Ari Danes - SVP, IR Doc O'Connor - President & CEO Donna Coleman - EVP and CFO.

John Janedis - Jefferies Brandon Ross - BTIG David Karnovsky - JPMorgan Benjamin Mogil - Stifel Nicolaus Michael Morris - Guggenheim Securities Ryan Fiftal - Morgan Stanley David Joyce - Evercore ISI Amy Young - Macquarie David Miller - Loop Capital Markets.

Good morning, my name is Christy and I'll be your conference operator today. At this time I'd like to welcome everyone to the Madison Square Garden Company FY '17 First Quarter Earnings Conference Call. [Operator Instructions].

I'd like to turn the call over to Ari Danes, Senior Vice President of Investors Relations for the Madison Square Garden Company. Please go ahead, sir. .

Thanks, Christy. Good morning and welcome to the Madison Square Garden Company's FY '17 first quarter earnings conference call. Our President and CEO Doc O'Connor will begin this morning's call with some of the company's recent highlights.

This will be followed by a review of our financial results with Donna Coleman, our EVP and Chief Financial Officer. 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 titled Risk Factors and Management's Discussions 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. Let me point out that the company has renamed its non-GAAP performance measure adjusted operating cash flow to adjusted operating income. Importantly there has been no change to the definition.

Lastly, on page four of today's earnings release, we provide consolidated and combined statements of operations and a reconciliation of operating income to adjusted income. I would like now introduce Doc O'Connor president and CEO of the Madison Square Garden Company. .

Billy Joel at The Garden and Jerry Seinfeld at the Beacon Theatre, as well as Adele's six-night sold-out run at MSG which also welcomed Justin Bieber and Radiohead for multiple sold-out shows. This multi-market, multi-night push has continued into our second quarter. In October, Amy Schumer took the stage at both The Forum and The Garden.

While last night, Kanye West treated fans to his last of his six sold-out performances at The Forum. In December, The Garden will welcome back Phish for a four-night New Year's run.

Turning back to the first quarter, our venues also served as backdrops for some of the summer's most popular award shows, such as, The Forum played host to the Teen Choice Awards, while The Garden welcomed the MTV Video Music Awards for the first time ever. We're also seeing additional growth from new types of content, such as E-sports.

During the first quarter, The Forum hosted a three-day event for the popular Activision game, Call of Duty. This was followed last month by the League of Legends World Championship which spent four nights at the Chicago Theatre, for the tournament's quarter-finals, before moving on to two sold-out nights at The Garden for the semi-finals.

We'll continue to explore ways to enhance our exposure to this growing sport. Next week, the first UFC event ever in New York State will take place at the world's most famous arena. This highly anticipated event has already broken MSG's gate record and we look forward to a night that is sure to become a part of The Garden's storied history.

This will be followed by one of the best college basketball schedules we have ever had, featuring power house teams Duke, Kentucky, Kansas and Michigan State, all slated to play at The Garden in the coming weeks.

On the production side, our first quarter results reflect the majority of this year's run of the New York Spectacular starring The Radio City Rockettes.

As we discussed in August, while ticket sales were not what we had hoped for, we firmly believe that the show is terrific and that there is a strong foundation we can build upon to drive improved results. We remain committed to the show's success and to creating a valuable long term asset for our company and our shareholders.

A great example of an enduring franchise, is our Radio City Christmas Spectacular. The beloved show kicks off its 84th year next Friday and we look forward to another successful holiday-season run. We've also seen real excitement and anticipation surrounding two of our other legendary franchises.

As 2016/2017 marks the Knicks 70th anniversary season and the Rangers 90th anniversary season. The Knicks are led by Carmelo Anthony and Kristaps Porzingis, along with newcomers Derrick Rose, Joakim Noah, Courtney Lee and Brandon Jennings.

While the Rangers added eight new players to their line-up this season including prize rookies Jimmy Vesey and Pavel Buchnevich.

As we've previously discussed we made changes to our ticketing policies for this year, limiting the amount of full-season tickets an individual can purchase which gives more fans, who may not be able to afford full-season subscriptions, the opportunity to buy tickets directly from us to enjoy their team's live and in-person.

