Madison Square Garden Sports Corp. (MSGS) Q3 2015 Earnings Report, Transcript and Summary

Good morning. My name is Christie and I'll be your conference operator today. At this time I would like to welcome everyone to The Madison Square Garden Company Fiscal Third Quarter Earnings Conference Call. [Operator Instructions]. Thank you. I would now like to turn the call over to Ari Danes, Vice President of Investor Relations for The Madison Square Garden Company. Please go ahead, sir.

Thank you, Christie. Good morning and welcome to The Madison Square Garden Company's fiscal 2015 third quarter earnings conference call. Our Executive Chairman, Jim Dolan will begin this morning's call with a discussion of some of the company's recent highlights. This will be followed by a review of our financial results with Sean Creamer, our EVP and Chief Financial Officer. Our Vice Chairman, Gregg Seibert will then provide an update on the company's plan spin-off. After our prepared remarks we will open up the call for questions. If you do not have a copy of today's earnings release it is available on the Investors section of our website at themadisonsquaregardencompany.com. Please take note of the following. Today's discussion may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments and events may differ materially from those in the forward-looking statements as a result of various factors. These include financial community perceptions of the company and its business, operations, financial conditions and the industry in which it operates, and the factors described in the company's filings with the Securities and Exchange Commission, including the sections entitled Risk Factors and management's discussion and analysis of financial condition and results of operations contained therein. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call. Let me point out that on Page 4 of today's earnings release, we provide consolidated statements of operations and a reconciliation of adjusted operating cash flow or AOCF, to operating income. I would now like to introduce Jim Dolan, Executive Chairman of the Madison Square Garden Company.

