Madison Square Garden Entertainment’s revenues in its fiscal 2024 first quarter (calendar Q3) shrank 3% year over year, or by $4.2 million, to $142.2 million, according to the company’s results published on Tuesday (November 7).
MSG Entertainment owns venues including New York’s Madison Square Garden, The Theater at Madison Square Garden, Radio City Music Hall, and Beacon Theatre; and The Chicago Theatre.
Event-related revenues narrowed by $8.3 million versus the same period last year.
“This decrease primarily reflected a lower number of concerts held at the company’s venues as compared to the prior year quarter, partially offset by higher per-concert revenues in the current year period,” MSG Entertainment said.
MSG Entertainment noted that the prior year’s numbers were bolstered by a substantial number of concerts that had been rescheduled due to the pandemic, which contributed to higher revenue figures.
Despite the dip in revenue, the company reported a $2.7 million increase in revenues subject to sharing economics with Madison Square Garden Sports, which helped cushion the overall revenue decline. This income is derived from arena license agreements.
During an earnings call, MSG Entertainment’s Chief Financial Officer, Dave Byrnes, expressed optimism about the future, stating that the company’s venues are poised to surpass their concert goals for the year.
Byrnes highlighted that the company hosted 130 events and welcomed over 800,000 guests during the quarter. However, bookings for fiscal Q1 fell compared to the previous year, as last year’s figures were buoyed by concerts that had been rescheduled due to the pandemic.
“I’d also note that the Garden hosted Harry Styles’ historic 15-night residency in the prior year period,” Byrnes told analysts.
“Despite those headwinds, the Garden was just two concerts shy of last year’s record number of concerts for a fiscal first quarter at the venue, a testament to the sustained demand for live events.”
Dave Byrnes, Madison Square Garden Entertainment
“Despite those headwinds, the Garden was just two concerts shy of last year’s record number of concerts for a fiscal first quarter at the venue, a testament to the sustained demand for live events,” said the executive.
This fiscal Q1 marks the start of a full fiscal year for MSG Entertainment as an independent public company. Established in 2020, MSG Entertainment emerged when the Madison Square Garden Co. (now known as MSG Sports) spun off its non-sports assets to operate independently, trading on the New York Stock Exchange under the symbol MSGE.
Breaking down the fiscal Q1 report, MSG Entertainment booked an operating loss of $33.4 million, wider by $22.1 million from $11.3 million a year ago. Adjusted operating loss stood at $715,000 during the quarter from an adjusted operating income of $11.5 million last year.
The company attributed the increase in its losses to restructuring charges, higher selling, general and administrative expenses, and lower revenues.
“The company continues to see its bookings calendar for the remainder of fiscal 2024 fill up and remains on track to achieve a low double-digit percentage increase in events in its bookings business for the fiscal year.”
Madison Square Garden Entertainment
MSG Entertainment’s fiscal Q1 direct operating expenses was virtually flat at $101.7 million as the increase in expenses related to the sharing of economics with MSG Sports over arena license agreements was offset by lower event-related expenses of $4.7 million.
However, the company booked a 22% YOY increase in selling, general and administrative expenses of $48.8 million, reflecting the costs associated with its transition into becoming a standalone company.
Against the lackluster results, MSG Entertainment reaffirmed its previously issued fiscal 2024 guidance, estimating revenues of $900 million to $930 million for the full fiscal year, operating income of $85 million to $95 million and adjusted operating income of $160 million to $170 million.
“The company continues to see its bookings calendar for the remainder of fiscal 2024 fill up and remains on track to achieve a low double-digit percentage increase in events in its bookings business for the fiscal year,” it said.
In October, the New York Knicks and New York Rangers returned to the Madison Square Garden Arena or the start of their 2023-24 regular seasons. Next week, the Christmas Spectacular production returns to Radio City Music Hall for its 90th holiday season.
MSG Entertainment said it recently added two performances to this year’s run due to strong overall demand for this year’s production. It has a total of 187 planned shows versus 181 shows in fiscal 2023.
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