What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-07 compared with 2023-05-18 · 370 added, 493 removed, 316 unchanged (73% of the section changed)

1 unchanged sentence

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONDENSED COMBINED BALANCE SHEETS (Unaudited)

(in thousands)

March 31, June 30,

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data)

September 30, June 30,

Current Assets:

11 unchanged sentences

Total assets $ 1,348,537 $ 1,401,157

LIABILITIES AND DIVISIONAL EQUITY (DEFICIT)

LIABILITIES AND DEFICIT

Current Liabilities:

1 unchanged sentence

Related party payables, current 69,914 47,281

Current portion of long-term debt 16,250 8,762

Long-term debt, current 20,313 16,250

Operating lease liabilities, current 38,211 36,529

8 unchanged sentences

Commitments and contingencies (see Note 8)

MSG Entertainment Divisional Equity (Deficit):

Sphere Entertainment investment 77,365 33,265

Class A Common Stock (a)

Class B Common Stock (b)

Additional paid-in-capital 17,980 17,727

Treasury stock at cost ( 4,365 and 840 shares outstanding as of September 30, 2023 and June 30, 2023, respectively)

( 140,512 ) ( 25,000 )

Accumulated deficit ( 79,368 ) ( 28,697 )

Accumulated other comprehensive loss ( 33,824 ) ( 34,021 )

Total MSG Entertainment divisional equity (deficit) 43,503 ( 1,475 )

Nonredeemable noncontrolling interest — ( 114 )

Total liabilities and divisional equity (deficit) $ 1,545,733 $ 1,526,701

See accompanying notes to the unaudited condensed combined financial statements.

Total deficit ( 235,201 ) ( 69,472 )

Total liabilities and deficit $ 1,348,537 $ 1,401,157

_________________

(a) Class A Common Stock, $ 0.01 par value per share, 120,000 shares authorized;

45,468 and 45,024 shares issued as of September 30, 2023 and June 30, 2023, respectively.

(b) Class B Common Stock, $ 0.01 par value per share, 30,000 shares authorized;

6,867 shares issued as of September 30, 2023 and June 30, 2023.

See accompanying notes to the unaudited condensed consolidated and combined financial statements.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONDENSED COMBINED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands)

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands, except per share data)

Three Months Ended

March 31, Nine Months Ended

2023 2022 2023 2022

September 30,

$ 142,212 $ 146,452

4 unchanged sentences

Depreciation and amortization ( 13,585 ) ( 15,985 )

(Loss) gains, net on dispositions ( 51 ) — 4,361 —

Restructuring charges ( 11,553 ) —

Operating income (loss) 24,664 15,821 126,798 ( 110 )

Interest income (a)

Operating loss

( 33,425 ) ( 11,309 )

Interest income (a)

Interest expense ( 14,287 ) ( 11,427 )

Other income (expense), net 8,070 ( 8,495 ) 6,784 ( 27,742 )

Income (loss) from operations before income taxes 21,793 ( 4,142 ) 101,331 ( 62,511 )

Income tax expense ( 73 ) — ( 804 ) —

Net income (loss) 21,720 ( 4,142 ) 100,527 ( 62,511 )

Other (expense) income, net

( 4,469 ) 886

Loss from operations before income taxes

( 51,330 ) ( 20,340 )

Income tax benefit

( 50,671 ) ( 18,274 )

Net loss attributable to nonredeemable noncontrolling interest — ( 372 )

Net income (loss) attributable to MSG Entertainment’s stockholders $ 21,720 $ ( 3,930 ) $ 101,080 $ ( 61,932 )

Basic and diluted earnings (loss) per common share attributable to the MSG Entertainment’s stockholders $ 0.42 $ ( 0.08 ) $ 1.95 $ ( 1.20 )

Net loss attributable to MSG Entertainment’s stockholders

$ ( 50,671 ) $ ( 17,902 )

Loss per share attributable to MSG Entertainment’s stockholders:

Basic and diluted

$ ( 1.00 ) $ ( 0.35 )

Weighted-average number of shares of common stock:

Basic and diluted (b)

50,437 51,768

_________________

(a) See Note 13 .

Related Party Transactions, for further information on related party arrangements.

See accompanying notes to the unaudited condensed combined financial statements.

(b) On April 20, 2023, 51,768 common shares were distributed to Sphere Entertainment Co.

stockholders (the “MSGE Distribution,” as defined in Note 1 Description of Business and Basis of Presentation).

This share amount is being utilized for the calculation of basic and diluted loss per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders for the three months ended September 30, 2022 because the Company was not a standalone public company prior to the MSGE Distribution.

See accompanying notes to the unaudited condensed consolidated and combined financial statements.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

(in thousands)

Three Months Ended Nine Months Ended

March 31, March 31,

Three Months Ended

September 30,

$ ( 50,671 ) $ ( 18,274 )

Net income (loss) $ 21,720 $ ( 4,142 ) $ 100,527 $ ( 62,511 )

Other comprehensive income (loss), before income taxes:

Amortization of net actuarial loss included in net periodic benefit cost 323 371 1,063 1,114

Other comprehensive income, before income taxes:

Amortization of net actuarial gain included in net periodic benefit cost

Other comprehensive income, before income taxes 238 371

Income tax expense ( 41 ) ( 66 )

Other comprehensive income, net of income taxes

Comprehensive income (loss) 21,987 ( 3,836 ) 101,405 ( 61,593 )

Comprehensive loss

( 50,474 ) ( 17,969 )

Comprehensive loss attributable to nonredeemable noncontrolling interest — ( 372 )

Comprehensive income (loss) attributable to MSG Entertainment $ 21,987 $ ( 3,624 ) $ 101,958 $ ( 61,014 )

See accompanying notes to the unaudited condensed combined financial statements.

Comprehensive loss attributable to MSG Entertainment

$ ( 50,474 ) $ ( 17,597 )

See accompanying notes to the unaudited condensed consolidated and combined financial statements.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONDENSED COMBINED STATEMENTS OF CASH FLOWS (Unaudited)

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

Nine Months Ended

Three Months Ended

September 30,

OPERATING ACTIVITIES:

Net income (loss) $ 100,527 $ ( 62,511 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

$ ( 50,671 ) $ ( 18,274 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 13,585 15,985

Share-based compensation expense 12,965 7,410

Deferred income tax benefit

Provision for doubtful accounts 305 15

Amortization of deferred financing costs 812 805

Related party paid in kind interest — ( 902 )

Net unrealized (gain) loss on equity investments with readily determinable fair value ( 4,307 ) 28,303

Amortization of right-of-use assets 9,975 8,061

Gains, net on dispositions ( 4,361 ) —

Other non-cash adjustments 83 —

Change in assets and liabilities:

Net unrealized and realized loss (gains) on equity investments with readily determinable fair value and loss (earnings) in nonconsolidated affiliates 3,901 ( 830 )

Non-cash lease expense

Accounts receivable, net ( 36,610 ) 9,934

Related party receivables, net of payables ( 5,292 ) 43,976

Related party receivables and payables, net

44,654 ( 33,764 )

Prepaid expenses and other current and non-current assets ( 10,391 ) ( 2,851 )

Accounts payable, accrued and other current, and non-current liabilities

( 41,184 ) ( 58,134 )

Deferred revenue 63,172 24,182

Operating lease right-of-use assets and lease liabilities ( 2,163 ) ( 4,077 )

Net cash provided by operating activities $ 132,341 $ 60,338

Net cash provided by (used in) operating activities

$ 1,378 $ ( 57,326 )

INVESTING ACTIVITIES:

Capital expenditures ( 3,334 ) ( 4,855 )

Proceeds from dispositions, net 27,904 —

Proceeds (purchases) from investments 4,244 ( 250 )

Proceeds from loan receivable — 4,695

Loan to related parties ( 6,700 ) ( 6,780 )

Net cash provided by (used in) investing activities $ 13,261 $ ( 13,060 )

Proceeds from sale of investments

Loans to related parties

Net cash used in investing activities

$ ( 55,490 ) $ ( 1,036 )

FINANCING ACTIVITIES :

Proceeds from issuance of debt 168 —

Principal repayments on long-term debt ( 6,063 ) ( 4,875 )

Proceeds from revolving credit facility

Proceeds from related party loan

Payments for debt financing costs

Taxes paid in lieu of shares issued for equity-based compensation

Stock repurchases

Net transfers to Sphere Entertainment and Sphere Entertainment’s subsidiaries — 102,096

Net cash used in financing activities $ ( 85,194 ) $ ( 150,035 )

Net increase (decrease) in cash, cash equivalents and restricted cash 60,408 ( 102,757 )

Net cash provided by financing activities

$ 9,273 $ 102,096

Net (decrease) increase in cash, cash equivalents, and restricted cash

( 44,839 ) 43,734

Cash, cash equivalents, and restricted cash, beginning of period

84,355 62,573

Cash, cash equivalents, and restricted cash, end of period

$ 39,516 $ 106,307

Non-cash investing and financing activities:

Capital expenditures incurred but not yet paid $ 1,291 $ 445

Non-cash reduction of loan receivable from related party $ 5,350 $ 4,019

See accompanying notes to the unaudited condensed combined financial statements.

Non-cash stock repurchases in lieu of payment of loan due from related parties

See accompanying notes to the unaudited condensed consolidated and combined financial statements.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONDENSED COMBINED STATEMENTS OF DIVISIONAL EQUITY (DEFICIT) (Unaudited)

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF (DEFICIT) EQUITY (Unaudited)

(in thousands)

Sphere Entertainment Investment Accumulated Other Comprehensive Income (Loss) Total MSG Entertainment Divisional Equity (Deficit) Nonredeemable

Sphere Entertainment Co.

Accumulated Other Comprehensive Loss

Total Madison Square Garden Entertainment Corp.

