Madison Square Garden Entertainment Corp. · NYSE:MSGE
Madison Square Garden Entertainment — Investor Presentation (November 2023)
27 slides from Madison Square Garden Entertainment's investor presentation, Nov 7, 2023
Slide 1: MSG Entertainment November 2023
tain SQUARE a GARDEN nena Ane NOVEMBER 2023
Slide 2: Safe Harbour
2 SAFE HARBOUR Madison Square Garden Entertainment Corp. (the "Company") has filed with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended June 30, 2023. The Annual Report contains extensive disclosure about the Company and its business, including selected histor
Slide 3: Non-GAAP Financial Measures
3 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 Brands, Iconic Venues, Compelling Opportunities
4 LEGENDARY BRANDS ICONIC VENUES COMPELLING OPPORTUNITIES
Slide 5: Overview of MSG Entertainment Spin-Off
OVERVIEW OF MSG ENTERTAINMENT SPIN-OFF ◼ On April 20, 2023, MSG Entertainment (NYSE: MSGE) was spun-off by Sphere Entertainment Co. ◼ ~67% of shares were distributed to shareholders, while 33% were retained by Sphere Entertainment Co. ◼ As of September 22, 2023, Sphere Entertainment Co. no longer ow
Slide 6: Key Investment Highlights
6 KEY INVESTMENT HIGHLIGHTS PROFITABLE BUSINESS POISED FOR GROWTH ENDURING POPULARITY OF CHRISTMAS SPECTACULAR WORLD-CLASS ENTERTAINMENT VENUES SUBSTANTIAL PRESENCE IN NEW YORK MARKET POTENTIAL FOR ONGOING RETURN OF CAPITAL
Slide 7: Our Portfolio
OUR PORTFOLIO 7
Slide 8: Company at a glance: Christmas Spectacular, venues, events, guests
8 90 YEARS OF THE CHRISTMAS SPECTACULAR STARRING THE RADIO CITY ROCKETTES 35 YEAR DEALS TO HOST HOME GAMES FOR NEW YORK KNICKS & RANGERS 5 ICONIC VENUES ACROSS NEW YORK AND CHICAGO ~900 LIVE EVENTS IN FISCAL 2023 5.5+ MILLION GUESTS IN FISCAL 2023
Slide 9: Madison Square Garden
MADISON SQUARE GARDEN “The World’s Most Famous Arena” #1 grossing venue of its size in the world1 ~21,000 seat maximum capacity 91BI LLBOARD MAGAZINE AS OF YEAR END 2022
Slide 10: The Theater at Madison Square Garden and Radio City Music Hall
10 THE THEATER AT MADISON SQUARE GARDEN Versatile venue in central New York City location ~5,600 seat maximum capacity RADIO CITY MUSIC HALL #3 grossing venue of its size in the world1 New York City and national landmark ~6,000 seat maximum capacity 1BI LLBOARD MAGAZINE AS OF YEAR END 2022
Slide 11: Beacon Theatre and The Chicago Theatre
111BI LLBOARD MAGAZINE AS OF YEAR END 2022 BEACON THEATRE Top 10 grossing venue of its size in the world1 Iconic rock and roll landmark venue ~2,800 seat maximum capacity THE CHICAGO THEATRE #5 grossing venue of its size in the world1 Chicago landmark ~3,600 seat maximum capacity
Slide 12: Christmas Spectacular Starring the Radio City Rockettes
12 CHRISTMAS SPECTACULAR STARRING THE RADIO CITY ROCKETTES Own the Radio City Rockettes and Christmas Spectacular brands 90 years of New York’s cherished holiday tradition
Slide 13: Valuable Real Estate Holdings
13 VALUABLE REAL ESTATE HOLDINGS O U R V E N U E S VENUE MARKET SIZE NEW YORK CITY ~1.1M SQ. FT. BUILDING NEW YORK CITY PART OF THE GARDEN CHICAGO ~73K SQ. FT. BUILDING VENUE MARKET SIZE EXPIRATION NEW YORK CITY ~577K SQ. FT. BUILDING 20381 NEW YORK CITY ~57K SQ. FT. BUILDING 20362 O W N E D LE A S
Slide 14: Our Business
14 OUR BUSINESS
Slide 15: Substantial Presence in New York City Metro Area
SUBSTANTIAL PRESENCE IN NEW YORK CITY METRO AREA T H E E N T E R T A I N M E N T C A P I T A L O F T H E W O R L D 15 1NEW-YORK-NEWARK (UNITED STATES CENSUS BUREAU) 2NYC & COMPANY FY22 REPORT 3FORTUNE 500 COMPANIES BY REGION REPORT 2022 4TRACKED BY NIELSEN RESEARCH 52023 POLLSTAR CONCERT MARKET RANK
