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MSG: Concert touring to return from late September

Madison Square Garden Entertainment, owner of the New York arena of the same name, beat analyst expectations in the fourth financial quarter of 2021, sending its share price to US$72.55, an increase of 16.2%, as of close of business yesterday (23 August).

The company’s Q4 results, which reflected the return of live events to its US venues, saw it increase entertainment revenues to US$31.1 million for the three months ending 30 June – up 264% on Q4 2020’s $8.6m – and narrow adjusted operating losses by 12%, from $90.2m to $79.6m. Event-related revenues specifically increased by $3.5m primarily “due to select events held in the current year quarter”, such as three New York Knicks basketball games and a sold-out full-capacity concert by Foo Fighters.

Speaking during the firm’s Q4 earnings call yesterday, MSG Entertainment president Andy Lustgarten said: “While we are clearly operating in a very fluid environment, we successfully navigated through one of the most challenging times in our company’s history and remain cautiously optimistic about the road ahead. Looking back at fiscal 2021, we saw number of positives, and I am proud of the role we played in helping to shepherd the return of live entertainment in New York as our venues hosted the city’s first large-scale events since the start of pandemic.”

He also told analysts that MSG is making “meaningful progress on our next chapter, MSG Sphere in Las Vegas” – one of two high-tech Sphere arenas planned, along with one in Stratford, London – “heading towards the venue’s opening in calendar 2023.”

Lustgarden said he expects “concert touring to begin ramping back up in late September, leading to a strong concert booking schedule on a full-year basis” for the company.

“2022 is currently pacing ahead of fiscal 2020, which was slated to be a record bookings year”

“In fact, fiscal 2022 is currently pacing ahead of fiscal 2020, which was slated to be a record bookings year for our company prior to the onset of the pandemic,” he said, adding that holds at Madison Square Garden are up 50% on 2019, the last pre-pandemic year.

While recent weeks have seen a number of cancellations as the delta variant of Covid-19 spreads, the US continues to lead the way on the reopening of the concert business.

The MSG Entertainment president also referenced recent remarks by Live Nation CEO Michael Rapino that the live music market will explode when coronavirus restrictions are lifted, particularly from 2022 onwards.

“There is real demand for artists to be on the road,” said Lustgarden. “We feel even more confident in this after listening to Live Nation’s recent public comments, where they talk about the touring business for the years to come. Live Nation has a different purview to what we do, because they are buying global tours and mapping them out at the right time, so while we speak directly to artists, they are speaking to whole tours.

“Together – between what we are seeing and hearing from artists, and what we are hearing from Live Nation – we feel really good about not only this fiscal year, but what the future could be for the next few.”

In addition to the Garden (pictured), MSG-owned and/or -operated venues include the Radio City Music Hall and Beacon Theatre, both in New York, and the forthcoming MSG Sphere Las Vegas and MSG Sphere London.

 


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NY launches Covid-19 pass to fast-track return to live

New York has become the first US state to launch a digital Covid-19 pass that shows citizens’ vaccination status and test results, in an effort to help venues welcome larger groups.

Madison Square Garden (cap. 20,789) in New York City and the Times Union Center (cap. 17,500) in Albany are among the major venues that have already announced they will begin to utilise the Excelsior Pass in the coming weeks.

Smaller arts, entertainment and event venues will be able to use the Excelsior Pass from 2 April.

The pass can either be printed out or stored on smartphones using the Excelsior Pass Wallet app. Each pass will have a secure QR code, which participating businesses and venues can scan using a companion app to verify proof of Covid-19 negative test results or proof of vaccination.

Governor Andrew Cuomo announced the launch of the Excelsior Pass, developed in partnership with IBM, on Friday (26 March).

“New Yorkers have proven they can follow public health guidance to beat back Covid, and the innovative Excelsior Pass is another tool in our new toolbox to fight the virus while allowing more sectors of the economy to reopen safely and keeping personal information secure,” said governor Cuomo.