Stockholders’

(Deficit) Equity

Nonredeemable

Noncontrolling

Total Divisional Equity (Deficit)

Balance as of December 31, 2022 $ 133,018 $ ( 34,129 ) $ 98,889 $ — $ 98,889

Net income 21,720 — 21,720 — 21,720

Other comprehensive income — 267 267 — 267

Comprehensive income — — 21,987 — 21,987

Net decrease in Sphere Entertainment Investment ( 77,373 ) — ( 77,373 ) — ( 77,373 )

Balance as of March 31, 2023 $ 77,365 $ ( 33,862 ) $ 43,503 $ — $ 43,503

Balance as of December 31, 2021 $ 358,035 $ ( 32,986 ) $ 325,049 $ 2,383 $ 327,432

Net loss ( 3,930 ) — ( 3,930 ) ( 212 ) ( 4,142 )

Other comprehensive income — 306 306 — 306

Comprehensive loss — — ( 3,624 ) ( 212 ) ( 3,836 )

Net decrease in Sphere Entertainment Investment ( 3,091 ) — ( 3,091 ) — ( 3,091 )

Balance as of March 31, 2022 $ 351,014 $ ( 32,680 ) $ 318,334 $ 2,171 $ 320,505

Total (Deficit) Equity

Balance as of June 30, 2023 $ 519 $ — $ 17,727 $ ( 25,000 ) $ ( 28,697 ) $ ( 34,021 ) $ ( 69,472 ) $ — $ ( 69,472 )

Net income (loss) 101,080 — 101,080 ( 553 ) 100,527

— — — — ( 50,671 ) — ( 50,671 ) — ( 50,671 )

Other comprehensive income

BCE disposition — — — 667 667

Comprehensive income — — 101,958 114 102,072

Net decrease in Sphere Entertainment Investment ( 56,980 ) — ( 56,980 ) — ( 56,980 )

Balance as of March 31, 2023 $ 77,365 $ ( 33,862 ) $ 43,503 $ — $ 43,503

— — — — — 197 197 — 197

Comprehensive loss

— — — — — — ( 50,474 ) — ( 50,474 )

Share-based compensation

— — 12,965 — — — 12,965 — 12,965

Tax withholding associated with shares issued for share-based compensation 4 — ( 11,838 ) — — — ( 11,834 ) — ( 11,834 )

Stock repurchases, inclusive of tax

— — ( 874 ) ( 115,512 ) — — ( 116,386 ) — ( 116,386 )

Balance as of September 30, 2023 $ 523 $ — $ 17,980 $ ( 140,512 ) $ ( 79,368 ) $ ( 33,824 ) $ ( 235,201 ) $ — $ ( 235,201 )

Balance as of June 30, 2022 $ — $ 33,265 $ — $ — $ — $ ( 34,740 ) $ ( 1,475 ) $ ( 114 ) $ ( 1,589 )

2 unchanged sentences

Comprehensive loss — — — — — — ( 17,597 ) ( 372 ) ( 17,969 )

Net decrease in Sphere Entertainment Investment ( 116,554 ) — ( 116,554 ) — ( 116,554 )

Balance as of March 31, 2022 $ 351,014 $ ( 32,680 ) $ 318,334 $ 2,171 $ 320,505

See accompanying notes to the unaudited condensed combined financial statements.

Net increase in Sphere Entertainment Co.

— 109,383 — — — — 109,383 — 109,383

Balance as of September 30, 2022 $ — $ 124,746 $ — $ — $ — $ ( 34,435 ) $ 90,311 $ ( 486 ) $ 89,825

See accompanying notes to the unaudited condensed consolidated and combined financial statements.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

All amounts included in the following Notes to Condensed Combined Financial Statements (unaudited) are presented in thousands, except as otherwise noted.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

All amounts included in the following Notes to Condensed Consolidated and Combined Financial Statements (unaudited) are presented in thousands, except per share data or as otherwise noted.

Description of Business and Basis of Presentation

Description of Business

The Company is a live entertainment company comprised of iconic venues and marquee entertainment content.

Madison Square Garden Entertainment Corp., formerly MSGE Spinco, Inc.

(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 is comprised of one reportable segment.

As of March 31, 2023, there have been no changes to the reportable segment structure of the Company.

to the Company’s audited combined financial statements and notes thereto as of June 30, 2022 and 2021 and for the three years ended June 30, 2022, 2021 and 2020 (“Audited Combined Annual Financial Statements”) included in the Company’s Information Statement, dated April 3, 2023 (the “Information Statement”), filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on April 4, 2023 for additional information regarding the details of the Company’s business.

Spin-off Transaction

On April 20, 2023 (the “MSGE Spinco Distribution Date”), Sphere Entertainment Co., formerly Madison Square Garden Entertainment Corp.

(“Sphere Entertainment”), distributed approximately 67 % of the outstanding common stock of Madison Square Garden Entertainment Corp., formerly MSGE Spinco, Inc.

(“MSG Entertainment” or the “Company”), to its stockholders (the “MSGE Spinco Distribution”), with Sphere Entertainment retaining approximately 33 % of the outstanding common stock of MSG Entertainment (in the form of Class A common stock) (the “MSGE Retained Interest”) immediately following the MSGE Spinco Distribution.

The Company owns the traditional live entertainment business previously owned and operated by Sphere Entertainment through its Entertainment business segment, excluding Sphere (which was retained by Sphere Entertainment after the MSGE Spinco Distribution Date).

In the MSGE Spinco Distribution, stockholders of Sphere Entertainment received (a) one share of MSG Entertainment’s Class A common stock, par value $ 0.01 per share, for every share of Sphere Entertainment’s Class A common stock, par value $ 0.01 per share, held of record as of the close of business, New York City time, on April 14, 2023 (the “Record Date”), and (b) one share of MSG Entertainment’s Class B common stock, par value $ 0.01 per share, for every share of Sphere Entertainment’s Class B common stock, par value $ 0.01 per share, held of record as of the close of business, New York City time, on the Record Date.

The Company’s combined statements of operations for the three and nine months ended March 31, 2023 and 2022 were prepared on a stand-alone basis derived from the consolidated financial statements and accounting records of Sphere Entertainment, and are presented as carve-out financial statements, because the Company was not a standalone public company prior to the MSGE Spinco Distribution.

Advertising Sales Representation Agreement Termination

The advertising sales representation agreement (the “Networks Advertising Sales Representation Agreement”) between the Company and Sphere Entertainment’s subsidiary, MSGN Holdings, L.P.

(“MSG Networks”), pursuant to which the Company had the exclusive right and obligation to sell MSG Networks advertising availabilities for a commission, was terminated effective as of December 31, 2022.

The Company recognized $ 0 and $ 8,802 of revenue from the Networks Advertising Sales Representation Agreement for the three and nine months ended March 31, 2023, respectively, and $ 9,621 and $ 17,015 of revenue for the three and nine months ended March 31, 2022, respectively.

The termination of the Networks Advertising Sales Representation Agreement has impacted the operating results of the Company for the three and nine months end March 31, 2023 and will impact the operating results of the Company on a go forward basis.

As a result, after December 31, 2022, the Company no longer recognizes advertising sales commission revenue or the employee costs related to the MSG Networks advertising sales agency.

The Company operates and reports financial information in one reportable segment.

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 ”).

The Company also 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.

MSG Entertainment Distribution

On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment Co., formerly Madison Square Garden Entertainment Corp.

(together with its subsidiaries, as applicable, “Sphere Entertainment”), distributed approximately 67 % of the outstanding common stock of the Company to its stockholders (the “MSGE Distribution”), with Sphere Entertainment retaining approximately 33 % of the outstanding common stock of the Company (in the form of Class A common stock (“Class A Common Stock”)) immediately following the MSGE Distribution.

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

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.

See Note 1 to the Company’s audited consolidated and combined financial statements and notes thereto as of June 30, 2023 and 2022 and for the three years ended June 30, 2023, 2022 and 2021 (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, 2023 filed on August 18, 2023 (the “2023 Form 10-K”) for more information regarding the MSGE Distribution.

Basis of Presentation

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

In these unaudited condensed combined interim financial statements, the years ended on June 30, 2023 and 2022 are referred to as “Fiscal Year 2023” and “Fiscal Year 2022,” respectively.

Certain Fiscal Year 2022 amounts have been reclassified to conform to the Fiscal Year 2023 presentation.

The accompanying interim condensed combined financial statements of the Company (the “condensed combined financial statements”) were prepared on a stand-alone basis derived from the consolidated financial statements and accounting records of

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Sphere Entertainment.

These financial statements reflect the combined historical results of operations, financial position and cash flows of the Company in accordance with U.S.

generally accepted accounting principles (“GAAP”) for interim financial information, the instructions of Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”), and SEC Staff Accounting Bulletin (SAB) Topic 1-B, Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity , and should be read in conjunction with the Company’s Audited Combined Annual Financial Statements.

References to U.S.

GAAP issued by the Financial Accounting Standards Board (“FASB”) in these footnotes are to the FASB Accounting Standards Codification, also referred to as “ASC.”

Prior to the MSGE Spinco Distribution, separate financial statements have not been prepared for the Company and it has not operated as a stand-alone business from Sphere Entertainment.

The condensed combined financial statements include certain assets and liabilities that have historically been held by Sphere Entertainment or by other Sphere Entertainment subsidiaries but are specifically identifiable or otherwise attributable to the Company.

The condensed combined financial statements are presented as if the Company’s businesses had been combined for all periods presented.

The assets and liabilities in the condensed combined financial statements have been reflected on a historical cost basis, as immediately prior to the MSGE Spinco Distribution, all of the assets and liabilities presented were wholly owned by Sphere Entertainment and were transferred to the Company at a carry-over basis.

The condensed combined statements of operations include allocations for certain support functions that are provided on a centralized basis and not historically recorded at the business unit level by Sphere Entertainment, such as expenses related to executive management, finance, legal, human resources, government affairs, and information technology, among others.

As part of the MSGE Spinco Distribution, certain corporate and operational support functions were transferred to the Company and therefore, charges were reflected in order to properly burden all business units comprising Sphere Entertainment’s historical operations.

These expenses have been allocated to Sphere Entertainment on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis of combined assets, headcount or other measures of the Company or Sphere Entertainment, which are recorded as a reduction of either direct operating expenses or selling, general and administrative expenses.

Management believes the assumptions underlying the condensed combined financial statements, including the assumptions regarding allocating general corporate expenses, are reasonable.

Nevertheless, the condensed combined financial statements may not include all of the actual expenses that would have been incurred by the Company and may not reflect its combined results of operations, financial position and cash flows had it been a stand-alone company during the periods presented.

In these unaudited condensed consolidated and combined financial statements, the years ending and ended on June 30, 2024 and 2023, respectively, are referred to as “Fiscal Year 2024” and “Fiscal Year 2023,” 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 (“SEC”), and should be read in conjunction with the Company’s Audited Consolidated and Combined Annual Financial Statements.

Subsequent to the MSGE Distribution, the Company’s balance sheets as of September 30, 2023 and June 30, 2023 and for the statement of operations for the three months ended September 30, 2023 are presented on a consolidated basis, as the Company became a standalone public company on April 21, 2023.

The Company’s financial statements prior to April 21, 2023 that are included in the results of operations for the three months ended September 30, 2022 were prepared on a stand-alone basis derived from the consolidated financial statements and accounting records of Sphere Entertainment.

These financial statements reflect the combined historical results of operations, financial position and cash flows of the Company in accordance with GAAP and SEC Staff Accounting Bulletin (SAB) Topic 1-B, Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity , and Article 10 of Regulation S-X of the SEC for interim financial information.

References to GAAP issued by the Financial Accounting Standards Board (“FASB”) in these footnotes are to the FASB Accounting Standards Codification, also referred to as “ASC.”

Management believes the assumptions underlying the combined financial statements, including the assumptions regarding allocating general corporate expenses, are reasonable.

Nevertheless, the combined financial statements may not include all of the actual expenses that would have been incurred by the Company and may not reflect its combined results of operations, financial position and cash flows had it been a stand-alone company during the periods presented on a combined basis.

Actual costs that would have been incurred if the Company had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.

The Company is unable to quantify the amounts that it would have recorded during the historical periods on a stand-alone basis as it is not practicable to do so.

Related Party Transactions for more information regarding allocations of certain costs from the Company to Sphere Entertainment.

Sphere Entertainment uses a centralized approach to cash management and financing of operations.

