Q2 2025 Madison Square Garden Sports Corp Earnings Call

Good morning, Thank you for standing by and welcome to the Madison Square Garden Sports Corp. Fiscal 2025 second quarter earnings Conference call. At this time all participants are in a listen only mode. After the Speakers' remarks, there will be a question and answer session.

Operator: Thank you for standing by and welcome to the Madison Square Garden Sports Court Fiscal 2025 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.

Ari Danes: I would now like to turn the call over to Ari Danes, Investor Relations. Please go ahead.

Ari Danes: I would now like to turn the call over to Ari Danes Investor Relations. Please go ahead.

Ari Danes: Thank you, operator.

Ari Danes: Thank you operator, good morning, and welcome to MSG Sports fiscal 2025 second quarter earnings Conference call.

Ari Danes: Good morning and welcome to MSG Sports Fiscal 2025 Second Quarter Earnings Conference Call. Our Chief Operating Officer, Jamaal Lesane, will begin this morning's call with an update on the company's strategy and operations. This will be followed by a review of our financial results with Victoria Mink, our EVP, Chief Financial Officer and Treasurer.

Speaker Change: Our Chief operating officer, Jim All the same we 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.

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

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

Ari Danes: If you do not have a copy of today's earnings release, it is available in the investor section of our corporate website. please take note of the following. Today's discussion may contain forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. 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. Please refer to the company's filings with the FTC 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.

Speaker Change: If you do not have a copy of today's earnings release. It is available in the investors 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 1090 fives.

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.

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.

Ari Danes: On pages four and five of today's earnings release, we provide consolidated statements of operations and a reconciliation of operating who adjusted operating income, or AOI, a non-GAAP financial.

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.

Speaker Change: Our non-GAAP financial measure.

Ari Danes: And with that, I'll now turn the call over to Jamaal.

Joel: I'll now turn the call over to Joel.

Jamaal Lesane: Thank you, Ari, and good morning, everyone. The Knicks and Rangers 2024-25 seasons are in full swing. For the fiscal 25 second quarter, MSG Sports generated revenues of approximately $358 million. an adjusted operating income of approximately $20 million. These results reflect strong overall demand, while adjusted operating income also reflects our continued investment in our team. The robust demand from fans and corporate partners alike has driven positive momentum in all key revenue areas. Ticketing, sweets, sponsorship, and food, beverage, and merchandise. In fact, pregame revenues across every key category were up as compared to the fiscal 24 second quarter.

Speaker Change: Thank you Ari and good.

Joel: Morning, everyone.

Joel: The Knicks and Rangers 'twenty 'twenty four 'twenty five seasons are in full swing.

Joel: For the fiscal 'twenty five second quarter.

Joel: MSG sports generated revenues of approximately $358 million and adjusted.

Joel: Operating income of approximately $20 million.

Joel: These results reflect strong overall demand.

Joel: While adjusted operating income also reflects our continued investment in our teams.

Joel: The robust demand from fans and corporate partners alike has driven positive momentum in all key revenue areas.

Joel: Ticketing suites, sponsorships and food beverage and merchandise.

Joel: In fact pro game revenues across every key category were up as compared to the fiscal 'twenty for second quarter.

Jamaal Lesane: So with our iconic sports franchises, and the strong top line trends we are seeing, we remain confident in the outlook for our business.

Joel: So with our iconic sports franchises and the strong topline trends, we are seeing we remain confident in the outlook for our business.

Jamaal Lesane: Let's discuss our operations in more detail. Since we last spoke with you in August, the Knicks offseason, which had already included a number of significant rosters, culminated with the trade for now five-time NBA All-Star Karl-Anthony Towns. More than halfway through the season, we are pleased with the team's performance so far, and we're excited to see both Towns and Jalen Brunson recently selected as starters for the 2025 NBA All-Star Game. On the hockey side, the Rangers signed an eight-year contract extension with the team's star goalie, Igor Shostakhin, in December. And next week, a number of our players will participate in the NHL's Four Nations Faceoff Tournament, which is being held in place of an All-Star Game.

