Dolan Makes Timely Purchase Of MSG Entertainment Shares

It’s still very early in the game, but thus far it’s looking like a member of Madison Square Garden
MSG
Entertainment’s board of directors made a timely purchase of the company’s shares a few days ago.

Thomas Charles Dolan snapped up 322,580 shares of MSGE on June 27 at a price of $31. Since then the stock, last seen at $33.85, is up 8% versus an increase of 3% for the S&P 500. Dolan now has a total of 369,708 shares of MSGE worth $12.5 million.

MSGE owns Madison Square Garden (home to New York’s Knicks and Rangers), The Theater at Madison Square Garden, Radio City Music Hall, and the Beacon Theatre and The Chicago Theatre. Two months ago MSGE completed its spin-off from Sphere Entertainment Co. (NYSE: SPHR) with Sphere retaining MSG Networks
MSGN
and Tao Group Hospitality businesses. A week ago, MSGE) announced the pricing of a secondary offering by Sphere of 5,250,000 shares of MSGE stock at $31.00 per share with Sphere retaining 24.7% of MSGE’s stock.

For the fiscal 2023 third quarter, the Company generated revenues of $201.2 million, an increase of $7.2 million, or 4%, as compared to the prior year period. Revenues related to the Company’s arena license agreements with the Knicks and Rangers increased $11.7 million. Revenues from the presentation of the Christmas Spectacular production increased $3.5 million, which reflected seven performances during the current year quarter as compared to no performances in the prior year quarter. The increase in revenues was partially offset by a decrease in advertising sales commissions of $9.6 million in the current year period due to the termination of MSG Networks’ advertising sales representation agreement.

For the fiscal year ending June, 2023 revenue is expected to come in at between $835 million to $845 million and adjusted operating income (earnings before interest, taxes, depreciation, amortization and other non-cash expenses) between $145 million to $155 million adjusted to reflect MSGE as if it had been a standalone, independent entity from the start of the fiscal year (July 1, 2022).

But how well MSGE ultimately does will depend a lot on the postseason success of the Knicks and Rangers next year due to the license agreement the Garden has with the two teams with sharing revenue. For example, MSGE keeps 65% of suite and club seat revenue from NBA games and 67.5% from NHL games.

Concerts also bring in a lot of money. The Garden led the pact in 2022, according to Billboard, grossing $241 million.

Top Arenas Concert Revenue (mil, gross)

1. Madison Square Garden, NYC: $241.3
2. O2 Arena, London $177.0
3. Kia Forum, Inglewood $156.8
4. T-Mobile Arena, Las Vegas: $124.7
5. Crypto.com Arena, Los Angeles: $89.8
6. American Airlines Center, Dallas: $87.7
7. United Center, Chicago: $87.6
8. Bridgestone Arena, Nashville: $84.1
9. FTX Arena, Miami: $80.1
10. Prudential Center, Newark: $79.9