What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-02-07 compared with 2023-11-07 · 271 added, 194 removed, 492 unchanged (49% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

September 30, June 30,

December 31, June 30,

Current Assets:

11 unchanged sentences

Total assets $ 1,420,275 $ 1,401,157

LIABILITIES AND DEFICIT

LIABILITIES AND RETAINED EARNINGS (DEFICIT)

Current Liabilities:

15 unchanged sentences

Additional paid-in-capital 25,339 17,727

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

Treasury stock at cost ( 4,365 and 840 shares outstanding as of December 31, 2023 and June 30, 2023, respectively)

( 140,512 ) ( 25,000 )

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

Retained earnings (deficit) 45,881 ( 28,697 )

Accumulated other comprehensive loss ( 33,279 ) ( 34,021 )

3 unchanged sentences

(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.

45,487 and 45,024 shares issued as of December 31, 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.

6,867 shares issued as of December 31, 2023 and June 30, 2023.

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

2 unchanged sentences

(in thousands, except per share data)

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2023 2022 2023 2022

$ 402,666 $ 355,880 $ 544,878 $ 502,332

Direct operating expenses (a)

3 unchanged sentences

Depreciation and amortization ( 13,205 ) ( 15,586 ) ( 26,789 ) ( 31,571 )

Gains, net on dispositions — 4,412 — 4,412

Restructuring charges ( 888 ) ( 7,359 ) ( 12,441 ) ( 7,359 )

Operating loss

( 33,425 ) ( 11,309 )

Operating income 137,423 113,443 103,999 102,134

Interest income (a)

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

Other (expense) income, net

1,083 1,812 1,935 3,322

Loss from operations before income taxes

( 51,330 ) ( 20,340 )

Income tax benefit

( 50,671 ) ( 18,274 )

Interest expense ( 15,049 ) ( 13,205 ) ( 29,336 ) ( 24,632 )

Other income (expense), net 2,846 ( 2,172 ) ( 1,625 ) ( 1,286 )

Income from operations before income taxes 126,303 99,878 74,973 79,538

Income tax expense ( 1,054 ) ( 2,797 ) ( 395 ) ( 731 )

Net income 125,249 97,081 74,578 78,807

Net loss attributable to nonredeemable noncontrolling interest — ( 181 ) — ( 553 )

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 )

Net income attributable to MSG Entertainment’s stockholders $ 125,249 $ 97,262 $ 74,578 $ 79,360

Income per share attributable to MSG Entertainment’s stockholders:

Basic $ 2.61 $ 1.88 $ 1.52 $ 1.53

Diluted $ 2.59 $ 1.88 $ 1.52 $ 1.53

Weighted-average number of shares of common stock:

Basic and diluted (b)

48,029 51,768 48,955 51,768

48,293 51,768 49,168 51,768

_________________

(a) See Note 14 .

1 unchanged sentence

(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.

stockholders in 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 and six months ended December 31, 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 CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2023 2022 2023 2022

Net income $ 125,249 $ 97,081 $ 74,578 $ 78,807

Other comprehensive income, before income taxes:

Amortization of net actuarial gain included in net periodic benefit cost

662 371 899 742

Other comprehensive income, before income taxes 662 371 899 742

1 unchanged sentence

Other comprehensive income, net of income taxes

Comprehensive loss

545 306 742 611

Comprehensive income 125,794 97,387 75,320 79,418

Comprehensive loss attributable to nonredeemable noncontrolling interest — ( 181 ) — ( 553 )

Comprehensive loss attributable to MSG Entertainment

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

Comprehensive income attributable to MSG Entertainment $ 125,794 $ 97,568 $ 75,320 $ 79,971

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

2 unchanged sentences

(in thousands)

Three Months Ended

September 30,

Six Months Ended

OPERATING ACTIVITIES:

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

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

Net income $ 74,578 $ 78,807

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 26,789 31,571

Share-based compensation expense 20,738 16,258

Deferred income tax benefit

Deferred income tax expense 394 —

Provision for doubtful accounts 305 —

1 unchanged sentence

Related party paid in kind interest ( 512 ) ( 1,804 )

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

Net unrealized and realized loss on equity investments with readily determinable fair value

Non-cash lease expense

Gains, net on dispositions — ( 4,412 )

Change in assets and liabilities:

Accounts receivable, net ( 38,362 ) 1,987

Related party receivables and payables, net

44,654 ( 33,764 )

Prepaid expenses and other current and non-current assets 1,479 ( 5,591 )

3 unchanged sentences

Operating lease right-of-use assets and lease liabilities ( 3,620 ) ( 8,886 )

Net cash provided by (used in) operating activities

$ 1,378 $ ( 57,326 )

Net cash provided by operating activities $ 105,232 $ 69,336

INVESTING ACTIVITIES:

Capital expenditures ( 11,215 ) ( 9,208 )

Proceeds from dispositions, net — 27,904

Proceeds from sale of investments

Loans to related parties

Net cash used in investing activities

Net cash (used in) provided by investing activities

$ ( 62,731 ) $ 22,390

1 unchanged sentence

Proceeds from revolving credit facility

Proceeds from related party loan

Principal repayments on long-term debt ( 98,225 ) —

Repayments on related party loan, net

Payments for debt financing costs

2 unchanged sentences

Net transfers to Sphere Entertainment and Sphere Entertainment’s subsidiaries — ( 553 )

Net cash provided by financing activities

$ 9,273 $ 102,096

Net cash used in financing activities $ ( 89,284 ) $ ( 553 )

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

5 unchanged sentences

Non-cash investing and financing activities:

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

Capital expenditures incurred but not yet paid or paid by landlord $ 12,858 $ 402

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

$ 65,512 $ 5,350

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

3 unchanged sentences

Sphere Entertainment Co.

Accumulated Other Comprehensive Loss

Retained Earnings (Deficit) Accumulated Other Comprehensive Loss

Total Madison Square Garden Entertainment Corp.

4 unchanged sentences

Total (Deficit) Equity

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

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

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

Net income — — — — 125,249 — 125,249 — 125,249

Other comprehensive income

— — — — — 545 545 — 545

Comprehensive loss

Comprehensive income — — — — — — 125,794 — 125,794

Share-based compensation

— — 7,773 — — — 7,773 — 7,773

Tax withholding associated with shares issued for share-based compensation 1 — ( 414 ) — — — ( 413 ) — ( 413 )

Balance as of December 31, 2023 $ 524 $ — $ 25,339 $ ( 140,512 ) $ 45,881 $ ( 33,279 ) $ ( 102,047 ) $ — $ ( 102,047 )

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

Net income — 97,262 — — — — 97,262 ( 181 ) 97,081

Other comprehensive income — — — — — 306 306 — 306

BCE Disposition — — — — — — — 667 667

Comprehensive income — — — — — — 97,568 486 98,054

Net decrease in Sphere Entertainment Co.

Investment — ( 88,990 ) — — — — ( 88,990 ) — ( 88,990 )

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

Sphere Entertainment Co.

Retained Earnings (Deficit) Accumulated Other Comprehensive Loss

Total Madison Square Garden Entertainment Corp.

Stockholders’

(Deficit) Equity

Nonredeemable

Noncontrolling

Total (Deficit) Equity

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

Net income — — — — 74,578 — 74,578 — 74,578

Other comprehensive income

— — — — — 742 742 — 742

Comprehensive income — — — — — — 75,320 — 75,320

Share-based compensation

3 unchanged sentences

— — ( 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 December 31, 2023 $ 524 $ — $ 25,339 $ ( 140,512 ) $ 45,881 $ ( 33,279 ) $ ( 102,047 ) $ — $ ( 102,047 )

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

Net loss — ( 17,902 ) — — — — ( 17,902 ) ( 372 ) ( 18,274 )

Net income — 79,360 — — — — 79,360 ( 553 ) 78,807

Other comprehensive income — — — — — 611 611 — 611

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

BCE disposition — — — — — — — 667 667

Comprehensive income — — — — — — 79,971 114 80,085

Net increase in Sphere Entertainment Co.