Joel: Let's discuss our operations in more detail.

Joel: Since we last spoke with you in August the next off season, which had already included a number of significant roster malls culminated with the trade for now five time NBA All star Carmelo Anthony towns.

Joel: More than halfway through the season, we are pleased with the team's performance so far and we're excited to see both towns and Zealand Brunson recently selected as startup for the 2025 NBA All star game.

Joel: On the hockey side the range of signed an eight year contract extension with the team's star goalie Igor should start in December.

Joel: And next week, a number of our players will participate in the NHL for Nations Faceoff tournament, which is being held in place of an all star game. This year.

Jamaal Lesane: As the seasons continue to unfold, we look forward to watching the coming months of competition. Throughout this year, our fans have continued to show their support for the Nixon Rangers. This season, our average combined season ticket renewal rate was approximately 97%. In addition, we have been opportunistically pricing our other ticketing offerings, including new season ticket packages, as well as individual and group tickets. We have also continued to provide our fans with more options and have seen increased demand for our flexible ticket plans as a result. Putting it all together, we saw year-over-year increases in both average ticket yield and average paid attendance on a per-game basis in the fiscal second quarter, which helped drive growth in ticketing revenue.

Joel: As the seasons continue to unfold, we look forward to watching the coming months the competition.

Joel: Throughout this year, our fans have continued to show their support for the Knicks and Rangers.

Joel: Season, our average combined season ticket renewal rate was approximately 97%.

Joel: In addition, we have been opportunistically pricing or other ticketing offerings, including new season ticket packages as well as individual and group tickets.

We have also continued to provide our fans with more options and have seen increased demand for our flexible ticket plans as a result.

Joel: Putting it altogether, we saw a year over year increases in both average ticket yields and average paid attendance on a per game basis in the fiscal second quarter, which helped drive growth in ticketing revenue.

Jamaal Lesane: Fan enthusiasm has also extended to in arena spending, where food, beverage, and merchandise per cap spending was up as compared to the fiscal 24 second quarter. Contributing to this growth are our continued efforts to introduce innovative merchandise offers. The Knicks are once again partnering with unique brands, including KISS and New Yorker Nowhere. and given the ongoing success of these two collaborations. We expanded those partnerships to the Rangers for the first time this season. It is clear that these initiatives are resonating. In fact, when the Knicks debuted their new KIPP collection and the Rangers launched with New York or nowhere this season, in-arena single-game merchandise sales were amongst their highest in each team's history.

Joel: Fan enthusiasm has also extended in arena spending where food beverage and merchandise per cap spending was up as compared to the fiscal 2000 and for second quarter.

Joel: Contributing to this growth are our continued efforts to introduce innovative merchandise offerings.

Joel: The Knicks are once again partnering with unique brands, including kit in New York in Delaware.

Joel: And given the ongoing success of these two collaborations.

Joel: We expanded those partnerships to the ranges for the first time this season.

Joel: It is clear that these initiatives are resonating.

Joel: In fact, when the mixed debut their new kicked collection and the ranges launched with New Yorker nowhere this season.

Joel: In arena single game merchandise sales were amongst their highest each team's history.

Jamaal Lesane: We also continue to introduce exciting event offerings to force the fan engagement. For example, we recently held our first NICS Homecoming weekend, celebrating the team's alumni and rich history. The celebration included a free daytime event sponsored by Chase with alumni and hundreds of fans. culminated that night with the official homecoming game presented by DoorDash, which honored a number of team alumni.

Joel: We also continue to introduce exciting event offerings the forced a fan engagement.

Joel: For example, we recently held our first mixed homecoming weekend celebrating the team's alumni and rich history.

Joel: The celebration included a free daytime event sponsored by Chase with alumni and hundreds of fans and culminated at night with the official homecoming gained presented by door dash, which on a number of team alumni.

Jamaal Lesane: Turning to media right now. As a reminder, the NBA has entered into new national media deals, which are scheduled to begin next year. While these deals will include a step-up in average annual value compared to the current agreements, as well as increased escalators, it will also result in a reduction in the number of exclusive live telecasts made available to RSNs, which impacts a valuable part of our ecosystem. As you may also know, in August, our local media rights partner, MSG Networks, announced that it is pursuing a refinancing of its credit facilities through a workout, which is ongoing.

