Q4 2025 Madison Square Garden Entertainment Corp Earnings Call
At this time all participants are in a listen only mode. After the Speakers' remarks, there will be a question and answer session.
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 2025 fourth quarter earnings Conference call.
On today's call, David Collins, our EVP and Chief Financial Officer will provide an update on the company's operations and review our financial results for the quarter.
After our prepared remarks, we will open up the call for questions.
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.
Today's discussion may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095, 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.
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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.
On pages four and five of today's earnings release, we provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income or AOI.
Our non-GAAP financial measure and with that I'll now turn the call over to David.
Thanks, Ari and good morning, everyone.
During fiscal 2025, we again benefited from strong demand across our portfolio of entertainment assets, which resulted in full year revenues of $942 7 million along with adjusted operating income of $222 5 million.
A 5% increase on a year over year basis.
In addition, we repurchased approximately $40 million of our class a common stock during fiscal 'twenty five delivering on one of our core capital allocation priorities.
As we enter the new fiscal year, we see a number of avenues for growth across our business, which include continuing to increase the number of events at our venues.
Driving growth in per event profitability Bill.
Building on the success of Christmas spectacular and growing our sponsorship and premium hospitality businesses.
And when combined with the strong consumer and corporate demand. We continue to see we believe our company is well positioned to drive solid growth in revenue and adjusted operating income in fiscal 'twenty six.
Now, let's review some key operational highlights from this past year.
During fiscal 'twenty five we hosted nearly 6 million guests at over 975 live events.
The majority of these events were delivered by our bookings business, where we saw modest growth in the number of events held at our venues compared to the prior year.
This growth was led by special events family shows and marquee sporting events. The number of concerts at our theaters also increase versus fiscal 'twenty four while the number of concerts at the garden was down year over year.
Highlights in the special events category included multi day takeovers for Saturday Night live 50th anniversary Special and the Tony Awards, both of which were held at radio city.
And our family show category, we welcome back the Westminster Dog show to the garden for the first time since 2020.
Our sports booking business delivered another strong year, featuring marquee College basketball match ups, UFC 309, and a return of professional tenants to the garden.
On the concert front the gardens year over year decrease in events included the impact of the end of Billy Joel's residency, while the growth across our theaters reflected our success in attracting a number of multi night runs from both first time and returning acts.
At radio City, we set a new record for the number of concerts.
From a consumer demand standpoint, the majority of concerts at our venues continue to sell assets past fiscal year, including in our fiscal fourth quarter. In addition, during this past quarter food and beverage per cap. The concerts at the garden were up while per caps at our theaters were modestly down as compared to the prior year quarter.
Looking ahead to fiscal 'twenty six we expect to grow the number of events at our venues on a year over year basis.
We plan to again host a wide range of events across concert special events family shows and marquee sports with our anticipated growth and total events, primarily driven by an increase in concerts, including a return to growth in concerts at the garden.
Turning to the Christmas spectacular production during fiscal 'twenty five we sold approximately $1 1 million tickets across 200 performances and generated over $170 million in revenue a new record for the production and its 90 <unk> season.
On the concert front, the Gardens' year-over-year decrease in events included the impact of the end of Billy Joel's residency, while the growth across our theaters reflected our success in attracting a number of multi-night runs from both first-time and returning acts.
At Radio City, we set a new record for the number of concerts.
We're currently on sale with 211 shows for the 2025 holiday season, and expect revenue growth for the production to be driven by the increased number of shows as well as higher per show revenue.
Turning to our agreements with MSG sports in fiscal 'twenty five the Knicks and Rangers played a combined 97 home games at the garden compared to a 103 games in the prior year.
From a consumer demand standpoint, the majority of concerts at our venues continued to sell out this past fiscal year, including in our fiscal fourth quarter. Additionally, during this past quarter, food and beverage per capita at concerts at the Garden were up, while per caps at our theaters were modestly down as compared to the prior year quarter.
Looking ahead to fiscal 2026, we expect to grow the number of events at our venues on a year-over-year basis.
This decrease reflected fewer home playoff games at the garden during our fiscal fourth quarter.
However, we did see growth on a per game basis, and our Knicks and Rangers shared revenue streams, including suites food beverage and merchandise and we expect this to carry forward into fiscal 'twenty six.
We plan to again host a wide range of events, including concerts, special events, family shows, and marquee sports, with our anticipated growth in total events primarily driven by an increase in concerts, including a return to growth in concerts at the Garden.
