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- The Madison Square Garden Company reported a net loss of $80.7M USD and net revenues of $215M for its first quarter of its FY 2020 for the period ended Sept. 30.
- Costs were primarily increased due to an esports related project, the MSG Sphere, a new entertainment venue to the Venetian Resort in Las Vegas set to open in 2021.
- The company’s board of directors unanimously approved a revised plan for the proposed separation of its sports and entertainment businesses in a pro-rata spin-off.
On Friday, Counter Logic Gaming majority owner and NBA’s New York Knicks parent, The Madison Square Garden Company (MSG), reported total revenues of $214.8M for the first quarter of its financial year (FY) 2020 for the period ended Sept. 30. The company reported a decrease of 1% compared to Q1 FY 2019.
Due to higher expenses in its Corporate and Other cost centers the company generated an operating loss of $89.3M as compared to an operating loss of $50.8M for Q1 FY 2019. The raised expenses are mainly the result of increased employee compensation related to Corporate and the company’s MSG Sphere initiative, a new entertainment venue to the Venetian Resort in Las Vegas; as well as additional expenses in MSG Sphere-related content development and technology.
In addition, results for the MSG Sports segment include a significant charge related to a traditional sports player waiver recorded during the first quarter of FY 2020. As a result, MSG ended Q1 FY 2020 with a net loss of $80.7M or $3.36 loss per share for the period.
Furthermore, The Madison Square Garden Company announced on Thursday that its board of directors has unanimously approved pursuing a revised plan for a previously proposed separation of its sports and entertainment businesses.
“We expect fiscal 2020 to be a defining year as we move forward with our proposed spin-off and plans for MSG Sphere in Las Vegas,” said James L. Dolan, MSG executive chairman and CEO in a release. “We firmly believe the separation of our sports and entertainment businesses would better highlight the unique value of our assets and brands while enabling both new companies to pursue their own distinct business plan.”
The newly revised transaction would be structured as a tax-free pro rata spin-off to all MSG shareholders. Each shareholder would continue to own their current economic interest in both the sports and entertainment businesses. Knicks Gaming, the official NBA 2K League esports franchise of the New York Knicks, and its majority interest in Counter Logic Gaming, would be part of the pure-play sports company after the spin-off.
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