Q2 2022 Madison Square Garden Entertainment Corp Earnings Call
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Speaker 1: Good morning. Thank you for standing by and welcome to the Madison Square Garden Entertainment Corp Fiscal 2022 Second Quarter Earnings Conference call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone.
Good morning, Thank you for standing by and welcome to the Madison Square Garden Entertainment Corp fiscal 2022 second quarter earnings Conference call. At this time, all participants are in a listen only mode.
The speaker's 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.
Speaker 1: I would now like to turn the call over to Ari Daines, Senior Vice President of Investor Relations and Treasury. Please go ahead. Thank you. Good morning and welcome to MSG Entertainment's fiscal 2022 second quarter earnings.
I'd now like to turn the call over to Ari Danes Senior Vice President Investor Relations and Treasury. Please go ahead. Thank you.
Good morning, and welcome to MSG Entertainments fiscal 2022 second quarter earnings Conference call.
Speaker 2: Our president, Andy Lusgarten, will begin today's call with a discussion on the company's entertainment and tao group sex.
Our president Andy Lustgarten will begin today's call with a discussion on the company's entertainment and Tao group segments.
Speaker 2: This will be followed by an update from Andrea Greenberg, President and CEO of MSG Now.
This will be followed by an update from Andrea Greenberg, President and CEO of MSG networks.
Speaker 2: Our EVP and Chief Financial Officer, David Burns, will then review our financial results.
Our EVP and Chief Financial Officer, David Burns will then review our financial results.
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: not have a copy of today's earnings release. It is available in the investor section of our corporate website.
If 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.
Today's discussion may contain statements that constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 <unk>.
Speaker 2: investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties.
Investors are cautioned that any such forward looking statements are not guarantees of future performance or results and involve risks and uncertainties.
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.
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: These include financial community perceptions of the company and its business, operations, financial condition, and the industry in which it operates.
These include financial community perceptions of the company and its business operations financial condition and the industry in which it operates.
Speaker 2: well as the factors described in the company's filings with the Securities and Exchange Commission, including the sections.
As well as the factors described in the company's filings with the Securities and Exchange Commission.
Including the sections entitled Risk factors.
Speaker 2: management's discussion and analysis of financial condition and results of operations contained therein.
In 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
The company disclaims any obligation to update any forward looking statements that may be discussed during this call.
Speaker 2: 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, a non-GAAP financial measure. And with that, I'll now turn the call over to Andy.
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 are.
non-GAAP financial measure and with that I'll now turn the call over to Andy.
Thank you Ari and good morning, everyone.
Speaker 3: On our last call, we spoke about the momentum we were seeing across our business and market.
On our last call we spoke about the momentum we are seeing across our business and markets.
Speaker 3: In our second quarter, this translated into positive AOI at our entertainment segment for the first time since the start of the pandemic.
And our second quarter. This translated into positive Hawaii at our entertainment segment for the first time since the start of the pandemic as.
Speaker 3: as well as strong results at Tau Group for the third consecutive quarter.
As well as strong results at Tao group for the third consecutive quarter.
Speaker 3: And while the emergence of Omicron dampened what otherwise would have been an even stronger financial result, for example, resulting in a shortened holiday run for the Christmas Spectacular, all signs for our business are pointed in the right direction. Our bookings fu-
And while the emergence of omicron dampen what otherwise would have been an even stronger financial result for example, resulting in a shortened holiday run for the Christmas spectacular all signs for our business are pointed in the right direction.
Our bookings schedule continues to fill up with calendar 'twenty, two having the potential to be a standout year.
Speaker 3: Calendar 22 having the potential to be a standout year.
Speaker 3: Guests are clearly spending for experiences they value, which plays to our strengths.
Guests are clearly spending for experiences they value.
Which plays to our strengths.
Speaker 3: Our sponsorship business has come back quickly and is now on pace to exceed pre-pandemic levels on a go-forward basis.
Our sponsorship business has come back quickly and is now on pace to exceed pre pandemic levels on a go forward basis.
Speaker 3: and cow group is well positioned for further expansion on the heels of robust demand in key markets, such as New York and Las Vegas.
And Tao group is well positioned for further expansion on the heels of robust demand in key markets, such as New York and Las Vegas.
Let's spend a few moments discussing the second quarter.
Speaker 3: As anticipated, our venue started to get busy again in October .
As anticipated our venue started to get busy again in October .
Speaker 3: with concert touring ramping back up, the Knicks and Rangers starting their seasons, and marquee sporting events returning to the garden.
With concert touring ramping back up the Knicks and Rangers, starting your seasons and marquee sporting events returning to the garden.
Speaker 3: We were also thrilled to welcome back the Christmas Spectacular in November .
We were also thrilled to welcome back the Christmas spectacular in November .
Speaker 3: To give you a sense of how busy we were, on an overall basis, we hosted nearly 300 events and welcomed approximately 1.7 million guests into our event.
To give you a sense of how busy we were on an overall basis, we hosted nearly 300 events and welcomed approximately $1 7 million guests into our venues.
Speaker 3: And our guests continue to spend for these premium experiences.
And our guests continue to spend for these premium experiences.
Speaker 3: For example, we hosted numerous sold-out events, including one of the highest-grossing nights ever for the UFC at the Garden.
For example, we hosted a numerous sold out events, including one of the highest grossing nights ever for the UFC at the garden.
And each of our venues contra.
Speaker 3: Contribution on a per concert basis was either above or in line with results for the fiscal 2020 second quarter, our last full pre-pandemic period.
Contribution on a per concert basis was either above or in line with results for the fiscal 2022nd quarter, our last full pre pandemic period.
Speaker 3: The Christmas Spectacular launched with solid demand, with ticket per caps well ahead of the 2019 production.
The Christmas spectacular launched with solid demand with ticket per caps well ahead of the 2019 production.
Speaker 3: and F&B and merchandise per caps at our venues increased double digits compared to pre-COVID levels.
In F&B and merchandise per caps at our venues increased double digits compared to pre COVID-19 levels.
Speaker 3: Unfortunately, the onset of Omicron slowed some of this momentum, as a number of booked events were cancelled or postponed.
Unfortunately, the onset of omicron slowed some of this momentum as the number of booked events were canceled or postponed.
Speaker 3: In addition, due to increasing operational challenges from the pandemic, we made the difficult decision to cancel the final two weeks of the Christmas Spectacular.
In addition, due to increasing operational challenges from the pandemic, we made the difficult decision to cancel the final two weeks of the Christmas spectacular.
Speaker 3: a period that typically includes among the highest grossing performances in a show's
A period that typically includes among the highest grossing performances in the shows run.
Speaker 3: It's clear that fans were excited for the return of the Rockettes. Ticket demand, including day of sales, remained robust right up until the final performance.
It's clear that fans. We're excited for the return of the Rockettes ticket demand, including day of sales remained robust right up until the final performance and.
Speaker 3: In fact, before canceling those last two weeks, we were on pace to sell nearly 700,000 tickets across 160 shows.