In addition, the cash component of the arena license fees will be approximately $45 million in fiscal 'twenty six and we will continue to grow 3% each year through fiscal 2055.
Turning to the Christmas Spectacular production during fiscal 25. We sold approximately 1.1 million tickets across 200 performances and generated over 170 million dollars in Revenue. A new record for the production in its 91st season.
Turning to our marketing partnerships business during fiscal 'twenty five we welcomed several new partners, including Lenovo and its subsidiary Motorola as well as the department of culture and tourism Abu Dhabi.
We are currently on sale with 211 shows for the 2025 holiday season and expect revenue growth for the production to be driven by the increased number of shows, as well as higher per-show revenue.
In addition, we reached multiyear renewals with Verizon and Pepsi.
As you know earlier in fiscal 'twenty five we made the strategic decision to bring our sponsorship sales effort back in house. Since then we have made progress in building out our internal team and we believe we're well positioned to capitalize on upcoming opportunities in fiscal 'twenty six.
Turning to our agreements with MSG Sports and fiscal 25. The Nixon Rangers played a combined, 97 home games at the Garden, compared to 103 games in the prior year.
This decrease reflected fewer home playoff games at the Garden, during our fiscal fourth quarter.
Turning to our premium hospitality business during fiscal 'twenty five we saw another year of strong demand for our premium hospitality offerings.
However, we did see growth on a per game basis in our Nixon Ranger shared, revenue streams, including sweets food, beverage and merchandise. And we expect this to carry forward into fiscal 26.
We also benefited from our expanded event level club space as well as from a number of event and Lexus level suites that were renovated at the start of the fiscal year.
In addition, the cash component of the Arena license fees will be 45 million dollars in fiscal 26, and will continue to grow, 3%, each year through fiscal 2055.
Following the successful initiatives several more suites are in the process of being renovated which we believe will again drive incremental revenue.
So as we look to fiscal 'twenty six I'm pleased to say, we expect another year of growth in this area of our business now.
Turning to our marketing Partnerships business during fiscal 25. We welcome several new partners including Lenovo and its subsidiary Motorola as well as the department of culture and tourism Abu Dhabi.
In addition we we reached multi-year renewals with Verizon and Pepsi
Now, let's turn to our financial results for the fiscal 2025 fourth quarter, we reported revenues of $154 $1 million, a decrease of 17% as compared to the prior year period.
This mainly reflected a decrease in revenues across our entertainment offerings and food beverage and merchandise revenue categories.
As you know, earlier in fiscal 2025, we made the strategic decision to bring our sponsorship sales effort back in-house. Since then, we have made progress in building out our internal team, and we believe we're well positioned to capitalize on upcoming opportunities in fiscal 2026.
The decrease in revenues from entertainment offerings, primarily reflected a decrease in event related revenues from concerts.
Turning to our premium hospitality business during fiscal 2025, we saw another year of strong demand for our premium hospitality offerings.
This was mainly due to a decrease in the number of concerts at the garden as well as lower per concert revenues, primarily due to a mix shift at the garden from promoted events to rentals, partially offset by an increase in the number of concerts at our theaters.
We also benefited from our expanding event Level Club Space as well as from a number of event and Lexus level suite that were renovated at the start of the fiscal year.
In addition revenue subject to the sharing of economics with MSG sports pursuant to the arena license agreements decreased year over year, primarily due to the impact of fewer Knicks and Rangers home games during the fourth quarter.
Following this successful initiative, several more Suites are in the process of being renovated which we believe will again Drive incremental Revenue.
So, as we look to fiscal 26, I'm pleased to say we expect another year of growth in this area of our business.
This was partially offset by an increase in revenues from other live entertainment and sporting events, primarily due to higher per event revenues the.
Now, let's turn to our financial results for the fiscal 2025 fourth quarter. We reported revenues of $154.1 million, a decrease of 17% as compared to the prior year period.
The decrease in food beverage and merchandise revenues, primarily reflected the impact of fewer Knicks and Rangers games at the garden as well as fewer concerts at the garden, partially offset by an increase in the number of concerts at the companys theaters as compared to the prior year quarter.
This mainly reflected a decrease in revenues across our entertainment offerings and food beverage and merchandise, Revenue categories.
The decrease in revenues from entertainment offerings, primarily reflected a decrease in event related revenues from concerts.
Fourth quarter, adjusted operating income decreased $14 4 million to a loss of $1 3 million as compared to the prior year quarter.
