What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-09 compared with 2024-02-07 · 292 added, 170 removed, 593 unchanged (44% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

December 31, June 30,

March 31, June 30,

Current Assets:

8 unchanged sentences

Goodwill 69,041 69,041

Intangible assets, net 63,801 63,801

Indefinite-lived intangible assets 63,801 63,801

Other non-current assets 126,482 108,356

Total assets $ 1,458,571 $ 1,401,157

LIABILITIES AND RETAINED EARNINGS (DEFICIT)

LIABILITIES AND DEFICIT

Current Liabilities:

15 unchanged sentences

Additional paid-in-capital 29,656 17,727

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

Treasury stock at cost ( 4,365 and 840 shares outstanding as of March 31, 2024 and June 30, 2023, respectively)

( 140,512 ) ( 25,000 )

5 unchanged sentences

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

45,487 and 45,024 shares issued as of December 31, 2023 and June 30, 2023, respectively.

45,523 and 45,024 shares issued as of March 31, 2024 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 December 31, 2023 and June 30, 2023.

6,867 shares issued as of March 31, 2024 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 Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

Revenues from entertainment offerings

$ 146,221 $ 129,260 $ 581,025 $ 524,331

Food, beverage, and merchandise revenues 45,380 39,954 127,379 112,412

Arena license fees and other leasing revenue

36,712 32,015 64,787 66,818

Total revenues 228,313 201,229 773,191 703,561

Direct operating expenses (a)

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

( 112,997 ) ( 90,296 ) ( 375,786 ) ( 332,290 )

Food, beverage, and merchandise direct operating expenses

( 29,024 ) ( 24,837 ) ( 70,673 ) ( 65,108 )

Total direct operating expenses ( 142,021 ) ( 115,133 ) ( 446,459 ) ( 397,398 )

Selling, general, and administrative expenses (a)

1 unchanged sentence

Depreciation and amortization ( 13,182 ) ( 14,798 ) ( 39,972 ) ( 46,369 )

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

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

Restructuring charges ( 2,362 ) ( 2,461 ) ( 14,803 ) ( 9,820 )

21 unchanged sentences

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.

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 nine months ended March 31, 2023 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.

2 unchanged sentences

(in thousands)

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

1 unchanged sentence

Other comprehensive income, before income taxes:

Amortization of net actuarial gain included in net periodic benefit cost

Amortization of net actuarial loss included in net periodic benefit cost

450 323 1,350 1,063

10 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

OPERATING ACTIVITIES:

7 unchanged sentences

Related party paid in kind interest ( 512 ) ( 2,939 )

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

Non-cash lease expense

Net unrealized and realized gains on equity investments with readily determinable fair value ( 391 ) ( 4,307 )

Gains, net on dispositions — ( 4,361 )

2 unchanged sentences

Related party receivables and payables, net

39,091 ( 5,292 )

Prepaid expenses and other current and non-current assets ( 41,434 ) ( 29,855 )

9 unchanged sentences

Loans to related parties

( 65,000 ) ( 6,700 )

Other investing activities ( 1,463 ) —

Net cash (used in) provided by investing activities

2 unchanged sentences

Proceeds from revolving credit facility

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

Principal repayments on term loan and revolving credit facilities

( 102,288 ) ( 6,063 )

Repayments on related party loan, net

12 unchanged sentences

Capital expenditures incurred but not yet paid or paid by landlord $ 29,389 $ 504

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

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

$ 65,512 $ 5,350

11 unchanged sentences

Total (Deficit) Equity

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 )

Net income — — — — 2,795 — 2,795 — 2,795

5 unchanged sentences

Tax withholding associated with shares issued for share-based compensation — — ( 1,131 ) — — — ( 1,131 ) — ( 1,131 )

Balance as of March 31, 2024 $ 524 $ — $ 29,656 $ ( 140,512 ) $ 48,676 $ ( 32,907 ) $ ( 94,563 ) $ — $ ( 94,563 )

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

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

Net income — 21,720 — — — — 21,720 — 21,720

4 unchanged sentences

Investment — ( 77,373 ) — — — — ( 77,373 ) — ( 77,373 )

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

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

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

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

(in thousands)

Sphere Entertainment Co.