— 20,393 — — — — 20,393 — 20,393

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

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

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

4 unchanged sentences

Description of Business

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

Madison Square Garden Entertainment Corp.

(together with its subsidiaries, as applicable, the “Company” or “MSG Entertainment”), is a live entertainment company comprised of iconic venues and marquee entertainment content.

6 unchanged sentences

MSG Entertainment Distribution

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

On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment Co.

(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.

1 unchanged sentence

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.

Description of Business and Basis of Presentation 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

3 unchanged sentences

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.

Subsequent to the MSGE Distribution, the Company’s balance sheets as of December 31, 2023 and June 30, 2023 and for the statement of operations for the three and six months ended December 31, 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 and six months ended December 31, 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 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.”

6 unchanged sentences

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.

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

1 unchanged sentence

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.

Reclassifications

For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation in accordance with GAAP.

Summary of Significant Accounting Policies

6 unchanged sentences

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 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.

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

Dispositions for further information on the BCE disposition.

Use of Estimates

8 unchanged sentences

In addition, these estimates are based on management’s best judgment at a point in time and, as such, these estimates may ultimately differ from actual results.

Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the Company’s condensed consolidated and combined financial statements in future periods.

Recently Issued and Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

In November 2023 , the FASB issued Accounting Standards Update (“ASU”) No.

2023-07, Improvement to Reportable Segment

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Disclosures .

This ASU aims to improve segment disclosures through enhanced disclosures about significant segment expenses.

The standard requires disclosure of significant expense categories and amounts for such expenses, including those segment expenses that are regularly provided to the chief operating decision maker, easily computable from information that is regularly provided, or significant expenses that are expressed in a form other than actual amounts.

This standard will be effective for the Company in Fiscal Year 2025 and is required to be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s condensed consolidated and combined financial statements .

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , a final standard on improvements to income tax disclosures which applies to all entities subject to income taxes.

The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions.

This standard will be effective for the Company in Fiscal Year 2026 and should be applied prospectively.

The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s condensed consolidated and combined financial statements .

The Company has not had any dispositions during Fiscal Year 2024.

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 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 .

The BCE Disposition did 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 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 Gains, net on dispositions in the condensed combined statements of operations.

Revenue Recognition

2 unchanged sentences

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.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

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 .

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 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 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,

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 and six months ended December 31, 2023 and 2022:

Three Months Ended Six Months Ended

December 31, December 31,

2023 2022 2023 2022

Event-related and entertainment offerings (a)

2 unchanged sentences

70,000 68,996 113,494 107,389

9,575 15,347 10,083 18,462

Total revenues from contracts with customers

1 unchanged sentence

Revenues from Arena License Agreements, leases, and subleases

25,629 32,649 28,075 34,803

Total revenues

2 unchanged sentences

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

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

(b) See Note 2.

5 unchanged sentences

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

September 30,

Six Months Ended

December 31, December 31,

2023 2022 2023 2022

Ticketing and venue license fee revenues (a)

8 unchanged sentences

Revenues from Arena License Agreements, leases, and subleases

25,629 32,649 28,075 34,803

Total revenues

3 unchanged sentences

(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 the opening and closing contract balances from the Company’s contracts with customers as of September 30, 2023 and June 30, 2023:

September 30,

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

2023 June 30,

7 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 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.

As of December 31, 2023 and June 30, 2023, the Company’s receivables from contracts with customers above included $ 3,814 and $ 5,397 , respectively, related to various related parties.

Related Party Transactions for further details on related party arrangements.

3 unchanged sentences

Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to a customer.