In fact before canceling those last two weeks, we were on pace to sell nearly 700000 tickets across 160 shows.
Speaker 3: And while we wanted to make it through the entire season, we are proud to have hosted more than 400,000 people at just over 100 performances.
And while we wanted to make it through the entire season. We are proud to have hosted more than 400000 people at just over 100 performances.
Speaker 3: The enthusiasm we saw throughout the run reinforces the important role the show plays during the holiday season and gives us great confidence for next year's production.
The enthusiasm we saw throughout the run reinforces the important role the show plays during the holiday season and gives us great confidence for next year's production.
Speaker 3: Looking ahead, we are encouraged by what we're seeing in the operating environment. As the Omicron wave continues to rec...
Looking ahead, we are encouraged by what we're seeing in the operating environment.
As the Omicron wave continues to recede.
Speaker 3: The percentage of ticket buyers attending our events, which understandably took a diff in late December , continues to recover and is now approaching pre-Omicron levels.
The percentage of ticket buyers attending our events, which understandably took a dip in late December continues to recover.
And is now approaching pre omicron levels.
Showing consumers sustained desire for live experiences.
Speaker 3: and we are ready to meet that demand. Our concert booking schedule for calendar 2022 remains strong and is currently pacing nearly 50% ahead of where we were at this point two years ago for 2020.
And we are ready to meet that demand our concert bookings schedule for calendar 2022 remains strong and is currently pacing nearly 50% ahead of where we were at this 0.2 years ago for 2020.
Turning to marketing partnerships.
Speaker 3: Since the start of the fiscal year, we've not only renewed
Since the start of the fiscal year, we have not only renewed.
Speaker 3: several more key and signature partners, but we've also welcomed new ones.
Several marquee and signature partners, but we've also welcome new ones in.
Speaker 3: In November , we announced agreements with BetMGM and Caeser Sportsbook.
In November we announced agreements with that MGM and Caesars Sports book.
Speaker 3: both expansive multi-year deals that leverage our assets across our portfolio.
Both expansive multiyear deals that leverage our assets across our portfolio.
Speaker 3: And with mobile sports gaming now live in New York, partners are seeing firsthand the value we provide in helping to drive their.
With more with mobile sports gaming now live in New York Partners are seeing firsthand the value we provide in helping to drive their business.
Speaker 3: and we anticipate further opportunities to increase our exposure in this exciting area.
And we anticipate further opportunities to increase our exposure in this exciting area.
Speaker 3: We have also started to make real inroads in the blockchain category.
We have also started to make real inroads in the blockchain and category.
Speaker 3: recently completing a new partnership agreement with Coinbase that provides significant exposure within our portfolio.
Recently, completing a new partnership agreement with Coinbase that provides significant exposure within our portfolio.
Speaker 3: including MSG Networks, and through our representation agreement, MSG Sports.
Including MSG networks and through our representation agreement MSG sports.
Moving now to Tao group.
Speaker 3: The business continues to see strong demand during the quarter in its two anchor markets of Las Vegas and New York.
The business continued to see strong demand during the quarter, it's two anchor markets of Las Vegas, and New York.
Speaker 3: with average check sizes meaningfully above 2019 levels.
The average check sizes meaningfully above 2019 levels.
Consistent with our entertainment business.
Speaker 3: Cal's results for the quarter would have been even stronger, had it not been for the onset of armor.
<unk> results for the quarter would have been even stronger had it not been for the onset of almond crop.
Speaker 3: which temporarily impacted both demand and operations near the end of the quarter.
Which temporarily impacted both demand and operations near the end of the quarter.
Speaker 3: On recent earnings calls, we've talked about our expectation for tau's margins to normalize over time at staffing levels.
On recent earnings calls, we've talked about our expectation for <unk> margins to normalize over time as staffing levels increase.
Speaker 3: Today's results reflect the impact of TOW's progress, staffing back up at its venues, as well as at the corporate level.
Today's results reflect the impact of towels progress staffing backup at its venues as well as at the corporate level.
Speaker 3: In addition, some of the margin reduction relative to our fiscal first quarter reflects a seasonal shift in TOW's revenue mix from beverage to food sales.
In addition, some of the margin reduction relative to our fiscal first quarter reflects a seasonal shift in Taos revenue mix from beverage to food sales as nightlife activity typically slows leading into the holidays as well as some inflation and cost of goods sold.
Speaker 3: as nightlife activity typically slows leading into the holidays, as well as some inflation in cost of goods sold.
Speaker 3: In a normal year, we would have benefited during the quarter from high margin corporate holiday events in New York and LA.
In a normal year, we would have benefited during the quarter from high margin corporate holiday events in New York and London.
Speaker 3: But due to the lingering effects of the pandemic on office occupancy, as well as Omicron, that was not the case this year.
But due to the lingering effects of the pandemic on office occupancy as well as omicron that was not the case this year.
Yeah.
Speaker 3: Looking ahead, Cal Group is continuing to make progress on its growth plans.
Looking ahead Tao group is continuing to make progress on its growth plans.
With a slate of exciting new venue openings.
Speaker 3: These include Lava in West Hollywood, which is set to open in coming weeks.
Include Labo in West Hollywood, which is set to open in coming weeks.
Speaker 3: and the highly anticipated reopening of a fully renovated Cow Beach in Las Vegas, as well as a brand new venue in Miami, both scheduled to open this spring.
And the highly anticipated reopening of a fully renovated <unk> beach in Las Vegas, as well as a brand new venue in Miami, both scheduled to open this spring.
Speaker 3: As we've discussed before, Las Vegas is a key market for us, with more than a dozen town venues in this entertainment capital. It is also the location of our...
As we've discussed before Las Vegas is a key market for us with more than a dozen tao venues in this entertainment capital.
It is also the location of our first MSG sphere.
Speaker 3: We continue to make significant construction progress on MSG Sphere at The Venetian, and remain on track to open the venue in calendar 2023.
We continue to make significant construction progress on MSG sphere at the Venetian and remain on track to open the venue in calendar 2023.
Speaker 3: We are now approaching the midway point of the building, the exosphere.
We are now approaching the midway point of the building the XO sphere.
Speaker 3: the 366 foot tall spherical structure that surrounds the base.
366 foot tall spherical structure that surrounds the venue.
Speaker 3: The exosphere will ultimately be covered with approximately 580,000 square feet of fully programmable LED light.
Exosphere will ultimately be covered with approximately 580000 square feet of fully programmable led lighting.
Speaker 3: forming the largest LED screen on earth and creating an impactful display for artists, partners, and brands.
Forming the largest LCD screen on Earth, and creating an impactful display for artist partners and brands.
Speaker 3: Inside the venue, we are building a steel framework that will support MSG Spheres' 160,000 square foot interior LED display plane and multilayered audio.
Inside the venue we are building the steel framework that will support MSG spheres of 160000 square foot interior led display plain and multi layered audio system.
