Madison Square Garden Entertainment Q4: Knicks and Rangers Deal Impact Amid Revenue Decline

Madison Square Garden Entertainment Corp MSGE reported a fourth-quarter FY23 revenue decline of 17% year-on-year to $147.9 million, beating the consensus of $140.0 million. EPS loss of $(0.47) beat the consensus loss of $(0.59).

Revenues related to the company's arena license agreements with the New York Knicks ("Knicks") and New York Rangers ("Rangers") decreased by $15.5 million Y/Y, primarily due to the timing of the NHL 2021-22 regular season in the prior year.

Also Read: Fewer Knicks and Rangers Games - Madison Square Garden Sports Revenue and Bottomline Hit in Q4

Advertising sales commissions decreased by $3.9 million Y/Y due to the termination of the company's advertising sales representation agreement with MSG Networks.

The overall revenue decrease was partially offset by an increase in event-related revenues of $8.1 million Y/Y.

The direct operating expenses of $102.5 million decreased by 18% Y/Y. The selling, general, and administrative expenses of $52.7 million increased 37% Y/Y.

MSGE reported an adjusted operating loss of $(0.78) million vs. a positive $18.99 million a year ago.

Madison Square Garden held $84.4 million in cash and equivalents.

Executive Chairman and CEO James L. Dolan said, "Throughout fiscal 2023, we saw robust demand for our portfolio of live entertainment offerings."

FY24 Guidance: Madison Square Garden sees revenues of $900 million - $930 million vs. consensus of $933.79 million and adjusted operating income of $160 million - $170 million.

Price Action: MSGE shares are trading higher by 4.40% at $32.00 premarket on the last check Friday.