Q4 2024 Madison Square Garden Sports Corp Earnings Call
Speaker Change: Good morning. Thank you for standing by and welcome to the Madison Square Garden Sports Corp Fiscal 2024 Fourth Quarter and Year End 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.
Operator: Fiscal 2024 fourth quarter and year-end earnings conference call. At this time, all participants are in a listen-only mode.
Operator: After the speaker's remarks, there will be a question and answer session. I would now like to turn the call over to Ari Danes, Investor Relations. Please go ahead.
Speaker Change: I would now like to turn the call over to Ari Danes, Investor Relations. Please go ahead.
Ari Danes: Thank you, operator. Good morning. And welcome to MSG Sports, fiscal 2024, fourth quarter and year-end earnings call. Our Chief Operating Officer, Jamaal Lesane, will begin this morning's call with an update on the company's strategy and operations, followed by a review of our financial results with Victoria Mink, our EVP, Chief Financial Officer, and Treasurer. After our prepared remarks, we will open up the call for questions. We do not have a copy of today's earnings release.
Jamal Hussain: Thank you, operator. Good morning and welcome to MSG Sports Fiscal 2024 fourth quarter and year-end earnings conference call. Our Chief Operating Officer, Jamal Hussain, will begin this morning's call with an update on the company's strategy and operations.
Speaker Change: This will be followed by a review of our financial results with Victoria Mink, our EVP, Chief Financial Officer, and Treasurer. After our prepared remarks, we will open up the call for questions.
Ari Danes: It is available in the investor section of our corporate web site. Please take note of the following. Today's discussion may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1994. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statement.
Speaker Change: If you do not have a copy of today's earnings release, it is available in the investor section of our corporate website.
Speaker Change: Please take note of the following.
Speaker Change: Today's discussion may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Speaker Change: Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.
Ari Danes: Please refer to the company's filings with the SEC for a discussion of risks and uncertainties. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call. (Inaudible) On pages 4 and 5 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. With that, I'll I'll now turn the call over to Jamal, David Karnovsky, David Karnovsky. Thank you, Ari, and good morning, everyone.
Speaker Change: Please refer to the company's filings with the SEC for a discussion of risks and uncertainties.
Speaker Change: The company disclaims any obligation to update any forward-looking statements that may be discussed during this call.
Speaker Change: 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 Jamal.
Ari Danes: I'd like to begin by saying how honored I am to step into this leadership role at MSG Sports. I look forward to working with my colleagues to continue to strengthen and build upon the legacies of our two iconic franchises, the NYX and the Rangers. Both teams had exciting regular and post-season campaigns this past year, resulting in strong financial results for Alberta. For Fiscal 24, MSG Sports generated revenues of over $1 billion and adjusted operating income of $172 million.
Jamal Hussain: Thank you, Ari, and good morning everyone.
Jamal Hussain: I'd like to begin by saying how honored I am to step into this leadership role at MSG Sports.
Jamal Hussain: I look forward to working with my colleagues to continue to strengthen and build upon the legacies of our two iconic franchises, the Knicks and the Rangers.
Jamal Hussain: Both teams had exciting regular and post-season campaigns this past year, resulting in strong financial results for our business.
Jamal Hussain: For Fiscal 24, MSG Sports generated revenues of over $1 billion and adjusted operating income of $172 million, both exceeding Fiscal 23 results and setting new records for our company.
Jamaal Lesane: Both exceeding fiscal 23 results and setting new records for our company. These strong results reflect the robust demand we experience from our fans and partners throughout the seats, as well as the on-ice and on-core performance of about two franchises this past year. The Rangers won the President's Trophy, awarded to the NHL team with the best regular season, while the NICS had their best regular season record in over 10 years, and both teams advanced to the playoffs, with the Rangers reaching the Eastern Conference Final and the NICS to the Eastern Conference semifinal.
Speaker Change: These strong results reflect the robust demand we experienced from our fans and partners throughout the season, as well as the on-ice and on-court performance of our two franchises this past year.
Speaker Change: The Rangers won the President's Trophy, awarded to the NHL team with the best regular season record.
Speaker Change: while the Knicks had their best regular season record in over 10 years and both teams advanced to the playoffs with the Rangers reaching the Eastern Conference Final and the Knicks to the Eastern Conference Semifinals.
Jamaal Lesane: This season, the Rangers have acquired a number of new players, including former Stanley Cup Champion, Riley Smith. The Knicks extended the contract of All-NBA guard Jalen Brunson and re-signed All-Defensive team forward O.G. Annanoby, while also acquiring Mikel Bridges via trade. As we look ahead to the 24-25 season. Both teams have a number of key players secured under long-term contracts and are poised to build upon last year's success. Our fans' enthusiastic support for our teams this past year was evident in many areas of our business, from ticket sales and purchase spending at the garden to local TV ratings and increased engagement on social media. At the garden, both the mix and the rangers again played to at or near capacity crowds all throughout the year.
