Madison Square Garden Entertainment Q4 2026 Earnings Call Transcript

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August 12, 2026

Key Takeaways

  • Positive Sentiment: Fiscal 2026 revenue exceeded $1 billion, rising 13% year over year, while adjusted operating income increased 18% to $262 million, supported by growth across the company’s key businesses.
  • Positive Sentiment: Management expects another year of revenue and adjusted operating income growth in fiscal 2027, driven by higher event volume, strong concert demand, improved per-event profitability, and continued momentum in sponsorships and premium hospitality.
  • Positive Sentiment: The Christmas Spectacular delivered a record year with approximately $195 million in revenue and more than 1.2 million tickets sold; the 2026 season will feature a record 230 performances, higher average ticket yields, a new Rockette scene, and immersive technology.
  • Positive Sentiment: The Knicks’ championship run contributed to a $7.4 million year-over-year increase in fourth-quarter revenue from MSG Sports agreements, while upcoming bookings include Harry Styles’ 30-date residency and the NCAA Men’s Basketball East Regional.
  • Negative Sentiment: Theater bookings are pacing behind plan for the September and December quarters, and the proposed transfer of the Infosys Theater remains subject to negotiations and definitive documents, creating uncertainty around future event volume and related economics.
AI Generated. May Contain Errors.
Earnings Conference Call
Madison Square Garden Entertainment Q4 2026
00:00 / 00:00

Transcript Sections

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Operator

Good morning. Thank you for standing by, and welcome to the Madison Square Garden Entertainment Corp. Fiscal 2026 fourth quarter and year-end earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. I would now like to turn the call over to Ari Danes, Senior Vice President, Investor Relations and Treasury. Ari, please go ahead.

Ari Danes
Senior VP of Investor Relations and Treasury at MSG Entertainment

Thank you. Good morning, and welcome to MSG Entertainment's fiscal 2026 fourth quarter and year-end earnings conference call. On today's call, David Collins, our EVP and Chief Financial Officer, will provide an update on the company's operations and review our financial results for the period. After our prepared remarks, we'll open up the call for questions. If you do not have a copy of today's earnings release, it is available in the Investors section of our corporate website. Please take note of the following. Today's discussion may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Please refer to the company's filings with the SEC for a discussion of risks and uncertainties.

Ari Danes
Senior VP of Investor Relations and Treasury at MSG Entertainment

The company disclaims any obligation to update any forward-looking statements that may be discussed during this call. On pages four and five of today's earnings release, we provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income, or AOI, a non-GAAP financial measure. With that, I'll now turn the call over to David.

David Collins
EVP and CFO at MSG Entertainment

Thank you, Ari, and good morning, everyone. Fiscal 2026 was an outstanding year for our company, with full-year revenues of more than $1 billion and adjusted operating income of $262 million. This represented increases of 13% and 18% respectively, driven by growth across all key areas of our business. In addition, we continued to execute on one of our core capital allocation priorities during the year, repurchasing approximately $25 million of our Class A common stock. In June, we announced the proposed transfer of the Infosys Theater at Madison Square Garden as part of the Penn Station redevelopment project, a transaction that, if finalized, would further our goal of creating long-term shareholder value.

David Collins
EVP and CFO at MSG Entertainment

As we head into fiscal 2027, we look to build on our operating momentum with a continued focus on growing the number of events across our venues, increasing per-event profitability, delivering another record-setting year for the Christmas Spectacular, and advancing our sponsorship and premium hospitality businesses. We also anticipate strong ongoing demand from consumers and partners alike, which we believe sets us up for another year of solid growth in revenues and AOI in fiscal 2027. Let's now review some key operational highlights. During fiscal 2026, we hosted approximately 6.4 million guests at nearly 960 live events. That included a strong fiscal fourth quarter, where we more than doubled the number of concerts at The Garden year-over-year, reflecting our efforts to drive utilization within the NBA playoff window. In terms of consumer demand, the majority of our concerts were again sold out during the quarter.