Joel: Turning to media rights.

Joel: As a reminder, the MBA has entered into new National media deals, which are scheduled to begin next year.

Joel: While these deals will include a step up in average annual value compares to the current agreements as well as increased escalators. It will also result in a reduction in the number of exclusive live telecast made available to RSM, which impacts a valuable part of our ecosystem.

Joel: As you May also know in August.

Joel: Local media rights partner MSG networks.

Joel: You said it is pursuing a refinancing of its credit facilities through a workout which is ongoing.

Jamaal Lesane: As part of that process, MSG Networks has approached us to renegotiate our local media rights agreement. including a potential reduction in our rate. In addition, on January 1st... BalticeUSA dropped MSG Networks from its optimum offer. demonstrating the challenging environment that the RSN industry continues to face.

Joel: As part of that process MSG networks has approached us to renegotiate our local media rights agreements, including a potential reduction in RIS fee.

Joel: In addition on January one.

Joel: Altice USA dropped MSG networks from its optimum offerings, demonstrating the challenging environment at the RSA industry continues to face.

Jamaal Lesane: We are actively assessing the best path forward for our business and we'll continue to keep you updated.

Joel: We are actively assessing the best path forward for our business and we will continue to keep you updated.

Jamaal Lesane: With respect to marketing partnerships, Fiscal 2025 has been highlighted by a number of new deals and renewals. In October, the company announced a significant multi-year agreement with Abu Dhabi's Department of Culture and Tourism, which included naming Experiance Abu Dhabi as the official patch partner of the network. Their logo now appears on all Knicks game jerseys, as well as warm-up jackets and shooting shorts. In addition, over the last several months, we signed new multi-year sponsorships with Lenovo and its subsidiary, Motorola, and reached multi-year renewals with Verizon and Benjamin Moore. In terms of premium hospitality, we continue to see strong new sales and renewal activity for Suites at the Garden.

Joel: With respect to marketing partnerships fiscal 2025 has been highlighted by a number of new deals and renewals so far.

In October the company announced a significant multiyear agreement with Abu Dhabi Department of culture, and tourism, which included naming experienced Abu Dhabi as the official patch partner of the mix.

Joel: Their logo now appears on all Knicks games Jersey, as well as warm up jacket and shooting shirts.

Joel: In addition over the last several months, we signed new multi year sponsorships with Lenovo and its subsidiary Motorola.

Joel: And reached multi year renewals with Verizon and Benjamin Moore.

Joel: In terms of premium hospitality, we continue to see strong new sales and renewal activity for suites at the garden.

Jamaal Lesane: That includes the event-level club space, which was introduced last year and was expanded ahead of the 2024-25. In addition, we are seeing the benefit of incremental revenue this year from a number of event and Lexus-level suites that were recently renovated. Our business continues to demonstrate strong underlying fundamentals.

Joel: That includes the event level club space, which was introduced last year and was expanded ahead of the 'twenty 'twenty four 'twenty five season.

Joel: In addition, we are seeing the benefit of incremental revenue this year from a number of events and Lexus level suites that were recently renovated.

Joel: Our business continues to demonstrate strong underlying fundamentals.

Jamaal Lesane: And while the ecosystem for RSMs continues to evolve, as we look ahead, we remain confident in the value of owning marquee sports franchises and our ability to drive long-term shareholder value.

Joel: And while the ecosystem for <unk> continues to evolve as we look ahead, we remain confident in the value of owning marquee sports franchises and our ability to drive long term shareholder value.

Victoria Mink: With that, I'll now turn the call over to Victoria. Thank you, Jamaal, and good morning, everyone. Results for the fiscal second quarter reflect preseason play and the start of the 24-25 regular seasons for the Knicks and Rangers. In aggregate, we hosted 35 pre and regular season games across both teams as compared to 32 games last year, which positively impacted this quarter's results.

Joel: With that I'll now turn the call over to Victoria.