Cash is managed centrally with net earnings reinvested and working capital requirements met from existing liquid funds.

The Company’s cash in excess of minimum liquidity requirements under the credit facilities was available for use and was regularly “swept” historically.

Cash and cash equivalents were attributed to the Company for each of the periods presented, as such cash was held in accounts legally owned by the Company.

Credit Facilities for more information regarding the Company’s debt facilities.

Transfers of cash both to and from Sphere Entertainment are included as components of Sphere Entertainment investment on the condensed combined statements of divisional equity (deficit).

Sphere Entertainment’s net investment in the Company has been presented as a component of divisional equity (deficit) in the condensed combined financial statements.

Distributions made by Sphere Entertainment to the Company or to Sphere Entertainment from the Company are recorded as transfers to and from Sphere Entertainment, and the net amount is presented on the condensed combined statements of cash flows as “Net transfers to Sphere Entertainment and Sphere Entertainment’s subsidiaries.”

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 March 31, 2023 and its results of operations for the three and nine months ended March 31, 2023, and 2022, and cash flows for the nine months ended March 31, 2023 and 2022.

The condensed combined balance sheet as of Fiscal Year 2022 was derived from the Audited Combined Annual

The Company is unable to quantify the amounts that it would have recorded during the historical periods on a stand-alone basis.

Related Party Transactions to the 2023 Form 10-K for further details regarding allocations of certain costs from the Company to Sphere Entertainment.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Financial Statements but does not contain all of the footnote disclosures from the Audited Combined Annual Financial Statements.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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, 2023 and its results of operations and cash flows for the three months ended September 30, 2023, and 2022.

The condensed consolidated balance sheets were derived from the Audited Consolidated and Combined Annual Financial Statements but do 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 Starring the Radio City Rockettes (the “ Christmas Spectacular ”), and arena license fees in connection with the use of Madison Square Garden (“The Garden”) by the New York Knicks (the “Knicks”) of the National Basketball Association (the “NBA”) and the New York Rangers (the “Rangers”) of the National Hockey League (the “NHL”), the Company generally earns a disproportionate share of its annual revenues in the second and third quarters of its fiscal year.

Impact of the COVID-19 Pandemic

The Company’s operations and operating results were not materially impacted by the COVID-19 pandemic during the three and nine months ended March 31, 2023, as compared to the prior year period, which was impacted by fewer ticketed events at our venues in the first half of the fiscal year due to the lead-time required to book touring acts and artists and the postponement or cancellation of select bookings at our venues (including the partial cancellation of the 2021 production of the Christmas Spectacular ) during the second and third quarters of the fiscal year.

Description of Business and Basis of Presentation in the Company’s Audited Combined Annual Financial Statements for additional information regarding the impact of the COVID-19 pandemic on the Company’s business.

It is unclear to what extent COVID-19 concerns, including new variants, could result in new government- or league-mandated capacity, other restrictions, vaccination/mask requirements, or impact the use of and/or demand for our venues, demand for our sponsorship and advertising assets, deter our employees and vendors from working at our venues (which may lead to difficulties in staffing) or otherwise materially impact our operations.

As a result of the production of the Christmas Spectacular , arena license fees in connection with the use of The Garden by the New York Knicks (the “Knicks”) of the National Basketball Association (the “NBA”) and the New York Rangers (the “Rangers”) of the National Hockey League (the “NHL”), the Company generally earns a disproportionate share of its annual revenues in the second and third quarters of its fiscal year.

Summary of Significant Accounting Policies

Principles of Combination

All significant intracompany transactions and balances within the Company’s condensed combined businesses have been eliminated.

Certain historical intercompany transactions between Sphere Entertainment and the Company have been included as components of Sphere Entertainment investment in the condensed combined financial statements, as they are considered effectively settled upon effectiveness of the MSGE Spinco Distribution and were not historically settled in cash.

Certain other historical intercompany transactions between Sphere Entertainment and the Company have been classified as related party, rather than intercompany, in the condensed combined financial statements as they were historically settled in cash.

Expenses related to corporate allocations from the Company to Sphere Entertainment prior to the MSGE Spinco Distribution, are considered to be effectively settled in the condensed combined financial statements at the time the transaction is recorded, with the offset recorded against Sphere Entertainment investment.

Principles of Consolidation and Combination

All significant intracompany accounts and balances within the Company’s consolidated businesses have been eliminated.

For the periods prior to the MSGE Distribution Date, the combined financial statements include certain assets and liabilities that were historically held at Sphere Entertainment’s corporate level but were specifically identifiable or otherwise attributable to the Company.

Certain historical intercompany transactions between Sphere Entertainment and the Company have been included as components of Sphere Entertainment’s investment in the condensed consolidated and combined financial statements, as they are considered to be effectively settled upon effectiveness of the MSGE Distribution and were not historically settled in cash.

Certain other historical intercompany transactions between Sphere Entertainment and the Company have been classified as related party, rather than intercompany, in the condensed consolidated and combined financial statements as they were historically settled in cash.

Expenses related to corporate allocations from the Company to Sphere Entertainment prior to the MSGE Distribution are considered to be effectively settled in the condensed consolidated and combined financial statements at the time the transaction is recorded, with the offset recorded against Sphere Entertainment’s investment.

Related Party Transactions, for further information on related party arrangements.

The Company disposed of its controlling interest in Boston Calling Events, LLC (“BCE”) on December 2, 2022 and these condensed combined financial statements reflect the results of operations of BCE until its disposition.

Dispositions, for details regarding the disposal.

The Company disposed of its controlling interest in Boston Calling Events, LLC (“BCE”) on December 2, 2022 and these condensed consolidated and combined financial statements reflect the results of operations of BCE until its disposition.

Dispositions in the Company’s Audited Consolidated and Combined Annual Financial Statements for additional information regarding the disposal.

Use of Estimates

The preparation of the accompanying condensed combined financial statements in conformity with GAAP requires management to make estimates and assumptions about future events.

The preparation of the accompanying condensed consolidated and combined 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, performance and share-based compensation, depreciation and amortization, litigation matters and other matters.

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

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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 combined financial statements in future periods.

Significant Accounting Policies

The following is an update to the Company’s Summary of Significant Accounting Policies disclosed in the Company’s Audited Combined Annual Financial Statements:

Earnings (Loss) Per Common Share

Basic earnings (loss) per common share (“EPS”) is based upon net income (loss) available to common stockholders divided by the weighted-average number of common shares outstanding during the period.

On the MSGE Spinco Distribution Date, 51,768 common shares of the Company, inclusive of 17,021 common shares related to the MSGE Retained Interest, were outstanding as of April 20, 2023.

This share amount is being utilized for the calculation of basic earnings (loss) per share for both the three and nine months ended March 31, 2023 and 2022 because the Company was not a standalone public company prior to the MSGE Spinco Distribution.

In addition, the computation of diluted earnings per share equals the basic earnings (loss) per common share calculation since there was no stock trading information available to compute dilutive effect of shares issuable under share-based compensation plans needed under the treasury method in accordance with ASC Topic 260, Earnings Per Share .

Recently Issued and Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

No recently issued accounting pronouncements are expected to materially impact the Company's financial statements.

Recently Adopted Accounting Pronouncements

In October 2021 , the FASB issued Accounting Standards Update (“ ASU ”) No.

2021-08, Accounting for Contract Assets and Contract Liabilities From Contracts With Customers .

This ASU requires that the acquiring entity in a business combination recognize and measure contract assets and contract liabilities acquired in accordance with ASC Topic 606.

This standard was adopted by the Company in the first quarter of Fiscal Year 2023.

The adoption of this standard had no impact on the Company’s condensed combined financial statements.

Disposition of Our Interest in Boston Calling Events

The Company entered into an agreement on December 1, 2022 to sell its controlling interest in BCE (the “BCE Disposition”).

The transaction closed on December 2, 2022, resulting in a total gain on sale of $ 8,744 , net of transaction costs.

BCE meets the definition of a business under SEC Regulation S-X Rule 11-01(d)-1 and FASB ASC Topic 805 — Business Combinations .

This disposition does not represent a strategic shift with a major effect on the Company’s operations, and as such, has not been reflected as a discontinued operation under FASB ASC Subtopic 205-20 — Discontinued Operations .

The gain on the BCE Disposition was recorded in (Loss) gains, net on dispositions in the condensed combined statements of operations.

Disposition of Corporate Aircraft

On December 30, 2022, the Company sold its owned aircraft for $ 20,375 .

In connection with the sale, the Company recognized a loss of $ 4,383 , net of transaction costs.

The loss on the aircraft disposition was recorded in (Loss) gains, net on dispositions in the condensed combined statements of operations.

Revenue Recognition

1 unchanged sentence

Summary of Significant Accounting Policies and Note 4.

Revenue Recognition, included in the Company’s Audited Combined Annual Financial Statements for more information regarding the details of the Company’s revenue

Revenue Recognition, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the details of the Company’s revenue recognition policies.

All revenue recognized in the condensed consolidated and combined statements of operations is considered to be revenue from contracts with customers in accordance with ASC Topic 606, Revenue From Contracts with Customers , except for

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

recognition policies.

All revenue recognized in the condensed combined statements of operations is considered to be revenue from contracts with customers in accordance with ASC Topic 606, except for revenues from the arena license agreements that require the Knicks and the Rangers to play their home games at The Garden (the “Arena License Agreements”), leases and subleases that are accounted for in accordance with ASC Topic 842.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

revenues from the arena license agreements that require the Knicks and the Rangers to play their home games at The Garden (the “Arena License Agreements”), leases and subleases that are accounted for in accordance with ASC Topic 842, Leases .

Disaggregation of Revenue

The following tables disaggregate the Company’s revenue by major source based upon the timing of transfer of goods or services to the customer for the three and nine months ended March 31, 2023 and 2022:

The following table disaggregates the Company’s revenue by major source based upon the timing of transfer of goods or services to the customer for the three months ended September 30, 2023 and 2022:

Three Months Ended

September 30,

Event-related and entertainment offerings (a)

7 unchanged sentences

$ 142,212 $ 146,452

Nine Months Ended

Event-related and entertainment offerings (a)

_________________

Sponsorship, signage and suite licenses (b)

167,113 113,565

25,637 31,881

Total revenues from contracts with customers

636,742 413,837

Revenues from Arena License Agreements, leases and subleases 66,819 61,313

Total revenues

$ 703,561 $ 475,150

(a) Event-related and entertainment offerings revenues are recognized at a point in time.

1 unchanged sentence

Summary of Significant Accounting Policies and Note 4.

Revenue Recognition, included in the Company’s Audited Combined Annual Financial Statements for further details on the pattern of recognition of sponsorship, signage, and suite license revenues.

Revenue Recognition, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for further details on the pattern of recognition of sponsorship, signage, and suite license revenues.

(c) Primarily consists of (i) revenues from sponsorship sales and representation agreements with Madison Square Garden Sports Corp.

(“MSG Sports”) and (ii) advertising commission revenues recognized under the Networks Advertising Sales Representation Agreement.