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

Revenue recognized for the three and six months ended December 31, 2023 relating to the deferred revenue balance as of June 30, 2023 was $ 65,980 and $ 135,710 , respectively.

Transaction Price Allocated to the Remaining Performance Obligations

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 .

As of December 31, 2023, the Company’s remaining performance obligations under contracts were approximately $ 555,000 , of which 49 % is expected to be recognized over the next two years and an additional 36 % 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.

In developing the estimated revenue, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

In developing the estimated revenue, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

that have original expected durations of one year or less.

Restructuring Charges

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:

During the six months ended December 31, 2023, the Company recorded restructuring charges related to termination benefits for certain corporate executives and employees.

The Company recorded restructuring charges of $ 888 and $ 12,441 for the three and six months ended December 31, 2023, respectively, inclusive of $ 0 and $ 6,788 , respectively, 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.

The Company recorded restructuring charges of $ 7,359 , net of contributory credits from the Company to Sphere Entertainment for the Company’s corporate employees, during the three and six months ended December 31, 2022.

Changes to the Company’s restructuring liability through December 31, 2023 were as follows:

Restructuring Liability

1 unchanged sentence

Restructuring charges (excluding share-based compensation expense)

September 30, 2023

December 31, 2023 $ 8,512

Equity Investments With Readily Determinable Fair Value

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

As of December 31, 2023, the Company held an investment in Townsquare Media, Inc.

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

3 unchanged sentences

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

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

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,

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

2023 June 30,

3 unchanged sentences

Total Equity Investments with Readily Determinable Fair Value $ 18,038 $ 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 months ended September 30, 2023 and 2022:

Three Months Ended

September 30,

Unrealized loss — Townsquare

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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

Three Months Ended Six Months Ended

December 31, December 31,

2023 2022 2023 2022

Unrealized gain — DraftKings

Unrealized gain (loss) — Townsquare $ 3,143 $ ( 32 ) $ ( 2,306 ) $ ( 3,015 )

Unrealized loss — DraftKings — ( 2,512 ) — ( 188 )

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

Total realized and unrealized (loss) gain

Total realized and unrealized gain (loss)

$ 3,143 $ ( 2,544 ) $ ( 758 ) $ ( 1,714 )

3 unchanged sentences

Property and Equipment, Net

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

September 30,

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

2023 June 30,

4 unchanged sentences

Leasehold improvements 105,877 105,877

Construction in progress 2,396 2,828

Construction in progress (a)

Total Property and equipment $ 1,546,339 $ 1,522,274

2 unchanged sentences

Property and equipment, net $ 626,172 $ 628,888

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 CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

_________________

(a) In October 2023, the Company took possession of certain floors in the New York corporate office space and will be relocating from the space that the Company currently occupies to newly renovated office space within the same building.

The Company was not involved in the design or construction of the new space for purposes of the Company’s build out prior to obtaining possession.

The increase in construction in progress primarily relates to these build out costs incurred after possession.

Upon obtaining possession of the space, the Company recognized an additional lease obligation of $ 96,334 and a right-of-use lease asset of $ 88,602 , net of tenant improvement incentives received on possession date.

While lease payments under the new lease agreement will be recognized as a lease expense on a straight-line basis over the lease term, the Company will begin paying full rent starting in the second half of Fiscal Year 2026 due to certain tenant incentives included in the arrangement.

Base rent payments will increase every five years beginning in Fiscal Year 2031 in accordance with the terms of the lease.

The Company recorded depreciation expense on property and equipment of $ 13,205 and $ 26,789 for the three and six months ended December 31, 2023 and $ 15,281 and $ 30,817 for the three and six months ended December 31, 2022, respectively, which is recognized in Depreciation and amortization in the condensed consolidated and combined statements of operations.

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,

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

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

2023 June 30,

3 unchanged sentences

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.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

No amortization expense was recognized in the three and six months ended December 31, 2023 for definite lived intangible assets.