This is a very important change that will have a meaningful long term impact on expanding our team's fan bases. We're pleased with the results thus far. As planned we're driving a change in the mix of tickets sold, with fewer full-season subscriptions and more sales of partial plans and individual and group tickets.

We're now virtually sold out of full-season ticket packages for both the Knicks and the Rangers and are seeing strong across-the-board demand for our other ticket offerings. So while the mix of tickets are changing we currently anticipate the same end result, that our teams will again play to at- or near-capacity crowds at The Garden this season.

On the sponsorship and signage front, we're confident that FY '17 will be another record setting revenue year for the company.

We're at the start of the renewal cycle for some of our signature partners and are aware that the conventional wisdom, from people outside of MSG, has been that these partnerships were driven by The Garden transformation and therefore, would not be sustainable.

However, we're finding as we move through this process, that the significance sponsorship revenue stream we created as part of the transformation is not only sustainable, but is growing.

Thanks to our innovative platforms and the unique and valuable exposure we provide our partners, we recently announced an agreement with Anheuser-Busch on a renewed multi-year marketing partnership which we were able to significantly expand.

With the renewed agreement, Anheuser-Busch will continue to have year-round exposure at the world's most famous arena. In addition to this, the brewing company is now the presenting partner for the one-night only concert series at the Theater at Madison Square Garden which kicked off the first of six shows in August with Florida Georgia Line.

And, in 2017 we look forward to debuting the Bud Light Lounge, a Premiere Hospitality space with direct views into the arena bowl. We're pleased to have reached this agreement and look forward to continue to provide our partner with exceptional experiences and activations across our unrivaled set of sports and entertainment properties.

And as we remain focused on delivering excellence across our operations, we also continue to pursue strategic opportunities to grow our live-experience offerings. As you know, one area of growth potential for the company is the expansion of our venue portfolio.

We remain excited about bringing a world class music and entertainment focus venue to Las Vegas, where we see a real opportunity to both gain market share and grow the overall concert market.

We've added two more world class partners to our team with the selection of ICON venue group as our project manager and HOK as our architect and we look forward to working with these industry leaders on creating a next-generation venue.

We're continuing to make progress on our plans including the building's design, timeline and financing options and we'll share more details in the months ahead. We've also taken a number of steps to expand our presence in live festivals.

In early July, we announced we purchased a controlling interest in Boston Calling Events, the entertainment production company responsible for New England's premier music festival, Boston Calling.

We continue to see significant upside potential for the festival which in 2017 will move to a new location in Boston that more than doubles its capacity and enables the festival to expand its content offerings. We expect to have more information to share including, about the festival's programming slate early next calendar year.

Another important growth strategy for the company has been the exploration of adjacencies that complement our existing business and broaden our portfolio of premium live experiences and we continue to pursue opportunities on this front.

In summary, after a successful FY '16, we continue to see evidence that our efforts to strengthen and grow our live sports and entertainment businesses are generating positive results for our company and we remain confident that we're taking the necessary steps to ensure that the company is positioned to drive attractive long term growth and asset value creation.

With that, I will now turn the call over to Donna, who will take you through our financial results. .

Thank you, Doc and good morning everyone. For the FY '17 first quarter, the company generated total revenues of $181.7 million, an increase of 21%. And adjusted operating income of $1.6 million, down $22.1 million on a reported basis.

Let me remind you, that while results for the FY '17 first quarter reflect MSG's financial results on a stand-alone basis, prior-year quarter results reflect the allocation of corporate, general and administrative costs based on accounting requirements for the preparation of carve-out financial statements.

As a result, FY '16 first quarter results do not reflect all of the actual expenses that the company would have incurred, had it been a standalone public company for that quarter. Had MSG operated as a stand-alone public company for the prior-year first quarter, we estimate that expenses would have been higher by approximately $10 million.

With that said, let's now go through our reported segment result as compared to the prior-year period. At MSG Entertainment, revenues of $110.7 million increased 44%. The increase was primarily due to higher overall event-related revenues at our venues and to a lesser extent revenues for the New York Spectacular production.

With respect to the New York Spectacular, we ran the show 56 times during our first quarter, verses none in the prior-year quarter. As a reminder, we shifted the timing of the show this calendar year to run from June to August, verses March to May last year.

MSG Entertainment generated an adjusted operating loss for the quarter of $1.1 million as compared to adjusted operating income of $3.1 million in the year-ago period.