Thank you, Ari and good morning. Our company delivered solid overall results in our fiscal third quarter with total revenue of $449 million and consolidated AOCF of $100 million. These results underscore the continued robust demand from our customers and partners for our portfolio of media sports and entertainment brands and assets. We're pleased with our execution so far this year, we remain focused on ensuring that our company and its assets are well positioned for long-term success and growth. Now with this in mind, we are pursuing a tax-free a spin-off of our sports and entertainment business from our media business. We believe this separation will further enhance the long-term value creation potential of both businesses by providing each company with increased strategic flexibility to pursue its own distinct business plan. In addition, it will enable each company to have a capital structure and capital return policy that is appropriate for its business. Assuming all closing conditions are met, we currently expect to complete this transaction during calendar 2015. Gregg will have more to add to this later. Turning now to MSG Sports. The Rangers led by Glen Sather and Allen Vigneault have followed up last season's Eastern Conference Championship by capturing their First President's Trophy since 1994, were the league's best season in record. Rangers have now made the playoffs nine in the last 10 years and after defeating the Pittsburgh Penguins in an exciting first round playoffs. This series started their second round against the Islanders-Washington Capital's last night. During a disappointing Knick season, we are confident in the team's outlook given its leadership. With Phil Jackson, Steve Mills and Derek Fisher and our salary cap flexibility as well as the return of a healthy Carmelo Anthony. The Liberty led by Tina Charles and newly acquired guard Epiphany Prince is gearing up for the start of the season and we look forward to the team's June 5th, home opener against the Atlanta Dream. Meanwhile, MSG Sports continues to host a variety of memorable events for the third quarter. This included the 64th Annual NBA All Star Game, which marked the first that the Garden has hosted the event since 1998. And last week, World Class Boxing returned to MSG. The Heavyweight Champion, Wladimir Klitschko successfully defended his titles against previously undefeated top rank contender Bryant Jennings. Turning now to our media segment. Our regional sports network, MSG Network and MSG Plus were again recognized for their commitment to programming excellence was 74 New York Emmy Award Nominations. This includes 61 nominations for MSG Network, the most of any single network or station for the eighth consecutive year. MSG Networks live hockey ratings were up across the board including for the Rangers whose regular season household ratings increased 26% over last season. This was followed by 38% increase in household ratings for the Rangers first round play offs series. For the second round, the networks will continue to provide post game coverage for every Rangers matchup along with in depth hockey specials. Turning to entertainment, we are pleased with a New York Spring Spectacular our new large scale production Radio City Musical featuring The Rockettes. Large part of Radio City's legacy was built by the grand production that took place in the 1930's and 1940's and this new production is our way of bringing that back. The audiences enthusiastic responses led to multiple sold out shows and we have added performances and extended this year's limited engagement in order to meet the demand. With a show now scheduled to run through May 7, we estimate that nearly $300,000 tickets will be sold to New York Spring Spectacular this season. We have made a significant investment in the show and while we expect there will be improvement. We believe, we have created a production that can run year-after-year and become an annual tradition much like the Radio City Christmas Spectacular. Meanwhile, our portfolio venues continues to play hosts to a diverse array of artist and events. It is highlighted by Billy Joel's landmark residency at The Garden, which includes 24 monthly shows announced through December and we look forward to a sold out run. On July 1, Billy took the stage for the 65th time surpassing Elton John's, 64 MSG shows and setting a new record for the most performance by an artist at the world's most famous arena. Our newest venue, The Forum in Inglewood California continues to service a premier destination for artist and music fans to like and this past quarter, hosted a number of concert and events including Nickelodeon's Kids Choice Award. The Forum has only been open for a little more than a year, is not only attracting top performers, but seeing them come back as they recognized unique artist and fan experience, the venue offers. Finally, last month we were honoured to have the Beacon Theatre service the backdrop for the opening and closing events of the Tribeca Film Festival, which was significantly expanded this year to include a new Downtown creative hub that serves as the festivals home. Our partnership with Tribeca began just prior to last year's festival. So this was the first year, we were able to truly collaborate with them and we think it was a great event. Before I turn the call over, we announced this morning that Sean is resigning his position as CFO and that his last day will be Monday. Over the past eight months, Sean has played an important role supporting the company's pursuit of the spin-off, we thank him for his service and wish him well. While the company will conduct the search for its successor. Right now, I'm very pleased to welcome Donna Coleman, who will serve as the company's Interim CFO immediately following Sean's departure. I've had the fortune of work with Donna for more than 15 years at Cablevision, while she recently retired as EVP of Corporate Financial Planning and Control. During her time with the company. Donna managed the development and coordination of the company's budget and financial planning and was actively involved in the spin-offs of both MSG and AMC's Cablevision. She's ideally suited to help us as we move forward with our plans and I'm confident that her leadership will help to ensure the company's success. I will now turn the call over to Sean.

