Sphere Entertainment Co. · NYSE:SPHR
Sphere Entertainment — Madison Square Garden Entertainment — Merger or Acquisition (May 2021)
24 slides from Sphere Entertainment's merger presentation, May 2021
Slide 1: MSG Entertainment / MSG Networks May 2021
7 || MADISON SQUARE GARDEN AMSG ENTERTAINMENT NETWORKS MAY 2021
Slide 2: Transaction at a Glance
TRANSACTION AT A GLANCE • MSG Entertainment would acquire MSG Networks in an all-stock, fixed exchange ratio transaction • MSG Networks shareholders would receive 0.172 shares of MSG Entertainment stock for each share of MSG Networks • Terms were exclusively negotiated by independent Special Committ
Slide 3: Focused on Creating Long-Term Shareholder Value
FOCUSED ON CREATING LONG-TERM SHAREHOLDER VALUE Since the spin-off of The Madison Square TOTAL SHAREHOLDER RETURN 1 Garden Company from Cablevision Systems FEBRUARY 10, 2010-APRIL 30, 2021 Corporation in 2010, the MSG companies have created shareholder returns which have outpaced the S&P 500 through
Slide 4: Transaction Creates Strategic Advantages and Financial Benefits
MSG Entertainment and MSG Networks A leading entertainment and media company Portfolio of marquee assets and brands Transaction Creates Strategic Advantages and Financial Benefits Powerful platform would feature linear networks, venues and digital assets Meaningful tax efficiencies and cost savings,
Slide 5: Merger Creates a Leading Entertainment and Media Company
MERGER CREATES A LEADING ENTERTAINMENT AND MEDIA COMPANY MSG ENTERTAINMENT MSG NETWORKS 5
Slide 6: MSG Entertainment
MSG ENTERTAINMENT PORTFOLIO OF MARQUEE ASSETS AND BRANDS “THE WORLD’S MOST FAMOUS ARENA” • #1 grossing venue of its size in the world1 • 35-year license agreements with NY Knicks and Rangers LIVE ENTERTAINMENT AND SPORTS BOOKINGS • Strong industry relationships and track record • ~4.8 million people
Slide 7: MSG Networks
MSG NETWORKS AWARD-WINNING, INNOVATIVE CONTENT WITH MULTI-PLATFORM DISTRIBUTION MSG NETWORK AND MSG+ ‘MUST-HAVE’ LOCAL SPORTS PROGRAMMING • ~5.6 million viewing subscribers1 across #1 DMA – NY – • Regional home to 9 sports franchises and other portions of NJ, CT, PA and NY • ~400 live sports telecas
Slide 8: Tao Group Hospitality
TAO GROUP HOSPITALITY A GLOBAL PORTFOLIO OF WORLD-RENOWNED ENTERTAINMENT, DINING AND HOSPITALITY BRANDS 61 VENUES IN 22 MARKETS ACROSS FIVE CONTINENTS ESTABLISHED PRESENCE IN NEW YORK, LAS VEGAS AND LONDON T H R O U GH I TS CO N T R O L LI NG I NTEREST I N T AO GR OU P H OSP I TALI TY , M SG E N TER
Slide 9: Transaction Creates Strategic Advantages and Financial Benefits
MSG Entertainment and MSG Networks A leading entertainment and media company Portfolio of marquee assets and brands Transaction Creates Strategic Advantages and Financial Benefits Powerful platform would feature linear networks, venues and digital assets Meaningful tax efficiencies and cost savings,
Slide 10: Combined Company's Portfolio Would Create Strategic Advantage
COMBINED COMPANY’S PORTFOLIO WOULD CREATE STRATEGIC ADVANTAGE POWERFUL PLATFORM WOULD FEATURE LINEAR NETWORKS, VENUES AND DIGITAL ASSETS • Collective data would deliver enhanced customer insights • Drives utilization and engagement of existing offerings • Helps provide roadmap for creation of new pr
Slide 11: Combination Amplifies Scale and Revenue Diversity
COMBINATION AMPLIFIES SCALE AND REVENUE DIVERSITY RESULTS IN SIGNIFICANT CONTRACTUAL REVENUE SPONSORSHIP, SIGNAGE, SUITES & AD COMMISSIONS CHRISTMAS 12% SPECTACULAR 7% FISCAL 2019 PRO FORMA REVENUE1,2 MSG NETWORKS ~$1.75B EVENT-RELATED2,3 (PRIMARILY 24% AFFILIATE FEES) 41% TAO GROUP OTHER HOSPITALIT
Slide 12: Transaction Delivers Substantial Value for All Shareholders
TRANSACTION DELIVERS SUBSTANTIAL VALUE FOR ALL SHAREHOLDERS NPV OF SAVINGS REPRESENTS SIGNIFICANT % OF MSG NETWORKS’ MARKET CAPITALIZATION • More efficient use of MSG Entertainment’s tax attributes with MSG Networks’ near-term cash flow SIGNIFICANT • ~$350M in federal NOLs as of March 31, 2021 TAX B
