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Edited Transcript of MSG earnings conference call or presentation 8-May-19 2:00pm GMT

Q3 2019 Madison Square Garden Co Earnings Call

New York May 14, 2019 (Thomson StreetEvents) -- Edited Transcript of Madison Square Garden Co earnings conference call or presentation Wednesday, May 8, 2019 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Andrew S. Lustgarten

The Madison Square Garden Company - President

* Ari Danes

The Madison Square Garden Company - SVP, IR

* Victoria M. Mink

The Madison Square Garden Company - Executive VP & CFO

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Conference Call Participants

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* Amy Yong

Macquarie Research - Analyst

* Benjamin Daniel Swinburne

Morgan Stanley, Research Division - MD

* Brandon A Ross

BTIG, LLC, Research Division - Associate Analyst

* Bryan Daniel Goldberg

BofA Merrill Lynch, Research Division - Research Analyst

* David Karnovsky

JP Morgan Chase & Co, Research Division - Analyst

* Michael C. Morris

Guggenheim Securities, LLC, Research Division - MD and Senior Analyst

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Presentation

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Operator [1]

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Good morning. My name is Tom, and I will be your conference operator today. At this time, I would like to welcome everyone to The Madison Square Garden Company Fiscal 2019 Third Quarter Earnings Conference Call. (Operator Instructions) I would now like to turn the call over to Ari Danes, Senior Vice President of Investor Relations for The Madison Square Garden Company. Please go ahead, sir.

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Ari Danes, The Madison Square Garden Company - SVP, IR [2]

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Thank you. Good morning, and welcome to The Madison Square Garden Company's Fiscal 2019 Third Quarter Earnings Conference Call. Our President, Andy Lustgarten, will begin this morning's call with an update on the company's operations. This will be followed by a review of our financial results with Victoria Mink, our EVP and Chief Financial Officer. After our prepared remarks, we will open up the call for questions.

If you do not have a copy of today's earnings release, it is available on the Investors section of our corporate website. Please take note of the following: Today's discussion 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.

These include financial community perceptions of the company and its business, operations, financial condition, and the industry in which it operates as well as the factors described in the company's filings with the Securities and Exchange Commission, including the sections entitled 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 that may be discussed during this call.

On Pages 4 and 5 of today's earnings release, we provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income, a non-GAAP financial measure. Lastly, on Pages 7 and 8 of the release, we present a reconciliation of adjusted operating income to adjusted operating income, excluding the impact of the adoption of ASC Topic 606, the new accounting standard for revenue recognition. And with that, I'll now turn the call over to Andy.

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Andrew S. Lustgarten, The Madison Square Garden Company - President [3]

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Thank you, Ari, and good morning, everyone. Our business continues to benefit from the strength of our sports and entertainment brands and assets. At the same time, we are focused on our key strategic initiatives, including our proposed spin-off and the launch of MSG Sphere, both of which will position the company for long-term growth.

In terms of the proposed spin-off of our Sports business, we remain on track to complete the transaction during the second half of this calendar year. In addition, we made important progress on MSG Sphere, which we believe will ultimately redefine the entertainment experience.

As we focused on advancing strategic priorities, we're also making the appropriate investments to enable our success. These investments include talent and infrastructure to support our growth as we move forward with the Las Vegas and London.

This was reflected in our third quarter AOI results, and we expect this will continue at some level until we open these 2 venues. In addition, this quarter was impacted by expenses related to corporate development activity, such as our proposed spin-off, payroll from prior years and the wind down of Obscura's third-party business as we focus the resources on Spheres.

With respect to our core business, on the entertainment side, we continue to see strong results in concert bookings but were impacted by the absence of a number of special events, including the Grammys that took place in the prior year period.

And not surprisingly, on the sports side, the performance of our teams this past season impacted the growth of certain revenue streams, including tickets. So while our third quarter AOI was lower year-over-year, on an underlying basis, we are confident that our fundamentals and long-term outlook remains strong and that we are taking the right steps for our future.

Turning to our entertainment segment. Our booking business delivered another solid quarter with an increase in overall event-related AOI led by The Garden and the Forum. We generated a double-digit percentage increase in concerts on a year-over-year basis but as I mentioned, this was partially offset by the absence of some key events that took place in the prior year quarter.

For full year 2019, we expect to deliver growth across total events driven by concerts as well as increases in overall event-related revenue and AOI. However, we anticipate the fourth quarter will be lower year-over-year in part due to certain events shifting from the fourth quarter into fiscal 2020, which gives us a good jump start to what we expect will be another strong booking year in 2020.