The decrease in adjusted operating income primarily reflects the direct loss to the New York Spectacular and higher SG&A expenses, largely offset by higher event-related direct contribution and lower venue operating costs. At MSG Sports, first quarter revenues of $71 million decreased 3%.

The decrease in revenues was mainly due to lower professional sports teams ticket-related revenue in food, beverage and merchandise sales. Both primarily due to one fewer Rangers pre-season game and two fewer Liberty regular-season games verses the prior-year period.

This decrease was primarily offset by higher suite rental fee revenue, ad sales commission and professional sports team sponsorship and signage revenues and local media-rights fees from MSG networks. MSG Sports, first quarter adjusted operating income decreased by $9 million to $15.4 million.

The decrease was primarily due to higher direct operating expenses, lower revenues and higher selling general and administrative expenses.

The increase in direct operating expenses was primarily due to a $5 million provision for a team personnel transaction which occurred during the quarter and higher net provisions for NBA and NHL revenue sharing expense.

This increase was partially offset by lower other team operating expenses, team personnel compensation and expenses associated with food, beverage and merchandise sales. Lastly, other adjusted operating loss increased by $9 million to a loss of $12.7 million in the FY '17 first quarter.

This increase primarily reflects higher employee compensation and related benefits, the company being subject to New York State and City capitol tax in the FY '17 first quarter and higher profession fees.

We would again note, that for both the MSG Entertainment and MSG Sports segments, as well as for other unallocated costs, SG&A expenses for the prior-year first quarter do not include all of the actual expenses that the company would have incurred had it been a standalone public company during that period.

Turning to our balance sheet, as of September 30, total unrestricted cash equivalence was approximately $1.3 billion. In addition, on September 30, the New York Knicks entered into a five-year $200 million secured senior revolving credit facility and a one-year $15 million unsecured credit facility.

Both of which are available to fund working capital needs and for general corporate purposes, including providing MSG with a liquidity backstop behind our substantial cash balance. There have been no borrowings made on either facility to date.

In terms of the company's share repurchase program, during the first quarter we purchased approximately 406,000 shares for $72.3 million, at an average price of about $178 per share, under a 10b5-1 program which expired on September 30.

This brings the total purchases under our current authorization to 1.085 million shares for $178 million at an average price of about $164 per share. This amount represents approximately 4.4% of total shares outstanding. With that I will now turn the call back over to Ari. .

Thanks, Donna.

Christy, can we open up the call for questions?.

Sure. [Operator Instructions]. And your first question comes from John Janedis with Jefferies..

Doc, just a little bit about your prepared remarks. You've been diligent on expanding upon the number of concerts and multi-net shows. What capacity do you have to continue this level of growth.

I guess what is the contribution margin for the shows?.

I'm sorry what was the last part of the question?.

What is the contribution margin for adding incremental shows?.

Okay. First of all we believe that we have a lot of capacity for higher utilization and more events at all of our venues. But particularly we see a great deal of capacity at the forum which doesn't have residence sports teams.

We're seeing event utilization numbers at the forum currently and into next set of quarters and across the board we're seeing great demand for live events at all of our venues. Frankly across the industry and that helps us with utilization and efficiency. We saw that trend play out last year, last fiscal year.

We're seeing in that fiscal year we saw a record number in nearly all of our venues. We're seeing that trend continue and frankly expand in 2017 as you can see by our first quarter numbers. And you know, that increased utilization comes from success on a number of different fronts. Some of which I said in the prepared remarks.

We're having great success at this multi-night multi-market event strategy. As I mentioned Adele, Drake, Kanye West, Louis CK and we're seeing that continue and accelerate in coming quarters. We're seeing success in expanding our content categories. I mentioned East Ports in the prepared remarks.

Those were two important events at The Forum and The Garden. UFC coming to The Garden in a few weeks for the first time ever in New York State. That's an expansion as well. We're seeing more special events like the VMAs and the Teen Choice Awards and again we have some interesting and exciting possibilities coming up in the next few quarters.

And we're succeeding as a company in creating new events. The one night only series that I mentioned in the prepared remarks is an example of that and we're going to see an acceleration of our ability to create new live events across the board.