Speaker 3: enabling the immersive technologies that will make MSTere a first of its kind in entertainment.
Enabling the immersive technologies that will make MSG sphere, a first of its kind and entertainment destination.
Speaker 3: In summary, we continue to be energized by the positive momentum we are generating across our business and by our ongoing progress with MSGsphere, which sets the stage for the future of our business.
In summary, we continue to be energized by the positive momentum, we are generating across our business and by our ongoing progress with MSG sphere.
Which sets the stage for our company's next chapter.
Speaker 3: We are optimistic about the road ahead and are confident in our ability to generate long-term shareholder value.
We are optimistic about the road ahead.
And are confident in our ability to generate long term shareholder value.
Speaker 3: Before turning the call over to Andrea, I'd like to take a moment to welcome our new CFO , David Byrne.
Before turning the call over to Andrea I'd like to take a moment to welcome our new CFO David Burns.
Speaker 3: David joined last month and after Andrew's remarks, we'll review our financial results for the quarter.
David joined last month, and after Andrew's remarks will review our financial results for the quarter.
Speaker 3: David is a seasoned executive with more than 30 years of finance experience, including at ViacomCBS, where he most recently served as Executive Vice President of Corporate Finance.
David is a seasoned executive with more than 30 years of finance experience, including at Viacom CBS , where he most recently served as executive Vice President of corporate finance.
Speaker 3: I'm confident that David's breadth of financial and operating experience will prove valuable in ensuring the long term success of our country.
I am confident that David's breadth of financial and operating experience will prove valuable ensuring the long term success of our company.
Speaker 3: We'd also like to thank Mark Fitzpatrick for his contributions during his time as CFO and wish him well in his future endeavors. And with that, I will turn the call over to Andrew.
We'd also like to thank Mark Fitzpatrick for his contributions during his time as CFO and wish him well in his future endeavors.
And with that I will turn the call over to Andrea.
Thank you Andy and good morning.
Speaker 4: We are now in the midst of the 21-22 NBA and NHL seasons and are pleased that MSG Networks is once again airing full telecast schedules of the Knicks and our four professional hockey teams.
We are now in the midst of the 'twenty, one 'twenty two NBA and NHL seasons and are pleased that MSG networks is once again, Aaron full telecast schedule over the next and are for professional hockey team.
Speaker 4: And while the environment has remained fluid with some COVID-related game postponements, I am proud of the way we have stayed nimble and creative to bring fans the exciting game telecasts and other compelling content they have come to expect from us. Good morning to our second quarter financial performance.
And while the environment has remained fluid with some COVID-19 related game postponements I am proud of the way we have stayed nimble and creative to bring fans the exciting game telecast and other compelling content they have come to expect from us.
Turning to our second quarter financial performance.
As you saw in this morning's earnings release affiliate revenue reflects the impact of our non renewal with Comcast.
Speaker 4: Affiliate revenue reflects the impact of our non-renewal with Comcast.
Speaker 4: It also includes decreases in our non Comcast subscriber base. Which were partially offset.
It also includes decreases in our non Comcast subscriber base.
Which were partially offset by higher affiliate rates.
Speaker 4: At the same time, our advertising revenue in the quarter was exceptional.
At the same time, our advertising revenue in the quarter was exceptional drill.
Speaker 4: driven by a return to full schedules for our teams and strong per game advertising sales.
Driven by a return to full schedules for our teams and strong per game advertising sales.
Speaker 4: relative to the second quarter of fiscal 2020, which was our last full quarter before the onset of the pandemic.
Relative to the second quarter of fiscal 2020, which was our last full quarter before the onset of the pandemic.
Speaker 4: we saw significant increases in both advertising rates and sell through for our live professional sports products.
We saw significant increases in both advertising rates and sell through for our live professional sports product.
Speaker 4: This reflects broad-based advertiser interest in our content, as well as our success in partnering with mobile sports betting operators who clearly value our unique ability to reach sports fans in this market.
This reflects broad based advertiser interest and our content.
As well as our success in partnering with mobile sports betting operators.
Clearly value our unique ability to reach sports fans in this market.
Speaker 4: in addition to significant levels of traditional spotlights.
In addition to significant levels of traditional spot buys we have been working closely with mobile gaming operators on developing unique content opportunities that integrate their brands into our programming.
Speaker 4: We've been working closely with mobile gaming operators on developing unique content opportunities that integrate their brands into our program.
Speaker 4: For example, Draskings recently became the presenting partner of our original sports betting shows, The Better Half Hour, The Betting Exchange, and odds within.
For example, <unk> recently became the presenting partner of our original sports betting shows the better half hour, the betting exchange and odds with earnings which now.
Speaker 4: which now include drafting talent integrations, setting odds, and promotions.
Now include drafting talent integrations, setting odds and promotions.
Speaker 4: DraftKings is also sponsoring this week's programming stunt on MSG Networks, which features live nightly specials and betting-themed game simulcasts, all leading up to the Super League
Draft Kings is also sponsoring this week's programming stunt on MSG networks.
Which features live nightly specials embedding themed games simulcast.
All leading up to the Super Bowl This Sunday.
Speaker 4: Cesar's sports book recently completed a month's long sponsorship of our programming to honor legendary Rangers Goalie and current MSG network studio analyst, Henrik Lunkwist, which culminated with Henrik's Jersey retirement ceremony on January 28th.
Caesars Sports Buck recently completed a month long sponsorship of our programming to honor legendary Rangers goalie and current MSG networks studio analyst Henrik Lundqvist, which culminated with Henricks Jersey retirement ceremony on January 28.
Speaker 4: Also in collaboration with CSER Sportsbook, we are launching a short form interview series hosted by CSER himself, Comedian JB Smoove, which will air across our networks and social media channels.
Also in collaboration with Caesars Sports stock, we are launching a short form interview series hosted by Caesars himself comedian JB snow.
Which will air across our networks and social media channels.
Speaker 4: And while mobile sports betting was our single largest advertising category for the quarter, we're also seeing growth and momentum across many other categories.
And while mobile sports betting with our single largest advertising category for the quarter were also seeing growth and momentum across many other categories.
Speaker 4: Blue chip companies such as Amazon, Google, Verizon and Facebook have all increased their advertising spend with us.
Lou chip companies, such as Amazon, Google, Verizon and Facebook have all increased their advertising spend with us.
Speaker 4: While we've simultaneously welcome new partners such as Coinbase, which Andy mentioned earlier. As well as TikTok and indeed.com.
While we simultaneously welcome new partners, such as Coinbase, which Andy mentioned earlier.
Well with Tic Toc, and indeed dot com.
Speaker 4: When coupled with the success we've had in mobile sports gaming, this has put us on a path for what could be our best year ever in advertising revenue with our NBA and NHL.
When coupled with the success we've had in mobile sports gaming. This has put us on a path for what could be our best year ever and advertising revenue with our NBA and NHL teams.
Speaker 4: And finally, as I highlighted last quarter, we continue to explore different direct to consumer models with an eye towards the launch by the end of this calendar year.