The Company recorded amortization expense on definite lived intangible assets of $ 305 and $ 754 for the three and six months ended December 31, 2022, respectively, which is recognized in Depreciation and amortization in the condensed consolidated and combined statements of operations.

Commitments and Contingencies

1 unchanged sentence

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).

During the six months ended December 31, 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.

2 unchanged sentences

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.

Commitments and Contingencies 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.

7 unchanged sentences

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,

The following table summarizes the presentation of the outstanding balances under the Company’s credit and other debt agreements as of December 31, 2023 and June 30, 2023:

2023 June 30,

4 unchanged sentences

$ 16,250 $ 16,250

September 30, 2023 June 30, 2023

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

December 31, 2023 June 30, 2023

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

8 unchanged sentences

National Properties Facilities

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”).

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 (as amended, the “National Properties Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent and the lenders and L/C issuers party thereto, providing for a five-year , $ 650,000 senior secured term loan facility (the “National Properties Term Loan Facility”) and a five-year , $ 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.

As of December 31, 2023, outstanding letters of credit were $ 17,591 and the remaining balance available under the National Properties Revolving Credit Facility was $ 132,409 .

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) 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 September 30, 2023 was 7.92 %.

The interest rate on the National Properties Facilities as of December 31, 2023 was 8.46 %.

Principal Repayments .

2 unchanged sentences

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.

3 unchanged sentences

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 September 30, 2023, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Credit Agreement.

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

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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.

16 unchanged sentences

Interest Payments Loan Principal Repayments

Three Months Ended Three Months Ended

September 30, September 30,

Six Months Ended Six Months Ended

December 31, December 31,

2023 2022 2023 2022

1 unchanged sentence

$ 27,424 $ 22,410 $ 98,225 $ —

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

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

December 31, 2023 June 30, 2023

National Properties Facilities

3 unchanged sentences

________________

(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.

(a) The total carrying value of the Company’s debt as of December 31, 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 $ 11,815 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.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Pension Plans and Other Postretirement Benefit Plans

2 unchanged sentences

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.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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.

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

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

All other components of net periodic benefit cost are reported in Other income (expense), net.

All other components of net periodic benefit cost (benefit) are reported in Other income (expense), net.

Pension Plans Postretirement Plan

Three Months Ended Three Months Ended

September 30, September 30,

December 31, December 31,

2023 2022 2023 2022

3 unchanged sentences

Recognized actuarial loss 662 330 — 9

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

Net periodic cost (benefit)

$ 1,057 $ ( 217 ) $ 30 $ 28

Pension Plans Postretirement Plan

Six Months Ended Six Months Ended

December 31, December 31,

2023 2022 2023 2022

Service cost $ 34 $ 60 $ 12 $ 16

Interest cost 2,938 1,854 48 22

Expected return on plan assets ( 2,182 ) ( 3,008 ) — —

Recognized actuarial loss 899 692 — 18

Net periodic cost (benefit)

$ 1,689 $ ( 402 ) $ 60 $ 56

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.

During the three and six months ended December 31, 2023, the Company contributed $ 0 and $ 12,250 to the Cash Balance Pension Plan, which is reported under Non-current liabilities in the accompanying condensed consolidated balance sheets as of December 31, 2023.

Defined Contribution Plans

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,

For the three and six months ended December 31, 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 Six Months Ended

December 31, December 31,

2023 2022 2023 2022

Savings Plans $ 2,265 $ 1,008 $ 4,299 $ 2,186

2 unchanged sentences

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 Company recorded compensation expense of $ 343 and $ 198 for the three and six months ended December 31, 2023, respectively, and $ 160 and $ 6 for the three and six months ended December 31, 2022, respectively, within Selling, general, and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability.

In addition, the Company recorded gains of $ 343 and $ 198 for the three and six months ended December 31, 2023 and $ 160 and $ 6 for the three and six months ended December 31, 2022, respectively, within Other income (expense), net to reflect remeasurement of the fair value of assets under the Deferred Compensation Plan.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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,

3 unchanged sentences

$ ( 4,344 ) $ ( 2,976 )

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Share-based Compensation

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”).

the 2023 Employee Stock Plan and the 2023 Stock Plan for Non-Employee Directors.