Speaker Change: This offseason Rangers have acquired a number of new players including former Stanley Cup champion Riley Smith
Speaker Change: The Knicks extended the contract of All-NBA guard Jalen Brunson and re-signed All-Defensive Team forward O.G. Ananovi, while also acquiring Mikel Bridges via trade.
Speaker Change: As we look ahead to the 24-25 season, both teams have a number of key players secured under long-term contracts and are poised to build upon last year's success.
Speaker Change: Our fans' enthusiastic support for our teams this past year was evident in many areas of our business, from ticket sales and per-cap spending at the Garden to local TV ratings and increased engagement on social.
Speaker Change: At the Garden, both the Knicks and Rangers again played to at- or near-capacity crowds all throughout the year.
Jamaal Lesane: His fan support has carried over in renewals for the 24-25 C, with the average combined season ticket renewal rate for the mix and rangers at approximately 94%. For the upcoming seasons, we made the decision to not increase season ticket prices for a loyal, renewing season ticket hold. However, we will continue to opportunistically price new season ticket packages, as well as individual and group tickets, and expect to benefit from increased demand for our flexible ticket plan.
Speaker Change: This fan support has carried over in renewals for the 24-25 seasons, with the average combined season ticket renewal rate for the Knicks and Rangers at approximately 94%.
Speaker Change: For the upcoming seasons, we made the decision to not increase season ticket prices for our loyal, renewing season ticket holders. However, we will continue to opportunistically price new season ticket packages, as well as individual and group tickets.
Speaker Change: and expect to benefit from increased demand for our flexible ticket plans.
Jamaal Lesane: A fan's excitement also translated into higher arena spending during fiscal 24, as food, beverage, and merchandise per cap spending was up year over year. On the merchandise front, we partnered with premium brands and introduced several new offerings that resonated with our fans.
Speaker Change: Our fans' excitement also translated into higher in-arena spending during Fiscal 24, as food, beverage, and merchandise per-cap spending was up year over year.
Speaker Change: On the merchandise front, we partnered with premium brands and introduced several new offerings that resonated with our fans. For example, both the Knicks and Rangers partnered with Siegelman Stable to offer a unique line of hats this past season.
Jamaal Lesane: Both the Knicks and Rangers partnered with Siegelman Stable to offer a unique line of hats this past season. At the same time, Denise launched a new collaboration with Fagherty while also continuing its successful partnership with Kip. These offerings, along with two new Rangers jerseys, one for home games and one to mark the team's participation in the 2024 NHL Stadium Series, were a success, as merchandise revenue in the regular season hit new highs in fiscal 24.
Speaker Change: At the same time, then NICS launched a new collaboration with Faherty while also continuing its successful partnership with KIF.
Speaker Change: These offerings, along with two new Rangers jerseys, one for home games and one to mark the team's participation in the 2024 NHL Stadium Series, were a success, as merchandise revenue in the regular season hit new highs in Fiscal 24.
Jamaal Lesane: Beyond merchandise, we continue to pursue ways to strengthen our connection with our fans. This past season, we hosted several special events during Playoff away games, including two watch parties at the garden during the Nixon Rangers second-round series and a viewing party in Central Park, game three of the Rangers' Eastern Conference That's fine.
Speaker Change: Beyond merchandise, we continue to pursue ways to strengthen our connection with our fans.
Speaker Change: This past season, we hosted several special events during playoff away games, including two watch parties at the Garden during the Knicks and Rangers second round series, and a viewing party in Central Park for Game 3 of the Rangers Eastern Conference Finals.
Jamaal Lesane: These events include alumni appearances and photo opportunities, allowing us to directly connect with a range of fans from across the city. Our fans' excitement to watch their teams this season was also reflected in strong local viewership. Local ratings for both teams on MSG Networks were up by a mid- to high-team percentage for the 23-24 season. Throughout the season, we also amplified team activity on social media, where we added over 830,000 net new followers during the season, bringing the Nick and Rangers combined following to over 19 million as of the end of the fiscal year.
Speaker Change: These events included alumni appearances and photo opportunities, allowing us to directly connect with a range of fans from across the city.
Speaker Change: Our fans' excitement to watch their teams this season was also reflected in strong local viewership. Local ratings for both teams on MSG Networks up by a mid to high teams percentage for the 23-24 seasons.
Speaker Change: And throughout the season, we also amplified team activity on social media, where we added over 830,000 net new followers during the season, bringing the Knicks and Rangers combined following to over 19 million as of the end of the fiscal year.
