Q2 2022 Madison Square Garden Sports Corp Earnings Call

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Speaker 1: Good morning. Thank you for standing by and welcome to the Madison Square Gardens Sports Corp fiscal 2022 second quarter earnings conference call. At this time, all participants are in a listen only mode. After the speakers remarks, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, press star zero. I would now like to turn the call over to Ari Danes, Investor Relations. Please go ahead.

Good morning, Thank you for standing by and welcome to the Madison Square Garden Sports Corp. Fiscal 2022 second quarter earnings Conference call. At this time all participants are in a listen only mode. After the Speakers' remarks, there will be a question and answer session to ask a question during the session.

You will need to press star one on your telephone.

If you require any further assistance press star Zero I would now like to turn the call over to Ari Danes Investor Relations. Please go ahead.

Thank you operator.

Speaker 2: Good morning and welcome to MSG Sports fiscal 2022 second quarter earnings conference call. Our president and CEO Andy Lusgarten will begin this morning's call with an update on the company's operation.

Good morning, and welcome to MSG Sports fiscal 2022 second quarter earnings Conference call, our President and CEO , Andy Lustgarten will begin this morning's call with an update on the company's operations.

Speaker 2: This will be followed by a review of our financial results with Victoria Mink, our EVP Chief Financial Officer and Treasurer.

This will be followed by a review of our financial results with Victoria Mink, Our EVP, Chief Financial Officer and Treasurer.

Speaker 2: After our prepared remarks, we will open up the call for questions.

After our prepared remarks, we will open up the call for questions.

Speaker 2: If you do not have a copy of today's earnings release, it is available in the investor section of our corporate website.

You do not have a copy of today's earnings release. It is available in the investors section of our corporate website.

Please take note of the following.

Speaker 2: Today's discussion 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 uncertainty.

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.

Speaker 2: and that actual results, developments and events may differ materially from those in the forward looking statements as a result of various facts.

Speaker 2: 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's discussion and analysis of financial condition and results of operations contained therein.

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 Companys filings with the Securities and Exchange Commission, including the sections entitled Risk factors and management's discussion and analysis of financial condition.

And results of operations contained therein.

Speaker 2: The company disclaims any obligation to update any forward-looking statements that may be discussed during this call.

The company disclaims any obligation to update any forward looking statements that may be discussed during this call.

Speaker 2: On pages four and five of today's earnings release, we provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income, or AOI, a non-GAAP financial measure. And with that, I'll now turn the call over to Andrew.

On pages four and five 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'll now turn the call over to Andy.

Speaker 3: Good morning and thank you for joining us. When we spoke last quarter, we shared the positive momentum we were seeing across our business, driven by strong consumer and corporate demand.

Good morning, and thank you for joining us when we spoke last quarter. We shared the positive momentum we were seeing across our business driven by strong consumer and corporate demand.

Speaker 3: Those positive signs are clearly reflected in our fiscal second quarter financial results, which include revenues of $290 million and adjusted operating income of $56 million.

Those positive signs are clearly reflected in our fiscal second quarter financial results, which include revenues of $290 million and adjusted.

Operating income of $56 million.

Speaker 3: Even with the onset of the Omicron variant, which briefly slowed us down, we are proud of the strides we have made in driving our business back. For our second quarter, I'm pleased to report that our per-game revenues were above pre-pandemic levels. This includes per-game suite and sponsorship revenues, as well as F&B and merchandise per caps that exceeded results for the fiscal 2020 second quarter.

Even with the onset of the Omicron variant, which briefly slowed US down we are proud of the strides we have made in driving our business back.

Our second quarter I'm pleased to report that our per game revenues were above pre pandemic levels.

This includes per game suite and sponsorship revenues.

As well as F&B and merchandise per caps.

It exceeded results for the fiscal 2022nd quarter.

Speaker 3: while per game ticket revenue was in line with results for that same period.

While per game ticket revenue was in line with the results for that same period.

Speaker 3: And based on our current trajectory, we expect total revenues for this fiscal year, both including and excluding our growth in media rights to exceed our last full pre pandemic year pro forma.

And based on our current trajectory, we expect total revenues for this fiscal year.

Including and excluding our growth in media rights to exceed our last full pre pandemic year pro.

Pro forma for the spinoff.

Speaker 3: The speed with which our business has returned and the demand and enthusiasm we are seeing from our fans and partners reinforces our conviction that as the owner of two of the most recognized professional sports franchises, we are uniquely positioned to drive long-term growth and value creation for our shareholders.

The speed with which our business has returned and the demand in <unk>, whose enthusiasm we're seeing from our fans and partners reinforces our conviction that as the owner of two of the most recognized professional sports franchises. We are uniquely positioned to drive long term growth and value creation for our shareholders.

Speaker 3: Let's now discuss in detail how our business is performing.

Let's now discuss in detail how our business is performing.

Speaker 3: Our teams are more than halfway through the 21-22 NBA and NHL regular season.

Our teams are more than halfway through the 'twenty, one 'twenty, two NBA and NHL regular seasons.

Speaker 3: And as we look ahead to several more months of exciting competition, we continue to be pleased with the response from our fans.

And as we look ahead to several more months of exciting competition. We continue to be pleased with the response from our Fabs.

Speaker 3: On our last earnings call, we discussed the strength we were seeing in our season tickets, which represent the significant majority of ticket sold.

On our last earnings call. We discussed the strength, we were seeing in our season tickets, which represent a significant majority of tickets sold.

Speaker 3: We also noted the pandemics lingering impact on individual and group tickets, which are a minority of overall ticket sales.

We also noted the pandemics lingering impact on individual and group tickets, which are a minority of overall ticket sales.

Throughout much of the second quarter, we were steadily closing the gap in individual and group sales relative to pre COVID-19 levels.

Speaker 3: Throughout much of the second quarter, we were steadily closing the gap in individual and group sales relative to pre-COVID levels.

Speaker 3: Then, towards the end of December , the Omicron variant slowed some of this positive momentum and also caused a small dip in attendance, but signs are pointing in the

Then towards the end of December beyond Mcgraw Con variant slowed some of this positive momentum.

And also caused a small dip in attendance.

Signs are pointing in the right direction again.

Speaker 3: as the impact on sales has leveled off and the percentage of ticket holders attending games is already approaching pre-Omicron levels.

As the impact on sales has leveled off and the percentage of ticket holders attending games is already approaching pre omicron levels.

Speaker 3: For those of you who have attended a Knicks or Rangers game this season, you have seen firsthand the garden is rocking, which is a testament to how tremendous our fans have been.

For those of you who have attended the Knicks Rangers game. This season, you have seen firsthand. The garden is walking which is a testament to how tremendous our fans have been.

Speaker 3: Their engagement has also translated into strong spending levels inside the arena. In the second quarter, we saw double digit percentage increases in F&B and merchandise per caps compared to pre-pandemic levels.