So all of that speaks to our -- all of that demand and all of that growth that speaks to our strategy of expanding our new venue portfolio as well. .

That's helpful, thanks. Donna, maybe a quick one.

Did you say the 10B 51 [ph] expired? Did you reup it?.

Yes, it expired on September 30. And we're really, right now currently assessing and evaluating how we want to execute on the share repurchase program going forward. The 10B 51 allowed us to make progress while we still pursued some of our growth activities. So right now we're looking at it and evaluating how we want to move forward. .

Your next question comes from Brandon Ross of BTIG..

One for Doc and one for Donna. For Doc, wanted to get your latest thoughts on the role you may have in the Penn Station renovation. I think Governor Cuomo recently again spoke to the possibility of acquiring the theater at MSG.

Do you believe that's still in play? And our reading of the New York city's zoning regulations are if you are involved in the Penn Station renovation it could unlock significant air rights for you maybe as much as double them. Are we reading that correctly? And then for Donna in the quarter you added a revolver against the Knicks.

Why the Knicks and after living without a credit line at MSG why did you decide to have one now. Thanks. .

I'll address the first part of that question. You know we support the governor and his vision for more train station and a renovated Penn station.

And as we said before we're receptive to a plan that would have us commit our theater as part of the Penn station renovation provided we get in return fair market value for our theater strategically and financially.

You know, as for our various concepts of monotizing our air rights really not going to speculate on that at this moment in time and don't have a comment on the transit bonuses as you say. .

And I'll address the second part of your question. You know in general we still feel prudent to have additional liquidity backstop available for working capital and for general corporate purposes.

I think we saw the opportunity today to leverage our strong balance street and also to capitalize on the bank relationships that we cultivated during last year's [indiscernible] transaction. And those items enabled us to get a five-year revolver in attractive terms and conditions. So we entered into a revolver a five-year revolver.

You know, we don't know what the market for the liquidity assets will be going forward and we thought this was the right timing. .

Your next question comes [indiscernible], JPMorgan. .

This is David Karnovsky for [indiscernible], just following up on your comments on sponsorships.

Is there room going forward to add more verticals to your sponsorship portfolio or is the growth really about working with current partners on a more experience and then as a follow up would there be any impact to your sponsor relationship with DraftKing should that company merge with FanDuel?.

When you say verticals I assume you mean categories?.

Yes. .

Yes. We do believe that there's real opportunity to expand our category offerings and sponsorship interactively involved in that process on a day-to-day basis.

We're seeing real potential in doing so but in general I would say, we talked this morning about the value and the demand that we're seeing with our live experiences across the board and sports and entertainment and they serve as a really valuable platform for our sponsors.

So as we expand our live offerings, we think that that will only lead to further potency in this area. So growth can happen both in terms of, in terms of new categories as well as existing. Sorry expanding and growing our existing relationships. But, you know, there are a number of unsold major categories that we can get into at our various venues.

We can always create and increase premium inventory. You know, I said on the call that we started our renewal cycles with some of our signature partners. We renewed Anheuser-Busch as I said and significantly expanded upon that. We're in the coming days we will be announcing the renewal and expansion of a second signature partnership.

So we're seeing now a pattern of the ability to extend and significantly expand our existing partnerships which we're quite excited about and that trend will continue. On the second part of your question regarding DraftKings and FanDuel merger, at this point it's only a potential merger and a speculation as to whether it will actually happen.

So we're not going to speculate now on potential impacts of that. .

Your next question comes from Benjamin Mogil with Stifel Nicolaus..

So a couple for Doc. When you look at the New York city spectacular and it's ongoing operating losses.

How much patience do you feel sort of is appropriate for some of those losses and sort of thoughts on why you want to be in the producing business as opposed to sort of the venue management, you know, sort of landlord business that you were talking a lot earlier in the prepared remarks. .

Well as I said we're disappointed in the results from our first numbers, but we don't think they are entirely indicative of our long term prospects. So I think we do have patience in building a second franchise here. We were launching almost an entirely new show in a new time period altogether.

To largely a new audience, so we think that we succeeded from a content and a creative standpoint. Audiences loved the show overwhelmingly they said they wanted to see it again. Critics were positive, and as we speak we're tweaking the show to make it even better. But building a second franchise takes time which speaks to the patience issue.

