Madison Square Garden Sports Corp (MSGS) 2018 Q1 法說會逐字稿

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 2018 First Quarter Earnings Conference Call. (Operator Instructions)

I would now like to turn the call over to Ari Danes, Senior Vice President of Investor Relations for The Madison Square Garden Company. Please go ahead, sir.

Thanks, Christie. Good morning, and welcome to The Madison Square Garden Company's Fiscal 2018 First Quarter Earnings Conference Call. Our President and CEO, Doc O'Connor, will begin this morning's call with a discussion of the company's operations. This will be followed by a review of our financial results with Donna Coleman, our EVP and Chief Financial Officer. 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 in the Investors section of our corporate website.

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 condition and the industry in which it operates, as well as, 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.

Lastly, on Pages 4 and 5 of today's earnings release, we provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income, a non-GAAP financial measure.

I would now like to introduce Doc O'Connor, President and CEO of The Madison Square Garden Company.

Thank you, Ari. Good morning, everyone. We're pleased with our start to fiscal 2018 and remain confident that our company's singular focus on providing the very best in live experiences uniquely positions us to drive long-term growth and value creation for our shareholders.

In fiscal 2017, our commitment to efficiently and effectively harness the strength of our assets and brands led to a number of successes across the company, from increased venue utilization to record revenue for the Christmas Spectacular and for sponsorship and signage, and we plan to continue building on those gains.

Another priority for our company has been growing our portfolio of premium live experiences. And since July 2016, we've added world-class companies in festivals, hospitality and esports. We are now focused on supporting the growth of these businesses and on leveraging our combined assets and expertise to drive additional value.

At the same time, we're continuing to pursue opportunities to meaningfully expand our business via acquisition and development and see the expansion of our portfolio of venues as the centerpiece of our growth strategy going forward.

So far this year, we have made real progress on these stated priorities, starting with our continued success in increasing the utilization of our venues. A vibrant live entertainment industry, combined with our ongoing efforts to drive multi-night and multi-venue engagements, as well as, a diverse array of family shows and marquee events, have helped our bookings business generate record-setting event numbers for the past 2 years. That momentum continued in the first quarter, as our bookings business saw a year-over-year increase in events held at our venues, putting us on a path for another strong year.

A few of the memorable events from our first quarter included the Baker's Dozen, an unprecedented 13-night run by Phish at Madison Square Garden; an equally impressive 16-show run by comedian Dave Chappelle at Radio City Music Hall; and the MTV Video Music Awards, which we hosted for the second consecutive year this time at the Forum.

The second quarter is providing -- is proving to be just as exciting, with highlights that include multi-night shows from Guns N' Roses and iHeartRadio's Jingle Ball at The Garden and the Forum, multi-night runs by Bruno Mars at the Forum, Bob Dylan at The Beacon and Chris Rock at The Theater at Madison Square Garden, as well as, Phish, who will return for the world -- to The World's Most Famous Arena in December for 4 shows, including 1 on New Year's Eve.

We have also recently announced that Billy Joel's record-setting residency will continue into 2018. And in January, music's biggest night will return to MSG and New York City for the first time in 15 years, as The Garden hosts the 60th Annual GRAMMY Awards, while the Tony Awards have announced their return to the legendary stage at Radio City Music Hall for their 72nd annual awards show in June.

With regard to Marquee sporting events, tomorrow night The Garden will welcome back the UFC for the second time in the last year; while next month, Championship Boxing returns to MSG as Miguel Cotto defends his junior middleweight title for the last time before ending his illustrious career.

We're pleased with the continued progress we've made in growing our bookings business and remain firm believers that we will only amplify these results as we expand our venue footprint.

We see a unique opportunity to take what we've achieved with the Forum to new heights through the creation of large-scale music and entertainment-focused venues equipped with game-changing technologies that will pioneer the next generation of live experiences.

In addition to our plans to bring a groundbreaking new venue to Las Vegas, we continue to explore select markets where we think our differentiated approach can be successful, driving long-term value for shareholders. We look forward to sharing more in early calendar 2018.

