What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-05-06 · 91 added, 178 removed, 181 unchanged (60% of the section changed)

9 unchanged sentences

• the on-ice and on-court performance of the sports teams whose games we host in our venues;

• competition, for example, from other venues and sports and entertainment options, including new competing venues;

• the level of our capital expenditures and other investments;

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• the demand for sponsorship and suite arrangements;

• competition, for example, from other venues and sports and entertainment options, including of new competing venues;

• the effect of any postponements or cancellations by third-parties or the Company of scheduled events, whether as a result of a pandemic or other public health emergency due to operational challenges and other health and safety concerns or otherwise;

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(together with its subsidiaries, as applicable, “MSG Sports”) of its obligations under various agreements with the Company and ongoing commercial arrangements, including the Arena License Agreements;

• the tax-free treatment of the Distribution (as defined below);

• our ability to achieve the intended benefits of the Distribution;

• failure of the Company or Sphere Entertainment Co.

(together with its subsidiaries, as applicable, “Sphere Entertainment”) to satisfy its obligations under services agreements or agreements entered into in connection with the Distribution;

• the tax-free treatment of the distribution by Sphere Entertainment Co.

(together with its subsidiaries, as applicable, “Sphere Entertainment”) of approximately 67% of the outstanding stock of the Company on April 20, 2023;

• failure of the Company or Sphere Entertainment to satisfy its obligations under various agreements with Sphere Entertainment, including the services agreement;

• the additional factors described under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025 filed with the Securities and Exchange Commission on August 13, 2025 (the “2025 Form 10-K”).

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The Company reports on a fiscal year basis ending on June 30th (“Fiscal Year”).

In this MD&A, the years ending and ended on June 30, 2025 and 2024, respectively, are referred to as “Fiscal Year 2025” and “Fiscal Year 2024,” respectively.

In this MD&A, the years ending and ended on June 30, 2026 and 2025, are referred to as “Fiscal Year 2026” and “Fiscal Year 2025,” respectively.

Our MD&A is organized as follows:

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Results of Operations.

This section provides an analysis of our unaudited results of operations for the three and nine months ended March 31, 2025 and 2024.

This section provides an analysis of our unaudited results of operations for the three months ended September 30, 2025 and 2024.

Liquidity and Capital Resources.

This section provides a discussion of our financial condition and liquidity, an analysis of our cash flows for the nine months ended March 31, 2025 and 2024, as well as certain contractual obligations.

This section provides a discussion of our financial condition and liquidity, an analysis of our cash flows for the three months ended September 30, 2025 and 2024, as well as certain contractual obligations.

Seasonality of Our Business.

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All of the Company’s revenues and assets are attributed to or located in the United States and are primarily concentrated in the New York City metropolitan area.

MSG Entertainment Distribution

On April 20, 2023, Sphere Entertainment distributed approximately 67% of the outstanding common stock of the Company to its stockholders (the “Distribution”), with Sphere Entertainment retaining approximately 33% of the outstanding common stock of MSG Entertainment in the form of Class A common stock, $0.01 par value per share (“Class A Common Stock”), immediately following the Distribution.

As a result, the Company became an independent publicly traded company on April 21, 2023.

Following the completion of the secondary offering by Sphere Entertainment of the Company’s Class A Common Stock on September 22, 2023, Sphere Entertainment no longer owns any of the Company’s outstanding common stock.

Description of Business and Basis of Presentation to the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the Distribution.

Factors Affecting Results of Operations

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Results of Operations

Total revenue is presented in three categories consisting of (i) Revenues from entertainment offerings, (ii) Food, beverage, and merchandise revenues, and (iii) Arena license fees and other leasing revenues.

In addition, total direct operating expenses is presented in two categories consisting of (i) Entertainment offerings, arena license fees and other leasing direct operating expenses and (ii) Food, beverage, and merchandise direct operating expenses.

Prior period financial information has been revised to conform with the current period presentation.

Comparison of the three and nine months ended March 31, 2025 versus the three and nine months ended March 31, 2024.

Comparison of the three months ended September 30, 2025 versus the three months ended September 30, 2024.

Three Months Ended

March 31, Change

2025 2024 Amount Percentage

Revenues from entertainment offerings

$ 160,214 $ 146,221 $ 13,993 10 %

Food, beverage, and merchandise revenues 45,808 45,380 428 1 %

Arena license fees and other leasing revenue (a)

36,443 36,712 (269) (1) %

Total revenues 242,465 228,313 14,152 6 %

Direct operating expenses

Entertainment offerings, arena license fees, and other leasing direct operating expenses

(107,995) (112,997) 5,002 4 %

Food, beverage, and merchandise direct operating expenses

(30,875) (29,024) (1,851) (6) %

Total direct operating expenses

(138,870) (142,021) 3,151 2 %

Selling, general, and administrative expenses

(52,112) (53,945) 1,833 3 %

Depreciation and amortization (14,372) (13,182) (1,190) (9) %

Impairment of long-lived assets (9,700) — (9,700) NM

Restructuring charges (84) (2,362) 2,278 96 %

Operating income 27,327 16,803 10,524 63 %

Interest income 710 341 369 108 %

Interest expense (11,800) (14,425) 2,625 18 %

Other (expense) income, net (949) 78 (1,027) NM

Income from operations before income taxes 15,288 2,797 12,491 NM

Income tax expense (7,252) (2) (7,250) NM

$ 8,036 $ 2,795 $ 5,241 188 %

Nine Months Ended

March 31, Change

September 30, Change

2025 2024 Amount Percentage

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Total revenues 158,262 138,714 19,548 14 %