Slide 13: Combining Strong Cash Flow and Compelling Opportunities
COMBINING STRONG CASH FLOW AND COMPELLING OPPORTUNITIES ENHANCED FLEXIBILITY TO EXPLORE AVENUES FOR GROWTH IN ENTERTAINMENT AND MEDIA ESTABLISHED ASSET PORTFOLIO WITH LIMITED STRONG INVESTMENT TRACK RECORD INVESTMENT OPPORTUNITIES $1 billion Transformation of The Garden FY2016-2020 free cash flow us
Slide 14: MSG Sphere – A Game-Changing Strategy for Growth
MSG Entertainment and MSG Networks A leading entertainment and media company Portfolio of marquee assets and brands Transaction Creates Strategic Advantages and Financial Benefits Powerful platform would feature linear networks, venues and digital assets Meaningful tax efficiencies and cost savings,
Slide 15: MSG Sphere – The Next Chapter of Growth
MSG SPHERE – THE NEXT CHAPTER OF GROWTH A DISRUPTIVE FORCE IN LIVE ENTERTAINMENT Traditional Venue Model • Limited utilization: typically no more than 1 event a day (at best) • No participation in content owner economics MSG Sphere • Will use advanced technologies to create original attractions • Ca
Slide 16: The Perfect Debut Market
THE PERFECT DEBUT MARKET A WINNING COMBINATION WILL HELP DRIVE SUCCESS MSG SPHERE AT THE VENETIAN • Debut venue currently under construction in Las Vegas • 17,500 seat venue will be the world’s largest spherical structure A GLOBAL ENTERTAINMENT MARKET • 42+ million Las Vegas visitors per year1 • 6.6
Slide 17: A Venue for the Next Generation of Experiences
A VENUE FOR THE NEXT GENERATION OF EXPERIENCES CUTTING-EDGE TECHNOLOGIES THAT ENABLE MULTI -SENSORY ENVIRONMENTS LARGEST HIGHEST RESOLUTION LED DISPLAY ON EARTH • 160,000+ square foot display inside the bowl • Bigger than 3 football fields CRYSTAL-CLEAR SOUND ENVELOPS AUDIENCE • World’s largest beam
Slide 18: Venue of Choice for a Wide Variety of Events
VENUE OF CHOICE FOR A WIDE VARIETY OF EVENTS A POWERFUL PARTNER FOR ARTISTS & ATHLETES TO CREATE CAPTIVATING CONTENT ORIGINAL ATTRACTIONS RESIDENCIES SELECT SPORTING EVENTS FULLY IMMERSIVE EXPERIENCES LEGENDARY PERFORMANCES ULTIMATE STAGE FOR COMPETITION Advanced technologies take Forging new connec
Slide 19: A Platform to Propel Brands
A PLATFORM TO PROPEL BRANDS UNPARALLELED PARTNERSHIP OPPORTUNITIES IN A VENUE THAT WILL INVITE ENGAGEMENT CORPORATE EVENTS MARKETING PARTNERSHIPS Powerful stage for product launches, meetings Game-changing platform includes fully and award shows programmable, 580,000 sq. ft. LED exterior U SE OF D E
Slide 20: Transaction Creates Strategic Advantages and Financial Benefits
MSG Entertainment and MSG Networks A leading entertainment and media company Portfolio of marquee assets and brands Transaction Creates Strategic Advantages and Financial Benefits Powerful platform would feature linear networks, venues and digital assets Meaningful tax efficiencies and cost savings,
Slide 21: Additional Information and Where to Find It
ADDITIONAL INFORMATION AND WHERE TO FIND IT This communication may be deemed to be solicitation material in respect of the proposed transaction between MSG Entertainment and MSG Networks. In connection with the proposed transaction, MSG Entertainment and MSG Networks filed with the Securities and Ex
Slide 22: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This document contains statements that may constitute forward -looking statements within the meaning of the Private Securities Li tigation Reform Act of 1995, as amended. Some of these forward-looking statements can be identified by the use of forward -looking words such a
Slide 23: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES FOR MSG ENTERTAINMENT We define adjusted operating income (loss), which is a non -GAAP financial measure, as operating income (loss) before (i) adjustm ents to remove the impact of non- cash straight-line leasing revenue associated with the arena license agreements with M
Slide 24: Madison Square Garden Entertainment / Networks
MADISON SQUARE GARDEN ENTERTAINMENT aa nc GC NETWORKS 24
Madison Square Garden Entertainment — Merger or Acquisition (May 2021) on 6ix