David Collins
EVP and CFO at MSG Entertainment

Looking ahead to fiscal 2027, we expect to grow the number of events at our venues year-over-year as we host a wide range of bookings across concerts, special events, family shows, and marquee sports. This includes a number of high-profile upcoming events, such as Harry Styles' residency with 30 dates from August through October and the return of the NCAA Men's Basketball East Regional to The Garden in March. Turning to the Christmas Spectacular production, during fiscal 2026, across 215 paid performances, we sold over 1.2 million tickets, the highest attendance in 25 years, leading to another record-setting year for the production with approximately $195 million in revenue. We are currently on sale with 230 shows for the 2026 holiday season, a new high in terms of number of performances in a year.

David Collins
EVP and CFO at MSG Entertainment

This year's show will feature the addition of a new Rockettes scene as well as new immersive technology that will give audiences different perspectives of the production as we continue innovating going into our 93rd season. In terms of our agreements with MSG Sports, the Knicks and Rangers completed their 2025-2026 regular seasons during the quarter, with the Knicks advancing to the NBA playoffs and ultimately going on to win the NBA championship. For both our fourth quarter and full year, we saw robust growth on a per-game basis in our Knicks and Rangers shared revenue streams, including suites and food, beverage, and merchandise, which all benefit from the Knicks' postseason run. We expect this momentum to carry forward into fiscal 2027.

David Collins
EVP and CFO at MSG Entertainment

In addition, the cash component of the arena license fees will be approximately $47 million in fiscal 2027 and will continue to grow 3% each year through fiscal 2055. On the marketing partnerships front, we capitalized on several notable opportunities in fiscal 2026. We welcome new partners, including most recently a multiyear deal with Calci, while also reaching multiyear renewals with Lexus, Anheuser-Busch, and Infosys. In terms of premium hospitality, we again saw strong new sales and renewal activity for suites at The Garden. That included a number of Lexus-level suites that were renovated at the start of the fiscal year. We're continuing to build on this successful initiative by renovating several more suites to drive incremental revenue in fiscal 2027. As we look to the next fiscal year, we expect the positive momentum in both marketing partnerships and premium hospitality to continue.

David Collins
EVP and CFO at MSG Entertainment

Turning to the Penn Station redevelopment, in May, Amtrak selected Penn Transformation Partners, led by Halmar International and Skanska as the master developer team to redevelop Penn Station. We then announced in June that we had entered into a non-binding MOU with the master developer to transfer the Infosys Theater at Madison Square Garden. Our proposed agreement will also acknowledge that the arena will remain fully operational during the redevelopment. We believe the potential transaction, which remains subject to negotiation and definitive documents, makes strategic and financial sense for the company as we look to create long-term value for our shareholders. We look forward to working with the master developer team, and we will keep you updated as we have more to share. Now let us turn to our financial results. For the fiscal 2026 fourth quarter, revenues were $196.3 million, up 27% year-over-year.

David Collins
EVP and CFO at MSG Entertainment

This primarily reflected an increase in revenues from entertainment offerings and, to a lesser extent, higher food, beverage, and merchandise revenues. The increase in revenues from entertainment offerings as well as food, beverage, and merchandise primarily reflected the increase in number of concerts at The Garden during the quarter. In addition, we benefited from higher revenues subject to the sharing of economics with MSG Sports, including the benefit of the Knicks championship run in areas such as merchandise. Revenues from venue-related sponsorships, signage, and suite license fees also grew year-over-year. These increases were partially offset by fewer concerts at our theaters. Fourth quarter adjusted operating income of $18.6 million increased $19.9 million from an adjusted operating loss of $1.3 million in the prior year quarter. This significant year-over-year growth primarily reflects the robust increase in revenues, partially offset by higher direct operating and SG&A expenses.

David Collins
EVP and CFO at MSG Entertainment

Turning to our balance sheet, as of June 30, we had $294 million of unrestricted cash, while our debt balance was approximately $579 million. This cash balance includes a significant amount due to promoters, which reflects the robust concert activity ahead at our venues led by The Garden. With respect to fiscal 2027, we anticipate generating significant free cash flow on an underlying basis. This will primarily be driven by our substantial and growing adjusted operating income, partially offset by ongoing net interest payments related to our credit facilities, which totaled $32 million in fiscal 2026. Our status as a full cash taxpayer, capital expenditures, which will reflect some incremental spend related to technology investments across the company and select suite renovations at The Garden, and the timing of working capital, including the partial reversal of our cash due to promoters balance as a result of the timing of events.