And finally as I highlighted last quarter.
We continue to explore different direct to consumer model with an eye towards the launch by the end of this calendar year.
Speaker 4: So while the media landscape continues to evolve, we remain confident in the popularity of our live content and believe that our commitment to innovation will enable us to continue to drive value for partners, advertisers, and viewers alike. With that, I'd like to turn...
So while the media landscape continues to evolve we remain confident in the popularity of our live content.
And believe that our commitment to innovation.
Able us to continue to drive value for our partners advertisers and viewers alike.
With that I'd like to turn the call over to David.
Speaker 5: Thank you, Andrea. I'm excited to join MSG Entertainment at such an important time for the company, and I look forward to helping ensure we continue to deliver excellence across our financial operations while also driving our key business priorities. What
Thank you Andrea.
I am excited to join MSG entertainment at such an important time for the company and I look forward to helping ensure we continue to deliver excellence across our financial operations, while also driving our key business priorities.
Let's start by reviewing our financial results.
Speaker 5: In the fiscal second quarter, we generated total revenues of $516 million and adjusted operating income of $76 million.
In the fiscal second quarter, we generated total revenues of $516 million and adjusted operating income of $76 million.
Speaker 5: significant improvement over last year's COVID impacted second quarter.
A significant improvement over last year's Covid impacted second quarter.
Speaker 5: The entertainment segment had $248 million in revenue, which primarily reflects the ramp up of live events in the quarter, the shortened holiday season run of the Christmas Spectacular.
The entertainment segment had $248 million revenue, which primarily reflects the ramp up of live events in the quarter. The shortened holiday season run of the Christmas spectacular.
Speaker 5: and revenues related to the arena license agreements with MSG sports, as the NYX and Rangers were back at the garden for full 2021-2022 season schedule.
Revenues related to the arena license agreements with MSG sports as the Knicks and Rangers, we're back at the garden for full 2021 2022 season schedules.
Speaker 5: Adjusted operating income for the entertainment segment was $15 million.
Adjusted operating income for the entertainment segment was $15 million.
Speaker 5: bringing us back to positive quarterly AOI for the first time since the onset of the pandemic.
Bringing us back to positive quarterly NOI for the first time since the onset of the pandemic.
Speaker 5: These results also reflect our efforts to strategically rehire across our entertainment segments as we come out of the pandemic.
These results also reflect our efforts to strategically re higher across our entertainment segment as we come out of the pandemic.
Speaker 5: as well as costs related to content development and technology for MSG Sphere.
As well as costs related to content development and technology for MSG sphere.
Speaker 5: Turning to MSG Networks, the segment generated $160 million in revenue.
Turning to MSG networks, the segment generated $160 million in revenues, an increase of 9% year over year and $44 million in Hawaii has comport as compared to 74 million in the prior year quarter.
Speaker 5: an increase of 9% year over year and 44 million in AOI as compared to 74 million in the prior year quarter.
Speaker 5: As Andrea discussed, the increase in revenue reflects strong advertising results partially offset by lower affiliate revenue.
As Andrea discussed the increase in revenue reflects strong advertising results, partially offset by lower affiliate revenues.
Speaker 5: The decrease in AOI reflects the return to normalized levels of direct and SG&A expenses with MSG networks slated to telecast full NBA and NHL regular season schedules this season.
The decrease in <unk> reflects the return to normalized levels of direct and SG&A expenses with MSG networks slated to telecast full NBA and NHL regular seasons schedules this year.
Yeah.
Speaker 5: Finally, TAO Group generated revenues of $117 million and adjusted operating income of $17.5 million.
Finally, Tao group generated revenues of $117 million and adjusted operating income of $17 5 million.
Speaker 5: which, as Andy mentioned earlier, reflects reopening momentum in key markets, such as Las Vegas and New York, TOW's efforts to staff back up, as well as some inflation and cost of goods.
Which as Andy mentioned earlier reflects reopening momentum in key markets, such as Las Vegas, and New York.
How's efforts to staff back up as well as some inflation in cost of goods sold.
Speaker 5: As a reminder, TAO's fiscal third quarter is a seasonally slower period and will also reflect some lingering impact from OMI crossing.
As a reminder, Taos fiscal third quarter is a seasonally slower period and will also reflect some lingering impact from army crop.
Speaker 5: And with a slate of new venue openings on the horizon, as Andy touched on, TAO's third quarter will also include certain pre-opening costs.
And with a slate of new venue openings on the horizon as Andy touched on Paas third quarter will also include certain pre opening costs.
Speaker 5: With Omicron receding and some of these new venues starting operations, we anticipate a strong end to the fiscal year for TAO.
With omicron receding and some of these new venues starting operations, we anticipate a strong end to the fiscal year for Tao.
Speaker 5: Turning to our balance sheet, as of December 31st, we had approximately 1.3 billion of cash on hand, and our debt balance was approximately 1.7 billion dollars.
Turning to our balance sheet as of December 31, we had approximately $1 3 billion of cash on hand.
Our debt balance was approximately $1 7 billion.
Speaker 5: With respect to MSG's sphere, our project to date construction costs through December 31st were approximately $1.1 billion, which includes $146 million of accrued costs that were not paid as of December 31st and is net of the $65 million received from the Las Vegas San.
With respect to MSG sphere.
Our project to date construction costs through December 31 were approximately $1 1 billion, which includes $146 million of accrued costs that were not paid as of December 31.
And this is net of the $65 million received from the Las Vegas Sands.
Speaker 5: As a reminder, our previously disclosed cost estimate for MSG Sphere is approximately $1.865 billion.
As a reminder, our previously disclosed the cost estimate for MSG sphere is approximately 1.865 billion.
Speaker 5: We are continuing to aggressively manage costs as we work toward the planned opening in calendar 23.
We are continuing to aggressively manage costs as we work toward the planned opening in calendar 'twenty three.
Lastly.
Speaker 5: Later today, we will be amending our 2021 10K and 2022 first quarter 10Q to retroactively capitalize interest on all outstanding debt during the periods when the company had capitalized costs relating to MSG Sphere in Las Vegas.
Later today, we will be amending our 2021 10-K, and 2022 first quarter 10-Q to retroactively capitalized interest on all outstanding debt during the periods. When the company had capitalized cost relating to MSG sphere in Las Vegas.
Speaker 5: We want to let you know that this will reduce interest expense and increase reported net income with no impact on our revenues, A O I, and operating income for the prior periods. With that, I will now...
We want to let you know that this will reduce interest expense and increased reported net income with no impact on our revenues and operating income for the prior periods.
With that I will now turn the call back over to Ari.
Speaker 2: Thank you, David. Operator, can we open up the call for questions?
Thank you David operator can we open up the call for questions. Please.
Speaker 1: At this time, if you would like to ask a question, please press star then the number one on your telephone keypad. That's star one. Your first question comes from Brandon Ross with Light Shed Partners.
