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MADISON SQUARE GARDEN ENTERTAINMENT CORP. REPORTS
FOURTH QUARTER AND FISCAL 2020 RESULTS
Company Implements Significant Cost-Reduction Measures
Lengthens Construction Timetable for MSG Sphere In Las Vegas; Expects to Open Venue in Calendar 2023
Maintains Strong Liquidity Position, With $1.2 Billion in Cash and Short-Term Investments at Fiscal Year-End
NEW YORK, N.Y., August 14, 2020 - Madison Square Garden Entertainment Corp. (NYSE: MSGE) today provided an update on its business operations and reported financial results for the fourth quarter and fiscal year ended June 30, 2020. On April 17, 2020, Madison Square Garden Entertainment Corp. (the Company or MSG Entertainment) became a standalone company, following the completion of its spin-off from The Madison Square Garden Company, which was renamed Madison Square Garden Sports Corp. (MSG Sports).
Executive Chairman and CEO James L. Dolan said, Our core operations performed well over the first eight months of fiscal 2020 and, even after the onset of COVID-19, we completed important initiatives, including the Forum sale and spin-off transaction. However, the ongoing impact of the pandemic has required us to make difficult decisions and take significant action in order to preserve the strength of our balance sheet and ensure we are well-positioned to resume operations when the time is right. Despite the uncertainty for our industry, we remain confident in our business and look forward to when we can bring fans and artists back together in our venues.
Over the first eight months of fiscal 2020, the Company was experiencing positive momentum across its operations. The 2019 season of the Christmas Spectacular Starring the Radio City Rockettes marked the shows highest grossing run ever. The Companys entertainment and sports bookings business was on track for a record number of events for the fiscal year and Tao Group Hospitality was delivering strong year-over-year growth. In addition, the Company was making significant progress on a number of important initiatives, including the construction of its MSG Sphere venue in Las Vegas and the completion of both the spin-off transaction and the $400 million sale of the Forum in Inglewood, California.
As a result of the COVID-19 pandemic, in mid-March, the Companys performance venues and Tao Group Hospitalitys entertainment dining and nightlife venues were closed, and, except for certain Tao Group Hospitality venues, remain closed today. The Boston Calling Music Festival, scheduled for Memorial Day weekend, was canceled. And last week, the Company canceled its Christmas Spectacular production for this upcoming holiday season as a result of the ongoing uncertainty.
Following the shutdown of its venues in March, the Company took immediate steps to reduce discretionary spending and made several difficult decisions. Tao Group Hospitality eliminated essentially all its venue line staff and manager positions. The Company also ended financial support of event-level employees at its performance venues at the end of May. The Company has continued to review its operations and last week implemented additional actions, including a workforce reduction and significantly reduced spending across all departments.
The Companys MSG Sphere venue in Las Vegas is also impacted. In April, the Company announced that it was suspending construction of MSG Sphere due to COVID-19 related factors that were outside of its control, including supply chain issues. As the ongoing effects of the pandemic have continued to impact its operations, the Company has revised its processes and construction schedule, and has resumed work with a lengthened timetable that enables the Company to better preserve cash in the near-term. The Company remains committed to bringing MSG Sphere to Las Vegas and, based on its new construction schedule, now expects to open the venue in calendar 2023.
The Company has taken these steps to conserve cash and believes it is well positioned to navigate the temporary shutdown. As of June 30, 2020, the Company had approximately $1.2 billion in cash and short-term investments. Debt outstanding consisted of a $33.8 million bank term loan at Tao Group Hospitality. The Companys cash and cash equivalents at fiscal year-end included approximately $200 million in deferred revenue and collections due to promoters, primarily related to tickets, suites and sponsorships all of which will be addressed, to the extent necessary, through credits, make-goods, refunds and/or rescheduled dates. As of June 30, 2020, the significant majority of deferred ticket revenue was related to events that have been or are expected to be rescheduled into calendar 2021. Ticketholders for rescheduled events have primarily opted to retain their tickets, and the Company is providing ticket refunds as appropriate.
The following information was filed by Madison Square Garden Entertainment Corp. (MSGE) on Friday, August 14, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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