Our entertainment expertise will play a key role in the success of our MSG Sphere venues in Las Vegas and London where we've made some key progress this past quarter. For Las Vegas, we have completed grading and excavation and in February, started foundation work, which is ongoing.

We are also finalizing the agreement with our general contractor, which we expect to announce soon. With respect to our MSG Sphere venue in London, we submitted our application to the local planning authority in March and expect a determination by the end of the calendar year 2019. Our continued goal is to open Las Vegas venue during calendar year 2021. London would have follow approximately 1 year later, subject to necessary approvals.

Turning to TAO Group. This quarter's year-over-year financial results showed improvement relative to recent quarters with AOI essentially flat despite 1 less week this third quarter versus the prior year period. Helping to drive these results was the rollout of new venues, in particular, the successful debut of TAO Chicago. TAO Group's venue expansion plans continued in March with the opening of several dining and nightlife offerings at the Moxy Chelsea in New York. This was followed last month by the debut of Marquee Singapore at the Marina Bay Sands where there are plans to open 2 additional TAO Group venues in the coming months.

In terms of the Christmas Spectacular, as we talked about before, we had a terrific year this past season with growth in attendance, revenue and AOI. Because of our success through December, we opportunistically extended the show into January, which translated into 13 shows in the third quarter versus 3 in the prior year period.

Since we added shows late in season's run, not surprisingly, while still profitable, we saw a lower than typical per show attendance for these performances. Next year, we expect it will include additional January shows from the start, which will result in improved financial results for these performances.

Turning to our sports segment. The NBA and NHL regular seasons recently concluded with neither of our teams making the playoffs. As I mentioned earlier, the performance of our teams impacted this quarterly results. While we benefited from additional Knicks and Rangers games as compared to the prior year quarter, we saw a lower per-game revenue across tickets, food, beverage and merchandise.

At the same time, we spend more year-over-year on marketing our teams to support our in-game sales, further impacting our results. Both teams are now entering an exciting off-season on with a young core of players, strong draft picks and salary cap flexibility, which we believe will enable us to continue down the path of strengthening our teams and building world-class franchises for the long term.

And as our teams improve over time, we expect this to be reflected in our financial results. With respect to eSports, we remain confident in the sport's long-term growth potential and are well positioned to leverage our expertise in various areas, including sponsorship.

We recently completed a number of new marketing partnership agreements for our eSports organization, Counter Logic Gaming, including one with Newegg, a leading tech-focused e-retailer in North America. As part of the partnership, Newegg is the presenting partner and official online technology retail partner for CLG Sport '19 with brand integration across a variety of CLG's assets.

This includes the annual Fortnite competition, which held its inaugural event last month at the Hulu Theater. In addition, last year, we had successfully renewed and expanded several signature marketing partnerships. We look forward to building on its momentum, and we'll have more in the coming months.

We are also pleased to share that we recently completed a multiyear renewal at Ticketmaster on both the marketing partnership and ticketing fronts. Ticketmaster has been a long-standing partner of ours, and we believe this new agreement will be beneficial for both companies.

In summary, we continue to execute on our business plans as we position our company for the future. This includes making important progress on 2 key initiatives: our proposed spin-off of our sports business and MSG Sphere, which we believe will create meaningful long-term value for shareholders.

I will now turn the call over to Victoria who will take you through our financial results.

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Victoria M. Mink, The Madison Square Garden Company - Executive VP & CFO [4]

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Thank you, Andy, and good morning, everyone. On a reported basis for the fiscal 2019 third quarter, MSG generated total revenues of $517.2 million and adjusted operating income of $84.1 million. Excluding the impact of the new revenue recognition accounting standard, we would have generated $38.2 million in AOI for the third quarter, a decrease of 24% on revenues that would have been $475.8 million, an increase of 4%.

In addition, these results include $8.3 million in revenue and AOI related to prior periods due to the renewal of our ticketing agreement with Ticketmaster. So as Andy indicated earlier, AOI for our third quarter was lower year-over-year on an underlying basis.

Andy also discussed a number of expense items for this quarter, including corporate development, payroll expense related to prior years and Obscura wind down costs. While we are not going to break out the impact of each individual item, in aggregate, this amounted to approximately $7.5 million in incremental costs on a year-over-year basis.

