Madison Square Garden Sports (US:MSGS)2020-08-14 19:08Financial Data and Key Metrics Changes - As of June 30, total cash and cash equivalents were approximately $78 million, with an additional $215 million in borrowing capacity [24] - For fiscal 2019, on a pro forma basis, MSG Sports generated $695 million in revenue and $96 million in adjusted operating income [27][28] - The company had over $290 million in liquidity at fiscal year-end [43] Business Line Data and Key Metrics Changes - The majority of revenue in fiscal 2019 came from media rights fees, sponsorship, and suite license fees, with nearly $240 million from media rights alone [28] - The company reported a significant portion of its revenue is contracted on a multi-year basis, providing strong visibility for future earnings [27] Market Data and Key Metrics Changes - The NBA and NHL have resumed play, with a significant public response indicating pent-up demand for live sports [9] - Over 80% of the Rangers' season ticket holders renewed for the upcoming season, reflecting strong fan engagement [9] Company Strategy and Development Direction - The company aims to create a pure-play sports entity to highlight premium assets and drive long-term value creation [6] - MSG Sports is focused on cost reduction and cash conservation due to the ongoing uncertainty from COVID-19 [31] - The company sees opportunities in improved team performance, playoff participation, and the continued legalization of sports gaming [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial flexibility to navigate through challenging times, emphasizing the value of its sports franchises [13] - The company is optimistic about the return of basketball and hockey next year, despite uncertainties related to COVID-19 [10] Other Important Information - The company has entered into 35-year arena license agreements with the Knicks and Rangers, with fees impacted by the pandemic [30] - The NHL's media rights agreement is set to expire after the 2020/21 season, presenting a potential opportunity for increased revenue [16] Q&A Session Summary Question: Impact of potential fanless games on revenue - Management indicated that if there are no fans, revenues from tickets, suites, food, beverage, and merchandise would decline significantly, but media rights revenue would still be recognized [36][37] Question: Cash burn rate and job cuts - The company is focused on cost reduction and cash conservation, with a workforce reduction of approximately 15% in business operations [42][44] Question: Plans around term loans and debt levels - The company plans to begin refinancing the Knicks' senior secured revolver in the near term and expects to successfully refinance credit facilities [50][52] Question: Bubble approach for the upcoming season and sports betting opportunities - Management is exploring various scenarios for the upcoming season, emphasizing the importance of fan safety, and sees significant opportunities in sports betting to drive engagement [55]