“The Excelsior Pass will play an important role in allowing people to gather safely, which will be critical to NY’s recovery”

“The question of ‘public health or the economy’ has always been a false choice — the answer must be both. As more New Yorkers get vaccinated each day and as key public health metrics continue to regularly reach their lowest rates in months, the first-in-the-nation Excelsior Pass heralds the next step in our thoughtful, science-based reopening,” he said.

James Dolan, executive chairman, MSG Sports and executive chairman and CEO, MSG Entertainment, says: “We are grateful the state is focused on doing everything possible to reopen businesses across our region safely and quickly. The Excelsior Pass will play an important role in allowing people to gather safely, which will be critical to New York’s recovery. We were proud to be part of the Excelsior Pass pilot and look forward to participating in the programme.”

Madison Square Garden (MSG) was part of the pilot programme to test the Excelsior Pass.

The initial phase of the pilot took place during a Brooklyn Nets game at Barclays Center (cap. 19,000) on 27 February and was tested for a second time during a New York Rangers game at MSG on 2 March.

Following that, major stadiums and arenas in New York were permitted to reopen with a capacity of 10% from 23 February, using guidelines based on the testing programme.

Similar ‘vaccine passports’ are already being developed, or are under consideration, in a number of European Union countries, including Sweden, Denmark, Poland, the Czech Republic and Cyprus.

An EU-wide vaccine passport that could replace the piecemeal approach currently being pursued by individual member states, was put forward last week.

 


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MSG sets out further Sphere London commitments

Madison Square Garden Entertainment has set out further details of its London arena project, MSG Sphere.

The futuristic 21,500-capacity arena – which will, if approved, occupy a nearly five-acre site in Stratford, east London – has overcome a major hurdle after Network Rail, which manages much of the UK’s railway network, withdrew its objection to Sphere following consultation with MSG and local partners.

“We are pleased to provide additional details in support of our planning application for MSG Sphere, underlining our commitment to create jobs and boost the local economy,” comments Jayne McGivern, MSG Entertainment’s executive vice-president of development and construction. “The materials reflect the constructive dialogue we have had with a range of local stakeholders, and further demonstrate the careful consideration that has gone into every aspect of our plans.”

The updated documents – issued in response to a request from the London Legacy Development Corporation (LLDC), which is considering MSG’s planning application – can be read on the LLDC planning portal here.

In addition to its work with Network Rail, the MSG submission includes a number of voluntary planning conditions the company says addresses feedback from LLDC and local residents.

“The materials reflect the constructive dialogue we have had with a range of local stakeholders”

They include parameters around the hours of operation, event timings and the high-tech venue’s eye-catching external display, including restrictions on overnight lighting, as well as measures to coordinate arrival and departure times for event attendees.

Another contains a proposal to provide 111 disabled parking spaces at Stratford International station with free mobility assistance to the arena.

MSG originally hoped Sphere London could open in 2022 – a year after its sister venue in Las Vegas – but with the planning process continuing well into 2020, that is no longer a “realistic” goal, the company said last November. (The opening of MSG Sphere Las Vegas has since been pushed back to 2023 after construction was halted by coronavirus.)

The latest submission to the LLDC builds on previous commitments made by MSG Entertainment, including a guarantee that all on-site jobs will be paid at least the London living wage, investment in a new entrance and ticket hall for Stratford station, and a commitment to employing local people for least 35% of construction and operational jobs.

“We are confident our proposal thoughtfully sets out how we will deliver a world-class venue, and remain excited about the opportunity to bring MSG Sphere to London,” continues McGivern.

 


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US election: Venues turn into polling stations

Live Nation has announced plans to use more than 100 of its US venues as polling stations for the American presidential election on 3 November.

The concert giant says it is working with local authorities to examine the feasibility of using Live Nation-owned venues across the country as polling centres, with the Wiltern (1,850-cap.) and Hollywood Palladium (3,800-cap.) in Los Angeles, Emo’s (1,700-cap.) in Austin, Texas, and the Buckhead Theatre (1,800-cap.) in Atlanta already confirmed.

The Fillmore (2,500-cap.) in Philadelphia is in the “final stages of the vetting process”, it adds.

