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MSG plans full ents spin-off amid UK Sphere delays

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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MSG Sphere further expands content team

The Madison Square Garden Company (MSG) has appointed award-winning creator Keri Elmsly to the newly created role of senior vice-president, immersive development and production, in the latest addition to its content team.

Elmsly will be tasked with the development of multi-sensory and immersive elements for the MSG Sphere entertainment venues planned for Las Vegas and London. With programmable LED exteriors, the Sphere venues aim to create immersive experiences both externally and internally.

The first MSG Sphere, in Las Vegas, is expected to be completed in 2021, with its London sister venue following a year later. MSG submitted its plans for the London sphere in March, revealing it will sit on a 4.7-acre former coach park located on the site of the 2012 Olympic games, and have a seated/standing capacity up to 21,500.

Elmsly joins Disney alumni Jennifer Vogt, president of creative content and productions, and Kristina Reed, senior vice-president of creative development and strategy on the MSG Sphere content team.

“MSG Sphere represents a truly unique convergence of art and technology that will create a powerful platform for immersive storytelling”

Prior to MSG, Elmsly served as chief creative officer at Second Story, a network of experience design studios. Previously, she produced the world’s first live drone orchestra – a narrative performance with Velvet Underground founder John Cale and Liam Young – as part of London’s Barbican Centre. As an executive producer at United Visual Artists, Elmsly led projects including the kinetic installation ‘Chorus’ and the stage design for Jay-Z’s Blueprint 3 tour.

“Throughout her career, Keri’s work has lived at the intersection of technology, art and immersive experiences pushing the boundaries of technology in the name of creative storytelling,” comments Vogt.

“She perfectly complements our multi-faceted team whose collective expertise spans all areas of entertainment – from live action film to animation, Broadway and more – we are creating a team of talented revolutionaries for MSG Sphere.”

“MSG Sphere represents a truly unique convergence of art and technology that will create a powerful platform for immersive storytelling,” says Elmsly. “I’m thrilled to take on this once-in-a-lifetime opportunity to transform how we interact with audiences – creating new types of experiences that encourage them to step outside of their everyday reality.”

 


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MSG reports weaker-than-expected Q4

The Madison Square Garden Company (MSG) today (20 August) reported financial results for the fourth quarter and fiscal year 2019, showing a 5% increase in revenue year-on-year alongside widening losses.

For the final quarter of 2019, MSG generated revenues of US$263.6 million, a 17% decrease from last year’s Q4. Operating losses for the quarter were up 81% from last year at $79.9m, as compared to $44.2m in 2018.

Overall, quarterly losses equated to $3.08 per share, exceeding analysts’ earnings per share (EPS) estimations of a $2.61 loss on each. MSG’s share price decreased by $22 (7%) to $270 following the report.

The company’s market capitalisation, which grew by almost 40% between mid-2017 and mid-2019, stands at $6.42 billion at time of press, as opposed to $6.65bn at the half-year point.

MSG’s entertainment division saw revenues dip by 6% to $174m in Q4, which the company puts down to “lower event-related” earnings at the company’s venues, which include New York’s Madison Square Garden (20,789-cap.) and the Forum (17,505-cap.) in Los Angeles, as well as a decrease in revenue from Boston Calling festival.

“Ongoing demand for our sports and entertainment assets helped drive a number of operational highlights in fiscal 2019″

The company was also affected by the switch to a new accounting standard for revenue recognition, ASC Topic 606, which changes the time at which certain revenues and sports team-related expenses are recognised within the fiscal year.

MSG’s year-long operating losses stand at $13.9 million, in comparison to operating income of $23.1m in 2018. However, revenues are up 5% from 2018 at US$1.6 billion, which the company contributes to growth in both its entertainment and sporting segments.

“Ongoing demand for our sports and entertainment assets helped drive a number of operational highlights in fiscal 2019, including continued growth in bookings, productions, suites, marketing partnerships and media rights,” says MSG executive chairman and chief executive James Dolan.

“Looking ahead, we remain confident in the strength of our core businesses and expect fiscal 2020 to be an important year as we work to complete the proposed sports spin-off and begin to usher in the company’s next chapter, with MSG Sphere in Las Vegas starting to take shape.”

“Significant progress” has been made on the construction of the 18,000-seat arena in Las Vegas, which MSG hopes will open in 2021. The futuristic Sphere concept will also form the basis for MSG’s first non-US venue, which will be located in Stratford, London.

Photo: Ajay Suresh/Flickr (CC BY 2.0) (cropped)

 


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Second Disney alum joins MSG Sphere content team

The Madison Square Garden Company (MSG) has hired Oscar-winning film producer Kristina Reed (Big Hero 6, Frozen, Madagascar) as senior vice-president, creative development and strategy.