Slide 16: Established Leader in Live Entertainment
UNMATCHED EXPERIENCES • World-class facilities and operations • Leveraging innovative technology ARTIST-FIRST APPROACH • Talent-friendly venues and service • Exclusive recurring programming • Exploring new event types ESTABLISHED RELATIONSHIPS • Deep industry connections • Promoter agnostic • Large
Slide 17: The Enduring Popularity of the Christmas Spectacular
THE ENDURING POPULARITY OF THE CHRISTMAS SPECTACULAR 9 0 Y E A R S O F N E W Y O R K ’ S C H E R I S H E D H O L I D A Y T R A D I T I O N 1FY 2021 PRODUCTION CANCELLED DUE TO THE IMPACT OF COVID -19 AND FY 2022 PRODUCTION RUN ENDED EARLY DUE TO OMICRON COVID -19 VARIANT 17 FY10 FY11 FY12 FY13 FY14
Slide 18: Valuable Long-Term Arena License Agreements with MSG Sports
ORIGINAL NBA T E A M “ORIGINAL S IX" N H L T E A M 3 5 Y E A R D E A L S S T A R T I N G I N F Y 2 0 2 1 3% ANNUAL ESCALATORS1 88 PRE / REGULAR SEASON GAMES PER YEAR ARENA LICENSE AGREEMENTS INCLUDE ADDITIONAL REVENUE AND PROFIT-SHARING BETWEEN THE COMPANY AND MSG SPORTS2 VALUABLE LONG-TERM ARENA LI
Slide 19: Strong Marketing Partnership Track Record
STRONG MARKETING PARTNERSHIP TRACK RECORD S P O N S O R S H I P R E L A T I O N S H I P S D E L I V E R C O M P E L L I N G V A L U E INNOVATIVE MARKETING PARTNERSHIP OFFERINGS • Sought-after entertainment brands • Significant exposure in NYC • Cross-selling opportunities with MSG Sports VALUABLE MU
Slide 20: Exceptional Hospitality Offerings
58 LEXUS LEVEL SUITES CAESARS SPORTSBOOK LOUNGE EXCEPTIONAL HOSPITALITY OFFERINGS D E L I V E R I N G F I R S T - C L A S S E X P E R I E N C E S 18 INFOSYS LEVEL SUITES 20 23 EVENT LEVEL SUITES(1) SUITE SIXTEEN THE HUB LOFT WIDE ARRAY OF PREMIUM PRODUCTS • Over 100 premium hospitality offerings • R
Slide 21: Financial Overview
21 FINANCIAL OVERVIEW
Slide 22: Diversified Revenue Base
22 ARENA LICENSE AGREEMENTS2 8% SPONSORSHIP, SIGNAGE, & SUITES1 31% FOOD, BEVERAGE & MERCHANDISE 18% FISCAL 2023 REVENUE $851M 1INCLUDES ADVERTISING SALES COMMISSIONS REVENUE ($8.8M) UNDER THE ADVERTISING SALES REPRESENTATION AGREEMENT WITH MSG NETWORKS , WHICH WAS TERMINATED EFFECTIVE DECEMBER 31,
Slide 23: Fiscal 2024 Financial Guidance
FISCAL 2024 REVENUE $900M-$930M ADJUSTED OPERATING INCOME1 $160M-$170M FISCAL 2024 FINANCIAL GUIDANCE OPERATING INCOME1 $85M-$95M 23 KEY DRIVERS OF FISCAL 2024 GUIDANCE IMPROVING VENUE UTILIZATION • Low double-digit percentage growth in events in bookings business BUILDING ON THE SUCCESS OF CHRISTMA
Slide 24: Balance Sheet Snapshot
BALANCE SHEET SNAPSHOT P O T E N T I A L F O R O N G O I N G R E T U R N O F C A P I T A L 24 TOTAL DEBT OUTSTANDING5 $732M CASH AND CASH EQUIVALENTS6 $37M NET DEBT $695M NET DEBT LEVERAGE7 4.1x – 4.3x CAPITAL ALLOCATION PRIORITIES • Focus on debt paydown and opportunistic return of capital to share
Slide 25: Appendix
25 APPENDIX
Slide 26: FY2024 Guidance Reconciliation of Operating Income to AOI
26 PROJECTED FY2024 OPERATING INCOME (U.S.GAAP) $85M-$95M Non-cash portion of Arena License fees from MSGS $(25)M Depreciation and Amortization $55M Share-based compensation $30M Restructuring charges $13M Merger, spin-off and acquisition-related costs1 $2M PROJECTED FY2024 ADJUSTED OPERATING INCOME
Slide 27: Madison Square Garden Entertainment
MADISON SQUARE GARDEN ENTERTAINMENT 7
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