The Networks Advertising Sales Representation Agreement was terminated as of December 31, 2022, as discussed in Note 1.

Description of Business.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

In addition to the disaggregation of the Company’s revenue by major source based upon the timing of transfer of goods or services to the customer disclosed above, the following tables disaggregate the Company’s combined revenues by type of goods or services in accordance with the required entity-wide disclosure requirements of ASC Subtopic 280-10-50-38 to 40 and the disaggregation of revenue required disclosures in accordance with ASC Subtopic 606-10-50-5 for the three and nine months ended March 31, 2023 and 2022.

(together with its subsidiaries, as applicable, “MSG Sports”) and (ii) advertising commission revenues recognized under the advertising sales representation agreement (the “Networks Advertising Sales Representation Agreement”) between the Company and Sphere Entertainment’s subsidiary, MSGN Holdings, L.P.

(“MSG Networks”).

The Networks Advertising Sales Representation Agreement was terminated as of December 31, 2022.

In addition to the disaggregation of the Company’s revenue by major source based upon the timing of transfer of goods or services to the customer disclosed above, the following table disaggregates the Company’s revenues by type of goods or services in accordance with the required entity-wide disclosure requirements of ASC Subtopic 280-10-50-38 to 40, Segment Reporting , and the disaggregation of revenue required disclosures in accordance with ASC Subtopic 606-10-50-5, Revenue From Contracts with Customers-Overall-Disclosures, for the three months ended September 30, 2023 and 2022.

Three Months Ended

Ticketing and venue license fee revenues (a)

$ 45,547 $ 46,867

Sponsorship and signage, suite, and advertising commission revenues (b)

78,504 79,631

Food, beverage and merchandise revenues

43,021 36,344

Other 2,140 660

Total revenues from contracts with customers

169,212 163,502

Revenues from Arena License Agreements, leases and subleases

32,017 30,486

Total revenues

$ 201,229 $ 193,988

Nine Months Ended

September 30,

Ticketing and venue license fee revenues (a)

8 unchanged sentences

Revenues from Arena License Agreements, leases and subleases

66,819 61,313

Total revenues

2 unchanged sentences

(a) Amounts include ticket sales, including 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.

(b) Amounts include (i) revenues from sponsorship sales and representation agreements with MSG Sports and (ii) advertising commission revenues recognized under the Networks Advertising Sales Representation Agreement.

The Networks Advertising Sales Representation Agreement was terminated as of December 31, 2022, as discussed in Note 1.

Description of Business.

(b) Amounts include (i) revenues from sponsorship sales and representation agreements with MSG Sports and (ii) advertising commission revenues from MSG Networks until the termination of the Networks Advertising Sales Representation Agreement as of December 31, 2022.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Contract Balances

The following table provides information about contract balances from the Company’s contracts with customers as of March 31, 2023 and June 30, 2022:

March 31, June 30,

The following table provides information about the opening and closing contract balances from the Company’s contracts with customers as of September 30, 2023 and June 30, 2023:

September 30,

2023 June 30,

Receivables from contracts with customers, net (a)

5 unchanged sentences

________________

(a) Receivables from contracts with customers, net, which are reported in Accounts receivable, net and Related party receivables, current in the Company’s condensed combined balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers.

As of March 31, 2023 and June 30, 2022, the Company’s receivables from contracts with customers above included $ 9,077 and $ 4,163 , respectively, related to various related parties.

(a) Receivables from contracts with customers, net, which are reported in Accounts receivable, net and Related party receivables, current in the Company’s condensed consolidated balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers.

As of September 30, 2023 and June 30, 2023, the Company’s receivables from contracts with customers above included $ 1,723 and $ 5,397 , respectively, related to various related parties.

Related Party Transactions for further details on related party arrangements.

(b) Contract assets, current, which are reported as Prepaid expenses and other current assets in the Company’s condensed combined balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

customers, for which the Company does not have an unconditional right to bill as of the reporting date.

(b) Contract assets, current, which are reported as Prepaid expenses and other current assets in the Company’s 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.

1 unchanged sentence

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 and nine months ended March 31, 2023 relating to the deferred revenue balance as of June 30,2022 was $ 21,196 and $ 175,326 , respectively.

Revenue recognized for the three months ended September 30, 2023 relating to the deferred revenue balance as of June 30, 2023 was $ 69,729 .

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2023, the Company’s remaining performance obligations were approximately $ 485,000 , of which 39 % is expected to be recognized over the next two years and an additional 41 % of the balance is expected to be recognized in the following two years .

As of September 30, 2023, the Company’s remaining performance obligations under contracts were approximately $ 615,000 , of which 55 % is expected to be recognized over the next two years and an additional 32 % of the balance is expected to be recognized in the following two years .

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.

1 unchanged sentence

Restructuring Charges

During Fiscal Year 2023, Sphere Entertainment implemented a cost reduction program which resulted in the recording of termination benefits for a workforce reduction of certain executives and employees.

The Company recorded restructuring charges of $ 2,461 and $ 9,820 , net of contributory credits from the Company to Sphere Entertainment for the Company’s corporate employees, for the three and nine months ended March 31, 2023, respectively.

Restructuring charges are inclusive of $ 0 and $ 2,293 of share-based compensation expenses for the three and nine months ended March 31, 2023, respectively.

As of March 31, 2023 and June 30, 2022, the Company had a restructuring accrual of $ 6,036 and $ 3,210 , respectively, shown in accounts payable, accrued and other current liabilities and divisional equity (deficit).

For Fiscal Year 2022, Sphere Entertainment underwent organizational changes to further streamline operations.

These measures included termination of certain executive and management level functions.

The Company recorded restructuring charges of $ 5,171 , net of contributory credits from the Company to Sphere Entertainment for the Company’s corporate employees, for the three and nine months ended March 31, 2022.

Restructuring charges are inclusive of $ 1,612 of share-based compensation expenses for the three and nine months ended March 31, 2022.

During Fiscal Year 2024, the Company recorded restructuring charges related to termination benefits for certain corporate executives and employees.

The Company recorded restructuring charges of $ 11,553 for the three months ended September 30, 2023, inclusive of $ 6,788 of share-based compensation expenses, which are accrued in accounts payable, accrued and other current liabilities and additional paid-in capital on the condensed consolidated balance sheet.

Changes to the Company’s restructuring liability through September 30, 2023 were as follows:

Restructuring Liability

June 30, 2023

Restructuring charges (excluding share-based compensation expense)

September 30, 2023

Equity Investments With Readily Determinable Fair Value

As of March 31, 2023, the Company held investments of (i) Townsquare Media, Inc.

(“Townsquare”) and (ii) DraftKings Inc.

(“DraftKings”):

As of September 30, 2023, the Company held an investment in Townsquare Media, Inc.

(“Townsquare”) and as of June 30, 2023, also held an investment in DraftKings Inc.

(“DraftKings”) which was subsequently sold during the first quarter of Fiscal Year 2024.

• Townsquare is a media, entertainment and digital marketing solutions company that is listed on the New York Stock Exchange (“NYSE”) under the symbol “TSQ.”

1 unchanged sentence

The fair value of the Company’s investments in Class A common stock of Townsquare and Class A common stock of DraftKings is determined based on quoted market prices in active markets on the NYSE and NASDAQ, respectively, which are classified within Level I of the fair value hierarchy.

As a holder of Class C common stock of Townsquare, the Company is entitled to convert at any time all or any part of the Company’s shares into an equal number of shares of Class A common stock of Townsquare, subject to restrictions set forth in Townsquare’s certificate of incorporation.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

The carrying fair value of these investments, which are reported under Other non-current assets in the accompanying condensed combined balance sheets as of March 31, 2023 and June 30, 2022, are as follows:

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

restrictions set forth in Townsquare’s certificate of incorporation.

Therefore, the fair value of the Company’s investment in Class C common stock of Townsquare is also determined based on the quoted market price in an active market on the NYSE, which is classified as Level I of the fair value hierarchy.

The carrying fair value of these investments, which is reported under Other non-current assets in the accompanying condensed consolidated balance sheets as of September 30, 2023 and June 30, 2023, is as follows:

September 30,

2023 June 30,

Townsquare Class A common stock $ 5,085 $ 6,945

Townsquare Class C common stock 9,810 13,399

DraftKings common stock 12,397 10,146

DraftKings Class A common stock

Total Equity Investments with Readily Determinable Fair Value $ 14,895 $ 31,641

The following table summarizes the realized and unrealized (loss) gain on equity investments with readily determinable fair value, which is reported in Other income (expenses), net for the three and nine months ended March 31, 2023 and 2022:

Three Months Ended Nine Months Ended

March 31, March 31,

Three Months Ended

September 30,

Unrealized loss — Townsquare

$ ( 5,449 ) $ ( 2,983 )

Unrealized gain (loss) — Townsquare $ 2,406 $ ( 1,732 ) $ ( 609 ) $ 129

Unrealized gain (loss) — DraftKings 5,104 ( 6,956 ) 4,916 ( 28,432 )

Unrealized gain — DraftKings

Gain from shares sold — DraftKings 1,548 1,489

Total realized and unrealized gain (loss) $ 7,724 $ ( 8,688 ) $ 6,010 $ ( 28,303 )

Total realized and unrealized (loss) gain

$ ( 3,901 ) $ 830

Supplemental information on realized gain:

2 unchanged sentences

Property and Equipment, Net

As of March 31, 2023 and June 30, 2022, property and equipment, net consisted of the following:

March 31, June 30,

As of September 30, 2023 and June 30, 2023, property and equipment, net consisted of the following:

September 30,

2023 June 30,

Land $ 62,768 $ 62,768

Buildings 1,002,699 999,205

Equipment 334,555 323,741

Furniture and fixtures 29,308 28,976

Equipment, furniture, and fixtures

353,159 351,596

Leasehold improvements 105,877 105,877

1 unchanged sentence

Total Property and equipment $ 1,526,899 $ 1,522,274

accumulated depreciation and amortization (a)

accumulated depreciation and amortization

( 906,971 ) ( 893,386 )

Property and equipment, net $ 619,928 $ 628,888

________________

(a) On December 30, 2022, the Company completed the disposition of a corporate aircraft (see Note 3.

Dispositions), which resulted in a reduction of gross assets of $ 38,090 and related accumulated depreciation of $ 13,689 .

Depreciation and amortization expense on property and equipment was $ 14,798 and $ 45,615 for the three and nine months ended March 31, 2023, respectively, and $ 15,760 and $ 48,425 , for the three and nine months ended March 31, 2022, respectively.

Goodwill and Intangible Assets

As of March 31, 2023 and June 30, 2022, the carrying amount of goodwill was $ 69,041 .

During the first quarter of Fiscal Year 2023, the Company performed its annual impairment test of goodwill and determined that there was no impairment of goodwill

The Company recorded depreciation expense on property and equipment of $ 13,585 and $ 15,536 for the three months ended September 30, 2023 and 2022 respectively, which is recognized in Depreciation and amortization.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

identified as of the impairment test date.

The Company’s indefinite-lived intangible assets as of March 31, 2023 and June 30, 2022 were as follows:

March 31, June 30,

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Goodwill and Intangible Assets

As of September 30, 2023 and June 30, 2023, the carrying amount of goodwill was $ 69,041 .

