Q2 2021 Madison Square Garden Entertainment Corp Earnings Call
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Excuse me, ladies and gentlemen, this is the operator of your conference will begin momentarily. Please standby. Thank you for your patience.
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Good morning, My name is Teresa and I will be your conference operator today at this time I would like to welcome everyone to the Madison Square Garden Entertainment Corp fiscal 'twenty two.
One second quarter earnings conference call.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session at the one.
I'd like to ask a question. During this time simply press Star then the number one on your telephone keypad.
If you would like to withdraw your question press the pound key I would now like to turn the call over to Ari Danes Investor Relations. Please go ahead Sir.
Thank you.
Good morning, and welcome to MSG Entertainments fiscal 2021 second quarter earnings Conference call.
Our president Andy Lustgarten will begin today's call with an update on the company's operations.
This will be followed by a review of our financial results with Mark Fitzpatrick, our EVP and Chief Financial Officer.
After our prepared remarks, we will open up the call for questions.
If you do not of a copy of today's earnings release. It is available in the investors section of our corporate website.
Please take note of the following.
Today's discussion may contain statements that constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095.
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.
These include financial community perceptions of the company and its business operations financial condition and the industry in which it operates.
As well as the factors described in the company's filings with the Securities and Exchange Commission.
Including the sections entitled Risk factors, and management discussion and analysis of financial condition and results of operations contained therein.
The company disclaims any obligation to update any forward looking statements that may be discussed during this call.
On pages five and six of today's earnings release, we provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income or AOI.
Our non-GAAP financial measure.
And with that I will now turn the call over to Andy.
Thank you Ari and good morning, everyone.
Let me start by saying that we are thrilled with governor Cuomo's announcement on Wednesday that arena is in New York can reopen with limited capacity.
This comes on the heels of the governors reopening in New York City restaurants for indoor dining at reduced capacity starting today.
We believe this is the beginning of our path back to normal operations and we look forward to returning to what we do best.
Been preparing for this moment working with state and local health officials to develop a comprehensive plan with rigorous safety protocols for our reopening.
In addition, thanks to the NBA and NHL.
Learn best practices as the number of teams have been playing with limited in arena fan attendance. This season.
We think the time as of right to welcome back fans and we've been encouraged by the tremendous demand for live events, we've seen recently.
From the success of the Buffalo bills playoff games to the crowds at the Super Bowl. This past weekend, it's clear the.
People are eager to gather again.
And we expect to see the enthusiasm once we're able to reopen our doors to fans.
Which we intend to do on February 23rd with the Knicks and February 26, with the Rangers for roughly 2000 people per diem.
These types of events will be taking place not only at the garden, but also in arenas across New York.
And we believe this push forward coupled with the ongoing vaccine rollout will pave the way for our other assets and brands to participate in the broader reopening.
With this week's news we've taken the next step and started talking to artists and managers to get to gauge their interest in playing the garden to reduce capacity crowds.
While the economics may prove to be more challenging for concerts, if theres one thing we know.
That there is an intense desire by the entire industry for the return of live music.
Nowhere is this more apparent than the <unk>.
Press of booking schedule, we've lined up for the second half of calendar 2021.
Which has the potential to be one of our busiest ever.
If we are able to fully reopen.
And although it's still early we're also seeing artists hold dates during the first half of calendar 2022.
Demand from fans is also strong.
As evidenced by our rescheduled shows we're 73% of ticket holders have chosen to hold onto their tickets instead of requesting of refunds.
We've also continued to see strong engagement with our rockettes in Christmas spectacular brands, which we believe bodes well for the productions continued success.
Traditional broadcast media still reaches the widest audience for the rockettes in their future performance at Macy's Thanksgiving Day Parade, and the Rockefeller Center Christmas tree lighting were seen by more than 29 million viewers.
We also partnered with the NBC to televise of Christmas spectacular special which became one of the season's most watched holiday shows with nearly 9 million viewers over two earrings.
And led to a noticeable bump in ticket sales around those areas.
Social media platforms have become another key tool, we are using to stay connected with our existing audience as.
As we also engage the next generation of fans. This fall we relaunched the rockettes presence from tick tock and during the holiday season share the video highlighting fun facts about the rockettes the generated more than 5 million views significantly exceeding our average price.
This enthusiasm from a younger demographic has only reinforced our strong belief in the enduring popularity of the Christmas spectacular and the broadcasts.
