Group 1 - The analyst downgraded Madison Square Garden Entertainment (NYSE: MSGE) to a hold rating due to concerns about the impact of Billy Joel's residency absence and the demand outlook for FY26 [1] - The investment strategy focuses on identifying undervalued companies with long-term growth potential, emphasizing the importance of buying quality companies at a discount to their intrinsic value [1] Group 2 - There are no disclosed stock, option, or derivative positions in any of the companies mentioned, nor plans to initiate such positions within the next 72 hours [2] - The article expresses the author's opinions and is not influenced by any business relationships with the companies mentioned [2]

Core Insights - Madison Square Garden Entertainment (NYSE: MSGE) is experiencing strong demand for live events at its renowned venues, which positively impacts its financial performance [1] Financial Performance - The latest financial results of MSGE indicate robust performance driven by the popularity of live events [1]

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Madison Square Garden Entertainment Corp. is a leading live entertainment company operating iconic venues and producing marquee content like the Christmas Spectacular, primarily concentrated in the New York City market - The company operates as a leader in live entertainment experiences, managing a portfolio of iconic venues such as Madison Square Garden, Radio City Music Hall, and The Chicago Theatre[14](index=14&type=chunk)[15](index=15&type=chunk) - Key business strategies include enhancing the live entertainment experience, increasing venue utilization with unique events and residencies, delivering marketing exposure for partners, offering premium hospitality, and utilizing customer data to drive revenue[17](index=17&type=chunk)[19](index=19&type=chunk) - In Fiscal Year 2025, the company hosted nearly **6 million** guests at more than **975 events** across its venues[22](index=22&type=chunk) - The company has long-term Arena License Agreements with MSG Sports, requiring the New York Knicks (NBA) and New York Rangers (NHL) to play their home games at The Garden[27](index=27&type=chunk) - The Christmas Spectacular production is a core property, selling approximately **1.1 million tickets** across **200 performances** in Fiscal Year 2025[35](index=35&type=chunk)[36](index=36&type=chunk) - As of June 30, 2025, the company had approximately **1,200 full-time** and **5,400 part-time employees**, with about **71%** of the total workforce represented by unions[70](index=70&type=chunk)[73](index=73&type=chunk) [Item 1A. Risk Factors](index=12&type=page&id=Item%201A.%20Risk%20Factors) The company faces significant risks including intense competition, heavy reliance on the Christmas Spectacular, economic sensitivity, geographic concentration in New York City, regulatory challenges, substantial indebtedness, cybersecurity threats, and Dolan Family control - The company's business is highly competitive, facing challenges from other leisure activities, entertainment venues, and changing consumer tastes[75](index=75&type=chunk)[76](index=76&type=chunk) - Financial results are significantly dependent on the Christmas Spectacular production, which accounted for **18% of total revenues** in Fiscal Year 2025[79](index=79&type=chunk) - The Madison Square Garden Complex benefits from a New York City real estate tax exemption, which amounted to **$43.0 million** for Fiscal Year 2025, with potential material impact if repealed or amended[86](index=86&type=chunk) - The business is geographically concentrated in New York City, making it vulnerable to adverse local events, economic conditions, and regulatory changes, such as the renewal of The Garden's zoning special permit[93](index=93&type=chunk)[99](index=99&type=chunk) - As of June 30, 2025, the company is highly leveraged with total indebtedness of **$609 million**[111](index=111&type=chunk) - The company faces evolving cybersecurity risks, having previously addressed a payment card issue in November 2016 at several of its venues[125](index=125&type=chunk) - The Dolan Family Group controls the company with approximately **64.0% of the total voting power**, enabling them to prevent changes in control and influence corporate actions[137](index=137&type=chunk)[140](index=140&type=chunk) [Item 1B. Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - None[153](index=153&type=chunk) [Item 1C. Cybersecurity](index=24&type=section&id=Item%201C.%20Cybersecurity) The company maintains a comprehensive cyber risk management program overseen by the Audit Committee and a cybersecurity leadership team, including regular testing, incident response, and employee training, acknowledging past incidents and evolving threats - The company's cyber risk management program is overseen by the Audit Committee of the Board of Directors and senior management[153](index=153&type=chunk)[159](index=159&type=chunk) - A cybersecurity leadership response team, including the Chief Security Officer (CSO), CFO, and General Counsel, is in place to manage threats and incidents[156](index=156&type=chunk)[157](index=157&type=chunk) - The program includes regular system security testing, an incident response policy, security awareness training, and vulnerability analysis systems[154](index=154&type=chunk) - A payment card issue affecting merchandise and food/beverage locations at several venues was identified and addressed in November 2016[160](index=160&type=chunk) [Item 2. Properties](index=25&type=section&id=Item%202.