16 unchanged sentences

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

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

Balance as of March 31, 2024 $ 524 $ — $ 29,656 $ ( 140,512 ) $ 48,676 $ ( 32,907 ) $ ( 94,563 ) $ — $ ( 94,563 )

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

5 unchanged sentences

— ( 56,980 ) — — — — ( 56,980 ) — ( 56,980 )

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

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

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

14 unchanged sentences

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.

(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, $ 0.01 par value per share (“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.

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.

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 with the Securities and Exchange Commission (the “SEC”) on August 18, 2023 (the “2023 Form 10-K”) for more information regarding the MSGE Distribution.

Basis of Presentation

2 unchanged sentences

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 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.

generally accepted accounting principles (“GAAP”) for interim financial information and Article 10 of Regulation S-X of the 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 March 31, 2024 and June 30, 2023 and the statements of operations for the three and nine months ended March 31, 2024 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 nine months ended March 31, 2023 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.

4 unchanged sentences

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.

Related Party Transactions in

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

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 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 Audited Consolidated and Combined Annual Financial Statements for further details regarding allocations of certain costs from the Company to Sphere Entertainment.

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, 2024 and its results of operations for the three and nine months ended March 31, 2024 and 2023 and cash flows for the nine months ended March 31, 2024, and 2023.

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.

3 unchanged sentences

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

The accompanying unaudited condensed consolidated and combined financial information for the three and nine-month periods ended March 31, 2024, and 2023 have been revised to change the presentation of our revenue and direct operating expenses from an aggregated to a disaggregated basis.

Summary of Significant Accounting Policies

19 unchanged sentences

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

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Revenue Recognition and Direct Operating Expenses

The following reflects an update to the Company’s comprehensive revenue recognition and direct operating expense accounting policies to align with the disaggregation of revenue and direct operating expenses as presented on the condensed consolidated and combined statements of operations.

The Company generates revenue from the provision of services and sale of tangible products, as well as leasing transactions.

Revenues are presented under these three categories in the condensed consolidated and combined statements of operations, as described below.

Service revenue, presented as “Revenues from entertainment offerings” primarily includes:

• Ticket sales and other ticket-related revenue

• Venue license fees for events held at the Company’s venues that the Company does not produce or promote/co-promote

• Sponsorship and signage

• Suite licenses and single night suite rentals

• Advertising commissions and related service fees

• Commissions related to the sale of merchandise for which the Company is not the principal in the underlying transaction

Direct operating expenses related to the provision of services and leasing, presented as “Entertainment offerings, arena license fees, and other leasing direct operating expenses”, primarily include:

• Event production costs including direct personnel expenses

• Venue operations and infrastructure costs (a)

• Venue rental costs for venues not owned by the Company

• Sponsorship and signage fulfillment costs

• Contractual revenue sharing expenses related to suite licenses and certain internal signage

• Event-related marketing and advertising costs

Product revenue, presented as “Food, beverage, and merchandise revenues”, includes:

• Sales of food and beverage during events held at the Company’s venues

• Sales of the Company’s merchandise at the Company’s venues and via traditional retail channels

Direct operating expenses related to the sale of products, presented as “Food, beverage, and merchandise direct operating expenses” include:

• Costs of goods sold including direct personnel expenses

• Contractual revenue sharing expenses related to food and beverage sold at events held by Madison Square Garden Sports Corp.

(together with its subsidiaries, as applicable, “MSG Sports”) at The Garden

Lease revenue, presented as “Arena license fees and other leasing revenue”, includes:

• Rental fees related to the arena license agreements that require the Knicks and the Rangers to play their home games at The Garden (the “Arena License Agreements”) with MSG Sports

• Sublease income

_________________

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

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

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

The Company recognizes revenue when, or as, performance obligations under the terms of a contract are satisfied, which generally occurs when, or as, control of promised goods or services is transferred to customers.

Revenue is measured as the amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services (“transaction price”).

To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which the Company expects to be entitled.

Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.

Estimates of variable consideration and the determination of whether to include such estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available.

The Company accounts for taxes collected from customers and remitted to governmental authorities on a net basis and excludes these amounts from revenues.

In addition, the Company defers certain costs to fulfill the Company’s contracts with customers to the extent such costs relate directly to the contracts, are expected to generate resources that will be used to satisfy the Company’s performance obligations under the

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

contracts, and are expected to be recovered through revenue generated under the contracts.

Contract fulfillment costs are expensed as the Company satisfies the related performance obligations.