Their engagement has also translated into strong spending levels inside the arena and.

In the second quarter, we saw double digit percentage increases in F&B and merchandise per caps compared to pre pandemic levels.

Speaker 3: And as of early December , Nick's Jersey sales at the Garden had already exceeded sales for each of the entire 18-19 and 19-20 seasons.

And as of early December next Jersey sales at the Garden had already exceeded sales for each of the entire 18 19 and 1920 seasons.

Speaker 3: We're also seeing that enthusiasm extend to corporate hospitality.

We're also seeing that enthusiasm extend to corporate hospitality.

Speaker 3: During the quarter, average usage of suites for Knicks and Rangers games steadily improved, essentially returning to full occupancy.

During the quarter average usage of suites for Knicks and Rangers games steadily improved.

Essentially returning to full occupancy.

Speaker 3: And while it took a temporary step back at the end of the quarter due to Omicron, average usage levels have been trending back up again over the past several weeks.

And while it took a temporary step back at the end of the quarter due to omicron average usage levels have been trending back up again over the past several weeks.

Speaker 3: In terms of marketing partnerships, our deal momentum has continued. As you know, in November , we announced our first partnership in the mobile sports gaming space with BetMGM.

In terms of marketing partnerships, our guild momentum has continued.

No in November .

We announced our first partnership in the mobile sports gaming space with bet MGM.

Speaker 3: which was followed soon after by a partnership with Caesar Sportsbook.

Which was followed soon after by a partnership with Caesars Sports book.

Speaker 3: Both agreements are expansive multi-year deals done in partnership with MSG Entertainment that span the breadth of our combined portfolio and include deep integration with the NICs and Rangers.

Both agreements are expensive multiyear deals done in partnership with MSG entertainment that span the breadth of our combined portfolio and include deep integration with the Knicks and Rangers.

Speaker 3: With mobile sports gaming now live in New York State, our partners have hit the ground running and are already seeing the value we provide in helping to drive their business.

With with mobile sports gaming now live in New York State Our partners have hit the ground running and are already seeing the value we provide in helping to drive their business and.

Speaker 3: and we anticipate further opportunities to increase our exposure to the sector. But mobile sports gaming isn't the only...

And we anticipate further opportunities to increase our exposure to the sector.

But mobile sports gaming isn't the only growth category.

Speaker 3: We also recently completed multi-year deals with two companies in the blockchain space, Coinbase and Socios, and are actively pursuing new opportunities in other categories.

We also recently completed multi year deals with two companies in blockchain space.

Basin Associates and are actively pursuing new opportunities in other categories.

Speaker 3: The league's ongoing commitment to introduce new inventory also provides additional potential upside for our marketing partnerships.

The <unk> ongoing commitment to introduce new inventory also provides additional potential upside for our marketing partnerships.

Speaker 3: For instance, the NBA recently announced the expansion of its jersey patch program to now include player warm-up shirts and jackets.

For instance, the NBA recently announced the expansion of its Jersey patch program to now include player warmup shirts and jackets.

Speaker 3: This is on top of the in-game jersey patch, which was introduced in 2017 and has only continued to increase in value as demonstrated by several recent deals across the league in comparable cities.

This is on top of the in game Jersey patch, which was introduced in 2017 and has only continued to increase in value as demonstrated by several recent deals across the league in comparable cities.

Speaker 3: In addition, as you know, the NHL previously announced the introduction of a jersey patch beginning next season, which we also believe will generate significant interest from potential partners.

In addition, as you know the NHL previously announced the introduction of a Jersey patch beginning next season, which we also believe will generate significant interest from potential partners.

Speaker 3: Before I turn things over to Victoria, I'd like to briefly touch on something we've spoken about in the past. And that's the substantial underlying value of our two iconic franchises, the NYX and the Rangers. Since we last spoke, there have been additional transactions which demonstrate the continued demand that exists for professional sports teams.

Before I turn things over to Victoria I'd like to briefly touch on something we've spoken about in the past.

And thats the substantial underlying value of our two iconic franchises the Knicks and Rangers.

Since we last spoke there have been additional transactions, which demonstrate the continued demand that exists for professional sports teams.

Speaker 3: They include a private equity firm reportedly increasing its illiquid minority investment in the Golden State Warriors at a valuation of above $5 billion.

<unk>, a private equity firm reportedly increasing its illiquid minority investment in the Golden State Warriors at evaluation of above $5 billion and.

Speaker 3: and the majority stake sale of the Pittsburgh Penguins at a reported valuation of approximately $900 million.

And the majority stake sale of the Pittsburgh Penguins had reported valuation of approximately $900 million.

Speaker 3: Closer to home, in December , Sportico published a ranking of NBA team valuations, with the Knicks leading the league at $6.1 billion, according to their list.

Closer to home in December support of co published a ranking of NBA team valuations with the Knicks, leading the league at $6 $1 billion. According to their list.

Speaker 3: That same month, Forbes updated its NHL team valuations, with the Rangers retaining the top spot, while also becoming the publication's first NHL franchise valued at $2 billion.

That same month Forbes update its NHL team valuations with the Rangers retaining the top spot while also becoming the publications first NHL franchise valued at $2 billion.

Speaker 3: As we pointed out in the past, these estimated team valuations continue to significantly exceed our current enterprise value, further highlighting the untapped value of these assets.

As we pointed out in the past these estimated team valuations continue to significantly exceed our current enterprise value further highlighting the untapped value of these assets.

Speaker 3: In closing, with more than half of the fiscal 2022 already behind us, we are proud of how our business is performing and, based on our current trajectory, our revenues for this year are on pace to exceed our pro forma results from our last full pre-pandemic season.

In closing.

With more than half of the fiscal 2022 already behind US we are proud of how our business is performing.

And based on our current trajectory our revenues for this year are on pace to exceed our pro forma results from our last full pre pandemic season.

Speaker 3: On the heels of this momentum, we see a bright future for our company with substantial opportunities for growth.

On the heels of this momentum we see a bright future for our company with substantial opportunities for growth.

Speaker 3: Our sponsorship business has come roaring back as partners re-engage with our assets and brands.

Our sponsorship business has come Roaring back as partners Reengage with our assets and brands.

Speaker 3: And with additional categories to target and valuable new inventory being introduced, we see a real opportunity to take this business to record levels in the future.

And with additional categories to target and valuable new inventory being introduced we see a real opportunity to take this business to record levels in the future.

Speaker 3: On the media side, our local and national rights fees provide steady contractual growth, and we have started to benefit from the NHL's new U.S. media deals.

On the media side, our local and National rights fees provides steady contractual growth.

And we are starting to benefit from the Nhl's, New U S media deals.

Speaker 3: And there's even further upside potential when the NBA's national rights come up for renewal in a few years.

And there's even further upside potential when the Nba's national rights come up for renewal in a few years.

