Good morning. Thank you for standing by and welcome to the Madison Square Garden Entertainment Corp. Fiscal 2022 Second Quarter Earnings Conference Call. I would now like to turn the call over to Ari Danes Senior Vice President Investor Relations and Treasury. Please go ahead sir. .

Thank you. Good morning and welcome to MSG Entertainment's Fiscal 2022 Second Quarter Earnings Conference Call. Our President; Andy Lustgarten will begin today's call with a discussion on the company's Entertainment and Tao Group segments.

This will be followed by an update from; Andrea Greenberg, President and CEO of MSG Networks; Our EVP and Chief Financial Officer, David Byrnes who will then review our financial results. 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 Investors 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 morning, everyone. On our last call we spoke about the momentum we were seeing across our business and markets. In our second quarter this translated into positive AOI at our Entertainment segment for the first time since the start of pandemic, as well as strong results at Tao Group for the third consecutive quarter.

And while the emergence of Omicron dampened what otherwise would have been an even stronger financial results, for example resulting in a shortened holiday run for the Christmas Spectacular, all signs for our business are pointed in the right direction.

Our booking schedule continues to fill up with calendar '22 having the potential to be a standout year. Guests are clearly spending for experiences they value which plays to our strengths. Our sponsorship business has comeback quickly and is now on pace to exceed pre-pandemic levels on a go-forward basis.

And Tao Group is well positioned for further expansion on the heels of robust demand in key markets such as New York and Las Vegas. Let's spend a few moments discussing the second quarter.

As anticipated our venues started to get busy again in October with concert touring ramping backup the Knicks and Rangers starting their seasons and marquee sporting events returning to the Garden. We were also thrilled to welcome back the Christmas Spectacular in November.

To give you a sense of how busy we were on an overall basis, we posted nearly 300 events and welcomed approximately 1.7 million guests into our venues. And our guests continued to spend for these premium experiences. For example, we hosted at numerous sold-out events including one of the highest grossing nights ever for the UFC at the Garden.

At each of our venues contribution on a per concert basis was either above or in line with results for the fiscal 2020 second quarter, our last full pre-pandemic period.

The Christmas Spectacular launched with solid demand with ticket per caps well ahead of the 2019 production and F&B and merchandise per caps at our venues increased double-digits compared to pre-COVID levels. Unfortunately, the onset of Omicron slowed some of this momentum as the number of booked events were canceled or postponed.

In addition, due to increasing operational challenges from the pandemic, we made the difficult decision to cancel the final two weeks of the Christmas Spectacular, a period that typically includes among the highest grossing performances in the shows run. It's clear that fans were excited for the return of the Rockettes.

Ticket demand including day of sales remained robust right up until the final performance. In fact before canceling those last two weeks we were on pace to sell nearly 700,000 tickets across 160 shows. And while we wanted to make it through the entire season, we are proud to have hosted more than 400,000 people at just over 100 performances.

The enthusiasm we saw throughout the run reinforces the important role the show plays during the holiday season and gives us great confidence for next year's production. Looking ahead, we are encouraged by what we're seeing in the operating environment as the Omicron wave continues to recede.

The percentage of ticket buyers attending our events, which understandably took a dip in late December continues to recover and is now approaching pre-Omicron levels, showing consumers sustained desire for live experiences and we are ready to meet that demand.

Our concert booking schedule for calendar 2022 remains strong and is currently pacing nearly 50% ahead of where we were at this point two years ago for 2020. Turning to marketing partnerships. Since the start of the fiscal year we've not only renewed several Marquee and signature partners, but we've also welcomed new ones.

In November, we announced agreements with BetMGM and Caesars Sportsbook both expansive multiyear deals that leverage our assets across our portfolio.

And with mobile sports gaming now live in New York partners are seeing firsthand the value we provide in helping to drive their business and we anticipate further opportunities to increase our exposure in this exciting area.

We have also started to make real inroads in the blockchain category recently completing a new partnership agreement with Coinbase that provides significant exposure within our portfolio including MSG Networks and through our representation agreement MSG Sports. Moving now to Tao Group.

The business continued to see strong demand during the quarter and its two anchor markets of Las Vegas and New York with average check sizes meaningfully above 2019 levels.

Consistent with our entertainment business, Tao's results for the quarter would have been even stronger had it not been for the onset of Omicron, which temporarily impacted both demands and operations near the end of the quarter.