Arrangements with Multiple Performance Obligations

The Company enters into arrangements with multiple performance obligations, such as multi-year sponsorship agreements, which may derive revenues for the Company, as well as Sphere Entertainment and MSG Sports within a single arrangement.

The Company also derives revenue from similar types of arrangements which are entered into by MSG Sports.

Payment terms for such arrangements can vary by contract, but payments are generally due in installments throughout the contractual term.

The performance obligations included in each sponsorship agreement vary and may include advertising and other benefits such as, but not limited to, signage at The Garden and the Company’s other venues, digital advertising, event or property-specific advertising, as well as non-advertising benefits such as suite licenses and event tickets.

To the extent the Company’s multi-year arrangements provide for performance obligations that are consistent over the multi-year contractual term, such performance obligations generally meet the definition of a series as provided for under the accounting guidance.

If performance obligations are concluded to meet the definition of a series, the contractual fees for all years during the contract term are aggregated and the related revenue is recognized proportionately as the underlying performance obligations are satisfied.

The timing of revenue recognition for each performance obligation is dependent upon the facts and circumstances surrounding the Company’s satisfaction of its respective performance obligation.

The Company allocates the transaction price for such arrangements to each performance obligation within the arrangement based on the estimated relative standalone selling price of the performance obligation.

The Company’s process for determining its estimated standalone selling prices involves management’s judgment and considers multiple factors including company specific and market specific factors that may vary depending upon the unique facts and circumstances related to each performance obligation.

Key factors considered by the Company in developing an estimated standalone selling price for its performance obligations include, but are not limited to, prices charged for similar performance obligations, the Company’s ongoing pricing strategy and policies, and consideration of pricing of similar performance obligations sold in other arrangements with multiple performance obligations.

The Company may incur costs such as commissions to obtain its multi-year sponsorship agreements.

The Company assesses such costs for capitalization on a contract by contract basis.

To the extent costs are capitalized, the Company estimates the useful life of the related contract asset, which may be the underlying contract term or the estimated customer life depending on the facts and circumstances surrounding the contract.

The contract asset is amortized over the estimated useful life.

Principal versus Agent Revenue Recognition

The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction.

The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service before transfer to the customer.

When the Company concludes that it controls the good or service before transfer to the customer, the Company is considered a principal in the transaction and records revenue on a gross basis.

When the Company concludes that it does not control the good or service before transfer to the customer but arranges for another entity to provide the good or service, the Company acts as an agent and records revenue on a net basis in the amount it earns for its agency service.

Contract Balances

Amounts collected in advance of the Company’s satisfaction of its contractual performance obligations are recorded as a contract liability within deferred revenue, and are recognized as the Company satisfies the related performance obligations.

Amounts collected in advance of events for which the Company is not the promoter or co-promoter do not represent contract liabilities and are recorded within accrued and other current liabilities on the accompanying consolidated and combined balance sheets.

Amounts recognized as revenue for which the Company has a right to consideration for goods or services transferred to customers and for which the Company does not have an unconditional right to bill as of the reporting date are recorded as contract assets.

Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional.

Production Costs for the Company’s Original Productions

The Company defers certain costs of productions such as creative design, scenery, wardrobes, rehearsal and other related costs for the Company’s proprietary shows.

Deferred production costs are amortized on a straight-line basis over the course of a production’s performance period using the expected life of a show’s assets and are recorded as a component of Entertainment offerings, arena license fees, and other leasing direct operating expenses on the Company’s condensed consolidated and combined statement of

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Deferred production costs are subject to recoverability assessments whenever there is an indication of potential impairment.

Revenue Sharing Expenses

Revenue sharing expenses are determined based on contractual agreements between the Company and MSG Sports, primarily related to suite licenses, certain internal signage and in-venue food and beverage sales and are recorded as a component of Entertainment offerings, arena license fees, and other leasing direct operating expenses on the Company’s condensed consolidated and combined statement of operations.

Recently Issued and Adopted Accounting Pronouncements

1 unchanged sentence

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 .

2023-07, Improvement to Reportable Segment Disclosures .

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

4 unchanged sentences

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.

The standard is intended to benefit investors by providing more detailed income tax disclosures that would be helpful to understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, assess income tax information that affects cash flow forecasts and capital allocation decisions, and identify potential opportunities to increase future cash flows.