Victoria Mink: Thank you Jill and good morning, everyone.

Victoria Mink: Results for the fiscal second quarter reflect preseason play and the start of the 'twenty four 'twenty five regular seasons for the Knicks and Rangers.

Victoria Mink: In aggregate, we hosted 35 pre in regular season games across both teams as compared to 32 games last year, which positively impacted this quarter's results.

Victoria Mink: I'd also note that our fiscal third and fourth quarters will reflect three fewer regular season home games in total as compared to the prior year period. So the fiscal 25 second quarter total revenues were $357.8 million as compared to $326.9 million in the prior year period, which reflected the impact of more home games at the Garden versus the prior year, as well as increases across every key revenue category on a per game basis. Event-related revenues of $139.4 million, which mainly consist of ticketing, food, beverage, and merchandise revenue, increased 14% year-over-year, while suites and sponsorship revenues of $79.4 million increased 15% year-over-year.

Victoria Mink: I'd also note that our fiscal third and fourth quarters will reflect three fewer regular season home games in total as compared to the prior year periods.

Victoria Mink: So the fiscal 'twenty five second quarter total revenues were $357 8 million as compared to $326 9 million in the prior year period, which reflected the impact of more home games at the garden versus the prior year as well as increases across every key revenue.

Victoria Mink: <unk> on a per game basis.

Victoria Mink: Event related revenues of $139 4 million, which mainly consist of ticketing food beverage and merchandise revenue increased 14% year over year, while suites and sponsorship revenues of $79 $4 million increased 15% year over year.

Victoria Mink: National and local media rights fees of $126.9 million increased 4%. primarily due to the impact of contractual rate increases on our local and national media rights deals, partially offset by the impact of a decrease in the number of games exclusively available to MSG networks during the current year as compared to the prior year.

Victoria Mink: National and local media rights fees of $126 $9 million increased 4%.

Victoria Mink: Primarily due to the impact of contractual rate increases on our local and national media rights deals, partially offset by the impact of a decrease in the number of games exclusively available to MSG networks during the current year as compared to the prior year.

Victoria Mink: Adjusted operating income decreased $16.8 million to $20.2 million primarily due to an increase in direct operating expenses and, to a lesser extent, higher selling general and administrative expenses, partially offset by the increase in revenue. Our fiscal 25 second quarter results include $9.3 million of non-cash arena license fees expense as compared to $9 million in the prior year period. The increase in direct operating expenses primarily reflects higher team personnel compensation and corresponding luxury tax, as well as the impact of certain team personnel transactions. These direct operating expenses reflect the company's expectation that the Knicks will be a significant luxury taxpayer for the 24-25 season based on the team's current roster.

Victoria Mink: Adjusted operating income decreased $16 8 million to $20 $2 million.

Victoria Mink: Primarily due to an increase in direct operating expenses and to a lesser extent higher selling general and administrative expenses, partially offset by the increase in revenues.

Victoria Mink: Our fiscal 'twenty second quarter results include $9 3 million of noncash arena license fees expense as compared to $9 million in the prior year period.

Victoria Mink: The increase in direct operating expenses, primarily reflects higher team personnel compensation and corresponding luxury tax as well as the impact of certain team personnel transactions.

Victoria Mink: These direct operating expenses reflect the companys expectation that the mix will be a significant luxury taxpayer for the 'twenty four 'twenty five season based on the team's current roster.

Victoria Mink: turning to our balance sheet. At the end of the quarter, our cash balance was approximately $108 million, and our debt balance was $305 million. This was comprised of $275 million under the NICS Senior Secured Revolving Credit Facility and $30 million advanced from the NHL. We are pleased with the demand trends we are seeing across our business so far in fiscal 25 and remain confident in its long-term trajectory.

Victoria Mink: Turning to our balance sheet.

Victoria Mink: At the end of the quarter, our cash balance was approximately $108 million and our debt balance was $305 million.

Victoria Mink: This was comprised of $275 million under the Nic senior secured revolving credit facility and $30 million advanced from the NHL.

