Madison Square Garden Sports Corp. Reports Fiscal 2021 Third Quarter Results
Madison Square Garden Sports Corp. (MSGS) reported $183.0 million in revenue for Q3 FY2021, a 32% decline compared to $267.6 million in Q3 FY2020, largely due to COVID-19 capacity restrictions. Operating income fell to $8.1 million, a decrease of $2.5 million year-over-year. Adjusted operating income saw a rise of 8% to $30.0 million. The company has $289.1 million in liquidity but carries a total debt of $410 million. Fan attendance is expected to increase to 30% from May 19, 2021, and opportunities in mobile sports gaming in New York could enhance engagement.
- Adjusted operating income increased by 8% to $30.0 million.
- Local media rights fees increased by $22.8 million.
- Liquidity of $289.1 million suggests stability.
- Revenue decreased by 32% from $267.6 million to $183.0 million.
- Operating income fell by $2.5 million.
- Total debt stands at $410 million, indicating financial leverage.
Madison Square Garden Sports Corp. (NYSE: MSGS) today reported financial results for the fiscal third quarter ended March 31, 2021.
In February, the New York Knicks ("Knicks") and the New York Rangers ("Rangers") welcomed fans back to home games at the Madison Square Garden Arena (“The Garden”), marking the first time fans have returned to The Garden since March 2020. While attendance has been restricted to
During the fiscal 2021 third quarter, the Knicks played nine home games with limited attendance and 12 home games without any fans, as compared to 17 home games with no attendance restrictions in the prior year period. The Rangers played seven home games with limited attendance and 10 home games without any fans during the quarter, as compared to 16 home games with no attendance restrictions in the prior year period. As a reminder, the fiscal 2020 third quarter was impacted by the suspensions of the 2019-20 NBA and NHL seasons in mid-March 2020.
For the fiscal 2021 third quarter, financial results reflect fan attendance restrictions at The Garden and the compressed timing of the shortened 2020-21 NBA and NHL regular seasons. The Company generated revenues of
Madison Square Garden Sports Corp. President and CEO Andrew Lustgarten said, “Both our Company and our overall industry have seen significant momentum. We are grateful for the overwhelming support from Knicks and Rangers fans this season and are also pleased with their response to our 2021-22 season ticket outreach. On a broader scale, the importance and value of live sports content was once again reaffirmed with the NHL’s recent national media rights agreements. And looking ahead, the recent legalization of mobile sports gaming in New York presents a meaningful opportunity for fan engagement, sponsorship and the value of our teams.”
Results from Operations
Results for the three and nine months ended March 31, 2021 and 2020 are as follows:
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Three Months Ended |
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Nine Months Ended |
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March 31, |
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Change |
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March 31, |
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Change |
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$ millions |
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2021 |
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2020 |
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$ |
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% |
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2021 |
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2020 |
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$ |
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% |
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Revenues |
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$ |
183.0 |
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$ |
267.6 |
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|
$ |
(84.6 |
) |
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(32 |
)% |
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$ |
268.8 |
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|
$ |
610.3 |
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$ |
(341.5 |
) |
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(56 |
)% |
Operating income (loss)(1) |
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$ |
8.1 |
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$ |
10.6 |
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|
$ |
(2.5 |
) |
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(24 |
)% |
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$ |
(57.7 |
) |
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$ |
(48.9 |
) |
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$ |
(8.8 |
) |
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(18 |
)% |
Adjusted operating income (loss)(2) |
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$ |
30.0 |
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$ |
27.8 |
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|
$ |
2.3 |
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|
8 |
% |
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$ |
(6.7 |
) |
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$ |
6.1 |
|
|
$ |
(12.8 |
) |
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NM |
Note: Does not foot due to rounding
(1) |
For the three and nine months ended March 31, 2020, the reported financial results of the Company reflect the results of the MSG Entertainment business segment and the sports booking business, previously owned and operated by the Company through its MSG Sports business segment, as discontinued operations. In addition, results from continuing operations for the same period include certain corporate overhead expenses that the Company did not incur in the period after the completion of the spin-off of Madison Square Garden Entertainment Corp. (“MSG Entertainment”) and does not expect to incur in future periods, but which did not meet the criteria for inclusion in discontinued operations. The reported financial results of the Company for the three and nine months ended March 31, 2021 reflect the Company’s results on a standalone basis, including the Company’s actual corporate overhead. |
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(2) |
See page 3 of this earnings release for the definition of adjusted operating income (loss) included in the discussion of non-GAAP financial measures. |
Summary of Reported Results from Continuing Operations
For the fiscal 2021 third quarter, the Company generated revenues of
Pre/regular season ticket-related revenues decreased
Local media rights fees from MSG Networks increased
Direct operating expenses of
Selling, general and administrative expenses of
Operating income of
Other Matters
As of March 31, 2021, the Company had
-
$69.1 million of cash and cash equivalents, which includes$30 million from the NBA, which the league provided to each team in December 2020, and$30 million advanced from the NHL during the quarter;(3) -
$55 million in borrowing capacity under the Knicks senior secured revolving credit facility; -
$90 million in borrowing capacity under the Rangers senior secured revolving credit facility; and -
$75 million available under the Knicks Holdings unsecured revolving credit facility.
As of March 31, 2021, total debt outstanding was
(3) |
All borrowings under the 2021 Rangers NHL Advance Agreement bear interest at |
About Madison Square Garden Sports Corp.
Madison Square Garden Sports Corp. (MSG Sports) is a leading professional sports company, with a collection of assets that includes: the New York Knicks (NBA) and the New York Rangers (NHL); two development league teams – the Westchester Knicks (NBAGL) and the Hartford Wolf Pack (AHL); and esports teams through Counter Logic Gaming, a leading North American esports organization, and Knicks Gaming, an NBA 2K League franchise. MSG Sports also operates two professional sports team performance centers – the MSG Training Center in Greenburgh, NY and the CLG Performance Center in Los Angeles, CA. More information is available at www.msgsports.com.
Non-GAAP Financial Measures
We define adjusted operating income (loss), which is a non-GAAP financial measure, as operating income (loss) excluding (i) deferred rent expense under the Arena License Agreements with MSG Entertainment, (ii) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (iii) share-based compensation expense or benefit, (iv) restructuring charges or credits, (v) gains or losses on sales or dispositions of businesses, and (vi) the impact of purchase accounting adjustments related to business acquisitions. Because it is based upon operating income (loss), adjusted operating income (loss) also excludes interest expense (including cash interest expense) and other non-operating income and expense items. We believe that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of our business without regard to the settlement of an obligation that is not expected to be made in cash. We believe that given the length of the Arena License Agreements and resulting magnitude of the difference in deferred rent expense and the cash rent payments, the exclusion of deferred rent expense provides investors with a clearer picture of the Company's operating performance.
We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of our Company. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and adjusted operating income (loss) as the most important indicators of our business performance, and evaluate management’s effectiveness with specific reference to these indicators. Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. For a reconciliation of operating income (loss) to adjusted operating income (loss), please see page 5 of this release.
Forward-Looking Statements
This press release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments and events may differ materially from those in the forward-looking statements as a result of various factors, including financial community and rating agency perceptions of the Company and its business, operations, financial condition and the industry in which it operates, the impact of the COVID-19 pandemic and the factors described in the Company’s filings with the Securities and Exchange Commission, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein. The Company disclaims any obligation to update any forward-looking statements contained herein.
MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) |
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FAQ
What were Madison Square Garden Sports Corp.'s Q3 FY2021 revenue results?
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