“Core to what we do at Live Nation is helping amplify voices on stage around the world, and supporting voting is another important way we want to continue making voices heard,” comments LN CEO Michael Rapino. “We’re honoured to work with such incredible partners and will do everything in our power to support and empower voter engagement among our employees and the public.”

The LN properties join other venues previously announced as serving as polling stations, including multiple arenas

The company has also partnered with More Than a Vote, a non-profit organisation supporting black voters, and announced it will give its employees paid time off to vote.

The Live Nation properties join other venues previously announced as serving as polling stations, including multiple arenas. They include Madison Square Garden in New York, the Los Angeles Forum, State Farm Arena in Atlanta and Intrust Bank Arena in Wichita, Kansas.

“As the Covid-19 pandemic continues to make mass gatherings difficult, we are excited to partner with New York City’s board of elections,” says Madison Square Garden’s Rich Constable, “and support our community by providing a large-scale venue in the heart of New York City that can accommodate social distancing and serve as a safe place for residents to exercise their right to vote.”

The US presidential election will be held on Tuesday 3 November 2020, pitting incumbent president Donald Trump against Democratic challenger Joe Biden.

 


This article forms part of IQ’s Covid-19 resource centre – a knowledge hub of essential guidance and updating resources for uncertain times.

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MSG completes entertainment spin-off

MSG Entertainment has become a new public company, as the Madison Square Garden Company (MSG) completes the spin-off of its entertainment businesses from its sports company.

The newly separate MSG Entertainment started trading on the New York stock exchange today (20 April) under the symbol MSGE, with shares opening at $68. Each MSG common stockholder received one share of MSGE Class A or B common stock for every common stock of MSG they held before the spin-off.

Former WeWork executive, Mark FitzPatrick, has been named executive vice president and chief financial officer of MSG Entertainment, with MSG’s Andrew Lustgarden serving as president of the new company.

The entertainment company retains no equity interest in MSG Sports, which now trades as MSGS, following revisions to an initial spin-off plan in November 2019.

“While the current environment presents significant challenges to our industry, we are confident in the future, and look forward to MSG Entertainment building on its reputation as a leader in live experiences,” says James Dolan, executive chairman and CEO of MSG Entertainment.

“While the current environment presents significant challenges to our industry, we are confident in the future”

“We are also very pleased to welcome Mark, a talented corporate finance executive who brings extensive experience working with well-known companies. We believe he is the ideal executive to help guide MSG Entertainment as we continue to pursue excellence across our operations.”

MSG Entertainment’s assets include New Yorks’ Madison Square Garden and the adjoining Hulu Theatre, Radio City Music Hall, the Beacon Theatre and the Chicago Theatre, as well as developing the cutting-edge ‘Sphere’ arenas in Las Vegas and London.

Prior to the spin-off last month, MSG sold the 18,000-capacity Forum in Inglewood to LA Clippers owner Steve Ballmer in an $400 million all-cash deal.

MSGE also retains majority interesting in hospitality company Tao Group and Boston Calling Events, the producer of Boston Calling Music Festival.

Photo: Min Lee/ Wikimedia Commons (CC BY-SA 3.0) (cropped)

 


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Madison Square Garden Company to sell LA Forum

The Madison Square Garden Company (MSG) has reached a deal to sell the Forum, the 18,000-capacity arena in Inglewood, Los Angeles, to Steve Ballmer, the billionaire owner of basketball team the LA Clippers, for US$400 million in cash.

MSG – which also operates the famous Madison Square Garden in New York, and is developing cutting-edge ‘Sphere’ arenas in Las Vegas and London – has long been opposed to Ballmer’s plans to build a new arena for the Clippers in the vicinity of the Forum (pictured), and formerly accused Inglewood mayor James Butts of colluding with the Clippers to secretly acquire a plot of land from MSG for the venue.

The purchase, which is expected to close in the second quarter of 2020, resolves all litigation between MSG and Ballmer/the Clippers, reports the Los Angeles Times.

“This is the best resolution for all parties involved”

Ballmer, formerly CEO of Microsoft, reportedly plans to build a new, privately financed 18,000-seat arena for the Clippers, while continuing to operate the Forum as a concert venue.

