Madison Square Garden Entertainment Corp. 10-Q

Item 1. Financial Statements (Unaudited) MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except per share data) As of September 30, June 30, 2025 2025 ASSETS Current Assets: Cash, cash equivalents, and restricted cash $ 30,471 $ 43,538 Accounts receivable, net 81,184 66,781 Related party receivables, current 23,762 22,487 Prepaid expenses and other current assets 128,800 104,326 Total current assets 264,217 237,132 Non-Current Assets: Property and equipment, net 612,611 621,075 Right-of-use lease assets 463,952 484,544 Goodwill 69,041 69,041 Indefinite-lived intangible assets 63,801 63,801 Deferred tax assets, net 72,816 54,072 Other non-current assets 133,389 140,177 Total assets $ 1,679,827 $ 1,669,842 LIABILITIES AND DEFICIT Current Liabilities: Accounts payable, accrued and other current liabilities $ 153,765 $ 184,360 Related party payables, current 45,432 23,830 Long-term debt, current 30,469 30,469 Operating lease liabilities, current 32,310 35,100 Deferred revenue 285,681 228,642 Total current liabilities 547,657 502,401 Non-Current Liabilities: Long-term debt, net of deferred financing costs 581,682 568,780 Operating lease liabilities, non-current 570,769 566,484 Other non-current liabilities 45,517 45,477 Total liabilities 1,745,625 1,683,142 Commitments and contingencies (see Note 7) Deficit: Class A Common Stock (a) 465 461 Class B Common Stock (b) 69 69 Additional paid-in-capital 38,802 44,843 Treasury stock at cost ( 6,106 and 5,483 shares outstanding as of September 30, 2025 and June 30, 2025, respectively) ( 205,204 ) ( 180,204 ) Retained earnings 131,380 153,034 Accumulated other comprehensive loss ( 31,310 ) ( 31,503 ) Total deficit ( 65,798 ) ( 13,300 ) Total liabilities and deficit $ 1,679,827 $ 1,669,842 _________________ (a) Class A Common Stock, $ 0.01 par value per share, 120,000 shares authorized; 46,468 and 46,076 shares issued as of September 30, 2025 and June 30, 2025, respectively. (b) Class B Common Stock, $ 0.01 par value per share, 30,000 shares authorized; 6,867 shares issued as of September 30, 2025 and June 30, 2025. See accompanying notes to the unaudited condensed consolidated financial statements. 2 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data) Three Months Ended September 30, 2025 2024 Revenues: Revenues from entertainment offerings $ 131,310 $ 115,081 Food, beverage, and merchandise revenues 22,837 18,975 Arena license fees and other leasing revenue 4,115 4,658 Total revenues (a) 158,262 138,714 Direct operating expenses: Entertainment offerings, arena license fees, and other leasing direct operating expenses ( 88,558 ) ( 86,466 ) Food, beverage, and merchandise direct operating expenses ( 13,812 ) ( 11,243 ) Total direct operating expenses (a) ( 102,370 ) ( 97,709 ) Selling, general, and administrative expenses (a) ( 56,585 ) ( 45,746 ) Depreciation and amortization ( 14,074 ) ( 13,781 ) Impairment of long-lived assets ( 13,782 ) — Restructuring (charges) credits ( 1,190 ) 40 Operating loss ( 29,739 ) ( 18,482 ) Interest income 520 372 Interest expense ( 11,028 ) ( 14,043 ) Other expense, net ( 172 ) ( 769 ) Loss from operations before income taxes ( 40,419 ) ( 32,922 ) Income tax benefit 18,765 13,601 Net loss $ ( 21,654 ) $ ( 19,321 ) Loss per share: Basic $ ( 0.46 ) $ ( 0.40 ) Diluted $ ( 0.46 ) $ ( 0.40 ) Weighted-average number of shares of common stock: Basic 47,482 48,217 Diluted 47,482 48,217 _________________ (a) See Note 10 . Related Party Transactions for further information on related party arrangements. See accompanying notes to the unaudited condensed consolidated financial statements. 3 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (in thousands) Three Months Ended September 30, 2025 2024 Net loss $ ( 21,654 ) $ ( 19,321 ) Other comprehensive income, before income taxes: Pension plans and other postretirement plans adjustments 295 541 Income tax expense related to items of other comprehensive income ( 102 ) ( 185 ) Other comprehensive income, net of income taxes 193 356 Comprehensive loss $ ( 21,461 ) $ ( 18,965 ) See accompanying notes to the unaudited condensed consolidated financial statements. 4 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Three Months Ended September 30, 2025 2024 OPERATING ACTIVITIES: Net loss $ ( 21,654 ) $ ( 19,321 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 14,074 13,781 Impairment of long-lived assets 13,782 — Share-based compensation expense 7,293 6,262 Amortization of deferred financing costs 527 852 Deferred income tax benefit ( 18,846 ) ( 13,612 ) Net unrealized and realized gain on equity investments with readily determinable fair value ( 155 ) ( 124 ) Other non-cash adjustments 29 94 Change in assets and liabilities: Accounts receivable, net ( 14,432 ) ( 18,360 ) Related party receivables and payables, net 20,327 ( 2,134 ) Prepaid expenses and other current and non-current assets ( 16,686 ) ( 6,457 ) Accounts payable 2,166 5,576 Accrued and other current, and non-current liabilities ( 31,486 ) ( 70,224 ) Deferred revenue 56,564 55,374 Operating lease right-of-use assets and lease liabilities 8,305 20,934 Net cash provided by (used in) operating activities $ 19,808 $ ( 27,359 ) INVESTING ACTIVITIES: Capital expenditures $ ( 5,953 ) $ ( 5,905 ) Proceeds from sale of investments — 55 Other investing activities ( 845 ) ( 840 ) Net cash used in investing activities $ ( 6,798 ) $ ( 6,690 ) FINANCING ACTIVITIES: Proceeds from revolving credit facility $ 35,000 $ 55,000 Principal repayment on long-term debt ( 22,617 ) ( 4,063 ) Repurchases of Class A common stock ( 25,000 ) — Taxes paid in lieu of shares issued for equity-based compensation ( 13,330 ) ( 12,830 ) Payments for debt financing costs ( 130 ) — 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 Cash, cash equivalents, and restricted cash, beginning of period 43,538 33,555 Cash, cash equivalents, and restricted cash, end of period $ 30,471 $ 37,613 Non-cash investing and financing activities: Capital expenditures incurred but not yet paid or paid by landlord $ 487 $ 15,379 Non-cash financing lease obligation $ — $ ( 130 ) See accompanying notes to the unaudited condensed consolidated financial statements. 