Speaker 3: We also will look to commercialize new digital opportunities as we pursue fresh and innovative ways to engage with our fans, including NFTs, where we have already made inroads with several Nix and Rangers products.

We also will look to commercialize new digital opportunities as we pursue fresh and innovative ways to engage with our fans, including <unk>, where we have already made inroads with several knicks and Rangers products.

Speaker 3: And of course, as our teams improve their on-court and on-ice performance, nearly every aspect of our business could see revenue acceleration.

Of course, as our teams improve their on court and on ice performance nearly every aspect of our business could see revenue acceleration so.

Speaker 3: So we are excited about the path ahead for our business and remain confident in our ability to generate long-term value for our shareholders. With that, I'll now turn the call over to Victoria. Thank you, Andy.

So we are excited about the path ahead for our business and remain confident in our ability to generate long term value for our shareholders with that I'll now turn the call over to Victoria.

Thank you Andy and good morning, everyone.

Speaker 4: I would like to start by reviewing our fiscal 2022 second quarter financial performance and then provide an update on our balance sheet, including our recent debt refinancing.

I would like to start by reviewing our fiscal 2022 second quarter financial performance and then provide an update on our balance sheet, including our recent debt refinancing.

Speaker 4: Results for the fiscal second quarter reflect preseason play as well as the start of the 21-22 regular seasons for the Knicks and Rangers.

Results for the fiscal second quarter reflect preseason play as well as the start of the 'twenty one 'twenty two regular seasons for the Knicks and Rangers.

Speaker 4: I'd remind you that the fiscal 2021 2nd quarter reflected the impact of the COVID-19 pandemic, including delayed starts to the 2021 seasons and fan attendance restrictions at the Garden, which affect the year over year, comparability of results.

I'd remind you that the fiscal 2021 second quarter reflected the impact of the COVID-19 pandemic, including delayed start to the 2021 season.

Fan attendance restrictions at the garden, which affect the year over year comparability of results.

Speaker 4: In the prior period, the Knicks played four home games without fans while the Rangers played none. This compares to 35 total pre and regular season home games without capacity restrictions in the current year period.

In the prior period, the Knicks played for home games without fans, while the Rangers play.

This compares to 35 total pre and regular season home games without capacity restrictions in the current year period.

Speaker 4: As a result, total revenues for the quarter were $289.6 million as compared to $28.8 million in the prior year period, with significant increases in every major revenue loss.

As a result total revenues for the quarter with $289 6 million as compared to $28 8 million in the prior year period with significant increases in every major revenue line.

Speaker 4: In particular, national and local media rights fees represented 112.3 million dollars of revenue this quarter, which reflects the return to normal levels of local media rights fees, anticipating full seasons for both teams, contractual escalators on the NBA's national media deals, as well as the impact of the NHL's new U.S. media rights deals, which began this

In particular national and local media rights fees represented $112 $3 million of revenue this quarter.

Which reflects a return to normal levels of local media rights fees anticipating full seasons for both teams contractual escalators on the NBA National media deal as well as the impact of the NHL New U S media rights deals, which began this season.

Speaker 4: For the balance of our revenue, the majority was ticket related, which was in line with pre-pandemic levels on a per game basis.

So the balance of our revenue. The majority was ticket related which was in line with pre pandemic levels on a per game basis as.

Speaker 4: as well as suites and sponsorships, which, as Andy mentioned earlier, are above pre-pandemic levels.

As well as suites and sponsorship, which as Andy mentioned earlier are above pre pandemic levels. This.

Speaker 4: This quarter's sponsorship results also reflect our new partnerships in sports betting, a category which we expect to be a significant contributor for the rest of the fiscal year with additional growth as we look ahead to fiscal 2023. Adjusted operating income increased $74.7 million to $55.7 million as compared to the prior year period.

This quarter's sponsorship results also reflect our new partnerships and sports betting a category, which we expect to be a significant contributor for the rest of the fiscal year with additional growth as we look ahead to fiscal 2023 <unk>.

Adjusted operating income increased $74 7 million to $55 7 million as compared to the prior year period. This improvement was due to the increase in revenues, partially offset by an increase in direct operating expenses and to a lesser extent higher SG&A expenses.

Speaker 4: This improvement was due to the increase in revenues partially offset by an increase in direct operating expenses and to a lesser extent higher SG&A expenses.

Speaker 4: The increase in direct operating expenses mainly reflects the impact of the COVID-19 pandemic in the prior year quarter, including the delayed starts to the 2021 NBA and NHL season.

The increase in direct operating expenses, mainly reflects the impact of the COVID-19 pandemic in the prior year quarter, including the delayed start to the 2021 NBA and NHL seasons. This.

Speaker 4: This included increases in team personnel compensation, other team operating expenses, and arena licenses.

This included increases in team personnel compensation and other team operating expenses and arena license fees.

Speaker 4: The increase in SG&A expenses was primarily due to higher marketing costs as well as fees related to the company's sponsorship representation agreements and services agreement with MSG Entertainment.

The increase in SG&A expenses was primarily due to higher marketing costs as well as fees related to the companys sponsorship representation agreements and services agreement with MSG Entertainment.

Now turning to our balance sheet.

Speaker 4: In December , we enhanced our financial flexibility by refinancing the Knicks and Rangers Senior Secured Revolving Credit Facilities at lower interest rates.

In December we enhanced our financial flexibility by refinancing the Knicks and Rangers senior secured revolving credit facilities at lower interest rates.

Speaker 4: Both facilities, which were previously set to mature in November 2023, were extended for another three years to December 2026.

Both facilities, which were previously set to mature in November 2023 were extended for another three years to December 2026.

Speaker 4: Additionally, the next $75 million unsecured revolving credit facility, which was also set to mature in November 2023, was extinguished.

Additionally, the next $75 million unsecured revolving credit facility, which was also set to mature in November 2023 was extinguished.

Speaker 4: This refinancing demonstrates both the quality of our assets and the confidence in the long-term outlook for both our teams and leads.

This refinancing demonstrates both the quality of our assets and the confidence in the long term outlook for both our teams and leagues.

Speaker 4: At the end of the quarter, we had $360 million of total debt outstanding comprised of $330 million under the Knicks and Rangers senior secured revolving credit facilities and $30 million advanced from the NHL.

At the end of the quarter, we had $360 million of total debt outstanding comprised of $330 million under the Knicks and Rangers senior secured revolving credit facilities and $30 million advanced from the NHL.

Speaker 4: This debt balance reflects a $25 million repayment on the Ranger's senior secured revolving credit facility during the period.

This debt balance reflects the $25 million repayment on the range of senior secured revolving credit facility during the period.

Turning to our liquidity as of December 31, we had $249 $8 million of liquidity comprised of 50.

Speaker 4: Turning to our liquidity, as of December 31st, we had 249.8 million dollars of liquidity comprised of 54.8 million dollars of unrestricted cash and cash equivalents.