788,596 773,191 15,405 2 %

Direct operating expenses

Entertainment offerings, arena license fees, and other leasing direct operating expenses

Entertainment offerings, arena license fees, and other leasing direct operating expenses (b)

(88,558) (86,466) (2,092) (2) %

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Impairment of long-lived assets (13,782) — (13,782) NM

Restructuring charges (14) (14,803) 14,789 100 %

Operating income 147,846 120,801 27,045 22 %

Restructuring (charges) credits (1,190) 40 (1,230) NM

Operating loss (29,739) (18,482) (11,257) (61) %

Interest income 520 372 148 40 %

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Other expense, net (172) (769) 597 78 %

Income from operations before income taxes 107,732 77,770 29,962 39 %

Income tax expense (43,124) (397) (42,727) NM

$ 64,608 $ 77,373 $ (12,765) (16) %

Loss from operations before income taxes (40,419) (32,922) (7,497) (23) %

Income tax benefit 18,765 13,601 5,164 38 %

Net loss $ (21,654) $ (19,321) $ (2,333) (12) %

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(a) Arena license fees and other leasing revenue are recognized on a straight-line basis and are comprised of a contractual cash component plus or minus a non-cash component for each period presented.

Arena license fees include operating lease revenue of (i) $21,746 and $40,048 collected in cash for the three and nine months ended March 31, 2025, respectively, and $22,372 and $38,610 for the three and nine months ended March 31, 2024, respectively, and (ii) a non-cash portion of $11,848 and $21,833 for the three and nine months ended March 31, 2025 respectively, and $13,216 and $22,831 for the three and nine months ended March 31, 2024, respectively.

Arena license fees include operating lease revenue of (i) $879 and $854 collected in cash for the three months ended September 30, 2025 and 2024 , respectively, and (ii) a non-cash portion of $445 and $470 for the three months ended September 30, 2025 and 2024, respectively.

(b) Venue operations and infrastructure costs are not specifically allocated to each revenue stream, but are instead attributed in their entirety to service revenue which is the Company’s principal revenue stream.

Leasing direct operating expenses materially consist of venue operations and infrastructure costs.

As a result, the Company combines service and leasing direct operating expenses as “Entertainment offerings, arena license fees, and other leasing direct operating expenses” for presentation purposes.

NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.

Revenues for the three and nine months ended March 31, 2025 increased $14,152 and $15,405, respectively, as compared to the prior year period.

Revenues for the three months ended September 30, 2025 increased $19,548 as compared to the prior year period.

Revenues from Entertainment Offerings

For the three months ended March 31, 2025 the increase in revenues from entertainment offerings was primarily due to (i) higher revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $6,250, (ii) higher revenues from the presentation of the Christmas Spectacular production of $4,907, and (iii) higher revenues from venue-related sponsorship, signage, and suite license fees of $4,628, partially offset by lower event-related revenues of $3,601.

The increase in revenues of $6,250 subject to the sharing of economics with MSG Sports pursuant to the Arena License agreements was primarily due to higher suite license revenues (excluding the portion retained by the Company).

The increase in revenues of $4,907 from the presentation of the Christmas Spectacular production was primarily due to an increase in ticket-related revenue, which reflected higher per-show revenue and, to a lesser extent, five additional performances as compared to the prior year quarter.

The increase in per-show revenue was primarily due to higher average per-show attendance and, to a lesser extent, higher average ticket yield as compared to the prior year period.

The increase in revenues of $4,628 from venue-related sponsorship, signage and suite license fees was primarily due to higher suite license revenues (excluding the portion shared with MSG Sports pursuant to the Arena License agreements).

The decrease in event-related revenues of $3,601 was due to (i) lower revenues from concerts of $21,912, which mainly reflects lower per-concert revenues primarily due to a shift in the mix of events at The Garden from promoted events to rentals and a decrease in the number of events at the Company’s venues, partially offset by (ii) higher revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) of $18,311, which was primarily due to higher per-event revenues and an increase in the number of events at the Company’s venues.

For the nine months ended March 31, 2025, the increase in revenues from entertainment offerings was primarily due to (i) higher revenues from the presentation of the Christmas Spectacular production of $20,058, (ii) higher revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $13,429, and (iii) higher revenues from sponsorship and suites of $5,069, which was partially offset by lower event-related revenues of $27,656.

The increase in revenues of $20,058 from the presentation of the Christmas Spectacular production, as compared to the prior year period, was primarily due to higher ticket-related revenues.

This reflected higher per-show revenue and, to a lesser extent, an increase in the number of performances as compared to the prior year period.

The increase in per-show ticket-related revenues was due to higher average ticket yield and higher average per-show attendance as compared to the prior year period.

The increase in revenues of $13,429 subject to the sharing of economics with MSG Sports pursuant to the Arena License agreements was primarily due to higher suite license revenues (excluding the portion retained by the Company).

The increase in revenues of $5,069 from suites and sponsorship was primarily due to higher suite license revenues (excluding the portion shared with MSG Sports pursuant to the Arena License agreements).

The decrease in event-related revenues of $27,656 was due to lower revenues from concerts of $40,502 which reflects lower per-concert revenues primarily due to a shift in the mix of the events at The Garden from promoted events to rentals, and a decrease in the number of events at The Garden, partially offset by and higher revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) of $12,846, which was primarily due to an increase in the number of events at The Garden and to a lesser extent, higher per-show revenues from other live entertainment and sporting events.