Turning to Tao group.
Tao entered the quarter with a number of its vendors, including in New York, Las Vegas, and Chicago opened at reduced capacities.
However, as the result of government mandates select restrictions were reinstated in late fall.
For example in Las Vegas nightclub capacity was reduced from 50% to 25 per cent.
And while venues in New York City, where again closed as I noted earlier that change today with indoor dining now reopened at 25% capacity.
In the Florida environment, we are pleased with the Tao group's creativity and flexibility.
Which will help ensure they are able to reopen their venues quickly as restrictions are lifted.
We truly believe that this is of significant moment for the company and until we can fully reopen we are confident that the steps we have taken over the past several months to cut costs raise additional capital and strengthen our balance sheet have provided us with sufficient liquidity to weather this period.
While protecting our core business is of course, our top priority.
We are also making important progress on the construction of the MSG sphere of mistakes.
A venue that we believe will create significant long term value for our shareholders.
We recently announced that we have assumed the role of construction manager for MSG sphere.
E Com has transitioned from his role as general contractor for new service agreements that facilitates their ongoing support through the project's completion.
This new structure enables us to continue benefiting from E commerce experience.
While also giving us greater transparency and control over the construction process.
Jean Marie <unk>, who joined US in 2018 has been named President of development and construction and we will continue to lead our construction efforts.
As many of you will recall she has spearheaded a number of large development projects, including her work Wembley Stadium and leading the development of the <unk> Arena.
Jane has taken significant steps to build out our internal construction team, which played an important part of enabling us to assume the construction manager role.
Our internal team now has direct responsibility for strategic planning and the construction time line and also currently overseas 30 E Comm employees, who continue to support key areas, including specialist roles, such as health and safety.
On the construction front, we remain focused on several of the MSG sphere as critical path of elements, including structural steel work and we anticipate starting to build the steel frame for the venues roof in the coming months.
In closing we are excited to see the start of live Entertainment returned to New York.
We have already been hosting Knicks and Rangers games at the garden without fans and we're now thrilled. The later this month those teams will play in front of crowds at the arena for the first time since last March.
With this reopening we believe that we've started down the path.
You did buybacks the nations and better health and safety protocols will lead to the return of normal operations.
When that day comes our Premier collection of the assets and brands places us in the prime position to capitalize on the significant pent up demand for live entertainment.
I'd like to thank our employees partners fans and shareholders for their continued support.
With that I will now turn the call over to Mark.
Thank you Andy and good morning, everyone.
I will start by discussing our second quarter financial performance and then I will review our liquidity position.
For the quarter total revenues were $23 $1 million and our adjusted operating loss was $64 million.
This compares to $394 $1 million in revenues and adjusted operating income of $108 $5 million in the second quarter of fiscal 'twenty 'twenty as.
As the vast majority of our operations remained impacted by COVID-19.
Also as a reminder, our results are not directly comparable on a year over year basis as the second quarter of fiscal 2020 is based on carve out financials does not include the impact of the various agreements between our company and MSG sports.
In terms of our revenue I wanted to spend a moment discussing the arena license agreements with MSG sports.
We were happy to welcome the Knicks back to the garden and the second quarter and as the result, we started to recognize the license revenue and NOI related to these agreements.
Although at a substantially reduced rate this year given the current environment.
As a reminder, while cash managed from these licenses low at three per cent per year, we recognize the revenue on a straight line basis over the 35 year term of the agreements as a result in this quarter approximately $1 $2 million of the $1 $6 million of revenue recorded was noncash.
For the purposes of determining adjusted operating income we exclude the non cash portion of the arena license fee revenue. This adjustment can be seen in the reconciliation of operating income to adjusted operating income on page six of our earnings press release.
So turning to our liquidity position.
As of December 31, we had one four of $5 billion of cash and short term investments, which represented an increase of approximately $487 million compared to our September 30th balance of $965 million. This increase was driven by the net proceeds.
From our $615 million debt rate November $6 $5 million of drawdown under our Tau revolving credit facility and $26 million from the partial sale of our equity position in drafting.
As a reminder, we invested approximately $10 million in draft Kings.
As of quarter end, we have sold shares for total proceeds of approximately $28 $2 million, while retaining approximately 894000 shares.
These inflows were partly offset by $64 million of operational cash burn for the quarter or about $21 million per month, which was slightly better than our previously disclosed expectations.