Thanks, Jim and good morning, everyone. Before I get into the quarter's results. I want to start by saying it's been a pleasure working with the talented team here at MSG. The company has a extraordinary collection of assets and brands and is on exciting path. With the Form 10 filed and our quarterly results announced. It's an appropriate time for me to move on and provide the company sufficient time to conduct the search for my successor. I want to thank Jim for this incredible experience. I also want to thank my colleagues and team. It's been a privilege working with them, the company is good hands and I wish everyone, the very best. Turning to our financial results, let me provide some more detail and color on the quarter and then I'll turn it over to Gregg. As Jim noted for our fiscal third quarter, we generated $449.4 million in revenue. While this represents a decrease of 2% on a reported basis, the total company revenue increased year-over-year after adjusting for the impact of the sale of Fuse.. On a reported basis, consolidated AOCF of $104 million increased 53% year-over-year. MSG Media generated $169 million in revenue, a decrease of 11% which reflects the absence of Fuse offset to some extent by revenue growth at MSG Networks. The affiliation fee revenue decreased $13.4 million due again to the absence of affiliation fee revenue for Fuse. Partially offset by a small increase in affiliation fee revenue at MSG Networks. The affiliation fee revenue increased at MSG Networks was mainly the result of higher affiliation rates partially offset by the impact of low single-digit percentage decrease in subscribers versus the prior year period. Advertising revenue decreased $9.4 million due to the absence of advertising revenue for Fuse and to a lesser extent by a decrease in advertising revenue at MSG Networks. The decrease at MSG Networks was primarily attributable to lower Knicks-related advertising revenue partially offset by higher hockey related advertising revenue. As I noted on last quarter's call, the decrease in Knicks rating this season negatively impacted advertising sales results in our third quarter and it did so again in the beginning of our fourth quarter albeit across fewer telecast as a regular season ended in mid April. Media AOCF of $91.9 million in the third quarter was essentially unchanged versus the prior year quarter as a reduction in SG&A and direct operating expenses was all set by the decrease in revenue. The decrease in SG&A expenses was primarily due to the absence of expenses for Fuse. While the decrease in direct operating expenses stems from the absence of Fuse expenses partially offset by an increase at MSG Networks. Our MSG Entertainment segment generated $61.6 million in revenue in our third quarter as an increase of 17%. This increase was primarily due to the opening of New York Spring Spectacular higher event related revenues at The Garden and Beacon Theatre as well as higher venue related sponsorship and signage and suite rental fee revenues. Partially offset by lower event-related revenues at the theatre in Madison Square Garden. MSG Entertainment AOCF loss of $13.4 million in the third quarter improved by $6.8 million or 34% primarily as a result of the increase in revenue partially offset by higher direct operating and SG&A expenses. The increase in direct operating expenses was primarily due to the higher event-related operating expenses at the company's venues. This increase was partially offset by a small decrease in expenses for New York Spring Spectacular. The decrease for New York Spring Spectacular reflect $9.5 million in expenses recorded in the prior year quarter, primarily associated with the acceleration of marketing cost for last year's plan drawn as a result of the post permanent in the show until the current fiscal year. This was largely offset by cost in the current quarter associated with the productions initial performances which includes preview shows that began on March 12. Our MSG Sports segment generated $239.1 million in revenue in the third quarter an increase of $5.4 million or 2%. This increase in revenue stems primarily from higher league distribution, inter-segment broadcast right fees and sponsorship and signage revenues. Third quarter sports AOCF grew by $19.5 million to $29.4 million as a result of lower direct operating expenses and the increase in revenue partially offset by higher SG&A expense. While there were several components driving the overall change and direct operating expense. The single largest item was lower NBA luxury tax expense. We accrue estimated luxury tax expenses based on the roster and place at the end of each quarter and as you know, the next executed multiple player transactions during the March quarter, which lower player compensation cost for this season relative to our luxury tax expense accrual for the December quarter. As a result, third quarter sports AOCF includes a luxury tax credit as we reversed a portion of luxury tax expense accrued in December quarter in order to true up the year-to-date accrual as of March 31, based on the team's final roster. As discussed on our last earnings call, luxury tax expense will be significantly below last season on a year-over-year basis and will also be low in absolute terms for fiscal 2015. Turning quickly to some other items with respect to the company's previously announced 500 million shares repurchase authorization. During the March quarter, the company repurchased nearly $1.5 million for $113.3 million. And through yesterday, the company has repurchased a total of approximately 1.8 million shares for $140.7 million under the current authorization. From a liquidity perspective, as of March 31, total unrestricted net cash and cash equivalence was approximately $241 million with all taxes related to the Fuse sales having been paid as of the end of the quarter. In addition, our $500 million revolver remained undrawn with our borrowing availability approximately $492 million as it remains approximately $8 million in Letters of Credit outstanding. With that, I'll turn the call over to Gregg.

