Madison Square Garden Is Able To Patiently Wait For The Return Of Sport Events

On Monday, the New York-based sports team and entertainment company, Madison Square Garden Sports Corp. MSGS reported a fiscal third-quarter loss of $118 million, after reporting a profit in the same period a year earlier. To avoid any confusion, The Madison Square Garden Company completed the spin-off of its entertainment businesses into a new company called Madison Square Garden Entertainment Corp. and changed its name to Madison Square Garden Sports Corp that began trading on NYSE as of April 20^th. Long story short: MSG became MSGE and MSGS as the company attempted to spinoff the sports assets from their entertainment portfolio. Madison Square Garden is the main attraction of the newly public company known as Madison Square Garden Entertainment Corporation MSGE.

Just to make things a little more complicated, as a result of the timing of this transition to a ‘growth' as opposed to a ‘value' label, the Company's fiscal 2020 third-quarter consolidated results include the financial results of both the sports and entertainment businesses so they do not reflect the results of Madison Square Garden Sports Corp. on a standalone basis.

Earnings report

Revenues of $423.96 million for the quarter ended March 2020 resulted in a quarterly loss of $0.66 per share, significantly below Zacks Consensus Estimate of $1.79. But making estimates is just too challenging these days considering the dynamics of the crisis so the better picture is given if we compare the earnings of $1.48 per share a year ago as these figures are adjusted for non-recurring items.

COVID-19 impact

The ongoing pandemics resulted in the suspension of the 2019-20 NBA and NHL seasons and the temporary closure of the company's performance venues led to a decrease in MSG Sports segment, primarily related to the cancellation of college basketball events that were scheduled to occur at The Garden. Its revenues of $288.4 million decreased by 18% as compared to the prior-year period. The suspension resulted in decreases across virtually every revenue stream including ticket-related revenues, local media rights fees, suite license fees, and sponsorship and signage revenues. Comparing to the same period last year, 2020 third-quarter operating income decreased by $47.1 million to $49.4 million, and adjusted operating income decreased by $47.8 million to $55.4 million. This is the result of a decrease in revenues as there is virtually no revenue being recognized and, to a lesser extent, higher selling, general and administrative expenses which were only partially offset by lower direct operating expenses.

Everyone's in the same boat…

Ascential Plc a B2B media holding company best known for operating the Cannes Festival of Creativity/Media Lions. Back in February, taking a minority stake in Hudson MX, a startup competing with media-buying systems providers like MediaOcean.

The companies said Ascential invested $10 million and that the companies would work together in an unspecified "strategic collaboration." But as for Cannes Lions Festival, they have been moved to 2021.

GL Events S.A. known for controversy regarding its CEO pay at least saw its revenue up 13% over last year before the storm. However, a study from May 11^th found that GL Events SA is currently paying its CEO below what is normal for companies of its size.

London-headquartered, Hyve Group formerly known as ITE Group, international organizer of exhibitions and conferences, just proposed an underwritten rights issue followed by a share consolidation. The industry took what is surely among the biggest hits and this is the company's attempt to raise £126.6mln as it is estimated to lose £80milion in revenue for its year ending in September, and this would be a 20% drop comparing to last year.

Back to the US, Live Nation Entertainment LYV announces on Wednesday its own cushion for the COVID-19 shaken finances as it plans to offer $800 million worth of bonds for sale. Last week, the company reported its quarterly revenue fell 21% to $1.37 billion resulting in net losses of $185 million, widening significantly from prior $52 million. Over summer, the company plans to experiment in more open states with smaller venues as the industry will have a slow path to recovery that is expected next year.

Results will take a while to show

The sports arena is famous for packing 20,000 screaming sports fans into tight confines atop Penn Station in midtown Manhattan. It has spun off from the teams that play there. But it's the exact opposite of social distancing, and it could be one of the last places to reopen as New York City aims for normalcy. The reason for the new label was that despite MSG owning the world's most famous and valuable arena, this was not reflected in the company's share price. Over the last four quarters, the company has surpassed consensus EPS estimates just once while The Madison Square Garden Company has underperformed the market so far.

MSG wasn't getting any credit for their entertainment assets or the real estate that goes along with them. The idea behind splitting up the company was to unlock that value to shareholders but they are still trading at a deep discount and no one saw this unprecedented health crisis coming. Since the beginning of this dynamic year, its shares dropped 41% but things needed fixing even before COVID-19 as the stock has fallen 42% in the last 12 months.

Outlook

The question is how patient investors will be as it will take quite a while for things to restart and actually see some results. Fortunately, the summer is traditionally a seasonally quiet period for Madison Square Garden Sports Corp. And despite these unprecedented times, the executives are confident that the company is well-positioned to weather the uncertainty. Sports will be back eventually and MSGS has the capital to keep its head above water until then.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be sent to ivana@iamnewswire.com

The post Madison Square Garden Is Able to Patiently Wait for the Return of Sports Events appeared first on IAM Newswire.