For the three months ended September 30, 2025, the increase in revenues from entertainment offerings of $16,229 was primarily due to (i) higher revenues from concerts of $8,263 due to an increase in the number of concerts at the Company’s theaters, an increase in the number of concerts at The Garden and higher per-event revenues, and (ii) higher revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) of $6,806, primarily due to an increase in the number of events at The Garden.

Food, Beverage, and Merchandise Revenues

For the three months ended March 31, 2025, the increase in food, beverage, and merchandise revenues was primarily due to higher food and beverage sales at other live entertainment and sporting events (excluding the Knicks and Rangers), partially offset by lower food and beverage sales at concerts.

The increase in food and beverage sales at other live entertainment and sporting events was due to an increase in the number of events held at the Company’s venues and higher per-event revenues, both as compared to the prior year quarter.

The decrease in food and beverage sales at concerts was primarily due to fewer concerts held at the Company’s venues as compared to the prior year quarter.

For the nine months ended March 31, 2025, the decrease in food, beverage and merchandise revenues was primarily due to (i) lower food and beverage sales at concerts at the Company’s venues as compared to the prior year period, partially offset by (ii) higher food and beverage sales at other live entertainment and sporting events, (iii) higher food, beverage and merchandise sales related to the Christmas Spectacular production, and (iv) higher food and beverage sales at Knicks and Rangers games.

The decrease in food and beverage sales at concerts was due to lower per-concert revenues and, to a lesser extent, fewer concerts at The Garden, both as compared to the prior year period.

The increase in food and beverage sales at other live entertainment and sporting events was due to additional events at The Garden and, to a lesser extent, higher average per-event revenues in the current year period.

The increase in food and beverage sales at Knicks and Rangers games was due to higher average per-game revenues in the current year period, and to a lesser extent, the impact of one combined additional Knicks and Rangers game played at The Garden.

The increase in food, beverage and merchandise sales related to the Christmas Spectacular production was due to higher average per-show revenues and, to a lesser extent, the impact of seven additional shows, both as compared to the prior year period.

For the three months ended September 30, 2025, the increase in food, beverage, and merchandise revenues was primarily due to higher food and beverage sales at concerts of $2,460, and higher food and beverage sales at other live entertainment and sporting events (excluding the Knicks and Rangers) of $1,382.

The increase in food and beverage sales at concerts was due to higher per-event revenue and an increase in the number of events held at the Company’s venues, both as compared to the prior year quarter.

The increase in food and beverage sales at other live entertainment and sporting events was primarily due to an increase in the number of events held at The Garden as compared to the prior year quarter.

Arena License Fees and Other Leasing Revenue

For the three months ended March 31, 2025, the decrease in revenues was due to lower arena license fees from MSG Sports pursuant to the Arena License Agreements due to a combined two fewer Knicks and Rangers games played at The Garden in the current year period, mostly offset by an increase in other leasing revenue.

For the nine months ended March 31, 2025, the increase in revenues was primarily due to other leasing revenue and, to a lesser extent, higher arena license fees from MSG Sports pursuant to the Arena License Agreements due to one combined additional Knicks and Rangers game played at The Garden in the current year period.

In the three and nine months ended March 31, 2025, the Knicks and Rangers played a combined 43 and 80 pre/regular season games at The Garden, respectively, as compared to 45 and 79 combined pre/regular season games, respectively, in the prior year periods.

For the three months ended September 30, 2025, the decrease in revenues was due to lower related party sublease income for corporate office space.

Direct operating expenses

Direct operating expenses for the three and nine months ended March 31, 2025 decreased $3,151 and $12,806, respectively as compared to the prior year period.

Direct operating expenses for the three months ended September 30, 2025 increased $4,661 as compared to the prior year period.

Direct Operating Expenses Associated with Entertainment Offerings, Arena License Fees and Other Leasing

For the three months ended March 31, 2025, the decrease in direct operating expenses associated with entertainment offerings, arena license fees, and other leasing primarily reflects lower event-related expenses of $8,977 and, to a lesser extent, a decrease in venue operating costs of $2,240, partially offset by an increase in direct operating expenses subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $6,589.

The decrease in event-related expenses of $8,977 reflects (i) lower direct operating expenses from concerts of $17,543, mainly due to lower per-concert expenses, primarily as a result of a shift in the mix of events at The Garden from promoted events to rentals and, to a lesser extent, a decrease in the number of events at the Company’s venues partially offset by (ii) higher direct operating expenses from other live entertainment and sporting events (excluding the Knicks and Rangers) of $8,566, primarily due to higher per-event expenses and an increase in the number of events at the Company’s venues.

The decrease in venue operating costs of $2,240 was primarily due to lower employee compensation and benefits and other cost decreases.

The increase in direct operating expenses of $6,589 subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements primarily reflects direct operating expenses incurred as a result of the increase in suite license fee revenues.

For the nine months ended March 31, 2025, the decrease in direct operating expenses associated with entertainment offerings, arena license fees, and other leasing primarily reflects lower event-related expenses of $26,116 and a decrease in venue operating costs of partially $3,703, offset by an increase in direct operating expenses subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $12,564.