%20Properties) The company owns the Madison Square Garden Complex and The Chicago Theatre, and operates Radio City Music Hall and the Beacon Theatre under long-term lease agreements, in addition to leasing administrative and executive office space Property Portfolio | Property | Location | Ownership | Seating Capacity | | :--- | :--- | :--- | :--- | | Madison Square Garden Complex | New York, NY | Owned | ~21,000 (The Garden) | | The Theater at MSG | New York, NY | Owned | ~5,600 | | The Chicago Theatre | Chicago, IL | Owned | ~3,600 | | Radio City Music Hall | New York, NY | Leased | ~6,000 | | Beacon Theatre | New York, NY | Leased | ~2,800 | [Item 3. Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The company is a defendant in various lawsuits, but management does not believe their resolution will have a material adverse effect on the company - The company is involved in various lawsuits, but management does not expect the outcomes to materially and adversely affect the business[164](index=164&type=chunk) [Item 4. Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[165](index=165&type=chunk) PART II [Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A Common Stock trades on the NYSE under "MSGE," with no current plans for cash dividends, and a stock repurchase program authorized for up to $250 million, of which $40 million was repurchased in FY2025 - The company's Class A Common Stock trades on the New York Stock Exchange (NYSE) under the symbol "MSGE"[167](index=167&type=chunk) - The company does not currently have plans to pay a cash dividend on its common stock for the foreseeable future[171](index=171&type=chunk) - Under its $250 million stock repurchase program, the company repurchased **1,117,601 shares** for approximately **$40 million** in Fiscal Year 2025, with approximately **$70 million** remaining available for future repurchases as of June 30, 2025[172](index=172&type=chunk) [Item 6. [Reserved]](index=28&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In Fiscal Year 2025, revenues decreased by 2% to $942.7 million, primarily due to lower event-related revenues, while operating income rose 9% to $122.1 million due to reduced expenses, though net income significantly decreased by 74% to $37.4 million due to a prior-year tax benefit, with Adjusted Operating Income (AOI) increasing 5% to $222.5 million, and the company maintaining sufficient liquidity with $43.0 million in cash and $134.0 million available under its revolving credit facility [Results of Operations](index=35&type=section&id=Results%20of%20Operations) For Fiscal Year 2025 compared to 2024, total revenues decreased by $16.5 million (2%) to $942.7 million, driven by declines in entertainment offerings and food/beverage, partially offset by increased arena license fees, leading to a 9% increase in operating income to $122.1 million due to reduced expenses, despite a sharp 74% drop in net income to $37.4 million primarily from a prior-year tax benefit, while Adjusted Operating Income (AOI) rose 5% to $222.5 million Consolidated Results of Operations (Fiscal Year 2025 vs. 2024) | Financial Metric | FY 2025 ($M) | FY 2024 ($M) | Change ($M) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | 942.7 | 959.3 | (16.5) | (2)% | | Total Direct Operating Expenses | (535.6) | (568.8) | 33.2 | 6% | | Operating Income | 122.1 | 111.9 | 10.2 | 9% | | Net Income | 37.4 | 144.3 | (106.9) | (74)% | - The decrease in revenues from entertainment offerings was primarily due to lower event-related revenues of **$49.2 million**, partially offset by a **$20.2 million** increase in revenues from the Christmas Spectacular production[218](index=218&type=chunk) - The Christmas Spectacular's revenue growth was driven by higher per-show revenue and an increase in performances to **200** in FY2025 from **193** in FY2024, with ticket sales rising to approximately **1.1 million** from over **1.0 million**[221](index=221&type=chunk) - The increase in operating income was primarily due to decreased direct operating expenses and lower restructuring charges, which offset the decline in revenues and an **$11.2 million** impairment charge on long-lived assets[239](index=239&type=chunk) Reconciliation of Operating Income to Adjusted Operating Income (AOI) | Metric | FY 2025 ($M) | FY 2024 ($M) | Change ($M) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating Income | 122.1 | 111.9 | 10.2 | 9% | | Depreciation & Amortization | 57.8 | 53.9 | 3.9 | 7% | | Impairment of long-lived assets | 11.2 | 0.0 | 11.2 | NM | | Share-based compensation | 27.7 | 24.5 | 3.2 | 13% | | Restructuring charges | 1.1 | 17.6 | (16.6) | (94)% | | **Adjusted Operating Income** | **222.5** | **211.5** | **11.0** | **5%** | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity sources are cash on hand, operating cash flow, and its revolving credit facility, with $43.0 million in unrestricted cash and $134.0 million available under its refinanced $150 million revolving credit facility as of June 30, 2025, alongside a new $609.4 million term loan, both maturing in June 2030, which management believes provides sufficient liquidity for the foreseeable future Liquidity Position as of June 30, 2025 | Item | Amount ($M) | | :--- | :--- | | Unrestricted Cash & Cash Equivalents | 43.0 | | Total Debt Outstanding | 609.4 | | Available Revolver Capacity | 134.0 | - On June 27, 2025, the company refinanced its credit facilities, establishing a new five-year **$609.4 million** term loan and a **$150 million** revolving credit facility, both maturing on June 27, 2030[256](index=256&type=chunk)[259](index=259&type=chunk) Cash Flow Summary (Fiscal Years 2025 vs. 2024) | Cash Flow Activity | FY 2025 ($M) | FY 2024 ($M) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 115.3 | 111.3 | | Net Cash used in Investing Activities | (23.7) | (62.4) | | Net Cash used in Financing Activities | (81.6) | (99.7) | Future Contractual Obligations as of June 30, 2025 | Obligation | Total ($M) | Year 1 ($M) | Years 2-3 ($M) | Years 4-5 ($M) | More Than 5 Years ($M) | | :--- | :--- | :--- | :--- | :--- | :--- | | Leases | 1,109.6 | 30.8 | 125.8 | 115.4 | 837.6 | | Debt Repayments | 609.4 | 30.5 | 60.9 | 518.0 | 0.0 | | **Total** | **1,719.0** | **61.2** | **186.8** | **633.4** | **837.6** | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to market risk from changes in interest rates on its variable-rate debt and from market performance affecting its defined benefit pension plans, with a hypothetical 200 basis point interest rate increase raising annual interest expense by $12.2 million, and pension obligations sensitive to discount rates and asset returns - The company is subject to interest rate risk on its variable-rate credit facilities; a hypothetical **200 basis point** increase in floating rates would increase annual interest expense by **$12.2 million**[283](index=283&type=chunk) - The company's defined benefit pension plans are subject to market risk; a **25 basis point** decrease in the assumed discount rate would increase the projected benefit obligation by approximately **$2.9 million**[286](index=286&type=chunk) - A **25 basis point** decrease in the long-term return on pension plan assets assumption would increase the net periodic pension benefit cost by **$280 thousand** for Fiscal Year 2025[289](index=289&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=45&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the company's audited consolidated and combined financial statements and supplementary data, which begin on page F-1 of the report - This item refers to the full financial statements and supplementary data which are included starting on page F-1 of the Annual Report[290](index=290&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=45&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[291](index=291&type=chunk) [Item 9A. Controls and Procedures](index=45&type=section&id=Item%209A.%20Controls%20and%20Procedures) Based on management's evaluation, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of June 30, 2025, and internal control over financial reporting was also concluded to be effective, as audited by their independent registered public accounting firm - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2025[292](index=292&type=chunk) - Management concluded that internal control over financial reporting was **effective** as of June 30, 2025, based on the COSO framework; this assessment was audited by Deloitte & Touche LLP[295](index=295&type=chunk) [Item 9B. Other Information](index=45&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[297](index=297&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=45&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[298](index=298&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=46&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required for this item will be included in the proxy statement for the 2025 annual meeting of stockholders and is incorporated by reference - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the forthcoming 2025 proxy statement[300](index=300&type=chunk) [Item 11. Executive Compensation](index=46&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item will be included in the proxy statement for the 2025 annual meeting of stockholders and is incorporated by reference - Information regarding executive compensation is incorporated by reference from the forthcoming 2025 proxy statement[301](index=301&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=46&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required for this item will be included in the proxy statement for the 2025 annual meeting of stockholders and is incorporated by reference - Information regarding security ownership is incorporated by reference from the forthcoming 2025 proxy statement[302](index=302&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=46&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item