Cable Channels Drive Q1 Gains At MSG


Affiliate fee increases and stronger advertising revenue at its cable channels helped drive substantial growth at Madison Square Garden in the first quarter, with overall revenue up 9% to $306.5 million and adjusted operating cash flow more than tripling to $48.5 million from $16 million in the prior year.
At MSG Media, which includes regional sports channels Madison Square Garden Network and MSG Plus and music channel Fuse, revenue was up 17.9% to $139.5 million and AOCF rose 41.4% to $61.8 million, mainly because of higher affiliate fees and increased ad sales. MSG Media reached a new affiliate agreement with its former parent Cablevision Systems last year, which became effective in January. DirecTV also reached a new carriage agreement with Rainbow Media and Cablevision's regional sports networks on Dec. 31, 2009, just hours before the pacts were set to expire.
Cablevision spun off the unit to shareholders earlier this year.

At MSG Entertainment, which includes the Madison Square Garden arena, Radio City Music Hall, the Beacon Theater and other concert venues, revenue in the period was up 9.1% to $41.5 million. The unit's AOCF deficit improved in the period to $12.7 million from $14.3 million a year ago.

Revenue at the MSG Sports segment, which includes the National Basketball Association New York Knicks and the National Hockey League New York Rangers, was up nearly 1% to $142.7 million, but the unit had a big turnaround in AOCF. That metric improved to a positive $3.4 million in the quarter, compared to an $11.2 million AOCF deficit last year. The company attributed the revenue growth to increased ticket revenue and league distributions. The AOCF improvement was due mainly to lower sports team player-related costs and net provisions for NBA luxury tax and NHL revenue sharing.
"Looking ahead, we are confident in the long term growth potential that our unique assets and integrated approach create for each of our three business segments," MSG CEO Hank Ratner said in a statement.