Thanks, Sean and good morning. As Jim noted, we continue to move forward with our plans for a tax-free spin-off of our sports and entertainment businesses to the company's shareholders. We believe the separation of these businesses from our media business will provide each company with increased flexibility to pursue its own strategic objectives and business plan. We also expect the spin-off enhanced long-term shareholder value and enable investors to more clearly evaluate each company's unique set of assets on opportunities. Well we've made significant progress, we have a number of critical steps to complete before the spin-off can take place. Among these steps are finalizing the terms of long-term local media rights agreements between the two companies and determining the appropriate capital structures for both companies. We presently expect, that the media company will make a significant cash contribution to the sports and entertainment company prior to completion of the spin-off. We anticipate that any contribution would be funded primarily through new primarily through new borrowings of the media company. This cash contribution will support the sports and entertainment company's business operations as well as provide capital for the pursuit of potential new growth opportunities and return of capital to the company's shareholders. The spin-off is subject of various conditions including effectiveness of the Form 10 registration statement. Receipt of a tax opinion, completion of the contemplated debt financing at the media company and certain approvals and consents including approval by the MSG Board of Directors. Assuming these conditions are met, we expect to complete the spin-off this calendar year. Let me now turn the call back over to Ari.

Thanks, Gregg. Christie, we're ready to open the call for questions.

[Operator Instructions] your first question comes from Ryan Fiftal of Morgan Stanley

I have two questions on the separation for Jim and Gregg. First, I guess now that the board has official decided on the structure. Maybe it would help, if you guys could maybe walk through the progression on your thinking and why splitting off sports and entertainment was ultimately the better structure compared to the first plan that was proposed, which was just to carve out entertainment?

And the second question?

The second question would be, anymore color you can provide on the right capital structure for each of the business. It seems like you're planning to lever up media, so any thoughts on appropriate capital structure and then also, any more color on potential uses of capital. Gregg, I think you mentioned both potentially growth opportunities and return of capital or sports and entertainment. So any color on that, I'm thinking that would be great?

This sounds good. As far as the structure is concerned and you know the board evaluated a significant number of structures here including one which separate the sports teams from the arena. This structure in terms of creating a pure play regional sports network and keeping the teams in the physical facility together is both the best structure for the company in the board's opinion and in management's opinion and it also has, it also has the simplicity from a tax perspective of given the fact that we're spinning. Technically sports and entertainment, it enables us to pay the distribution from the regional sports network business over to sports and entertainment with a minimum of adverse tax consequences. Where if we had, looked at this the other way around the tax treatment would have been different? In terms of the capital structure, there are couple of things that I think are really critical here to the thought process and I'd like to sort of refer you back to the AMC spin-off which Cablevision under took several years. It was a spin-off that supported roughly 5 times, actually 5.4 times that this AOCF in terms of leverage. The business was able to support that type of leverage because it is the same type of cash flow characteristics that the RSN business has. Number one, steady and stable growth. Number two, very high cash flow generation and so the ability to be able to deleverage rapidly. So I'm not guiding anybody toward a specific leverage level. So don't take the 5.4 times and extrapolate that to this transaction, that ultimate level will be determined by the Board of Directors based upon market conditions and strategic objectives for the two companies just prior to financing taken place. But I think that's a very good model to look at. So the regional sports network can provide the capital necessary for the sports and entertainment business number one, operate its businesses in an efficient manner. Number two, it provides growth capital for the sports and entertainment business to pursue its strategic vision and number three, it provides a very good opportunity for additional return of capital to shareholders. As Sean mentioned in his remarks, we've already returned a significant amount of capital to shareholders. We intend to continue with that program and this structure will enable us to do so in an efficient manner.

Very helpful, thank you.

Thank you. Your next question comes from Bryan Goldberg of Bank of America Merrill Lynch

I guess, I've got one on the growth strategy and one on the spin. So I guess, first of Jim. As the architect of MSG's relationship with Irving Azoff, I was hoping if you could share your current views on Azoff, MSG's Entertainments growth potential and the opportunities the JV creates for MSG shareholders over the medium to long-term and then secondly for Gregg. Can you help ups think about the process you're using to determine or the puts and takes at least in determining the value of the local TV rights under the new contract. And I guess, will you be looking at comparable markets to do this or perhaps shopping the rights to see what the New York market can support or are there other considerations and then if you could just confirm whether or not the leagues would have to approve what you ultimately arrive at?