David Collins
EVP and CFO at MSG Entertainment

As I touched on earlier, we repurchased approximately 623,000 shares of our Class A common stock for $25 million during fiscal 2026. Since our spinoff in 2023, we have repurchased approximately 6.1 million shares in total for $205 million. Going forward, we will continue to explore ways to opportunistically return capital to shareholders. In summary, we saw strong demand across our business in fiscal 2026. We see this momentum continuing in fiscal 2027 and remain confident in our ability to deliver long-term shareholder value. I will now turn the call back over to Ari.

Ari Danes
Senior VP of Investor Relations and Treasury at MSG Entertainment

Thanks, David. Operator, can we now open up the call for questions?

Operator

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Peter Henderson with Bank of America. Your line is open. Please go ahead.

Peter Henderson
Peter Henderson
Analyst at Bank of America

Good morning. Thank you for taking the questions. Two if I can, related. Can you just update us on the status of the Infosys Theater sale process? If that sale occurs, how much of the venue's event volume and associate economics, like the sponsorship, do you believe you can recapture elsewhere in your portfolio?

David Collins
EVP and CFO at MSG Entertainment

Sure. Good morning, Peter. Thanks for the question. First, I would like to congratulate Penn Transformation Partners on being selected to redevelop Penn Station. As I had mentioned earlier, we believe that this potential transaction is in line with our goal of creating long-term value for our shareholders. Currently, we are working through the definitive documents with their team, and we will keep you posted on that progress. As it relates to our ability to redirect the theater's business, first, I would remind you that a significant majority of our company's economics are driven by The Garden and the Christmas Spectacular production. The theaters in aggregate follow those two revenue streams. That said, we are exploring all opportunities to maximize the economic benefit of this potential transaction, which does include analyzing our ability to shift events from the Infosys Theater to our other theaters in New York.

David Collins
EVP and CFO at MSG Entertainment

And I would say in terms of sponsorship and signage, our partnerships do generally allow us the flexibility within our business, while protecting the value delivered to our partners. Similar to events, we are evaluating ways to leverage our other live entertainment assets for sponsorship and signage.

Peter Henderson
Peter Henderson
Analyst at Bank of America

Great. Thank you.

Operator

Your next question comes from the line of Brandon Ross with LightShed. Your line is open. Please go ahead.

Brandon Ross
Analyst at LightShed

Good morning. Thanks for taking the question. Just maybe a follow-up on the last one. Assuming the Infosys sale does go through, how do you guys expect to use the proceeds and limit tax leakage at the same time? Do those options include partnering with Sphere potentially on a New York Sphere or Sphere elsewhere? Thank you.

David Collins
EVP and CFO at MSG Entertainment

Thanks, Brandon. I would say, with regard to the proposed transfer of the theater, our focus right now currently is on completing the proposed transaction. No decisions have been made at this stage in terms of the use of those proceeds should the transfer be completed. With that said, we are certainly mindful of the potential tax implications related to the transfer of the theater. As you may know, the primary way to minimize the tax leakage would be to reinvest the potential proceeds in another venue. Of course, we would evaluate venue opportunities in New York City market if they presented to us in the future. I do not think we are in a position to speculate on any hypothetical venue transactions at this time.

David Collins
EVP and CFO at MSG Entertainment

I would also add that any decision that we do make will be in line with our core priorities for capital allocation, which, as you know, are ensuring that we continue to have a strong balance sheet, that we maintain our flexibility to pursue compelling opportunities when they arise, and lastly, to opportunistically return capital to our shareholders. We will continue to make our decisions based on these priorities, and we will have more to share as we move through that process.

Ari Danes
Senior VP of Investor Relations and Treasury at MSG Entertainment

Thanks, Brandon. Operator, we will take the next question.

Operator

Your next question comes from Stephen Laszczyk with Goldman Sachs. Your line is open. Please go ahead.

Stephen Laszczyk
Stephen Laszczyk
Analyst at Goldman Sachs

Great. Thanks for taking the question. I wanted to see if you could provide an update on the pacing of event bookings in 2027 across the portfolio. Just to be curious how much visibility you have into bookings potentially growing at The Garden year-over-year, and then wanted to check in on the pacing of bookings around the theater footprint since we last caught up in the third quarter, how that's progressed since. Thank you.