Venues expansion has also been a key component to TAO Group's growth strategy. In July, TAO Group successfully completed a 5-venue Hollywood complex, creating L.A.'s biggest nightlife destination. This was followed in September by the opening of Moxy Times Square in New York, which now features a number of TAO Group entertainment dining and nightlife experiences throughout the hotel, including one of the city's largest all-season hotel rooftop lounges.

Looking ahead, we are nearing the opening of TAO Group's second international venue, LAVO Singapore, which will be located on the iconic rooftop of the Marina Bay Sands hotel. With 25 venues now open and a robust pipeline, we expect TAO Group's portfolio to grow significantly over the next several years.

On our last earnings call, we talked about the growth of TAO Group and noted that in addition to its venue expansion plans we are also increasingly optimistic about the ability to utilize premium assets and brands of both TAO Group and MSG to drive incremental value. With TAO Group's asset as part of our -- assets as part of our portfolio, our sales team is now able to provide companies with a full spectrum of premium hospitality offerings that can be tailored to meet their needs. We've had some terrific early success on this front and recently reached a first-of-its-kind, comprehensive corporate hospitality agreement with a Fortune 500 company. This multi-year, multi-million dollar relationship, comparable in size to our signature marketing partnerships, creates efficiencies and savings for this partner by allowing them to consolidate their entertainment spend with us across our portfolio of assets. This includes tickets, suites and venue rentals, as well as, dining and private events at TAO Group's venues.

We're pleased to have reached this agreement, which has created a new hospitality partnership model for us to take to other potential corporate partners.

In addition, last month, we announced our first joint project, Suite Sixteen, a members-only lounge at Madison Square Garden, which will deliver TAO's signature premium hospitality combined with the very best in sports and entertainment.

Early demand for memberships has been extremely robust, and we believe this is just the beginning in terms of how we can work together with the TAO Group. Exploring additional opportunities to utilize the combined strength of our assets will continue to be a priority, particularly as we move forward with our venue expansion plans.

Turning to production. One of the ways we're more effectively harnessing the strength of our brands is through thoughtful investments that help ensure we're delivering the most innovative live experiences for our customers. Today, people want and expect a more immersive experience, which is why we are focused on employing next-generation technologies that will change the way we engage with our audiences. We're starting with the Christmas Spectacular Starring the Radio City Rockettes, which next Friday debuts for its 85th season.

Utilizing the most advanced 4K digital mapping technology available, we will, for the first time ever, project imagery on all 8 of the venues proscenium arches. This large-scale projection, along with a backdrop that now includes one of the largest 8K resolution LED screens in the world, will visually transform the production, completely immersing the entire audience in the show. We're excited about these enhancements and look forward to a successful holiday season.

Turning to sports. The 2017-18 Rangers and Knicks seasons are underway. The Rangers, who have made the playoffs the last 7 years led by goalie Henrik Lundqvist, welcomes 5 new players this offseason. Meanwhile, the Knicks, under the leadership of President Steve Mills and General Manager Scott Perry, feature an exciting group -- core group of young players led by Kristaps Porzingis and are focused on a long-range plan to restore the pride and accountability that comes with playing in New York.

With the start of the regular season, we have seen some early impacts on Knicks' ticket revenue. That said, we believe in where the team is headed long term and that this new direction will lead to success. We also believe that we have the right ticketing policy in place to capitalize on that success, as our strategy of reducing full-season subscriptions and increasing sales of partial plans, along with group and individual tickets, creates lasting benefits for the company. These include helping us establish direct relationships with our customers and further broadening our fan base, both of which should positively impact revenues over the long term.

On the sponsorship and signage front, last month we welcomed the brand-new signature marketing partner, Squarespace. In addition to becoming the Knicks' first-ever jersey sponsor through this multifaceted partnership, Squarespace will also have year-round exposure across our unrivaled portfolio of sports and entertainment assets, as well as, on MSG Networks' award-winning regional sports networks. We're extremely pleased to have reached this agreement and look forward to building this new partnership.

Another excellent illustration of the meaningful value we provide our partners is the overall success we've had in renewing and expanding our marketing partnerships. As you know, last fiscal year, we kicked off the start of our renewal cycle with our signature partners by reaching new agreements with Anheuser-Busch and Lexus. We're pleased to report that we recently completed multiyear renewals with 3 additional signature partners, Delta Air Lines, Charter Communications and Kia, world-class companies that share our commitment to delivering exceptional experiences for customers.

