Sphere Entertainment Co. · NYSE:SPHR
Sphere Entertainment — Madison Square Garden Entertainment — Investor Presentation (February 2023)
26 slides from Sphere Entertainment's investor presentation, Feb 16, 2023
Slide 1: February 2023
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Slide 2: Safe Harbour
SAFE HARBOUR MSGE Spinco, Inc. (to be renamed "Madison Square Garden Entertainment Corp." in connection with the Distribution as defined in the Form 10) (the "Company") has filed with the Securities and Exchange Commission a registration statement on Form 10. The Form 10 contains extensive disclosur
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES We define adjusted operating income (loss) (“AOI”), which is a non-GAAP financial measure, as operating income (loss) excluding (i) the impact of non- cash straight-line leasing revenue associated with the Arena License Agreements with Madison Square Garden Sports Corp. (
Slide 4: Legendary Iconic Compelling: Brands, Venues, Opportunities
LEGENDARY ICONIC COMPELLING BRANDS VENUES OPPORTUNITIES 4
Slide 5: Transaction Overview
TRANSACTION OVERVIEW 67% spin-off of live entertainment business to be named Madison Square Garden Entertainment Corp. (NYSE: MSGE) Current parent company to be renamed MSG Sphere Corp. (NYSE: SPHR) Separation creates more focused investment profiles as well as enhanced strategic and financial
Slide 6: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS ENDURING PROFITABLE WORLD-CLASS POPULARITY OF BUSINESS ENTERTAINMENT CHRISTMAS POISED FOR VENUES SPECTACULAR GROWTH SUBSTANTIAL POTENTIAL FOR PRESENCE IN RETURN OF CAPITAL NEW YORK MARKET OVER TIME 6
Slide 7: Our Portfolio
OUR PORTFOLIO 7
Slide 8: 5 Iconic Venues, Over 900 Live Events, 5+ Million Guests
5 ICONIC VENUES OVER 900 LIVE EVENTS ACROSS NEW YORK AND CHICAGO PROJECTED IN FISCAL 2023 5+ MILLION GUESTS PROJECTED IN FISCAL 2023 35 YEAR DEALS 89 YEARS TO HOST HOME GAMES FOR OF THE CHRISTMAS SPECTACULAR NEW YORK KNICKS & RANGERS STARRING THE RADIO CITY ROCKETTES 8
Slide 9: Madison Square Garden
MADISON SQUARE GARDEN “The World’s Most Famous Arena” #1 grossing venue of its size in the world 1 ~21,000 seat capacity 1 BI L L BO AR D M AGAZ I N E AS O F Y E AR E N D 2 0 2 2 9
Slide 10: Radio City Music Hall and The Theater at Madison Square Garden
RADIO CITY MUSIC HALL THE THEATER #3 grossing venue of its size in the world 1 AT MADISON SQUARE GARDEN New York City and national landmark Intimate environment in central New York City location ~6,000 seat capacity ~5,600 seat capacity 1 BI L L BO AR D M AGAZ I N E AS O F Y E AR E N D 2 0 2 2 10
Slide 11: Beacon Theatre and The Chicago Theatre
BEACON THEATRE THE CHICAGO THEATRE Top 10 grossing venue of its size in the world 1 #5 grossing venue of its size in the world 1 Iconic rock and roll landmark venue Chicago landmark ~2,800 seat capacity ~3,600 seat capacity 1 BI L L BO AR D M AGAZ I N E AS O F Y E AR E N D 2 0 2 2 11
Slide 12: Christmas Spectacular Starring the Radio City Rockettes
CHRISTMAS SPECTACULAR STARRING THE RADIO CITY ROCKETTES Own the Radio City Rockettes and Christmas Spectacular brands Averaging 1 million or more people annually 1 1 AV E R AGE AN N U AL V I SI TATI O N FR O M FI SCAL Y E AR 2 0 1 1- 2020 AN D 2 0 2 3 . FI SCAL Y E AR 2 0 2 1 CH R I STMA S SP E CTA
Slide 13: Valuable Real Estate Holdings
VALUABLE REAL ESTATE HOLDINGS OUR VENUES VENUE MARKET SIZE OWNED NEW YORK CITY ~1.1M SQ. FT. BUILDING NEW YORK CITY PART OF THE GARDEN CHICAGO ~73K SQ. FT. BUILDING VENUE MARKET SIZE EXPIRATION LEASED NEW YORK CITY ~577K SQ. FT. BUILDING 2038 1 NEW YORK CITY ~57K SQ. FT. BUILDING 2036 2 1 R AD I O C