This was mainly due to a decrease in the number of concerts at the Garden, as well as lower per-concert revenues, primarily due to a mixed shift that the Garden experienced from promoted events to rentals.
The decrease in NOI, primarily reflects lower revenues and to a lesser extent higher SG&A expenses, partially offset by a decrease in direct operating expenses.
Partially offset by an increase in the number of concerts at our theaters.
Now turning to our balance sheet as of June 30, we had approximately $43 million of unrestricted cash while our debt balance was approximately $609 million.
In addition, revenue subject to the sharing of economics with MSG Sports, pursuant to the arena license agreements, decreased year-over-year primarily due to the impact of fewer Knicks and Rangers home games during the fourth quarter.
During the quarter, we refinanced our credit facility. This refinancing extended the facility's maturity for a new five year term ending June 2030, with a modest improvement in the borrowing rate and no change to the term loan or revolver capacity.
This was partially offset by an increase in revenues from other live entertainment and sporting events primarily due to higher per event revenues.
Looking ahead to fiscal 'twenty six we currently expect our company to have another year of substantial free cash flow generation.
The decrease in food, beverage, and merchandise revenues primarily reflected the impact of fewer Knicks and Rangers games at the Garden, as well as fewer concerts at the Garden. This was partially offset by an increase in the number of concerts at the company's theaters compared to the prior year quarter.
This reflects the following expectations solid growth and adjusted operating income ongoing net interest payments related to our national properties debt, which totaled $45 million in fiscal 'twenty five our status as a full cash taxpayer and capital expenditures, which will include both maintenance capex as well as some.
33 million as compared to the prior year quarter.
The decrease in aoi primarily reflects lower revenues and to a lesser extent, higher sgna expenses. Partially offset by a decrease in direct operating expenses.
Mental spend related to enhancements at radio City Music Hall at the Beacon theater and certain sweet renovations at the garden.
As I mentioned earlier during fiscal 'twenty, five we repurchased approximately one 1 million shares of our class a common stock for $40 million.
Now, turning to our balance sheet, as of June 30th, we had approximately 43 million of unrestricted cash. While our debt balance was approximately 609 million.
Following these repurchases we have approximately $70 million remaining under our current share repurchase authorization and going forward. We will continue to explore ways to opportunistically return capital to shareholders.
During the quarter, we refunded our credit facility. This refinancing extended the facilities maturity for new 5-year term ending, June 2030 with a modest Improvement in the borrowing rate and no change to the term loan or revolver capacity.
Looking ahead to fiscal 26, we currently expect our company to have another year of substantial free, cash flow generation.
In summary fiscal 2025 reflected strong demand for our entertainment assets and as we look ahead to fiscal 'twenty. Six we are focused on organically growing the business and remain confident in our ability to deliver long term shareholder value with that I will now turn the call back over to Ari. Thank you.
this reflects the following expectations,
Solid growth in adjusted operating income.
Thank you David operator can we open up the call for questions. Please.
Certainly 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 you raise your hand and joined the queue. If you would like to withdraw your question simply press Star one again.
I'm going net, interest payments related to our national properties debt, which totaled 45 million in fiscal 2525. Our status as a full cash taxpayer and capital expenditures which will include both maintenance capex, as well. As some incremental, spend related to enhancements at Radio City Musical, and The Beacon Theater in certain sweet, Renovations, at the Garden.
Your first question today comes from the line of Peter Henderson from Bank of America. Your line is open.
As I mentioned earlier, during fiscal, 25, we repurchase approximately 1.1 million shares of our class a common stock for forty million dollars.
Good morning, and thank you for taking the question. So I'm just wondering can you provide an update on how ticket sales are pacing for the Christmas spectacular and how to think about the growth opportunities for the production with the show count increasing to 211.
Following these repurchases, we have approximately 70 million dollars remaining under our current share repurchase authorization and and going forward, we will continue to explore ways to opportunistically return Capital to shareholders.
How do you think about the sort of a balance between sell through and ticket pricing for this upcoming season run.
In summary fiscal 2025, reflected strong demand for our entertainment assets.
Yes, Peter Thanks for the question.
As a reminder, we initially went on sale in March this year as opposed to April last year, so that impacts our year over year comparison.
And as we look ahead to fiscal 26, we are focused on organically growing the business and remain confident in our ability to deliver long-term shareholder value with that. I will now turn the call back over to Ari. Thank you.
Thank you. David operator. Can we open up the call for questions, please?
And while it's still early in the sales cycle. Our advanced ticket revenue continues to pace well ahead of last year at the same time.
