Ready, Steady, Go

Research evidence excerpt

Ready, Steady, Go

IdeaM

Framing the growth outlook for MSG Entertainment

We forecast MSGE grows revenue at a ~5% CAGR and EBITDA at a ~9% CAGR over the

next several years, with potential upside from its upcoming Harry Styles residency.

The growth outlook for MSG Entertainment is predominantly driven by two of its

underlying businesses: (i) concerts at its five (potentially soon four) owned or operated

venues and (ii) its Christmas Spectacular production held annually at Radio City Music

Hall. While we see its sports and other events businesses growing nicely, concerts and

Christmas are collectively expected to generate ~75% of its revenue and ~90% of it

earnings growth over the next five years ( Exhibit 4 ).

We discuss our expectations for each below, and frame the range of outcomes considered

in our bull and bear case analysis. Overall, our base case forecasts MSGE growth at a ~5%

CAGR over the next several years, supporting a roughly 8% and 9% AOI/EBITDA CAGR,

respectively, over the same time period (through FY29E).

In the bull case, continued growth in Christmas shows and strong consumer health and

demand for concerts supports higher growth and a 10%+ AOI and EBITDA CAGR ( Exhibit

5 ). In the bear case, recent strength appears more driven by the recovery in show count at

Christmas and lapping a light concert slate in FY25 - combined with softening consumer

demand, growth slows into the low-single digits over the next few years, underpinning a

mid-single digit AOI and EBITDA CAGR.

Exhibit 4: Concerts and its Christmas Spectacular production should generate the

vast majority of incremental growth over the next several years

Estimated Relative Contribution to Growth (FY26-FY29E)

70%

60% Revenue Gross Profit

55%

48%

50%

40%

35%

29%

30%

19%

20%

10% 8%

4% 3%

0%