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

4 unchanged sentences

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.

BCE meets the definition of a business under SEC Regulation S-X Rule 11-01(d)-1 and 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 ASC Subtopic 205-20 — Discontinued Operations .

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

Disposition of Corporate Aircraft

1 unchanged sentence

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.

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

Revenue Recognition

Contracts with Customers

Summary of Significant Accounting Policies and Note 4.

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 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, leases and subleases that are accounted for in accordance with ASC Topic 842, Leases .

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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 and six months ended December 31, 2023 and 2022:

Three Months Ended Six Months Ended

December 31, December 31,

The following table disaggregates the Company’s revenue by major source based upon the timing of satisfaction of the Company’s performance obligations to the customer for the three and nine months ended March 31, 2024 and 2023:

Three Months Ended Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

Event-related and entertainment offerings (a)

Event-related offerings (a)

$ 113,165 $ 95,634 $ 501,211 $ 432,729

4 unchanged sentences

191,601 169,214 708,404 636,743

Revenues from Arena License Agreements, leases, and subleases

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

Arena license fees and other leasing revenue 36,712 32,015 64,787 66,818

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.

1 unchanged sentence

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.

(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.

(c) Primarily consists of (i) revenues from sponsorship sales and representation agreements with 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 and six months ended December 31, 2023 and 2022.

In addition to the disaggregation of the Company’s revenue by major source as disclosed above, the following table disaggregates the Company’s revenues by revenue category 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 and nine months ended March 31, 2024 and 2023.

Three Months Ended

Six Months Ended

December 31, December 31,

Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

8 unchanged sentences

191,601 169,214 708,404 636,743

Revenues from Arena License Agreements, leases, and subleases

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

Arena license fees and other leasing revenue 36,712 32,015 64,787 66,818

Total revenues

4 unchanged sentences

Contract Balances

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:

The following table provides information about the opening and closing contract balances from the Company’s contracts with customers as of March 31, 2024 and June 30, 2023:

2024 June 30,

6 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 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.

(a) Receivables from contracts with customers, net, which are reported in Accounts receivable, net and Related party receivables, current in the Company’s

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

condensed consolidated balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers.

As of March 31, 2024 and June 30, 2023, the Company’s receivables from contracts with customers above included $ 4,309 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 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.

Revenue recognized for the three and nine months ended March 31, 2024 relating to the deferred revenue balance as of June 30, 2023 was $ 23,006 and $ 158,715 , respectively.

Transaction Price Allocated to the Remaining Performance Obligations

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 .

As of March 31, 2024, the Company’s remaining performance obligations under contracts were approximately $ 493,000 , of which 43 % is expected to be recognized over the next two years and an additional 57 % of the balance is expected to be recognized thereafter.

This primarily relates to performance obligations under sponsorship and suite license agreements that have original expected durations longer than one year and for which the consideration is not variable.

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

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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 that have original expected durations of one year or less.

Restructuring Charges

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:

During the nine months ended March 31, 2024, the Company recorded restructuring charges related to termination benefits for certain corporate executives and employees.

The Company recorded restructuring charges of $ 2,362 and $ 14,803 for the three and nine months ended March 31, 2024, 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 $ 2,461 and $ 9,820 , net of contributory credits from the Company to Sphere Entertainment for the Company’s corporate employees, during 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.

Changes to the Company’s restructuring liability through March 31, 2024 were as follows:

Restructuring Liability

1 unchanged sentence

Restructuring charges (excluding share-based compensation expense)

December 31, 2023 $ 8,512

Equity Investments With Readily Determinable Fair Value

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

March 31, 2024 $ 10,778

As of March 31, 2024, the Company held an investment in Townsquare Media, Inc.

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

2 unchanged sentences

• DraftKings is a fantasy sports contest and sports gambling provider that is listed on the NASDAQ Stock Market (“NASDAQ”) under the symbol “DKNG.”

• Other equity investments held in trust under the Company’s Executive Deferred Compensation Plan.

Refer to Note 11.

Pension Plans and Other Postretirement Benefit Plans for further details regarding the plan

On March 1, 2024, the Company converted all shares of Class C common stock of Townsquare into an equal number of shares of Class A common stock of Townsquare, subject to restrictions set forth in Townsquare’s certificate of incorporation.

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.