<unk> $54 $8 million of unrestricted cash and cash equivalents.

Speaker 4: and $195 million in borrowing capacity under the Teams Revolving Credit Facility.

And $195 million in borrowing capacity under the team's revolving credit facility.

Speaker 4: Our quarter-end cash balance of $54.8 million represented a net increase of $21.2 million compared to our September 30th balance of $33.6 million.

Our quarter end cash balance of $54 8 million represented a net increase of $21 2 million compared to our September 30th balance of $33 $6 million.

Speaker 4: I would also add that this week, we paid down an additional 25Million dollars on the Rangers revolver from cash on hand and cash flow from operations, which reflects our confidence in the trajectory of our business.

I would also add that this week, we paid down an additional $25 million on the Rangers revolver from cash on hand, and cash flow from operations, which reflects our confidence in the trajectory of our business and given the momentum we're seeing for the remainder of fiscal 2022 and beyond.

Speaker 4: given the momentum we're seeing for the remainder of fiscal 2022 and beyond. With that, I will now turn the...

With that I will now turn the call back over to Ari.

Speaker 2: Thank you, Victoria. Operator, we'd now like to open the call for questions.

Thank you Victoria, operator, we'd now like to open the call for questions.

Speaker 1: Thank you. If you would like to ask a question, please press star then the number one on your telephone keypad. Again, that is star one. Your first question comes from the line of David Kornowski with JP Morgan.

Thank you if you would like to ask a question. Please press Star then the number one on your telephone keypad again that is star one.

First question comes from the line of David Karnofsky with J P. Morgan.

Speaker 5: All right. Thank you for the question. Andy, as we look at your share price since you last reported in November , it's underperformed against some of those positive catalysts you mentioned, like the Forbes value or the Penguin sale. So, I mean, when you see this disconnect, what are some tools that you have, either capital allocation or otherwise, that are in your control and could potentially help narrow that gap to asset value?

Alright. Thank you for the question Andy as we look at your share price. Since you last reported in November underperformed against some of those positive catalyst you mentioned like the <unk> value of the Penguin sale. So I mean, when you see this disconnect what are some tools that you have either a capital allocation or otherwise that are in your control and potentially.

Potentially help narrow that.

GAAP the asset value.

Speaker 3: Thanks, David. So, before I turn over to Victoria, who will talk a little bit more about capital allocation, I think we should just take a step back. And as you mentioned, we agree, we think our stock price does not appropriately reflect the value of our assets.

Thanks, David.

So before I turn over Victoria, who will talk a little bit more about capital allocation.

I think we should just take a step back and as you mentioned.

We agree we think our stock price does not appropriately reflect the value of our assets.

Speaker 3: The pandemic has clearly been a difficult operating environment for every business, but especially difficult for live entertainment.

The pandemic has clearly been a difficult operating environment.

Environment for every business, but especially difficult for live entertainment.

Speaker 3: But I'm really proud of how quickly we've bounced back to pre-pandemic levels.

But I'm really proud of how quickly we've bounced back to pre pandemic levels.

<unk>.

Speaker 3: But as we saw with Omicron, it came very quickly, and we do think we're mostly through, if not totally through it. We don't know what's going to come around the corner next, so we do need to maintain our financial flexibility to handle it. But I do feel really good about the business. Our sponsorship business has come back and is already at record levels, and we believe we can continue to drive it to further levels in the future.

But as we saw with omicron. It came very quickly and we do think we're mostly through if not totally through it.

We don't know what is going to come around the corner next so we do need to maintain our financial flexibility to to handle it so.

But I do feel really good about the business our sponsorship business has come back.

They're already at record levels, and we believe we can continue to drive it to further levels in the future.

Speaker 3: Our media rights fees continue to grow, and we think there's future upsides in renewals.

Our media right fees continue to grow and we think there's future upsides in upside in renewals.

Speaker 3: And as the team performance accelerates, both on ice and on court, we think there's other ways to grow across every area of business. So as our operating business continues to perform, we think that our shareholders will come along with that as well. But to your point, there is capital allocation decisions in Victoria.

And as the team performance accelerates both on ice and Encore. We think there is other ways to grow across every area of our business. So as our operating business continues to grow.

Perform we think that our shareholders will come along with that as well, but to your point there is capital allocation decisions and inventory.

Speaker 4: Sure, good morning David. In terms of capital allocation, you'll recall that we spoke in the last few...

Yes, sure good morning, David.

In terms of capital allocation and Youll recall that we spoke in the last few quarters about how paying down debt is our near term focus.

Speaker 4: about how paying down debt is our near-return focus. And that's what we've been doing, reducing our revolver borrowings. We spoke about $25 million on the Rangers facility in the quarter, as well as an additional $25 million that we've paid down just this week.

And that's what we've been doing reducing our revolver capacity borrowings.

We spoke about.

$25 million on the range of its facility in the quarter as well as an additional $25 million that we've paid down just this week.

Speaker 4: And as part of our recent refinancing, we lowered our borrowing costs, we freed up some restricted cash, we extended our maturities, and we also extinguished the NIC $75 million unsecured revolver, which reflects the increasing strength of our liquidity position.

And as part of our recent refinancing, which lowered our borrowing cost we freed up some restricted cash we extended our maturities and we also extinguished the next $75 million unsecured revolver, which reflects the increasing strength of our liquidity position.

Speaker 4: Now, and while Omicron is a reminder that we need to be prudent and maintain flexibility until the pandemic meaningfully recedes. Now, as Andy said, we feel really good about the trajectory of our business. And over time, we'll evaluate all options for utilizing our pre-cash flow.

Yes.

<unk> is a reminder, that we need to be prudent and maintain flexibility until the pandemic meaningfully receipts as Andy said, we feel really good about the trajectory of our business and over time, we'll evaluate all options for utilizing our free cash flow.

Speaker 5: OK, and then I know this is a way ways off and we did mention renewals. You know the NHL is heading into the latter part of a 12 year deal with Rogers in Canada and you would appreciate any high level thoughts you have on the landscape for rights in that market. You know, and whether you think the lead could similarly be positioned for an increase like they realized in the US. Thank you.

Okay.

I know this is a way with off and if you did mentioned renewals the.

The NHL is heading into the latter part of a 12 year deal with Rogers in Canada and would appreciate any high level thoughts you have on the landscape for Reits in that market and whether you think the league.

Similarly be positioned for an increase like they realized in the U S. Thank you.

Speaker 3: Pleasure, David. So we said it, I'll say it again. I love being a rights holder, a premium media rights holder. I think there is sports is the most premium of media assets, and we think that there's always going to be a demand for it.

Pleasure.

So we said it I'll say it again I love being a rights holder of premium media rights holder I think there is sports.

This is the most premium of media assets and we think that there is always going to be a demand for it obviously.