Certainly, 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.
The pacing.
As reflected in both higher individual and group ticket sales.
Your first question today comes from the line of Peter Henderson from Bank of America, your line is open.
And that is driven by increases in our average ticket yield across both individual and group sales as well as well as higher volume from our individual tickets.
In terms of growth drivers. This year, we are on sale for.
211 shows for this upcoming season as compared to 200.
Thank you. Good morning and thank you for taking the question. So I'm just wondering, can you provide an update on how ticket sales are pacing for the Christmas Spectacular? And how to think about the growth opportunities for the production with, you know, the show count increasing to a 2111, uh, how you think about the sort of balance between sell through and ticket pricing for this, uh, upcoming season's run?
This past season and that represents a mid single digit percent increase in show count.
We can also increase the show count if if demand warrants it and that's something that we'll be watching closely.
Uh, yeah. Peter, uh, thanks for the question. Um, as a reminder, you know, we initially went on sale in March,
This year, as opposed to April last year, impacts our year-over-year comparison.
We also continue to see opportunities to improve our per show revenue for this year as you know the Christmas spectacular as a premium entertainment product in this market.
You know, with, you know, while it's still early in the sales cycle, our Advanced ticket Revenue continues to pay. So, well ahead of last year at the same time.
It is still well priced I mean still priced well below average ticket prices for comparable entertainment options. So.
We will we will be strategically managing in marketing and pricing our ticketing inventory to maximo to maximize revenue for every show so with all that said and all thats going on there we remain confident in our ability to continue to grow this business this fiscal year.
The pacing, uh, is reflected in both higher individual and group tickets sales. Uh, and that is driven by increases in our average ticket yield across both individual and group sales as well, are as well as higher volume from our individual tickets.
In terms of growth drivers this year, we are on sale for
Thank you.
Our next question comes from the line of Cameron <unk> from Morgan Stanley. Your line is open.
2111 shows for for this upcoming season as compared to 200, uh, this past season and, and that represents a, a mid single-digit percent increase in in in show count
Thanks, Good morning.
I was wondering if you could just provide some more color on forward bookings trends as we look further out into the year.
We can also increase the show count if demand warrants it, and that’s something that we will be watching closely.
And some color on.
Kind of levels of visibility into fiscal 2006 at this point in the year, and then somewhat relatedly, but separately outside of concert bookings.
And more specific to kind of special and other events just any detail you can give us on the outlook for fiscal 2006, you highlighted some of the strength you had this year.
We also continue to see opportunities to improve our per show revenue for this year. You know, as you know, the Christmas Spectacular is, is a premium entertainment product in in this market and it is still well priced. I mean, still priced, well, below average, ticket prices for comparable, entertainment options. So you know, we
So now.
And other events How's the calendar looking for fiscal 'twenty, six and how should we think about kind of that growth and the calendar outlook across non concerts.
Will we will be strategically managing, and marketing and pricing. Our ticketing inventory to Maximo to maximize Revenue, uh, for every show. So, with all that said, and all that's going on there, we remain confident in our ability to continue to grow this business. This fiscal year,
Thank you.
Would be helpful. Thank you.
Sure Kamran no problem.
Your next question comes from the line of Cameron. Manson Peron from Morgan Stanley, your line is open
As I mentioned earlier, we expect to increase the number of booking events, including concerts in fiscal 'twenty six. So if you look on a full year basis.
We're currently pacing of hitting concerts versus fiscal 'twenty at this point in time in fact, we are 80% to our bookings goal for the year at the garden and we're about two thirds of the way to our goal for our theaters.
Our fiscal first quarter is already underway and we are still on track for a new record number of concerts in the quarter at the garden. We also expect our concerts to be up across.
Our theaters in the September September quarter as well.
We're taking a look at the December quarter.
We are again piecing ahead at our theaters in terms of the number of concerts.
And and some color on kind of levels of visibility into physical 26 at this point in the year. Um, and then, you know, somewhat relatedly, but separately outside of concert bookings and, and more specific to kind of special and other events. Just any detail, you can give us on, you know, the outlook for physical 26. You highlighted some of the strengths you had this year um, with SNL uh and other events. Uh how's the calendar looking for physical 26 and how should we think about kind of the the growth and calendar Outlook uh across non-con concerts would be helpful. Thank you.
Sure, Cameron, uh, no problem. Um,
But still behind that the garden, so with all that said I would say overall, we feel good about our start and we expect to grow the number of events at our venues this year.