On recent earnings calls, we've talked about our expectation for Tao's margins to normalize over time as staffing levels increase. Today's results reflect the impact of Tao's progress, staffing back up at its venues as well as at the corporate level.

In addition some of the margin reduction relative to our fiscal first quarter reflects a seasonal shift in Tao's revenue mix from beverage to food sales as nightlife activity typically slows leading into the holidays as well as some inflation in cost of goods sold.

In a normal year, we would have benefited during the quarter from high-margin corporate holiday events in New York and London. But due to the lingering effects of the pandemic on office occupancy as well as Omicron that was not the case this year. Looking ahead, Tao Group is continuing to make progress on its growth plans.

With a slate of exciting new venue openings these include Lavo in West Hollywood which is set to open in coming weeks and the highly anticipated reopening of a fully renovated Tao Beach in Las Vegas as well as a brand-new venue in Miami both scheduled to open this spring.

As we've discussed before Las Vegas is a key market for us with more than a dozen Tao venues in this entertainment capital. It is also the location of our first MSG Sphere. We continued to make significant construction progress on MSG Sphere at The Venetian and remain on track to open the venue in calendar 2023.

We are now approaching the midway point of the building The Exosphere, the 366-foot tall spherical structure that surrounds the venue.

The Exosphere will ultimately be covered with approximately 580,000 square feet of fully programmable LED lighting forming the largest LED screen on earth and creating an impactful display for artists, partners, and brands.

Inside the venue, we are building a steel framework that will support MSG Sphere's 160,000 square foot interior LED display plan and multilayered audio system, enabling the immersive technologies that will make the MSG Sphere a first of its kind in entertainment destination.

In summary, we continue to be energized by the positive momentum we are generating across our business and by our ongoing progress with MSG Sphere, which sets the stage for our company's next chapter. We are optimistic about the road ahead and are confident in our ability to generate long-term shareholder value.

Before turning the call over to Andrea, I'd like to take a moment to welcome our new CFO, David Byrnes. David joined last month and after Andrew's remarks, will review our financial results for the quarter.

David is a seasoned Executive with more than 30 years of finance experience including at ViacomCBS where he most recently served as Executive Vice President of Corporate Finance. I'm confident that David's breadth of financial and operating experience will prove valuable ensuring the long-term success of our company.

We'd also like to thank Mark Fitzpatrick for his contributions during his time as CFO and wish him well in his future endeavors. And with that, I will turn the call over to Andrea..

Thank you, Andy and good morning. We are now in the midst of the 2021-2022 NBA and NHL seasons and are pleased that MSG Networks is once again airing full telecast schedules of the Knicks and our four professional hockey teams.

And while the environment has remained fluid with some COVID-related game postponements, I am proud of the way we have stayed nimble and creative to bring fans the exciting game telecasts and other compelling content they have come to expect from us. Turning to our second quarter financial performance.

As you saw in this morning's earnings release, affiliate revenue reflects the impact of our non-renewal with Comcast. It also includes decreases in our non-Comcast subscriber base which were partially offset by higher affiliate rates.

At the same time our advertising revenue in the quarter was exceptional driven by a return to full schedules for our teams and strong per game advertising sales.

Relative to the second quarter of fiscal 2020 which was our last full quarter before the onset of the pandemic we saw significant increases in both advertising rates and sell-through for our live professional sports product.

This reflects broad-based advertiser interest in our content as well as our success in partnering with mobile sports betting operators who clearly value our unique ability to reach sports fans in this market.

In addition to significant levels of traditional spot size we've been working closely with mobile gaming operators on developing unique content opportunities that integrate their brands into our programming.

For example DraftKings recently became the presenting partner of our original sports betting shows The Better Half Hour, The Betting Exchange, and Odds With Ends which now include DraftKings talent integrations betting odds and promotions.

DraftKings is also sponsoring this week's programming stunt on MSG Networks which features live nightly specials and betting-themed game simulcast all leading up to the Super Bowl this Sunday.

Caesars Sportsbook recently completed a month's ongoing sponsorship of our programming to honor legendary Rangers goalie and current MSG Networks Studio Analyst Henrik Lundquist which culminated with Henrik's Jersey Retirement ceremony on January 28th.

Also in collaboration with Caesars Sportsbook, we are launching a short-form interview series hosted by Caesars themselves, Comedian JB Smoove which will air across our networks and social media channels.