In the newly-created position, Reed, known for her work with DreamWorks and Walt Disney Animation, will develop creative content for the MSG Sphere entertainment venues under development in Las Vegas and London.

Utilising the Spheres’ cutting-edge immersive technology, which includes programmable, wall-to-floor HD screens and steerable spatial sound, Reed will be “responsible for developing and implementing a slate of content for [the] MSG Sphere venues, from conception to execution”, according to New York-based MSG.

The first MSG Sphere, in Las Vegas, is expected to be completed in 2021, with its London sister venue following a year later. MSG submitted its plans for the London sphere in March, revealing it will sit on a 4.7-acre former coach park located on the site of the 2012 Olympic games, and have a seated/standing capacity up to 21,500.

Reed is the first hire for Jennifer Vogt, MSG’s newly appointed president, creative content and productions, who worked with Reed at Disney, including on Galaxy’s Edge, the Star Wars-themed area at Disneyland in California.

“Our vision for MSG Sphere is to completely revolutionise the entertainment experience and rethink the possibilities for immersive storytelling on a very large scale,” comments Vogt.

“Our vision for MSG Sphere is to completely revolutionise the entertainment experience”

“To do this, we are building a team that includes the industry’s very best talent – who not only have the creative instincts to recognise compelling content, but also the breadth and depth of experience to develop, produce and deliver thought-provoking immersive projects.

“Kristina is that type of leader, and I am thrilled she is joining our team to help make our vision for creating game-changing content for MSG Sphere a reality.”

Kristina Reed joins MSG from Disney Television Animation, where she was vice-president of production, overseeing Disney Channel TV content globally. Previously, she spent seven years at Disney Animation Studios, where she headed up production for Tangled and the Princess and the Frog and development for FrozenZootopia/Zootropolis and Moana, and co-produced the Academy Award-winning Big Hero 6.

Prior to joining Disney, she worked at DreamWorks Animation, where she was a production executive on Shrek 2, Shark Tale and Madagascar and associate producer on Kung Fu Panda.

“The opportunity to create ground-breaking visuals and tell stories on such a powerful platform is irresistible,” she says of her new role. “I’m excited to join this team of passionate creative colleagues, build on the rich legacy of the company and bring the visionary potential of MSG Sphere to life.”

 


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MSG hires head of content for Sphere venues

The Madison Square Garden Company (MSG) has announced film industry veteran Jennifer Vogt as president of creative content and productions.

In the newly created position, Vogt – most recently show design and production executive for Galaxy’s Edge, the Star Wars-themed area at Disneyland – will oversee content strategy and development for the state-of-the-art new MSG Sphere entertainment venues in London and Las Vegas.

In addition to heading up the creation of content that will utilise the Spheres’ headline-grabbing range of immersive technology – including wall-to-floor HD screens and spatial sound – Vogt will work alongside the venues’ construction and technology teams to develop a set of tools, called the ‘palette’, that will “make content creation for MSG Sphere an intuitive experience, enabling artists, creators and educators to maximise the potential of the venue’s immersive technologies”, according to MSG.

The first MSG Sphere, in Las Vegas, is expected to completed in 2021, with its London sister venue following a year later. MSG submitted its plans for the London sphere in March, revealing it will sit on a 4.7-acre former coach park located on the site of the 2012 Olympic games, and have a seated/standing capacity up to 21,500.

MSG submits plans for 21,500-cap. Sphere London

Jennifer Vogt will report to MSG president Andrew Lustgarten, who comments: “The success of our vision for MSG Sphere comes down to content: how we will utilise fully immersive experiences on an unprecedented scale to transform the entertainment industry and utterly change the relationship between artist and audience.

“Jennifer’s experience in bringing some of the world’s most complex and high-profile entertainment projects to life make her ideally suited to help us make MSG Sphere a reality.”

“The success of our vision for MSG Sphere comes down to content”

Prior to joining Walt Disney Imagineering, Vogt worked as a management consultant for film studio DreamWorks Animation, where she played a key role in setting up its Chinese division, Oriental DreamWorks (now Pearl Studio). She started her career at her own design company, which worked with major studios to conceive, design and execute over 150 feature films and TV and live theatre shows.

“I am energised by this incredible opportunity,” comments Vogt. “I believe MSG Sphere will revolutionise the entertainment experience through sight and sound, and feel confident that we can take the beloved Radio City Christmas Spectacular and Rockettes to even greater heights while respecting their incredible legacy.

“This is an important time for MSG, and I am deeply honoured to help build on the company’s reputation as a world-leader in entertainment.”

 


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