At this time, if you would like to ask a question. Please press.
And the number one on your telephone keypad at Star One. Your first question comes from Brandon Ross with light shed partner Harris.
Speaker 6: Good morning, everyone. Andrea, you said in the prepared remarks that you have an eye towards a direct to consumer launch for MSG networks, I think by the end of the calendar year. Can you discuss how you expect the launch to impact your relationship with your MVPD partners on your current deals and how you expect it to impact future negotiations with those partners?
Good morning, everyone. Andrea you said in the prepared remarks that you have an eye towards the direct to consumer launch for MSG networks I think by the end of the calendar year can you discuss how you expect the launch to impact your relationship with your M. B P D partner.
<unk> on your current deals and how you expect it to impact future negotiations with those partners.
Speaker 4: You know, as you might expect, there's absolutely some balancing to be done here. You know, we're operating, as you know, in a very delicatical system with our affiliates and our leagues, our fans, our sponsors, who we believe understand the value of our programming. So we're quite confident that we'll work together to find an appropriate model.
Sure Hi, Brandon well you know as you might expect there's absolutely some balancing to be done here.
We're operating as you know in a very delicate ecosystem.
With our affiliates and our league soccer fans our sponsors.
We believe understand the value of our programming. So we are quite confident that we'll work together to find an appropriate model.
Speaker 4: You know, but we've said in the past we have the flexibility in our affiliate agreement. The offer a DTC product. So it's been contemplated. You know, but that being said, we're certainly mindful of our traditional linear business. Yeah, we're certainly mindful of the important partnerships that we have with our distributors and the benefits, you know, including clearly the revenues and the subscribers that we see from those relationships. Um, um,
But.
We've said in the past we have the flexibility in our affiliate agreements.
Offer a DTC product so it's been contemplated.
But that being said, we're certainly mindful of our traditional linear business.
We're certainly mindful of the important partnerships that we have with our distributors and the benefits, including clearly the revenues and the subscribers that we see from those relationships.
We believe that.
Speaker 4: Their remains continue to value in the bundle.
There remains continued value in the bundle.
Speaker 4: So for us, any DPC offering will take this into consideration.
So for us and a DTC offering will take this into consideration.
Speaker 4: You know, on another note, when we think about the millions of homes in our regions that don't receive our network, they're likely to be customers of our affiliates in one way or another. So there also may be a partnership opportunities on that front. You know, I think we said we're evaluating all the opportunities right now and weighing all the considerations.
On another note when we think about the millions of homes in our regions that don't receive our networks. They are likely to be customers of our affiliates and one way or another.
So there also may be a partnership opportunities.
On that front.
I think we said we're evaluating all the opportunities right now.
Weighing all the considerations.
Speaker 6: Okay, and then I think you alluded to it. You need league approval and a deal with the NBA and NHL in order to launch. He talked about where those negotiations stand and I know Sinclair is in a situation now where they need to they're on rolling one year deals and need league approval at least for the NBA every year. So we expect something similar in your deal with the NBA.
Okay, and then I think you alluded to it you'd need league approval on the deal.
With the NBA and NHL in order to launch.
Can you talk about where those negotiations stand and I know Sinclair.
<unk> is in a situation now where they need to they're on rolling one year deals.
The league approval at least for the NBA every year should we expect something similar in your deal with the N V F.
Speaker 4: Well, you know, we're currently in the process of renewing our agreements with the NBA and the NHL for multiple years.
Well, we're currently in the process of renewing our agreements with the NBA and NHL for multiple years.
Speaker 4: As I've said before, we've renewed lead agreements many times in the ordinary course of business. And for us, we're quite confident that this time will be no different. I also mentioned in the past that our previous agreements with both leagues included direct consumer rights.
As I've said before we.
You've renewed league agreements many times in the ordinary course of business and for US we're quite confident that this time will be no different.
I'd also mentioned in the past that our previous agreements with both leagues included direct to consumer rights.
Speaker 4: So as to us, I can't comment on Sinclair's agreements with the leagues, but I will say that not all RSNs are the same and that there aren't external factors here that may have played a role in decision-making on behalf of the leagues or Sinclair.
So as to us.
I can't comment on Sinclair agreements with the leagues.
But I will say that not all <unk> are the same.
And that.
There arent external factors here.
That may have played a role in decision, making on behalf of the leagues are Sinclair.
Perfect. Thank you Andrew.
Speaker 1: Thanks, Brandon. Your next question is from David Karnowski with JP Morgan.
Thanks, Brian .
Your next question is from David Karnofsky with J P. Morgan.
Speaker 7: Hi, thank you. I'm Andy, you highlighted the organic pipeline for Tau, but just given some of the early success you've had in the Great O'Conn in a DCD opportunity to add deer-like life offerings to M&I.
Alright. Thank you Andy you highlighted though organic pipeline per cow, but just given some of the early success you've had integrating Pakistan do you see any opportunity to add life offerings or M&A.
Thanks, David.
Speaker 3: Well, first, I'd like to acknowledge it's been not even a year since we purchased Hawke's on what a year has been, but we're so excited. What we've brought two of the leading hospitality premium hospitality brands together. And I think we have, if not the best management team in the business, without a question.
Well first of all I'd like to acknowledge it's been about.
<unk> been a year since we purchased <unk> us on what are your spin.
So we're excited and the support we bought two of the leading hospitality premium hospitality brands together.
And I think we have.
If not the best the best management team in the business.
Without a question in my mind.
Speaker 3: I'd say that Hawkeson allowed COW to grow faster and TOW to grow and Hawkeson to grow faster as well as we bring the best management team together to push this business. You've seen strong profitability of the combined business over the past few quarters. This has been driven by these great assets as well if people desire to experience premium experiences. And we expect this demand to continue.
I would say that horizontal allowed cao to grow faster than <unk> growth.
And horizontal grow faster as well as we bring the best management team together to push this business you've seen strong profitability of the combined business over the past few quarters.
It has been driven by these great assets as well as People's desire to experience premium experiences.
And we expect this demand to continue.
Speaker 3: That said, the team is still digesting hawkasson. It was purchased in the middle of COVID. There are still locations in numerous parts of the world that we're working on to improve drive the business.
That said the team is still digesting hock as Sean It was purchased in the middle of Covid.
There are still locations and numerous parts of the world.
We're working on to improve and drive the business.
Speaker 3: And what this team is really focused on first is organic growth.
Yeah.
And what this team is really focused on first is.
Organic growth. So we've got three venues coming up the next few months lava West Hollywood Cal Beach in Las Vegas, a brand new venue in Miami. There is a huge pipeline also over the next 12 months and thereafter, so organic growth is first that said.
Speaker 3: So we've got three venues coming up the next few months, Lobba West Hollywood, Tal Beach in Las Vegas, a brand new venue in Miami. There's a huge pipeline also over the next 12 months and thereafter. So organic growth is first. That said, we're always opportunistic, and if there's the right property and the right opportunity, we would look at it seriously. I mean, they've shown that their ability to digest a significant, significant...