We look forward to continuing to provide all of our partners with the innovative platforms and unique and valuable exposure they've come to expect from MSG.

We also continue to make progress on new agreements for those event Lexus and Signature Level Suite products up for renewal this year. We have reached new deals with solid, built-in, annual escalators for nearly all of these suites and anticipate selling the remaining few in the near term.

In summary, we're pleased with our start to fiscal 2018, as we remain committed to pursuing opportunities to drive both organic and external growth. We continue to attract an increasing number of premium events to our venues and have had early successes that demonstrate the value of a combined MSG and TAO Group offering. Furthermore, we also continued to build our portfolio of live offerings and expect to make important strides on our venue expansion plans in the coming year. We remain confident that as a pure-play company focused on premium live experiences we are well positioned to drive long-term growth and value creation for our shareholders.

With that, I'll now turn the call over to Donna who'll take you through our financial results.

Thank you, Doc. And good morning, everyone. For the fiscal 2018 first quarter, our company generated total revenues of $245 million, an increase of 35%; and adjusted operating income of $29 million, an increase of $27.4 million.

At MSG Entertainment, revenues of $164.1 million increased 48%. This was primarily due to the inclusion of operating results for TAO Group and, to a lesser extent, higher overall event-related revenues at the company's venues, partially offset by the absence of the New York Spectacular production and, to a lesser degree, lower sponsorship and signage revenues.

With regard to the increase in overall event-related revenues, as Doc mentioned, our bookings business had another solid quarter fueled by continued growth in concerts, which translated into revenue increases at Radio City Music Hall, The Chicago Theatre and The Garden. These results were partially offset by lower revenues at the Forum and The Theater at Madison Square Garden.

MSG Entertainment AOI of $17.8 million increased by $18.8 million. This increase -- this reflects the inclusion of TAO Group operating results, the absence of the loss related to the New York Spectacular and higher overall event-related results at our venues. This was partially offset by SG&A and other operating cost increases and, to a lesser extent, lower sponsorship and signage results.

At MSG Sports, revenues of $80.9 million increased 14%. This was primarily due to higher lead distribution, preseason ticket-related revenue and local media rights fees from MSG Networks. The increase in preseason ticket-related revenue was primarily due to 1 additional preseason game and higher average per-game revenue as compared to the prior year period.

MSG Sports AOI of $25.8 million increased by $10.4 million. This reflects the increase in revenues and, to a lesser extent, lower direct operating expenses, partially offset by an increase in SG&A expenses.

The increase in direct operating expenses was due to lower net provisions for certain team personnel transactions, partially offset by higher team personnel compensation and other team operating expenses and net provisions for NBA and NHL revenue-sharing expense.

Corporate and other adjusted operating loss of $14.6 million increased by $1.9 million, primarily due to higher employee compensation and related benefits and, to a lesser extent, higher professional fees, mainly related to our business development initiatives. This was partially offset by a management fee from TAO Group.

Lastly, purchase accounting adjustments of $5.4 million reflected in operating expenses are primarily related to the TAO Group acquisition.

Turning to our balance sheet. As of September 30, total unrestricted cash and cash equivalents was approximately $1.2 billion. In addition, there have been no borrowings made under either our $150 million New York Rangers revolving credit facility or our $215 million New York Knicks credit facility.

As a reminder, there also remains outstanding a $110 million 5-year term loan at the TAO Group level.

In terms of the company's share repurchase program, this fiscal year through yesterday, we have repurchased approximately 44,000 shares for 5 -- for $9.3 million. Total repurchases under our current authorization now stands at 1.55 million shares for approximately $263 million at an average price of about $170 per share. This amount represents 6% of total shares outstanding as of our spend date.

With that, I will now turn the call back over to Ari.

Thank you, Donna. Christie, can we open up the call for questions?

(Operator Instructions) And your first question comes from Brandon Ross of BTIG.

