Madison Square Garden inks sports-betting marketing deal with BetMGM

Madison Square Garden Entertainment Corp. is signing a multiyear marketing partnership with MGM Resorts International’s sports wagering subsidiary, the New York-based company announced Tuesday.

MSGE, which also is partnering with Las Vegas Sands Corp. to build the $1.9 billion, 17,500-seat MSG Sphere at The Venetian entertainment venue, announced the new venture with BetMGM prior to reporting its first-quarter 2022 earnings Tuesday.

It will mark MSGE’s first foray into sports betting. Company executives said the BetMGM deal could be the first of several since the deal with MGM is not exclusive. The company plans to vet other potential partners in the future.

As part of the new partnership agreement, BetMGM will get access to courtside and ribbon LED signage, GardenVision features and basket stanchion signage at Madison Square Garden for New York Knicks games and dasher board and Zamboni branding at New York Rangers games.

BetMGM also will appear on MSG Networks programming, which is launching sports-betting content. In addition to broadcasting Knicks and Rangers games, MSG Networks covers the New Jersey Devils and New York Islanders National Hockey League teams.

Touring performances

In MSGE’s conference call with investors, executives were enthusiastic about the return of live performances to the company’s many venues; the rebound of convention business, and this week’s announcements about the return of international travel and the prospect of children receiving COVID-19 vaccinations to help fill many family-oriented shows.

MSGE President Andrew Lustgarten told investors that the company is benefiting from touring performances coming back and that corporate hospitality is rebounding with companies reengaging and performance patrons willing to spend more for their concert experiences.

He also said Tao Group Hospitality, which has nightclubs in Las Vegas, is operating without capacity restrictions and is benefitting from increased customer demand in all major markets, led by Las Vegas.

Net income down

But as income and earnings figures show, the company has a long way to go to recover to prepandemic levels.

MSGE reported a net loss of $84.3 million, $2.55 a share, on revenue of $294.5 million for the quarter that ended Sept. 30. In the same period a year earlier, the company reported a net loss of $40.6 million, $1.06 a share on revenue of $170.5 million.

Company officials also provided an update on the supply chain for the MSG Sphere project in Tuesday’s call.

“When you think about The Sphere and the complexity associated with it, we’ve been managing our supply chain since day one, and we’re on track to open in 2023 and we don’t see anything changing in the near term,” said MSGE Chief Financial Officer and Executive Vice President Mark FitzPatrick.

FitzPatrick said the company has accelerated the purchase of higher-risk items, including securing the majority of the structural steel needed for the project.

“In addition, where possible, we’ve identified alternative manufacturers and delivery methods for certain components, such as semiconductors, to minimize any chance of delays,” FitzPatrick said. “I think overall we’ve done a good job managing our supply chain and making sure we continue to be on track for a 2023 opening.”

Through Sept. 30, the company has spent $976 million on the Sphere project, including $121 million of accrued costs not paid by Sept. 30 and net of $65 million received from Las Vegas Sands.

MSGE has said that once new owners take possession of The Venetian and Palazzo next year, it will coordinate the project with them. New York-based Apollo Global Management Inc. and real estate investment trust Vici Properties Inc. in March announced plans for Sands to sell The Venetian, Palazzo and The Venetian Expo convention center to real estate investor Apollo for $6.25 billion.

Sphere update

The MSG Sphere construction team gave a project update last week.

Workers are completing the interior and exterior LED screens and inside the domed structure, 730 tons of steel framing is being installed to hold a 160,000-square-foot screen and a 170,000-speaker audio system.

Crews also are in the midst of completing a bridge connecting the Sphere with The Venetian Expo.

MSGE shares, traded on the Nasdaq exchange, closed down $2.32, 2.8 percent to $81.51 a share on volume twice the daily average. After hours, shares fell another 50 cents, 0.6 percent to end at $81.01 a share.

The Review-Journal is owned by the family of Dr. Miriam Adelson, the majority shareholder of Las Vegas Sands Corp., which operates The Venetian and Palazzo.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.