will be included in the proxy statement for the 2025 annual meeting of stockholders and is incorporated by reference - Information regarding related party transactions and director independence is incorporated by reference from the forthcoming 2025 proxy statement[303](index=303&type=chunk) [Item 14. Principal Accountant Fees and Services](index=46&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required for this item will be included in the proxy statement for the 2025 annual meeting of stockholders and is incorporated by reference - Information regarding principal accountant fees and services is incorporated by reference from the forthcoming 2025 proxy statement[304](index=304&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=47&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and all exhibits filed as part of the Form 10-K report, including key corporate agreements such as the Distribution Agreement with Sphere Entertainment, Articles of Incorporation, credit agreements, and various employment and lease agreements - This item lists all documents filed as part of the report, including financial statements and exhibits such as material contracts and governance documents[307](index=307&type=chunk) [Item 16. Form 10-K Summary](index=52&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has elected not to provide a summary for the Form 10-K - The Company has elected not to provide summary information[315](index=315&type=chunk) Financial Statements and Notes to Financial Statements This section presents the company's audited consolidated and combined financial statements for the fiscal years ended June 30, 2025, 2024, and 2023, including the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Operations, Comprehensive Income, Cash Flows, and Deficit, with accompanying notes detailing accounting policies, revenue recognition, leases, debt, pension plans, and extensive related party transactions with Dolan Family-controlled entities [Consolidated Balance Sheets](index=58&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, the company reported total assets of $1.67 billion, an increase from $1.55 billion in the prior year, with total liabilities also increasing to $1.68 billion from $1.58 billion, and the total deficit improving to $13.3 million from $23.2 million, primarily due to net income and changes in additional paid-in capital Consolidated Balance Sheet Highlights (as of June 30) | Account | 2025 ($M) | 2024 ($M) | | :--- | :--- | :--- | | Cash, cash equivalents and restricted cash | 43.5 | 33.6 | | Total Current Assets | 237.1 | 219.1 | | Property and equipment, net | 621.1 | 633.5 | | Total Assets | **1,669.8** | **1,552.7** | | Total Current Liabilities | 502.4 | 505.8 | | Long-term debt, net | 568.8 | 599.2 | | Total Liabilities | **1,683.1** | **1,575.9** | | Total Deficit | **(13.3)** | **(23.2)** | [Consolidated and Combined Statements of Operations](index=59&type=section&id=Consolidated%20and%20Combined%20Statements%20of%20Operations) For the fiscal year ended June 30, 2025, the company generated $942.7 million in total revenues, a slight decrease from $959.3 million in 2024, while operating income increased to $122.1 million from $111.9 million, and net income attributable to stockholders was $37.4 million, or $0.78 per basic share, a significant decrease from $144.3 million, or $2.99 per basic share, in 2024, which was impacted by a large tax benefit Statements of Operations Highlights (Years Ended June 30) | Account | 2025 ($M) | 2024 ($M) | 2023 ($M) | | :--- | :--- | :--- | :--- | | Total Revenues | **942.7** | **959.3** | 851.5 | | Total Direct Operating Expenses | (535.6) | (568.8) | (499.9) | | Operating Income | **122.1** | **111.9** | 105.0 | | Net Income Attributable to Stockholders | **37.4** | **144.3** | 76.6 | | Basic EPS | **$0.78** | **$2.99** | $1.48 | | Diluted EPS | **$0.77** | **$2.97** | $1.47 | [Note 4. Revenue Recognition](index=73&type=section&id=Note%204.%20Revenue%20Recognition) The company disaggregates its revenue into several categories, with ticketing and venue license fees being the largest contributor, totaling $862.8 million from contracts with customers in FY2025, and has significant remaining performance obligations, with an estimated $558.2 million of revenue expected to be recognized in future periods as of June 30, 2025 Disaggregation of Revenue (Years Ended June 30) | Revenue Category | 2025 ($M) | 2024 ($M) | 2023 ($M) | | :--- | :--- | :--- | :--- | | Ticketing and venue license fee revenues | 453.2 | 463.3 | 396.4 | | Sponsorship, signage, suite license, and advertising commission | 252.7 | 254.1 | 243.1 | | Food, beverage, and merchandise revenues | 150.5 | 162.1 | 135.9 | | **Total revenues from contracts with customers** | **862.8** | **886.0** | **779.8** | | Arena license fees and other leasing revenue | 79.9 | 73.3 | 71.7 | | **Total Revenues** | **942.7** | **959.3** | **851.5** | - As of June 30, 2025, the company had **$558.2 million** in estimated future revenue related to remaining performance obligations, with **$189.0 million** expected to be recognized in Fiscal Year 2026[465](index=465&type=chunk) [Note 12. Credit Facilities](index=81&type=section&id=Note%2012.