5 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONDENSED CONSOLIDATED STATEMENTS OF DEFICIT (UNAUDITED) (in thousands) Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Loss Total Deficit Balance as of June 30, 2025 $ 530 $ 44,843 $ ( 180,204 ) $ 153,034 $ ( 31,503 ) $ ( 13,300 ) Net loss — — — ( 21,654 ) — ( 21,654 ) Other comprehensive income — — — — 193 193 Share-based compensation — 7,293 — — — 7,293 Tax withholding associated with shares issued for share-based compensation 4 ( 13,334 ) — — — ( 13,330 ) Repurchases of Class A common stock — — ( 25,000 ) — — ( 25,000 ) Balance as of September 30, 2025 $ 534 $ 38,802 $ ( 205,204 ) $ 131,380 $ ( 31,310 ) $ ( 65,798 ) Balance as of June 30, 2024 525 33,481 ( 140,512 ) 115,603 ( 32,262 ) $ ( 23,165 ) Net loss — — — ( 19,321 ) — ( 19,321 ) Other comprehensive income — — — — 356 356 Share-based compensation — 6,262 — — — 6,262 Tax withholding associated with shares issued for share-based compensation 4 ( 12,834 ) — — — ( 12,830 ) Balance as of September 30, 2024 $ 529 $ 26,909 $ ( 140,512 ) $ 96,282 $ ( 31,906 ) $ ( 48,698 ) See accompanying notes to the unaudited condensed consolidated financial statements. 6 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) All amounts included in the following Notes to Condensed Consolidated Financial Statements (unaudited) are presented in thousands, except per share data or as otherwise noted. Note 1. Description of Business and Basis of Presentation Description of Business Madison Square Garden Entertainment Corp. (together with its subsidiaries, as applicable, the “Company” or “MSG Entertainment”), is a live entertainment company comprised of iconic venues and marquee entertainment content. Utilizing the Company’s powerful brands and live entertainment expertise, the Company delivers unique experiences that set the standard for excellence and innovation while forging deep connections with diverse and passionate audiences. The Company operates and reports financial information in one reportable segment. The Company’s decision to organize as one reportable segment is based upon its internal organizational structure, the manner in which its operations are managed, and the criteria used by the Company’s Executive Chairman and Chief Executive Officer, its Chief Operating Decision Maker (“CODM”), to evaluate segment performance. The Company’s CODM reviews total company operating results to assess overall performance and allocate resources. The Company’s portfolio of venues includes: Madison Square Garden (“The Garden”), The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. The Company also owns and produces the original production, the Christmas Spectacular Starring the Radio City Rockettes (the “ Christmas Spectacular ”). In addition, the Company has an entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually. The Company conducts a significant portion of its operations at venues that it either owns or operates under long-term leases. The Company owns The Garden, The Theater at Madison Square Garden and The Chicago Theatre, and leases Radio City Music Hall and the Beacon Theatre. 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. Basis of Presentation The Company reports on a fiscal year basis ending on June 30 th (“Fiscal Year”). In these unaudited condensed consolidated financial statements, the fiscal years ending or ended on June 30, 2026, 2025 and 2024, respectively, are referred to as “Fiscal Year 2026,” “Fiscal Year 2025,” and “Fiscal Year 2024,” respectively. The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the Company’s audited consolidated and combined financial statements and notes thereto as of June 30, 2025 and 2024 and for the years ended June 30, 2025, 2024 and 2023 (the “Audited Consolidated and Combined Annual Financial Statements”) included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025 filed with the SEC on August 13, 2025. In the opinion of the Company, the accompanying financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2025 and its results of operations for the three months ended September 30, 2025 and 2024 and cash flows for the three months ended September 30, 2025 and 2024. The condensed consolidated balance sheet as of June 30, 2025 was derived from the Audited Consolidated and Combined Annual Financial Statements but does not contain all of the footnote disclosures from the Audited Consolidated and Combined Annual Financial Statements. The results of operations for the periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year. As a result of the production of the Christmas Spectacular and arena license fees in connection with the use of The Garden by the New York Knicks (the “Knicks”) of the National Basketball Association and the New York Rangers (the “Rangers”) of the National Hockey League, the Company generally earns a disproportionate share of its annual revenues in the second and third quarters of its fiscal year. Reclassifications For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation in accordance with GAAP. 7 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 2. Summary of Significant Accounting Policies A. Principles of Consolidation All intercompany accounts and balances within the Company’s consolidated businesses have been eliminated. B. Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the provision for credit losses, goodwill, intangible assets, other long-lived assets, deferred tax assets, pension and other postretirement benefit obligations and the related net periodic benefit cost, and other liabilities. In addition, estimates are used in revenue recognition, depreciation and amortization, litigation matters and other matters. Management believes its use of estimates in the financial statements to be reasonable. Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and, as such, these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the Company’s condensed consolidated financial statements in future periods. C. Revenue Recognition and Direct Operating Expenses The Company generates revenue from the provision of services and sale of tangible products, as well as leasing transactions. Revenues are presented under these three categories in the condensed consolidated statements of operations, as described below. Service revenue, presented as “Revenues from entertainment offerings,” primarily includes: • Ticket sales and other ticket-related revenue • Venue license fees for events held at the Company’s venues that the Company does not produce or promote/co-promote • Sponsorship and signage • Suite licenses and single night suite rentals • Advertising commissions and related service fees • Commissions related to the sale of merchandise for which the Company is not the principal in the underlying transaction Direct operating expenses related to the provision of services and leasing, presented as “Entertainment offerings, arena license fees, and other leasing direct operating expenses,” primarily include: (a) • Event production costs including direct personnel expenses • Venue operations and infrastructure costs (a) • Venue rental costs for venues not owned by the Company • Sponsorship and signage fulfillment costs • Contractual revenue sharing expenses related to suite licenses and certain internal signage • Event-related marketing and advertising costs Product revenue, presented as “Food, beverage, and merchandise revenues,” includes: • Sales of food and beverage during events held at the Company’s venues • Sales of the Company’s merchandise at the Company’s venues and via traditional retail channels 8 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Direct operating expenses related to the sale of products, presented as “Food, beverage, and merchandise direct operating expenses,” include: • Costs of goods sold including direct personnel expenses • Contractual revenue sharing expenses related to food and beverage sold at events held by Madison Square Garden Sports Corp. (together with its subsidiaries, as applicable, “MSG Sports”) at The Garden Lease revenue, presented as “Arena license fees and other leasing revenue,” includes: • Rental fees related to the arena license agreements that require the Knicks and the Rangers to play their home games at The Garden (the “Arena License Agreements”) with MSG Sports • Sublease income _________________ (a) Leasing direct operating expenses materially consist of venue operations and infrastructure costs. Venue operations and infrastructure costs are not specifically allocated to each revenue category, but are instead attributed in their entirety to service revenue, which is the Company’s principal revenue category. As a result, the Company combines service and leasing direct operating expenses within “Entertainment offerings, arena license fees, and other leasing direct operating expenses” for presentation purposes. The Company recognizes revenue when, or as, performance obligations under the terms of a contract are satisfied, which generally occurs when, or as, control of promised goods or services is transferred to customers. Revenue is measured as the amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services (“transaction price”). To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and the determination of whether to include such estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available. The Company accounts for taxes collected from customers and remitted to governmental authorities on a net basis and excludes these amounts from revenues. In addition, the Company defers certain costs to fulfill the Company’s contracts with customers to the extent such costs relate directly to the contracts, are expected to generate resources that will be used to satisfy the Company’s performance obligations under the contracts, and are expected to be recovered through revenue generated under the contracts. Contract fulfillment costs are expensed as the Company satisfies the related performance obligations. Arrangements with Multiple Performance Obligations The Company enters into arrangements with multiple performance obligations, such as multi-year sponsorship agreements, which may derive revenues for the Company, as well as Sphere Entertainment and MSG Sports within a single arrangement. The Company also derives revenue from similar types of arrangements which are entered into by Sphere Entertainment Co. (together with its subsidiaries, as applicable, “Sphere Entertainment”) and MSG Sports. Payment terms for such arrangements can vary by contract, but payments are generally due in installments throughout the contractual term. The performance obligations included in each sponsorship agreement vary and may include advertising and other benefits such as, but not limited to, signage at The Garden and the Company’s other venues, digital advertising, event or property-specific advertising, as well as non-advertising benefits such as suite licenses and event tickets. Further, these arrangements may require the Company to purchase the customers’ goods or services. To the extent the Company’s multi-year arrangements provide for performance obligations that are consistent over the multi-year contractual term, such performance obligations generally meet the definition of a series as provided for under the accounting guidance. If performance obligations are concluded to meet the definition of a series, the contractual fees for all years during the contract term are aggregated and the related revenue is recognized proportionately as the underlying performance obligation is satisfied. The timing of revenue recognition for each performance obligation is dependent upon the facts and circumstances surrounding the Company’s satisfaction of its respective performance obligation. The Company allocates the transaction price for such arrangements to each performance obligation within the arrangement based on the estimated relative standalone selling price of the performance obligation. The Company’s process for determining its estimated standalone selling prices involves management’s judgment and considers multiple factors including company specific and market specific factors that may vary depending upon the unique facts and circumstances related to each performance obligation. Key factors considered by the Company in developing an estimated standalone selling price for its performance obligations include, but are not limited to, prices charged for similar performance obligations, the Company’s ongoing pricing strategy and policies, and consideration of pricing of similar performance obligations sold in other arrangements with multiple performance obligations. 