Victoria Mink: We are pleased with the demand trends, we are seeing across our business. So far in fiscal 'twenty five and remain confident in its long term trajectory.

Ari Danes: I will now turn the call back over to Ari. Thanks, Victoria.

Ari Danes: I will now turn the call back over to Ari.

Ari Danes: Thanks, Victoria, operator can we open up the call for questions. Please.

Operator: Operator, can we open up the call for questions, please? 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: Thank you we will now begin the question and answer session. If you'd like to ask a question. Please press star one telephone keypad to raise your hand to join the queue. If you would like to withdraw your question simply press Star one again.

David Karnovsky: Your first question comes from the line of David Karnovsky from J.P. Morgan.

Speaker Change: First question comes from the line of David Karnofsky from Jpmorgan. Your line is open.

David Karnovsky: Your line is open. Hey, thank you for the question. Um, you know, just given the ongoing process with MSG Networks and its lenders, and then the blackout with Optimum, obviously there's some risk here to your local rights revenue.

David Karnofsky: Hey, Thank you for the question.

David Karnofsky: Just given the ongoing process with MSG network, that's lenders and then the.

David Karnofsky: Blackout with optimum obviously, there is some risk here to your local rights revenue. So should investors look at the range of outcomes here is simply.

Jamaal Lesane: So should investors look at the range of outcomes here as simply, you know, a reduction to Nixon Ranger's fees, or is there also an opportunity through this process to maybe rethink a bit your distribution structure and look at alternatives, like broadcast or streaming first?

David Karnofsky: A reduction to Knicks and Rangers fees.

David Karnofsky: Or is there also an opportunity through this process to maybe rethink a bit your distribution structure and look at alternatives like broadcast or streaming for instance.

David Karnofsky: Okay.

Jamaal Lesane: Good morning, David, and thanks for the question. Our focus continues to be on maximizing value for our shareholders and maintaining our connection with our local fans. Obviously, there has been industry wide pressure on local media rights, which includes, as I mentioned earlier, MSG Networks has approached us about negotiating a reduction in our rights MSC Networks is a great partner of ours, their content helps drive and Drive and Grow, our engagement with our local fan base.

David Karnofsky: Good morning, David Thanks, Thanks for the question.

Speaker Change: Our focus continues to be on maximizing value for our shareholders and maintaining our connection with our local fans.

David Karnofsky: Now.

David Karnofsky: Obviously, there has been industry wide pressure on local media rights, which includes as I mentioned earlier MSG networks has approached us about negotiating a reduction in our rates fees.

David Karnofsky: I must be networks is a great partner of ours.

David Karnofsky: <unk> content helps drive and.

David Karnofsky: Drive and grow our engagement with our local fan base.

Jamaal Lesane: That being said, you know, I'm not going to speculate on hypotheticals other than we continue to assess the best path forward for our business, and we remain focused on maximizing long-term value for our shareholders and maintaining that important connection we have with our local fans.

David Karnofsky: That being said I'm not going to speculate on hypotheticals other than we continue to assess the best path forward for our business and we remain focused on maximizing long term value for our shareholders and maintaining that important connection we have with our local fans.

David Karnofsky: Thanks.

Brandon Ross: Your next question comes from the line of Brandon Ross from Light Shed Partners. Your line is open.

Brandon Ross: Your next question comes from the line of Brandon Ross from <unk> Partners. Your line is open.

Brandon Ross: Morning, thanks for taking the question. But maybe a follow up to what David just asked. If there does end up being a pause in local rights payments from an MSGN bankruptcy, or you have to take a significant reduction of rights fees, can you walk us through your liquidity position to fund team operations, including access to your revolvers and any other sources of capital that you may have?

Brandon Ross: Good morning, Thanks for taking the question.

Speaker Change: Maybe a follow up to what David just SaaS. If there does end up being a pause in local rights payments for from an MSG and bankruptcy or you have to take a significant reduction of rights.

Speaker Change: Can you walk us through your liquidity position to fund team operations, including <unk>.

Speaker Change: Access to your revolver and any other sources of capital.

Speaker Change: You may have.