%20Credit%20Facilities) In June 2025, the company refinanced its debt, establishing a new credit agreement with a $609.4 million term loan facility and a $150 million revolving credit facility, both maturing in June 2030, with the total principal balance outstanding at $609.4 million as of June 30, 2025, and the facilities subject to floating interest rates and financial covenants with which the company was in compliance - The company refinanced its debt on June 27, 2025, entering into a new agreement for a **$609.4 million** term loan and a **$150 million** revolver, both maturing in 2030[500](index=500&type=chunk) Debt Maturities as of June 30, 2025 | Fiscal Year Ending June 30 | Principal Amount ($M) | | :--- | :--- | | 2026 | 30.5 | | 2027 | 30.5 | | 2028 | 30.5 | | 2029 | 30.5 | | 2030 | 487.5 | | **Total** | **609.4** | [Note 16. Related Party Transactions](index=93&type=section&id=Note%2016.%20Related%20Party%20Transactions) The company engages in extensive related party transactions with other entities controlled by the Dolan Family, primarily MSG Sports and Sphere Entertainment, including Arena License Agreements with MSG Sports which generated $68.1 million in revenue in FY2025, and various services agreements, resulting in $109.8 million in revenues from related parties and $122.8 million in net operating credits in FY2025 - The Dolan Family Group controls MSG Entertainment, Sphere Entertainment, MSG Sports, and AMC Networks, leading to numerous related party transactions[574](index=574&type=chunk) - Key agreements exist with MSG Sports for arena licensing, sponsorship sales, and services, and with Sphere Entertainment for corporate services and marketing partnerships[575](index=575&type=chunk)[577](index=577&type=chunk) Summary of Related Party Transactions (Years Ended June 30) | Transaction Type | 2025 ($M) | 2024 ($M) | 2023 ($M) | | :--- | :--- | :--- | :--- | | **Revenues** | **109.8** | **101.8** | **105.9** | | **Operating Credits (Expenses), Net** | | | | | Revenue sharing expenses | (21.3) | (21.6) | (19.1) | | Reimbursement under Arena License Agreements | 29.6 | 25.1 | 22.3 | | Cost reimbursement from MSG Sports | 37.2 | 37.4 | 38.5 | | Corporate reimbursement/allocations (Sphere) | 78.5 | 108.8 | 151.2 | | Other operating (expenses) credits, net | (1.2) | 0.8 | (3.9) | | **Total operating credits, net** | **122.8** | **150.5** | **189.0** |

Financial Data and Key Metrics Changes - For fiscal year 2025, the company reported full year revenues of $942.7 million and adjusted operating income (AOI) of $222.5 million, representing a 5% year-over-year increase [5] - In the fourth quarter, revenues were $154.1 million, a decrease of 17% compared to the prior year, primarily due to lower event-related revenues from concerts and food, beverage, and merchandise [12][13] - Fourth quarter adjusted operating income decreased by $14.4 million to a loss of $1.3 million compared to the prior year quarter [13] Business Line Data and Key Metrics Changes - The company hosted nearly 6 million guests at over 975 live events during fiscal year 2025, with modest growth in the number of events held at venues compared to the prior year [6] - The Christmas Spectacular production sold approximately 1.1 million tickets across 200 performances, generating over $170 million in revenue, a new record for the production [8] - The number of concerts at theaters increased, while the number of concerts at The Garden decreased year-over-year due to the end of Billy Joel's residency [7] Market Data and Key Metrics Changes - The Knicks and Rangers played a combined 97 home games at The Garden, down from 103 games in the prior year, impacting shared revenue streams [9] - The company expects cash component of Arena license fees to be approximately $45 million in fiscal year 2026, growing 3% each year through fiscal year 2055 [9] Company Strategy and Development Direction - The company aims to increase the number of events at venues, drive growth in per event profitability, and expand sponsorship and premium hospitality businesses [5] - The strategic decision to bring sponsorship sales in-house is expected to capitalize on upcoming opportunities in fiscal year 2026 [10] - The company is focused on organic growth and remains confident in delivering long-term shareholder value [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive solid growth in revenue and adjusted operating income in fiscal year 2026, supported by strong consumer and corporate demand [5] - The company anticipates another year of substantial free cash flow generation and plans to explore ways to opportunistically return capital to shareholders [14][40] Other Important Information - The company repurchased approximately $40 million of Class A common stock during fiscal year 2025, with $70 million remaining under the current share repurchase authorization [15][40] - The company is in the late planning stages for a new residency at The Garden, which is expected to create potential for concert growth in