You want to go first, Jim?

Sure. The Azoff MSG. Well, we continue to remain pleased with the partnership, when you look at that partnership I guess sort of the building block of the partnership is the management business, the artist management business. I would, mention to say that there is no better company out there doing artist management in regards particularly to music artist management and the Azoff Group. So that remains to sort of foundation of the business and by itself that is extremely value and could support the investment that we made just there. But from there, you can then take a look at the growth that Azoff MSG has been pursuing particularly in a business called Global Music Rights that is essentially is out competing with ASCAP and BMI and attempting to change the formula, by which artists are rewarded for their work. They're making a great deal of progress there. They have been warmly welcomed by the artist community and have been very successful in signing artist to GMR and we anticipate that this is going to be a very valuable business for us. And beyond that, the investment that Azoff MSG has made in the Levity Group has been, is also looks extremely promising there is a lot of group opportunity and so, I would say those are three. There are other businesses that Azoff MSG are involved with, but those would be the three key ones and all three of them look good and we're quite pleased with them.

And in terms of rights agreement. I don't have any specifics to add on that agreement today. What I can say is that, we will put in place a fair market agreement the same as we would put in place with, sort of an arm's length agreement. We're actually going to be required to do that, as part of our tax opinion and we're having very constructive discussion with the two leagues.

Okay, thank you very much.

Thank you. Your next question is coming from Brandon Ross of BTIG

I've two for Jim and one follow-up for Gregg. For Jim, now that media is in the process of becoming a standalone entity. Can you comment on what you think the viability of standalone cable networks are in this environment, especially with the emergence of several new MVPDs? And a second question, The Forum has been extremely successful, you called it out earlier in this call especially from an ROI perspective. Do you see other similar opportunities out there that you can take advantage of? And for Gregg, he mentioned the capital return at sports. Is there going to be room for capital return at media well? Thanks.

Okay, from now on I want my questions to come last. What was the first one?

How do you view the standalone future?

Oh! standalone future of the network, yes right. Well, look I can certainly comment on the MSG's regional sports network. The assets that network has particularly The Knicks, The Rangers, Islanders, Devils, etc are extremely strong in this marketplace. And I don't anticipate that weakening at all. How over the long-term future the networks monetize that. First off, I don't expect that will change much in the near term future, maybe in the next couple of years. But the strength of those products will always give it a bright future. So that as far as the other standalone networks, we don't own any, so I'm not going to comment and what was the second one?

Well, the forum.

Oh! The Forum.

Do you see other opportunities?

Yes. The Forum has been very successful and it's very clear that you know the formula of entertainment in a building like that is very appealing to both the customers and to the artist and so I do think that they're going to other opportunities. I don't think, that they're going to be everywhere, I think you have to be somewhat select about them. You have to have the right size marketplace, you have the right size building opportunity, all those things. But if you do and I think there are places where you do, I think we can duplicate the success that we had in Inglewood.

In terms of the return of capital profile of the two companies because I mentioned before sports and entertainment should have a significant return of capital component to it for our shareholders and as Sean and as I mentioned before, we've been aggressive in returning capital to the shareholders. The other side of the coin is the RSN business and again I'm going to analogize the RSN business back to AMC. Where you know AMC was spun from Cablevision in July, 2011 over that period of time it was very much of deleveraging story as oppose to return of capital story and additionally, it was able as it deleverage, find opportunities to make the right type of tuck-in acquisition. So I think a fair way to look at things here is that sports and entertainment is likely to be the primary return of capital vehicle and RSN equity return should be driven by both growth in the RSN and the ability of the RSN to deleverage rather rapidly after the spin-off.

Sure. Your next question is from Michael Morris with Guggenheim

Two questions. Another one on the spin, just within the documents you referenced I believe the two-year holding period for the tax treatment of the spun company and my question is, whether or not that same parameter would apply to the legacy networks business with respect to a potential transaction. And then, my second question is on the operations at the media network segment. Specifically the affiliate fee trend softened a bit by about $3 million in the third quarter versus second quarter. I know you had a true up payment or a true up receipt in the second quarter. I guess my question is, did the underlying trend decelerate or decline at all for that affiliate revenue pace and any more color you could give there, be great. Thanks.