Jamaal Lesane: Going forward, we will continue to look for unique ways to engage with fans and deliver compelling content through our digital platform. Last month, the NBA announced new agreements for the league's national media. These 11-year deals start with the 25-26 season and include a step-up and average annual value compared to the current agreements as well as increased annual escalation. The agreements also include an increase in the number of live game telecasts made available to national media partners, which will result in a corresponding reduction in the number of exclusive telecasts made available to regional sports.
Speaker Change: Going forward, we will continue to look for unique ways to engage with fans and deliver compelling content throughout digital platforms.
Speaker Change: Turning to media rights. Last month, the NBA announced new agreements for the league's national media rights.
Speaker Change: These 11-year deals start with the 25-26 season and include a step up in average annual value compared to the current agreements, as well as increased annual escalators.
Speaker Change: The agreements also include an increase in the number of live game telecasts made available to national media partners.
Speaker Change: This will result in a corresponding reduction in the number of exclusive telecasts made available to regional sports networks.
Jamaal Lesane: The RSN industry is already facing a challenging environment. The reduction in local telecasts for the impact is a valuable part of our equals, which teams relie upon to drive enhanced fan engagement through unique and tailored content for local markets. This evolving landscape impacts our local media rights partner, MSG Networks, which faces a significant debt maturity this October. In its 10Q filing this past May, MSG provided additional disclosure on the status of its refinancing, including the implications of not completing a refining. We continue to actively evaluate these developments, including the potential impact on MSG networks and our corresponding local media rights revenue. Turning to the marketing department,
Speaker Change: The RSN industry is already facing a challenging environment.
Speaker Change: The reduction in local telecasts further impacts this valuable part of our ecosystem, which teams relied upon to drive enhanced fan engagement through unique and tailored content for local markets.
Speaker Change: This evolving landscape impacts our local media rights partner, MSG Networks, which faces a significant debt maturity this October.
Speaker Change: In its 10-Q filing this past May, MSG Networks provided additional disclosure on the status of its refinancing efforts.
Speaker Change: including the implications of not completing a refinancing.
Speaker Change: We continue to actively evaluate these developments, including the potential impact on MSG networks and our corresponding local media rights revenue.
Jamaal Lesane: This past year, we welcomed several new marketing partners, including Beyond Me, Pfizer, Next Entire, and Oura Ring, among others. We have also gotten off to a good start in fiscal 25 in terms of new deals and expect to have more to share in the coming year. In terms of our premium hospitality business, this past fiscal year, we saw record suite revenues driven by strong demand, as well as the addition of two new event-level suite products, an event-level suite, and the luxury event-level club.
Speaker Change: Turning to Marketing Partnerships.
Speaker Change: This past year, we welcomed several new marketing partners, including Beyond Me, Pfizer, Next Entire, and Oura Ring, among others.
Speaker Change: We have also gotten off to a good start in fiscal 25 in terms of new deals and expect to have more to share in the coming weeks.
Speaker Change: In terms of our premium hospitality business, this past fiscal year we saw record suite revenues driven by strong demand as well as the addition of two new event level suite products.
Speaker Change: an event-level suite, and a luxury event-level club space.
Jamaal Lesane: Looking ahead to fiscal 25, we expect to benefit from continued renewals and new sales activity. You're also expanding the capacity of the event-level club space, and in partnership with MSG Entertainment, we are in the process of renovating a number of the event and Lexus level suites.
Speaker Change: Looking ahead to fiscal 25 we expect to benefit from continued renewals and new sales activity.
Speaker Change: You are also expanding the capacity of the event-level club space.
Speaker Change: And in partnership with MSG Entertainment, we are in the process of renovating a number of the event and Lexus-level suites.
Jamaal Lesane: This is in keeping with our goal of improving the guest experience and creating incremental revenue opportunities for our business. So, to summarize, we are pleased with how our business has performed this past fiscal year. And while the media landscape is continuing to evolve, fan enthusiasm for live sports remains strong, and the popularity of our leagues continues to grow, which reinforces our confidence in the value of our franchises and our ability to drive long-term shareholder value. With that, I'll now turn the call over to Victoria. Thank you, Jamaal, and good morning, everyone.
Speaker Change: This is in keeping with our goal of improving the guest experience and creating incremental revenue opportunities for our business.
Speaker Change: So to summarize, we are pleased with how our business has performed this past fiscal year.
Speaker Change: And while the media landscape is continuing to evolve...
Speaker Change: Fan enthusiasm for live sports remains strong and the popularity of our leagues continues to grow Which reinforces our confidence in the value of our franchises and our ability to drive long-term shareholder value. With that, I'll now turn the call over to Victoria.
