Madison Square Garden's CEO Discusses F2Q12 Results - Earnings Call Transcript
Madison Square Garden, Inc. (
)
F2Q12 Earnings Call
February 8, 2012 - 10:00 a.m. ET
Executives
Hank Ratner – President and Chief Executive Officer
Robert Pollichino – Executive Vice President and Chief Financial Officer
Mike Bair – President, MSG Media
Melissa Ormond – President, MSG Entertainment
Scott O'Neil – President, MSG Sports
Ari Danes – Vice President, Investor Relations
Analysts
Benjamin Swinburne – Morgan Stanley & Co., LLC
Vasily Karasyov – Susquehanna Financial Group, LLLP
Bryan Goldberg – Bank of America Merrill Lynch
David C. Joyce – Miller Tabak & Co., LLC
Brett Harriss – Gabelli & Company, Inc.
Robert Routh – Phoenix Partners Group, LLC
John Tinker – Maxim Group, LLC
Martin Pyykkonen – Wedge Partners Corporation
Presentation
Operator
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Good morning. My name is Kelly and I will be your conference operator today. At this time, I would like to welcome everyone to The Madison Square Garden Company fiscal 2012 second quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer period. (Operator Instructions)
I will now turn the conference over to Ari Danes, Vice President of Investor Relations, The Madison Square Garden Company. Please go ahead.
Ari Danes
Thanks, Kelly. Good morning and welcome to The Madison Square Garden Company's fiscal 2012 second quarter earnings conference call. Joining us this morning are members of the MSG management team, including Hank Ratner, President and CEO; Bob Pollichino, EVP and Chief Financial Officer; Mike Bair, President, MSG Media; Melissa Ormond, President, MSG Entertainment; and Scott O'Neil, President, MSG Sports.
Following a discussion of the company's financial results, we'll open the call for questions. If you do not have a copy of today's earnings release, it is available in the Investor's section of our website at themadisonsquaregardencompany.com.
Please take note of the following: Today's discussion may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results or developments may differ materially from those in the forward-looking statements as a result of various factors, including financial community perceptions of the company and its business, operations, financial condition and the industry in which it operates and the factors described in the company's filings with the Securities and Exchange Commission, including the sections entitled 'Risk Factors' and management's discussion and analysis of financial condition and results of operations contained therein. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call.
Let me point out that on page four of today's earnings release, we provide consolidated operations data and a reconciliation of adjusted operating cash flow or AOCF to operating income. I would now like to introduce, Hank Ratner, President and CEO of The Madison Square Garden Company.
Hank Ratner
Thank you, Ari. This morning, we released our fiscal second quarter results. Most notably, we generated adjusted operating cash flow growth of approximately 14% versus the prior-year period, a reflection of the breadth and strength of our assets and brands across our three business segments.
We were able to achieve these solid quarterly results despite the NBA work stoppage which delayed the start of the regular season until December 25, two months later than originally planned and which has resulted in a shortened 66-game regular season. While we generated double-digit AOCF growth for the quarter, our results would have been much stronger if the NBA regular season had started as originally scheduled.
With respect to our business segments, MSG Entertainment was a strong performer during the second quarter, generating a meaningful year-over-year increase in AOCF. As we've previously discussed, we made a significant enhancement to the 2011 Radio City Christmas Spectacular, which is in keeping with our strategy of investing in our core assets and brands to drive growth.
In fact, these enhancements helped drive strong revenue gains this past holiday season for the New York production of the show, which Melissa Ormond will discuss shortly. With a 79-year history, the Radio City Christmas Spectacular remains extremely popular and is a meaningful contributor to the AOCF for our company.
Our MSG Media segment also generated strong AOCF growth during the quarter. MSG Networks continues to benefit from a robust array of live sports and other original programming. To give you a sense of the depth of compelling programming on MSG Networks, MSG and MSG Plus telecasted over 650 live professional and college sports events in calendar 2011, even with the NBA work stoppage.
In addition, the New York Knicks and the New York Rangers have both experienced strong ratings growth this season, a testament to their passionate and growing fan bases. We continue to view Fuse as a significant growth opportunity for our company and are executing against our plan to drive increased viewership to both Fuse's digital and linear network properties as Mike Bair will address.
Turning to our MSG Sports segment. With respect to the New York Rangers, the team is off to its best start in 18 years, led by coach John Tortorella, who was named coach in last month's NHL All-Star Game. The Rangers' strong on-ice performance so far this season also led to All-Star Game appearances for goaltender Henrik Lundqvist, forward Marian Gaborik and defenseman Dan Girardi. With a record of 33-13-5, the Rangers are currently leading the Eastern Conference.
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