MSG presented at the 2011 Global Communications, Media and Technology Conference on Wednesday May 25th 2011. Throughout the MSG presentation President and CEO Hank Ratner reiterated that the company believes capital expenditures for the Garden venue reconstruction will prove profitable in the coming sports seasons. Product introduction includes event level suites which aim to provide the luxury of skybox with the up close sports action. Event level suites will return higher prices, as they are closer to the ice/court. The lower level suites will become available for use in October and all but one are already sold showing a better then expected response to the new product.
Furthermore the presentation highlighted the company’s non-playoff dependent business model meaning that the company builds the business to succeed without making the playoffs. If a team moves forward into the playoffs essentially it is a bonus for the company rather then something they depend on. Both the NY Rangers and NY Knicks did make the playoffs this season however neither team made it to the finals. While the company cannot make direct comments on the possible NBA work stoppage for 2011 they do not feel that this would affect the funding for the Garden transformation. However a NBA work stoppage would reduce earnings because while costs of hosting NBA games would decrease there would be no revenue coming in from one of the company’s large earnings producers.
In regards to the acquisitions the company is still valuing the L.A forum for purchase. L.A is the second largest market in the United States for entertainment and is predominantly run through one venue with 3 sports teams. The company states that it will make the acquisition if the find it to be profitable, as it would feed their entertainment business including Fuse. UASBIG will continue to watch MSG through the transformation process this summer but remains optimistic about the future of the company.
-Susan
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