Just a few months back, we wrote a piece about a couple different strategic possibilities for MSG. And there's been some speculation in the market recently, I think, about each of them. So wanted to just directly ask about each thing. First of all, would you consider a sale or a minority investment in either the Knicks or the Rangers or both? And then, secondly, and perhaps related, would you consider or are you considering a spin-off of the sports business or the teams from the entertainment business? And I have a follow-up.

Okay. We continually review and evaluate all of our potential strategic options. Historically, that has led to spin-offs. It's led to acquisitions. It's led to share repurchase programs. All of that said, we have no current plans to spin off or sale the Knicks or the Rangers or a minority interest in either one of the entities, and we view them as important parts of our overall business. I -- we're not going to comment on any hypothetical transactions or scenarios on this call. We've consistently demonstrated over the years that we're focused on creating long-term shareholder value, and we're going to continue to do so.

Great. And then just to follow up, I think sponsorship was down in the quarter. Can you talk about why it was down and what the outlook is for the rest of the year?

I'm going to let Donna answer that one.

Sure. Well, in terms of the first quarter, first of all, as you know, I'd note that it's the smallest quarter of the year. The Knicks and Rangers seasons have not really started. We were impacted this quarter by the timing of our contract renewals. And as Doc mentioned, we are pleased to report that we have now renewed 5 for 5 of our signature partners. And we're excited about the addition of our new signature marketing partner, Squarespace. So I think we can -- we are comfortable saying we expect another very solid year for our sponsorship and signage business.

Your next question is from Michael Morris with Guggenheim.

A couple of questions. First, Doc, you mentioned more information would be to come on your venue expansion strategy. But I'm hoping you could update us specifically on the plans in Las Vegas. Maybe how are you thinking about size, format, what that market needs in terms of a venue? And what the competitive opportunity is there? And then, secondly, somewhat more broadly, in light of a number of the tragic events that have happened over the past year at public events and the human element, which is important, but putting that aside, just the business impact, like how are you thinking about that? What type of impact do you see or would you anticipate on demand? And does it impact the cost side for things like increases in security or other factors we're not thinking of?

Okay. I'll start with Vegas. We're -- as I said in our prepared remarks, we're close to completing our design plans for Las Vegas. I don't have specifics on that, and I expect to share more specifics with everyone in early calendar 2018, the first quarter of calendar -- the calendar year. It -- I can say that it will be a full-scale venue and with a lot of technology infusion that we will unveil at that time. We think that there's a real opportunity in Las Vegas with a state-of-the-art, large-scale, purpose-built venue for music and entertainment. And we think we can take what we did with the Forum to a whole different level. Speaking of the Los Angeles market, when we came in, we've said this before, we saw a potential for growth and invested in the Forum, renovated and reopened. And since that time, the L.A. market has grown 70% overall, with the Forum accounting for most of that growth. Similarly, we look at Las Vegas as a fantastic market opportunity for us. T-Mobile has opened there, and since opening, that concert market has grown 80% since that venue opened. That said, Las Vegas still represents only a market about half the size currently in concerts -- in terms of concerts as that of Los Angeles. So in other words, content is coming to the region. It's just not coming in -- at such scale as Las Vegas -- I mean, as Los Angeles. So the point being that we think that we can effectively grow that market. Las Vegas itself is growing. There are major multimillion dollar developments happening across the city. There's an additional 5,000 hotel rooms that are projected to go in by 2020. The Wynn company announced recently Wynn Resorts Paradise Park, which is built -- being built immediately adjacent to our property in Las Vegas. So we think that there is tremendous growth opportunities in Vegas, and we think that we can harvest those opportunities just as we did with the Forum in Los Angeles and more. So I think that, that largely answers your question on Las Vegas. With respect to security, we are very, very conscious of what's going on out there in the world. And in light of recent events, we've spent an enormous amount of time focused on the issue because the safety and security of our guests is our absolute #1 priority. We've increased security measures and instituted new safety protocols across all of our venues, both within the walls of the venues themselves but, in particular, the common areas immediately adjacent to our venues and our perimeters. We've invested in a lot of technologies to enhance our securities -- our security. And I'll remind you that all of this has contributed to us being the first arena to be awarded the safety act designation by the Department of Homeland Security. We've also beefed up our security personnel, including the hiring of a new head of security, who brings decades of security experience to our team. So we feel that we have been focused on this issue and invested properly and keep monitoring the global situation in order to respond effectively with our security measures.