The decrease in event-related expenses of $26,116 reflects (i) lower direct operating expenses from concerts of $35,380, primarily due to lower per-concert expenses due to a shift in the mix of events at The Garden from promoted events to rentals, and (ii) higher direct operating expenses from other live entertainment and sporting events (excluding the Knicks and Rangers) of $9,264.

The decrease in venue operating costs of $3,703 was primarily due to lower variable operating costs.

For the three months ended September 30, 2025, the increase in direct operating expenses associated with entertainment offerings, arena license fees, and other leasing primarily reflects (i) higher direct operating expenses from other live entertainment and sporting events (excluding the Knicks and Rangers) of $4,835, primarily due to an increase in the number of events at The Garden as compared to the prior year period, partially offset by (ii) the decrease in venue operating costs of $1,287, primarily due to lower repairs and maintenance expenses and lower employee compensation and benefits, and (iii) lower direct operating expenses from concerts of $1,230, primarily due to lower per-event expenses as a result of a shift in the mix of events at The Garden from promoted events to rentals, partially offset by an increase in the number of events at the Company’s venues.

Direct Operating Expenses Associated with Food, Beverage, and Merchandise

For the three months ended March 31, 2025, the increase in food, beverage and merchandise direct operating expenses was primarily driven by an increase in food and beverage costs related to other live entertainment and sporting events (excluding the Knicks and Rangers), partially offset by a decrease in food and beverage costs related to concerts at the Company’s venues.

For the nine months ended March 31, 2025, the increase in food, beverage and merchandise direct operating expenses was primarily driven by higher food, beverage and merchandise costs related to other live entertainment and sporting events, Knicks and Rangers games at The Garden, and the Christmas Spectacular production, which was partially offset by a decrease in food and beverage costs related to fewer concerts at The Garden.

For the three months ended September 30, 2025, the increase in food, beverage and merchandise direct operating expenses was primarily driven by the related increase in food and beverage sales at concerts held at the Company’s venues and the related increase in food and beverage sales from other live entertainment and sporting events (excluding the Knicks and Rangers).

Selling, general, and administrative expenses

For the three and nine months ended March 31, 2025, selling, general, and administrative expenses decreased $1,833 and increased $3,891, respectively, as compared to the prior year period.

For the three months ended March 31, 2025, the decrease of $1,833 was primarily due to a decrease in employee compensation and benefits partially offset by other net cost increases.

For the nine months ended March 31, 2025, the increase of $3,891 was primarily due to (i) higher rent expense, and (ii) an increase in employee compensation and benefits, including executive management transition costs of $4,562 recognized in the current year period partially offset by (iii) decreases in professional fees and other costs.

For the three months ended September 30, 2025, selling, general, and administrative expenses increased $10,839 as compared to the prior year period primarily due to an increase in employee compensation and benefits.

Depreciation and amortization

For the three and nine months ended March 31, 2025, depreciation and amortization increased $1,190 and $2,364, respectively, as compared to the prior year period primarily due to the increase in fixed assets in the first and second quarter of Fiscal Year 2025.

For the three months ended September 30, 2025, depreciation and amortization increased $293 as compared to the prior year period primarily due to fixed asset additions made during Fiscal Year 2025 and the first quarter of Fiscal Year 2026.

Impairment of long-lived assets

For the three and nine months ended March 31, 2025, impairment of long-lived assets increased $9,700, as compared to the prior year period due to impairment losses recognized on the Company’s right-of-use assets due to the decision to stop utilizing one of the floors in its New York office in the third quarter of Fiscal Year 2025.

For the three months ended September 30, 2025, impairment of long-lived assets increased $13,782 as compared to the prior year period, primarily due to impairment losses recognized on the Company’s right-of-use lease assets in its New York corporate office in the first quarter of Fiscal Year 2026.

Restructuring charges

For the three and nine months ended March 31, 2025, restructuring charges decreased $2,278 and $14,789, respectively, as compared to the prior year period, which reflects termination benefits provided in the prior year period due to a workforce reduction of certain executives and employees.

Operating income

For the three and nine months ended March 31, 2025, operating income increased by $10,524 and $27,045, respectively, as compared to the prior year period.

The increase in operating income for the three months ended March 31, 2025 was primarily due to an increase in revenues and, to a lesser extent, a decrease in direct operating expenses and restructuring charges, partially offset by an increase in impairment of long-lived assets.

The increase in operating income for the nine months ended March 31, 2025 was primarily due to an increase in revenues, a decrease in direct operating expenses and lower restructuring charges, partially offset by an increase in selling, general and administrative expenses and impairment of long-lived assets.

For the three months ended September 30, 2025, restructuring charges increased $1,230 as compared to the prior year period, which reflects termination benefits provided in the first quarter of Fiscal Year 2026 due to a workforce reduction.

Operating loss

For the three months ended September 30, 2025, operating loss increased by $11,257 as compared to the prior year period, primarily due to an increase in impairment of long-lived assets, including right-of-use asset and related lease costs, selling, general, and administrative expenses, and direct operating expenses, partially offset by an increase in revenues.

Interest income

For the three and nine months ended March 31, 2025, interest income increased $369 and decreased $828, respectively, as compared to the prior year period.

The increase in interest income for the three months ended March 31, 2025 was primarily due to higher average balances in the Company’s cash, cash equivalents and restricted cash for the quarter.

The decrease in interest income for the nine months ended March 31, 2025 was primarily due to lower average balances for the first half of Fiscal Year 2025 and lower interest rates in the Company’s cash, cash equivalents and restricted cash.