David Collins
EVP and CFO at MSG Entertainment

Sure, Stephen. In terms of our progress, we're almost 90% to our bookings goal for this year for The Garden, and about 60% to our goal for our theaters. Our fiscal first quarter is already underway, and we remain on track to shatter our record for the number of concerts in any quarter at The Garden. Obviously, that includes the impact of the Harry Styles residency. At our theaters, we are currently pacing behind for the September quarter. Looking at the December quarter, we are again pacing ahead at The Garden in terms of the number of concerts, but still behind at the theaters. However, as I've discussed in the past, the booking window at our theaters is typically a months in advance window. We do still have time, and we are definitely working to narrow that gap.

David Collins
EVP and CFO at MSG Entertainment

I would say overall, all in, we feel good about our start to the year and expect to drive growth at both The Garden and our theaters in fiscal 2027.

Stephen Laszczyk
Stephen Laszczyk
Analyst at Goldman Sachs

Great. Thank you very much.

Operator

Your next question comes from the line of David Karnovsky with JPMorgan. Your line is open. Please go ahead.

David Karnovsky
David Karnovsky
Analyst at JPMorgan

Hey, thank you for that color on the upcoming year. As it relates to the Christmas show, can you just update on the sales pacing and price strategy? You mentioned a 230-show count. Is there any room to move that higher if the demand is there? Thanks.

David Collins
EVP and CFO at MSG Entertainment

Sure, David. While it is still early in the sales cycle, our expectation is that we will grow ticketing revenue this year, which reflects both more shows and higher average ticket yields. As you mentioned, we are on sale with 230 performances right now for the 2026 holiday season, which is up from 215 last year. That translates to a mid-single-digit percentage increase in show count year-over-year. In addition, the Christmas Spectacular continues to be a premium entertainment product and is still priced well below average ticket prices for comparable entertainment options in the city. Given all that, we will continue to thoughtfully manage and market and price our ticketing inventories to maximize revenue for every show.

David Collins
EVP and CFO at MSG Entertainment

I would again note that this year's show will feature the addition of a new Rockettes scene as well as new immersive technology, which we believe will give audiences a different perspective of the production. We continue to believe that our efforts to continue innovating the show will help drive increased interest, and we remain confident in the growth opportunity for the 2026 holiday season.

Operator

Your next question comes from the line of Cameron Mansson-Perrone with Morgan Stanley. Your line is open. Please go ahead.

Cameron Mansson-Perrone
Cameron Mansson-Perrone
Analyst at Morgan Stanley

Thanks. Morning. I wanted to ask a general one on residency models. Specifically, when you lost the Billy Joel residency, it took you some time to replace that activity. Obviously, found a great replacement in Harry Styles. Looking back on that, why was the situation with Billy Joel maybe unique? What do you think you can do, or have you done operationally to try to reduce similar volatility around residency changes year to year going forward? Thanks.

David Collins
EVP and CFO at MSG Entertainment

That's a good question, Cameron. We believe there is great value, obviously, in bringing residencies to our venues. We believe it builds more of a recurring base of our business, and it really also increases the visibility into our forward calendar. Bringing residency remains a really important area for our bookings business and a key focus of our team. With that said, every residency is going to look a little different, right? Artists want to put their own unique structure and spin on their residency. For example, Billy Joel, that was one concert per month. Where with Harry Styles, that means every Wednesday, Friday, Saturday for 10 straight weeks. So, each one's going to look a little different. I would also note that we also have a number of other residencies across our venues in the first half of fiscal 2027.

David Collins
EVP and CFO at MSG Entertainment

Bon Jovi and Phish have been at the Garden both this past month. Joe Hisaishi currently at Radio City, and Seth Meyers and John Oliver, as well as Jerry Seinfeld, have each extended their long-running residencies at the Beacon Theatre. I would reiterate that we are off to a strong start in terms of our concert bookings for fiscal 2027. While it's a little early to discuss fiscal 2028 and beyond, we continue to have discussions with other artists about future residencies at all our venues, including the Garden. So we will certainly keep working on that and keep you updated on the progress.

Cameron Mansson-Perrone
Cameron Mansson-Perrone
Analyst at Morgan Stanley

That's helpful. Appreciate it.

Operator

Your next question comes from the line of David Joyce with Seaport. Your line is open. Please go ahead.

