More details have emerged about Madison Square Garden Company's future-facing arena complex, which will occupy a 4.7ac site in Stratford
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The release of Q1 2020 financial results sees Madison Square Garden Company announce a revised entertainment spin-off plan and updates to the London Sphere development
By Anna Grace on 11 Nov 2019
Madison Square Garden Company (MSG) expects 2020 to be a “defining year”, as the company prepares to spin-off its entertainment businesses from its sports company and announces changes to Sphere plans.
The announcements were made in an earnings call for the first fiscal quarter of 2020, in which reported an adjusted operating loss of US$41.1 million, compared to $9.9m in Q1 2019. The company puts part of the increased losses down to “additional expenses in MSG Sphere related content and technology”.
The Sphere venues formed a major part of the conversation, with MSG president Andrew Lustgarten confirming that a 2022 opening for the 21,500-capacity London Sphere is “no longer realistic”, as the planning application process looks to continue into 2020.
“As we work through the planning application and design process, our timeline will continue to evolve,” said Lustgarten. “Therefore, we do not have a target opening date at this time.”
MSG vice chairman Gregg Seibert cited the change to the London Sphere opening plans as a reason for the company’s decision to pursue a full spin-off of its entertainment business from its sports business, resulting in no retention of equity interest in the sports company.
“We do not have a target opening date [for the London Sphere] at this time”
“Timeline for the opening of our London venue is evolving and we believe that the entertainment company will have sufficient financial flexibility to pursue its venue expansion plans without the need for the retained interest,” explained Seibert.
MSG had previously explored a spin-off of its sports and entertainment businesses into two distinct public companies, with the entertainment company retaining a one-third stake in MSG sports.
The spin-off remains subject to final approvals by the MSG board and others.
All remains on track for the original MSG Sphere to open in Las Vegas in 2021. MSG believes the venue will be “highly successful”, due to the growing demand for immersive shared experiences, Las Vegas’ positioning as “one of the world’s top entertainment destinations” and a partnership with convention-based resort specialist Las Vegas Sands.
“We expect MSG Sphere to change how we think about the entertainment experience, which is why we anticipate the Las Vegas Sphere becoming the most highly utilised venue in our portfolio.”
The first quarter of 2020 also saw MSG report a quarterly revenue of $214.8m, a 2% decrease year-on-year. The decline was attributed to the absence of a “special event” to replace the MTV Video Music Awards, which took place in Q1 2019.
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