Victoria Mink: For fiscal 24, we generated total revenues of $1 billion and adjusted operating income of $172.2 million, which, as Jamaal mentioned, are both records for our company. Our results for the fiscal 24-4th quarter reflected robust demand for our teams as they completed their 23-24 regular seasons followed by playoff appearances from both the Nixon reigns. Our results also reflected a combined four more nicks and rangers regular season home games and seven additional playoff home games in our fourth quarter as compared to the prior year period. As a result, total revenues for the quarter were $227.3 million as compared to $126.9 million in the prior year period.
Victoria Mink: Thank you, Jamal. And good morning, everyone.
Victoria Mink: For Fiscal 24, we generated total revenues of $1 billion and adjusted operating income of $172.2 million, which, as Jamal mentioned, are both records for our company.
Victoria Mink: Our results for the fiscal 24 fourth quarter reflected robust demand for our teams as they completed their 23-24 regular seasons, followed by playoff appearances from both the Knicks and Rangers.
Speaker Change: Our results also reflected a combined four more Knicks and Rangers regular season home games and seven additional playoff home games in our fourth quarter as compared to the prior year period.
Speaker Change: As a result, total revenues for the quarter were $227.3 million as compared to $126.9 million in the prior year period.
Victoria Mink: Event-related revenues of $152.1 million, which mainly consists of ticket, food, beverage, and merchandise revenues, inclusive of the playoffs, increased 116% year-over-year. Sweet sponsorship and signage revenues, also inclusive of the playoffs, came in at $34.7 million, an increase of 71% year-over-year. In addition, national and local media rights fees of $28.4 million decreased 1%, primarily due to a reduction in a number of exclusive gains made available to MSG networks, partially offset by the impact of contractual rate increases on our local and national media rights.
Speaker Change: Event-related revenues of $152.1 million, which mainly consists of tickets, food, beverage, and merchandise revenues, inclusive of the playoffs, increased 116% year-over-year.
Speaker Change: Suites, sponsorship and signage revenues, also inclusive of the playoffs, were $34.7 million, an increase of 71% year-over-year.
Speaker Change: In addition, national and local media rights fees of $28.4 million decreased 1%, primarily due to a reduction in the number of exclusive games made available to MSG networks.
Speaker Change: partially offset by the impact of contractual rate increases on our local and national media rights deals.
Victoria Mink: Adjusted operating income of $56.5 million increased $64.3 million, primarily due to the increase in revenue, partially offset by higher direct operating expenses and, to a lesser extent, higher selling general and administrative expenses. AOI for our fiscal 24 fourth quarter includes $2.4 million of non-cash arena operating lease costs as compared to $1.4 million in the prior year period.
Speaker Change: Adjusted operating income of $56.5 million increased $64.3 million, primarily due to the increase in revenues, partially offset by higher direct operating expenses, and to a lesser extent, higher selling general and administrative expenses.
Speaker Change: AOI for our fiscal 24 fourth quarter includes $2.4 million of non-cash arena operating lease costs as compared to $1.4 million in the prior year period.
Victoria Mink: The increase in direct operating expenses reflected higher playoff-related expenses, other team operating expenses, and arena operating lease costs, all due to more games played at the garden during the current year. The increase in direct operating expenses and arena operating lease costs, all due to more games played at the garden during the current year period. These increases were partially offset by a decrease in provisions for team personnel transactions and lower net provisions for revenue sharing expense and luxury tax.
Speaker Change: The increase in direct operating expenses reflected higher playoff-related expenses, other team operating expenses, and arena operating lease costs, all due to more games played at the Garden during the current year period.
Speaker Change: These increases were partially offset by a decrease in provisions for team personnel transactions and lower net provisions for revenue sharing expense and luxury tax.
Victoria Mink: Turning to our balance, at the end of the quarter, our cash balance was approximately $89 million, and our debt balance was $305 million. This was comprised of 275 million dollars under the NICS Senior Secured Revolving Credit Facility and 30 million dollars advanced from the NHL. Our cash and debt balance both reflect a total of $55 million of repayments under our Ranger senior secured revolving credit facility during the quarter, bringing the outstanding borrowings under this facility to zero.
Speaker Change: Turning to our balance sheet, at the end of the quarter, our cash balance was approximately $89 million, and our debt balance was $305 million.
Speaker Change: This was comprised of $275 million under the NICS Senior Secured Revolving Credit Facility and $30 million advanced from the NHL.
Speaker Change: Our cash and debt balance both reflect a total of $55 million of repayments under our Rangers Senior Secured Revolving Credit Facility during the quarter, bringing the outstanding borrowings under this facility to zero.
Victoria Mink: So we are pleased with how our business has performed this fiscal year and remain confident in our ability to drive long-term value for our shareholders. I will now turn the call back over to our. Thanks, Victoria. Operator, can we now open the call for questions? Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again.
