The Madison Square Garden Company Reports Fiscal 2016 First Quarter Results

Successful completion of spin-off from MSG Networks Inc.

20 year media rights agreements for New York Knicks and Rangers with MSG Networks Inc.

Cash balance of $1.47 billion as of September 30, 2015

Board authorization to repurchase up to $525 million of Class A common stock

Strong revenue, AOCF and operating income growth for the first quarter versus the prior year period

NEW YORK, Nov. 5, 2015 (GLOBE NEWSWIRE) -- The Madison Square Garden Company (NYSE:MSG) today reported financial results for the first quarter ended September 30, 2015.

On September 30, 2015, the spin-off of The Madison Square Garden Company from MSG Networks Inc. was completed. As a result, total company reported financial results for both the fiscal 2016 and 2015 first quarter are presented as the combined results of the sports and entertainment businesses, which had been consolidated with MSG Networks Inc. prior to the completion of the spin-off.

Please note that both periods presented reflect the allocation of corporate and administrative costs based on accounting requirements for the preparation of carve-out financial statements. The allocated corporate and administrative costs in these results do not reflect the level of expenses that the Company expects to incur in future periods. Had The Madison Square Garden Company operated as a standalone public company for the fiscal 2016 first quarter, the Company estimates that these expenses would have been higher by approximately $10 million.

On a reported basis, fiscal 2016 first quarter revenues of $150.4 million grew 26%, adjusted operating cash flow ("AOCF")⁽¹⁾ of $23.8 million increased by $22.0 million, and operating loss of $4.6 million improved by $30.5 million, all as compared to the prior year quarter.

President and CEO David O'Connor said, "With the completion of our spin-off, MSG begins its next historic chapter as a new, publicly traded company focused on live sports and entertainment. This transaction highlights the value of our unique assets and brands and sets the stage for future growth by providing the company with the strategic flexibility to continue delivering exceptional live experiences for our fans and partners, while exploring new and innovative ways to build upon our celebrated legacy."

Results from Operations

Segment results for the quarters ended September 30, 2015 and 2014 are as follows:

1. See definition of adjusted operating cash flow ("AOCF") included in the discussion of non-GAAP financial measures on page 3 of this earnings release.

MSG Entertainment

For the fiscal 2016 first quarter as compared to the prior year period, MSG Entertainment revenues of $77.0 million increased 18%. The increase was primarily due to higher event-related revenues at The Garden, the Beacon Theatre, The Theater at Madison Square Garden and the Forum, as well as higher venue-related sponsorship and signage and suite rental fee revenues.

First quarter AOCF of $3.1 million improved by $4.0 million and operating loss of $0.4 million improved by $4.0 million, both due to the increase in revenues, partially offset by an increase in direct operating expenses and selling, general and administrative expenses. The increase in direct operating expenses was primarily due to higher event-related operating expenses at the Company's venues and other net increases. The increase in selling, general and administrative expenses was primarily due to higher corporate general and administrative costs.

MSG Sports

For the fiscal 2016 first quarter as compared to the prior year period, MSG Sports revenues of $73.1 million increased 37%. The increase in revenues was primarily due to higher broadcast rights fees from MSG Networks Inc. as a result of new long-term media rights agreements between the New York Knicks and New York Rangers and MSG Networks Inc. In addition, the overall increase in segment revenues reflects higher professional sports teams' pre/regular season ticket-related revenue and sponsorship and signage revenues, as well as higher suite rental fee revenue. Excluding the impact of the new long-term media rights agreements, MSG Sports revenues would have increased 13%, or $7 million, as compared to the prior year period.

First quarter AOCF increased by $16.6 million to $24.4 million and operating income of $20.0 million improved by $26.3 million. The increase in AOCF was primarily due to the increase in revenues and, to a lesser extent, a decrease in direct operating expenses, partially offset by higher selling, general and administrative expenses. The increase in operating income was due to the increase in revenues, lower depreciation and amortization expense and, to a lesser extent, lower direct operating expenses, partially offset by higher selling, general and administrative expenses. The increase in selling, general and administrative expenses was primarily due to higher corporate general and administrative costs, marketing expenses and employee compensation and related benefits, partially offset by lower professional fees.