Now turning to our segment results for the quarter. At MSG Entertainment, revenues of $166.5 million increased 4%. This was primarily driven by higher revenues at TAO Group on the Christmas Spectacular production partially offset by other net revenue decreases. Increased revenue for TAO Group reflects the impact of new venue openings, most notably, TAO Chicago, which more than offset the impact of 1 less week in the quarter versus the prior year period as a result of the timing of the retail calendar.

The increase in revenues for the Christmas Spectacular primarily reflects higher ticket-related revenue as a result of additional performances versus the year ago quarter and revenue related to prior periods due to the Ticketmaster renewal partially offset by lower average per show paid attendance in the quarter.

Third quarter entertainment AOI of $7.2 million decreased 26% as compared with the prior year period. This was primarily due to higher SG&A expense driven by higher employee compensation and related benefits, including expenses associated with the wind down of a Spheres' third-party business and payroll expense related to prior years.

These cost increases were partially offset by growth in event-related contribution at the company venues. Excluding the impact of the new revenue recognition standard, entertainment revenues for the third quarter would have been $170.3 million, an increase of 7%, and AOI would have been $6.7 million, a decrease of 31%, respectively, both as compared to the prior year quarter.

At MSG Sports, revenues of $351.6 million increased 17% year-over-year. This primarily reflects increases in local media rights fees from MSG Networks, ticket-related revenue and suite license fee revenue, all mainly due to the impact of the new accounting standard.

MSG Sports AOI increased 74% to $103.1 million primarily due to the increase in revenues partially offset by higher direct operating and SG&A expenses. The increase in direct operating expenses reflects higher net provisions for certain team personnel transactions and other team operating costs partially offset by lower team personnel compensation costs.

The increase in SG&A expense includes higher employee compensation and related benefits and higher marketing costs. Excluding the impact of the new accounting standard, MSG Sports revenues for the third quarter would have been $306.3 million, an increase of 2%, and MSG Sports AOI would have been $57.7 million, a decrease of 2%.

Corporate and Other adjusted operating loss of $26.2 million increased 40% year-over-year primarily due to higher employee compensation and related benefits as well as higher expenses related to the company's corporate development initiatives and cost associated with the proposed spin-off transaction.

Turning to our balance sheet. As of March 31, total unrestricted cash and cash equivalents and short-term investments were approximately $1.3 billion. In addition, there have been no borrowings made under either our $150 million New York Rangers revolving credit facility or our $215 million New York Knicks credit facilities.

Lastly, as of March 31, TAO Group's term loan balance was approximately $104 million. With that, I will now turn the call back over to Ari.

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Ari Danes, The Madison Square Garden Company - SVP, IR [5]

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Thanks, Victoria. Can we open up the call for questions?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Brandon Ross from BTIG.

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Brandon A Ross, BTIG, LLC, Research Division - Associate Analyst [2]

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Andy, you mentioned you made progress on the Spheres in the quarter. Was hoping you could maybe give us some specific details on what exactly you accomplished over the last 3 months and what the next steps are towards getting a budget out there and getting the Spheres built? And then I have another one.

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Andrew S. Lustgarten, The Madison Square Garden Company - President [3]

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Thanks, Brandon. So as we talked about earlier, we had made important progress this last quarter both with our design and construction for both MSG Spheres. In London, we filed our planning application, which requires fairly detailed design drawings. They call them Stage 3 in London, which is roughly comparable to a schematic design here in the U.S. And we expect the decision from the planning authority by the end of this year.

In Las Vegas, as I mentioned earlier, we completed our grading and excavation and are continuing foundation work right now. We are also close to finalizing agreement with our general contractor. As part of that agreement, we are going to have full transparency into all of our subcontractors and have already begun working with them. Focus on our construction needs around items, such as concrete, steel, to ensure that the building is the most efficiently built possible. We've made progress on our development of our design, including the integration of our display and audio technology with the framing required to bring these 2 components together. The progress we've made over the last few months on both design and construction has only reinforced our confidence that we are creating something that will redefine the entertainment experience. And we look forward to sharing more as we -- as developments occur.

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Brandon A Ross, BTIG, LLC, Research Division - Associate Analyst [4]

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Okay. And then secondly, since the last call, Bill Simmons and others reported you are marketing an outright sale of the Knicks. I'd let you answer, but I assume there was confusion perhaps about your process for selling the retained interest in sports. And how aggressively have you been pursuing the retained interest sale? And what are your latest thoughts on timing for that?

