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MSG Entertainment: Bag Full Of Diamonds Searching For A Necklace And Bracelet (NYSE:MSGE)

  • August 23, 2022

The Madison Square Garden Subway Station, NYC

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Above: Madison Square Garden, a legendary venue relocated many times in Manhattan, has its own subway stop. Big sports events have been in its DNA for 100 years.

Madison Square Garden Entertainment Corp. (NYSE:MSGE) (“MSG”) and its affiliated companies, to quote Churchill, are “an enigma wrapped in a mystery.” That is because many observers can make the case that live entertainment, pro sports, TV network sports, high-end dining, and live theaters are related businesses in that they all share a common objective: the generation of live bodies or eyeballs in greater and greater numbers paid with discretionary income dollars from consumers.

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MSGE data by YCharts

They also share the need to present ever-compelling content the core of which is passionate fandom linked to high-density tourist visitation cities. The test of management is this: are their locations in tune with their product? The answer is yes. MSGE nodes are in New York, Chicago, Las Vegas, Los Angeles, London and Singapore. Management gets an A.

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MSG

Above: The Garden sits cheek by jowl with offices loaded with high-end information workers who fill the building no matter how the teams are doing.

The next question: is their product consistently appealing to the markets most inclined to the “You gotta be there” segment of the consumer sector? Here too, the answer is yes—to an extent– depending on a post-pandemic worldview of consumers.

But the final question, the one investors most care about, is this: what can you make of it all to determine value?

Mr. Market has assigned at writing a $2.22b market cap to the company. At the same time, MSG’s most valuable assets, which essentially are off the table, are the two pro sports teams owned by James L. Dolan: The New York NBA Knicks and the New York

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