Michael, let me comment on the strategy of the two companies because there is absolutely no present intention for either of these two entities to be sold and there is no present intention that either of them will make a very significant acquisition going forward. As Jim pointed out, the spin-offs are intended to give both companies more strategic flexibility and you know as we look forward, I think the strategic direction for both companies will be determined by management and the Board of Directors of the independent separate companies. So I think that's the right way to view the business as going forward and I think on the affiliate fee side, Sean I think that one falls into your wheelhouse.

Sure, absolutely. As I mentioned, the driver behind the decrease in affiliate fee revenue is really the absence of Fuse. In fact from affiliate fee perspective for MSG Networks it was actually an acceleration in the growth rate versus the first two quarters of the years. So I think positive trends underlying the MSG Networks business. So you can attribute the differential quarter-to-quarter to Fuse in the absence of it.

And you referenced in the release the low single-digit decline in the subscribers which was consistently last quarter, was that, was that trend sequentially any worse quarter-over-quarter.

As we mentioned on last call, there was a very small incremental increase in the percentage rate decrease this quarter versus last and similar in size to what it was in the first quarter. So that trend continues.

Thank you.

Thank you. Your next question is from Amy Yong with Macquarie Capital

This is Andrew for Amy. First question, can you tell us how you're thinking about the organizational structure for the two entities. In other words, are you thinking about two separate management teams and secondly, can you update us on current digital initiatives? Thanks.

On the management team side, my guess is that there will be overlap. We don't believe there will be complete overlap on the management side. Those decisions are yet to be made, we'll see where we go and filling the various management vacancies that, you know the worker [ph] they're looking to fill.

And on the digital initiatives?

Which one would you like to know about?

All of them, if possible.

So, we assume that we're talking about the initiatives with our affiliates.

And MSG GO.

And MSG GO, right versus the in-house apps and the other things that are going on at the company. I think MSG GO has been launched. It's early still to see, where the - what the consumer is going to do with it. I think that our distributors are happy to have the opportunity. They're looking for as much flexibility when they come to that, this is what they possibly can get and but it's a little too early to claim any big success, one way or other with that.

Thank you. Your next question is from Townsend Buckles of JPMorgan

Two, if I may? First on the Spring Spectacular. It sounds like it's been doing pretty well. Can you talk about the profitability impact it should have this quarter and how you're thinking about it for next year and its ability to be a positive earnings driver then? And then the second one, I'll throw it in, on MSG Network as we see some of the new MVPD offerings like Verizon, where RSN's are essentially double-tier to second sports package and also carry an extra RSN fee. I know the service is being contested by ESPN and others, but if you could talk about how that fits in with your contracts. Which I think kind of carry minimum subscriber guarantee, which is pretty high and in general, how you can position the network to avoid distribution going further in this direction?

Well, let me talk about the Spring Spectacular first because it's one my favorite things. The Spring Spectacular model is essentially derived from the Christmas Spectacular which is a model that runs year after, year after, year it's quite different actually then the one that you see on Broadway, which is you know basically a 52-week, a year model. It really is, I think the Christmas Spectacular now is running around nine weeks to 10 weeks somewhere in there and doing over 200 shows and is extremely profitable. But that's this is the initial build, with the Spring Spectacular so it was very, very important with this product to get out of the gate strong. they start to build with the market place that this is a show to see year-after-year and to build in that kind of product. We're really very, very happy with how the market place has reacted to that and it bodes well for years to come. There is an initial very big investment that you make in something like this and this being the first new one that we've done in over 30 plus years. There was some fits and starts with it, which also increased the investment expense, but overall. If it follows the Christmas Spectacular model this will be a fabulous property both financially and culturally for the company. So let's see and the other question was.

