MSG Starts Strong

By Mike Farrell -- Multichannel News, 3/22/2010 12:55:20 PM

Nothing starts a game like a strong opening.

In its first quarterly conference call as a separate, publicly-traded company, Madison Square Garden reported a strong fourth quarter, spurred almost entirely by affiliate fee increases at its cable networks and a return to profi tability for its sports teams.

For the period ended Dec. 31, revenue at MSG rose 3.6% to $412 million and adjusted operating cash flow more than doubled from $25.5 million in 2008 to $62.9 million in the current period.

Cablevision Systems spun off its Madison Square Garden unit on Feb. 9. MSG began trading on the NASDAQ exchange on Feb. 10.

Driving those increases was MSG Media, which consists of the MSG regional sports channels and Fuse. Revenue at MSG Media rose 13.8% in the quarter to $128.5 million and AOCF rose 73.5% to $41.2 million. Spurring that growth was a $12.5 million increase in affiliate-fee revenue in the quarter.

At MSG Sports — which includes the National Basketball Association’s New York Knicks and the National Hockey League’s New York Rangers — revenue was flat in the period at $123.7 million. But the teams reported positive AOCF of $3.8 million in the period, compared to a $22.9 million AOCF deficit in the same period of 2008.

On a conference call with analysts, MSG Sports president Scott O’Neill said that since the Feb. 19 NBA trading deadline — when the team picked up veteran players Tracy McGrady and Eddie House and cleared substantial room under the salary cap for future deals — the Knicks have received 1,950 new season-ticket orders for 2010- 2011. Last year the team didn’t reach that mark until Sept. 4.

MSG stock closed up 3 cents each to $20.06 per share last Thursday (March 18).