We also had $107 million of capital expenditures, which primarily related to the construction of the MSG sphere in Las Vegas.
Through December 31.
The project to date construction cost incurred were approximately $645 million, which includes $73 million of of crude costs that were not paid as of December 31.
Which is net of $65 million received from the Las Vegas Sands.
In February 2020, we announced the cost estimate for the MSG sphere inclusive of core technology and soft costs of approximately 166 billion.
But this is subject to uncertainty given the project's complexity the more than two years of meeting until the planned opening and the ongoing impact of the global pandemic.
That said, we continue to aggressively manage costs, we're happy with the progress we made on the construction. So far this fiscal year and look forward to opening the venue in 2023.
Finally, I would note that our cash balance as of December 31 included approximately $190 million in deferred revenue and collections due to the promoters, which was roughly unchanged since September 30.
With that I'll now turn the call back over to Ari.
Yes.
Thanks Mark.
Operators can we open up the call for questions. Please.
As a reminder to the ask a question press Star then the number one on your telephone keypad again that of Star then the number one we will policy just a moment to compile the Q&A roster.
And the first question comes from John <unk> with Wolfe Research.
Yeah. Thanks, Good morning, maybe one for Andy one for Mark and he's starting with your opening remarks.
On a practical level can you talk about what being able to operate of 10% capacity actually means and to your point, there's talent toward that level.
And if rather the teams or concerts, just 10% translate to positive cash flow and then from Mark just wanted to follow up on the cost of the sphere of projects.
Sure, but your comments suggest some incremental the uncertainty around the cost side and is moving away from a comp impact again, the costs or timing of the project.
Thanks, John.
So in terms of the tens of percent capacity. So let me start.
I started the call like we are absolutely thrilled by this move this was.
The earlier than we had expected we've been preparing for a long time working with the government and health officials.
I'll say, 10%.
We should split that we should split the the types of events that would come through right. So the sports teams, which mind you as the MSG Entertainment, we have of license agreement, where we get paid rental fees as well as sheriffs of tickets of ticketing of.
Hum.
Sweet revenue of F&B revenue of Merck's revenue since the events are already on because they're being produced by the sports team. It's it's automatically marginally profitable right minus the small number of people that we can stop the building to make the work worthwhile.
So put that into one bucket of of events the touring business, it's going to be much more challenging.
It's a big production to put somebody on the road, there's a lot of pieces.
And not only the talent, but the risk involved so while.
We are enthused by by the movement towards that.
Fab capacity you know.
I don't expect the big piece of the torn market to be on the road of 10% capacity, but we hope that this is the beginning right. We think this is the beginning of wear.
The governor.
Starts to reopen the economy and we think that is of capacities range. We'll see we'll see further interest and we've had a lot of interest already on the 10% because everyone understands that this is the beginning.
Then on top of it we were a little different than in the almost any other venue in America because of where we are and our relationships. So there are it is possible to have the one offs, where an artist comes directly to us and either uses our equipment or brings in some of its small but that's the settled those will be more one off events.
And the exception rather than the rule, but we really feel this is of great start towards getting us back to normal because of this 110% of the beginning not the young.
Thanks, John This is mark I, just wanted to kind of hit on your question about the cost estimate first of all of them just wanted to clarify upfront the movement to a kind of had no impact on the cost or the.
The timing of the construction so we're still planning to open.
The Las Vegas sphere in 2023.
But as you know last February we announced the cost estimate was 166 billion. Since then we and the rest of the world were hit by Covid, which ultimately resulted in us announcing last August the weighted lengthened our construction timetable by two years.
The I mean, it's six years later, we've learned a lot more maintenance of substantial progress on the construction, but we thought it was important to flag that there is uncertainty that we're seeing around the cost estimate.
The uncertainty of flex the impact of the pandemic, which has added another layer of complexity to an already unique project.
But as you know we've transitioned of the construction manager, which is giving us more even more control of the progress. We will continue to aggressively manage every aspect of the project and we look forward to opening the menu in 2023.
Alright, thank you.
Okay.
And your next question comes from Brandon Ross with Elisha of partners.
Hey, guys.
I have follow ups I think on each of Johns questions first was hoping to dive a little deeper into the decision to become the construction manager on the spheres project, maybe if you could walk us through the rationale and benefits.
For taking that over and is there anything to glean about your plans for future of venues from that decision.
Hey, Brian how are you doing.
As I mentioned.