The Company’s indefinite-lived intangible assets as of September 30, 2023 and June 30, 2023 were as follows:

September 30,

2023 June 30,

Trademarks $ 61,881 $ 61,881

1 unchanged sentence

Total indefinite-lived intangible assets $ 63,801 $ 63,801

During the first quarter of Fiscal Year 2023, the Company performed its annual impairment test of indefinite-lived intangible assets and determined that there were no impairments of indefinite-lived intangibles identified as of the impairment test date.

The Company’s intangible assets subject to amortization are as follows:

March 31, 2023 Gross Accumulated

Other intangibles (b)

$ 4,217 $ ( 4,217 ) $ —

Total amortizable intangible assets $ 4,217 $ ( 4,217 ) $ —

June 30, 2022 Gross Accumulated

Trade names (a)

$ 2,530 $ ( 2,169 ) $ 361

Festival rights (a)

8,080 ( 6,926 ) 1,154

Other intangibles 4,217 ( 4,094 ) 123

Total amortizable intangible assets $ 14,827 $ ( 13,189 ) $ 1,638

________________

(a) On December 2, 2022, the Company completed the BCE Disposition (see Note 3.

Dispositions) which resulted in a reduction of gross assets and accumulated amortization related to festival rights and trade names, associated with the BCE Disposition.

(b) The Other intangibles were fully amortized.

Amortization expense for intangible assets was $ 0 and $ 754 for the three and nine months ended March 31, 2023, respectively, and $ 247 and $ 741 for the three and nine months ended March 31, 2022, respectively.

During the first quarter of Fiscal Year 2024, the Company performed its annual impairment test of goodwill and indefinite-lived intangible assets and determined that there were no impairments of goodwill and indefinite-lived intangibles identified as of the impairment test date.

The Company recorded amortization expense on definite lived intangible assets of $ 0 and $ 449 for the three months ended September 30, 2023 and 2022, respectively, which is recognized in Depreciation and amortization.

Commitments and Contingencies

Commitments and Contingencies, included in the Company’s Audited Combined Annual Financial Statements for details on the Company’s off balance sheet commitments.

The Company’s off-balance sheet commitments as of June 30, 2022 included a total of $ 21,422 of contractual obligations.

During the nine months ended March 31, 2023, the Company’s off-balance sheet commitments increased by a total of $ 6,478 of contractual obligations offset by an immaterial decrease in marketing partnerships agreement-related commitments.

The increase in contractual obligations primarily relates to future performances at The Garden.

Credit Facilities for details of the principal repayments required under the Company’s various credit facilities.

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, 2023 included a total of $ 926,466 (primarily related to contractual obligations).

During the three months ended September 30, 2023, the Company did not have any material changes in its non-cancelable contractual obligations (other than activities in the ordinary course of business).

Credit Facilities for details of the principal repayments required under the Company’s credit facilities.

Delayed Draw Term Loan Facility

On April 20, 2023, a subsidiary of the Company, MSG Entertainment Holdings, LLC (“MSG Entertainment Holdings”), entered into a delayed draw term loan facility (the “DDTL Facility”) with Sphere Entertainment.

Pursuant to the DDTL Facility, MSG Entertainment Holdings has committed to lend up to $ 65,000 in delayed draw term loans to Sphere Entertainment on an unsecured basis until October 20, 2024.

As of the date of this filing, Sphere Entertainment has not yet drawn upon the DDTL Facility.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

The DDTL Facility will mature and any unused commitments thereunder will expire on October 20, 2024.

Borrowings under the DDTL Facility will bear interest at a variable rate equal to either, at the option of Sphere Entertainment, (a) a base rate plus an applicable margin, or (b) Term SOFR plus 0.10 %, plus an applicable margin.

The applicable margin is equal to the applicable margin under the National Properties Facilities (as defined below), plus 1.00 % per annum.

Subject to customary borrowing conditions, the DDTL Facility may be drawn in up to 6 separate borrowings of $ 5,000 or more.

The DDTL Facility is prepayable at any time without penalty and amounts repaid on the DDTL Facility may not be reborrowed.

If drawn, Sphere Entertainment will have the option to make any payments of principal, interest or fees under the DDTL Facility either in cash or by delivering to MSG Entertainment Holdings shares of MSG Entertainment Class A common stock.

If Sphere Entertainment elects to make any payment in the form of MSG Entertainment Class A common stock, the amount of such payment would be calculated based on the dollar volume-weighted average trading price for MSG Entertainment Class A common stock for the 20 trading days ending on the day on which Sphere Entertainment made such election.

Sphere Entertainment shall only be permitted to use the proceeds of the DDTL Facility (i) for funding costs associated with its Sphere initiative and (ii) in connection with refinancing of the indebtedness under certain senior secured credit facilities by and among MSG Networks, MSGN Eden, LLC, Regional MSGN Holdings LLC, and certain subsidiaries of MSG Networks pursuant to a credit agreement as amended and restated on October 11, 2019.

The DDTL Facility contains certain representations and warranties and affirmative and negative covenants, including, among others, financial reporting, notices of material events, and limitations on asset dispositions restricted payments, and affiliate transactions.

Pursuant to the DDTL Facility, MSG Entertainment Holdings committed to lend up to $ 65,000 in delayed draw term loans to Sphere Entertainment on an unsecured basis until October 20, 2024.

See Note 11 to the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the DDTL Facility.

On July 14, 2023, Sphere Entertainment drew down the full amount of $ 65,000 under the DDTL Facility.

On August 9, 2023, Sphere Entertainment repaid the full principal amount of the DDTL Facility and accrued interest and commitment fees by delivering 1,923 shares of the Company’s Class A Common Stock held by Sphere Entertainment, as permitted as payment under the DDTL Facility.

Such shares have been classified by the Company pursuant to the Stock Repurchase Program (as defined and further explained in Note 12.

Stockholders’ Equity) as treasury shares and are no longer outstanding on the date of repayment.

Legal Matters

2 unchanged sentences

Credit Facilities

Credit Facilities, included in the Company’s Audited Combined Annual Financial Statements for more information regarding the Company’s credit facilities.

The following table summarizes the outstanding balances under the Company’s credit facilities as of March 31, 2023 and June 30, 2022:

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 and other debt agreements as of September 30, 2023 and June 30, 2023:

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

September 30,

2023 June 30,

4 unchanged sentences

$ 20,313 $ 16,250

March 31, 2023 June 30, 2022

September 30, 2023 June 30, 2023

Principal Unamortized Deferred Financing Costs Net Principal Unamortized Deferred Financing Costs Net

4 unchanged sentences

90,100 ( 629 ) 89,471 17,100 — 17,100

Other long-term loan 168 — 168 — — —

430 — 430 304 — 304

Long-term debt, net of deferred financing costs

1 unchanged sentence

National Properties Facilities

On June 30, 2022, MSG National Properties, LLC (“MSG National Properties”), Sphere Entertainment Group, LLC

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

(formerly known as MSG Entertainment Group, LLC and referred to herein as “Sphere Entertainment Group”) and certain subsidiaries of MSG National Properties entered into a credit agreement with JP Morgan Chase Bank, N.A., as administrative agent and the lenders and L/C issuers party thereto (as amended, the “National Properties Credit Agreement”), providing for a five-year , $ 650,000 senior secured term loan facility (the “National Properties Term Loan Facility”) and a five-year , $ 100,000 revolving credit facility (the “National Properties Revolving Credit Facility” and, together with the National Properties Term Loan Facility, the “National Properties Facilities”).

As of March 31, 2023 outstanding letters of credit were $ 7,992 and the remaining balance available under the National Properties Revolving Credit Facility was $ 64,908 .

MSG National Properties, LLC (“MSG National Properties”), MSG Entertainment Holdings and certain subsidiaries of MSG National Properties are party to a credit agreement dated June 30, 2022 with JP Morgan Chase Bank, N.A., as administrative agent and the lenders and L/C issuers party thereto (as amended, the “National Properties Credit Agreement”), providing for a five-year , $ 650,000 senior secured term loan facility (the “National Properties Term Loan Facility”) and a five-year , $ 100,000 revolving credit facility (the “National Properties Revolving Credit Facility” and, together with the National Properties Term Loan Facility, the “National Properties Facilities”).

On September 15, 2023, the National Properties Credit Agreement was amended to, among other things, increase the National Properties Revolving Credit Facility by $ 50,000 to $ 150,000 .

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

As of September 30, 2023, outstanding letters of credit were $ 15,646 and the remaining balance available under the National Properties Revolving Credit Facility was $ 44,254 .

In October 2023, the Company made principal repayments of $ 35,000 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 (the “National Properties Base Rate”), or (b) Term SOFR 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 (the “National Properties SOFR Rate”).

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 (the “National Properties Base Rate”), 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 (the “National Properties SOFR Rate”).

As of September 30, 2023, the additional rate used in calculating the floating rate was (i) 2.50 % per annum for borrowings bearing the National Properties Base Rate, and (ii) 5.42 % per annum for borrowings bearing the National Properties SOFR Rate.

The National Properties Credit Agreement requires MSG National Properties to pay a commitment fee ranging from 0.30 % to 0.50 % 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, 2023 was 7.41 %.

The interest rate on the National Properties Facilities as of September 30, 2023 was 7.92 %.

Principal Repayments .

Subject to customary notice and minimum amount conditions, the Company may voluntarily repay outstanding loans under the National Properties Facilities and 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 principal obligations under the National Properties Term Loan Facility are to be repaid in quarterly installments beginning with the fiscal quarter ending March 31, 2023, in an aggregate amount equal to 2.50 % per annum ( 0.625 % per quarter), stepping up to 5.00 % per annum ( 1.25 % per quarter) in the fiscal quarter ending September 30, 2025, with the balance due at the maturity of the facility on June 30, 2027.

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 30, 2027.

The principal obligations under the National Properties Term Loan Facility are to be repaid in quarterly installments beginning with the fiscal quarter ending 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.

On October 3, 2023, MSG National Properties made principal repayments of $ 4,062 under the National Properties Term Loan 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.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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 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 ending December 31, 2022, and is set at a ratio of 2 :1 before stepping up to 2.5 :1 in the fiscal quarter ending September 30, 2024.

The leverage ratio covenant begins testing in the fiscal quarter ending June 30, 2023.

The debt service coverage ratio covenant began testing in the fiscal quarter ended December 31, 2022, and is set at a ratio of 2 :1 before stepping up to 2.5 :1 in the fiscal quarter ending 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, stepping down to 5.5 :1 in the fiscal quarter ending June 30, 2024 and 4.5 :1 in the fiscal quarter ending June 30, 2026.

As of March 31, 2023, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Credit Agreement.

As of September 30, 2023, 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.

11 unchanged sentences

Guarantors and Collateral.

As of March 31, 2023, all obligations under the National Properties Facilities were guaranteed by Sphere Entertainment Group and MSG National Properties’ existing and future direct and indirect domestic subsidiaries, other

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

than the subsidiaries that own The Garden and certain other excluded subsidiaries (the “Subsidiary Guarantors”).