Speaker 5: Obviously, in Canada, the NHL is the most premium of sports assets and has done very well in that market for a long time. I look forward to what the NHL and the league office is going to be able to do when the rights expire. Now, this is a few years out. I think it's 25, 26 before it expires, so it's a little out. I think that owning such premium rights in a premium market will deliver value for us. Thank you.

Obviously in Canada. The NHL is the most premium of sports assets and have done very well in that market for a long time.

And I look forward to what the NHL and the league office is going to be able to do in the rights expire and now. This is a few years I think it's 'twenty five 'twenty six before it expires so its a little out but I think that.

Owning owning such premium rights and a premium market will will deliver value for us.

Thank you.

Thanks, David Operator, we'll take the next question.

Okay.

Speaker 1: Your next question is from Brandon Ross with Light Shed Partners.

Your next question is from Brandon Ross with light shed partners.

Speaker 6: Hey, Andy, you mentioned additional sports betting opportunities to come in the prepared remarks beyond the MGM and Caesars deals that you announced. I was wondering if you could size that opportunity for us, even if it's relative to the deals that you already signed and tell us maybe what inventory is still available to be sold.

Hey, Andy you.

You mentioned additional sports betting opportunities to come in the prepared remarks beyond the MGM Caesars deals that you announced.

Wondering if you could size that opportunity for us even if it's relative to the deals that you already signed and tell us maybe what inventory is still available before.

Speaker 3: So thanks Brandon. I always want to start when I talk about sports betting in the beginning. I've been saying this for a long time and I believe it. Sports betting is fabulous for fan engagement and we're going to see this across many aspects of our business. So part of the sponsorship revenue that we're generating from it, this is great for us. Now let's turn to the sponsorship. So in New York we've all seen the launch. It's been

Thanks Brendan.

Sure.

I always wanted to start when I talk about sports betting in the beginning.

Been saying this for a long time and I believe that sports betting is fabulous for fan engagement and we're going to see this across many aspects of our business. So.

Parts of the sponsorship revenue that we're generating from that this is great for us.

Now, let's turn to the sponsorship so.

In New York, we've all seen the launch it's been.

Speaker 3: been massive here. I think it's the largest launch of any market that has gone into.

The massive here.

Largest launch of any any market anyway.

That has gone into.

Speaker 3: And that's in one of the most restrictive legal systems, frameworks around sports betting, with the highest tax rate. So what does that tell me? There is upside here.

And Thats one of the most restrictive legal systems frameworks around sports betting with the highest tax rate. So what does that tell me there is upside here.

Speaker 3: We've hit the ground running, that MGM and Caesars have been great partners and are very excited about what we've been able to do with them.

We've hit the ground running that MGM Caesars have been great partners.

And are very excited about what we've been able to do with their business now what we've seen is there is a number of they love to reach our fans right and so how do we reach our fans best and I think this is the way we think about any partnership wed.

Speaker 3: Now, what we've seen is there's a number of...they love to reach our fans, right? And so, how do we reach our fans best? And I think this is the way we think about any partnership.

Speaker 3: We like to keep it premium. We're going to keep it limited. So we have two partners now, both partners and anyone else we'd ever talked to or we've been talking to are very focused on how do we reach our fans that through on ice, on court signage, digital assets.

We'd like to keep it premium we're going to keep it limited. So we have two partners now.

Both partners and anyone else, who would ever talk to or we've been talking to.

Very focused on how do we reach our films that through an ice on court signage.

Digital assets virtual through our social platforms official team designations hospitality has been a very big part of it.

Speaker 3: virtual, through our social platforms, official team designations, hospitality has been a very big part of it, being the fifth space for their online gaming players.

The fixed base for their online gaming.

Players.

Speaker 3: And our database of our fans, so while we're not going to be open up to every partner, we do think there is space to potentially add another at the right time. Who is going to be, who has the same vision for us and how we believe that we should drive this business.

And our database of our films so while we're not going to be open up to every partner. We do think there is space to potentially add another at the right time.

Who is going to be who has the same vision for us on how we believe we should drive this business.

Speaker 6: Great, and then beyond sports betting or their new categories of sponsorship, we should be thinking about or areas that are under penetrated where there could be some larger opportunities to really grow sponsorship from here.

Great and then beyond sports betting or their new categories of sponsorship, we should be thinking about or areas that are underpenetrated.

Where there could be some larger opportunities.

Really.

Gross sponsorship from here.

Speaker 3: Sure, so I think we should start from.

Sure so.

I think we should start from.

Speaker 3: As we come out of the pandemic, one of the things I really would like to applaud the league is really working with the teams to find new inventory, new types of inventory to deliver so that we're able to find partners. And I can't downplay the significance of premium inventory. Whenever we're able to offer something like a jersey patch.

Where it's been as we come out of the pandemic one of the things I really would like to applaud. The league is really working with the teams to find new inventory and new types of inventory to deliver so that we're able to find partners and I can't downplay the significance of premium inventory whenever you whenever we're able to offer something like a <unk>.

Z patch.

Speaker 3: We're able to not only drive the revenue from the patch, but from a whole holistic partnership and what we found specifically when the NBA launches patch is a whole host of new partners came into the space that didn't exist and didn't spend here in New York Square space has been an amazing partner. Anthony is a great leader and they've been a great partner of ours and we expect to continue to grow our relationship.

We're able to not only drive the revenue from the patch, but from a whole holistic partnership and what we've found specifically when the NBA launches patch is a whole host of new partners came into the space that didn't exist and didn't spend here in New York on square space has been an amazing partner Anthony is a great leader and they've been a great partner of ours and we.

To continue to grow our relationship.

Speaker 3: The NHL is opening up jersey packs, just recently opened up the helmet packs. The NBA is opening up additional ways to use the patch on warm-up gear. So, every time...

The NHL is opening up Jersey packages recently opened up the helmet patch. The NBA is opening up additional ways to use the patch on warm gear.

So every time every time when those type of categories. Those type of inventory open were able to drive and grow new categories don't let me.

Speaker 3: Every time when those type of categories, those type of inventory open, we're able to drive and grow new categories.

Speaker 3: Don't let me misunderstand, don't let me misguide you here, though. There are categories that we need to continue to drive and grow here. Where I think health insurance, fitness, home improvement, these are all categories that have upside for us. And if you would have asked me two or three years ago about...

Misunderstand don't let me Misguide, you hear though there are categories that we need to continue to drive and grow here.

I think health insurance fitness home improvement. These are all categories that have upside for us.

And if you would've asked me two or three years ago about the whole blockchain space.

Speaker 3: the whole blockchain space that it's amazing how fast that changed. And we already have two great partners in this space.

It's amazing how fast that changed and we already have two great partners in this space and we expect to add blockchain continues develop there'll be new opportunities. There. So we feel really good about continuing to build that drive our sponsorship business Theres a lot to do here, we have great assets and we are in the greatest city. So thanks.

