Author: SelbyRoyal
- 40.01 -41.39% (03/07/2025)
- 116.00 +69.94% (23/01/2023)
- MONITOR
Madison Square Garden Entertainment owns a collection of iconic performance venues in some of the world’s most important entertainment markets such as New York, Los Angeles and Las Vegas. Many of these assets have predictable values such as Madison Square Garden in NY + associated air rights, the annual Christmas Spectacular show as well as various balance sheet items at cost.
More uncertain elements include the Sphere, a huge construction project meant to 'reimagine' live shows, and MSGN, which owns regional sports networks in NY.
Back-of-the-Envelope Valuation:
Madison Square Garden – 1,407MM (City of New York's Independent Budget Office 2014 market valuation)
Tao Hospitality Group – 290MM ('19 after-tax CF @ 13x, assuming Hakkasan acquired stores at only 60% profitability of TAO stores)
Christmas Spectacular – 633MM (gross income of 78MM, 'annuity-like' cash stream, estimated CF of 42MM, @ 15x)
MSGN – 1,400MM ('19 after-tax CF @ 7x as future of RSN is gloomy. But, sports betting optionality in NY exists)
Balance Sheet Items:
Net Cash – 215MM
CapEx of Sphere to-date – 850MM
Air Rights – 128MM (50% haircut to JPM/Grand Central comp.)
Equity Investments – 121.5MM
Land – 80MM
Tax Credits – 151.5MM (505 NOL * 30%)
Net Debt from MSGN Acq. – (-721MM)
Sphere:
Assumed Cost – 2,000MM (over-budget due infl. pressures)
Assumed Worth – 1,400MM (project is a dud)
Final Value – 3,955MM
FV/shr – $116