For the three months ended September 30, 2025, interest income increased $148 as compared to the prior year period, primarily due to higher average balances in the Company’s cash, cash equivalents and restricted cash for the quarter.

Interest expense

For the three and nine months ended March 31, 2025, interest expense decreased $2,625 and $4,963, respectively, as compared to the prior year period primarily due to lower average borrowings and lower interest rates under the National Properties Facilities (as defined below under Liquidity and Capital Resources).

Other (expense) income, net

For the three months ended March 31, 2025, other expense, net was $949, as compared to other income, net of $78 in the corresponding prior year period.

The change for the three months ended March 31, 2025 was primarily due to (i) a change in unrealized gains to an unrealized loss of $837 associated with the investment in Townsquare Media, Inc., and (ii) a change in unrealized gains to an unrealized loss of $278 associated with the Company’s Executive Deferred Compensation Plan.

For the nine months ended March 31, 2025, other expense, net was $2,763, as compared to $1,545 in the corresponding prior year period.

The change for the nine months ended March 31, 2025 was primarily due to (i) the absence of a $1,658 net gain associated with the investment in DraftKings Inc.

recognized in the prior period, (ii) a decrease in dividend income of $455 associated with the

investment in Townsquare Media, as compared to the prior period, and (iii) a decrease in unrealized gains from the Company’s other investments of $323, as compared to the prior period, partially offset by (iv) a decrease in realized and unrealized loss of $1,232 associated with the investment in Townsquare Media.

Income tax expense

For the three months ended September 30, 2025, interest expense decreased $3,015 as compared to the prior year period primarily due to lower average borrowing rates under the National Properties Facilities (as defined below under Liquidity and Capital Resources).

Other expense, net

For the three months ended September 30, 2025, other expense, net decreased $597 as compared to the prior year period primarily due to (i) lower net periodic benefit costs associated with the Company’s funded and unfunded and qualified and non-qualified defined benefit plans, and (ii) an increase in unrealized gains associated with the Company’s Executive Deferred Compensation Plan.

Income tax benefit

In general, the Company is required to use an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in an interim period.

The estimated annual effective tax rate is revised on a quarterly basis.

Income tax expense for the three and nine months ended March 31, 2025 of $7,252 and $43,124, respectively, reflects an effective tax rate of 47% and 40%, respectively.

The estimated annual effective tax rate exceeds the statutory federal tax rate of 21% primarily due to state and local taxes and nondeductible officers’ compensation.

The Company expects to utilize its net operating losses during Fiscal Year 2025 and as such is a federal taxpayer.

Income tax expense for the three and nine months ended March 31, 2024 of $2 and $397 , respectively, reflects an effective tax rate of 0% and 1%, respectively.

The estimated annual effective tax rate is lower than the statutory federal tax rate of 21% primarily due to the offset of the valuation allowance, partially offset by state and local taxes.

Adjusted operating income (loss) (“AOI”)

During the third quarter of Fiscal Year 2024, the Company amended the definition of adjusted operating income so that the non-cash portion of operating lease revenue related to the Company’s Arena License Agreements with MSG Sports is no longer excluded in all periods presented.

The Company evaluates its performance based on several factors, of which the key financial measure is adjusted operating income (loss), a non-GAAP financial measure.

We define adjusted operating income (loss) as operating income (loss) excluding:

(i) depreciation, amortization and impairments of property and equipment, goodwill and other long-lived assets, including right-of-use assets and related lease costs,

Income tax benefit for the three months ended September 30, 2025 of $18,765 reflects an effective tax rate of 46%.

The estimated annual effective tax rate exceeds the statutory federal tax rate of 21% primarily due to state and local taxes and excess tax deficiencies related to share-based compensation, partially offset by nondeductible officers’ compensation.

Income tax benefit for the three months ended September 30, 2024 of $13,601 reflects an effective tax rate of 41%.

The estimated annual effective tax rate exceeds the statutory federal tax rate of 21% primarily due to state taxes and excess tax deficiencies related to share-based compensation.

Adjusted operating income (“AOI”)

The Company evaluates its performance based on several factors, of which the key financial measure is adjusted operating income, a non-GAAP financial measure.

We define adjusted operating income as operating loss excluding:

(i) depreciation, amortization and impairments of property and equipment, goodwill and other long-lived assets, including right-of-use lease assets and related lease costs,

(ii) share-based compensation expense,

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(viii) gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan.

The Company excludes impairments of long-lived assets, including right-of-use assets and related lease costs, as these expenses do not represent core business operating results of the Company.

The Company excludes impairments of long-lived assets, including right-of-use lease assets and related lease costs, as these expenses do not represent core business operating results of the Company.

The Company believes that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the Company’s business without regard to the settlement of an obligation that is not expected to be made in cash.

The Company eliminates merger, spin-off, and acquisition-related transaction costs, when applicable, because the Company does not consider such costs to be indicative of the ongoing operating performance of the Company as they result from an event that is of a non-recurring nature, thereby enhancing comparability.

In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan, provides investors with a clearer picture of the Company’s operating performance given that, in accordance with GAAP, gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan are recognized in Operating income whereas gains and losses related to the remeasurement of the assets under the executive deferred compensation plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recognized in Other (expense) income, net, which is not reflected in Operating income.

In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan, provides investors with a clearer picture of the Company’s operating performance given that, in accordance with GAAP, gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan are recognized in Operating loss whereas gains and losses related to the remeasurement of the assets under the executive deferred compensation plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recognized in Other expense, net, which is not reflected in Operating loss.