We're always opportunistic and if there is the right property and the right opportunity. We would look at it seriously I mean, they've shown that their ability to digest the significant.
A significant.
Speaker 3: acid is supposedly pulling from the hot towel and hawks on together, but for the near term, I would say organic growth is the primary focus of the organization.
Asset is supposedly pulling could tau and <unk> together, but for the near term I would say organic growth is the primary focus of the organization.
Speaker 7: Okay, and then, and he also gives some, you know, great insight on the calendar for the concerts pipeline this year. Um, wondered if you had an early view into 2023 as we've heard from some other promoters about, you know, the supply just being so strong that some of it just has to get extended into the out here. And any early insight would be great.
Okay.
And do you also get some.
Great insight on the calendar for the concert pipeline this year.
Wondering if you had an early view into 2023 as we've heard from some other promoters about <unk>.
Supply just being so strong but some of it's just tough to get extended into the out year and any early insight would be great.
Speaker 3: Sure, so I just want to reiterate for calendar 22. It's looking to be a standout year. The first half of the calendar.
Sure so.
I just want to reiterate for calendar 'twenty two.
It's looking to be a standout year.
The first half of the calendar.
Speaker 3: 22 we're about 30% above free pandemic levels for the same period and as I mentioned earlier for the full year we're gonna be about 50% up
'twenty two we're about 30% above pre pandemic levels for the same period and as I mentioned earlier for the full year, we are going to be about 50% up compared to pre pandemic. We expect a really busy spring and summer we've got more data than we've ever had held up.
Speaker 3: Compared to free pandemic, we expect a really busy spring and summer. We've got more dates than we've ever had held date subject to change over during the NBA and NHL playoffs.
Date subject to change over during the NBA and NHL NHL playoffs, and I think that just shows the demand.
Speaker 3: And I think that just shows the demand or the supply, the demand from artists and the demand from clients and from customers. So as we looked out past that, I just wanna remind you, the way typically it happens, we start hearing from holes and then we start turning into firms and booked an actual events more like six, nine, maybe 12 months out.
The supply demand from artists and the demand from clients and from customers.
So as we look out past that I just want to remind you the way typically it happens we start hearing from holes and then we start turning into firms and booked an actual events more like six nine maybe 12 months out.
Speaker 3: That said, as we look further out, we've got more holds than we've ever seen. There's a real strong demand. There are a number of top artists who haven't been on the road yet. So we feel really good for not only this next six months, the next year and beyond. We just think this is a very strong business. Thank you.
That said as we look further out we've got more holds than we've ever seen theres real strong demand. There are a number of top artists who havent been on the road yet so we feel really good for not only this next six months to next year and beyond we just think this is a very strong business. Thank you.
Alright. Thanks.
Speaker 1: Your next question is from Ben Swenburn with Morgan Stan.
Your next question is from Ben Swinburne with Morgan Stanley .
Speaker 7: Thanks, just a couple of follow-ups. Andrea, one of them, not to make the turn this into a Sinclair call, but one of the points have just viewed out there is going to be the price point on the product. If there's an $18 a month number floating around that the leaves aren't happy with them. Just wondering if you have a perspective on...
Thanks, just a couple of follow ups.
Andrew one of them not to make to turn this into a Sinclair call, but one of the points of dispute out theres going to be the price point on the product that there was an $18 a months number of floating around that the leagues arent happy with I'm. Just wondering if you have a perspective on pricing do you see even if just a view on on something in that range. As you think about trying to put this product together and it sort of.
Speaker 7: pricing D to C even if just the view on on something in that range as you think about trying to put this product together And sort of if you're not willing to be specific just what are you balancing as you try to find market fit and And work through as you describe the a delicate ecosystem
If you're not willing to be specific just what are you balancing as you try to find market fit and and worked through as you described a delicate ecosystem and then <unk>.
Speaker 8: And then Andy just coming back, you know, that 50% number obviously could get pretty interesting. We think about the revenue implications of that, especially when you when you layer on the per cap.
Andy just coming back that 50% number obviously it could get.
Pretty interesting when you think about the revenue implications of that especially when you when you layer on the per caps.
Speaker 8: Just wanted to ask, is that representative of sort of night at the garden? Is there a mix shift we should be thinking about in terms of bad booking growth across your venues as we try to think about the financial impact of that level of supply, assuming the demand is there from the customer? Thank you.
I need to ask is that representative of sort of nights at the garden is there a mix shift we should be thinking about in terms of that booking growth across your venues as we try to think about the financial impact of that level of supply assuming the demand is there from the customer.
Thank you.
Speaker 4: Well, Ben, as we've said, we continue to actively evaluate the opportunity for us.
Well then you know as we've said we continue to actively evaluate the opportunity for us.
Speaker 4: you know, for us in this market, that includes not only pricing, but also product types and technical requirements and other considerations. We had condo-
In this market that includes not only pricing, but also product types and technical requirements and other considerations.
We had conducted some early research that we're settling now.
Speaker 4: some early research that we're supplementing now. So a little too early for us to comment on packaging, pricing, and what the product of the ultimate we look like. But it's something that we are actively exploring. And as we said, with an eye towards a launch book for the end of this calendar year.
So a little too early for us to comment on packaging pricing and what the products will ultimately look like but.
It's something that we are actively exploring and as we said with an eye toward launch.
A launch before the end of this calendar year.
Got it.
Speaker 3: Thanks Ben, so I think we talked about the 50% increase as we look out for the next 12 months.
Thanks, Ben So as I talked about the 50% increase as we look out for the next 12 months.
Speaker 3: It's really roughly, it's across all of our venus. It's actually a little bit higher in the arena. It's almost 60% up in the arena, but when you look across all of our venus, we see an increase. And the only reason why I think it's a little bit higher in the arena than some of the other venus is those are the bigger tours that actually do need to plan a little farther out. And some of the smaller tours have a little bit...
It's really roughly.
It's across all of our venues, it's actually a little bit higher in the arena. So I'm almost it's almost 60% in the arena, but when you look across all of our venues we see an increase and the only reason why I think it's a little bit higher D arena than some of the other venues is those are the bigger towards that actually do need to plan a little farther out and some of the smaller tours have a little bit.
Speaker 3: more wiggle room to when they start planning. But I think we see this demand everywhere. We feel really good. Got it. Thank you.
More wiggle room to when they start planning, but I think we see this demand everywhere and we feel really good.
Got it thank.
Thank you.
Your next question is from David Katz with Jefferies.
Hey, Good morning, guys. This is proceed on behalf of David are you guys able to speak towards progress on the sphere and whether there are any supply chain issues you might've experience.
Sure I'll take that this is Dave.
Speaker 5: Obviously, I've only been on board at MSG for a couple weeks, but I've already spent a significant amount of my time working directly with the Sphere team, including being out at the site in Vegas or earlier.
Obviously I've only been on board at MSG for a couple of weeks, but I've already spent a significant amount of my time working directly with the sphere team.