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

2 unchanged sentences

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

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2023 2022 2023 2022

Share-based compensation expense (a)

3 unchanged sentences

________________

(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.

(a) The expense shown excludes $ 0 and $ 6,788 for the three and six months ended December 31, 2023 , respectively, and $ 2,293 for both the three and six months ended December 31, 2022, that was reclassified to Restructuring charges in the condensed consolidated and combined statements of operations a s detailed in Note 5.

Restructuring Charges.

(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.

(b) To fulfill required statutory tax withholding obligations for the applicable income and other employment taxes, RSUs and PSUs with an aggregate value of $ 412 and $ 12,229 , and $ 0 and $ 1,147 were retained by the Company during the three and six months ended December 31, 2023 and 2022, respectively.

For the three and six months ended December 31, 2023 , weighted-average shares used in the calculation for diluted earnings per share (“EPS”) consisted of 48,293 and 49,168 weighted-average shares of Class A Common Stock for basic EPS, respectively, and the dilutive effect of 264 and 213 shares of Class A Common Stock issuable, respectively, under share-based compensation plans.

For the three and six months ended December 31, 2023 , weighted-average anti-dilutive shares primarily consisted of approximately 727 and 740 RSUs and stock options, respectively, and were excluded in the calculation of diluted EPS because their effect would have been anti-dilutive.

On April 20, 2023, 51,768 shares of Class A Common Stock were distributed to Sphere Entertainment stockholders in the MSGE Distribution.

This share amount is being utilized for the calculation of basic and diluted loss per share of Class A Common Stock attributable to the Company’s stockholders for the three and six months ended December 31, 2022 because the Company was not a standalone public company prior to the MSGE Distribution.

As of December 31, 2023, there was $ 46,564 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 2.1 years.

Award Activity

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.

During the six months ended December 31, 2023 and December 31, 2022 , 620 and 66 RSUs were granted and 624 and 40 RSUs vested, respectively.

During the six months ended December 31, 2023 and December 31, 2022, 506 and 60 PSUs were granted and 273 and 11 PSUs vested, respectively.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Stockholders’ Equity

3 unchanged sentences

The timing and amount of purchases will depend on market conditions and other factors.

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 CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

For the six months ended December 31, 2023, the Company repurchased 3,525 shares of Class A Common Stock for $ 115,512 .

As of December 31, 2023, the Company had approximately $ 110,000 remaining available for repurchases.

Accumulated Other Comprehensive Loss

1 unchanged sentence

Pension Plans and Postretirement Plan

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2023 2022 2023 2022

Balance at beginning of period $ ( 33,824 ) $ ( 34,435 ) $ ( 34,021 ) $ ( 34,740 )

1 unchanged sentence

Amounts reclassified from accumulated other comprehensive loss (a)

662 371 899 742

Income tax expense ( 117 ) ( 65 ) ( 157 ) ( 131 )

Other comprehensive income, net of income taxes

545 306 742 611

Balance at end of period $ ( 33,279 ) $ ( 34,129 ) $ ( 33,279 ) $ ( 34,129 )

3 unchanged sentences

Related Party Transactions

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).

As of December 31, 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 December 31, 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, included in the Company’s Audited Consolidated and Combined Audited Financial Statements for a description of the Company’s current related party arrangements.

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

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

5 unchanged sentences

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.

Pursuant to this arrangement, the Company recognized $ 0 and $ 34 of expense for the three and six months ended December 31, 2023, respectively, and $ 65 and $ 135 of expense for the three and six months ended December 31, 2022 , respectively.

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

2 unchanged sentences

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 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.

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.

During Fiscal Year 2023 and the first quarter of Fiscal Year 2024, MSG Sports made market rate interest-bearing advances to the Company in connection with the construction of new premium hospitality suites at The Garden.