The Company believes AOI is an appropriate measure for evaluating the operating performance of the Company on a consolidated basis.

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The Company uses revenues and AOI measures as the most important indicators of its business performance and evaluates management’s effectiveness with specific reference to these indicators.

AOI should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP.

AOI should be viewed as a supplement to and not a substitute for operating loss, net loss, cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP.

Since AOI is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies.

The Company has presented the components that reconcile operating income (loss), the most directly comparable GAAP financial measure, to AOI.

The following is a reconciliation of operating income to adjusted operating income for the three and nine months ended March 31, 2025 as compared to the prior year periods:

The Company has presented the components that reconcile operating loss, the most directly comparable GAAP financial measure, to AOI.

The following is a reconciliation of operating loss to adjusted operating income for the three months ended September 30, 2025 as compared to the prior year period:

Three Months Ended

March 31, Change

2025 2024 Amount Percentage

Operating income $ 27,327 $ 16,803 $ 10,524 63 %

Depreciation and amortization 14,372 13,182 1,190 9 %

Impairment of long-lived assets 9,700 — 9,700 NM

Share-based compensation (excluding share-based compensation included in restructuring charges)

6,250 5,611 639 11 %

Restructuring charges 84 2,362 (2,278) (96) %

Amortization for capitalized cloud computing arrangement costs 183 388 (205) (53) %

Remeasurement of deferred compensation plan liabilities (45) 191 (236) NM

Adjusted operating income $ 57,871 $ 38,537 $ 19,334 50 %

Nine Months Ended

March 31, Change

September 30, Change

2025 2024 Amount Percentage

Operating income $ 147,846 $ 120,801 $ 27,045 22 %

Operating loss $ (29,739) $ (18,482) $ (11,257) (61) %

Depreciation and amortization 14,074 13,781 293 2 %

Impairment of long-lived assets 13,782 — 13,782 NM

Share-based compensation (excluding share-based compensation included in restructuring charges) 21,834 19,561 2,273 12 %

Restructuring charges 14 14,803 (14,789) (100) %

Merger, spin-off , and acquisition-related costs (a)

1,361 2,035 (674) (33) %

Share-based compensation 7,293 6,262 1,031 16 %

Restructuring charges (credits) 1,190 (40) 1,230 NM

Amortization for capitalized cloud computing arrangement costs 175 168 7 4 %

Remeasurement of deferred compensation plan liabilities 306 220 86 39 %

Adjusted operating income $ 223,792 $ 198,397 $ 25,395 13 %

Adjusted operating income $ 7,081 $ 1,909 $ 5,172 NM

________________________________________________________

(a) This adjustment represents non-recurring transaction costs incurred by the Company.

NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful .

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Sources and Uses of Liquidity

Our primary sources of liquidity are cash and cash equivalents, cash flows from our business operations and available borrowing capacity under the National Properties Revolving Credit Facility (as defined below) .

Our primary sources of liquidity are cash and cash equivalents, cash flows from the operations of our businesses and available borrowing capacity under the National Properties Revolving Credit Facility (as defined below) .

Our principal uses of cash include working capital-related items (including funding our operations), capital spending, debt service, investments and related loans and advances that we may fund from time to time.

We may also use cash to continue to repurchase shares of our Class Common A Stock pursuant to the share repurchase program authorized by our Board of Directors on March 29, 2023, of which there was approximately $70,000 remaining as of March 31, 2025.

We may also use cash to continue to repurchase shares of our Class A Common Stock pursuant to the share repurchase program authorized by our Board of Directors on March 29, 2023, of which there was $44,796 remaining as of September 30, 2025.

Our decisions as to the use of our available liquidity will be based upon the ongoing review of the funding needs of the business, the optimal allocation of cash resources, and the timing of cash flow generation.

To the extent that we desire to access alternative sources of funding through the capital and credit markets, challenging U.S.

and global economic and market conditions could adversely impact our ability to do so at that time.

To the extent that we desire to access alternative sources of funding through the capital and credit markets, market conditions could adversely impact our ability to do so at that time.

We regularly monitor and assess our ability to meet our net funding and investing requirements.

As of March 31, 2025, the Company’s unrestricted cash and cash equivalents balance was $88,953.

The principal balance of the Company’s total debt outstanding as of March 31, 2025 was $613,438 and the Company had $131,633 of available borrowing capacity under the National Properties Revolving Credit Facility.

We believe we have sufficient liquidity from cash and cash equivalents, available borrowing capacity under our credit facilities and cash flows from operations to fund our operations and satisfy any obligations for the foreseeable future.

As of September 30, 2025, the Company’s unrestricted cash and cash equivalents balance was $29,950.

The principal balance of the Company’s total debt outstanding as of September 30, 2025 was $621,758 and the Company had $112,573 of available borrowing capacity under the National Properties Revolving Credit Facility.

We believe we have sufficient liquidity from cash and cash equivalents, available borrowing capacity under the National Properties Revolving Credit Facility and cash flows from operations to fund our operations and satisfy any obligations for the foreseeable future.

Financing Agreements

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National Properties Facilities

MSG National Properties, LLC (“MSG National Properties”), MSG Entertainment Holdings, LLC (“MSG Entertainment Holdings”) and certain subsidiaries of MSG National Properties are party to a credit agreement dated June 30, 2022 (as amended, the “National Properties Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent and the lenders and L/C issuers party thereto, providing for a five-year, $650,000 senior secured term loan facility (the “National Properties Term Loan Facility”) and a five-year, $150,000 revolving credit facility (the “National Properties Revolving Credit Facility” and, together with the National Properties Term Loan Facility, the “National Properties Facilities”).