“This is the best resolution for all parties involved and we wish the new owners every success,” MSG says in a statement.

“We are looking forward to putting the legal issues behind us,” add the Clippers. “This will allow us to focus on delivering world-class experiences for music fans and building a new arena that will provide a unique environment and a true home-court advantage for Clippers fans.”

 


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Live stocks hit as coronavirus batters markets

The major publicly traded live entertainment companies have seen the value of their shares decline this week, as stock markets around the world reel from fears over the impact of the Covid-19 coronavirus.

Markets in Europe, Asia and the Americas are suffering their worst week since the global financial crisis of 2008, according to the BBC, with the spread of coronavirus affecting both the global supply chain and consumer demand.

Live Nation CEO Michael Rapino referred to the “resilience” of music fans in the company’s earnings call yesterday (27 February), stating that consumers are still buying tickets worldwide, despite the ongoing spread of Covid-19.

The company’s share price, which reached an all-time high of US$76.08 earlier this month, has fallen by 20% in the past few days, in keeping with the global stock market drop. Shares are back up 2% today, following the publication of strong 2019 financial results.

Shares for German ticketing and promotion powerhouse CTS Eventim have taken a similar hit, falling by just under 20% since last week. Eventim shares reached a record high of €61.30 ($67.27) on 24 January 2020.

“We’re confident that, long-term, the show will happen”

Fellow German company Deutsche Entertainment AG (DEAG), whose shares have climbed almost 30% to €6.30 ($6.92) since mid January, has seen a 22% drop since last week, whereas shares for New York-based Madison Square Garden Company (MSG) have decreased by around 17% in the past week, falling to $261.34.

In Latin America, Sao Paulo-based Time 4 Fun’s shares are also down 22%, from BRL5.41 ($1.20) to BRL4.24 ($0.94). Brazil recorded its first case of coronavirus on Wednesday, marking the virus’ arrival to Latin America.

It is not just live entertainment companies that have suffered in the wake of coronavirus. The S&P 500 index, a measure of the stock performance of 500 large companies listed on US stock exchanges, has fallen 15% from the record high it achieved just last week.

Although coronavirus has already caused the cancellations of thousands of shows across Asia and Europe, not all are worried about the long-term impact. “We’re confident that, long-term, the show will happen,” says Rapino. “The revenue will flow and the fan will show up.”

 


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Sphere to be first living wage-accredited major venue

The Madison Square Garden Company (MSG) has been accredited as a ‘living wage employer’ by the Living Wage Foundation (LWF), IQ can reveal. This includes all on-site jobs at MSG’s planned Sphere arena in Stratford, east London, with the Sphere becoming the first major entertainment venue in the UK to receive the accreditation.

The news comes after MSG announced in December 2019 that all jobs directly on site at MSG Sphere – both during construction as well as once the venue is open – will be paid at least the London living wage (LLW) of £10.75, significantly higher than UK minimum wage of £6.15 for 18–24-year-olds and £7.70 for 21–24-year-olds.

Jayne McGivern, MSG’s EVP of development and construction, says: “We are absolutely committed to developing a groundbreaking venue that will not only redefine the future of entertainment, but also deliver tremendous benefits for local residents – including employment opportunities and training initiatives across a wide range of skill sets.

“That’s why we’re proud to have received this accreditation from the Living Wage Foundation and for MSG Sphere to become the first major entertainment venue in the UK to pay the London living wage as a minimum to everyone employed on site.”

The London Sphere – the US venues giant’s first large-scale international property – will be a showcase for a range of technological innovations, including the largest and highest resolution LED screen in the world, an adaptive acoustics system that delivers clear audio to every guest, and a haptic system so the audience can “feel” the experience.

“We are absolutely committed to developing a groundbreaking venue that will … deliver tremendous benefits for local residents”

MSG says the Sphere will bring thousands of jobs to the local area, including 4,300 jobs annually in the construction phase and 3,200 jobs once open. The New York-based company  has also made a commitment to ensure at least 35% of on-site construction jobs and 35% of on-site operational jobs – from senior managers to venue operations staff – go to local people.