Yes.
So we took we took over as the construction manager.
But we should take a step back.
The strategic decision on how we set up this project.
The cost plus structure.
With the economy right, we did that for a very specific reason.
Thought it would allow us to maximize the quality of the work.
Allow us much greater transparency into the costs and the labor being in materials being used by the subcontractor.
Providing of so much of a bedroom what role in managing.
Our cost overall, and what and what product we're going to get here. So that we of the best consumer experience.
With the.
Uh huh.
With Covid and the lengthening of our timeline it allowed us to reassess how are we going to work and go forward and how can we actually delivered some of the best way, So we decided to.
Restructure of the project with the.
The the relationship with E com.
It allows us to.
Get the best of really both worlds right. It comes the expertise we've got 30 of their top people.
On the site still working with us, but at the same time allows us even greater transparency, even greater control and it also gave us a little of time.
Over the last seven months eight months to really put together the the still of genes team to allow her to have the the staff that she needs to be able to effectively manage and drive. This project both of the time line and the cost structure.
Sure.
And.
To your point. This is also giving us our ability to.
Think think about.
What.
What what and who do we need and what infrastructure, we need as we think about the future. So the.
Does give us the further insight when the time is ready that we have of the people. We're in we have the the infrastructure and.
So when that time is there.
We will be even better for them in our next project when it of course.
Cool and then on the partial reopening can you just walk us through the health and safety protocols that are now in place maybe share of the fan experience from when we arrive at the garden too when we take our seats and how you see that.
That 10% capacity evolving what have been the discussions maybe with cuomo and others about milestones for further reopening from that 10%.
So I'll start we are always focused on the on the guest experience from customer experience. So right now safety.
All of our guests our talent and our employee is by far number one and something that we've always been focused on even before the pandemic, but now we're going even further focus on it.
We've been preparing for this for a while.
Obviously.
You can do a lot of preparations, but information keeps on changing so there'll be always tweaks as we learn more about the disease and how it affects people but.
In the heart and the highest level.
We have been.
We also benefit from all of you take a step back our venue was built in 2008.
Less than seven years ago, and we have one of the best venues, we've got the amazing health and safety of already built in we had to supplement that change filters.
Add some more touchless sinks. So those types of changes are.
In and well thought through in terms of the customer experience, so there's going to be.
And the safety Covid tests before the event.
<unk>.
Health screens.
When they're inside the event there is gonna be limited specific types of food.
<unk>.
Food and beverage and certain locations Kim.
Eat in the hallways, but where it's going to be the best experience that keeps people safe, we're gonna have obviously social distance within the venue.
Hmm.
And we're going to continue to go above and beyond.
We've been working with many medical professionals to make sure that we've got the best.
The state of the art technology.
And.
Of course, we're going to acquire facemask temperature checks on the insurance.
And the Governor's office has been great I don't think that Theres a specific.
Number that debt.
We know of when the next capacity jump will be but he has clearly created a roadmap and other types of industry win win.
Rates are down and hospitalizations or down parts of the parts of the economy open so as if if we.
Can you on the path of we're on I think we're on the path to continue to increase capacity.
But obviously this disease will change in.
Over the next few months and we might be in a different place both very good or very bad in the future.
It looks like everything seems to be going in the right direction and we feel pretty good so we.
We feel good about this as the beginning of the opening.
Awesome. Thank you.
Yeah.
And your next question comes from the line of David Karnofsky with J P. Morgan.
Alright. Thank you Andrew maybe just the follow up on some of the commentary prior I guess, how solid should we consider the bookings for the back half of the year in the context of potentially still having capacity restriction.
What level do you think artists promoters or maybe the easier to answer.
Regarding your own the resident sees like where would you find find it viable.
To have shows.
<unk>.
Yeah.
It's a different it's a difficult question to answer directly right. So it's obviously, 100% capacity. It's no question right.
There's just some of some of the incremental cost around the safety protocols, but most of the that's already in.
The 10% is very difficult.
And the on the gradient as we get closer to 100, it's a lot easier. So I will say the back half of our calendar is what I'm, saying very weak.
We feel very good about right now.
Both between the artist that move their schedule from before Covid two of the all the other artists who are looking to be on the road.
The.
But I can't give you the exact answer if the number is 50 60 70 80 90, I think it's gonna be very <unk> specific.
Very promoter specific in terms of the risk level they want to take on.