Including.
Being out at the site in Vegas earlier this week.
Speaker 5: First off, we have a really strong team managing the project and we continue to make great progress on the construction. So what a meaningful breakout.
So first off we have a really strong team managing the project and we continue to make great progress on the construction.
Speaker 5: The team has been very focused on supply chain and managing lead time since we began construction. And continually we are continually evaluating our timelines and developing alternatives where they might be needed.
The team has been very focused on supply chain and managing lead times since since we began construction.
And continually we are continually evaluating our timelines.
And developing alternatives, where where they might be needed. So.
Speaker 5: Also progress wise, remember pre pandemic, we had already purchased the bigger items, like the majority of the main structural steel for the project is all.
Also progress wise remember pre pandemic, we had already purchased the bigger items like the majority of the main structural steel for the project.
Is all secured.
Speaker 5: Other areas like the concrete of the main structure is essentially complete.
Other areas like like the concrete of the main structure is essentially complete.
Speaker 5: You know, of course there are some uncertainties to work through regarding electronics, for example, but our team is doing all we can to manage through it in every single detail. So.
Of course, there are some uncertainties to work through regarding electronics for example, but our team is doing all we can to manage through it in every single detail. So.
Speaker 5: You know, in summary, what I'll say is one, we're aggressively managing every aspect of the project. Two, we feel good about where we are. And three, we continue to be really excited about opening the venue in the second half of calendar 23.
In summary, what I'll say is one way we are aggressively managing every aspect of the project to we feel good about where we are.
And three we continue to be really excited about about opening the venue in the second half of calendar 'twenty three.
Speaker 9: Appreciate it, that helps. And then also if I can ask, are there any thoughts on sports spending facilities in MSG? Yes.
I appreciate it that helps and then also if I can ask are there any thoughts on sports betting facilities and NFC.
Sure. Thanks.
Speaker 3: So let me just take a stab at it. We are really pleased that how we've launched the Sports Petting category. I've always talked about this. This is great for us in terms of both consumer engagement as well as sponsorship business. Our partners, our current partners, that MGM, Cesar Sportsbook, had very strong launches. One of them even credited.
<unk>.
So let me just take a stab at it we're really pleased at how we've launched sports betting category.
Always talked about this this is great for us in terms of both.
Sumer engagement as well as the sponsorship business.
Our partners at MGM.
Current partners bet MGM Caesars Sports book had very strong launches.
One of them even credited.
Speaker 3: part of their market shared grab toss and how helping them do it. So we feel really good about what we're able to do with our partners. New York State.
Part of their market share grab to us and how we're helping them do it. So we feel really good about what we're able to do with our partners <unk>.
Speaker 3: It's been one of the more restrictive states in terms of both tax rate and certain rules around gaming. And so in the news, you might have read about conversations about kiosks, lounges, other possibilities. Any of those would be incremental revenue for us and it would be a win-win.
Mark State.
It's been one of the more restrictive states in terms of both tax rate and certain rules around gaming and so in the news you might've read about conversations about kiosks lounges other possibilities.
Any of those would be incremental revenue for us.
And would be a win win for our partners.
Speaker 3: We have great assets that enable our partners to blanket the market.
We have great assets that enable our partners to blank at the market through the garden through hospitality here at the garden and how on MSG networks Moynahan Hall, our relationship with demonstrates sports and we think we're able to help a partner really capitalize on mobile sports gaming as well as any other changes that could come.
Speaker 3: through the garden, through hospitality, here at the Garden of NTOW, on MSG Network, Moynihan Hall, our relationship with MSG Sports, and we think we're able to help a partner really capitalize on mobile sports gaming, as well as any other changes that could come into the market. And here at the Garden, we've always been a very strong believer of this, and so when those laws do change, if they did change, we will be on top of it and moving very quickly to capitalize.
Into the market.
And here at the Garden, we have always been a very strong believer of this and so when those laws do change if and they do change we will be on top of it and moving very quickly to capitalized.
Speaker 3: So we think there's a lot of opportunity here, we think it's evolving category and evolving business that's very good for both us and our partners.
So we think theres a lot of opportunity here and when things are evolving category.
Involving business, that's that's very good for both us and our partners.
I appreciate it thank you.
Speaker 1: Your next question is from Curry Baker with Guggenheim Securit.
Your next question is from Curry Baker with Guggenheim Securities.
Speaker 10: Hey, good morning. Thanks for the questions. I have two. The first one's on TOW. Margins were around 15% this quarter, down from 22% last quarter, where I think you benefited from some reduced staffing. Can you help us think about normalized TOW margins, maybe going forward or on a full-year basis, and any puts and takes to consider whether it's be a staffing wage inflation seasonality? Thanks.
Hey, good morning, Thanks for the questions I have two the first one is on Tao our margins were around 15% this quarter down from 22% last quarter, where I think you benefited from some reduced staffing can.
Can you help us think about normalized how margins, maybe going forward or on a full year basis, and any puts and takes to consider whether it be a staffing wage inflation seasonality. Thanks.
Speaker 3: Sure, thanks, Curry. So again, let's take a step back. It's been not even the years since we dig, since we merged with Hawkson, damn, merged with Hawkson, still a lot of integration efforts going on. It's been a very interesting year with the pandemic. And as we mentioned, when we first reopened, we benefited from reduced competition and also reduced staffing levels.
Sure. Thanks, Kerry so again, let's take a step back it's been not even a year since we digest essentially merger talks on Denmark with hawkish on still a lot of integration efforts going on it's been very interesting year with the pandemic.
As we mentioned when we first reopened we benefited from.
Reduced competition and also reduced staffing levels.
Speaker 3: As you saw in this quarter, as some of those, as the competition came back a little bit, as well as some inflation with cost of good souls and increased staffing levels, it came down to about a 15% margin. I do expect this business to continue to be very strong. I'd also note that in this past quarter, we had impacts from Omicron, so obviously that impacted margin. But as we think long-term, I think average long-term margins should be in the mid-teens with fluctuations depending on seasonality, and demand as we open new venues.
As you saw in this quarter as some of those competition came back a little bit as well as some inflation with cost of goods sold increased staffing levels, we came down to about a 15% margin.
I do expect this business to continue to be very strong I'd also note that in this past quarter, we had impacts from omicron, So obviously that impacted margin.
But as we think long term.
I think average long term margins should be in the mid teens with fluctuations depending on seasonality and end demand as we opened new venues.
Speaker 10: Okay, great. Thanks. And then my second question is on the networks business. You guys have renewed an agreement recently for Rise and we're aware of the con con cast situation. Looking ahead over calendar 22. Are there any other material agreements coming up with distributed partners and if so, can you help us with timing?
Okay, Great. Thanks, and then my second question is on the networks business.
You guys have renewed an agreement recently Verizon we're aware of the Con Comcast situation looking ahead over calendar 'twenty two are there any other material agreements coming up.
With distributor partners and if so can you help us with timing.
