortizable intangible assets, net

 

 

182,006

 

 

 

198,274

 

Indefinite-lived intangible assets

 

 

63,801

 

 

 

63,801

 

Goodwill

 

 

500,181

 

 

 

502,195

 

Other assets

 

 

150,326

 

 

 

166,781

 

Total assets

 

$

5,523,074

 

 

$

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)

 

 

 

December 31,
2021

 

June 30,
2021

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

 

 

 

 

Current Liabilities:

 

 

 

 

Accounts payable

 

$

43,815

 

 

$

26,644

 

Net related party payables, current

 

 

56,597

 

 

 

23,173

 

Current portion of long-term debt, net of deferred financing costs

 

 

56,483

 

 

 

53,973

 

Income taxes payable

 

 

406

 

 

 

2,527

 

Accrued liabilities:

 

 

 

 

Employee related costs

 

 

73,078

 

 

 

91,853

 

Other accrued liabilities

 

 

268,135

 

 

 

210,749

 

Operating lease liabilities, current

 

 

65,663

 

 

 

73,423

 

Collections due to promoters

 

 

49,513

 

 

 

37,877

 

Deferred revenue

 

 

256,154

 

 

 

209,651

 

Total current liabilities

 

 

869,844

 

 

 

729,870

 

Long-term debt, net of deferred financing costs

 

 

1,606,759

 

 

 

1,650,628

 

Operating lease liabilities, noncurrent

 

 

450,019

 

 

 

233,556

 

Defined benefit and other postretirement obligations

 

 

52,653

 

 

 

54,179

 

Other employee related costs

 

 

17,814

 

 

 

21,193

 

Collections due to promoters, noncurrent

 

 

 

 

 

6,625

 

Deferred tax liabilities, net

 

 

181,214

 

 

 

200,325

 

Other liabilities

 

 

74,952

 

 

 

75,263

 

Total liabilities

 

 

3,253,255

 

 

 

2,971,639

 

Redeemable noncontrolling interests

 

 

142,004

 

 

 

137,834

 

Madison Square Garden Entertainment Corp. Stockholders’ Equity:

 

 

 

 

Class A Common stock, par value $0.01, 120,000 shares authorized; 27,327 and 27,093 shares outstanding as of December 31, 2021 and June 30, 2021, respectively

 

 

273

 

 

 

271

 

Class B Common stock, par value $0.01, 30,000 shares authorized; 6,867 shares outstanding as of December 31, 2021 and June 30, 2021

 

 

69

 

 

 

69

 

Preferred stock, par value $0.01, 15,000 shares authorized; none outstanding as of December 31, 2021 and June 30, 2021

 

 

 

 

 

 

Additional paid-in capital

 

 

2,317,415

 

 

 

2,294,775

 

Retained earnings

 

 

(173,302

)

 

 

(96,341

)

Accumulated other comprehensive loss

 

 

(32,632

)

 

 

(30,272

)

Total Madison Square Garden Entertainment Corp. stockholders’ equity

 

 

2,111,823

 

 

 

2,168,502

 

Nonredeemable noncontrolling interests

 

 

15,992

 

 

 

11,904

 

Total equity

 

 

2,127,815

 

 

 

2,180,406

 

Total liabilities, redeemable noncontrolling interests and equity

 

$

5,523,074

 

 

$

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)

 

 

Six Months Ended

 

 

December 31,

 

 

2021

 

2020

Net cash provided by (used in) operating activities

 

$

132,786

 

 

$

(102,467

)

Net cash (used in) provided by investing activities

 

 

(332,532

)

 

 

136,238

 

Net cash (used in) provided by financing activities

 

 

(57,639

)

 

 

598,512

 

Effect of exchange rates on cash, cash equivalents and restricted cash

 

 

(572

)

 

 

7,795

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(257,957

)

 

 

640,078

 

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

 

$

1,282,019

 

 

$

1,761,219

 

_________________

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.

Mark Costiglio
Senior Vice President, Communications
Madison Square Garden Entertainment Corp.
(212) 465-4402

Ari Danes, CFA
Senior Vice President, Investor Relations & Treasury
Madison Square Garden Entertainment Corp.
(212) 465-6072

Source: Madison Square Garden Entertainment Corp.

Multimedia Files:

Categories: Press Releases
View all news