Speaker Change: Okay.

Jamaal Lesane: Sure. Good morning, Brandon, and thank you for the question. So I guess before I get into liquidity, let me just, you know, take a step back.

Brandon Ross: Sure Good morning, Brandon and thank you for the question.

Brandon Ross: I guess before I get into liquidity, let me just.

Brandon Ross: Take a step back.

Jamaal Lesane: So if there were a reduction in our local media rights fees in the future, it's important to note that a one dollar reduction in revenue doesn't translate into a one dollar reduction in cash flow, as there are significant offsetting factors. You know, so for example, our revenue sharing expense would decrease. as would our income taxes, given the company's status as a full-income cash taxpayer. So it's not a one-for-one.

Brandon Ross: Yes, if there were a reduction in our local media rights fees in the future. It is important to note that adopt $1 reduction in revenue doesn't translate into a $1 reduction in cash flow is there.

Brandon Ross: There are significant offsetting factors.

Brandon Ross: So for example, our revenue sharing expense would decrease.

Brandon Ross: As what our income taxes and.

Brandon Ross: Given the company's status as a full income cash taxpayer now.

Brandon Ross: So it's not a one for one.

Jamaal Lesane: You know, but with that said, our liquidity position is strong. We ended the calendar year with over $100 million of cash on hand. In addition, we have the Nixon Rangers Revolving Credit Facilities in place with $250 million in borrowing capacity available on the Rangers Revolver.

Brandon Ross: But with that said our liquidity position is strong.

Brandon Ross: We ended the calendar year with over $100 million of cash on hand.

In addition, we have the Knicks and Rangers revolving credit facilities in place with $250 million in borrowing capacity available on the Rangers revolver.

Jamaal Lesane: Now, in the event of a network, an MSG network bankruptcy, we would need to seek waivers from our lenders to borrow additional funds against either of the facilities. Yeah, but irrespective of that, we have substantial financial flexibility and are confident we'd be able to borrow funds from a number of other sources if needed.

Brandon Ross: Now in the event of a networks MSG networks bankruptcy, we would need to seek waivers from our lenders to borrow additional funds against either of the facilities.

Brandon Ross: But irrespective of that we have substantial financial flexibility and are confident we'd be able to borrow funds from a number of other sources if needed.

Ben Swinburne: Thank you. Your next question comes from the line of Ben Swinburne from Morgan Stanley.

Brandon Ross: Thank you.

Speaker Change: Your next question comes from the line of Ben Swinburne from Morgan Stanley. Your line is open.

Ben Swinburne: Your line is open.

Brandon Ross: Okay.

Jamaal Lesane: Good morning. I guess two topics. I'm wondering if you could help us understand how potential of additional franchise expansion in the NBA impacts MSCS, MSC Sports P&L. In particular, you get your share of those fees, but does that go into the... in a player payroll pot, or does that fall through to the bottom?

Ben Swinburne: Good morning.

Ben Swinburne: I guess two topics I'm wondering if you could help us understand how.

Ben Swinburne: The potential additional franchise expansion and the NBA.

Ben Swinburne: Impacts and the CFS.

Ben Swinburne: MSG sports P&L.

Ben Swinburne: Protein in particular.

Ben Swinburne: You get your share of those fees, but does that go into the.

Ben Swinburne: Player payroll part or does that fall through to the bottom line.

Jamaal Lesane: And then maybe to revisit a topic from a while ago, which is selling a minority stake in the teams, either of the teams, which had been talked about a while ago, the NBA and NHL, I think, continue to expand, consider and expand pools of capital that can invest in sports franchises. What's your appetite to let that happen with the teams? And any gain that you would generate would that be something we should be thinking about as taxes?

Ben Swinburne: And then maybe to revisit a topic from a while ago, which is selling a minority stake.

Ben Swinburne: In the teens.

Ben Swinburne: Either of the teams, which had been talked about a while ago that the NBA and NHL I think continue to expand consider and expand pools of capital that can invest in.

Ben Swinburne: Sports franchises, what's your appetite to let that happen with the teams.

Ben Swinburne: And.