Our next question is from John Janedis with Jefferies.

A couple for me. One is, Doc, while you've been prudent in avoiding the luxury tax with the Knicks over the last several years, how do you balance your commitment to team performance with cost management?

Well, we weren't a luxury taxpayer in the last 2 seasons, and we don't project to be a luxury taxpayer this season based on our current roster. But we're not going to speculate on whether we will or we won't be a taxpayer going forward. We evaluate it based on the idea that we're committed to fielding championship-caliber teams and building such. So we take all of those factors into account in figuring out the best long-term interest of the teams and the company.

Okay. And maybe separately, you touched on this. But with the Knicks jersey sponsorship deal with Squarespace last month, do you have any other large sponsorship opportunities? And is there any color you can give us on the expanded agreement with Delta?

Well, I'll take the Delta part first. For Delta specifically, first of all, we're really pleased that we renewed it. It's a 10-year deal, and it's an expanded deal. They remain the official airline and private jet carrier for our New York venues and our sports teams. The Christmas Spectacular and the Boston Calling Music Festival, they'll continue to be the entitlement partner for the Delta Sky360 Club at MSG, and they receive prominent exposure across our sports assets and our outdoor signage at The Garden. They -- one of the new elements or newer elements is that we'll work together with Delta on a first-class digital content platform with pieces that are customized around the Knicks and the Rangers and the Christmas Spectacular to amplify some of their key activations and extend the partnership reach beyond just simply our events. So we're, again, really pleased with the Delta partnership. I think that when we -- when (inaudible) partnerships were established, the conventional wisdom was that it was the transformation that was driving the value of these partnerships. I think we've proven over the long term our -- the value of our partners -- partnerships to our partners. And we believe that we will only continue to expand on them. And the fact that we have gone 5 for 5 with our signature partners is proof that it wasn't the transformation alone driving this, that we have long-term value with those partnerships. I believe I've answered your question.

Your next question is from David Karnovsky with JPMorgan.

For the Christmas Spectacular, are you approaching this year's run differently at all from a ticketing or pricing strategy relative to last season? And given the new investment into the show, should we expect any change to the overall profitability? And then separately, The New York Times had an article recently quoting sources that claim that the New York Spectacular was no longer in the works for 2018. Can you give us an update on where you stand with that show?

Yes. Starting with the Christmas Spectacular. So we constantly are revising and monitoring our ticket strategy based on current market data that we receive. It's early yet in the process. The show doesn't premiere for another 2 weeks, so it's early yet in terms of ticket sales. But we've made significant investment in improving the customer journey through the sales process, and we've augmented our ability to capture consumer data as well, which results in us being able to deliver continuously improved performance with respect to ticket sales. So we're very pleased with what has happened so far, but it's still too early to say exactly what we can expect for this year's Christmas Spectacular. On the New York Spectacular, as I've said previously in earnings calls, we are revising the show. We are not going to continue with the New York Spectacular per se. We think that we have unique assets in the Rockettes and Radio City Music Hall and unique experiences with both that we want to leverage in a more advantageous fashion. So we're exploring the creation of a streamlined show that leverages the technology that we referenced in our prepared remarks and that creates a more immersed experience of experiencing that show. So what we are -- what we plan to do with the second show is to create one that's more nimble that we can actually play over a longer period of time but that can come in and out of the hall easily and not take up big consecutive blocks of dates. This would allow us to market the Rockettes and Radio City Music Hall in a year-round fashion, and it would allow us to opportunistically book the hall with premium entertainment and residencies, as we did with Dave Chappelle on that 16-show run. So we're intending to create a show that will allow people to experience both Radio City Music Hall and the incredible talent of the Rockettes, and it's our intention to do so. We're in the planning phases of this. We have nothing specific to report as to the concept of the show or the size and scale of the show or the schedule of the show at this moment in time, but we will when we're prepared to do so.

Your next question comes from Bryan Goldberg with Bank of America.

I had a question on your JVs, namely Azoff and Tribeca. And I'm asking in the context of -- if I'm reading your P&L correctly, your share of the net income that you recognized on the P&L. It looks like it was up nicely year-on-year in the quarter, and I guess wondering what's driving that. Is this a onetime event? Or is this type of growth sustainable? Any color you could provide would be appreciated.