Now in terms of your question about special events and bookings growth.
Let me take you through how we think about all of our key booking categories for this coming year, including special events. So.
You know, as I mentioned earlier, we expect to increase the number of booking events, including concerts in, in fiscal 26. So, if you look on a full year basis, we are currently pacing ahead in concerts versus fiscal 20. At this point in time. In fact, we are 80% to our bookings goal for the year at the Garden. And, and we're about 2/3 of the way to our goal for our theaters.
So starting there.
We are expecting a modest increase in the number of special events in fiscal 2006. However, we will face a tough comparison in this category in terms of financial results given the absence of our <unk> 50 <unk>.
You know, our our fiscal first quarter is already underway and we are still on track for a new record number of concerts in a quarter at the Garden.
We also expect our concerts to be up cross uh, our theaters in the September September quarter as well.
Diversity is special.
But looking at looking at the rest of the booking business our growth in fiscal 'twenty six we expect to be driven primarily by concerts family Joe's and sports properties.
And taking a look at the December quarter, we are again pacing ahead at our theaters in terms of the number of concerts.
From a concert category perspective, our expectations include a return to concert event growth at the garden as well as continuing our growth across our theaters.
But still behind at the Garden. So, with all that said, I would say overall we feel good about our start, and we expect to grow the number of events at our venues this year.
Now in terms of your, your question about, you know, special events and and and bookings growth. Um,
In terms of our family show category, while we are not expecting growth in the number of events, we do expect to see improved financial results.
Let me take you through how we think about all our key booking categories for this upcoming year, including special events. So.
so, starting there, um,
And that's mainly due to a return of surplus delay for 63 shows for the holiday season at the theater at MSG and the Chicago Theatre.
We we're expecting a modest increase in the number of special events in in fiscal 26.
And lastly in terms of our marquee sports business, we expect to see modest event growth next year as well we are expecting another robust year of college basketball in boxing.
However, we, we will face a tough comparison. In this category, in terms of financial results, you know, given the absence of our SNL's 50th Anniversary Special,
Given all of that I would say we are we definitely are expecting growth across a number of our bookings categories and feel good about our booking calendar for fiscal 'twenty six.
You know, but looking at looking at the rest of the booking business, you know, our growth in fiscal 26. We expect to be driven primarily by concerts family shows and sports properties.
That's helpful. Thank you.
Our next question comes from the line of Peter Zaffino from Wolfe Research. Your line is open.
You know, from from a concert category perspective, our expectations include a return to concert event growth at the Garden as well as continuing our, our growth across our theaters.
Hello, Good morning.
Garden's utilizations such an important part of your business, but just wondered if you could share some progress on utilization.
Driving the higher presumably maybe.
Maybe if you could talk about any new residency at the garden that would fill the gap left by Billy Joel. Thanks.
In terms of our family show category, uh, while we are not expecting growth in the number of events, we do expect to see, uh, improved Financial results. And, and, and that mainly due to a return of serp for 63 shows for the holiday season at the theater at MSG and the Chicago theater.
Sure no problem. Thanks, Peter.
Starting with the utilization question.
And lastly, in terms of our a marquee Sports business, we expect to see modest event growth next year as well. We are expecting another robust year of college basketball and boxing.
As you know we have a track record of successfully driving event growth at our venues.
I would say from fiscal 2015, which.
So given all that I would say we are. We definitely are expecting growth across a number of our bookings categories and feel good about our booking calendar for for fiscal 26.
It was our first full year following the gardens renovation.
Through fiscal 2024, we drove mid single digit annual growth in the number of concerts at the garden and across our venues.
That's helpful. Thank you.
Your next question comes from the line of Peter spino from Wolfe research. Your line is open.
As you know we did see a decrease in concert at the garden in this past fiscal year.
And as a result.
The venue had an effective utilization of a little over 65% based on approximately 230 events in fiscal 'twenty five and that includes our Knicks and Ranger games.
Hello. Good morning. Um, with the gardens utilization, such an important part of your business. I just wondered. If you could share some progress on on utilization, uh, driving that higher presumably and and maybe if you could talk about any new residencies at the Garden, that would fill the Gap left by Billy Joel. Thanks.
We continue to believe there is real upside to utilization at the garden and we're looking to get back on track with event growth at the arena in fiscal 'twenty six.
Sure uh, no problem. Thanks Peter. Um,
In terms of our fourth theaters, we hosted over 540 events. Excluding the 200 Christmas spectacular shows in fiscal 'twenty, five which averages to approximately 135 events or so at each venue and if you look at that on a 365 day a year.