Ben Swinburne: And any gain that you would generate with that these thing we should be thinking about is taxable.

Jamaal Lesane: Thanks so much for all of you.

Ben Swinburne: So much for all the time.

Jamaal Lesane: Great.

Jamaal Lesane: Good morning, Ben. Let me start.

Ben Swinburne: Great. Good morning, Ben Let me start I'll take the first part of your question regarding the expansion so.

Jamaal Lesane: I'll take the first part of your question regarding the expansion. So, you know, first, we're not going to comment on, you know, league matters or hypotheticals. But, you know, what I think what I can say here is that, you know, any potential expansion fee is divided equally among the 30 existing NBA teams. You know, just by way of example, you know, as you may recall, back in fiscal 21 when the Seattle Kraken joined the NHL, we recognized our pro rata share of that expansion fee in that fiscal year, and it basically drops right to the bottom line.

First we're not going to comment on lead matters or hypotheticals, but you know what.

Ben Swinburne: I think what I can say here is that.

Ben Swinburne: Any potential expansion fee is divided equally among the 30 existing NBA teams.

Ben Swinburne: Just by way of example, as you may recall.

Ben Swinburne: Back in fiscal 'twenty, one when the Seattle crack and joined the NHL, we recognized our pro rata share of that expansion fee in that fiscal year.

Ben Swinburne: It basically drops right to the bottom line.

Jamaal Lesane: But, you know, however, I would note, right, following any potential expansion, you know, lead distributions, for example, you know, including the revenue from our national meteorites agreements, you know, that would be divided pro rata amongst the increased number of teams on a go forward basis. Right.

Ben Swinburne: But however, I would note following any potential expansion.

Ben Swinburne: League distributions.

Ben Swinburne: For example, including the revenue from our National Media rights agreements that would be divided pro rata amongst the increased number of teams on a go forward basis right.

Ben Swinburne: Yes.

Ben Swinburne: Yeah.

Jamaal Lesane: And with respect to the second part of your question, Ben, We are as confident as ever in the value of our team. They are scarce assets, they have strong business fundamentals, and we don't think that those are appropriately reflected in our current stock price.

Ben Swinburne: And with respect to the second part of your question Ben.

Ben Swinburne: We are as confident as ever in the value of our teams.

Ben Swinburne: We are scarce assets they have strong business fundamentals.

Ben Swinburne: And we don't think that those are appropriately reflected in our current stock price.

Jamaal Lesane: So we would never rule out the possibility of a minority fake sale. But we also at this time have nothing concrete to report.

Ben Swinburne: So we would never rule out the possibility of a minority stake sale.

Ben Swinburne: But we also at this time have nothing concrete to report and with that I can't speculate on any tax implications of your hypothetical.

Jamaal Lesane: And with that, I can't speculate on any tax implications of your hypothetical.

Ben Swinburne: Yes.

Ben Swinburne: Okay, fair enough. Thanks, Ben.

Okay fair enough. Thank you.

Ben Swinburne: Thanks, Ben Operator, we'll take one last caller.

David Joyce: Operator will take one last caller. Your final question comes from a line of David Joyce from Seaport Research Partners.

Speaker Change: Your final question comes from the line of David Joyce from Seaport Research Partners. Your line is open.

David Joyce: Your line is open. Thank you.

David Joyce: Thank you a couple of questions. Please first on sponsorship.

David Joyce: A couple of questions, please. First on sponsorship, you touched on the experience out of the Adobe Jersey patch. Can you provide some more color on that arrangement and more broadly the outlook for sponsorship going forward, given you also announced C4 Energy sponsor this morning, and what are the other areas where you could still be growing that revenue line?

David Joyce: You touched on the experience on the Diavik Jersey, perhaps could you provide some more color on that arrangement and more broadly the.

David Joyce: Is the outlook for sponsorship going forward given you also announced C for energy.

David Joyce: Sponsor this.

David Joyce: Morning.

David Joyce: What are the other areas, where you can still be growing that revenue line and then secondly, given the various puts and takes on the revenue growth and maintain performance what are your thoughts about ticket pricing for next year. Thanks.

