Revenue rose 2% year over year to $246.3 million in fiscal Q3, helped by stronger concert activity at Madison Square Garden, higher suite and marketing partnership revenue, and the final performances of the Christmas Spectacular. However, adjusted operating income fell to $46 million as costs increased.
Concert demand remains very strong, with more than 165 events and 1.4 million guests across venues in the quarter, and the company expects a much bigger concert slate at The Garden in fiscal Q4, including Harry Styles’ 30-night residency. Management said it is on track for a record quarter for concerts at the venue.
The Christmas Spectacular posted a record season, generating about $195 million across 215 paid performances, and sales for the next holiday season are already open. MSG Entertainment says the show still has room for growth through more performances and higher ticket prices.
Madison Square Garden Entertainment (NYSE:MSGE) reported higher fiscal third-quarter revenue, supported by concert activity at Madison Square Garden, growth in suites and marketing partnerships, and the final performances of the latest Christmas Spectacular season, while adjusted operating income declined on higher costs.
David Collins, executive vice president and chief financial officer, said demand for the company’s live entertainment offerings “remains strong” as MSG Entertainment enters the final stretch of fiscal 2026. For the quarter, the company generated revenue of $246.3 million, up 2% from the prior-year period, and adjusted operating income of $46 million, down $12 million year over year.
Collins said the company expects to end fiscal 2026 on a positive note, driven by a “significant increase” in concerts at The Garden in the fiscal fourth quarter compared with last year. He added that the company remains on track to deliver “robust full-year growth” in revenue and adjusted operating income.
Concert Demand Remains a Key Driver
During the fiscal third quarter, MSG Entertainment’s venues hosted more than 165 events and welcomed over 1.4 million guests. Collins said the quarter included a year-over-year increase in concerts at The Garden, highlighted by several multi-night runs, though that was partially offset by fewer concerts across the company’s theaters.
“From a demand standpoint, we continue to see the vast majority of concerts at our venues sell out,” Collins said. He noted that food and beverage per caps at concerts rose during the quarter, while merchandise per caps declined, which the company attributed primarily to event mix.
Looking ahead, Collins said the concert calendar is filling up for fiscal 2027, including Harry Styles’ 30-night residency at The Garden. In response to an analyst question, he said the company has “substantial visibility” into the September quarter and is pacing well ahead at The Garden, including the impact of the Styles residency. He said MSG Entertainment remains on track to “shatter” its record for the number of concerts in any quarter at the venue.
Collins also highlighted other residencies, including Bon Jovi for nine shows and Phish for five shows at The Garden this summer. At the theaters, Jo Koy is scheduled for a seven-night residency at Radio City Music Hall in August, while Seth Meyers and John Oliver recently extended their residency at the Beacon Theatre into the fall.
Christmas Spectacular Posts Record Season
The company’s Christmas Spectacular concluded its 92nd holiday season in January with what Collins described as a record-setting run. The production generated approximately $195 million in total revenue across 215 paid performances. Sixteen of those shows took place during the fiscal third quarter, delivering year-over-year growth in per-show ticketing revenue.
Sales for the 2026 holiday season are underway, with 230 shows currently on sale. Collins said the production is “well-positioned to deliver growth again next fiscal year.” In response to a question from Susquehanna analyst Joseph Stauff, Collins said the company sees growth potential through both a higher show count and higher average ticket yields.
Collins said the Christmas Spectacular remains a “premium entertainment product” and that the company believes it is still priced below average ticket prices for comparable entertainment options. He said it was too early to discuss sales pacing because the production only went on sale in March and marketing will begin over the summer.
Revenue Growth Offset by Higher Expenses
MSG Entertainment said the increase in quarterly revenue reflected higher revenue from entertainment offerings, including growth in suite license fee revenue and more concerts at The Garden. The company also benefited from higher per-show ticket revenue for the Christmas Spectacular and one additional performance in the quarter versus the prior-year period.
Those gains were partially offset by lower arena license fees and other leasing revenue, as well as a decline in food, beverage and merchandise revenue. Collins said the decrease in arena license fees was primarily due to the Knicks and Rangers playing fewer home games during the quarter. The modest decline in food, beverage and merchandise revenue also reflected fewer Knicks and Rangers home games, partly offset by higher food and beverage sales at concerts.
The company also faced a tough comparison in special events, as the prior-year quarter benefited from Saturday Night Live’s 50th anniversary special at Radio City Music Hall and the final shows of Annie’s extended holiday run.
On expenses, Collins said the quarter included “several million” dollars of unanticipated costs across direct and selling, general and administrative expenses. He cited higher-than-expected healthcare benefit expenses due to higher overall healthcare costs and increased claims activity. Venue operating costs rose $2.4 million year over year, reflecting higher healthcare expenses and updated cost estimates. Collins also said event mix contributed to higher direct operating expenses, noting that the prior-year quarter included several multi-night runs with lower costs and higher margins.
SG&A expense also rose, including the impact of higher healthcare costs and higher employee compensation. Collins said SG&A growth should begin to normalize on a year-over-year basis in the June quarter and into the start of fiscal 2027.
Balance Sheet and Capital Returns
As of March 31, MSG Entertainment had $323 million in unrestricted cash, up from $157 million at the end of December. Collins said the increase reflected strong cash flow generation and an increase in cash due to promoters tied primarily to future events at The Garden. The company’s debt balance was $587 million at quarter-end.
MSG Entertainment has repurchased approximately 623,000 shares of Class A common stock for $25 million fiscal year to date, with about $45 million remaining under its current buyback authorization. Collins said the company will continue to evaluate opportunistic capital returns while maintaining a strong balance sheet and flexibility to pursue growth opportunities.
On Penn Station redevelopment, Collins declined to comment on press reports but said the U.S. Department of Transportation and Amtrak have continued to reiterate their intended project schedule. He said RFP submissions from three shortlisted bidders were recently due, Amtrak is expected to select a master developer this month and a preliminary design is expected in June. Collins said the company is committed to collaborating with stakeholders as redevelopment of the area continues.
Collins also said the company benefits from Knicks playoff games at The Garden through revenue-sharing arrangements with MSG Sports, including food and beverage, merchandise and single-night suite sales. He added that strong team performance can support future arena attendance, while the company is also targeting more concerts during the playoff window to increase utilization of The Garden.
About Madison Square Garden Entertainment (NYSE:MSGE)
Madison Square Garden Entertainment Corp. (NYSE: MSGE) is a premier live entertainment company focused on producing and hosting a wide range of events across North America. Established as a separate publicly traded entity in April 2020 through a spin-off from Madison Square Garden Company, MSGE owns and operates iconic venues such as Madison Square Garden in New York City, Radio City Music Hall, The Chicago Theatre and Sphere in Las Vegas. These facilities serve as flagship stages for concerts, sports events, family shows and cultural performances.
The company’s core business activities center on venue management, event promotion and production services.
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