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Andrew S. Lustgarten, The Madison Square Garden Company - President [5]

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A few on that, Brandon, so I'll try to answer them all. In terms of Bill Simmons, as we said a few times publicly, it's 100% fake. I don't speculate on how the confusion as you put it, but there's no -- the rumors are 100% fake. In terms of the retained interest.

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Victoria M. Mink, The Madison Square Garden Company - Executive VP & CFO [6]

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Yes, Andy. I'm so happy to take that. So where we ultimately end up, is in terms of raising capital versus exchanging the shares, it just hasn't been determined at this point. It still depend on a variety of factors, just including how the stocks trade and the capital needs of the entertainment company, so we'll -- as our thinking progresses, we'll update you as appropriate.

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Brandon A Ross, BTIG, LLC, Research Division - Associate Analyst [7]

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Thanks, and good luck with the ping pong balls next week.

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Andrew S. Lustgarten, The Madison Square Garden Company - President [8]

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Thank you.

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Operator [9]

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Our next question comes from the line of Amy Yong from Macquarie.

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Amy Yong, Macquarie Research - Analyst [10]

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I also have a question on the Spheres. I guess Andy, have there been any early conversations with the artist community or potential sponsors or marketing folks that have expressed interest and obviously partnering with the Spheres? And then also, Victoria, TAO AOI was actually very -- performed very well this quarter. When do we expect TAO to actually contribute to AOI given that a lot of the venue openings are now over?

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Andrew S. Lustgarten, The Madison Square Garden Company - President [11]

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Well, I'll start, and Victoria can answer. In terms of outreach about the artist and partnership and community, so we've had a lot of inbound interests as well as we can start having conversations. The more we discussed, the more we see the excitement in the industry, and we feel very good about it. That said, we don't have anything to announce right now as we're continuing focusing on the design and construction.

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Victoria M. Mink, The Madison Square Garden Company - Executive VP & CFO [12]

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Amy, on TAO, yes, this quarter was -- the AOI for the TAO Group was essentially flat versus a year ago quarter. And as you're aware, the last 2 quarters, we -- look, the TAO Group hasn't performed as well, and we have indicated that we are clearly working with the TAO management on ways to operate the business more efficiently. So we are pleased that there hasn't been any meaningful decline on a year-over-year basis this quarter, and it tends to appear to be certainly stabilizing and moving in the right direction for us. As it relates to the overall contribution, TAO does provide meaningful contribution to the company's AOI. So we continue to be pleased with that, and the TAO management team works closely at looking at new venue expansion opportunities as an ongoing part of our business. So we continue to be excited about TAO and the strategy and how it complements the Madison Square Garden Company.

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Andrew S. Lustgarten, The Madison Square Garden Company - President [13]

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And I'd add, we've got a few new venues on the near-term horizon, and they've been very helpful as we thought about the premium experience within our -- within the Las Vegas Sphere. And we had a real key of the part of fitting our strategy to change a very -- to deliver a completely different entertainment experience.

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Operator [14]

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Our next question comes from the line of Michael Morris from Guggenheim.

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Michael C. Morris, Guggenheim Securities, LLC, Research Division - MD and Senior Analyst [15]

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A couple of questions. First on the split of the company. Have you made any progress? Can you share any progress on the capitalization or the capital structures of each new companies post-spin from what you shared with us in the last call? And then also I believe on the last call, you referenced the need for league approvals. Have you receive those approvals yet? What is the league approving? And why is it necessary given that it doesn't seem that the teams are changing ownership? And then the third thing, just in the utilization of sports gaming now that the season -- the seasons are behind us. Can you share how that impacted the business, if at all, in the past year? And then what you see it for the coming year in terms of how approvals could be impactful at the state level and any initiatives that you have for the coming year?

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Victoria M. Mink, The Madison Square Garden Company - Executive VP & CFO [16]

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Sure. Michael, I'm happy to start. So while we don't have an update since the one we've provided on our last earnings call regarding the capital structure and capital allocation plans. Yes, I'm happy just to review our thinking again at a high level.

With the entertainment company, we'll be focused on expansion to the creation of the MSG Spheres, of course, starting in Las Vegas and then in London. So it's important that we want to make sure that the company is appropriately capitalized to fund those growth initiatives. At the same time for our sports business, that company will possess and generate significant recurring revenue streams and will generate solid free cash flow. So yes, as a result, we currently envision the sports company potentially maintaining some debt but ultimately becoming a return of capital story. So that's the extent to the update at this point, but will happy to keep you updated as we progress.