On June 27, 2025, MSG National Properties, MSG Entertainment Holdings and certain subsidiaries of MSG National Properties entered into Amendment No.

4 (“Amendment No.

4”) to the credit agreement dated June 30, 2022 (as amended, supplemented and otherwise modified prior to June 27, 2025, the “Prior National Properties Credit Agreement” and, as amended by Amendment No.

4, the “National Properties Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent, and the lenders and letter of credit issuers party thereto, pursuant to which, among other things, (i) the term loan facility under the Prior National Properties Credit Agreement (the “Prior National Properties Term Loan Facility”) was refinanced in its entirety with a five-year $609,375 senior secured term loan facility (the “National Properties Term Loan Facility”) and (ii) the revolving credit facility under the Prior National Properties Credit Agreement (the “Prior National Properties Revolving Credit Facility” and, together with the Prior National Properties Term Loan Facility, the “Prior National Properties Facilities”) was refinanced in its entirety with a five-year, $150,000 revolving credit facility (the “National Properties Revolving Credit Facility” and, together with the National Properties Term Loan Facility, the “National Properties Facilities”).

Up to $25,000 of the National Properties Revolving Credit Facility is available for the issuance of letters of credit.

As of March 31, 2025, outstanding letters of credit were $18,367 and the remaining balance available under the National Properties Revolving Credit Facility was $131,633 .

As of September 30, 2025, outstanding letters of credit were $17,427 and the remaining balance available under the National Properties Revolving Credit Facility was $112,573.

During October 2025, the Company paid $20,000 to fully settle the outstanding borrowings under the National Properties Revolving Credit Facility.

Interest Rates.

Borrowings under the current National Properties Facilities bear interest at a floating rate, which at the option of MSG National Properties may be either (a) a base rate plus an applicable margin ranging from 1.50% to 2.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries, or (b) adjusted Term SOFR (i.e., Term SOFR plus 0.10%) plus an applicable margin ranging from 2.50% to 3.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries.

Borrowings under the National Properties Facilities bear interest at a floating rate, which at the option of MSG National Properties may be either (a) Term SOFR plus an applicable margin ranging from 1.75% to 2.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries, or (b) a base rate plus an applicable margin ranging from 0.75% to 1.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries.

The National Properties Credit Agreement requires MSG National Properties to pay a commitment fee ranging from 0.20% to 0.30% in respect of the daily unused commitments under the National Properties Revolving Credit Facility.

MSG National Properties is also required to pay customary letter of credit fees, as well as fronting fees, to banks that issue letters of credit pursuant to the National Properties Credit Agreement.

The interest rate on the National Properties Facilities as of March 31, 2025 was 6.92%.

As of September 30, 2025, the interest rates on the National Properties Term Loan Facility and the National Properties Revolving Credit Facility were 6.41% and 6.39%, respectively.

Principal Repayments.

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The National Properties Facilities will mature on June 27, 2030.

The principal obligations under the National Properties Term Loan Facility are to be repaid in quarterly installments beginning with the fiscal quarter ended March 31, 2023, in an aggregate amount equal to 2.50% per annum (0.625% per quarter), stepping up to 5.0% per annum (1.25% per quarter) in the fiscal quarter ending September 30, 2025, with the balance due at the maturity of the facility.

The principal obligations under the National Properties Term Loan Facility are to be repaid in quarterly installments beginning with the fiscal quarter ended September 30, 2025, in an aggregate amount equal to 5.00% per annum (1.25% per quarter) with the balance due at the maturity of the facility.

The principal obligations under the National Properties Revolving Credit Facility are due at the maturity of the facility.

Under certain circumstances, MSG National Properties is required to make mandatory prepayments on loans outstanding, including prepayments in an amount equal to the net cash proceeds of certain sales of assets or casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights), subject to certain exceptions.

The National Properties Credit Agreement includes financial covenants requiring MSG National Properties and its restricted subsidiaries to maintain a specified minimum liquidity level, a specified minimum debt service coverage ratio and a specified maximum total leverage ratio.

The minimum liquidity level is set at $50,000, and is tested based on the level of average daily liquidity, consisting of cash and cash equivalents and available revolving commitments, over the last month of each quarter over the life of the National Properties Facilities.

The debt service coverage ratio covenant began testing in the fiscal quarter ended December 31, 2022, and was set at a ratio of 2:1 before stepping up to 2.5:1 in the fiscal quarter ended September 30, 2024.

The leverage ratio covenant began testing in the fiscal quarter ended June 30, 2023.

It is tested based on the ratio of MSG National Properties and its restricted subsidiaries’ consolidated total indebtedness to adjusted operating income, with an initial maximum ratio of 6:1, which stepped down to 5.5:1 in the fiscal quarter ended June 30, 2024 and steps down to 4.5:1 in the fiscal quarter ending June 30, 2026.

As of March 31, 2025, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Credit Agreement.

The National Properties Credit Agreement includes financial covenants requiring MSG National Properties and its restricted subsidiaries to maintain a specified minimum debt service coverage ratio and specified maximum total leverage ratio.

The debt service coverage ratio covenant is set at a ratio of 2.50:1.