Speaker Change: So we are pleased with how our business has performed this fiscal year and remain confident in our ability to drive long-term value for our shareholders.
Speaker Change: I will now turn the call back over to Ari.
Ari Danes: Thanks, Victoria. Operator, can we now open the call for questions?
Speaker Change: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. Your first question comes from a line of David Kronofsky from J.P. Morgan. Your line is open.
Operator: Your first question comes from David Karnovsky from J.P. Morgan. Your line is open. Thank you. Just with the pressure of the RSN ecosystem, we have seen a number of crossboard teams take care cuts on their right sides in order to put more stability into the model.
Speaker Change: Thank you. Just with the pressure to the RSAN ecosystem, we have seen a number of teams across sports take haircuts on their right seeds in order to put
David Kronofsky: more stability into the model. So given your distributors declining revenue and the upcoming debt maturity, wondering if that's something that's under consideration for the Knicks and Rangers.
Speaker Change: and then related with the National MBA Rights Deal. Obviously, there's a nice step up in fees coming, but as you noted, there's some offsets in the exclusive game inventory for MSU Networks coming down. So, curious if you could expand on how you do the net of it all for the teams.
David Karnovsky: Um, and taking a step back for a moment, and as I mentioned earlier, our local media rights partner, MSG Networks, provided additional disclosure on the status of its debt refinancing efforts, including the implications of not completing a refinancing, and then more recently, as I mentioned earlier, the MBA reached new agreements for its national media rights. These agreements may result in a reduction in the number of exclusive live telecasts made available to MSG Network.
Speaker Change: Thanks David and good morning. And taking a step back for a moment, and as I mentioned earlier, our local media rights partner, MSG Networks, provided additional disclosure on the status of its debt refinancing efforts.
Speaker Change: including the implications of not completing a refinancing.
Speaker Change: and then more recently, as I mentioned earlier, the NBA reached new agreements for its national media rights.
Speaker Change: These agreements may result in a reduction in the number of exclusive live telecasts made available to MSG networks.
Jamaal Lesane: So it's clear that the sports media landscape continues to evolve. We continue to actively evaluate these developments, including the potential impact on MSG networks and any potential impact on our local media rights revenue, and we'll keep you updated as appropriate. Hey David, it's Victoria.
Speaker Change: So, it's clear that the sports media landscape continues to evolve.
Speaker Change: We continue to actively evaluate these developments.
Speaker Change: including the potential impact on MSG networks and any potential impact on our local media rights revenue and we'll keep you updated as appropriate.
Victoria Mink: I'll take the second part of your question around the overall financial impact of the NBA's new national media deal. As you know, all NBA teams share equally in national media rights fees, and at the league level, players receive about 50% of league-wide revenues, including national media rights fees. Starting with the 25-26 season, the NBA will see a step up in the average annual value for its national media rights, as well as increased annual escalators, which in turn will increase our national media rights revenue.
Victoria Mink: Hey David, it's Victoria. I'll take the second part of your question around the overall financial impact on the NBA's new national media deal.
Speaker Change: As you know, all NBA teams share equally in national media rights fees, and at the league level players receive about 50% of league-wide revenues, including the national media rights fees.
Victoria Mink: So...
Speaker Change: Starting with the 25-26 season, the NBA will see that step up in the average annual value for its national media rights, as well as increased annual escalators, which in turn will increase our national media rights fees revenues.
Victoria Mink: However, as noted, we're also assessing the impact that these new rights agreements may have on other areas of our business, including local media rights revenue. Our local agreements include thresholds around the number of live game telecasts to be provided to MSG networks, such as a minimum number of total regular season games.
Speaker Change: However, as noted, we're also assessing the impact that these new rights agreements may have on other areas of our business, including local media rights revenue.
Speaker Change: Our local agreements include thresholds around the number of live games telecast to be provided to MSG networks, such as a minimum number of total regular season games.
Operator: If certain thresholds are not met as a result of the new NBA National Deals, our local rights agreements would provide for a reduction in local media rights fees, and this would partially offset the increase in national media rights revenue. Thank you. Your next question comes from the line of Daniel Juran from Morgan Stanley. Your line is open.
Speaker Change: If certain thresholds are not met as a result of the new NBA National Deals, our local rights agreements would provide for a reduction in local media rights fees.
Speaker Change: and this would partially offset the increase in the national media rights revenue.
Speaker Change: Thank you.
Speaker Change: Thank you very much for joining us today, and we'll see you in the next video.
Speaker Change: Your next question comes from the line of Daniel Duran from Morgan Stanley. Your line is open.
Daniel Juran: Hi, thank you for taking my question. Why not raise ticket prices? And what are the implications for revenues and AOI in fiscal 25? Thank you.