We learned a lot over the run last summer and what we learn will definitely improve our efforts in the coming summer and we think that with an improved sales effort, an improved marketing group with the company behind what is now a known commodity and the lessons learned from last summer, we think our results will show great improvement, that doesn't mean to say we're cognizant of the risks.

We don't take them lightly. But we will continue to look for ways to both improve the show both from a content standpoint, but also from an operating standpoint. And the benefits, the larger question.

You know we have with the Knicks, the rangers and the Christmas Spectacular, we have plenty of evidence to show that when you're both a content owner and a venue operator that there is tremendous profitability associated with that. So the point is in trying to make a second franchise with the Rockettes is to add to that equation. .

And then sort of on the town square investment.

Kind of curious why you went the sort of public company route and sort oven vested at the public company level with a lot of radio exposure and why you didn't just directly invest in the operating business into the live entertainment investment part of the direct business and probably have a chance for more operational synergies instead of direct access to that segment's cash flow.

Kind of curious why you went sort of the more diversified route as opposed to the operating company sort of direct route. .

Well direct investment in their live business was not an option for us. Our investment was both, I think as I said previously both opportunistic and strategic. So opportunistic because we were able to invest in this public company at a very, very attractive price for us.

Strategic because each of the companies have unique assets and expertise in the live space and are very complimentary in many ways and the fact that we all connect to diverse and passionate audiences. So we felt that our investment in this public company better aligns our interest in that space.

And since we've concluded this investment we started to work together to explore some of those very opportunities and they include new live content, new festivals and frankly with their radio portfolio, numerous cross promotional opportunities.

I guess I would say in general that taking minority investments in companies like this is not the center piece of our capital allocation strategy it was as I said opportunistic and strategic. .

Your next question comes from Michael Morris with Guggenheim Securities..

I'm hoping you can help me think a bit more about how the greater venue utilization can further, benefit the business overtime specifically on the sponsorships and the suite rentals.

First of all on the sponsorships, do you anticipate or is there a reason not to think there is a direct relationship between attendance and utilization and the value that you're delivering to your sponsorship partners and therefore the pricing partner you have as you renegotiate the sponsorships.

So is there a direct relationship between the attendance and your pricing power there and kind of what time frame does it takes to recognize that? And then on the suite rentals I think that you did multi-year deals post of transformation.

Where are we in the cycle there? Are we getting closer to those coming up for renewal? And again should there be a direct relationship between the utilization and the value that you're able to extract on the pricing there? Thanks. .

Yes in general when it comes to both marketing partnerships and suites there is absolutely a direct correlation between attendants, between a number of events between the premium quality of those events and the value of those marketing partnerships or as you add our suite inventory.

There's definitely a direct correlation and why we're seeing these tremendous expansions with our existing partnerships. We're seeing a great deal of demand from the corporate community to access our portfolio of live events and venues. So I think exactly what you're saying is driving our success and the value in these areas.

As to suite renewals it is, absolutely identical to our marketing partnerships program. You know you have tremendous demand in the marketplace because not only the quantity and diversity of the event in our venue particularly Madison Square Garden, but also the quality of it.

We're succeeding in all fronts in terms of not only increasing the number, but the quantity. We're just, you know, beginning to enter the cycle of suite renewals and we're seeing that demand and we're very confident in our ability to like our marketing partnerships extend and expand those relationships. .

And with respect to the suite renewals, I can't imagine to be too specific but could you help us with whether they tend to be lumpy? You know like most of them come up at once or is it relatively spread out.

How should we think about the timing of those renewals coming through?.

It's relatively spread out. The terms of these relationships vary across the board. Like I said we're seeing great demand in the marketplace for them, we're confident in our ability to extend relationships where they exists and expand upon them. .

Your next question comes from Ryan Fiftal with Morgan Stanley..

I have three quick ones if I can. So first I'm not sure if I missed it in the prepared remarks, but on the Christmas show can you talk about how pre-sales are attracting there verses last year and then I'll just ask them all upfront.

Second, on the Knicks and Rangers ticket mix changes, do you expect selling smaller packages to be -- do you expect that to be accretive or dilutive to your average ticket prices and then last for Donna you mentioned a city and state capital tax. Is that new and if so can you help size that? Thank you. .