Starting with, uh, utilization question. Um, you know, as as you know we have a track record of of successfully driving event growth at our venues.
I would say from uh fiscal 2015 which uh was our first full year following the gardens renovation, um, through fiscal 2024, we drove mid single digit, annual growth in the number of concerts at the Garden and and across our venues
You can see our theaters have a large slate of available data to work from so that's an opportunity that we are really targeting.
As you know, we did see a decrease in concerts at the Garden this past fiscal year.
Across our venues we expect to.
The benefit in future years, and this year from continued industry growth.
And we will continue to leverage our industry relationships to identify new events that include potential residencies multi night runs additional marquee sports and special events. So given all that we are confident in our ability to continue to grow our bookings business, including in fiscal 'twenty six.
65% based on approximately 230 events in fiscal 25 and that includes uh, Nicks and and Ranger games.
We continue to believe there is real upside to utilization at the Garden. And we're looking to get back on track with event growth at the arena in fiscal 26.
Now you had mentioned.
<unk> new residency at the garden.
<unk>.
What I would say is that we are in the late planning stages for a residency next calendar year. This.
Residency would include a substantial number of dates at the arena and would create potential for concert growth at the garden in fiscal 2007.
In terms of our fourth theaters, we hosted over 540 events excluding, uh, the 200 Christmas Spectacular shows in fiscal 25, which averages through approximately 135 events or so at each venue. And if you look at that on a 3665 day a year, uh, you can see our theaters have a large slate of available dates to work from. So that's an opportunity that we are really targeting.
And keeping in mind that we'll be following what we expect to be a strong performance here in fiscal 'twenty six.
So.
We're looking forward to sharing more details on.
That residency when it's a more appropriate time.
Your next question comes from the line of Stephen <unk> from Goldman Sachs. Your line is open.
Hey, Good morning. This is <unk> on for Stephen Thanks for taking my question.
Venues we expect to benefit in future years and this year from continued industry growth, and we will continue to leverage our industry relationships. So, we will identify new events that include potential residencies, multi-night runs, additional marquee sports, and special events. So, you know, given all that, we are confident in our ability to continue to grow our bookings business, including in fiscal 2026.
Or would you describe the approach to capital returns coming up here in fiscal 'twenty six specifically is there a plan to it.
Now, you had uh mentioned uh a potential new residency at the Garden. Um,
Continue to be opportunistic with share buybacks or is there a chance you guys become more methodical and buying back stock from here. Thanks.
Sure. Thanks for the question.
What I would say is that we are in the late planning stages for a residency. Next calendar year. This uh residency would include a substantial number of dates at the arena and would create potential for concert growth at the Garden in fiscal 27.
Let me provide an update on how we're thinking about our capital allocation include.
Including our capital returns.
You know and and in keeping in mind that will be following what we expect to be a strong performance here in fiscal 26. So
As I mentioned earlier, we expect fiscal 2006 to be another year of OE growth and significant free cash flow generation.
so um, we're looking forward to sharing more details on on that residency, when it's a more appropriate time.
As as you've heard us discuss before we have.
Three main priorities in terms of capital allocation.
Your next question comes from a line of Steven Lesik from Goldman Sachs. Your line is open.
The first is making sure we continue to have a strong balance sheet.
Our net debt leverage was approximately two five times at quarter end and we should continue to delever as the business grows.
Second is to ensure that we have flexibility to invest in our core business when we see compelling opportunities.
And as we look to fiscal 'twenty six while there aren't any major capital projects. The flag. We are always looking at ways in which we can enhance our current portfolio of offerings and generate attractive returns and as I mentioned earlier, we are in the process of renovating several event in lexis level suites, which are <unk>.
Hey, good morning. This is antaris on for Stephen. Thanks for taking the question. Um, how would you describe the approach to Capital returns coming up here in fiscal? 26, specifically, is there a plan to continue to be opportunistic with share BuyBacks? Or is there a chance you guys become more methodical in buying back stock from here? Thanks.
Sure, thanks for the question. Um,
Let let me provide an update on on how we're thinking about our Capital allocation, um, including our our Capital returns.
Drive incremental revenue and we also expect some incremental spend related to radio city and the Beacon Theatre, which will enhance the guest experience at those theaters.
As I mentioned earlier, you know, we expect uh fiscal 26 to be another year of aoi growth and significant free cash flow generation.
As you've heard us discuss before, we have three main priorities in terms of capital allocation.