The MSG Network and reaction to what Verizon is doing, with the?

We're studying at this point. It's a little early for us to make any comments on it.

Got it and then, on Spectacular do you think that it can ramp and profitability fairly quickly or it's kind of multiyear gradual step up.

Okay, so that's what I'm trying to emphasize here is that, the Christmas Spectacular has been running for like 80 years. So I mean, I'm not looking at a 80-year horizon on this, but it is an investment that you expect to amortize over multiple years. And if we got that model, actually has a fantastic return to it, if it falls the same one with the Christmas one did and is looking very good. If you're looking for impact on quarterly basis over the next 12 months, no, that's not going to happen. But if you're looking at a business that will year-after-year have a stronger and stronger return, it'd be something that we can count on, much like we do with some of our other products like Knicks and Rangers etc. This is a great thing for the company.

Thank you. Your next question comes from Ben Mogil of Stifel

A lot of them have been asked, so I'll just go with one. Following it like on Townsend's question on the subscriber front and about what you can and what you can't do. When you talk to the MVPD partners, do you get a sense that maybe some more promotional dollars for both of you is, is what's needed to help row this subs declines, if you will and then on a sort of adjunct to that, do you have any sense when talking to them whether or not the sub declines with some of the RSN's in the region are any different than yours?

I don't know anything about the other RSN's. I do know something about MVPD's though and I don't know that increased promotional budget would have much impact on subscriber losses. It's pretty difficult in this market place to because you have a lot of direct competition here. Both wired line as well as satellite competition. So what you see is a lot of trading of customers, so from a network point of view, you know a loss of one is gain of another and it's so it tends to wash, what we've been talking about in our earnings. I don't think at this point we can even tell you, where that's coming from. I mean that could be coming from so many places. Some people think that it's cord cutting, I mean it can also be market shrinkage, just you know the less people in the market place and it's, so it's a little hard to tell.

Okay, that's great. Thank you.

Christie, we have time for one last caller.

Thank you. Your final question is coming from David Joyce of Evercore ISI

Since you like talking about the Spring Spectacular, Jim, I do have another question regarding that. What is the growth opportunity just in terms of number of days that it could be running, could it start earlier in the third quarter next year, could you extend it longer and is it something that granted New York Centric, but is it something that could be extended to other markets or cater to other markets?

First off, let's just talk about this market place. Most definitely, we would look, I think next year we will add more shows. Whether that takes more time or not, that's a little bit of a scheduling question. Interesting thing with the Spring Spectacular this year I mean is that, the best part of the run was the Spring Break where ticket sales really sort of skyrocketed. So I would say that will probably try and push more shows into the Spring Break period. But overall the model calls for the more shows that you can with x amount of sell out, etc. The better off you do, so as I said the Christmas show is up to over 200, so I think we had around 80 for this one.

68.

Okay, 68. Kind of close to 80. And so that's what we look forward to it, with it. In terms of being able to take the show out into other market places. If you've gone to show which I hope you have, you'll notice that a lot of the staging with the show is it involves the screens. And that is eminently movable, right? So yes we are looking at opportunities to take the show into other market places. I don't have anything in particular to certainly to announce to-date, but I do think that opportunity is going to be there.

Thank you and on Tribeca Film Festival, you mentioned expanding that into the Beacon theatre. Is there opportunity, what's the roadmap for that expanding into other markets?

Oh! I don't know if its Tribeca Film Festival is ready to expand other markets but, I really actually should let, work trying for - we're partners. It's not a wholly owned entity and our partners are really managing partners. I think at this point, they're pretty happy with what happened this year between finding a big new physical home for themselves as well as expanding their presence in the marketplace side. I would mention again that they're, they feel it's been a big success and I think, that you would have to at least in part point to the partnership, as the reason why.

Thank you.

Thank you. I'll now hand the floor over to Ari Danes for any closing remarks.

Thank you for joining us on today's call, we look forward to speaking with you on our next earnings call. Have a good day.