Daniel Duran: Hi, thank you for taking my question. Why not raise ticket prices and what are the implications for revenues and AOI in fiscal 25? Thank you.
Jamaal Lesane: So, philosophically... All of our key decisions are made with a long-term view, that includes how we manage our relationships with our loyal season ticket holders. And, as you alluded to, after a successful season for both of our teams... Well, I should say successful seasons, we made the decision not to increase season ticket prices for renewing holders.
Speaker Change: And thank you for that, Daniel.
Speaker Change: So, philosophically,
Speaker Change: All of our key decisions are made with a long-term view. That includes.
Speaker Change: how we manage our relationships with our loyal season ticket holders.
Daniel Duran: And, as you alluded to, after a successful season for both of our teams...
Jamaal Lesane: However, we will continue to opportunistically price new season ticket packages as well as individual and group tickets and expect to benefit from increased demand for those and our flexible ticket plans. And so, putting it all together, we believe we have the opportunity to drive modest ticket revenue growth in Fiscal 25 and then beyond the 24-25 seasons. We still see opportunity around ticket yield, and we'll continue to re-evaluate our season ticket pricing on an annual basis. God, thank you very much.
Daniel Duran: or I should say successful seasons, we made the decision to not increase season ticket prices for renewing holders. However, we will continue.
Daniel Duran: to opportunistically price new season ticket packages as well as individual and group tickets and expect to benefit from increased demand for those and our flexible ticket plans.
Daniel Duran: And so putting it all together, we believe we have the opportunity to drive modest ticket revenue growth in fiscal 25. And then looking beyond the 24, 25 seasons.
Daniel Duran: We still see opportunity around ticket yield and will continue to re-evaluate our season ticket pricing on an annual basis.
Operator: Your next question comes from Brandon Ross from Late Shed. Your line's open. Hey, thanks for taking the questions. I just wanted to get an update on how you're thinking about capital return. You've delivered a bunch at this point.
Speaker Change: Got it. Thank you very much.
Speaker Change: Your next question comes from the line of Brandon Ross from LightShed. Your line is open.
Brandon Ross: You pay down that ranger's facility, and cash on the balance sheets is up what $50 million year over year. Should we expect some buyback activity, and how does the situation with networks play into your thinking around capital return? Follow me. I'm sorry, but I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: Hey, thanks for taking the questions. Just wanted to get an update on how you're thinking about capital return. You've de-levered a bunch at this point. You paid down that Rangers facility. Cash on the balance sheet's up, what, 50 million dollars year-over-year.
Speaker Change: Should we expect some buyback activity and how does the situation with networks play into your thinking around capital return? Follow
Victoria Mink: Sure. Good morning. So in taking a step back as it relates to our overall capital allocation philosophy and priorities, you know, things really remain the same at this point. So, to just take you through the right first step is to maintain appropriate liquidity to fund our operations and invest in our core business. Second, we want to make sure we have a strong balance sheet. You know, and we've continued to prioritize debt paydowns given the high interest rate environment.
Speaker Change: Sure, good morning. So, in taking a step back, as it relates to our overall capital allocation philosophy and priorities, you know, things really remain the same at this point.
Speaker Change: You know sort of just take you through right first is to maintain appropriate liquidity to fund our operations and invest in our core business
Speaker Change: Second, we want to make sure we have a strong balance sheet.
Speaker Change: You know and we've continued to prioritize debt pay downs given the high interest rate environment Now and as you noted this included 55 million dollars of repayments under our rangers revolving credit facility during the fourth fiscal quarter
Victoria Mink: And as you noted, this included $55 million of repayments under our Rangers revolving credit facility during the fourth fiscal quarter. And then third, we plan to be opportunistic about other uses of our cash flow, and we'll keep all options open. As you know, we currently have approximately $185 million remaining under our share repurchase authorization. And, as Jamaal noted, we continue to just evaluate the overall landscape of the RSN industry.
Speaker Change: And then third, we plan to be opportunistic about other uses of our cash flow, and we'll keep all options open.
Speaker Change: As you know, we currently have approximately $185 million remaining under our share repurchase authorization. And as Jamal noted, we continue to just evaluate the overall landscape of the RSN industry.
Victoria Mink: Great. And then it's been a couple of years since you spoke about exploring minority cells of the team. Seems like franchise values have increased quite a bit since then. Is that still something that's on the table, or have you, I guess, put it aside at this point?
Jamal Hussain: and we'll act accordingly.
Speaker Change: Great, and then it's been a couple years since you spoke to exploring minority cells of the of the teams.
Speaker Change: It seems like franchise values have increased quite a bit since then. Is that still something that's on the table, or have you, I guess, tabled it at this point?