MSG recently submitted updated documents relating to its proposals for MSG Sphere to the London Legacy Development Corporation (LLDC), which manages the former Olympic site in Stratford on which Sphere will be built. The company – which is currently going through the process of spinning off its entertainment companies from its sports business – recently said Sphere London would likely no longer open in 2022, as planned.

Katherine Chapman, director of the Living Wage Foundation, comments: We’re delighted that The Madison Square Garden Company has joined the movement of over 6,000 responsible employers across the UK who voluntarily commit to go further than the government minimum to make sure all their staff earn enough to live on.

“Accredited businesses recognise that paying the real living wage is the mark of a responsible employer and they believe that a hard day’s work deserves a fair day’s pay.”

 


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MSG moves forward with ents spin-off

The Madison Square Garden Company (MSG) has announced that it has reached a “significant milestone” in the proposed spin-off of its entertainment business, set to take place in the first three months of 2020.

The venue giant filed an initial form 10 registration statement with US regulator the Securities and Exchange Commission (SEC) yesterday (3 December), detailing the terms of the spin-off, which would split MSG into two distinct companies – one focused on sports and the other on entertainment.

Structured as a tax-free spin-off to all MSG shareholders, those directly holding shares of common stock would maintain economic interest in both businesses, with MSG executive chairman and CEO James Dolan and his family retaining majority voting control of both companies.

MSG hopes the spin-off will enable investors to evaluate the assets and opportunities of each company more clearly, with the entertainment business in particular offering chances for growth through venue expansion.

MSG hopes the spin-off will enable investors to evaluate the assets and opportunities of each company more clearly

The entertainment company would feature venues including New York’s Madison Square Garden (20,789-cap.); Hulu Theater (5,600-cap.); Radio City Music Hall (6,015-cap.); the Forum in Inglewood (17,505-cap.); and The Chicago Theatre (3,600-cap.); as well as the state-of-the-art MSG Sphere venue in Las Vegas, due to open in 2021, and a second planned Sphere in London.

In addition to its venue portfolio, the post spin-off ents business would include MSG’s booking company, which will also programme sports events; the productions sector, which includes the Radio City Rockettes and the Christmas Spectacular; and majority interests in hospitality group Tao Group Hospitality and Boston Calling Events, which organises the Boston Calling Music Festival.

The New York Knicks (basketball) and Rangers (ice hockey) sports franchises, and the Knicks Gaming esports franchise, would make up the pure-play sports company.

MSG had previously explored a spin-off which would see the entertainment company retain a one-third stake in MSG sports, but later decided there was sufficient financing for venue expansion on the entertainment side without support from the sports division.

The completion of the spin-off remains subject to conditions including final MSG board approval.

 


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Silver Lake invests in OVG Manchester arena partner

Silver Lake, a private equity firm with stakes in a number of major live entertainment companies, has acquired a US$500 million stake in Manchester City Football Club owner City Football Group (CFG), the partner on Oak View Group’s (OVG) new arena project.

The buy-in, which sees the investor take control of more than 10% of CFG, complements the $100m investment Silver Lake made in venue development group OVG last year.

OVG is currently working in partnership with CFG on building a major new concert venue in the Eastlands area of Manchester, home to the football club’s Etihad Stadium. The arena project entered into its second round of consultation meetings yesterday (Thursday 28 November), the day after Silver Lake announced its CFG investment.

“We and Silver Lake share the strong belief in the opportunities being presented by the convergence of entertainment, sports and technology”

“We and Silver Lake share the strong belief in the opportunities being presented by the convergence of entertainment, sports and technology,” comments CFG chairman Khaldoon Al Mubarak.

Silver Lake has invested heavily in the entertainment industry in recent years and currently owns 100% of Asia-Pacific live entertainment giant TEG, 51% of WME/UFC parent company Endeavor and 8.4% of Madison Square Garden Company.

The investor’s most recent deal places CFG at a valuation of $4.8 billion – a record for a sports group. According to the Financial Times, the $500m cash injection will help fund CFG’s acquisition of more football clubs globally, as well as the planned construction of a new stadium in New York.

 


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