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 December 31, 2023 and June 30, 2023, is as follows:

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

The carrying fair value of these investments, which is reported under Other non-current assets in the accompanying condensed consolidated balance sheets as of March 31, 2024 and June 30, 2023, is as follows:

Ownership Percentage as of March 31, 2024 March 31,

2024 June 30,

Equity investments with readily determinable fair values:

Townsquare Class A common stock $ 18,755 $ 6,945

1 unchanged sentence

DraftKings Class A common stock — 11,297

Total Equity Investments with Readily Determinable Fair Value $ 18,038 $ 31,641

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,

Other equity investments with readily determinable fair values held in trust under the Company’s Executive Deferred Compensation Plan 4,566 2,954

Equity method investments:

Crown Properties Collection (a)

Equity investments without readily determinable fair values 596 475

Total investments $ 23,968 $ 35,070

_______________

(a) In March 2024, the Company paid $ 51 for an 8.3 % investment in Oak View Group’s Crown Properties Collection, LLC ("CPC").

The investment in CPC is accounted for as an equity method investment, with MSGE's share of CPC results recorded on a three‐month lag.

The impact of recording results on a three-month lag is not material.

The following table summarizes the realized and unrealized gain (loss) on equity investments with readily determinable fair value, which is reported in Other income (expense), net for the three and nine months ended March 31, 2024 and 2023:

Three Months Ended Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

Unrealized gain (loss) — Townsquare $ 717 $ 2,406 $ ( 1,589 ) $ ( 609 )

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

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

Total realized and unrealized gain (loss)

Unrealized gain — DraftKings — 5,104 — 4,916

Unrealized gain — Executive Deferred Compensation Plan

233 129 432 135

Realized gain from shares sold — DraftKings

— 214 1,548 1,703

Total realized and unrealized gain

$ 950 $ 7,853 $ 391 $ 6,145

Supplemental information on realized gain:

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Property and Equipment, Net

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

As of March 31, 2024 and June 30, 2023, property and equipment, net consisted of the following:

2024 June 30,

4 unchanged sentences

Leasehold improvements

105,885 105,877

Construction in progress (a)

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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.

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

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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

In January 2024, the Company recognized an additional lease obligation and ROU lease asset of $ 5,408 as the Company took possession of additional space in the New York corporate office.

The Company recorded depreciation expense on property and equipment of $ 13,182 and $ 39,972 for the three and nine months ended March 31, 2024, respectively, and $ 14,798 and $ 45,615 for the three and nine months ended March 31, 2023, respectively, which is recognized in Depreciation and amortization in the condensed consolidated and combined statements of operations.

Goodwill and Intangible Assets

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:

As of March 31, 2024 and June 30, 2023, the carrying amount of goodwill was $ 69,041 .

The Company’s indefinite-lived intangible assets as of March 31, 2024 and June 30, 2023 were as follows:

2024 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.

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.

No amortization expense was recognized in the three and nine months ended March 31, 2024 for definite lived intangible assets as a result of the disposition of the related assets in connection with the BCE Disposition on December 2, 2022.

The Company recorded amortization expense on definite lived intangible assets of $ 0 and $ 754 for the three and nine months ended March 31, 2023, 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 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).

During the nine months ended March 31, 2024, 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.

9 unchanged sentences

The Company is a defendant in various lawsuits.

Although the outcome of these lawsuits cannot be predicted with certainty (including the extent of available insurance, if any), management does not believe that resolution of these lawsuits will have a material adverse effect on the Company.

Although the outcome of these lawsuits cannot be predicted with certainty (including

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

the extent of available insurance, if any), management does not believe that resolution of these lawsuits will have a material adverse effect on the Company.

Credit Facilities

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 December 31, 2023 and June 30, 2023:

The following table summarizes the presentation of the outstanding balances under the Company’s credit and other debt agreements as of March 31, 2024 and June 30, 2023:

2024 June 30,

4 unchanged sentences

$ 16,250 $ 16,250

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

December 31, 2023 June 30, 2023

March 31, 2024 June 30, 2023

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

11 unchanged sentences

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

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 .

As of March 31, 2024, outstanding letters of credit were $ 17,726 and the remaining balance available under the National Properties Revolving Credit Facility was $ 132,274 .

Interest Rates.

2 unchanged sentences

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 December 31, 2023 was 8.46 %.