And finally, our third priority is to Opportunistically return capital to our shareholders.
The first is making sure we continue to have a strong balance sheet.
As I mentioned, we repurchased $40 million of stock during fiscal 'twenty, five and we have $70 million remaining under our current buyback authorization.
Our net debt. Leverage was approximately 2.5 times that that quarter in, and we should continue to delegate growth.
Going forward, we will continue to explore ways to opportunistically return capital to our shareholders.
Second is to ensure that we have flexibility to invest in our Core Business. When we see compelling opportunities,
Alright, thank you.
Your next question comes from the line of David Karnofsky from Jpmorgan. Your line is open.
Alright. Thank you David maybe just to the upcoming fiscal year wanted to see if you could just discuss how we should think about trajectory of various cost items or EBIT margin. If you could speak to it just recognizing that.
But that mix is always a factor.
And as we look to fiscal 26, while there aren't any major capital projects, the flag. We are always looking at ways in which we can enhance our our current portfolio of offerings and, and generate attractive returns. And as I mentioned earlier, we, we are in the process of renovating several events and Lexus level Suites, which should drive incremental revenue. And, and we also expect some incremental, spend related to Radio City and The Beacon Theater, which will enhance. Uh the guest experience at at at those theaters and
Sure. Thanks, David.
As I mentioned earlier, we expect to deliver solid growth in fiscal 'twenty six.
And that reflects a number of components.
First of all we we.
To see growth across our core categories and that includes our bookings the Christmas spectacular suites marketing partnerships.
And finally, our third priority is to opportunistically, return Capital to our shareholders. Uh, as I mentioned, we we repurchase forty million dollars of stock during fiscal 25 and we have 70 million dollars remaining under our current buyback authorization. So going forward, we will continue to explore ways to opportunistically return Capital to our shareholders.
Our expectations for AOR growth also reflect higher corporate costs. However, in and that includes the impact of staffing up our sponsorship business as well as executive management and other hires that we had we have made in recent months.
Great. Thank you.
Your next question comes from the line of David karnowsky from JP Morgan. Your line is open.
With that said, we are always looking for ways to run our business more efficiently and we will look for opportunities to offset those those cost increases.
Thank you, David. Um maybe just for the upcoming fiscal year 1 to see if you could just discuss how we should think about, you know, a trajectory of various cost items or even margin if you can speak to it. Just recognizing that uh, you know, event mix is always a factor. Thanks.
I would say from a margin standpoint that we have the opportunity to modestly expand our margins in fiscal 'twenty six even with the higher SG&A expenses.
Sure. Thanks David. Um,
All of our key revenue lines carry attractive contribution margins.
As I mentioned earlier, we, we expect to deliver solid aoi growth in fiscal 26 and and that reflects a number of components.
And we expect broad based growth across our business. This year. So so taking into account all of those factors.
You know, first of all, we we expect to see growth across our core categories and that that includes our bookings. The Christmas Spectacular. Suites marketing Partnerships.
We expect to deliver solid NOI growth in fiscal 'twenty, six and have the opportunity to modestly improve our.
AOI margin.
Okay.
Operator, we'll take one last caller.
Our expectations for AO growth also reflect higher corporate costs. However, and and that includes the impact of Staffing up our sponsorship business as, as well as executive management and other hires that we had, we have made in in recent months.
Your final question comes from the line of David Joyce from Seaport Research Partners. Your line is open.
Thank you a couple please one on sponsorship you did just mentioned staffing up some more for that infrastructure what is your outlook for <unk>.
With that said, we are always looking for ways to run our business more efficiently. We'll look for opportunities to offset those cost increases.
Sponsorship over the course of the next fiscal year.
Is there some sort of quarterly cadence we should expect.
I would say, uh, from a margin standpoint that we have the opportunity to modestly expand our AO margins in fiscal 26, even with the higher sgna expenses,
And then secondly on the consumer demands.
For the concerts, given that you've got more events coming.
Have you seen so far in this quarter the per cap spending on ancillary.
<unk> trend.
Those pricing trends basically whats your outlook for the health of the consumer.
All of our key Revenue lines, carry attractive, contribution margins and, and we expect broad-based growth across our business this year. So, so taking into account, all of those factors. Um, we expect to deliver solid aoi growth, in fiscal 26 and have the opportunity to modestly improve our AO aoi margins.
Okay.
Sure. Thanks, David.
In terms of our sponsorship outlook.
Operator will take 1 last caller.
