David Karnovsky: Hey, thank you. On the Penn Station renovation, I wanted to see if there was any update you could provide there. And just given there have been some press reports about offers for the Hulu Theater. Is it possible to frame the materiality of that venue in terms of revenue and EBITDA? And then a separate question on capital allocation. Dave, you noted priority to pay down debt. Is there a target leverage range you have in mind? And the buybacks, how do you think about that? What governs when you would be in the market to repurchase shares?
Dave Byrnes: Sure. Thanks, David. As far as a potential sale to theater we have nothing to add on today’s call. We’ve said before we are certainly committed to improving Penn Station in the surrounding area. We’ll continue to work closely with all of the stakeholders involved in that. We always say that we’ll consider options that make strategic and financial sense. We’ll continue to do that, but nothing further to add on a potential sale sitting here today? And then your second part of that, as it relates to the AOI of our business, the significant majority of the company’s economics are driven, first and foremost, by the Garden and the Christmas Spectacular production. And then the theaters in aggregate follow. So the theater at MSG, obviously, is one of our four theaters in the portfolio.
It’s one of three here in New York with different capacities. If needed, we believe we have the ability to shift some events from the theater at MSG to other theaters here in New York. Your question on leverage, I’d say first, our capital allocation priorities remain focused on returning capital to shareholders and debt pay down. As we mentioned since the spin, we’ve repurchased approximately 10% of our Class A shares, roughly $140 million, and we have $110 million remaining under our current authorization. We’ll continue to evaluate returning capital to shareholders as we move forward. As far as debt paydown, our balance as of September 30 was approximately $732 million. Since the end of the quarter, we’ve paid down $35 million of the revolver, and we also expect to fully pay down the revolver by the end of the December quarter.
From there, we expect to make our mandatory principal payments. And while we’re not setting up a public leverage target, we expect our business to naturally delever as AOI increases over time. So with that, we believe we’re well positioned to advance both of our capital allocation priorities.
David Karnovsky: Thank you.
Ari Danes: Welcome. Go ahead we have time for one last caller.
Operator: Certainly your final question for today comes from the line of Peter Henderson from Bank of America. Your line is open.
Peter Henderson: Hi. Good morning and thank you for taking the question. Just wondering, are there any pandemic-related rescheduled shows in your fiscal second quarter through your fiscal fourth quarter for 2024?
Dave Byrnes: Sure, Peter. Thanks. As we mentioned, the prior year first quarter included 30 concerts rescheduled to the period last year from earlier dates due to the pandemic. And the majority of those rescheduled concerts were at the Garden and Radio City, which are our largest revenue-generating venues. The year-over-year decline was also heightened by seasonality of our business with fiscal first quarter being our seasonally quietest in terms of bookings each year and when we look into fiscal second quarter, we had nine pandemic-related schedule shows in the year ago period also. All nine of those were at our smaller venues, the Beacon Theatre and the Chicago theater, so much smaller economic impact on our business, and we had no rescheduled shows in the third or fourth quarters last year.
So the vast majority of the tough year-over-year comp from the pandemic-related rescheduling is behind us, and we’re confident we’re on track to deliver strong results on a full year basis.
Peter Henderson: That’s very helpful. And then just following up, I was wondering if you could provide an update on your sponsorship outlook for the fiscal year. And just sort of related to that, if you can give us a little more color on the OVG partnership and how that will help to drive results.