The advances were fully repaid (including interest) in the second quarter of Fiscal Year 2024.

As of December 31, 2023 and June 30, 2023, the other debt balance was $ 0 and $ 304 , respectively.

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 consolidated and combined statements of operations for the three months ended September 30, 2023 and 2022:

Three Months Ended

September 30,

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

Three Months Six Months Ended

December 31, December 31,

2023 2022 2023 2022

Revenues $ 33,630 $ 49,630 $ 38,789 $ 55,188

8 unchanged sentences

_________________

(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 .

(a) Of the total operating expenses (credits), net, $ 1,246 and $ 2,556 for the three and six months ended December 31, 2023 and $( 901 ) and $( 525 ) for the three and six months ended December 31, 2022 , respectively, are included in direct operating expenses in the accompanying condensed consolidated and combined statements of operations, and $( 36,535 ) and $( 76,766 ) for the three and six months ended December 31, 2023 and $( 46,591 ) and $( 90,643 ) for the three and six months ended December 31, 2022 , respectively, are included in selling, general, and administrative expenses.

The Company recorded $ 24,529 and $ 25,853 of revenues under the Arena License Agreements for the three and six months ended December 31, 2023 .

In addition to the Arena License Agreements, during the three and six months ended December 31, 2023, the Company’s revenues from related parties primarily reflected sponsorship sales and service representation agreements of $ 5,506 and $ 8,269 , and merchandise sharing revenues of $ 2,102 and $ 2,298 , respectively, with MSG Sports.

The Company also earned sublease revenue from related parties of $ 738 and $ 1,497 during the three and six months ended December 31, 2023 , respectively.

The Company recorded $ 31,825 and $ 33,149 of revenues under the Arena License Agreements for the three and six months ended December 31, 2022 .

In addition, during the three and six months ended December 31, 2022 the Company recorded revenues under sponsorship sales and service representation agreements of $ 6,031 and $ 8,564 , and merchandise sharing revenues of $ 2,176 and $ 2,291 , respectively, with MSG Sports.

The Company recorded revenues under the Networks Advertising Sales Representation Agreement of $ 8,424 and $ 8,802 for the three and six months ended December 31, 2022 , respectively.

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

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

The Company also earned sublease revenue from related parties of $ 527 and $ 1,222 during the three and six months ended December 31, 2022 .

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Other Related Party Matters

8 unchanged sentences

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 CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

The Company recorded related party interest income of $ 0 , and $ 0 related to the Eden Loan Agreement in the three and six months ended December 31, 2023 and $ 902 and $ 1,804 in the three and six months ended December 31, 2022, respectively.

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,

7 unchanged sentences

Prepaid expenses and other current assets consisted of the following:

September 30,

2023 June 30,

7 unchanged sentences

Other non-current assets consisted of the following:

September 30,

2023 June 30,

8 unchanged sentences

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

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

(b) See Note 6.

1 unchanged sentence

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

September 30,

2023 June 30,

4 unchanged sentences

Total accounts payable, accrued and other current liabilities $ 197,256 $ 214,725

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Other (expense) income, net includes the following:

Three Months Ended

September 30,

Other income (expense), net includes the following:

Three Months Ended Six Months Ended

December 31, December 31,

2023 2022 2023 2022

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

Net unrealized loss on equity investments with readily determinable fair value

Net unrealized gains (loss) on equity investments with readily determinable fair value

3,143 ( 2,544 ) ( 2,306 ) ( 3,203 )

Other ( 297 ) 372 ( 867 ) 428

Total other (expense) income, net

Total other income (expense), net

$ 2,846 $ ( 2,172 ) $ ( 1,625 ) $ ( 1,286 )

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

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

During the six months ended December 31, 2023, the Company made income tax payments of $ 58 .

During the six months ended December 31, 2022, the Company received income tax refunds, net of payments, of $ 2,031 .

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