I'll take the first two. On Christmas it's just a little premature for us to talk about our sales at this point. We feel very good about where we're, but it's premature to speculate on overall performance at this moment in time. On Knicks and Rangers, yes, indeed we very much did change our mix of tickets.

We have actually reduced the number of full-season ticket packages in favor of more partial plans, more individual tickets for sale and more group offerings.

You know as I said in the previous remarks that is about giving our fans greater opportunity to experience the Knicks and the Rangers and yes that plan is intended to be accretive to our revenue in these sectors and it's proving itself to be so thus far. .

I'll adjust the capital tax. After this spin we were in a tax-loss position in New York State and since New York State wants to get their taxes whether or not you have income, they levy upon you with capital tax which is based on a number of factors.

Unfortunately under GAAP you need to put that cost of that capital tax into your adjusted operating income. It's not an income tax perse. So it goes kind of above the line and not below the line. So it is new for us this year. .

Your next question comes from David Joyce with Evercore ISI. .

I was wondering if you could help us think about flow through of step ups in the NBA TV rights after this season. Is it seasonal or is it straight line through the season? And then secondly if we could think about the summer's New York spectacular show. You've taken some breakdowns in the past on that whenever you changed the show around.

Was there anything taken related to that this quarter? I'm kind of answering my own question by saying I don't think since your AOY was pretty solid, but if you could just help us with that. Thank you. .

Okay. I'll address your first question on the NBA. We're now able to enjoy our 138 share of the increase in the NBA national media rights revenue.

It is spread from November throughout the season from November through April and I would just remind you that related to the increase in revenue there is also a significant increase in player compensation costs, which is primarily result of the increase in the league's salary caps which went from $70 million last season to $94 million this season and we also expect to see an increase in revenue sharing amongst the teams.

But net-net of all of that we expect this will have a positive impact on us as a company. .

David what was your second question?.

If you could talk about any charges you may have taken related to New York spectacular this summer since the tickets, the sales were a little bit light or is that already behind you from some other charges.

What sort of incremental expense to do with the show revamps might there be?.

On the show revamps I think that Doc mentioned in his prepared remarks that we have some tweaks. But that's probably all we expect for this year's show. Again as Doc mentioned we think we have a terrific show. We're committed to the show's success. There is nothing that happens that would have triggered any sort of write-off or impairment.

And of course we continually assess the carrying amounts of our deferred production assets but at this point there's nothing to do. .

Your next question comes from Amy Young with Macquarie..

I was wondering if you could comment on your sponsorship and advertising opportunity and as you grow kind of this west coast presence and become more you’ve a greater geographic reach, some of your new sponsorship and advertising agreements do they contemplate kind of a greater geographic footprint that you now have? Thank you. .

Our current deals, excuse me our current partnerships and our agreements are for the venue portfolio that exists today. So that as we come online with Las Vegas, that will be a new sales effort and will be new inventory and new revenue for the company.

So none of our existing agreements contemplate new venue expansion as part of the revenue streams that exist. So I believe I'm answering your question in saying that any new venue that comes online, Las Vegas or any other would represent new revenue streams. .

Sure. Your final question is coming from David Miller with Loop Capital Markets..

Donna, just two questions for you. You took a $5 million provision for "a team personnel transaction" in the quarter I assume that has to do with the New York Knicks. If you could just expound on that and just provide some detail I'd appreciate it. And then I want to make sure I have my fact straight on the Vegas opportunity.

So my understanding is that Las Vegas sands is going to kick in the land for free in return for a 50-year lease agreement at no cost to you. They're also going to kick in $75 million towards CapEx. Any granularity on your CapEx commitment from your side in terms of the building of a new arena? Thanks a lot. .

Okay. I'll let Donna deal with the first part of your question. But as it pertains to Las Vegas, I'm sorry I can confirm that your understanding of sands participation in this agreement is what you said. The land is contributed for free and they are contributing $75 million in CapEx. As for our CapEx contribution, it's too early to say.

We're still in design process. So we're not prepared to talk about what the cost might be associated with delivering the design that we're in right now. .

Right, and as to your question on the $5 million, yes, you're correct. We had a player trade that required a $5 million write off, but we really don't give any more details than that. .

Thank you. With that I'll hand the floor back over to Ari Danes for any additional or closing remarks. .

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

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