And while mobile sports betting was our single largest advertising category for the quarter we're also seeing growth and momentum across many other categories. Blue-chip companies such as Amazon, Google, Verizon and Facebook have all increased their advertising spend with us.

While we simultaneously welcome news partners such as Coinbase, which Andy mentioned earlier as well as TikTok and Indeed.com. When coupled with the success we've had in mobile sports gaming this has put us on a path for what could be our best year ever in advertising revenue with our NBA and NHL teams.

And finally, as I highlighted last quarter we continue to explore different direct-to-consumer models with an eye towards the launch by the end of this calendar year.

So while the media landscape continues to evolve, we remain confident in the popularity of our live content and believe that our commitment to innovation, will enable us to continue to drive value for partners, advertisers and viewers alike. With that I'd like to turn the call over to David. .

Thank you, Andrea. I'm excited to join MSG Entertainment at such an important time for the company, and I look forward to helping ensure we continue to deliver excellence across our financial operations while also driving our key business priorities. Let's start by reviewing our financial results.

In the fiscal second quarter, we generated total revenues of $516 million and adjusted operating income of $76 million, a significant improvement over last year's COVID-impacted second quarter.

The Entertainment segment had $248 million, in revenues which primarily reflects the ramp-up of live events in the quarter, the shortened holiday season run of the Christmas Spectacular and revenues related to the Arena license agreements with MSG Sports as the Knicks and Rangers were back at the Garden for full 2021/2022 season schedules.

Adjusted operating income for the Entertainment segment was $15 million, bringing us back to positive quarterly AOI for the first time since the onset of the pandemic.

These results also reflect our efforts to strategically rehire across our Entertainment segment, as we come out of the pandemic, as well as, costs related to content development and technology for MSG Sphere. Turning to MSG Networks.

The segment generated $160 million in revenues, an increase of 9% year-over-year and $44 million in AOI as compared to $74 million in the prior year quarter. As Andrea discussed, the increase in revenue reflects strong advertising results partially offset by lower affiliate revenues.

The decrease in AOI reflects the return to normalized levels of direct and SG&A expenses with MSG Networks slated to telecast full NBA and NHL regular season schedules this year.

Finally Tao Group generated revenues of $117 million and adjusted operating income of $17.5 million which as Andy mentioned earlier, reflects reopening momentum in key markets such as Las Vegas and New York, Tao's efforts to staff back up, as well as some inflation and cost of goods sold.

As a reminder, Tao's fiscal third quarter, is a seasonally slower period and will also reflect some lingering impact from Omicron. And with the slate of new venue openings on the horizon as Andy touched on, Tao's third quarter will also include certain preopening costs.

With Omicron receding and some of these new venues starting operations, we anticipate a strong end to the fiscal year for Tao. Turning to our balance sheet. As of December 31, we had approximately $1.3 billion of cash on hand and our debt balance was approximately $1.7 billion.

With respect to MSG Sphere, our project to date construction costs through December 31, were approximately $1.1 billion, which includes $146 million of accrued costs that were not paid as of December 31 and is net of the $65 million received from the Las Vegas fans.

As a reminder, our previously disclosed cost estimate for MSG Sphere is approximately $1.865 billion. We are continuing to aggressively manage costs as we work towards the planned opening in calendar 2023.

Lastly, later today we will be amending our 2021 10-K and 2022 first quarter 10-Q to retroactively capitalize interest on all outstanding debts during the periods when the company had capitalized cost relating to MSG Sphere and Las Vegas.

We want to let you know that this will reduce interest expense and increase reported net income with no impact on our revenues AOI and operating income for the prior periods. With that I will now turn the call back over to Ari..

Thank you David.

Operator, can we open up the call for questions please?.

Your first question comes from Brandon Ross with LightShed Partners..

Good morning, everyone. Andrea, you said in the prepared remarks that you have been the eyes towards the direct-to-consumer launch for MSG Network I think by the end of the calendar year.

Can you discuss how you expect the launch to impact the relationship with your MVPD partners on your current yields and how you expect it to impact future negotiations with those partners?.

Hi, Brandon. Well, as you might expect it is absolutely some balancing to be done here. We’re operating as you know in a very delicate ecosystem with our affiliates and our leagues, our fans, our sponsors, who we believe understand the value of our programming. So, we’re quite confident that we’ll work together to find an appropriate model.