Speaker 3: And we expect as blockchain continues to develop, there'll be new opportunities there. So we feel really good about continuing to be able to drive our sponsorship business. There's a lot to do here. We have great assets and we're in the greatest city. So thanks.

Thank you.

Speaker 1: Your next question is from Curry Baker with Guggenheim Security.

Your next question is from Curry Baker with Guggenheim Securities.

Speaker 3: Hey, good morning. Thanks for the question. Andy, higher level, can you help us think about the financial impact of making it to the playoffs? How should we think about home playoff games translating into incremental AOI as well as long-term value creation? And last part is, is there any difference to consider between a Knicks versus Rangers playoff game?

Hey, good morning, Thanks for the question.

Andy higher level can you help us think about the financial impact of making it to the play offs how.

How should we think about home playoff games translating into incremental AOI as well as long term value creation and last part is there any difference to consider between a knicks versus Rangers playoff game.

<unk>.

Speaker 3: Sir, thank you for so let me start we would be thrilled.

Thank you Kurt.

So let me start we would be thrilled.

Speaker 3: Team both teams either team for a playoff run. It's a great experience for fans. It's a great experience. It's great for New York City. And I think the fans have really been embraced both teams so far this year.

Both teams either team for a playoff run its a great experience for our fans, it's a great experience.

For New York City.

And I think the fans have really been embraced both teams so far this year.

Speaker 3: A playoff run is different than a regular season, so when you take apart what does it mean to be, you know, what drives our business, right? The two biggest cost components of our business are already paid for and fixed. That's player salaries and our arena lease. So that's fixed and there's no incremental cost for that. So largely...

Ah playoff run is different than our regular season. So when you take apart what does it mean to be what drives our business right. The two biggest cost components of our business already paid for and fix that's player salaries in our arena.

So that's fixed and there is no incremental cost for that so largely the incremental revenue.

Speaker 3: the incremental revenue that comes from a playoff drops to the bottom line. When I say largely, there are incremental gate taxes, there's revenue sharing, there's some bonuses we have to pay, but the lion's share of it drops down. Now, let me take that back even further.

That comes from a playoff drops to the bottom line when I say largely there are incremental gate taxes. There is revenue sharing in some bonuses, we have to pay but but the lion's share of it drops down now let me take that back even further when you think about premium events premium games, so such as when the Lakers came here versus the next or.

Speaker 3: When you think about premium events, premium games, such as when the Lakers came here versus the Knicks or Henrik's retirement night, we're able to drive significantly premium revenues for those types of games. And I'd expect the playoffs we'd see similar types of revenues.

Henrik retirement, we're able to drive significantly premium revenues for those types of games and I would expect the playoffs, we'd see similar types of revenues and as if we are so lucky to have multiple rounds. Each round will drive further revenue. So long run would be very very beneficial for our business for this for now.

Speaker 3: And as if we were so lucky to have multiple rounds, each round would drive further revenue. So a long run would be very, you know, very beneficial for our business for this for now. But we should even park that for one sec because current revenues are only one part of it. Well, when we have a long run or even a run, it has knock-on effects for multiple years. It helps drive ticket renewals. It helps drive pricing. It helps us drive renewals for sponsorships, suites.

But we should even parks that for one second because current revenues are only one part of it well when we have a long run or even a run at it.

It has knock on effects for multiple years. It helps drive ticket renewals. It helps drive pricing helps us drive renewals for sponsorship suites.

Speaker 3: And in the long term, it'll even affect media rights. So every time we have long playoff runs and we feel good about the youth of our teams and where they're going, we think that there's ability to drive our business and continue to drive the business.

Long term it will even effect media right. So every time, we have long playoff runs and we feel good about the use of our teams and where they're going we think that there's ability to drive our business to continue to drive the business.

Thanks for the answers I appreciate it.

Your next question is from Paul <unk> with Macquarie capital.

Speaker 1: Your next question is from Paul Golding with Macquarie.

Speaker 7: Thanks so much. Andy, I was wondering if you could help us understand the potential revenue opportunity or relationship opportunity from the NFT partnerships and how you see that evolving. I think we've we've seen peers like, you know, at Crypto.com Arena take time to invest in NFTs for those franchises. So I just wanted to get a view on that and then a quick follow up. Thanks.

Thanks, so much.

Andy I was wondering if you could.

Help us understand the potential revenue opportunity or relationship opportunity from the ft partnerships and how you see that evolving I think we've seen.

The peers like.

At Crypto Dot Com arena.

Take time to invest in Ftes for those franchises. So I just wanted to get a view on that and then a quick follow up thanks.

Sure. Thanks, Paul.

Speaker 8: So NFTs, like.

So NFC is like.

Speaker 3: other collectibles, because NFTs in effect is a digital collectible, do fall under, there are certain rights the teams have and there are certain rights the leagues have. And so together, that makes up the whole ecosystem. So I actually think about NFTs a little bit at a step up. And I like the example you had of Crypto.com Arena, right? So we've got two great partners already that we brought in, Socios and Coinbase.

Other collectibles, whose entities and effects of the digital collectible do fall under <unk>.

Certain rights the teams have in a certain rights to lease and so together that makes it the whole ecosystem. So I actually think about NFC is a little bit.

A step up and I'd like the example, you had of crypto and.

Dot Com arena right. So we've got two great partners already that we brought in <unk> and coinbase.

Speaker 3: We think there are other ways to play in the space as well, especially as blockchain continues to grow, but

We think there are other ways to play in this space as well, especially as blockchain and continues to grow but going back to entities. We do have certain rights. The next launch the limited NFC.

Speaker 3: release at the end of last season and over the summer. We recently launched Henrik NFT around his retirement night. What's great, not only the revenue that that generates, but also just the fan engagement and the continued fan engagement and the ability to speak with our fans and hear and watch what they do with the NFTs. And so there's a lot of benefits here, both as blockchain changes, as the leagues who have done an amazing job, especially the NBA and NHL with Dapper Labs and Topshop. Like there's a lot of revenue that they're being generated.

Release over at the end of last season over and over the summer.

Recently launched Henrik and if key around around his retirement night.

Great not only the revenue that generates but also just the fan engagement and to continue fan engagement and ability to speak with our fans and hear and watch where they do with us with the <unk> and so there's lots of benefits here, both as blockchain changes as the leagues who've done amazing job, especially the NBA and NHL to adopt.

Speaker 3: The NBA and NHL with Dapper Labs and Topshop, like there's a lot of revenue that they're being generated that flows through as a collective revenue. And so we think this is a growing business and there's many ways for us.

<unk> labs in Topshop like Theres, a lot of revenue that they are being generated that flows through as a collective revenue and so we think there is a growing business in many ways for us to play out.

Great and does that come through on the sponsorship side or do we see that just in Reits, just a different kind of right. How should we think about that hitting the P&L.