With our relationships and the venue, we feel very good that will be the leader of it.
Yeah.
This market is different than the other markets and we think that.
We've shown over and over our ability to deliver for artists amazing.
Amazing experiences as well as our customers.
And so we think.
It will be it will be back.
And we feel very good about where this is going in the future.
Yeah.
Okay and then.
Is there any update you would be willing to provide on the how you're thinking about.
The return profile on the sphere or maybe when you would be willing to.
Disclose to investors or provide some view into how to think about the financials.
Once the the venues at the right. Thank you.
Sure. This is Marc I'll take that one.
Well look I think we just want to reiterate we continue to believe the MSG sphere will create significant long term value for shareholders and.
That has not changed.
You've heard us talk before about the venues unique platform, which will create.
Create compelling growth operating two needs across the spectrum of opportunities, including of Ben sponsorships premium hospitality and we believe the this is going to translate into substantial levels of revenue and NOI.
So I talked about there being uncertainty due to the pandemic. We also talked about the positive signs we are seeing including the pent up demand for live entertainment and Andy.
Noted.
But overall, we're confident of the pandemic will end, we are confident that Las Vegas will return and that we are building of venue that will capitalize on people's intent desire to gather take part of new experience.
And.
In addition to debt you know with our extended timetable.
Enable has enabled us to preserve cash in the near term. It's also given us it's given Las Vegas time to kind of recover. So we believe that's going to be work to our advantage that tourism and convention business will be in full swing by 2023. So in terms of your second question about when we're going to give additional information I think with two years left.
So we're not really ready to get into specifics, but overall I just want to reiterate we're very bullish on the opportunity.
Okay.
And your next question comes from the line of David Beckel with.
Bahrenburg capital.
Great. Thanks. Thanks for the question. So other question on Christmas spectacular and the Rockettes. Thank you for.
All of that color regarding the engagement in social media I'm just curious.
And sort of dovetails on what you've already talked about with respect to reopening at what point will you.
Need to make a go no go call on the spectacular and what are some of the contingency plans you have in place for the production this year.
So as I mentioned, we're very happy so far with the engagement, we've had through social media and other and through our special on NBC.
And I mentioned earlier.
We are you probably picked up we already on sale. So we're planning on having our show and we benefited from the bump from those debt exposure given the past Christmas. So we're on the sale right now with about 200 shows for the 2021 of holiday season.
Obviously, we're going to have to continue their monitor the developments, but with where we were.
We're really excited about the suites.
The decision and we think this is just the path to begin to open so.
We're planning on the show.
Great and just to be clear at any capacity level, you'll be having a show.
Oh, I didn't say at any capacity level.
But.
As I said, we think this is the beginning of an opening at the end of an opening and very much are.
Planning on the higher capacity by the.
The next November.
Fair enough I appreciate that and just as a follow up.
I'm curious if you're you know the.
Of the unfortunate circumstances surrounding live entertainment has left some venues and and lesson.
Less than ideal financial condition or are you seeing opportunities for venue acquisition in the marketplace that look interesting as a result of the pandemic or is that even the marketplace.
Currently interested in thanks.
Well, let me start we generally don't discuss M&A.
Of that are.
Uh huh.
That we don't have plans or is that exactly but I'll say, we're focused right now on the sphere. That's our main focus of our company and that's our main source of growth.
<unk>.
That's on the entertainment side, obviously, there is a lot of opportunity.
Given to your point about the financial conditions of.
The venues both.
On the entertainment as well as in our hospitality or in the restaurant business on the tower side.
We have a really strong management team, who is very focused on growth.
That could be organically.
Organically such as in three weeks or opening up of new restaurant tow up and Mohegan.
Or maybe inorganically through either new leases or any opportunity, but I'll tell you. There's nothing so so we're looking at things, but at the same time, we're very focused on our on our base business and getting back to operations.
Rowing.
Getting ourselves back and running.
Great. Thanks, so much.
And your next question comes from the line of David Katz with Jefferies.
Good morning, everyone. Thanks for taking my questions.
Number one it with respect to the Tao group can you just talk about.
Whether you can be profitable.
This initial stage or where the pivot point is at.
And my second question.
It was really around New York sports betting which has become topical.
You know what your interest level is what your you know X.
Expected engagement might be.
And how you see yourselves playing a role in that thank you.
Absolutely.
So on the <unk> side.
The the operating restrictions have been an extremely fluid environment. So I'll remember we have both.