Speaker 4: Well, we won't get into specifics. We will say that our major affiliate deals are staggered and they come up from renewal from time to time. You know, as you noted, we've recently renewed our agreement with Verizon, along with several other smaller affiliates. Okay, thanks, appreciate it. Thanks, Perry. Operator, we have time. Antes.
Well and while we won't get into specifics.
We will say that our major affiliate deals are staggered.
And they come up.
Renewals from time to time.
As you know that we've recently renewed our agreement with Verizon.
Along with several other smaller affiliates.
Okay. Thanks I appreciate it.
Thanks, Corey operator, we have time, one last caller.
Our last question comes from Paul Golding with Macquarie.
Thanks, so much for the question and congrats on the new role.
Speaker 5: I wanted to turn to Haka-san quickly just to see if Andy, if you...
I wanted to turn to Hakan on quickly.
See if Andy if you could expand at all on potential synergistic.
Speaker 10: So, the potential synergistic go forward, impact as the cow and hawkathon management and operation becomes more...
Go forward impact is of the cow and Hog Hassan.
Management and operation becomes more a more integrated and whether you have any expectations in terms of how that synergy could contribute to sphere and vice versa, once youre up and running.
Speaker 3: Thanks, Paul. So, again, we think two of the most premium hospitality brands, and we've created a global powerhouse here. I think his management team is excellent. And...
Thanks, Paul.
Again, we've got we think two of the most premium hospitality brands and we've created a global powerhouse here.
<unk> talked about that I think this management team is excellent and.
Speaker 3: So as bringing them together, we were able to obviously create synergies between that management team by focusing on duplicate roles and growing the management team in the right way around the town management team. So there was the first level of synergies. But there were other synergies we saw between the two. There were economies of scales, such an areas of food and beverage, purchasing, marketing,
Yes.
So bringing them together, we were able to obviously create synergies between that management team by focusing on duplicate roles.
<unk>.
Growing the management team and the right way around are the top management team. So there was the first level of synergies, but there are other synergies we saw between the two there are economies of scales, such an areas of food and beverage purchasing marketing.
And.
Speaker 3: One of the other things that Hawkson offered to have how did have some international presence, but Hawkson is a much larger international presence. So we're able to see ability for tout to grow faster internationally. I mentioned cities like London, where Hawkson had numerous restaurants, including a Michelin-star Chinese restaurant. I mean, it really, they play well together and they complement each other. And so it'll help tout grow faster internationally.
One of the other things that <unk> did have some international presence, but I'll touch on is a much larger international presence. So we're able to see.
Ability for <unk> to grow faster internationally, I mentioned cities like London, where hakkasan has numerous restaurants.
Including Michelin starred Chinese restaurant.
It really play well together and they complement each other so it'll help <unk> grow faster internationally.
Speaker 3: In addition, as we think about Chao and Haka-san in Las Vegas.
In addition, as we think about <unk>.
<unk> and <unk> in Las Vegas.
Speaker 3: There, if you look at what we're doing here in the Madison Square Garden, for example, you know, Tows come in and brought the Sweet 16, which has been a great success.
Well if you look at what we're doing here in the Madison Square Garden for example, hotels come in and brought the Sweet 16, which has been a great success, they've been helping us drive our premium business here in the in the garden, we started to add food stand Theres, a lava and <unk> stay on that just opened up so you can see some of the essence.
Speaker 3: They've been helping us drive our premium business here in the garden. We started to add food stamps. There's a lava meatball stand that just opened up. So you can see some of the essence of what's going to happen as we think towards the sphere. So being the dust and premium hospitality and experiences as we look to Las Vegas, you can't even part of our design, you can't part of thinking our FNB experience, our premium experiences. And it's going to be great. It's a great synergy as we look to open the sphere when we do. It's on our corona however, so everyone can take the auto order warning for him. It's an additional one at the
What's going to happen as we think towards the sphere, so being the best in premium hospitality experiences as we look to Las Vegas, you could've been part of our design and part of thinking our F&B experience, our premium experiences and it's going to be a great. It's a great synergy as we hope looked openness for year, one when we do.
Great and then just a quick.
Quick follow up on the commentary around crypto.
Speaker 10: Either for for for for Andrew what you see in terms of the NFT space evolving
Either for you Andy or for Andrew what you see in terms of VNS T space evolving from a monetization perspective.
Of your respective businesses, whether Andy on your side you see.
In venue or incremental sponsorship opportunity for for the networks business.
Speaker 3: Sure, thankful. So I think crypto actually is a more macro level, higher level up in the blockchain ecosystem. Cryptocurrency is obviously one part of it. There's NFTs, there's exchanges, there's digital fan tokens. And given where we saw it, if you would have asked me two years ago where we are, we think there's gonna be other businesses that come off of it. And where that drives, where that gives us our opportunities is.
Sure. Thanks, Paul so.
I think I think of crypto actually.
More macro level, a higher level up in the blockchain ecosystem crypto currencies, obviously, one one part of it there has been a key is theres exchanges, there's digital Sam tokens and given where we saw if you would've asked me two years ago, where we are.
We think theres going to be other businesses that come off of it.
Where that drives for where that gives us our opportunity is where we've been able to do on the sponsorship side, which we really feel strong that we started off in a really strong way.
Speaker 3: What we've been able to do on the sponsorship side, which we've really feel strong, that we've started off in a really strong way. We've brought in a great partnership with QueenDIS, which includes significant exposure across our portfolio, including MSG networks. We've acted as a sales agent for MSG Sports on their recent deal with socios.
We brought in a great partnership with Coinbase, which includes significant exposure across our portfolio, including MSG networks.
That is a sales agent for MSG sports on their recent deal associates.
Speaker 3: And we're having many discussions about other ways to expand our exposure in this category.
Having many discussions about other ways to expand our exposure in this category.
Speaker 3: And we think here's, and not only is it from sponsorship, but there's new, what we're seeing is there's new and innovative ways for customers to connect, creating communities, being able to track. So we view it not only as a sponsorship business, but also as a way to market and understand our consumers better. And we think there's ways that we're going to continue to grow it, that could be in arena uses of crypto. But again, we're exploring lots of options and we feel really good that there's what we've done so far. We feel very good at what the future bears for us. So let's see, let's listen on.
And we think there's.
Not only is it from sponsorship if there is new and what we're seeing is there's new and innovative ways for customers to connect creating communities being able to track. So we view it not only the sponsorship business, but also as a way to market and understand our consumers better and we think theres ways that we're going to continue to grow it there could be an arena uses.
Crypto, but again, we're exploring lots of options and we feel really good that there is what we've done so far we feel very good of what the future areas for us.
Okay. Thanks.
I would now like to turn it back over to Ari Danes for closing remarks.
Speaker 2: Thank you all for joining us today. We look forward to speaking with you on our next earnings call. Have a good day. Goodbye.
Thank you all for joining US today, 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.
Speaker 11: glasses shining
Okay.
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