Let's take a step back in and let me say that we offer our marketing partners here at MSG, a strong value proposition with our unique assets and brands here at MSG.
Your final question comes from the line of David Joyce from Seaport research Partners, your line is open.
We did see that this past year with a number of notable sponsorship announcements such as Lenovo is subsidiary of Motorola The department of culture, and tourism Abu Dhabi Verizon Pepsi.
And we believe this positive momentum will continue as we look and go through fiscal 'twenty six.
Secondly, we have several premium sponsorship assets available and those include outdoor signage naming rights at our theater MSG as well as.
Thank you. Uh, a couple please 1 on sponsorship, you did just mention Staffing up some more for that infrastructure. What is your outlook for, uh, sponsorship over the course of the next fiscal year? Uh, is there some sort of quarterly Cadence? We should expect? Uh, and then secondly, on the, uh, consumer demands, uh, for the concerts given that you've got more events coming, how have you seen so far in this quarter? You know, the per cap spending on Silver and the ancillary, uh, Trends. Uh, you know, how are the pricing Trends. Basically, that you know, what's, what's your outlook for the health of the consumer?
We have some notable presenting partnerships across our venue so.
Sure. Thanks David. Um,
We also we also have a number of renewals coming up that we are optimistic about and lastly, I would say from a sponsorship perspective.
Our sponsorship sales effort being back in house makes us truly believe that we are well positioned to execute on all of these opportunities in this year ahead.
in terms of our, our sponsorship Outlook, uh, let's take a a step back. And, and, and let me say that we offer our marketing Partners here at MSG, a strong value proposition, uh, with our unique assets and Brands here at MSG.
And taking a look at your question regarding.
We did see that this past year with a number of notable sponsorship announcements such as Lenovo, its subsidiary, Motorola, the department of culture and tourism Abu Dhabi. Verizon Pepsi
Consumer demand.
While we are certainly keeping an eye on the macro environment, we continue to see strong consumer demand.
You know, and we believe this positive momentum will continue as we look and go through fiscal 2026.
A number of factors that support this view is.
We are seeing strong demand for the Christmas spectacular 2025 holiday run in our advanced tickets are pacing well ahead of last year at this time.
Secondly, we have several premium sponsorship assets available and and those include outdoor signage naming rights at at our theater at MSG as well as um, we have some notable presenting Partnerships across our venues. So um,
In terms of bookings the majority of concerts at our venues where again sold out this past quarter and a number of upcoming acts across our venues have also added additional shows due to strong demand.
we also, we also have a number of renewals coming up that we are optimistic about and, um, lastly, I would say, from a sponsorship perspective, you know,
And looking at our fiscal first quarter that sell through rate for concerts is currently pacing ahead of where it was same time last year.
Our sponsorship sells effort being back in-house. You know, it makes us truly believe that we are, well, positioned to execute on all of these opportunities in the year ahead.
In addition, our overall F&B per cap spending at concerts at the garden was up double digit percentages in our fiscal fourth quarter, while our per caps at our theaters were modestly down.
And taking a look at your question regarding, you know, consumer demand.
While we're still keeping an eye on on the macro environment. Uh, we continue to see strong consumer demand.
And for the month of July our concert F&B per caps on a combined basis across our venues were up a double digit percentage so with all that said.
We believe we continue to see strong demand from consumers.
Um, a number of factors that, that support this view is, um, you know, we, we are seeing strong demand for, for the Christmas Spectacular, 2025 holiday run. And our Advanced tickets are are pacing, well, ahead of of last year, at, at this time.
Great. Thank you very much.
And that concludes our question and answer session I will now turn the call back over to Ari Danes for closing remarks.
In terms of bookings, the majority of concerts at our venues were, again, sold out this past quarter. A number of upcoming acts across our venues have also added additional shows due to strong demand.
Thank you all for joining US we look forward to speaking with you on our next earnings call have a good day.
That concludes today's conference call. Thank you for your participation you may now disconnect.
In looking at our fiscal, uh, first quarter, the sell-through rate for concerts is currently pacing ahead of where it was at the same time last year.
In addition, our overall FNB per cap spending at at concerts at the Garden was up double digit percentages. In our fiscal fourth quarter, while our, our per caps at our theaters were were modestly down.
On a combined basis across our venues, we're up a double digit percentage. So with all that said, um you know, we believe we continue to see strong demand from from consumers.
Great, thank you very much.
And that concludes our question-and-answer session. 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.
Conference call. Thank you for your participation.