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Andrew S. Lustgarten, The Madison Square Garden Company - President [17]

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Sure. In terms of the process, look, I think you asked about league approvals. So take a step back, we are part -- we are a member of the league, and the league has wide rights to protect its members. So just like in all other MSG-related spin transactions, they need to understand what our -- what the plans are and how it impacts the other members of the league. They're focused on things such as our intercompany agreement, the team's right to play at the arena and other things of that nature. So it's been pretty standard with other -- with the other 2 spins that we've had with MSG.

And your other question was around gaming and its impact on our past season. So let's start with we remain incredibly bullish on the opportunity for gaming for both the customer experience and also for the financial results that we'll benefit from. That said, it's only legalized in a few states, New Jersey is being the closest. So we've had very minimal impact so far this year. We made a little bit of commission between -- from our sales group on MSG Networks on the sale of ads served in New Jersey, but it's been not a huge number. But we've -- as I said before, we feel very strong about this, and we believe it's very -- it'll be very beneficial for consumers and for us financially. And New York has started to move forward, taking the first step towards land-based gaming, and we continue to monitor it very closely.

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Michael C. Morris, Guggenheim Securities, LLC, Research Division - MD and Senior Analyst [18]

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That's great. And then just to be clear on the league approvals, is that still pending? And is that -- I mean if it is, I assume it's still within your goal of the second half of the calendar year completion, but just kind of curious what the timing of that may be.

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Andrew S. Lustgarten, The Madison Square Garden Company - President [19]

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So yes to both of your questions. It's still pending and yes, it'll keep us in the time period with our goal to complete by the end of the year.

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Operator [20]

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Our next question comes from the line of Bryan Goldberg from Bank of America.

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Bryan Daniel Goldberg, BofA Merrill Lynch, Research Division - Research Analyst [21]

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I had a question on sports. It looks like segment revenues are pretty much flat this quarter on an underlying basis, and you played more home games. So I guess could you help us think about how the Knicks' current season performance is playing into this? Or said another way, as we monitor your progress in the upcoming draft and free agency period, could you refresh us on what the near-term growth potential looks like if the Knicks were to improve heading into next season? And then I had 1 small follow-up on the Sphere. Andy, thanks for the update on the London timing. You said that was subject to necessary approvals. So I'm wondering are there other approvals required outside of the ongoing review period you talked about that would end by the end of this calendar year.

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Andrew S. Lustgarten, The Madison Square Garden Company - President [22]

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Victoria?

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Victoria M. Mink, The Madison Square Garden Company - Executive VP & CFO [23]

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Let me start with the overall sports revenue performance. Bryan, you are correct, obviously, the new revenue recognition standard does have a significant impact on the sports teams revenue in the quarter. But we did have 8 more games in total, 6 more at the Knicks and 2 more at the Rangers compared to the prior year period, so that did help drive an increase in revenue. However -- in addition to the revenue related to the prior periods that we have mentioned earlier regarding the renewal of our Ticketmaster agreement. However, our -- what we did have lower revenue generated on a per-game basis, which we believe mainly reflects the on court and on ice performance of our teams this past season.

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Andrew S. Lustgarten, The Madison Square Garden Company - President [24]

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Sorry. I wish to add to that for a second. So the -- we didn't impact lower attendance on both teams, and we had lower attendance with ripples through, not only at ticket sales, but your margin, your FNB, and so especially this last quarter, where the teams were clearly out of the playoffs. You'd see a different type of performance and attendance levels, actually, we still have very strong attendance, but we're not at the same levels as we've been historically. If the 2 teams, both teams improved dramatically, we'll see effect in ticket prices both on a single-game basis where we'll price -- the price will be differently as we did -- now if we price those tickets.

To long term, we've lived -- we've always had a policy in the past where we don't raise season ticket prices on renewals of the season tickets unless the team makes the playoffs. So that will be another factor if you think long term. In addition, we want to fully sold-out building, we will see higher per caps on -- we'll see a higher gross revenues from both food and beverage and merchandise as there are more people in the building. So I think those -- I think that answers your question in terms of what's the effect on long term. And of course, as the teams get hotter, we'll -- it will impact also sponsorship business, which we still feel strongly about today. It will only be stronger.

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Bryan Daniel Goldberg, BofA Merrill Lynch, Research Division - Research Analyst [25]

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Great. And then on the London Sphere timing or just the approvals, is there anything else required outside of the ongoing review period that you talked about in your prepared remarks?