fiscal year 2027 [35] Q&A Session Summary Question: Update on ticket sales for the Christmas Spectacular - Management noted that advanced ticket revenue is pacing well ahead of last year, with higher individual and group ticket sales [18][19] Question: Forward bookings trends for fiscal year 2026 - Management indicated that they expect to increase the number of booking events, including concerts, and are currently pacing ahead in bookings [25][27] Question: Progress on utilization at The Garden - Management reported an effective utilization of a little over 65% for The Garden and is looking to increase event growth in fiscal year 2026 [32] Question: Capital returns strategy for fiscal year 2026 - Management stated that they will continue to explore ways to opportunistically return capital to shareholders while maintaining a strong balance sheet [38][40] Question: Outlook for sponsorship and consumer demand - Management expressed optimism about sponsorship opportunities and noted strong consumer demand, with advanced ticket sales pacing well [51][53]

Core Insights - Madison Square Garden Entertainment (MSGE) reported a revenue of $154.14 million for the quarter ended June 2025, reflecting a year-over-year decline of 17.2% and an EPS of -$0.50 compared to $1.41 a year ago [1] - The revenue reported was a surprise of -0.27% against the Zacks Consensus Estimate of $154.56 million, while the EPS surprise was -6.38% against the consensus estimate of -$0.47 [1] Revenue Breakdown - Arena license fees and other leasing revenue amounted to $9.01 million, exceeding the average estimate of $6.07 million by three analysts, representing a year-over-year increase of 6.2% [4] - Revenues from entertainment offerings were reported at $118.72 million, below the average estimate of $125.18 million from three analysts [4] - Food, beverage, and merchandise revenues totaled $26.4 million, surpassing the average estimate of $23.31 million, but showing a year-over-year decline of 23.9% [4] Stock Performance - Shares of MSG Entertainment have returned +1.6% over the past month, compared to a +3.1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Company Overview and Performance - MSG Entertainment's spin-off from Sphere Entertainment Co was completed on April 20, 2023[10] - In fiscal year 2025, the company hosted over 975 live events[14] and welcomed nearly 6 million guests[15] - The company reported total revenue of $942.7 million in fiscal year 2025[52] - Operating income for fiscal year 2025 was $122.1 million[52], while adjusted operating income (AOI) reached $222.5 million[52] Key Assets and Agreements - The company has 35-year deals to host home games for the New York Knicks & Rangers[15] - Madison Square Garden is the 2 grossing venue of its size in the world[16, 17] - Radio City Music Hall is the 1 grossing venue of its size in the world[18, 19] - The company has valuable long-term arena license agreements with MSG Sports, including 3% annual escalators[40, 41] Financial Position and Strategy - As of June 30, 2025, total debt outstanding was $609 million, with unrestricted cash and cash equivalents of $43 million, resulting in net debt of $566 million[56] - Net debt leverage is 2.5x, calculated using fiscal 2025 AOI of $222.5 million[56, 57] - The company repurchased $180 million of Class A shares since April 2023 and has $70 million remaining under share repurchase authorization[58]

Group 1: Earnings Performance - Madison Square Garden Entertainment (MSGE) reported a quarterly loss of $0.5 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.47, and a significant decline from earnings of $1.41 per share a year ago [1] - The company posted revenues of $154.14 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.27% and down from $186.07 million year-over-year [2] - Over the last four quarters, MSGE has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Group 2: Stock Performance and Outlook - MSGE shares have increased approximately 13% since the beginning of the year, outperforming the S&P 500's gain of 9.6% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at -$0.38 for the coming quarter and $1.81 for the current fiscal year on revenues of $146 million and $997.06 million, respectively [7] - The Zacks Rank for MSGE is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Media Conglomerates industry, to which MSGE belongs, is currently in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