9 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The Company may incur costs such as commissions to obtain its multi-year sponsorship agreements. The Company assesses such costs for capitalization on a contract by contract basis. To the extent costs are capitalized, the Company estimates the useful life of the related contract asset, which may be the underlying contract term or the estimated customer life depending on the facts and circumstances surrounding the contract. The contract asset is amortized over the estimated useful life. Principal versus Agent Revenue Recognition The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service before transfer to the customer. When the Company concludes that it controls the good or service before transfer to the customer, the Company is considered a principal in the transaction and records revenue on a gross basis. When the Company concludes that it does not control the good or service before transfer to the customer but arranges for another entity to provide the good or service, the Company acts as an agent and records revenue on a net basis in the amount it earns for its agency service. Contract Balances Amounts collected in advance of the Company’s satisfaction of its contractual performance obligations are recorded as a contract liability within Deferred revenue, and are recognized as the Company satisfies the related performance obligations. Amounts collected in advance of events for which the Company is not the promoter or co-promoter do not represent contract liabilities and are recorded within Accounts payable, accrued and other current liabilities on the accompanying consolidated balance sheets. Amounts recognized as revenue for which the Company has a right to consideration for goods or services transferred to customers and for which the Company does not have an unconditional right to bill as of the reporting date are recorded as contract assets. Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional. Production Costs for the Company’s Original Productions The Company defers certain costs of productions such as creative design, scenery, wardrobes, rehearsal and other related costs for the Company’s proprietary shows, reported in Prepaid expenses and other current assets and Other non-current assets. Deferred production costs are amortized on a straight-line basis over the course of a production’s performance period using the expected life of a show’s assets and are recorded as a component of Entertainment offerings, arena license fees, and other leasing direct operating expenses on the Company’s condensed consolidated statement of operations. Deferred production costs are subject to recoverability assessments whenever there is an indication of potential impairment. Revenue Sharing Expenses Revenue sharing expenses are determined based on contractual agreements between the Company and MSG Sports, primarily related to suite licenses, certain internal signage and in-venue food and beverage sales and are recorded as a component of Entertainment offerings, arena license fees, and other leasing direct operating expenses on the Company’s condensed consolidated statement of operations. D. Recently Issued and Adopted Accounting Pronouncements Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures , a final standard on improvements to income tax disclosures which applies to all entities subject to income taxes. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be helpful to understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, assess income tax information that affects cash flow forecasts and capital allocation decisions, and identify potential opportunities to increase future cash flows. This standard will be effective for the Company for the Fiscal Year 2026 annual reporting period and will be applied prospectively. The impact upon adoption will be on the Company’s income tax disclosures only, with no impact to the Company’s consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , as amended by ASU 2025-01, which was issued in January 2025, requiring disclosu re, in the notes to financial statements, of specified information about certain costs and expenses at each interim and annual reporting period. This standard will be effective for the Company for annual periods beginning with the Company’s fiscal year ending 2028, and interim reporting periods beginning with the Company’s fiscal year ending 2029. Early adoption of ASU 2024-03 is permitted. This amended ASU may be applied either prospectively to financial 10 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) statements issued for reporting periods after the effective date or retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this standard on the Company’s consolidated financial statements. In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides all entities with a practical expedient that allows for the assumption that current conditions as of the balance sheet date do not change for the remaining life of the asset when estimating credit losses for such assets. This standard will be effective for the Company in the first quarter of the Company’s fiscal year ending 2027, and early adoption is permitted. The Company is currently evaluating the potential impact of applying the allowable practical expedient on its estimates of credit losses for accounts receivable and contract assets. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software - Targeted Improvements to the Accounting for Internal-Use Software. This ASU amends the existing standard to remove all references to prescriptive and sequential software development project stages. Under this standard, an entity will be required to start capitalizing software costs when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. This standard will be effective for the Company in the first quarter of the Company’s fiscal year ending 2028, and early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on the Company’s consolidated financial statements. Note 3. Revenue Recognition All revenue recognized in the condensed consolidated statements of operations is considered to be revenue from contracts with customers in accordance with FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts with Customers , except for revenues from the Arena License Agreements and, leases and subleases that are accounted for in accordance with ASC Topic 842, Leases . The Company’s revenues by category are outlined in Note 2. Summary of Significant Accounting Policies. As of September 30, 2025 and June 30, 2025, the Company did not have any material provisions for credit losses on receivables or contract assets arising from contracts with customers. Disaggregation of Revenue The following table disaggregates the Company’s revenues by revenue category for the three months ended September 30, 2025 and 2024. The footnotes to