But we’ve said in the past, we have the flexibility in our affiliate agreement to offer a DTC. So it's been contemplated. But that being said, we're certainly mindful of our traditional linear business.

Yeah, we're certainly mindful of the important partnerships that we have with our distributors and the benefits including clearly the revenues and the subscribers that we see from those relationships. We believe that there remains continued value in the bundle. So for us any DTC offering we'll take this into consideration.

On another note when we think about the millions of homes in our regions that don't receive our networks, they are likely to be customers of our affiliates in one way or another. So there also may be partnership opportunities on that front. I think we said, we're evaluating all the opportunities right now and weighing all the considerations..

Okay. And then I think you alluded to it you need League's approval and a deal with the NBA and NHL in order to launch. Can you talk about where those negotiations stand? And I know Sinclair is in a situation now where they need to they're rolling one-year deals and need league approval at least for the NBA every year.

Should we expect something similar in your deal with the NBA?.

Well, we're currently in the process of renewing our agreements with the NBA and NHL for multiple years. As I've said before, we've renewed league agreements many times in the ordinary course of business. And for us we're quite confident that this time will be no different.

I've also mentioned in the past that our previous agreements with both leagues included direct-to-consumer rights. So as to us, I can't comment on Sinclair's agreements with the leagues.

But I will say that not all RSNs are the same and that there aren't external factors here that may have played a role in decision making on behalf of the leagues for Sinclair..

Perfect. Thank you, Andrea..

Thank you Brandon..

Your next question is from David Karnovsky with JPMorgan..

Thank you. Andy you highlighted the organic pipeline for Tao.

But just given some of the early success you had integrating Hakkasan, do you see any opportunity to add live offering through M&A?.

Thanks David. Well, first I'd like to acknowledge it's been not even a year since we purchased Hakkasan. What a year it's been, but we -- so excited that we bought two of the leading hospitality, premium hospitality brands together. And I think we have if not the best management team in the business without a question in my mind.

I'd say that Hakkasan allowed Tao to grow faster and Tao to grow -- and Hakkasan to grow faster as well as we bring the best management teams together to push this business. You've seen strong profitability of the combined business over the past few quarters.

This has been driven by these great assets, as well as people's desire to experience premium experiences and we expect this demand to continue. That said, the team is still digesting Hakkasan. It was purchased in the middle of COVID. There are still locations in numerous parts of the world that we are working on to improve drive the business.

And what this team is really focused on first is organic growth. So, we've got three venues coming up in the next few months, Lavo West Hollywood, Tao Beach in Las Vegas, a brand-new venue in Miami. There's a huge pipeline also over the next 12 months and thereafter, so organic growth is first. That said we're always opportunistic.

And if there is the right property and the right opportunity, we would look at it seriously. I mean they've shown their ability to digest significant asset before going to Tao and Hakkasan together, but for the near term, I would say organic growth is the primary focus of the organization..

Okay. And then -- and you also gave some great insight on the calendar for the concert pipeline this year. I wondered, if you had an early view into 2023, as we've heard from some other promoters about the supply just being so strong and some of it just have to get extended into the out year. Any early insight would be great..

Sure. So, I'll just sort of reiterate for calendar '22, just looking to be a standout year. For the first half of the calendar of '22, we're about 30% above pre-pandemic levels for the same period. And as I mentioned earlier for the full year, we're going to be about 50% up compared to pre-pandemic, which is like a really early summer.

We've got more dates than we've ever had held, dates subject to change or during the NBA or NHL leagues playoffs. And I think that just shows the demand or the supply -- the demand from artists -- or I mean demand from clients and from customers.

So as we look out past that, I just want to remind you the way typically it happens, we start hearing from holes and then we start turning into firms and booked an actual event more like six, nine, maybe 12 months out. That said, as we look further out, we've got more holes than we've ever seen. There's real strong demand.

There are a number of top artists who haven't been on the road yet. So, we feel really good for not only this next six months, the next year and beyond. We just think this is a very strong business. Thank you..

Great. Thanks..

Your next question is from Ben Swinburne with Morgan Stanley..

Thanks. Just a couple of follow-ups. Andrew, I wondered -- not to take a tentative look in Sinclair call, but one of the points of this year I think will be the price point on the product if there's an $18 a month number floating around that the leads aren't happy with.

I'm just wondering, if you have a perspective on pricing B2C, even if it's just a view on something in that range as you think about trying to put this product together.