Speaker 7: Great, and does that come through on the sponsorship side or do we see that just in rights, just a different kind of right? How should we think about that hitting the P&L?

Speaker 3: So there'll be some, when we release the NFT sale, you'll see something and hit our merchandise. So far, the two partnerships we have are much more in the sponsorship and hospitality side of the world, which is generally the way we think about our partners, right? There is a component of viewership of signage and data, retail fans, there's always a hospitality. So we think there's ways to continue to drive this business.

So there'll be some.

Really it's been a T cell youll see something and hit our merchandise.

So far the two partnerships we have are much more in the sponsorship.

In hospitality side of the World, which is generally the way we think about our partners, but there is a component of viewers of of signage and data rich our fans, there's always a hospitality so.

We think there's ways to continue to drive this business.

Speaker 7: Great, thanks. And just a quick housekeeping one in terms of the MGM and Caesars partnerships, you've been live, the state's been live for a few weeks now. Should we think about the cadence as being proportional in terms of, you know,

Great. Thanks, and just a quick housekeeping one in terms of the bet MGM and Caesars partnerships have you been live.

The state has been live for a few weeks now.

Should we think about the cadence is being proportional in terms of.

What we could see going forward as in terms of late late stage in F. <unk> and now you have more runway and it should be proportional revenue represented or do you see acceleration.

Speaker 7: what we could see going forward in terms of late stage in F2Q, and now you have more runway and it should be proportional revenue represented, or do you see acceleration now that you're sort of more underway? How should we think about the cadence of layering that in?

Now that youre sort of more underway, how should we think about the cadence of layering that in.

Speaker 3: So, let me just add one thing and then Victoria might jump in after me, but remember when we did, we did announce our deal to complete the deal. Caesars was in early November that MGM was in to late November . So there's only going to be a piece of that in this year. Of course, as the time goes on, and most of our partnerships, we see step ups in the year. This was a partial year.

So let me just add one thing and then Victoria. Thank jamba in the afternoon, but remember when we did we did announce our deals are complete the deals Caesars was in early November that MGM was in late November . So there is only going to be a piece of that in this year.

Of course as the.

Time goes on and most of our partnerships, we see step ups in the year. This was a partial year.

Speaker 4: Anything? Andy, I think you covered it perfectly right. We have a limited amount recorded in this quarter. We'll expect, you know, increases as we're performing, you know, through a full quarter period and then into the future.

And anything.

Andy I think you covered it perfectly right we have a limited amount recorded in this quarter, we will expect increases as we're performing.

Full quarter period, and then into the future.

Speaker 3: And I'll add, I do think there's room to continue to grow this category. And if we were, and I mentioned as well, you know, we do have the most, one of the most restrictive gaming laws here in New York State. There's been discussion of kiosks, there's been discussion of other changes that could drive that change in the law, changes in tax code. Those things will impact our business, but we do feel very good at where we are right now. And we do think there's further upside. Thanks so much.

Evident.

I do think there is room to continue to grow this category.

And if we were and I mentioned as well we do have the most one of the most restrictive gaming laws here in New York State. There's been discussion of kiosks, there's been discussion of other changes that could drive that change in the law changes in tax code those things will impact our business.

But we do feel very good of where we are right now and we do think there is further upside.

Thanks, so much.

Your next question is from David Joyce with Barclays.

Speaker 6: Thank you. A couple of questions, please. First, in thinking about the sustainability of the per cap spending growth, you've obviously mentioned some new areas like NFTs, maybe that's lumped into the merchandising side, but what else do you think you can do on food and beverage and merch to help sustain this growth and maybe even expand it some more? What's the strategy there and what's your outlook on

Thank you a couple of questions. Please first thinking about the sustainability of the per cap spending growth.

You've obviously mentioned some some new areas like <unk>, maybe that's lumped into the merchandising side.

What else do you think you can do on food and beverage and merch.

To help sustain this growth or maybe even expanded similar.

The strategy, there and whats your outlook on the sustainability versus.

Speaker 9: versus this pent-up demand of people coming out of COVID. And then secondly, on sports betting in that area,

This pent up demand of people coming out of Covid.

And then secondly on sports betting.

In that area.

Could we think about.

Speaker 9: Could we think about a revenue stream related to the data for your IP that's supplied ultimately to the sports books? Meaning is that a part of your media rights already or is that some incremental upside from here? Thank you.

Our revenue stream.

Related to the data for your IP, that's supplied ultimately to the sports books.

Meaning is that part of your media rights already or is that some incremental upside from here. Thank you.

Speaker 3: My pleasure. Thank you. Let's start your first question on the sustainability of our per cap. So one thing we've seen not just here, but across the whole industry is as people have come back as they've come back to live entertainment for they've come back spending for things that they care about.

My pleasure. Thank you.

Sorry, your first question on the sustainability of our per cap. So one thing we've seen not just here, but across the whole industry is as people have come back.

And as they come back to live entertainment.

They've cut back spending for things that they care about that.

Speaker 3: That's definitely been a theme that we see and we believe our fans really care about our business. They're super passionate and they care. So what that does is it drives our business, drives our merchandise, our merchandise levels are above.

Definitely been a theme that we see and we believe our fans really care about our business they're super passionate.

And they care so what that does is it drives our business drives our merchandize, our merchandise levels or above we've already broken our pre pandemic full season.

Speaker 8: We've already broken our pre-pandemic full season merchandise from before the pandemic for a whole year.

Merchandize from before the pandemic for full year.

Speaker 8: The spending has continued for every game we've had so far, we've seen no step back on any game.

The spending has continued for every game we've had so far we haven't seen we've seen no step back on any game.

And.

Speaker 8: We believe that that's going to continue. But the real question is then how do we continue to grow it? So we've been focused on bringing in new, fresh ideas, new, fresh brands. For example, we have a great partnership with Kif.

We believe that that's going to continue but the real question is then how do we continue to grow it. So we've been focused on bringing in new fresh ideas new fresh brands. For example, we have a great partnership with kit, who designs one of our <unk> and <unk>.

Speaker 3: who designs one of our Knicks jerseys and will be releasing and releases a release around it. Brands like that help us drive our business, help us stay relevant, help us stay connected to our fans.

We will be releasing in releases of release around brands like that help us drive our business help us stay relevant helped us stay connected to our fans.

Speaker 3: And we've got numerous other ideas like that. We're always focused with how do we change and improve the customer experience here in the venue. Try to be innovative with.

Got numerous other ideas like that we're always focused with how do we change and improve the customer experience here in the venue.

Try to be innovative with how do people pay whereas the right place to put stand we're always changing locations, where people are able to pick up and buy goods. So.

Speaker 3: How do people pay? Where's the right place to put stands? We're always changing locations where people are able to pick up and buy goods. So you want to make, you know, we are very careful about not.

You want to make we are very careful about not.

