Madison Square Garden Entertainment Corp.

operator today's conference call is scheduled to begin momentarily until that time your lines will again be placed on music hold thank you for your patience Oh, my God. THE END THE END Good morning. My name is Jamaria and I will be your conference operator today. At this time, I would like to welcome everyone to the Madison Square Garden Entertainment Corp. Fiscal 2021 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. I would now like to turn the call over to Ari Daines, Investor Relations. Please go ahead, sir.

Thank you. Good afternoon and welcome to MSG Entertainment's fiscal 2021 first quarter earnings conference call. Our president, Andy Lustgarten, will begin today's call with an update on the company's operations. This will be followed by a review of our financial results with Mark Fitzpatrick, our EVP and chief financial officer. After our prepared remarks, we will open up the call for questions. If you do not have a copy of today's earnings release, it is available in the investor section of our corporate website. 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, developments, and events may differ materially from those in the forward-looking statements as a result of various factors. These include financial community perceptions of the company and its business, operations, financial condition, and the industry in which it operates, as well as 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. On pages five and six 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. And with that, I'll now turn the call over to Andy.

Thank you, Ari, and good afternoon, everyone. We are now several months into our first full year as a standalone entertainment company. And while our business continues to be impacted by COVID-19, we are encouraged by the recent news about a vaccine and what it could mean for our future reopening. And when that day comes, we are confident that the strength of our assets and the pent-up demand for live entertainment will drive a quick recovery of our business. and that we are well positioned to create long-term value for shareholders. Until then, we are also confident that our company can navigate the current environment. Our focus this fiscal year is on a number of key initiatives that we believe will position MSG Entertainment for long-term success. These include preserving our company's strong liquidity position, making continued progress on the construction of MSG Sphere in Las Vegas, and ensuring we're able to reopen our doors quickly to artists and guests when the time is right. Our five entertainment venues have been closed since mid-March due to the pandemic. Since then, our top priority has been maintaining the strength of our balance sheet to protect our core business. On our last earnings call, we noted that we were actively pursuing debt financing, and we've delivered on that goal, completing a $650 million raise. This transaction, coming at a time when our venues are closed, underscores the value of our assets and the expectation that we will bounce back quickly once we're able to reopen. This debt raise, in addition to the extensive actions we've already taken to reduce operating expenses by approximately $100 million on an annual basis, those actions include reducing our corporate workforce by a third and cutting spending across all departments. We've taken these actions to protect our core business and are confident that we have the financial flexibility to successfully navigate this period. We've also taken additional steps to help preserve our liquidity. As we shared last quarter, we've lengthened our construction timetable for MSG Sphere in Las Vegas and expect to open in calendar 2023. At the same time, we continue to make important progress on the venue's construction. This fiscal year, our efforts will focus on several critical path elements. These include completing all superstructure concrete, the continuation of structural steel erection, and building the steel-domed roof. In addition to our progress in Las Vegas, we are preparing for the eventual return of the rest of our business. Last week, the NBA announced its 2021 season will start on December 22nd. We look forward to the next returning to the garden, and will continue to watch for more information from the NBA. We're also eager to hear more about the Rangers' return to play as the NHL continues to finalize its plans. With regards to concerts, while the current environment is fluid, we've seen strong demand from both artists and promoters, with total concert bookings up across all of our venues. This increase is led by the Garden. which is currently pacing up approximately 50% for the calendar 2021 versus at the same time last year for calendar 2020. And while we do not currently have significant booking activity at our venues in the first half of calendar 2021, we have an impressive schedule in the back half of the year, which is shaping up to be one of the busiest ever. I would also note that this booking strength is not just because of our rescheduled events. We've also added many new shows to our calendar. In fact, over one-third of the events booked for 2021 are new rather than rescheduled. In addition, for the rescheduled shows, approximately 75% of ticket holders have chosen to keep their tickets despite being provided with a refund option. So while we are eager for the day when we could safely welcome guests back, we remain optimistic about the pent-up demand we continue to see from both artists and fans. Throughout this shutdown, we've also been encouraged by how fans are continuing to engage with our assets and brands. For example, the Christmas Spectacular starring the Radio City Rockettes, which in a typical year would be kicking off its holiday run this week, is still attracting significant interest from fans. Over the past several months, a Rockettes rehearsal for last year's production racked up over 100 million Facebook views. demonstrating the connection people feel to our brands and their desire to engage with our content. In October, we began our first-ever virtual residency, featuring Phish's Trey Anastasio live from the Beacon Theater. The Beacon Jams, an unprecedented eight-week series of intimate performances, kicked off on October 9th and has been a remarkable success each week. We are excited for the next installment this Friday. These opportunities are a great way to showcase talent as well as our venues. Helping us stay connected with fans and our team is continuing to have conversations with artists and partners on how we can create additional unique moments in this current environment. While our performance venues remain closed this past summer, several of our talent group venues did reopen their doors for delivery, takeout, outdoor dining, and in some locations, limited indoor dining. In Las Vegas, this includes Marquis, which opened in June and has since increased its hours of operations due to customer demand. This was followed in September by select New York restaurants welcoming back guests for indoor dining at 25% capacity. And in October, Cow Nightclub in Las Vegas reopened at limited capacity. These venues are operating in a continually changing environment, as seen by the recent government shutdown of indoor dining in Chicago. But even with the restrictions in place, the demand we've seen has been encouraging. We look forward to the day when we can fully reopen all of our venues. Until then, we will continue to work diligently to ensure that when we do open our doors, our employees, fans, artists, and partners can be confident that they are entering a safe and secure environment where they will share in unforgettable experiences. The Garden recently served as an early voting and election day poll site for over 60,000 eligible New York City voters. And I want to thank our staff, along with the New York City Board of Elections, who enabled us to play an important role in serving the community. I'd like to end by saying that despite this difficult period, we remain optimistic about our company's future and are confident in our ability to navigate these times. We continue to be encouraged by and grateful for our fans and partners' enthusiasm for our assets and brands. With that, I will now turn the call over to Mark.