And sort of -- if you're not willing to be specific, just what are you balancing as you try to find market fit and work through as you described a delicate ecosystem? And then, Andy, just coming back, that 50% number obviously could get pretty interesting, we think with the revenue implications of that, especially when you layer on the per caps.

Just wanted to ask, is that representative of sort of night at the Garden? Is there a mix shift we should be thinking about in terms of that booking growth across your venues as we try to think about the financial impact of that level of supply assuming the demand is there from the customer? Thank you..

Well, Ben, as we've said, we continue to actively evaluate the opportunity for us. For us in this market that includes not only pricing, but also product types and technical requirements and other considerations. We had conducted some early research that we'll supplement now.

So, a little too early for us to comment on packaging, pricing and what the product development would look like, but it's something that we are actively exploring. And as we said, with an eye towards a launch before the end of this calendar year. .

Got it..

Thanks, Ben. So, as I talked about the 50% increase, as we look out for the next 12 months, it's really, roughly -- it's across all of our venues. It's actually a little bit higher in the Arena. It's almost 60% up in the Arena. But when you look across all of our venues, we see an increase.

And the only reason why, I think it's a little bit higher at the Arena than some of the other venues is those are the bigger tours that actually do need to plan a little further out and some of the smaller tours have a little bit more wiggle room to when they start planning. But I think, we see this demand everywhere and we feel really good. .

Got it. Thank you..

Your next question is from David Katz with Jefferies..

Hey, good morning, guys. This is Rasheed on behalf of David.

Are you guys able to speak towards partners on the Sphere and whether there are any supply chain issues you might have experienced?.

Sure. I'll take that. This is Dave. Obviously, I've only been onboard at MSG for a couple of weeks, but I've already spent a significant amount of my time working directly with the Sphere team, including being out at the site in Vegas, earlier this week.

So first off, we have a really strong team managing the project, and we continue to make great progress on the construction. The team has been very focused on supply chain and managing lead times since we began construction and continually – we are continually evaluating our timelines and developing alternatives where they might be needed.

So – also progress-wise remember pre-pandemic we had already purchased the bigger items like the majority of the main structural steel for the project is all secured. Other areas like the concrete of the main structure is essentially complete. Of course, there are some uncertainties to work through regarding electronics for example.

But our team is doing all we can to manage through it in every single detail. So in summary, what I'll say is, one, we're aggressively managing every aspect of the project; two we feel good about where we are; and three, we continue to be really excited about opening the venue in the second half of calendar 2023..

Appreciate it. That helps.

And then also, if I can ask are there any thoughts on sports betting facilities in MSG?.

Sure. Thanks. So let me just take a stab at it. We are really pleased at, how we've launched the sports betting category. I've always talked about this. This is great for us in terms of both consumer engagement, as well as the sponsorship business. Our partners BetMGM – our current partners BetMGM and Caesars Sportsbook had very strong launches.

One of them even credited part of their market share grab to us, and how we're helping them do it. So we feel really good about what we're able to do with our partners. New York State has been one of the more restrictive states in terms of both tax rate and certain rules around gaming.

And so in the news you might have read about conversations about kiosks lounges other possibilities any of those would be incremental revenue for us and would be a win-win for our partners.

We have great assets that enable our partners to blanket the market through the Garden through hospitality here at the Garden and Tao on MSG Networks, Hall, our relationship with MSG Sports. And we think we're able to help a partner really capitalize on mobile sports gaming, as well as any other changes that could come into the market.

And here at the Garden, we've always been a very strong believer of this. And so when those laws do change if and if they get changed, we will be on top of it and moving very quickly to capitalize. So we think there's a lot of opportunity here. We think it's an evolving category and evolving business that's very good for both us and our partners..

Appreciate it. Thank you..

Your next question is from Curry Baker with Guggenheim Securities..

Hey. Good morning. Thanks for the questions. I have two. The first one is on Tao. Margins were around 15% this quarter, down from 22% last quarter where I think you benefited from some reduced staffing.

Can you help us think about normalized Tao margins maybe going forward or on a full year basis? And any puts and takes to consider whether it's staffing wage inflation seasonality? Thanks..

Sure. Thanks Curry. So, again let's take a step back. It's been not even the year since we merged with Hakkasan. Tao merged with Hakkasan. Still a lot of integration efforts going on. It's been a very interesting year with the pandemic. And as we mentioned, when we first reopened, we benefited from reduced competition and also reduced staffing levels.