the table provide additional disclosure with respect to the timing of transfer of goods or services to the customer for each category. Three Months Ended September 30, 2025 2024 Ticketing and venue license fee revenues (a) $ 85,848 $ 70,206 Sponsorship and signage, suite license, and advertising commission revenues (b) 43,908 42,890 Other (c) 1,554 1,985 Total revenues from entertainment offerings 131,310 115,081 Food, beverage, and merchandise revenues (d) 22,837 18,975 Total revenues from contracts with customers 154,147 134,056 Arena license fees and other leasing revenue 4,115 4,658 Total revenues $ 158,262 $ 138,714 _________________ (a) Amounts include ticket sales, including single night suite rentals and other ticket-related revenue, and venue license fees from the Company’s events such as (i) concerts, (ii) the presentation of the Christmas Spectacular and (iii) other live entertainment and sporting events. Revenues from entertainment offerings are generally recognized at a point in time. (b) Sponsorship and signage, suite license, and advertising commission revenues are generally recognized over time. (c) Other primarily consists of venue tours which are generally recognized at a point in time. (d) Food, beverage, and merchandise revenues are generally recognized at a point in time. 11 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Contract Balances The following table provides information about the opening and closing contract balances from the Company’s contracts with customers as of September 30, 2025 and June 30, 2025: As of September 30, 2025 June 30, 2025 Receivables from contracts with customers, net (a) $ 80,643 $ 69,513 Contract assets, current (b) $ 6,412 $ 7,648 Deferred revenue, including non-current portion (c) $ 292,607 $ 236,043 ________________ (a) Receivables from contracts with customers, net, which are reported in Accounts receivable, net and Related party receivables, current in the Company’s accompanying condensed consolidated balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers. As of September 30, 2025 and June 30, 2025, the Company’s receivables from contracts with customers above included $ 185 and $ 3,649 , respectively, related to various related parties. See Note 10. Related Party Transactions for further details on related party arrangements. (b) Contract assets, current, which are reported in Prepaid expenses and other current assets in the Company’s accompanying condensed consolidated balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to customers, for which the Company does not have an unconditional right to bill as of the reporting date. Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional. (c) Deferred revenue primarily relates to the Company’s receipt of consideration from customers in advance of the Company’s transfer of goods or services to the customers. Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to a customer. Revenue recognized for the three months ended September 30, 2025 relating to the Deferred revenue balance as of June 30, 2025 was 99,004 . Transaction Price Allocated to the Remaining Performance Obligations As of September 30, 2025, the Company’s remaining performance obligations under contracts were $ 621,153 , of which 54 % is expected to be recognized over the next two years and an additional 46 % of the balance is expected to be recognized thereafter. This primarily relates to performance obligations under sponsorship and suite license agreements that have original expected durations longer than one year and for which the consideration is not variable. In developing the estimated revenue, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less. Note 4. Investments As of September 30, 2025, the Company held an investment in Townsquare Media, Inc. (“Townsquare”), a media, entertainment and digital marketing solutions company that is listed on the New York Stock Exchange under the symbol “TSQ.” As of September 30, 2025, the Company also held other equity investments in trust under the Company’s Executive Deferred Compensation Plan. Refer to Note 13. Pension Plans and Other Postretirement Benefit Plans included in the Company’s Audited Consolidated and Combined Annual Financial Statements, for further details regarding the plan. The fair value of the Company’s equity investments with readily determinable fair values is determined based on quoted market prices in active markets, which are classified within Level I of the fair value hierarchy. The carrying value of the Company’s investments, which is reported in Other non-current assets in the accompanying condensed consolidated balance sheets as of September 30, 2025 and June 30, 2025, is as follows: As of September 30, 2025 June 30, 2025 Equity investments with readily determinable fair values: Townsquare Class A common stock $ 851 $ 1,002 Other equity investments with readily determinable fair values held in trust under the Company’s Executive Deferred Compensation Plan 6,120 5,238 Equity investments without readily determinable fair values 909 848 Total investments $ 7,880 $ 7,088 12 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following table summarizes the realized and unrealized gain on equity investments with readily determinable fair value, which is reported in Other expense, net in the accompanying condensed consolidated statements of operations for the three months ended September 30, 2025 and 2024: Three Months Ended September 30, 2025 2024 Unrealized loss — Townsquare $ ( 151 ) $ ( 101 ) Unrealized gain — Executive Deferred Compensation Plan 306 220 Realized gain from shares sold — Townsquare — 5 Total realized and unrealized gain $ 155 $ 124 Supplemental information on realized gain: Shares of common stock sold — Townsquare — 5 Cash proceeds from common stock sold — Townsquare $ — $ 55 Note 5. Property and Equipment, Net As of September 30, 2025 and June 30, 2025, Property and equipment, net consisted of the following: As of September 30, 2025 June 30, 2025 Land $ 62,768 $ 62,768 Buildings 1,016,047 1,014,553 Equipment, furniture, and fixtures 343,121 340,411 Leasehold improvements 163,099 163,342 Construction in progress 7,629 6,074 Total property and equipment $ 1,592,664 $ 1,587,148 Less: accumulated depreciation and amortization ( 980,053 ) ( 966,073 ) Property and equipment, net $ 612,611 $ 621,075 The Company recorded depreciation and amortization expense on property and equipment of $ 14,074 and $ 13,781 for the three months ended September 30, 2025 and 2024, respectively, which is recognized in Depreciation and amortization in the accompanying condensed consolidated statements of operations. Note 6. Goodwill and Intangible Assets As of September 30, 2025 and June 30, 2025, the carrying amount of Goodwill was $ 69,041 and does not reflect any historical impairment charges. The Company has one reportable segment and one reporting unit. The Company’s Indefinite-lived intangible assets as of September 30, 2025 and June 30, 2025 were as follows: As of September 30, 2025 June 30, 2025 Trademarks $ 61,881 $ 61,881 Photographic related rights 1,920 1,920 Total indefinite-lived intangible assets $ 63,801 $ 63,801 During the first quarter of Fiscal Year 2026, the Company performed its annual impairment test of Goodwill and Indefinite-lived intangible assets and determined that there were no impairments of Goodwill or Indefinite-lived intangible assets identified as of the impairment test date. No amortization expense for intangible assets was recognized for the three months ended September 30, 2025 and 2024. 13 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 7. Commitments and Contingencies Commitments See Note 11. Commitments and Contingencies, included in the Company’s Audited Consolidated and Combined Annual Financial Statements, for details on the Company’s commitments. The Company’s commitments as of June 30, 2025 included a total of $ 21,095 (primarily related to letters of credit). 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). See Note 8. Credit Facilities for details of the principal repayments required under the Company’s credit facilities. Legal Matters The Company is a defendant in various lawsuits. Although the outcome of these lawsuits cannot be predicted with certainty (including the extent of available insurance, if any), management does not believe that resolution of these lawsuits will have a material adverse effect on the Company. Note 8. Credit Facilities See Note 12. Credit Facilities, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the Company’s credit facilities. The following table summarizes the presentation of the outstanding balances under the Company’s credit facilities as of September 30, 2025 and June 30, 2025: As of September 30, 2025 June 30, 2025 Current Portion National Properties Term Loan Facility $ 30,469 $ 30,469 Current portion of long-term debt $ 30,469 $ 30,469 As of September 30, 2025 June 30, 2025 Principal Unamortized Deferred Financing Costs Net Principal Unamortized Deferred Financing Costs Net Non-current Portion National Properties Term Loan Facility $ 571,289 $ ( 9,607 ) $ 561,682 $ 578,906 $ ( 10,126 ) $ 568,780 National Properties Revolving Credit Facility 20,000 — 20,000 — — — Long-term debt, net of deferred financing costs $ 591,289 $ ( 9,607 ) $ 581,682 $ 578,906 $ ( 10,126 ) $ 568,780 National Properties Facilities General. On June 27, 2025, MSG National Properties, LLC (“MSG National Properties”), MSG Entertainment Holdings, LLC (“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 September 30, 2025, outstanding letters of credit were $ 17,427 and the remaining balance available under the National Properties Revolving Credit 14 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 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. Proceeds. The proceeds of the National Properties Facilities were used on the closing date to repay in full the obligations outstanding under the Prior National Properties Term Loan Facility and to pay fees and expenses in connection with the National Properties Facilities and the refinancing of the Prior National Properties Facilities. Proceeds of the National Properties Revolving Credit Facility may be used to fund working capital needs, for general corporate purposes of MSG National Properties and its subsidiaries and to make distributions to MSG Entertainment Holdings. Interest Rates. 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. 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 . Subject to customary notice and minimum amount conditions, the Company may voluntarily repay outstanding loans under the National Properties Facilities or terminate commitments under the National Properties Revolving Credit Facility, at any time, in whole or in part, subject only to customary breakage costs in the case of prepayment of Term SOFR loans. 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 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 facil ity. 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. Covenants. 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. The National Properties Credit Agreement contains certain restrictions on the ability of MSG National Properties and its restricted subsidiaries to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the National Properties Credit Agreement, including the following: (i) incur additional indebtedness; (ii) create liens on certain assets; (iii) make investments, loans or advances in or to other persons; (iv) pay dividends and distributions or repurchase capital stock (which will restrict the ability of MSG National Properties to make cash distributions to the Company); (v) repay, redeem or repurchase certain indebtedness; (vi) change its lines of business; (vii) engage in certain transactions with affiliates; (viii) amend their respective organizational documents; (ix) merge or consolidate; and (x) make certain dispositions. Guarantors and Collateral. All obligations under the National Properties Facilities are guaranteed by MSG Entertainment Holdings and MSG National Properties’ existing and future direct and indirect domestic subsidiaries, other than the subsidiaries that own The Garden and certain other excluded subsidiaries (the “Subsidiary Guarantors”). 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 Chicago Theatre or the leasehold interests in Radio City Music Hall or the Beacon Theatre. 15 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Interest payments and loan principal repayments made by the Company under the National Properties Facilities were as follows: Interest Payments Loan Principal Repayments Three Months Ended Three Months Ended September 30, September 30, 2025 2024 2025 2024 National Properties Facilities $ 10,611 $ 13,277 $ 22,617 $ 4,063 The carrying value and fair value of the Company’s debt reported in the accompanying condensed consolidated balance sheets were as follows: As of September 30, 2025 June 30, 2025 Carrying Value (a) Fair Value Carrying Value (a) Fair Value National Properties Facilities $ 621,758 $ 612,432 $ 609,375 $ 600,234 ________________ (a) The total carrying value of the Company’s debt as of September 30, 2025 and June 30, 2025 is equal to the current and non-current principal payments for the Company’s credit agreements excluding unamortized deferred financing costs of $ 9,607 and $ 10,126 , respectively. The Company’s long-term debt is classified within Level II of the fair value hierarchy as it is valued using quoted indices of similar instruments for which the inputs are readily observable. Note 9. Share-based Compensation The Company has two share-based compensation plans: the 2023 Employee Stock Plan and the 2023 Stock Plan for Non-Employee Directors. See Note 14. Share-based Compensation, included in the Company’s Audited Consolidated and Combined Annual Financial Statements, for more information on these plans. Share-based compensation expense for the Company’s restricted stock units (“RSUs”) and performance stock units (“PSUs”) are recognized in the condensed consolidated statements of operations as a component of direct operating expenses or selling, general, and administrative expenses. The following table summarizes the Company’s share-based compensation expense: Three Months Ended September 30, 2025 2024 Share-based compensation expense $ 7,293 $ 6,262 Fair value of awards vested (a) $ 30,599 $ 29,022 ________________ (a) To fulfill required statutory tax withholding obligations for the applicable income and other employment taxes, RSUs and PSUs with an aggregate value of $ 13,369 and $ 12,808 were retained by the Company during the three months ended September 30, 2025 and 2024, respectively. For the three months ended September 30, 2025 and 2024 all RSUs and stock options were excluded from the anti-dilutive calculation because the Company reported a net loss for the period and, therefore, their impact on reported loss per share would have been anti-dilutive. As of September 30, 2025, there was $ 62,091 of unrecognized compensation cost related to unvested RSUs and PSUs held by the Company’s direct employees. The cost is expected to be recognized over a weighted-average period of approximately 2.4 years. Award Activity The following table summarizes activity related to MSG Entertainment’s RSUs and PSUs held by the Company, MSG Sports, and Sphere’s employees: Three Months Ended September 30, 2025 2024 RSUs PSUs RSUs PSUs Granted 464 414 433 386 Vested 397 300 416 305 16 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 10. Related Party Transactions As of September 30, 2025 , certain members of the Dolan family, including certain trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”), for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, collectively beneficially owned 100 % of the Company’s outstanding Class B Common Stock, $ 0.01 par value per share (“Class B Common Stock”) and approximately 4.1 % of the Company’s outstanding Class A Common Stock (inclusive of options exercisable within 60 days of September 30, 2025) . Such shares of Class A Common Stock and Class B Common Stock, collectively, represent approximately 64.3 % of the aggregate voting power of the Company’s outstanding common stock. Members of the Dolan Family Group are also the controlling stockholders of Sphere Entertainment, MSG Sports, and AMC Networks Inc. See Note 16. Related Party Transactions, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for a description of the Company’s current related party arrangements. There have been no material changes in such related party arrangements as of September 30, 2025 , except as described below. Sphere Entertainment provides certain technology services related to Sphere Immersive Sound to certain of the Company’s venues. For the three months ended September 30, 2025 , gross capital additions associated with these arrangements were approximately $ 1,400 , and are reported in Property and equipment, net in the accompanying condensed consolidated balance sheets. Revenues and Operating Expenses The following table summarizes the composition and amounts of the transactions with the Company’s related parties. The significant components of these amounts are discussed below. These amounts are reflected in revenues and operating expenses in the accompanying condensed consolidated statements of operations for the three months ended September 30, 2025 and 2024: Three Months September 30, 2025 2024 Revenues $ 7,483 $ 7,883 Operating credits (expenses): Revenue sharing expenses (a) ( 1,544 ) ( 1,150 ) Reimbursement under Arena License Agreements 556 73 Cost reimbursement from MSG Sports 10,755 8,387 Cost reimbursement from Sphere Entertainment 16,072 22,993 Other operating credits, net 1,795 1,117 Total operating credits, net (b) $ 27,634 $ 31,420 _________________ (a) Amounts exclude revenue sharing expenses of $ 19,491 and $ 19,424 related to MSG Sports suites revenue sharing for three months ended September 30, 2025 and 2024, respectively, and are included in Direct operating expenses in the accompanying condensed consolidated statements of operations. (b) Of the total operating credits (expenses), net, $( 1,340 ) and $( 1,294 ) for the three months ended September 30, 2025 and 2024, respectively, are included in direct operating expenses in the accompanying condensed consolidated statements of operations, and $ 28,974 and $ 32,714 for the three months ended September 30, 2025 and 2024, respectively, are included in selling, general, and administrative expenses in the accompanying condensed consolidated statements of operations. Revenues The Company recorded $ 1,324 of revenues under the Arena License Agreements for the three months ended September 30, 2025 and 2024 . In addition to the Arena License Agreements, the Company’s revenues from related parties primarily reflected amounts earned under sponsorship sales and service representation agreements of $ 2,392 and $ 2,751 during the three months ended September 30, 2025 and 2024, respectively, and merchandise sharing revenues with MSG Sports of $ 285 and $ 247 during the three months ended September 30, 2025 and 2024, respectively . The Company also earned sublease revenue from related parties of $ 2,644 and $ 3,561 during the three months ended September 30, 2025 and 