Dining as well as the nightlife and hospitality both of those necessarily have the same capacity constriction restrictions and don't necessarily of the same between cities and even within the cities of the Interstate and definitely not between different states. So it's really hard to give you a single number that says here's where we're profitable.
But I will say the momentum is moving in the right direction today, New York City reopen dining of 25%.
No it's been outside which obviously has been not.
Not the best operating conditions.
And I think it is the first step towards going to higher capacities.
They are still.
The curfew of 10 P M here in New York City.
Entertainment, so that will obviously be of big restriction that will affect performance in the <unk>.
Long run, but again as things get better we're hoping that that restriction changes as well in other markets theres different endured in dining and outdoor dining restrictions and it'll be it's really case by case, but we do feel like.
Most of the locations were in of all moving in the right direction protocols between our safety and healthy protocols. We're proving that we can be sales health and safety.
The very safe for our customers and we feel good about the <unk> growth.
Back to profitability.
On the on the gaming side.
Yes, theres been a lot of noise, especially your a lot of talk right here in New York City of about or New York State about the gaming.
Gaming and we're very thrilled that Goldman of Governor Cuomo's recent announcement.
Debt theyre, intending to pursue mobile sports gaming.
Spending times theirs, we very much like sports gaming and what the impact is on consumer experience in terms of engagement.
We think the.
It just further drives people's interest in sports. So it's very strong given that we have to get tenants.
And the timing is right here in New York the <unk>.
Gordon.
We note that the governor Cuomo set of approximately 20% of all New Jersey Sports Wagering has come from outs from New York residents. So we're very bullish about what does that mean from New York.
And he made the noticed at the Meadowlands, which opened in 2018 is now one of the largest sports books in the country. So again.
Piques, our interest as to what we can do here obviously the legislation is going to affect how we could play but I'll note in D. C capital one arena with the Wizards of the capital partnered with William Hill to create the sports book.
The Cubs in Chicago with partnered with draft Kings and is pursuing the sports book at the inside regularly field those are opportunities for us and also note the.
Here at MSG Entertainment, we represent.
The MSG network through an advertising arrangement and the industry sports through of sponsorship arrangement and so as both of those businesses.
The continued choose to.
We received the benefits of the advertising and sponsorship from sports betting we will see our sports gaming, but we will see the effect on MSG entertainments results as well so we feel pretty good there's lots of opportunity and we are.
We look forward to hearing more about the.
The the rules and the regulations that will be coming into place.
The global sports gaming comes into.
It becomes authorized.
I appreciate it thanks very much.
Operator, we have time for one last question.
And your last question is from Ben Swinburne with Morgan Stanley.
Good morning. This is Mariana on for Dan just one question on the opening of new line.
If there's anything you can share.
The school in terms of share.
All of the reopening plans and capacity on what you're doing kind of process.
Per floor.
Full of reopening down the line that kind of take the financial the staff fully obvious telephony.
Thanks.
So I think we've talked a lot about the path of reopening and we really were thrilled of the 10%.
Thrilled in the sense that we believe this is the beginning of the path towards the reopening that at the end of the path.
There'll be can and as.
Not that.
Those who follow the governor and actually an even said this in the very beginning in terms of the way he's thinking about reopening of New York I think it was eight months ago right. He laid out periods of time.
Third as case loads come down as hospitalizations come down.
He opens up certain sectors of the economy.
We're now turning to the entertainment and dining, which I think is a very important sector from New York City to come back because that's what it will drive new York's resurgence.
And so this is the beginning of the reopening of house case loads continue to go down and hospitalizations go down we're expecting capacity to continue to go up.
In terms of the second part of your question of what what would we be hit it I mean, I think look where we have an infrastructure we need to continue to build back up.
Our arena staff and.
Our concluding our ushers in.
The F&B, but that's that's.
It's the that's about training and development and we expect that that will continue to grow as we increase the capacity and so we're very focused on our first event.
On the 23rd and.
I'm, sorry of the 26 I'm sorry in the third right 23rd.
And then and look forward to hosting the next worry are scams and look forward to just begin at the beginning of us welcoming fans back to the garden.
Awesome. Thank you.
Elegant like to turn the call back over to Ari Danes.
Thank you all for joining US we look forward to speaking with you on our next earnings call kind of a good day.
Thank you, ladies and gentlemen for your participation you may now disconnect.
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