The leverage ratio covenant is tested based on the ratio of MSG National Properties and its restricted subsidiaries’ consolidated total indebtedness to adjusted operating income, with a maximum ratio of 3.50:1.

As of September 30, 2025, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Credit Agreement.

In addition to the financial covenants discussed above, the National Properties Credit Agreement and the related security agreement contain certain customary representations and warranties, affirmative and negative covenants and events of default.

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All obligations under the National Properties Facilities, including the guarantees of those obligations, are secured by certain of the assets of MSG National Properties and the Subsidiary Guarantors (collectively, “Collateral”) including, but not limited to, a pledge of some or all of the equity interests held directly or indirectly by MSG National Properties in each Subsidiary Guarantor.

The Collateral does not include, among other things, any interests in The Garden or the leasehold interests in Radio City Music Hall or the Beacon Theatre.

The Collateral does not include, among other things, any interests in The Garden or The Chicago Theatre or the leasehold interests in Radio City Music Hall or the Beacon Theatre.

Contractual Obligations

During the nine months ended March 31, 2025, the Company did not have any material changes in its non-cancelable contractual obligations (other than activities in the ordinary course of business).

During the three months ended September 30, 2025, the Company did not have any material changes in its non-cancelable contractual obligations (other than activities in the ordinary course of business).

Property and Equipment, Net and Note 7.

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Cash Flow Discussion

As of March 31, 2025, cash, cash equivalents and restricted cash totaled $89,474, as compared to $33,555 as of June 30, 2024.

The following table summarizes the Company’s cash flow activities for the nine months ended March 31, 2025 and 2024:

Nine Months Ended

Net cash provided by operating activities $ 142,308 $ 111,054

As of September 30, 2025, cash, cash equivalents and restricted cash totaled $30,471, as compared to $43,538 as of June 30, 2025.

The following table summarizes the Company’s cash flow activities for the three months ended September 30, 2025 and 2024:

Three Months Ended

September 30,

Net cash provided by (used in) operating activities $ 19,808 $ (27,359)

Net cash used in investing activities (6,798) (6,690)

Net cash used in financing activities (67,010) (94,476)

Net increase (decrease) in cash, cash equivalents, and restricted cash $ 55,919 $ (56,047)

Net cash (used in) provided by financing activities (26,077) 38,107

Net (decrease) increase in cash, cash equivalents, and restricted cash $ (13,067) $ 4,058

Operating Activities

Net cash provided by operating activities for the nine months ended March 31, 2025 increased by $31,254 as compared to the prior year period, primarily due to an increase in Net income adjusted for non-cash items of $22,679, and an increase in cash flows from changes in working capital of $8,575.

The increase in cash flows from changes in working capital was primarily driven by (i) a smaller increase in accounts receivable as compared to the prior year period, due to the timing of cash collections, and (ii) an increase in the net operating lease liabilities in the current year period, as the Company took possession of additional office space in New York.

These increases were partially offset by (iii) negative net cash outflows from related party receivables and payables, due to the timing

and settlement of the underlying related party transactions, (iv) a decrease in accounts payable, due to the timing of payments to vendors, (v) a decrease in accrued and other current and non-current liabilities, primarily as a result of timing of settlements with promoters, and (vi) a smaller increase in deferred revenue, due to the timing of billing and recognition of suite license and sponsor signage revenues, in each case as compared to the nine months ended March 31, 2024.

Net cash provided by operating activities for the three months ended September 30, 2025 increased by $47,167 as compared to the prior year period, primarily due to higher net income adjusted for non-cash items of $7,118, and an increase in cash flows from changes in working capital of $40,049.

The increase in cash flows from changes in working capital was primarily driven by (i) a smaller net cash outflow for accrued and other current and non-current liabilities settled, primarily as a result of lower employee related costs, and their associated payroll tax costs, and (ii) net cash inflows from related party receivables and payables, due to the timing and settlement of the underlying related party transactions.

These increases were partially offset by (iii) an increase in payments for prepaid expenses and other current and non-current assets, primarily related to contractual revenue sharing expenses related to suite licenses paid to MSG Sports, and (iv) a decrease in accounts payable, due to the timing of payments to vendors, in each case as compared to the three months ended September 30, 2024.

Investing Activities

Net cash used in investing activities for the nine months ended March 31, 2025 decreased by $53,246 to $19,379 as compared to the prior year period primarily due to (i) the absence of a loan to a related party under the delayed draw term loan facility, partially offset by fewer proceeds received from the sale of investments in the current year period as compared to the prior year period.

Net cash used in investing activities for the three months ended September 30, 2025 increased by $108 to $6,798 as compared to the prior year period primarily due to (i) the absence of proceeds received from the sale of investments, and (ii) a slight reduction in capital expenditures, both as compared to the prior year period.

Financing Activities

Net cash used in financing activities for the nine months ended March 31, 2025 decreased by $27,466 to $67,010 as compared to the prior year period primarily due to (i) a decrease in principal debt repayments, and (ii) a decrease in stock repurchases, partially offset by (iii) a decrease in proceeds received from the National Properties Revolving Credit Facility.

Net cash used in financing activities for the three months ended September 30, 2025 increased by $64,184 to $26,077 as compared to the prior year period primarily due to (i) an increase in stock repurchases, (ii) a decrease in proceeds received from the National Properties Revolving Credit Facility, and (iii) incremental principal repayments under the National Properties Revolving Facilities.

Seasonality of Our Business

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis