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Dec 31, 2019
MSG Sports Q2 2020 Earnings Report
MSG Sports' financial performance remained strong, driven by growth in both the MSG Sports and MSG Entertainment segments.
Key Takeaways
The Madison Square Garden Company reported a slight decrease in revenue but an increase in operating income for the fiscal second quarter ended December 31, 2019. Revenue was $628.8 million, a 1% decrease compared to the prior year quarter, while operating income increased by 3% to $80.8 million.
MSG Entertainment revenues decreased by 1% due to lower event-related revenues from concerts.
MSG Sports revenues increased slightly, driven by higher league distributions and local media rights fees.
Operating income for MSG Entertainment increased due to lower direct operating expenses and selling, general and administrative expenses.
Operating income for MSG Sports increased due to lower direct operating expenses, partially offset by higher selling, general and administrative expenses.
Forward Guidance
The company is focused on the proposed spin-off of its Entertainment business and the development of MSG Sphere in Las Vegas, anticipating continued growth and long-term value creation.
Positive Outlook
- Strategic priorities are expected to drive continued growth.
- MSG Sphere at The Venetian is expected to generate substantial revenue and adjusted operating income after opening.
- Identified significant savings relative to the general contractor’s initial benchmark estimate for hard construction costs for MSG Sphere at The Venetian.
- Design changes are expected to greatly improve the venue and overall guest experience at MSG Sphere at The Venetian.
- Goal to open MSG Sphere at The Venetian in calendar year 2021.
Challenges Ahead
- MSG Sphere initiative expenses increased due to personnel, content development, and technology costs.
- Expenses related to the proposed spin-off of the Company’s Entertainment business increased.
- Lower event-related revenues from concerts impacted MSG Entertainment revenues.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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