In connection with the MSGE Spinco Distribution, on April 18, 2023, the National Properties Credit Agreement was amended to change the parent guarantor from Sphere Entertainment Group to MSG Entertainment Holdings, the direct parent of MSG National Properties.

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.

2 unchanged sentences

Interest Payments Loan Principal Repayments

Nine Months Ended

Three Months Ended Three Months Ended

September 30, September 30,

2023 2022 2023 2022

National Properties Term Loan Facility $ 35,283 $ 34,917 $ 6,063 $ 4,875

The carrying value and fair value of the Company’s financial instruments reported in the accompanying condensed combined balance sheets are as follows:

March 31, 2023 June 30, 2022

National Properties Facilities

$ 13,193 $ 2,804 $ — $ —

The carrying value and fair value of the Company’s financial instruments reported in the accompanying condensed consolidated balance sheets were as follows:

September 30, 2023 June 30, 2023

National Properties Facilities

$ 731,975 $ 727,414 $ 658,975 $ 655,509

Other debt 430 430 304 304

1 unchanged sentence

________________

(a) The total carrying value of the Company’s financial instruments as of March 31, 2023 and June 30, 2022 is equal to the current and non-current principal payments for the Company’s credit agreements excluding unamortized deferred financing costs of $ 13,644 and $ 16,063 , respectively.

(a) The total carrying value of the Company’s financial instruments as of September 30, 2023 and June 30, 2023 is equal to the current and non-current principal payments for the Company’s credit agreements excluding unamortized deferred financing costs of $ 12,665 and $ 12,845 , 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.

Pension Plans and Other Postretirement Benefit Plans

Sphere Entertainment sponsors several pension, savings and postretirement benefit plans including the defined benefit pension plans (“Pension Plans”), postretirement benefit plan (“Postretirement Plan”), The Madison Square Garden 401(k) Savings Plan and the MSG Entertainment Group, LLC Excess Savings Plan (collectively, the “Savings Plans”), and The Madison Square Garden 401(k) Union Plan (the “Union Savings Plan”).

Certain of these Pension Plans and the Postretirement Plan, such as the Cash Balance Plan and Excess Plans, historically included participants of the Company as well as Sphere Entertainment and MSG Sports (“Shared Plans”).

Other plans, such as the Union Plan, only included participants of the Company and not of MSG Sports and Sphere Entertainment (“Direct Plan”).

Pension Plans and Other Postretirement Benefit Plans, included in the Company’s Audited Combined Annual Financial Statements for more information regarding these plans.

Defined Benefit Pension Plans and Postretirement Benefit Plan

For the historical periods, Sphere Entertainment was the legal sponsor of the Pension Plans and Postretirement Plan.

For purposes of the condensed combined financial statements, it was determined that these plans’ assets and liabilities were attributable to the Company.

Therefore, the condensed combined financial statements reflect the full impact of the Shared Plans

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

and the Direct Plan on both the condensed combined statements of operations and condensed combined balance sheets.

The pension expense and liabilities related to employees of other Sphere Entertainment businesses participating in the Shared Pension Plans and Postretirement Plan were immaterial for the three and nine months ended March 31, 2023 and 2022.

The following table presents components of net periodic benefit cost for the Pension Plans and Postretirement Plan included in the accompanying condensed combined statements of operations for the three and nine months ended March 31, 2023 and 2022.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Pension Plans and Other Postretirement Benefit Plans

Prior to the MSGE Distribution, Sphere Entertainment sponsored both funded and unfunded and qualified and non-qualified defined benefit plans (the “Pension Plans”), as well as a postretirement benefit plan (the “Postretirement Plan”), covering certain full-time employees and retirees of the Company.

In connection with the MSGE Distribution, the sponsorship of the Pension Plans and Postretirement Plan was transferred to the Company.

Pension Plans and Other Postretirement Benefit Plans, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the Pension Plans, Postretirement Plan, the Madison Square Garden 401(k) Savings Plans, together with associated excess savings plan, and the Madison Square Garden 401(k) Union Plan.

Defined Benefit Pension Plans and Other Postretirement Benefit Plans

The following table presents components of net periodic benefit cost for the Pension Plans and Postretirement Plan included in the accompanying condensed consolidated and combined statements of operations for the three months ended September 30, 2023 and 2022.

Service cost is recognized in direct operating expenses and selling, general and administrative expenses.

1 unchanged sentence

Pension Plans Postretirement Plan

Three Months Ended

2023 2022 2023 2022

Service cost $ 30 $ 25 $ 8 $ 9

Interest cost 927 928 11 12

Expected return on plan assets ( 1,504 ) ( 1,504 ) — —

Recognized actuarial loss 314 355 9 16

Net periodic (benefit) cost $ ( 233 ) $ ( 196 ) $ 28 $ 37

Pension Plans Postretirement Plan

Nine Months Ended

Three Months Ended Three Months Ended

September 30, September 30,

2023 2022 2023 2022

4 unchanged sentences

Net periodic (benefit) cost $ 633 $ ( 185 ) $ 30 $ 28

Contributions for Qualified Defined Benefit Pension Plan

Sphere Entertainment sponsors a non-contributory, qualified defined benefit pension plan covering certain of its union employees (the “Union Plan”).

During the three and nine months ended March 31, 2023, the Company did not make any contributions to the Union Plan.

Contributions for Qualified Defined Benefit Pension Plans

During the three months ended September 30, 2023, the Company contributed $ 12,250 to the Cash Balance Pension Plan.

Defined Contribution Plans

For the three and nine months ended March 31, 2023 and 2022, expenses related to the Savings Plans and Union Savings Plan included in the accompanying condensed combined statements of operations are as follows:

Three Months Ended Nine Months Ended

March 31, March 31,

2023 2022 2023 2022

For the three months ended September 30, 2023 and 2022, expenses related to the Savings Plans and Union Savings Plan included in the accompanying condensed consolidated and combined statements of operations are as follows:

Three Months Ended

September 30,

Savings Plans $ 2,034 $ 1,178

Union Savings Plan $ 50 $ 18

Executive Deferred Compensation

Pension Plans and Other Postretirement Benefit Plans, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the Company’s Executive Deferred Compensation Plan (the “Deferred Compensation Plan”).

The Company recorded compensation income of $ 145 and $ 154 for the three months ended September 30, 2023 and 2022, respectively, within Selling, general, and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability.

In addition, the Company recorded loss of $ 145 and $ 154 for the three months ended September 30, 2023 and 2022, respectively, within Other (expense) income, net to reflect remeasurement of the fair value of assets under the Deferred Compensation Plan.

The following table summarizes amounts recognized related to the Deferred Compensation Plan in the condensed consolidated and combined balance sheets:

September 30,

2023 June 30,

Non-current assets (included in Other non-current assets)

$ 3,871 $ 2,954

Non-current liabilities (included in Other non-current liabilities)

$ ( 3,914 ) $ ( 2,976 )

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Share-based Compensation

Certain employees of the Company have historically participated in the share-based compensation plans of Sphere Entertainment (“Sphere Entertainment Employee Stock Plans”).

Only the expenses for the awards provided to the Company’s direct employees, net of expenses related to the Company’s corporate employees who participate in the plans that were charged to Sphere Entertainment, are recorded in the condensed combined financial statements.

Share Based Compensation, included in the Company’s Audited Combined Annual Financial Statements for more information on these plans.

Share-based compensation expense was recognized in the condensed combined statements of operations as a component of direct operating expenses or selling, general and administrative expenses.

The share-based compensation expense recorded by the Company, in the periods presented, includes the expenses associated with the employees attributable to the Company, net of contributory credits from the Company to Sphere Entertainment for the Company’s corporate employees.

The Company has two share-based compensation plans:

the 2023 Employee Stock Plan (the “Employee Stock Plan”) and the 2023 Stock Plan for Non-Employee Directors (the “Non-Employee Director Plan”).

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 and combined statements of operations as a component of direct operating expenses or selling, general, and administrative expenses.

The share-based compensation expense recorded by the Company in Fiscal Year 2023 includes the expenses associated with the employees attributable to the Company, net of contributory credits from the Company to Sphere Entertainment for the Company’s corporate employees.

The following table summarizes the Company’s share-based compensation expense:

Three Months Ended Nine Months Ended

March 31, March 31,

2023 2022 2023 2022

Share-based compensation (a)

Three Months Ended

September 30,

Share-based compensation expense (a)

$ 6,177 $ 7,410

Intrinsic value of awards vested

Fair value of awards vested (b)

$ 26,400 $ 2,867

________________

(a) The balances shown includes $ 0 and $ 2,293 which was reclassified to Restructuring charges in the condensed consolidated statements of operations for the three and nine months ended March 31, 2023, respectively, and $ 1,612 for the three and nine months ended March 31, 2022, as detailed in Note 5.

(a) The expense shown excludes $ 6,788 that was reclassified to Restructuring charges in the condensed consolidated and combined statements of operations for the three months ended September 30, 2023 , as detailed in Note 4.

Restructuring Charges.

As of March 31, 2023, there was $ 6,401 of unrecognized compensation cost related to unvested RSUs and PSUs held by the Company’s direct employees.

(b) To fulfill required statutory tax withholding obligations for the applicable income and other employment taxes, RSUs and PSUs with an aggregate value of $ 11,817 and $ 1,147 , were retained by the Company during the three months ended September 30 2023 and 2022, respectively.

As of September 30, 2023, there was $ 53,136 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

During the nine months ended March 31, 2023 and 2022, 66 and 59 RSUs were granted, respectively, and 40 and 22 RSUs vested, respectively.

During the nine months ended March 31, 2023 and 2022, 60 and 55 PSUs were granted, respectively, and 11 and 8 PSUs vested, respectively.

During the three months ended September 30, 2023 and 2022, 562 and 66 RSUs were granted, respectively, and 476 and 40 RSUs vested, respectively.

During the three months ended September 30, 2023 and 2022, 506 and 60 PSUs were granted, respectively, and 241 and 11 PSUs vested, respectively.

Stockholders’ Equity

Share 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.

Under the authorization, 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 (including through repayment by Sphere Entertainment of the DDTL Facility with shares of the Company’s Class A Common Stock) in accordance with applicable insider trading and other securities laws and regulations.

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.

No shares have been repurchased to date.

For the three months ended September 30, 2023, the Company repurchased 3,525 shares of Class A Common Stock for $ 115,512 .

As of September 30, 2023, the Company had approximately $ 110,000 remaining available for repurchases.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Accumulated Other Comprehensive Loss

2 unchanged sentences

Three Months Ended

Nine Months Ended

2023 2022 2023 2022

September 30,

Balance at beginning of period $ ( 34,021 ) $ ( 34,740 )

Other comprehensive income (loss):

Other comprehensive income:

Amounts reclassified from accumulated other comprehensive loss (a)

323 371 1,063 1,114

Income tax expense ( 41 ) ( 66 )

Other comprehensive income (loss), net of income taxes 267 306 878 918

Other comprehensive income, net of income taxes

Balance at end of period $ ( 33,824 ) $ ( 34,435 )

________________

(a) Amounts reclassified from accumulated other comprehensive loss represent the amortization of net actuarial loss and net unrecognized prior service credit included in net periodic benefit cost, which is reflected under Other income (expense), net in the accompanying condensed consolidated statements of operations (see Note 11.

