Famed New York venues heading for record 12 months
Madison Square Garden Entertainment’s famed MSG and Radio City Music Hall venues are on track to set new records for the number of concerts held in a year.
The New York-based business made the disclosure during its financial report for the fiscal Q3 2024, in which it reported revenues of $228.3 million – up 13% on the prior year quarter. In addition, it posted operating income of $16.8m and adjusted operating income of $38.5m, down $7.9m and $11.6m, respectively, as compared with the same period 12 months ago.
MSG Entertainment’s portfolio includes New York City’s 20,000-cap MSG, The Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre and The Chicago Theatre, along with the firm’s entertainment and sports bookings business and long-term arena licence agreements with the New York Knicks and New York Rangers.
“Our business continues to outperform our original expectations for fiscal 2024, and we are on track to generate robust growth in our first full year as a standalone public company,” says executive chair and CEO James Dolan. “Looking ahead, we remain confident in the strength of our assets and our ability to generate long-term value for our shareholders.”
Speaking to investors on the firm’s earnings call, Dolan added: “Our booking business, has continued to grow and remains set to achieve a low double-digit percentage increase in events for fiscal 2024. This includes contract growth across all of our venues, with the Garden and Radio City both headed towards setting new records for a number of concerts in the year.”
“For the third quarter, the majority of concerts at our venues were once again sold out”
He continued: “During the quarter, our portfolio of venues hosted more than 1.5 million guests at over 200 live events. A majority of these events were driven by our bookings business, which delivered a double-digit percent increase in total concerts versus the prior year quarter.
“As the volume of events at our venues continues to increase, we are pleased to see it matched by strong demand. For the third quarter, the majority of concerts at our venues were once again sold out.”
The company’s share price has dipped around 8% over the past week to stand at $36.44 at press time.
MSG spun-off its live entertainment and MSG Networks divisions last year to create two distinct companies – Sphere Entertainment and MSG Entertainment Corp. Sphere Entertainment reported an operating loss of $40.4m on revenues of $321.3m for fiscal Q3.
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Sphere posts losses for fiscal 2024 Q2
The Sphere in Las Vegas has posted losses of US$193.9 million (€179.4m) for fiscal 2024 Q2 – its first full quarter of operation – on revenue of $167.8m.
The next-generation 17,500-seat/20,000-cap Sphere opened in Vegas in September 2023 with U2’s residency, U2:UV Achtung Baby Live At The Sphere. Every show of the U2 run, which wraps up next month after 40 shows and multiple extensions, has sold out so far, with upcoming stints by Phish and Dead & Company set to follow.
According to the company’s latest financial results, which cover the three-month period ending 31 December 2023, the majority of the Sphere’s losses resulted from a non-cash impairment charge of $116.5m in the current year quarter related to the company’s decision to no longer pursue the development of a London replica.
Madison Square Garden (MSG) Entertainment officially withdrew its planning application for the London Sphere project last month – more than five years after the scheme was first announced.
Sphere Entertainment reported event-related revenues of $55.2m, almost entirely from concerts, apart from one marquee sporting event held at the venue during the quarter.
“Sphere is a next-generation medium intended to disrupt the traditional venue model”
The Sphere Experience featuring Postcard from Earth also generated $92.9m across 191 performances after debuting on 6 October, grossing more than £1m in average daily ticket sales. In addition, sponsorship, signage, Exosphere advertising and suite licence fees brought in $17.5m.
“Sphere is a next-generation medium intended to disrupt the traditional venue model,” says Sphere Entertainment executive chair and CEO James Dolan. “With positive adjusted operating income at the Sphere segment in our first full quarter of operations in Las Vegas, our early results are beginning to prove that thesis, and we remain confident in the global opportunities ahead.”
In December last year, Dolan was reported to be in “serious talks” to build a second Sphere venue – this time in the UAE – which would become MSG’s first property outside of the US.
MSG spin-off Sphere Entertainment encompasses the first Sphere venue as well as MSG Networks and Tao Group Hospitality businesses. The company reported revenues of $314.2m, an increase of $154.6m on the prior year quarter, and an operating loss of $159.7m, (up from the prior year’s quarter $109.9m). Adjusted operating income was $51.4m, compared to $13.2m in the same quarter last year.
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MSG Entertainment revenue dips due to less concerts
Madison Square Garden Entertainment (MSGE) has reported revenue of US$142.2 million in its fiscal 2024 first quarter, down 3% ($4.2m) year over year.
The financial results are MSGE’s first as a standalone live entertainment company after it spun off from MSG’s Sphere and MSG Networks businesses in April.
MSGE – which owns venues including New York’s Madison Square Garden, The Theater at Madison Square Garden, Radio City Music Hall, Beacon Theatre and The Chicago Theatre – said event-related revenues narrowed by $8.3m compared to the same period last year.
“This decrease primarily reflected a lower number of concerts held at the company’s venues as compared to the prior year quarter, partially offset by higher per-concert revenues in the current year period,” MSG Entertainment said.
The prior-year quarter benefited from some concerts that were rescheduled due to the Covid-19 pandemic, plus, Madison Square Garden (cap. 21,000) enjoyed a 15-show run from Harry Styles from 20 August to 21 September 2022 that grossed $63.1m from 277,000 ticket sales, according to Billboard Boxscore.
Also revealed in the fiscal Q1 report, MSG Entertainment booked an operating loss of $33.4m (an increase of $22.1m as compared to the prior year quarter) and an adjusted operating loss of $0.7m, as compared to adjusted operating income of $11.5m in the prior year quarter.
The prior-year quarter benefited from some rescheduled concerts, plus, MSG enjoyed a 15-show run from Harry Styles
The company attributed the increase in its losses to restructuring charges, higher selling, general and administrative expenses, and lower revenues.
However, MSGE’s chief financial officer Dave Byrnes expressed optimism about the future, stating that the company’s venues are poised to surpass their concert goals for the year.
The company will achieve a low double-digit percentage increase in event bookings this fiscal year, thanks to a new generation of artists who have graduated from smaller buildings in its portfolio to its flagship venue, Madison Square Garden.
“This fiscal year, there are a number of acts, including Olivia Rodrigo, Tyler Childers and Niall Horan, who previously performed at either The Beacon [Theatre] or Radio City [Music Hall] that will soon headline the Garden for the first time in their careers,” said Byrnes. What’s more, he added, “a number of these first-time acts” are playing multiple nights and experiencing “strong ticket demand for their entire run.”
“We’re currently on sale with more concerts at our venues than we were at this time last year for the second half of fiscal ’23,” said Byrnes, “and of those on-sales, a majority of those tickets are already sold, and sell-through on those shows is currently up [a] high single-digit percentage as compared to the second half of fiscal ’23.”
Looking at the full fiscal year, MSGE is estimating revenues of $900m to $930m, operating income of $85m to $95m and adjusted operating income of $160m to $170m.
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