Speaker 8: making ourselves over-commercial inside the venue, doing it at the right premium place, but we do it to drive fan experience because when we find fans have a great experience, they wanna spend, they wanna be with us, and they wanna be here.

Making ourself over commercial inside the venue being joining the right premium place, but we do it to drive fan experience because what we find fans have a great experience they want to spend they want to be with us and they want to be here.

Speaker 8: In terms of your second question on data IP, so I think I'm going to split it a little bit. I got to tweak it apart from what you're asking. I think part of all of our deals so far, we've talked about reaching our consumers and through many different sources, social, our database.

In terms of your second question on data IP. So I think I would split it a little bit I got to tweak that apart from what you're asking I think part of all of our deals so far we've talked about reaching our consumers.

Through many different sources, social our database, but I think what you're really talking about is statistics and IP around staff. So if thats part of the question.

Speaker 8: But I think what you're really talking about is statistics and IP around stats. So if that's part of the question, the official stat fees are league rights and are able to grant them as part of their league deals. We see the benefit of pickup of league IP as this business grows.

The official stats, either our league rights and are able to grant them as part of their lead deals. So we see the benefit of pickup of league IP.

As this business grows, but we do think that at a team level.

Speaker 2: But we do think that at a team level, integration in our media integration in the games, virtual signage are ways to continue to drive the category. Good great. Thank you very much. Thanks, David operator.

Integration in our media integration and the game's virtual signage are ways to continue to drive the category.

Okay, great. Thank you very much.

Thanks, David Operator, we have time for one last caller.

Your last question comes from David Katz with Jefferies.

Speaker 10: Hi, everyone. Thanks for taking my question. I did want to go back to the sports betting category.

Hi, everyone. Thanks for taking my question.

I did want to go back to the sports betting category.

Speaker 10: because it does seem as though there's quite a few tributaries of wage that the teams can earn off of it.

Because it does seem as though there's quite a few tributaries of wage.

<unk> can earn off of it.

Speaker 10: And I just wonder if you could, you know, help us sit down and pencil something that give us a number. But, you know, any tools you can provide us with.

I just wonder if you could.

Help us sits out in pencil something that can give us a number.

But any tools that you can provide us with.

Speaker 10: to sit down and perhaps assign some value. Because it is happening. It's happening in New York. And it's happening related to you.

Sit down and perhaps assign some value because it is happening it's happening in New York.

It's happening related to you.

Speaker 10: And I suppose it'd be helpful to me and maybe the group at large.

On.

I suppose it would be helpful to me and maybe the group at lunch.

Speaker 3: I need to think about how to respond exactly. I mean we don't share obviously the individual details of any partnerships. What I can tell you is that

And you can figure out how to respond exactly I mean, we don't share obviously, the individual details of any partnerships.

What I can tell you is.

Speaker 8: We think this is a very large category and a very large growing category, potential to be our largest category.

We think this is a very large category and a very large growing category.

Potential to be our largest category.

Speaker 8: And we might be there already. So it's a.

And we might be there already.

So.

<unk>.

Speaker 3: This is this is big and we think there's lots of ways to continue to grow it the way we break out the exact split between sponsorship and hospitality. That's a very, we don't believe, you know, when we, when we work with a partner to integrate a partnership and as we've talked about, we think it's about driving, helping drive their business, which enables us to drive our business and enables us to keep our partners for long periods of time. There's a reason why our partners come back and want to be with us because we don't view them as just sponsors.

This is this is big and we think there's lots of ways to continue to grow it.

The way, we break out the exact split between sponsorship and hospitality Thats a very weak.

We don't believe when we when we work with a partner it's an integrated partnership.

And as we've talked about we think it's about driving helping drive their business, which enables us to drive our business and enables us to keep our partners for long periods of time as a reason why our partners come back and want to be with us because we don't view them as just sponsors.

Speaker 3: So we think we're going to be able to help our partners drive their business. And I think it's already shown in the results from who's the, who are the leader, who are the leaders in the New York market and who are our partners.

So we think we're going to be able to help our partners drive their business and I think it's already shown in the results from who we are the leader who are the leaders in the New York market and who are our partners.

Speaker 10: I completely understand and appreciate the answer. If I can just follow this up in recognizing that some of this may be, you know, beyond the scope of, you know, MSGS.

I completely understand and I appreciate the answer.

Just follow this up and recognizing that some of this may be.

The scope of.

MSG.

Speaker 6: Is there, you know, now that it's legal in New York, we've seen, you know, other venues include, you know, actual sports betting, you know, kiosks or, or, you know, sports book type lounges. If something like that were to occur without asking you whether it will or won't, you know, is, is that something that would be financially beneficial for the teams?

Is there now that it's legal in New York, we've seen.

Other venues include.

Actual sports betting kiosks or or sports book pipeline.

Yes, something like that were to occur without asking you, whether it will or won't.

Is that something that would be financially beneficial for the teams as well or is that just more of a venue tissue.

Speaker 6: as well, or is that just a venue, more of a venue issue?

Speaker 8: It's it is a hypothetical, so it's hard to give you a specific answer on it. There has been a lot of talk about coming to the market. What I'll say is there.

It is a hypothetical so it's hard to give you a specific answer on it there has been a lot of talks about kiosks coming to the market.

What I'll say is there is I mean, if you look at our lease agreement between MSG Sports <unk> Entertainment. There is sharing in many different forms of revenue fixed signage and different parts of the business.

Speaker 3: If you look at our lease agreement between MSG Sports, MSG Entertainment, there's sharing in many different forms of revenue, fixed signage, and different parts of the business. So I wouldn't assume that a kiosk would be only for entertainment, nor only for sports. There's different ways to share, and we think that there's ways.

So I wouldn't assume that our kiosks would be only for entertainment.

Entertainment, nor only for sports theres different ways to share and we think that theres ways. If there were kiosks or other changes in the industry.

Speaker 3: If there were kiosks or other changes in the industry, changes around microbedding, changes, other rules that would enable us to further drive the business, there's lots of ways to grow this business for both for the teams and for MSG Entertainment.

Changes around Microbiota changes other other rules that would enable us to further drive the business theres lots of ways to grow this business for both for the teams and for MSG Entertainment.

Speaker 6: Perfect. I appreciate it. Thanks for taking my question.

Perfect I appreciate it thanks for taking my questions.

Speaker 1: Thank you. I would like to turn the conference back over to Ari Danes for closing remarks.

Thank you I would like to turn the conference back over to Ari Danes for closing remarks.

Speaker 2: Thank you all for joining us. We look forward to speaking with you on our next earnings call. Have a good day.

Thank you all for joining US we look forward to speaking with you on our next earnings call have a good day goodbye.

Goodbye.

Speaker 1: Thank you. This concludes today's conference call. You may now disconnect.

Thank you. This concludes today's conference call you may now disconnect.