[Fiscal 2025 Fourth Quarter and Full Year Results](index=1&type=section&id=Fiscal%202025%20Fourth%20Quarter%20and%20Full%20Year%20Results) [Overall Performance Summary](index=1&type=section&id=Overall%20Performance%20Summary) Fiscal 2025 revenue decreased 2% to **$942.7 million**, while operating income rose 9% to **$122.1 million**, despite a Q4 revenue decline and operating loss Overall Financial Performance | Metric | Q4 FY2025 | Q4 FY2024 | Change | FY 2025 | FY 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $154.1M | $186.1M | -17% | $942.7M | $959.3M | -2% | | **Operating (Loss) Income** | $(25.8)M | $(8.9)M | -191% | $122.1M | $111.9M | +9% | | **Adjusted Operating (Loss) Income** | $(1.3)M | $13.1M | NM | $222.5M | $211.5M | +5% | - Hosted nearly **6 million guests** at more than **975 events** during fiscal 2025, including concerts, special events, and sports[2](index=2&type=chunk) - The *Christmas Spectacular* production sold approximately **1.1 million tickets** across **200 shows**, achieving another year of record-setting revenues[2](index=2&type=chunk) - The company repurchased approximately **$40 million** of its Class A common stock during fiscal 2025[2](index=2&type=chunk) - Executive Chairman and CEO James L. Dolan stated, "We see this momentum continuing in fiscal 2026, and believe we are well positioned to drive solid revenue and adjusted operating income growth in the year ahead"[3](index=3&type=chunk) [Segment Performance Analysis (Q4 FY2025)](index=2&type=section&id=Segment%20Performance%20Analysis%20(Q4%20FY2025)) [Entertainment Offerings, Arena License Fees and Other Leasing](index=2&type=section&id=Entertainment%20Offerings%2C%20Arena%20License%20Fees%20and%20Other%20Leasing) Q4 FY2025 entertainment offerings revenue decreased 17% to **$118.7 million** due to lower event-related revenues, partially offset by a 6% increase in arena license fees, with direct operating expenses falling 14% - Entertainment offerings revenues decreased by **$24.1 million** (17%) compared to the prior year quarter, driven by lower event-related revenues and decreased revenue sharing with MSG Sports[6](index=6&type=chunk) - Event-related revenues fell by **$21.6 million**, mainly from a decrease in the number of concerts at Madison Square Garden Arena and a shift in event mix from promoted events to rentals[13](index=13&type=chunk) - Arena license fees and other leasing revenues increased by **$0.5 million** (6%), primarily due to higher other leasing revenues[7](index=7&type=chunk) - Direct operating expenses for this segment decreased by **$14.2 million** (14%), mainly due to lower event-related expenses[8](index=8&type=chunk) [Food, Beverage and Merchandise](index=2&type=section&id=Food%2C%20Beverage%20and%20Merchandise) Q4 FY2025 food, beverage, and merchandise revenues declined 24% to **$26.4 million** due to fewer events, with direct operating expenses decreasing 27% to **$16.5 million** Food, Beverage and Merchandise Performance | Metric | Q4 FY2025 | Change vs Q4 FY2024 | Reason | | :--- | :--- | :--- | :--- | | **Revenues** | $26.4M | -$8.3M (-24%) | Fewer games and concerts at The Garden | | **Direct Operating Expenses** | $16.5M | -$6.2M (-27%) | Lower costs in line with reduced sales volume | [Selling, General and Administrative Expenses](index=2&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) Q4 FY2025 selling, general and administrative expenses increased 7% to **$59.9 million**, primarily driven by higher employee compensation and benefits - Q4 SG&A expenses increased by **$4.1 million**, or 7%, to **$59.9 million**[11](index=11&type=chunk) - The primary driver for the increase was higher employee compensation and related benefits, which was partially offset by lower rent expense[11](index=11&type=chunk) [Operating Loss and Adjusted Operating (Loss) Income](index=2&type=section&id=Operating%20Loss%20and%20Adjusted%20Operating%20(Loss)%20Income) Q4 FY2025 operating loss widened by **$16.9 million** to **$25.8 million**, and adjusted operating income swung to a **$1.3 million** loss, driven by lower revenues and higher SG&A expenses Operating and Adjusted Operating Income | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | **Operating Loss** | $(25.8)M | $(8.9)M | +$16.9M | | **Adjusted Operating (Loss)/Income** | $(1.3)M | $13.1M | -$14.4M | - The decline in operating results was primarily due to lower revenues and, to a lesser extent, higher selling, general and administrative expenses, partially offset by lower direct operating expenses[12](index=12&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Fiscal year 2025 consolidated operations show total revenues of **$942.7 million** and operating income of **$122.1 million**, but net income significantly dropped to **$37.4 million** due to tax changes Fiscal Year Ended June 30 | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Total revenues** | $942,734 | $959,265 | | **Operating income** | $122,092 | $111,941 | | **Net income** | $37,431 | $144,300 | | **Diluted EPS** | $0.77 | $2.97 | Three Months Ended June 30 | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Total revenues** | $154,138 | $186,074 | | **Operating loss** | $(25,754) | $(8,860) | | **Net (loss) income** | $(27,177) | $66,927 | | **Diluted (Loss) EPS** | $(0.57) | $1.41 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$1.67 billion** and total liabilities to **$1.68 billion**, with cash rising to **$43.5 million** and the total deficit narrowing Consolidated Balance Sheets Summary | Metric (in thousands) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Total current assets** | $237,132 | $219,084 | | **Total assets** | $1,669,842 | $1,552,707 | | **Total current liabilities** | $502,401 | $505,823 | | **Total liabilities** | $1,683,142 | $1,575,872 | | **Total deficit** | $(13,300) | $(23,165) | - Cash, cash