Phil D’Ambrosio: Okay. Thanks, David. So first, let me start by saying it’s been our privilege to partner with Billy Joel for 10 years. Many ways, it’s hard to believe that he started in January of 2014, and Billy Joel was certainly our first-ever music franchise. You’re right that it’s not like our typical bookings, which are venue rentals or venue licenses. With regard to Billy, it’s more of a co-production or a co-promotion. But I think some of the key takeaways, the Billy Joel residency was a great example of how we’ve been developing ways to increase our venue utilization. And I can tell you that we’re exploring the potential for other residencies at our venues, and we’re in discussions with many artists. Quite frankly, we’re seeing that the appetite for residencies from artists is growing.
Residencies, as we’ve noted in prior discussions, mean less travel and less wearing down on the artists. So it helps the artists and it helps us drive incremental growth. But with regard to Billy, it’s important to note that as we replace his residency, it’s not going to be exactly the same. Artists will want to put their own unique structure and spin on something like this. But again, we’re discussing residencies with many artists where we have strong relationships and we look forward to those future residencies. And just to mention, again, what Ari said earlier, even though it’s early, if you look at The Garden in terms of concerts pacing ahead for the first half of fiscal ’25, again, we’re seeing a strong double-digit increase for those first six months relative to this fiscal year ’24.
And of course, that forward look on those six months includes multiple anticipated residencies of The Garden. I can turn now to your next question with regard to consumer demand and what’s it looking like across our venues and show types. Let me begin by saying, notwithstanding the current question that’s been twisting and turning with regard to the economy and whether or not we’re going to have a recession or we’re going to have a soft landing, something in between, we’re not seeing any change in consumer demand. If anything, as we’ve mentioned in our press release, given Jim’s quote, we continue to see strong demand for our live entertainment offerings. And this is across the arena and our four theaters and across our various event types led by concerts.
So with regard to concerts, in particular, our recent on sales continued to perform very well. In fact, recently, we announced concerts for a number of artists and the demand was so strong that we wound up adding additional shows. So this is happening now. It’s not something that just happened in the past. Again, continued strong demand. We also have a number of sold-out multi-night runs across our various venues, such as Olivia Rodrigo, Tina Fey & Amy Poehler, and Matt Rife. In addition, the number of tickets sold for concerts in the second half of this fiscal year, so January through June, are up by a strong double-digit, excuse me, percentage increase year-over-year. And this reflects a number of factors, including more events, the timing of on sales and higher average sell-through.
Turning to family shows, this category has been very strong this year and you heard us talk about the success of the Christmas Spectacular run this past holiday season. But on top of that, ticket sales for Cirque du Soleil’s holiday show came in well above our expectations, both here at The Theater at MSG and in Chicago — at The Chicago Theatre. And finally, if you look at our per-cap spending, food and beverage and merchandise per caps at concerts were up approximately 10% year-over-year this past second quarter, while per-cap spending on the Christmas Spectacular was also up a low-double-digit percentage increase. So again, we’re continuing to see strong demand in our venue spending from our guests.
Operator: Your next question comes from the line of Brandon Ross from LightShed Partners. Your line is open.
Brandon Ross: Hi. Thanks. Very quickly. In the quarter, I guess you used your excess cash to pay down, I think you said $90 million in debt. Stock was significantly lower than it is at this time. What made you decide to pay down debt there instead of buying back stock? And when do you expect for us to see a return to buyback activity?
Phil D’Ambrosio: Sure, Brandon. How are you? So…
Brandon Ross: Thanks.
Phil D’Ambrosio: With regard to our capital allocation priorities, they remain unchanged. We have two, as you just noted, opportunistically returning capital to our shareholders and paying down debt. With regard to debt, on our earnings call in November, we had noted that it was our intention to fully pay down the revolver, which was at $90 million. And again, we drew a significant amount on the revolver in September to fund the share repurchase we made at the time in September. So we’re happy that we were able to deliver on that intention and pay down the revolver. It’s obviously available to us in the future if we need it. But given where rates are, we wanted to eliminate that interest cost. And then turning to our share repurchase program.
Even though we’ve acquired about $140 million of our stock since we spun off last April, we still have $110 million of authorization. And it’s our intention to continue opportunistically returning capital to shareholders. If you look at these two priorities and how they will operate, with regard to debt, we simply plan to continue making the quarterly amortization payments on our Term Loan A. So that’s just over $4 million per quarter. The balance will be directed toward a return of capital, and again, we intend to be opportunistic. Finally, with regard to leverage, we also want to point out that while we’re not providing a specific leverage target, as our business grows and we’re certainly anticipating growth and AOI improvement in the future, our leverage will come down.
So in summary, we think we’re very well-positioned to execute on these two priorities for capital allocation.
Brandon Ross: Thank you so much.
Ari Danes: Operator, we’ll take one last caller.
Operator: Your final question comes from the line of Logan Angress from Wolfe Research. Your line is open.
Logan Angress: Hi. Thank you. Just quickly on Garden utilization. Since you now have 100% visibility into The Garden pipeline for this fiscal year, can you comment on how utilization is tracking versus prior years? And specifically, you last said that effective utilization was around 70% and I’m curious how realistic is it that at some point that reaches 100%, or are there sort of roadblocks in the way like artists maybe not wanting to perform during certain weekdays or other factors like that? Thank you.
Phil D’Ambrosio: Sure, Logan. So please let me start by saying again that The Garden is on track to deliver solid bookings growth this fiscal year and Ari touched upon the outlook for the first six months of fiscal ’25. If you look at this fiscal year ’24, we’re currently estimating around 230 total events at The Garden or the arena. And this includes over 140 bookings events, plus the Knicks and Rangers home games. On a base of 365 days a year and taking into account load-in and load-out days, we estimate that venue utilization this year is essentially the same as it was last year. So referencing the 70% that you mentioned, and that’s despite the fact that we’ve increased events at The Garden. There are a number of items driving this, beginning with lower or fewer load-in days.
And another factor again is that we’ve been able to program more multiple-event days than we’ve had in the past. So that’s an area that we’re focused on and it really helps drive the business for The Garden. And then in terms of booking events during the weekdays, it’s important to keep in mind that New York is a unique market and The Garden is certainly a unique venue. And we have a track record of shows selling out without regard, again, without regard to the day of the week. We see that trend continuing and we plan to expand upon it. That said, I would say the more challenging periods during the year that we see as opportunities, are primarily addressing the NBA and the NHL playoff windows for the Knicks and the Rangers. Those windows implicate the spring and can linger into the summer at a time when artists are more focused on playing outdoors.
But that said, we continue to work with our artists where we have good relationships, strong relationships. And they are willing to book dates during the playoff windows, subject to change. And this is going to help us drive additional utilization in the future. Finally, in the summer, we’re continuing to have success by increasing the number of concerts. And again, this has to do with The Garden and where it sits in the heart of Manhattan. So we see that trend continuing. We plan to expand upon it to increase our utilization. So with The Garden being our largest venue, we really believe that utilization increases are important and we’re confident in our ability to continue to grow this utilization. Again, led by The Garden.
Logan Angress: Great. Thank you.
Phil D’Ambrosio: Thank you.
Operator: This concludes our question-and-answer session. I will now turn the call back over to Mr. Ari Danes for some closing remarks.
Ari Danes: Thank you all for joining us. We look forward to speaking with you on our next earnings call. Have a good day.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
