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Sep 30, 2022
Sphere Entertainment Co Q1 2023 Earnings Report
Reported an increase in revenue and a decrease in operating loss, driven by strong performance in the Entertainment and Tao Group Hospitality segments and improvement in MSG Networks.
Key Takeaways
Madison Square Garden Entertainment Corp. reported a 36% increase in revenue to $401.2 million and an improved operating loss of $44.8 million, reflecting robust demand and successful events.
Revenues increased by $106.7 million, or 36%, compared to the prior year quarter.
Operating loss improved by $38.5 million, or 46%, year-over-year.
Adjusted operating income decreased by $7.5 million, or 73%, compared to the prior year period.
MSG Sphere in Las Vegas is on track to open in the second half of calendar 2023, with an adjusted construction cost estimate of approximately $2.175 billion.
Sphere Entertainment Co
Sphere Entertainment Co
Sphere Entertainment Co Revenue by Segment
Revenue by Segment
MSG Networks Revenue
CapyFin.com Forward Guidance
MSG Entertainment expects fiscal 2023 to be a defining year, with progress toward the completion of MSG Sphere in Las Vegas and a potential spin-off.
Positive Outlook
- Completion of MSG Sphere in Las Vegas.
- Potential spin-off of traditional live entertainment and MSG Networks businesses.
- Expected delivery of long-term value for shareholders.
- MSG Networks began airing its full regular season telecast schedules for its five professional sports teams across both the NBA and NHL.
- Christmas Spectacular production returns for its 2022 holiday season run at Radio City Music Hall with new immersive technology elements and 181 planned shows.
Challenges Ahead
- Increase in the construction cost estimate for MSG Sphere due to inflation, supply chain pressures, and project complexity.
- Decrease in adjusted operating income compared to the prior year quarter.
- Non-renewal of MSG Networks’ carriage agreement with Comcast.
- Decrease in subscribers of MSG Networks (excluding the impact of the non-renewal with Comcast).
- Higher direct operating expenses and selling, general and administrative expenses for Tao Group Hospitality.