Slide 14: Our Business
OUR BUSINESS 14
Slide 15: Substantial Presence in New York City Metro Area
SUBSTANTIAL PRESENCE IN NEW YORK CITY METRO AREA THE ENTERTAINMENT AND FINANCIAL CAPITAL OF THE WORLD 23 MILLION+ 65 MILLION+ POPULATION1 ANNUAL TOURISTS PRE-PANDEMIC2 HOME TO GREATEST # RANKED #1 OF 210 OF FORTUNE 500 COMPANIES3 DESIGNATED MARKET AREAS4 #1 CONCERT5 AND ENTERTAINMENT MARKET IN THE W
Slide 16: Established Leader in Live Entertainment
ESTABLISHED LEADER IN LIVE UNIQUE APPROACH DRIVES BOOKING SUCCESS OPPORTUNITIES UNMATCHED EXPERIENCES • Grow per-event revenue and • World-class facilities and operations profitability • Leveraging innovative technology • Drive repeat visitation ARTIST-FIRST APPROACH • Talent-friendly venues and ser
Slide 17: The Enduring Popularity of the Christmas Spectacular
THE ENDURING POPULARITY OF THE CHRISTMAS SPECTACULAR 89 YEARS OF NEW YORK’S CHERISHED HOLIDAY TRADITION PAID ATTENDANCE TOTAL REVENUE IN MILLIONS $ IN MILLIONS $132 $128 $130 1.1 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 $114 0.9 $109 $101 $102 $95 $93 $90 $84 $82 $56 0.4 FY10 FY11 FY12 FY13 FY14 FY15
Slide 18: Valuable Long-Term Arena License Agreements with MSG Sports
VALUABLE LONG-TERM ARENA LICENSE AGREEMENTS WITH MSG SPORTS MADISON SQUARE GARDEN SERVES AS HOME TO MARQUEE SPORTS FRANCHISES ARENA LICENSE FEE CASH PAYMENTS $ IN MILLIONS FY55E Knicks Rangers $107M ORIGINAL NBA “ORIGINAL SIX" TEAM NHL TEAM 35 YEAR DEALS STARTING IN FY2021 FY23E $42M 88 PRE / REGULA
Slide 19: Strong Marketing Partnership Track Record
STRONG MARKETING PARTNERSHIP TRACK RECORD SPONSORSHIP RELATIONSHIPS DELIVER COMPELLING VALUE INNOVATIVE MARKETING PARTNERSHIP OFFERINGS • Sought-after entertainment brands • Significant exposure in NYC • Cross-selling opportunities with MSG Sports VALUABLE MULTI-YEAR PARTNERSHIPS • Signature and Mar
Slide 20: Exceptional Hospitality Offerings
EXCEPTIONAL HOSPITALITY OFFERINGS DELIVERING FIRST-CLASS EXPERIENCES 21 58 WIDE ARRAY OF PREMIUM PRODUCTS EVENT LEVEL LEXUS LEVEL • Over 100 premium hospitality offerings SUITES SUITES • Range of exclusive private spaces, first-class amenities and premier seating locations PRIME POSITIONING IN NEW Y
Slide 21: Financial Overview
FINANCIAL OVERVIEW SS ee
Slide 22: Fiscal 2023 Projected Financials
FISCAL 2023 PROJECTED FINANCIALS PROFITABLE BUSINESS WITH DIVERSIFIED REVENUE MIX FY23 PROJECTED REVENUE MIX FISCAL 2023 REVENUE1 SPONSORSHIP, $840M-$860M SIGNAGE, & SUITES3 28% ADJUSTED OPERATING INCOME1 $145M-$155M MSG SPORTS AGREEMENTS4 BOOKINGS 15% BUSINESS2 OPERATING INCOME1 42% CHRISTMAS $90M-
Slide 23: Balance Sheet Snapshot
BALANCE SHEET SNAPSHOT POTENTIAL FOR RETURN OF CAPITAL OVER TIME CAPITAL ALLOCATION PRIORITIES • Near-term focus on deleveraging TOTAL DEBT OUTSTANDING 3 $675M • Long-term will evaluate all options, including return of capital CASH AND CASH EQUIVALENTS 4 $50M WELL POSITIONED FOR CASH GENERATION NET
Slide 24: Appendix
APPENDIX 24
Slide 25: FY2023 Reconciliation of Operating Income to Adjusted Operating Income
APPENDIX FY2023 RECONCILIATION OF OPERATING INCOME TO ADJUSTED OPERATING INCOME PROJECTED FY2023 OPERATING INCOME (U.S.GAAP) $90M-$100M Non-cash portion of Arena License fees from MSGS $(27)M Share-based compensation $20M Depreciation and Amortization $55M Restructuring Charges $10M Gains, net on di
Slide 26: Madison Square Garden Entertainment
MADISON SQUARE GARDEN ENTERTAINMENT 26
Madison Square Garden Entertainment — Investor Presentation (February 2023) on 6ix