David Joyce
David Joyce
Analyst at Seaport

Thank you. I appreciate the color that you had an increase in Madison Square Garden sharing revenue from the Knicks' championship run. Could you please detail the revenue and AOI components on the various business lines that contribute to that? Does sponsorship provide some of that? I know that you did mention merchandise, food and beverage suites. If you could please help us understand what that contribution was. Thanks.

David Collins
EVP and CFO at MSG Entertainment

Sure, David. First of all, I would say that we were very excited to see the Knicks win the NBA championship. As you mentioned, we benefit from those playoff games at the Garden through our agreements with MSG Sports. We share in revenue streams like F&B, merchandise, single night suite rentals. First of all, we operate and manage the F&B services during all team events, and MSGE shares 50% of the net profits with the Knicks and Rangers. We also operate and manage the team merchandise sales at the Garden and retain 30% of net revenues. We also earn commission on sales of single night suites at the Garden during Knicks and Rangers games. This year we hosted nine Knicks playoff games during the team's championship run.

David Collins
EVP and CFO at MSG Entertainment

While that compares to the same number of games in the year-ago period when the team advanced to the Eastern Conference Finals, today's results reflect a $7.4 million increase in fourth quarter revenues related to our agreements with MSG Sports, which includes the impact of the championship run. We believe that this reflects the enthusiasm we saw from fans throughout this year's championship run in those areas, such as merchandise and F&B sales. One thing I also like to say is we believe that that strong team performance will benefit this upcoming year in the form of continued strong in-arena attendance, which will further benefit our shared revenue streams with MSG Sports.

Ari Danes
Senior VP of Investor Relations and Treasury at MSG Entertainment

Thanks for the question, David. Operator, we'll take one last caller.

Operator

Your last question comes from the line of Joe Stauff with Susquehanna. Your line is open. Please go ahead.

Eric Mondelblatt
Eric Mondelblatt
Analyst at Susquehanna

Good morning. This is Eric Mondelblatt on for Joe. Thanks for the question. Just one from us. You gave some helpful details on the fiscal 2027 bookings outlook in aggregate, but could you talk about the bookings outlook by category across concerts, special events, family shows, and marquee sporting events? Thank you.

David Collins
EVP and CFO at MSG Entertainment

Thanks for the question, Eric. As I mentioned earlier, we expect to increase the number of bookings in fiscal 2027. We expect that growth to be driven primarily by concerts and, to a lesser extent, special events and marquee sports. For our concert category, our expectations include another year of concert growth at The Garden, as well as increases across our theaters. I would say in terms of special events, we are also expecting an increase in the number of events along with improved per event economics. Looking at marquee sports, we expect to see modest event growth this coming year, which will include the NCAA Men's Basketball East Regional Tournament, returning to The Garden in March, and that will be a significant multi-day event in our fiscal third quarter.

David Collins
EVP and CFO at MSG Entertainment

Lastly, in terms of our family show category, I would say we face a tough year-over-year comparison with the absence of Cirque du Soleil's holiday run at the Infosys Theater and the Chicago Theater that took place this past year. However, we expect that to be largely offset by a variety of family and performing arts attractions in the year ahead, including the Les Misérables: The Arena Concert Spectacular production that just ran at Radio City Music Hall. So overall, we are expecting growth across a number of our bookings categories and feel really good about our booking calendar for fiscal 2027.

Operator

We have reached the end of the question-and-answer session. I will now turn the call back to Ari for closing remarks.

Ari Danes
Senior VP of Investor Relations and Treasury at MSG Entertainment

Thank you all for joining us. We look forward to speaking with you on our fiscal 2027 first quarter earnings conference call. Have a good day.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.

Analysts
    • Ari Danes
      Senior VP of Investor Relations and Treasury at MSG Entertainment
    • David Collins
      EVP and CFO at MSG Entertainment
    • Peter Henderson
      Analyst at Bank of America
    • Brandon Ross
      Analyst at LightShed
    • Stephen Laszczyk
      Analyst at Goldman Sachs
    • David Karnovsky
      Analyst at JPMorgan
    • Cameron Mansson-Perrone
      Analyst at Morgan Stanley
    • David Joyce
      Analyst at Seaport
    • Eric Mondelblatt
      Analyst at Susquehanna
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