Other Matters

As of September 30, 2015, The Madison Square Garden Company had approximately $1.47 billion in unrestricted cash and cash equivalents, which primarily reflects a cash contribution from MSG Networks Inc. that took place prior to the completion of the spin-off. In addition, effective upon completion of the spin-off, The Madison Square Garden Company's board authorized the repurchase of up to $525 million of the Company's Class A common stock.

The Company has entered into 20-year media rights agreements with MSG Networks Inc. for the New York Knicks and the New York Rangers, which provide MSG Networks Inc. with exclusive local media rights to team games. Under these media rights agreements, the Company expects to recognize rights fee revenue of approximately $130 million for fiscal 2016, which would be approximately $49 million more than the intercompany rights fee revenue reflected in the Company's financial statements for fiscal 2015.

The Madison Square Garden Company has entered into a variety of other agreements with MSG Networks Inc., including an Advertising Sales Representation Agreement and a Transition Services Agreement.

About The Madison Square Garden Company

The Madison Square Garden Company (MSG) is a world leader in live sports and entertainment with a portfolio of legendary sports teams, exclusive entertainment productions and celebrated venues.  MSG Sports owns and operates some of the most widely recognized sports franchises: the New York Knicks (NBA), the New York Rangers (NHL) and the New York Liberty (WNBA), along with two development league teams - the Westchester Knicks (NBADL) and the Hartford Wolf Pack (AHL).  MSG Sports also presents a broad array of world-class sporting events, including: professional boxing, college basketball, tennis, bull riding and e-gaming events.  MSG Entertainment features exclusive, original productions that include the Radio City Christmas Spectacular and the Rockettes New York Spectacular, both starring the Rockettes, and presents or hosts a wide variety of live entertainment offerings, including concerts, family shows and special events, in the Company's diverse collection of iconic venues. These venues are: New York's Madison Square Garden, The Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre; the Forum in Inglewood, California; The Chicago Theatre; and the Wang Theatre in Boston, MA. More information is available at www.themadisonsquaregardencompany.com.

The Madison Square Garden Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=15647

Non-GAAP Financial Measures

We define adjusted operating cash flow ("AOCF"), which is a non-GAAP financial measure, as operating income (loss) before 1) depreciation, amortization and impairments of property and equipment and intangible assets, 2) share-based compensation expense or benefit, 3) restructuring charges or credits and 4) gains or losses on sales or dispositions of businesses. Because it is based upon operating income (loss), AOCF also excludes interest expense (including cash interest expense) and other non-operating income and expense items. We believe that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the various operating units of our business without regard to either the distortive effects of fluctuating stock prices or the settlement of an obligation that is not expected to be made in cash.

We believe AOCF is an appropriate measure for evaluating the operating performance of our business segments and the Company on a consolidated basis. AOCF and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and AOCF measures as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators. AOCF should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with U.S. generally accepted accounting principles ("GAAP"). Since AOCF is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. For a reconciliation of AOCF to operating income (loss), please see page 4 of this release.

This press release 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, including financial community and rating agency 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 titled "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 contained herein.

Conference Call Information:

The conference call will be Webcast live today at 10:00 a.m. ET at www.themadisonsquaregardencompany.com
Conference call dial-in number is 877-347-9170 / Conference ID Number 63192366
Conference call replay number is 855-859-2056 / Conference ID Number 63192366 until November 12, 2015

ADJUSTMENTS TO RECONCILE ADJUSTED OPERATING CASH FLOW TO OPERATING LOSS

The following is a description of the adjustments to operating loss in arriving at adjusted operating cash flow as described in this earnings release:

• Share-based compensation expense. This adjustment eliminates the compensation expense relating to restricted stock units granted under our employee stock plans and non-employee director plans in all periods.
• Depreciation and amortization. This adjustment eliminates depreciation, amortization and impairments of property and equipment and intangible assets in all periods.