And you saw in this quarter as some of those -- as competition came back a little bit as well as some inflation with cost of goods sold increased staffing levels, it came down to about a 15% margin. I do expect this business to continue to be very strong. I'd also note that in this past quarter, we had impacts from Omicron.

So, obviously that impacted margin. But as we think long-term, I think average long-term margin should be in the mid-teens with fluctuations depending on seasonality and the demand as we open new venues..

Okay, great. Thanks. And then, my second question is on the Networks business. You guys have renewed an agreement recently with Verizon, and we're aware of the Comcast situation.

Looking ahead over calendar 2022, are there any other material agreements coming up with distributor partners? And if so, can you help us with timing?.

Well, we won't get into specifics. We will say that our major affiliate deals are staggered and they come up for renewal from time-to-time. As you noted, we've recently renewed our agreement with Verizon along with several other smaller affiliates..

Okay. Thanks. Appreciate it..

Thanks, Curry. Operator, we have time for one last call..

Our last question comes from Paul Golding with Macquarie..

Thanks so much for question. And Dave, congrats on the new role. I wanted to turn to Hakkasan quickly.

Just to see if -- Andy, if you could expand at all on potential synergistic go-forward impact as the Tao and Hakkasan management and operation becomes more integrated? And whether you have any expectations in terms of how that synergy could contribute to Sphere and vice versa once you're up and running?.

Thanks, Paul. So, again we've got, we think two of them are premium hospitality brands. We created a global powerhouse here. I'm talking about -- I think the management team is excellent.

So -- and bringing them together, we were able to obviously create synergies between that management team by focusing on duplicate roles and growing the management team in the right way around -- or the Tao management team. So there was the first level of synergies. But there are other synergies you saw between the two.

There were economies of scales such in areas of food and beverage, purchasing, marketing. And one of the other things that Hakkasan offered Tao, Tao did have some international presence but Hakkasan has a much larger international presence. So we're able to see ability for Tao to grow faster internationally.

I mentioned cities like London where Hakkasan has numerous restaurants, including a Michelin star Chinese restaurant. I mean it really -- they play well together and they complement each other. So it'll help Tao grow faster internationally.

In addition, as we think about Tao and Hakkasan in Las Vegas, the -- when -- if you look at what we're doing here in the Madison Square Garden, for example, Tao's come in and brought the Suite Sixteen which has been a great success. They've been helping us drive our premium business here in the Garden. We've started to add food stands.

There's a Lavo meatball stand that just opened up. So you could see some of the essence of what's going to happen as we think towards the Sphere.

So being the best in premium hospitality and experiences, as we look to Las Vegas you could have taking part of our designs, taking part of thinking our F&B experience, our premium experiences, it's going to be a great -- it's a great synergy as we look over in the Sphere when we do..

Great. And then just a quick follow-up on the commentary around crypto either for you Andy or for Andrea, what you see in terms of the NFT space evolving from a monetization perspective for your respective businesses whether Andy on whose side you see in-venue or incremental sponsorship opportunity for the Networks business? Thanks..

Sure. Thanks, Paul. So I mean I think crypto actually is at a more macro level, higher level up in the blockchain ecosystem. Cryptocurrency is obviously one part of it. There's NFTs, there's exchanges, there's digital fan tokens.

And given where we saw -- if you would have asked me two years ago where we are, we think there's going to be other businesses that come off of it. And where that drives -- or where that gives us our opportunity is what we've been able to do on the sponsorship side, which we really feel strong -- that we've started off in a really strong way.

We act -- we brought in a great partnership with Coinbase which includes significant exposure across our portfolio including MSG Networks. We've acted as a sales agent for MSG Sports on a recent deal with Socios. And we're having many discussions about other ways to expand our exposure in this category.

And we think there's -- and we're -- not only is it from sponsorship, but there's new -- what we're seeing is there's new and innovative ways for customers to connect creating communities being able to track. So we view it not only the sponsorship business, but also the way to marketing understand our consumers better.

And we think there's ways that we're going to continue to grow it. That could be in Arena uses crypto, but again we're exploring lots of options and we feel really good that there is -- what we've done so far we feel very good what the future bares for us..

Thanks..

I would now like to turn it back over to Ari Danes for closing remarks..

Thank you all for joining us today. We look forward to speaking with you on our next earnings call. Have a good day..

Goodbye..

Thank you. This concludes today's conference call. You may now disconnect..