(a) Amounts reclassified from accumulated other comprehensive loss represent the amortization of net actuarial loss included in net periodic benefit cost, which is reflected under Other income (expense), net in the accompanying condensed consolidated and combined statements of operations (see Note 10.

Pension Plans and Other Postretirement Benefit Plans).

Related Party Transactions

Given that the MSGE Spinco Distribution did not occur until after March 31, 2023, the transactions described below, unless otherwise indicated, were in place with Sphere Entertainment as of March 31, 2023, and continued with the Company following the MSGE Spinco Distribution.

As of March 31, 2023, members of the Dolan family, including 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 Sphere Entertainment’s outstanding Class B common stock and approximately 5.5 % of Sphere Entertainment’s outstanding Class A common stock (inclusive of options exercisable within 60 days of March 31, 2023).

Such shares of Sphere Entertainment’s Class A common stock and Class B common stock, collectively, represent approximately 72.4 % of the aggregate voting power of Sphere Entertainment’s outstanding common stock.

Pursuant to the MSGE Spinco Distribution on April 20, 2023, Sphere Entertainment distributed approximately 67 % of the outstanding common stock of the Company to its stockholders, with one share of the Company’s Class A Common Stock issued for every share of Sphere Entertainment’s Class A common stock held as of the Record Date, and one share of the Company’s Class B Common Stock issued for every share of Sphere Entertainment’s Class B common stock held as of the Record Date, and retained approximately 33 % of the Company’s outstanding common stock.

Members of the Dolan family are the controlling stockholders of the Company, Sphere Entertainment (including its subsidiaries MSG Networks Inc.

and TAO Group Hospitality, which was subsequently sold on May 3, 2023), MSG Sports, and AMC Networks Inc.

As of September 30, 2023 , members of the Dolan family, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, members of the Dolan family including trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”) collectively beneficially owned 100 % of the Company’s outstanding Class B Common Stock and approximately 4.8 % of the Company’s outstanding Class A Common Stock (inclusive of options exercisable within 60 days of September 30, 2023).

Such shares of Class A Common Stock and Class B Common Stock, collectively, represent approximately 64 % 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.

(“AMC Networks”).

Related Party Transactions to the Company’s Audited 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 except as described below and in Note 1.

Description of Business and Basis of Presentation.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Related Party Transactions, included in the Company’s Audited Consolidated and Combined Audited Financial Statements for a description of the Company’s current related party arrangements.

There have been no material changes in such related party arrangements except as described below.

From time to time the Company enters into arrangements with 605, LLC (“605”).

Dolan, the Company’s Executive Chairman, Chief Executive Officer and a director, and his spouse, Kristin A.

Dolan, own 50 % of 605.

Dolan is also the founder and Non-Executive Chairman of 605.

Dolan, owned 605 until September 13, 2023.

Dolan is also the founder and was the Chief Executive Officer of 605.

605 provides audience measurement and data analytics services to the Company and its subsidiaries in the ordinary course of business.

Sphere Entertainment’s audit committee approved the entry into one or more agreements with 605 to provide certain data analytics services to the Company for an aggregate amount of up to $ 1,000 .

In August 2022, a subsidiary of Sphere Entertainment entered into a three-year agreement with 605, valued at approximately $ 750 , covering several customer analysis projects per year in connection with events held at our venues, which was assigned to the Company in connection with the MSGE Spinco Distribution.

The Company expects to engage 605 to provide additional data analytics services in the future.

Pursuant to this arrangement, the Company recognized $ 68 and $ 204 of expense for the three and nine months ended March 31, 2023, respectively, and as of March 31, 2023, $ 68 has been recognized in Prepaid expenses and other current assets.

In August 2022, a subsidiary of Sphere Entertainment entered into a three-year agreement with 605, valued at $ 750 , covering several customer analysis projects per year in connection with events held at our venues, which was assigned to the Company in connection with the MSGE Distribution.

Pursuant to this arrangement, the Company recognized $ 34 and $ 70 of expense for the three months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023 and June 30, 2023, $ 102 and $ 0 has been recognized in Prepaid expenses and other current assets.

On September 13, 2023, 605 was sold to iSpot.tv, and James L.

Dolan and Kristin A.

Dolan now hold a minority interest in iSpot.tv.

As a result, as of September 13, 2023, 605 is no longer considered to be a related party.

MSG Sports has made market rate interest-bearing advances to the Company in connection with the construction of new premium hospitality suites at The Garden.

The advances will be repaid (including interest) through cash receipts from the licenses for each new suite.

As of March 31, 2023, MSG Sports had advanced $ 168 to the Company in connection with the arrangement.

As of September 30, 2023 and June 30, 2023, MSG Sports had advanced $ 430 and $ 304 , respectively, to the Company in connection with the arrangement.

This advance has been recognized in Long-term debt, net of deferred financing costs in the accompanying condensed consolidated balance sheets.

As of June 30, 2022 , the Company had $ 637 of notes payable with respect to a loan received by BCE from its noncontrolling interest holder.

There were no notes payable as of March 31, 2023 as a result of the BCE Disposition.

Subsequent to June 30, 2023, the Company entered into arrangements with (i) MSG Sports, pursuant to which MSG Sports provides certain sponsorship, premium hospitality and other business operations services to the Company in exchange for service fees, (ii) Sphere Entertainment, pursuant to which the Company provides certain sponsorship account management services to Sphere Entertainment in exchange for service fees, and (iii) MSG Sports and Sphere Entertainment, pursuant to which the three companies have agreed to allocate expenses in connection with the use by each company of aircraft owned or leased by the Company and MSG Sports.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Revenues and Operating Expenses

1 unchanged sentence

The significant components of these amounts are discussed below.

These amounts are reflected in revenues and operating expenses in the accompanying condensed combined statements of operations for the three and nine months ended March 31, 2023 and 2022:

These amounts are reflected in revenues and operating expenses in the accompanying condensed consolidated and combined statements of operations for the three months ended September 30, 2023 and 2022:

Three Months Ended

Nine Months Ended

2023 2022 2023 2022

September 30,

Revenues $ 5,159 $ 5,558

3 unchanged sentences

Cost reimbursement from MSG Sports ( 9,861 ) ( 9,517 )

Corporate allocations to Sphere Entertainment ( 40,794 ) ( 32,343 ) ( 114,761 ) ( 106,628 )

Cost reimbursement from Sphere Entertainment (after April 20, 2023) and Corporate allocations to Sphere Entertainment (before April 20, 2023) ( 30,336 ) ( 35,748 )

Other operating expenses, net 553 895

2 unchanged sentences

_________________

(a) Of the total operating expenses, net, $( 804 ) and $( 1,329 ) for the three and nine months ended March 31, 2023, respectively, and $( 4,427 ) and $( 7,458 ) for the three and nine months ended March 31, 2022, respectively, are included in direct operating expenses in the accompanying condensed combined statements of operations, and $( 51,010 ) and $( 141,653 ) for the three and nine months ended March 31, 2023, respectively, and $( 40,790 ) and $( 130,267 ) for the three and nine months ended March 31, 2022, respectively, are included in selling, general and administrative expenses.

The Company recorded $ 31,163 and $ 64,312 of revenues under the Arena License Agreements for the three and nine months ended March 31, 2023, respectively.

In addition to the Arena License Agreements, the Company’s revenues from related parties primarily reflected sponsorship sales and service representation agreements of $ 7,079 and $ 15,643 , and merchandise sharing revenues of $ 2,160 and $ 4,451 with MSG Sports during the three and nine months ended March 31, 2023, respectively.

The Company recorded revenues under the Networks Advertising Sales Representation Agreement of $ 0 and $ 8,802 for the three and nine months ended March 31, 2023, respectively.

The Company also earned sublease revenue from related parties of $ 716

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

and $ 2,100 during the three months and nine months ended March 31, 2023, respectively.

The Company recorded $ 29,616 and $ 58,797 of revenues under the Arena License Agreements for the three and nine months ended March 31, 2022, respectively.

In addition, the Company recorded revenues under sponsorship sales and service representation agreements of $ 7,027 and $ 14,206 and merchandise sharing revenues of $ 1,548 and $ 3,000 with MSG Sports during the three and nine months ended March 31, 2022, respectively.

The Company recorded revenues under the Networks Advertising Sales Representation Agreement of $ 9,621 and $ 17,015 for the three and nine months ended March 31, 2022, respectively.

The Company also earned sublease revenue from related parties of $ 736 and $ 1,958 during the three and nine months ended March 31, 2022, respectively.

Operating Expenses

Revenue sharing expenses

Revenue sharing expenses include MSG Sports’ share of the Company’s in-venue food and beverage sales and certain venue signage agreements.

Reimbursements under Arena License Arrangements

Fees recognized by the Company under the Arena License Agreements with MSG Sports for use of The Garden are reported as operating lease revenues in accordance with ASC Topic 842.

In addition, the Company records credits to direct operating expenses as a reimbursement under the Arena License Agreements.

Cost reimbursement from MSG Sports

Per the Services Agreement with MSG Sports, the Company’s corporate overhead expenses that are charged to MSG Sports are primarily related to centralized functions, including information technology, security, accounts payable, payroll, tax, legal, human resources, insurance and risk management, investor relations, corporate communications, benefit plan administration and reporting, and internal audit.

Corporate allocations to Sphere Entertainment

Allocations of corporate overhead and shared services expense to Sphere Entertainment from the Company were recorded for corporate and operational functions based on direct usage when identifiable, with the remainder allocated on a pro rata basis of combined assets, headcount or other measures of the Company or Sphere Entertainment, which is recorded as a reduction of either direct operating expenses or selling, general and administrative expense.

The aforementioned allocations for certain support functions that are provided on a centralized basis and not historically recorded at the business unit level by Sphere Entertainment related to departments such as executive management, finance, legal, human resources, government affairs, and information technology, among others.

In addition, corporate allocations to Sphere Entertainment include charges to MSG Networks under the services agreement with MSG Networks.

Other operating expenses, net

The Company and its related parties enter into transactions with each other in the ordinary course of business.

Amounts charged to the Company for other transactions with its related parties are net of amounts charged by the Company to the Knickerbocker Group, LLC, an entity owned by James L.

Dolan, the Executive Chairman, Chief Executive Officer and a director of the Company, for office space and the cost of certain technology services.

In addition, other operating expenses primarily include net charges relating to (i) reciprocal aircraft arrangements between the Company and each of Q2C and CFD, (ii) time sharing and/or dry lease agreements with MSG Sports, AMC Networks and Brighid Air, and (iii) commission under the group ticket sales representation agreement with MSG Sports.