Well, I'll take the general part of that question and then turn the financial part over to Donna. We're pleased with the results of all of the Azoff entities as well as Tribeca. I think we're particularly pleased with the Oak View Group and Tim Leiweke's enterprise in terms of the success -- the early success that they've had and the momentum they have several of their initiatives. And Tim and Irving, with respect to leadership of that entity, are forces to be reckoned with and are building a great business. Likewise, with global -- the global music rights business, success has been excellent there, so we're very, very happy with the performance of the various Azoff assets under that umbrella. With respect to the financials, I'll turn it over to Donna.

Yes, first of all, I'm pleased to say you are reading our P&L correctly. And we were happy to see a net improvement in earnings reported from our Azoff MSG Entertainment and Tribeca Enterprises businesses. There is a very small piece that's not recurring, so as -- I think this reflects, as Doc just discussed, the -- how the business is doing.

Your next question is from David Miller with Loop Capital Markets.

Doc, on TAO, I just want to make sure I have it straight. How many U.S. locations have you opened since the closure of the deal, which was February? And how many do you have set to open next year? I just want to have that straight. And then also related to TAO, it feels like you guys are taking advantage of synergies here, myriad of cross-promotional opportunities, ticketing, sponsorship, advertising to a captive audience. Do you feel like there's any more wood to chop in terms of creating additional synergies beyond that?

Appreciate it.

On the first part of your question, I believe the answer is 6: 5 in Los Angeles and the Moxy Times Square venues. And we're -- in terms of the performance of those venues, the TAO Group are very, very pleased with those results. It was a rollout of new venues in Los Angeles, but now 5 are fully operational and up and running and doing quite well. And Moxy has had an excellent opening as well. And I think they've succeeded in creating significant buzz with all of those openings. I'm sorry, the second part of your question was what exactly?

Well, it -- yes, I just want to make sure that like do you guys feel like there's more wood to chop in terms of creating synergies out of TAO? Or do you feel like you've completely integrated into your model as of now, and you're -- it's all -- it's running on all 8 cylinders?

Oh, no, we're just at the very beginning in terms of integration. And we're very, very pleased with the initial results. We've talked about what we're now calling hospitality partnerships. We have 1 model now, and the size and scale and term of these deals is akin to our signature marketing partnerships with the company. So that's significant revenue and significant synergies, and we think it provides a model that can be expanded upon with other Fortune 500 companies that spend enormous amounts of money in entertainment and hospitality. So that's one example. Suite Sixteen is another hospitality innovation that has resulted from this new partnership. It is a members-only lounge at Madison Square Garden that provides really innovative hospitality options and amenities that haven't existed before in a major sports and entertainment venue. And we think that, as we said from the very beginning with TAO, that these guys have an expertise in the premium experience unlike any others. And we intend to bring that expertise not only to our existing venues, as you're seeing, but with integration into our venue expansion, which, again, we will be happy to elaborate upon in calendar '18, early calendar '18.

Your final question is from David Joyce with Evercore ISI.

And thinking about your incremental rights monetization opportunities and in light of some of the big Internet platforms trying to insert themselves into some of the other professional sports rights or sports leagues, are there opportunities for you on this front across your properties? And then maybe more broadly, where should we think about other ways that you could be monetizing your rights?

Are you specifically referring to our sports rights?

That's primarily what I would be considering, yes.

Well, we have long-term local media rights agreements in place with the networks, with the Knicks and Rangers, and the revenues from those agreements are in excess of $135 million a year and growing over the term. But the local digital rights for both teams are part of these agreements. So there's no additional local media rights revenue opportunities for us to monetize. Now -- but with the acquisition of CLG and the growing esports category, the opportunities for monetizing those rights digitally are there and apparent. And with our expertise in media rights, particularly in the sports space that we've had over decades at this company, we plan to aggressively pursue those opportunities with CLG and the esports category.

With that, I will turn the call back over to Ari Danes for any additional or closing remarks.

Thank you all for joining us, and have a good day.

Thank you. This does conclude today's conference call. You may now disconnect.