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Andrew S. Lustgarten, The Madison Square Garden Company - President [26]

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So the main approval is the London Legacy Development Corporation or LLDC as they call it. That's the planning authority. Coming out of there, there are other -- depending on what occurs from that planning application, there can be other approvals, but that's the main to start construction.

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Operator [27]

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Our next question comes from the line of David Karnovsky from JPMorgan.

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David Karnovsky, JP Morgan Chase & Co, Research Division - Analyst [28]

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On TAO Group, you mentioned the new venues and plans to open more. Do you see venue expansion as the primary growth driver for this business? Or are there also opportunities to do may be bolt-on acquisitions in the hospitality space to extend the reach of the brands?

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Andrew S. Lustgarten, The Madison Square Garden Company - President [29]

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So I'd say there's 3 pieces of growth. One, as Victoria mentioned, we've been working with the Madison team to get the current stores operations up and as we started to see positive results, the -- as a team, the TAO Group is very focused on expansion, as you could have seen in the recent quarters and will continue their focus towards finding great opportunities. I wouldn't -- we're not actively pursuing any bolt-on acquisitions, but M&A can always occur and -- but I would say right now, the main drivers of growth are the underlying business and adding on venues opportunistically.

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David Karnovsky, JP Morgan Chase & Co, Research Division - Analyst [30]

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Okay. And then I think Boston Calling is scheduled for the coming weeks. Any update you can provide on how that's shaping up? I think last year you said the event had underperformed your expectation.

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Andrew S. Lustgarten, The Madison Square Garden Company - President [31]

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So it's still early. There is still a number of ticket gets sold in the coming last month leading up to the festival. But as of right now, that tickets have been pacing behind where we were last year, but we have seen them pick up in the last couple of weeks as we've been leaning in with the management team to change marketing and branding, and we've seen an uptick from those efforts. But the jury is out until the time of the festival.

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Operator [32]

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Our last question comes from the line of Ben Swinburne from Morgan Stanley.

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Benjamin Daniel Swinburne, Morgan Stanley, Research Division - MD [33]

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Andy, I think in the beginning of the fiscal year, you talked about the bookings business having grown, I think, double-digit last year in fiscal '18 and healthy growth ahead. And as we get closer to the separation of these 2 companies, we're pretty focused on the growth outlook for the core booking business. If you could talk about when you look at how this year has played out and cutting through the noise in the comps, how the business has performed and as you look at the rest of calendar '19 based on what's on the books, how are you feeling about the growth prospects for the rest of this calendar year as well? And then I just have a quick follow-up for either you or Victoria.

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Andrew S. Lustgarten, The Madison Square Garden Company - President [34]

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So in terms of our booking business spend, we've had 3 record-setting bookings years, and we expect fiscal 2019 to be another year of growth for events, our revenue and also our AOI. As I mentioned earlier, our fiscal fourth quarter might be impacted because of timing of certain events. There are a handful of events at the arena that were generally -- we thought were going to be in the fourth quarter but ended up being moved to fiscal 2020. An example, Ozzy Osbourne, he's delayed his tour, and so that's it. It puts us in a good place as we pull up to 2020 in terms of jumping off with the number of events on our calendar and as a whole -- are confirmed and on sale have been very strong so far. And we expect this to continue to be driven, this type of demand to continue to be driven by the -- by what's going on in the world in terms of entertainment. Millennials like experiences and live music is a great experience. And we asked [them to tour] and are continued to be focused on touring. So we stand in a pretty good place to benefit from that financially. I think that gets your question.

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Benjamin Daniel Swinburne, Morgan Stanley, Research Division - MD [35]

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Yes, that's great. And then I just want to come back on the minority interest on sports or the opportunity to sell a piece of the teams. Is selling a piece ahead of the spin still an option? I just want to come back because I don't think we talk specifically about that, and I think there's been some expectation that, that could happen. I just wanted to see if you had any thoughts on whether that was still an option or if this is more likely just the sort of capital raise decision as they post spin events.

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Andrew S. Lustgarten, The Madison Square Garden Company - President [36]

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Ben, I just can't -- I can't speculate on sales at this time. We're focused on executing our spin.

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Operator [37]

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And that concludes our question-and-answer session. I will now turn the conference over to Mr. Ari Danes for closing remarks.

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Ari Danes, The Madison Square Garden Company - SVP, IR [38]

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Thank you for joining us. We look forward to speaking with you on our next earnings call. Have a good day.

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Operator [39]

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Goodbye.