The reciprocal aircraft arrangement between the Company and Q2C and the related aircraft support services arrangement between them was no longer effective as of December 21, 2021.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

(a) Of the total operating expenses, net, $ 1,310 and $ 376 for the three months ended September 30, 2023 and 2022, respectively, are included in direct operating expenses in the accompanying condensed consolidated and combined statements of operations, and $( 40,231 ) and $( 44,052 ) for the three months ended September 30, 2023 and 2022, respectively, are included in selling, general, and administrative expenses.

The Company recorded $ 1,324 of revenues under the Arena License Agreements for the three months ended September 30, 2023 .

In addition to the Arena License Agreements, during the three months ended September 30, 2023, the Company’s revenues from related parties primarily reflected sponsorship sales and service representation agreements of $ 2,763 , and merchandise sharing revenues of $ 196 with MSG Sports.

The Company also earned sublease revenue from related parties of $ 759 during the three months ended September 30, 2023 , respectively.

The Company recorded $ 1,324 of revenues under the Arena License Agreements for the three months ended September 30, 2022 .

In addition, during the three months ended September 30, 2022 the Company recorded revenues under sponsorship sales and service representation agreements of $ 2,533 and merchandise sharing revenues of $ 115 with MSG Sports.

The Company recorded revenues under the Networks Advertising Sales Representation Agreement of $ 378 for the three months ended September 30, 2022 , respectively.

The Company also earned sublease revenue from related parties of $ 695 during the three months ended September 30, 2022 .

Other Related Party Matters

Loans Receivable from Sphere Entertainment

The Company’s captive insurance entity, Eden Insurance Company, Inc.

(“Eden”), entered into a loan agreement with Sphere Entertainment (the “Eden Loan Agreement”), under which Eden granted Sphere Entertainment an unsecured loan bearing interest at a rate of LIBOR plus 350 basis points with a principal amount not exceeding $ 60,000 .

This loan is in the form of a demand promissory note, payable immediately upon order from Eden.

As of March 31, 2023 and June 30, 2022, Eden had an outstanding loan receivable from Sphere Entertainment of $ 53,634 and $ 56,060 , respectively, inclusive of accrued interest.

During the three and nine months ended March 31, 2023 and 2022, Eden declared dividends to Sphere Entertainment through a reduction of the loan receivable from Sphere Entertainment.

During the three and nine months ended March 31, 2023 and 2022, no interest or principal payments were received by Eden and instead the accrued but unpaid interest was added to the outstanding principal amount of the loan.

The cash flows related to this loan receivable are reflected as investing activities, as these balances represent amounts loaned by the Company to Sphere Entertainment.

The Company recorded related party interest income of $ 1,121 and $ 2,925 related to the Eden Loan Agreement during the three and nine months ended March 31, 2023, respectively.

The Company recorded related party interest income of $ 352 and $ 1,413 related to the Eden Loan Agreement during the three and nine months ended March 31, 2022, respectively.

The loan payable to the Company held by Sphere Entertainment under the Eden Loan Agreement was assigned by Sphere Entertainment to the Company in connection with the MSGE Spinco Distribution, and will be eliminated in consolidation by the Company for periods subsequent to the MSGE Spinco Distribution.

On May 23, 2019, the Company entered into a subordinated credit agreement with TAO Group Sub-Holdings, LLC (“TAOG Sub-Holdings”), a wholly-owned subsidiary of Sphere Entertainment (the “TAO Subordinated Credit Agreement”), under which the Company granted TAOG Sub-Holdings a $ 49,000 subordinated loan.

This loan had a maturity date of August 22, 2024.

On June 15, 2020, the TAO Subordinated Credit Agreement was amended to provide an additional $ 22,000 of borrowing capacity and subsequently, the Company provided additional proceeds of $ 19,000 under the TAO Subordinated Credit Agreement.

There are no mandatory repayments of principal until the maturity date.

Subject to customary notice and minimum amount conditions, TAOG Sub-Holdings can voluntarily prepay outstanding loans under the TAO Subordinated Credit Agreement at any time, in whole or in part, without premium or penalty.

Interest is due monthly in cash or paid-in-kind based on the terms of the TAO Senior Credit Agreement.

On June 9, 2022, Sphere Entertainment paid the full outstanding principal amount of this TAO Subordinated Credit Agreement.

The Company recorded related party interest income of $ 1,105 and $ 3,506 related to the TAO Subordinated Credit Agreement during the three and nine months ended March 31, 2022, respectively.

Cash Management

Sphere Entertainment uses a centralized approach to cash management and financing of operations.

The Company’s and Sphere Entertainment’s other subsidiaries’ cash was available for use and was regularly “swept” historically.

Cash and cash equivalents were attributed to the Company for each of the periods presented, as such cash was held in accounts legally owned by the Company.

Transfers of cash both to and from Sphere Entertainment were included as components of Sphere Entertainment’s Investment on the condensed combined statements of divisional equity (deficit).

The main components of the net transfers to Sphere Entertainment are cash pooling/general financing activities, various expense allocations to/from Sphere Entertainment, and receivables/payables from/to Sphere Entertainment deemed to be effectively settled upon the distribution of the Company by Sphere Entertainment.

Sphere Entertainment Investment

Certain significant balances and transactions among the Company and Sphere Entertainment and its subsidiaries, which include allocations of corporate general and administrative expenses, share-based compensation expense and other historical intercompany activities, are recorded as components of divisional equity (deficit), except for the transactions noted above related to historically cash-settled loans between the Company and Sphere Entertainment.

The changes in Sphere Entertainment Investment also include financing activities for capital transfers, cash sweeps, and other treasury services.

As part of this activity, cash balances are swept to Sphere Entertainment regularly as part of the Sphere Entertainment cash management policy.

Prior to the MSGE Distribution, the Company’s captive insurance entity, Eden Insurance Company, Inc.

(“Eden”), entered into a loan agreement with Sphere Entertainment (the “Eden Loan Agreement”), under which Eden granted Sphere Entertainment an unsecured loan bearing interest at a rate of SOFR plus 350 basis points with a principal amount not exceeding $ 60,000 .

This loan was in the form of a demand promissory note, payable immediately upon order from Eden.

The loan payable to the Company held by Sphere Entertainment under the Eden Loan Agreement was assigned by Sphere Entertainment to the Company in connection with the MSGE Distribution, and has been eliminated in consolidation by the Company for periods subsequent to the MSGE Distribution.

During Fiscal Year 2023, Eden declared and paid dividends to Sphere Entertainment through a reduction of the loan receivable from Sphere Entertainment.

During Fiscal Year 2023, no interest or principal payments were received by Eden.

Instead, the accrued but unpaid interest was added to the outstanding principal amount of the loan.

The cash flows related to this loan receivable for periods prior to the MSGE Distribution are reflected as investing activities, as these balances represent amounts loaned by the Company to Sphere Entertainment.

The Company recorded related party interest income of $ 0 , and $ 902 related to the Eden Loan Agreement in the three months ended September 30, 2023 and 2022, respectively.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Related Party Transactions after the MSGE Spinco Distribution

In connection with the MSGE Spinco Distribution, the Company and Sphere Entertainment entered into arrangements with respect to, among other things, transition services.

Additionally, on April 20, 2023, MSG Entertainment Holdings entered into the DDTL Facility with Sphere Entertainment.

Pursuant to the DDTL Facility, MSG Entertainment Holdings has committed to lend up to $ 65,000 in delayed draw term loans to Sphere Entertainment on an unsecured basis until October 20, 2024.

As of the date of this filing, Sphere Entertainment has not yet drawn upon the DDTL Facility.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Additional Financial Information

The following table provides a summary of the amounts recorded as cash, cash equivalents, and restricted cash:

September 30,

2023 June 30,

Cash and cash equivalents $ 37,179 $ 76,089

6 unchanged sentences

Prepaid expenses and other current assets consisted of the following:

September 30,

2023 June 30,

Prepaid expenses $ 77,458 $ 58,588

1 unchanged sentence

Inventory (a)

Notes and other receivables 797 322

Other 7,888 5,163

2 unchanged sentences

(a) Inventory is mostly comprised of food and liquor for venues.

Other non-current assets consisted of the following:

September 30,

2023 June 30,

Unbilled lease receivable (a)

$ 57,957 $ 67,325

Equity investments with readily determinable fair value (b)

14,895 31,641

Deferred costs 4,111 4,120

Other 6,187 5,270

Total other non-current assets $ 83,150 $ 108,356

_________________

(a) Unbilled lease receivable relates to the amounts recorded under the Arena License Agreement.

(b) See Note 5.

Equity investments with readily determinable fair value for more information on long-term investments.

Accounts payable, accrued and other current liabilities consisted of the following:

September 30,

2023 June 30,

Accounts payable $ 18,715 $ 15,628

4 unchanged sentences

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Other income (expense), net includes the following:

Three Months Ended Nine Months Ended

March 31, March 31,

2023 2022 2023 2022

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Other (expense) income, net includes the following:

Three Months Ended

September 30,

Gains from shares sold — DraftKings $ 1,548 $ 1,489

2 unchanged sentences

Other ( 568 ) 56

Total other income (expense), net $ 8,070 $ ( 8,495 ) $ 6,784 $ ( 27,742 )

During the nine months ended March 31, 2023 and 2022, the Company received income tax refunds, net of payments, of $ 2,031 and $ 10,281 , respectively.

Total other (expense) income, net

$ ( 4,469 ) $ 886

During the three months ended September 30, 2023 and 2022 , the Company received income tax refunds, net of payments, of $ 0 and $ 2,071 , respectively.

Subsequent Events

The Company licenses Suite Sixteen to TAO Group Hospitality, a former related party and subsidiary of Sphere Entertainment, in exchange for license fee payments.

On May 3, 2023, TAO Group Hospitality was sold by Sphere Entertainment and the lounge license agreement was extended for an additional four years through September 2028.

On April 20, 2023, Sphere Entertainment distributed approximately 67 % of the outstanding common stock of the Company, to its stockholders in the form of Class A Common Stock, with Sphere Entertainment retaining approximately 33 % of the outstanding common stock of the Company immediately following the MSGE Spinco Distribution.

Description of Business and Basis of Presentation for more information regarding the MSGE Spinco Distribution.

On April 20, 2023, a subsidiary of the Company, MSG Entertainment Holdings, entered into a delayed draw term loan facility with Sphere Entertainment.

Pursuant to the DDTL Facility, MSG Entertainment Holdings has committed to lend up to $ 65,000 in delayed draw term loans to Sphere Entertainment on an unsecured basis until October 20, 2024.

As of the date of this filing, Sphere Entertainment has not yet drawn upon the DDTL Facility.

Commitments and Contingencies for more information regarding the DDTL Facility.

On April 20, 2023, Sphere Entertainment transferred the interest bearing unsecured loan under the Eden Loan Agreement to the Company.

Related Party Transactions for more information regarding the Eden Loan Agreement.

On April 18, 2023, in connection with the MSGE Spinco Distribution, the National Properties Credit Agreement was amended to change the parent guarantor from Sphere Entertainment Group to MSG Entertainment Holdings, the direct parent of MSG National Properties.

Credit Facilities for more information regarding the change in the National Properties Credit Agreement parent guarantor.

In October 2023, the Company paid down $ 35,000 under the National Properties Revolving Credit Facility .

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 1. Financial Statements