Victoria Mink: Sure. As we've said before, we continue to be as confident as ever in the value of our teams. These are incredibly scarce assets with strong business fundamentals, which we don't think are appropriately reflected in our current stock price. And while we would never rule out the possibility of a minority stake sale, we have nothing to report at this time.
Speaker Change: Sure.
Speaker Change: As we said before, we continue to be as confident as ever in the value of our teams.
Speaker Change: These are incredibly scarce assets.
Speaker Change: with Strong Business Fundamentals.
Speaker Change: which we don't think is appropriately reflected in our current stock price.
Speaker Change: And while we would never rule out the possibility of a minority stake sale, we have nothing to report at this time. Great, thank you very much.
Peter Supino: A question about revenue growth, obviously, the new Broadcast Wright Steel and Media Wright Steel will bring welcome growth to the company. I wonder what initiatives you might be thinking about beyond that to drive organic revenue growth next year and beyond. Thank you for that, Peter, and I'm glad you asked that question as we continue to be very pleased with how our business is performing, including record financial results in fiscal 24. And let me walk you through some of the key areas of our business for the upcoming year and look ahead.
Speaker Change: Your next question comes from the line of Peter Cepino from Wolf Research. Your line is open.
Peter Cepino: Hi, good morning. A question about revenue growth. Obviously the new broadcast rights deal, media rights deal will bring welcome growth to the company. I wonder what initiatives you might be thinking about beyond that to drive organic revenue growth next year and beyond. Thanks.
Speaker Change: Thank you for that, Peter, and I'm glad you asked that question, as we continue to be very pleased with how our business is performing, including record financial results in Fiscal 24. And let me walk you through some of the key areas of our business for the upcoming year and looking ahead.
Peter Supino: From a ticketing standpoint, we are already seeing strong demand, with, as I mentioned earlier, combined average season ticket renewal rates of approximately 94%. We will also continue to opportunistically price new season ticket packages, as well as individual and group tickets. And we expect to benefit from increased demand for our flexible ticket packages. From a sponsorship standpoint, we believe we're off to a good start in fiscal 25 in terms of new deals, and expect to have more to share in the coming weeks.
Speaker Change: From a ticketing standpoint, we are already seeing strong demand.
Speaker Change: with, as I mentioned earlier, combined average season ticket renewal rates of approximately 94%.
Speaker Change: We will also continue to opportunistically price new season ticket packages, as well as individual and group tickets. And we expect to benefit from increased demand for our flexible ticket packages.
Speaker Change: From a sponsorship standpoint, we believe we're off to a good start in fiscal 25 in terms of new deals and expect to have more to share in the coming weeks. We also have a number of renewals this year and are optimistic about those.
Peter Supino: We also have a number of renewals this year and are optimistic about those, and then on premium hospitality. We expect to capitalize on strong demand for renewals and new sales activity, and in partnership with MSG Entertainment, we are expanding the event-level club space at the garden that was introduced last season. And lastly, on suites, we also expect to benefit from the renovation of several event and Lexas-level suites. So we believe we have the opportunity to drive growth across a number of areas of our business this year. Thanks, Peter. Operator, we will take one last caller. Certainly, your final question comes from a line of Paul Golding from Macquarie Capital. Your line is open. Thanks so much.
Speaker Change: And then on premium hospitality.
Speaker Change: We expect to capitalize on strong demand for renewals and new sales activity.
Speaker Change: and in partnership with MSG Entertainment, we are expanding the event level club space at the Garden that was introduced last season.
Speaker Change: Lastly, on suites, we also expect to benefit from the renovation of several event and Lexus-level suites.
Speaker Change: So we believe we have the opportunity to drive growth across a number of areas of our business this year.
Speaker Change: [inaudible]
Speaker Change: [inaudible]
Speaker Change: Thank you very much for joining us today, and we'll see you in the next video.
Jamaal Lesane: Just was wondering if you could give some additional detail on the financial dynamics of the playoffs this year in terms of maybe per game margins or contribution. And, as a follow-up, now that you've had a couple years of both teams having good playoff appearances, wondering if that's factoring into your planning going forward at all, assuming team stability for next year.
Speaker Change: Thanks, Peter. Operator, we will take one last caller.
Speaker Change: Certainly. Your final question comes from a line of Paul Golding from Macquarie Capital. Your line is open.
Paul Golding: Thanks so much. Just was wondering if you could give some additional detail on the financial dynamics of the playoffs this year in terms of maybe per-game margins or contribution. And as a follow-up,
Paul Golding: Now that you've had a couple years of both teams having good playoff appearances, wondering if that's factoring into your planning going forward at all, assuming team stability for next year. Thanks.