2024, respectively. Note 11. Segment Information The Company is managed on a consolidated basis through one operating and reportable segment, MSG Entertainment. MSG Entertainment includes the Company’s portfolio of venues: The Garden, The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. MSG Entertainment also includes the original production, the Christmas Spectacular , as well as the entertainment and sports bookings business, which features a variety of live entertainment and sports experiences. In making its segment determination, the Company takes into account the types of products and services offered as well as the type of discrete financial information that is available and regularly reviewed by its CODM. The Company’s CODM is the 17 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Company’s Executive Chairman and Chief Executive Officer. The Company’s MSG Entertainment segment derives revenues primarily from entertainment offerings held at its venues that drive ticket sales and other ticket-related revenues, venue license fees from third-party promoters, sponsorships and signage, suite license fees at The Garden, concessions, merchandising and tours at certain of the Company’s venues. The amount of revenue and expense recorded by the Company for a given event depends to a significant extent on whether the Company is promoting or co-promoting the event or is licensing a venue to a third-party or MSG Sports. The CODM regularly reviews consolidated net income as the measure of segment profit or loss to evaluate operating performance and make strategic decisions regarding the allocation of resources. The CODM is regularly provided with the consolidated expense categories presented in the condensed consolidated statements of operations. As a result, there are no other significant segment expense categories that would require disclosure. The CODM does not review segment assets at a different asset level or category than those disclosed in the consolidated balance sheets. Note 12. Additional Financial Information The following table provides a summary of the amounts recorded as Cash, cash equivalents, and restricted cash: As of September 30, 2025 June 30, 2025 Cash and cash equivalents $ 29,950 $ 43,017 Restricted cash 521 521 Total cash, cash equivalents, and restricted cash $ 30,471 $ 43,538 The Company’s Cash, cash equivalents, and restricted cash are classified within Level I of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets. The Company’s restricted cash includes cash deposited in escrow and operating accounts. The Company has deposited cash in escrow and operating accounts related to general liability insurance obligations. Prepaid expenses and other current assets consisted of the following: As of September 30, 2025 June 30, 2025 Prepaid revenue sharing expense $ 80,146 $ 61,997 Other prepaid expenses 28,913 26,987 Current contract assets (a) 6,412 7,648 Inventory (b) 4,612 3,751 Other 8,717 3,943 Total prepaid expenses and other current assets $ 128,800 $ 104,326 _________________ (a) See Note 3. Revenue Recognition for more information on contract assets. (b) Inventory is mostly comprised of food and liquor for the venues. Other non-current assets consisted of the following: As of September 30, 2025 June 30, 2025 Unbilled lease receivable (a) $ 117,922 $ 125,527 Investments (b) 7,880 7,088 Deferred costs 5,707 5,683 Other 1,880 1,879 Total other non-current assets $ 133,389 $ 140,177 _________________ (a) Unbilled lease receivable relates to the amounts recorded under the Arena License Agreements. (b) See Note 4. Investments for more information on long-term investments. 18 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Accounts payable, accrued and other current liabilities consisted of the following: As of September 30, 2025 June 30, 2025 Accounts payable $ 14,268 $ 12,102 Accrued payroll and employee related liabilities 35,558 54,355 Cash due to promoters 67,914 76,455 Accrued expenses and other current liabilities 36,025 41,448 Total accounts payable, accrued and other current liabilities $ 153,765 $ 184,360 Leases In February 2025, the Company recognized a right-of-use lease asset of $ 116,963 and an additional lease obligation of $ 115,335 as the Company took possession of additional space in its New York corporate office. For the three months ended September 30, 2025, the Company recognized an impairment loss of $ 13,782 on the Company’s right-of-use lease assets in its New York corporate office which is reported in Impairment of long-lived assets in the accompanying condensed consolidated statements of operations. Stock Repurchase Program On March 29, 2023, the Company’s Board of Directors authorized a share repurchase program to repurchase up to $ 250,000 of the Company’s Class A Common Stock (the “Stock Repurchase Program”). Pursuant to the Stock Repurchase Program, shares of Class A Common Stock may be purchased from time to time in open market or private transactions, block trades or such other manner as the Company may determine in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. For the three months ended September 30, 2025, the Company repurchased 623,271 shares of Class A Common Stock for $ 25,000 . As of September 30, 2025, the Company had approximately $ 45,000 remaining available under its Stock Repurchase Program for repurchases. Other expense, net Other expense, net includes the following: Three Months Ended September 30, 2025 2024 Net periodic benefit costs (excluding service costs) $ ( 639 ) $ ( 858 ) Realized and unrealized gain on equity investments with readily determinable fair value 155 124 Other income (expense) 312 ( 35 ) Total other expense, net $ ( 172 ) $ ( 769 ) Income Taxes During the three months ended September 30, 2025 and September 30, 2024, the Company made income tax payments of $ 26 and $ 381 , respectively. 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. On July 4, 2025, the Reconciliation Bill commonly known as the “One Big Beautiful Bill Act” (the “OBBBA”) was enacted into law. OBBBA includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions (both domestic and international), expanding certain Inflation Reduction Act incentives, and accelerating the phase-out of others. The Company has analyzed the provisions of OBBBA and determined that the financial impact is not material to its interim or annual consolidated financial statements for the periods presented. 19