equivalents and restricted cash increased to **$43.5 million** from **$33.6 million** in the prior year[28](index=28&type=chunk) - Long-term debt, net of deferred financing costs, decreased to **$568.8 million** from **$599.2 million**[28](index=28&type=chunk) [Selected Cash Flow Information](index=7&type=section&id=Selected%20Cash%20Flow%20Information) For FY2025, net cash from operating activities increased to **$115.3 million**, while investing activities used **$23.7 million** and financing activities used **$81.6 million**, resulting in a **$10.0 million** net cash increase Selected Cash Flow Summary | Metric (in thousands) | FY 2025 | FY 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $115,297 | $111,266 | | **Net cash used in investing activities** | $(23,693) | $(62,371) | | **Net cash used in financing activities** | $(81,621) | $(99,695) | | **Net increase (decrease) in cash** | $9,983 | $(50,800) | [Appendix](index=3&type=section&id=Appendix) [Non-GAAP Financial Measures Reconciliation](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) This section reconciles GAAP operating income to adjusted operating income, showing how **$122.1 million** operating income was adjusted to **$222.5 million** for FY2025, a key internal performance indicator - Adjusted operating income is defined as operating income excluding items such as depreciation, amortization, share-based compensation, restructuring charges, and merger/spin-off costs[16](index=16&type=chunk) Reconciliation to Adjusted Operating Income (FY 2025) | Description | Amount (in thousands) | | :--- | :--- | | **Operating income** | **$122,092** | | Depreciation and amortization | $57,768 | | Impairment of long-lived assets | $11,202 | | Share-based compensation | $27,694 | | Restructuring charges | $1,055 | | Other adjustments | $2,695 | | **Adjusted operating income** | **$222,506** | - The company uses revenues and adjusted operating income as its most important internal indicators of business performance and management effectiveness[17](index=17&type=chunk) [Company Overview and Other Information](index=3&type=section&id=Company%20Overview%20and%20Other%20Information) Madison Square Garden Entertainment Corp. is a prominent live entertainment company operating renowned venues and producing the *Christmas Spectacular*, with the report including standard forward-looking statement disclaimers - The company's portfolio includes world-renowned venues in New York and Chicago, such as Madison Square Garden and The Chicago Theatre[15](index=15&type=chunk) - Features the original production, the *Christmas Spectacular Starring the Radio City Rockettes*, a holiday tradition for over 90 years[15](index=15&type=chunk) - The press release includes a forward-looking statements disclaimer, cautioning investors about risks and uncertainties that could affect future performance[18](index=18&type=chunk)

Core Insights - The upcoming earnings report for Madison Square Garden Entertainment (MSGE) is projected to show a quarterly loss of -$0.63 per share, reflecting a significant decline of 144.7% year-over-year [1] - Analysts forecast total revenues of $155.01 million, indicating a year-over-year decrease of 16.7% [1] Earnings Estimates - The consensus EPS estimate has been revised downward by 2.7% in the last 30 days, indicating a reassessment by covering analysts [2] - Revisions to earnings projections are crucial for predicting investor behavior and stock price performance [3] Revenue Projections - Analysts expect total revenues from contracts with customers to be approximately $149.94 million, representing a year-over-year decline of 15.6% [5] - Food, beverage, and merchandise revenues are estimated to reach $25.09 million, indicating a significant year-over-year drop of 27.7% [5] - The consensus estimate for arena license fees and other leasing revenue stands at $5.04 million, reflecting a year-over-year change of -40.6% [6] Market Performance - Over the past month, MSG Entertainment shares have declined by 2.8%, contrasting with the Zacks S&P 500 composite's increase of 1.9% [6] - MSGE holds a Zacks Rank of 4 (Sell), suggesting it is likely to underperform the overall market in the near term [6]

Core Insights - The Las Vegas Sphere will host an immersive screening of "The Wizard of Oz," marking its first film experience [1][4] - The venue features a 160,000-square-foot wraparound screen and will present the film in 16k resolution with advanced audio and haptic technology [2][5] Company and Industry Summary - Sphere Entertainment has partnered with Google Cloud to utilize AI "outpainting" technology, enhancing the original film frames for the immersive experience [2] - The Sphere's CEO, James Dolan, emphasized that the goal was to maintain the film's integrity while creating an immersive environment [3] - Glenn Derry, an executive at MSG Ventures, is overseeing the implementation of 4D effects, including motion, wind, water, and scent, to enhance audience immersion [4] - The Las Vegas Sphere, which opened in September 2023, has a capacity of approximately 20,000, with 10,000 seats equipped with haptic technology [5]