Operator: So let me, um, I'll jump in and just talk about the playoffs in general, and then I'll turn it over to Victoria for more of the, uh, financial impact. And, you know, typically, a playoff run results in several benefits to our business, in terms of ticket sales. A player friend usually increases demand across all of our offerings, whether it's season ticket renewals, sales to new members, or individual and group ticket sales. As I mentioned earlier, our combined renewal rate for last season, for season ticket packages, is already approximately 94%.
Victoria Mink: And thank you for that, Paul. So let me, I'll jump in and just talk about playoffs in general, and then I'll turn it over to Victoria for more of the financial impact. And you know, typically, a playoff run results in several benefits to our business.
Victoria Mink: In terms of tickets, a player friend usually increases demand across all of our offerings, whether it's season ticket renewals, sales to new members, or individual and group ticket sales.
Victoria Mink: As I mentioned earlier, our combined renewal rate for season ticket packages is already approximately 94%.
Operator: A player friend also typically drives new fans to the end of the day. On Fiscal 24, we added over 830,000 net new social media followers. And of those new followers, nearly 35% were added during the playoffs.
Victoria Mink: A player front also typically drives new fans.
Victoria Mink: In fiscal 24, we added over 830,000 net new social media followers, and of those new followers, nearly 35% were added during the playoffs.
Jamaal Lesane: This increased demand also extends to the corporate side of our business, which then, in turn, allows us to sell more premium hospitality and marketing partnerships. So we are already seeing the momentum from the playoffs carry forward. And I'll turn to Victoria for a little bit more detail. Great. Sure.
Victoria Mink: This increased demand also extends to the corporate side of our business, which then in turn allows us to sell more premium hospitality and marketing partnerships.
Victoria Mink: So we are already seeing the momentum from the playoffs carry forward.
Victoria Mink: Yeah, so the playoffs result in significant incremental business for our company, depending obviously on the length of the playoff run, which is very evident in our results today. Playoff tickets are priced at a premium compared to regular season games and increase by each incremental round. F&B and merchandise per cap spending is typically above regular season averages. And then, in particular, this past quarter, we hosted 15 playoff games at the Garden as compared to eight last year.
Victoria Mink: and I'll turn to Victoria for a little bit more detail. Great, sure, so
Victoria Mink: Yeah, so the playoffs result in significant incremental business for our company, depending obviously on the length of the playoff run, which is very evident in our results today.
Victoria Mink: Playoff tickets are priced at a premium to regular season games and increase each incremental round.
Victoria Mink: F&B and merchandise per cap spending is typically above regular season averages.
Victoria Mink: and then in particular this past quarter we hosted 15 playoff games at the Garden as compared to eight last year.
Victoria Mink: So as a result, our playoff-related revenues for the fourth quarter were $128 million as compared to $56.2 million in the prior year period. This translates to approximately $8.5 million in average per-game revenues and approximately $4 million in average per game direct operating expenses as well as some additional marketing and administrative costs incurred in connection with our overall playoff participation.
Victoria Mink: So, as a result, our playoff-related revenues for the fourth quarter were $128 million as compared to $56.2 million in the prior year period.
Victoria Mink: So this translates to approximately 8.5 million dollars in average per game revenues.
Victoria Mink: and approximately, there were approximately $4 million in average per game direct operating expenses as well as some additional marketing and administrative costs incurred in connection with our overall playoff participation.
Victoria Mink: So, as Jamaal mentioned, we expect to see the positive impact of the past season's playoffs runs across our business in fiscal 25th. Thanks so much. We have reached the end of our question and answer session. I will now turn the call back over to Ari Danes for his closing remarks. Thank you all for joining us. We look forward to speaking with you on our next earnings call. Have a good day. This concludes today's conference call. Thank you for your participation. You may now disconnect. Music
Victoria Mink: So as Jamal mentioned, we expect to see the positive impact.
Jamal Hussain: of the past season's playoffs runs across our business in fiscal 25.
Jamal Hussain: Thanks so much.
Jamal Hussain: We have reached the end of our question and answer session. I will now turn the call back over to Ari Danes for closing remarks.
Ari Danes: Thank you all for joining us. We look forward to speaking with you on our next earnings call. Have a good day.
Speaker Change: This concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: I'll deal with your grief, Bill Supino. Great. Thank you very much. Your next question comes from a line Peter Supino from Wolf Research. Your line is open. Hi, good morning.
David Karnovsky: So, given your distributors' declining revenue and the upcoming debt maturity, wondering if that's something that's under consideration for the mix and rangers, and then related to the National MBA Red Steel. Obviously, there's a nice step up in cheese coming, but as you noted, there's some offsets in the exclusive game inventory for our machine, and networks coming down, so curious who you could expand on how you do the net of it Thanks, David, and good morning.