David Joyce: And then secondly, given the various puts and takes on the revenue growth and new team performance, what are your thoughts about ticket pricing for the next year? Thanks.

Jamaal Lesane: Sure. Good morning, David. Again, I'll take, I think, the first part of your question here around sponsorship. So, you know, while we don't discuss the specifics of any individual marketing partnership deal, we believe our overall sponsorship category is on track for a solid growth in fiscal 25. This fiscal year has been highlighted so far by a number of new deals and renewals and as Jamaal had mentioned earlier, we announced multi-year extensions with Verizon and Benjamin Moore as well as new multi-year deal with Lenovo and its subsidiary Motorola. So we formed a multi-faceted partnership with Abu Dhabi's Department of Culture and Tourism with Experience Abu Dhabi, becoming a NICS global marketing partner and the official patch partner of the team.

David: Sure Good morning, David.

David: And again I will take I think the first part of beer question here around sponsorship. So while we don't discuss the specifics of any individual marketing partnership deal. We believe our overall sponsorship category is on track for a solid growth in fiscal 'twenty five.

Speaker Change: This fiscal year has been highlighted so far by a number of new deals and renewals and as <unk> had mentioned earlier, we announced multi year extensions with Verizon and Benjamin Moore, as well as new multi year deal with Lenovo and its subsidiary Motorola.

Speaker Change: So we formed a multifaceted partnership with Abu Dhabi Department of culture and tourism.

Speaker Change: With experienced Abu Dhabi, becoming our next global marketing partner and the official patch partner of the team.

Jamaal Lesane: And as a global partner, Experience Abu Dhabi can also leverage the NYX marks outside the US and Canada, expanding the team's brand presence in an international market.

Speaker Change: And as a global partner experienced Abu Dhabi can also leverage the next marks outside the U S and Canada, expanding the teams brand presence in international markets.

Jamaal Lesane: So as we've always said, you know, the Jersey patch, we believe is real premium inventory, and we are pleased with this deal.

Speaker Change: So as we've always said the Jersey patch, we believe this premium inventory and we are pleased with this deal.

Jamaal Lesane: And with respect to our season ticket pricing, you know, those decisions are made both annually and also with a long-term view. We're factoring in how we manage our relationships with our season ticket holders. as well as our goal of maximizing long-term shareholder value. As you may recall, last season, or last fiscal, coming off of two successful Nix and Ranger seasons, we made the decision to not increase season ticket prices for our renewing holders, while at the same time, we have and we continue to opportunistically price both our new season ticket packages, as well as our individual and group tickets.

Speaker Change: And with respect to our season ticket pricing.

Speaker Change: Those decisions are made both annually and also with a long term view, we are factoring in how we manage our relationships with our season ticket holders.

Speaker Change: As well as our goal of maximizing long term shareholder value.

Speaker Change: As you May recall last season are less physical coming off of two successful mixing range of seasons.

Speaker Change: We made the decision to not increase season ticket prices for our renewing holders while at the same time.

Speaker Change: We have and we continue to opportunistically priced both our new season ticket packages as well as our individual and group tickets.

Jamaal Lesane: And, you know, with that, we're on track to drive modest overall ticket revenue growth this fiscal year. And then looking ahead, we still see opportunity around ticket yield, and we'll continue, as we do every year, to reevaluate our season ticket pricing on an annual basis.

Speaker Change: And with that we're on track to drive modest overall ticket revenue growth. This fiscal year and then looking ahead, we still see opportunity around ticket yield and we will continue as we do every year to reevaluate our season ticket pricing on an annual basis.

David Joyce: Great, thank you very much.

Speaker Change: Great. Thank you very much.

Ari Danes: And that concludes our question and answer session.

And that concludes our question and answer session I will now turn the call back over to Ari Danes for closing remarks.

Operator: I will now turn the call back over to Ari Danes for closing remarks. Thank you all for joining us. We look forward to speaking with you on our next earnings call. Have a good day.

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

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect.

Okay.

Speaker Change: Yeah.

Speaker Change: Yeah.