I found this interesting.
www.sportico.com
Sphere Entertainment reported financial results for the three months ending Dec. 31 that had revenue down 2% to $308 million. The net loss for the quarter was $126 million and $231 million for the six months, as the company transitioned from a June fiscal year end to December.
Sphere, whose two business segments are the eponymous Las Vegas venue and MSG Networks, also warned that bankruptcy is an option for the regional sports network if can’t refinance its debt that came due last Oct. 11. The company and its lenders have entered into several forbearance agreements to extend the deadline, with the current expiration date on March 26. On Feb. 4, the company made a $25 million principal repayment to reduce the debt outstanding to $804 million.
According to Sphere Entertainment’s quarterly results: “If MSG Networks is not successful in negotiating a refinancing or work-out of its indebtedness, the company believes it is probable that MSG Networks and/or its subsidiaries would seek bankruptcy protection or the lenders would foreclose on the MSG Networks collateral securing the credit facilities.”
MSG Networks revenue fell 5% during the quarter to $139 million, as it continues to struggle with users cutting the cord. Advertising revenue ticked up slightly, but distribution revenue fell $7.1 million, as total subscribers declined 11.5%.
Some investors are rooting for MSG Networks to enter bankruptcy. “We believe MSGN was contributing $300-$400 million of negative equity value,” Brandon Ross, LightShed Partners analyst, wrote in a January research note.
The RSN’s debt is owed solely by the MSG arm, which means creditors can’t make a claim on Sphere, even though it is the corporate parent. Sphere would also benefit from convincing debt-holders to take less money than the $804 million owed.
The Sphere segment reported revenue of $169 million for the quarter, up just 1%. Sphere Experience revenue represents half the segment, and it dipped 7% due to lower average per-show revenues across 190 performances of Postcard from Earth and V-U2 An Immersive Concert Film. Event revenue of $54 million was flat with six fewer concerts versus the prior year quarter partially offset by a multiday corporate event takeover.
Revenue from advertising and sponsorships was $20.3 million.
Sphere had an operating loss of $107.9 million, compared to a $35 million loss for the MSG segment. Adjusted operating income, which adds back depreciation, amortization and impairment charges, was -$801,000 (Sphere) and $33.7 million (MSG Networks).
“I think there’s opportunity to take the big costs out,” Jim Dolan, Sphere Entertainment CEO, said during the earnings call regarding the Sphere segment. “We are becoming more efficient, more efficient with content, we are more efficient with how we operate the business, how we schedule the shows, really across the board.”
New York Mets owner Steve Cohen recently added more than 400,000 shares to his position in Sphere Entertainment through his Point72 Asset Management hedge fund, according to a Feb. 14 SEC filing. It pushed the billionaire’s stake in Sphere to 7.3%. Last year, Point72 acquired 1.56 million shares in Sphere during the second quarter, representing a 5.5% stake, and the fund added another 110,000 shares in the fall.
Sphere shares fell 13.6% on the day to close at $37.69.
Sphere Revenue Falls, MSG Networks Bankruptcy on Table
The Sphere segment reported a 1% revenue increase, while the company's MSG Networks business dipped 5%, due to a 11.5% decline in total subscribers.
www.sportico.com
Sphere Entertainment reported financial results for the three months ending Dec. 31 that had revenue down 2% to $308 million. The net loss for the quarter was $126 million and $231 million for the six months, as the company transitioned from a June fiscal year end to December.
Sphere, whose two business segments are the eponymous Las Vegas venue and MSG Networks, also warned that bankruptcy is an option for the regional sports network if can’t refinance its debt that came due last Oct. 11. The company and its lenders have entered into several forbearance agreements to extend the deadline, with the current expiration date on March 26. On Feb. 4, the company made a $25 million principal repayment to reduce the debt outstanding to $804 million.
According to Sphere Entertainment’s quarterly results: “If MSG Networks is not successful in negotiating a refinancing or work-out of its indebtedness, the company believes it is probable that MSG Networks and/or its subsidiaries would seek bankruptcy protection or the lenders would foreclose on the MSG Networks collateral securing the credit facilities.”
MSG Networks revenue fell 5% during the quarter to $139 million, as it continues to struggle with users cutting the cord. Advertising revenue ticked up slightly, but distribution revenue fell $7.1 million, as total subscribers declined 11.5%.
Some investors are rooting for MSG Networks to enter bankruptcy. “We believe MSGN was contributing $300-$400 million of negative equity value,” Brandon Ross, LightShed Partners analyst, wrote in a January research note.
The RSN’s debt is owed solely by the MSG arm, which means creditors can’t make a claim on Sphere, even though it is the corporate parent. Sphere would also benefit from convincing debt-holders to take less money than the $804 million owed.
The Sphere segment reported revenue of $169 million for the quarter, up just 1%. Sphere Experience revenue represents half the segment, and it dipped 7% due to lower average per-show revenues across 190 performances of Postcard from Earth and V-U2 An Immersive Concert Film. Event revenue of $54 million was flat with six fewer concerts versus the prior year quarter partially offset by a multiday corporate event takeover.
Revenue from advertising and sponsorships was $20.3 million.
Sphere had an operating loss of $107.9 million, compared to a $35 million loss for the MSG segment. Adjusted operating income, which adds back depreciation, amortization and impairment charges, was -$801,000 (Sphere) and $33.7 million (MSG Networks).
“I think there’s opportunity to take the big costs out,” Jim Dolan, Sphere Entertainment CEO, said during the earnings call regarding the Sphere segment. “We are becoming more efficient, more efficient with content, we are more efficient with how we operate the business, how we schedule the shows, really across the board.”
New York Mets owner Steve Cohen recently added more than 400,000 shares to his position in Sphere Entertainment through his Point72 Asset Management hedge fund, according to a Feb. 14 SEC filing. It pushed the billionaire’s stake in Sphere to 7.3%. Last year, Point72 acquired 1.56 million shares in Sphere during the second quarter, representing a 5.5% stake, and the fund added another 110,000 shares in the fall.
Sphere shares fell 13.6% on the day to close at $37.69.