The interest rate on the National Properties Facilities as of March 31, 2024 was 7.93 %.

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.

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

The principal obligations under the National Properties Revolving Credit Facility

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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.

4 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 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)

As of March 31, 2024, 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.

15 unchanged sentences

Interest payments and loan principal repayments made by the Company under the National Properties Credit Agreement were as follows:

Interest Payments Loan Principal Repayments

Six Months Ended Six Months Ended

December 31, December 31,

Interest Payments Principal Repayments

Nine Months Ended Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

2 unchanged sentences

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

March 31, 2024 June 30, 2023

National Properties Facilities

3 unchanged sentences

________________

(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.

(a) The total carrying value of the Company’s debt as of March 31, 2024 and June 30, 2023 is equal to the current and non-current principal payments for the

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Company’s credit agreements excluding unamortized deferred financing costs of $ 10,969 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.

2 unchanged sentences

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.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

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 the 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 (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.

2 unchanged sentences

Three Months Ended Three Months Ended

December 31, December 31,

March 31, March 31,

2024 2023 2024 2023

6 unchanged sentences

Pension Plans Postretirement Plan

Six Months Ended Six Months Ended

December 31, December 31,

Nine Months Ended Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

6 unchanged sentences

Contributions for Qualified Defined Benefit Pension Plans

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.

During the three and nine months ended March 31, 2024, the Company contributed $ 0 and $ 12,250 to the Cash Balance Pension Plan.

Defined Contribution Plans

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,

For the three and nine months ended March 31, 2024 and 2023, 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 Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

1 unchanged sentence

Union Savings Plan $ 490 $ 371 $ 621 $ 409

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 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)

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 expense of $ 233 and $ 432 for the three and nine months ended March 31, 2024, respectively, and $ 129 and $ 135 for the three and nine months ended March 31, 2023, respectively, within Selling, general, and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability.

In addition, the Company recorded gains of $ 233 and $ 432 for the three and nine months ended March 31, 2024 and $ 129 and $ 135 for the three and nine months ended March 31, 2023, respectively, within Other income (expense), 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:

11 unchanged sentences

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

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

4 unchanged sentences

________________

(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.

(a) The expense shown excludes $ 0 and $ 6,788 for the three and nine months ended March 31, 2024 , respectively, and $ 0 and $ 2,293 for the three and nine months ended March 31, 2023, respectively, 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 $ 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.

(b) To fulfill required statutory tax withholding obligations for the applicable income and other employment taxes, RSUs and PSUs with an aggregate value of $ 993 and $ 13,222 , and $ 0 and $ 1,147 were retained by the Company during the three and nine months ended March 31, 2024 and 2023, respectively.

For the three and nine months ended March 31, 2024 , weighted-average shares used in the calculation for diluted earnings per share (“EPS”) consisted of 48,447 and 48,883 shares of Class A Common Stock for basic EPS, respectively, and the dilutive effect of 338 and 208 shares of Class A Common Stock issuable, respectively, under share-based compensation plans.

For the three and nine months ended March 31, 2024 , weighted-average anti-dilutive shares primarily consisted of approximately 540 RSUs and stock options, 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.

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 nine months ended March 31, 2023 because the Company was not a standalone public company prior to the MSGE Distribution.

As of March 31, 2024, there was $ 33,914 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 2.0 years.

Award Activity

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)

Award Activity

During the nine months ended March 31, 2024 and March 31, 2023 , 624 and 66 RSUs were granted and 688 and 40 RSUs vested, respectively.

During the nine months ended March 31, 2024 and March 31, 2023, 506 and 60 PSUs were granted and 273 and 11 PSUs vested, respectively.

Stockholders’ Equity

3 unchanged sentences

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

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.

For the nine months ended March 31, 2024, the Company repurchased 3,525 shares of Class A Common Stock for $ 115,512 .

As of March 31, 2024, 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 Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

11 unchanged sentences

Related Party Transactions

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) .

As of March 31, 2024 , members of the Dolan family, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, and 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, $ 0.01 par value per share (“Class B Common Stock”) and approximately 3.9 % of the Company’s outstanding Class A Common Stock (inclusive of options exercisable within 60 days of March 31, 2024) .

Such shares of Class A Common Stock and Class B Common Stock, collectively, represent approximately 63.7 % of the aggregate voting power of the Company’s outstanding common stock.

2 unchanged sentences

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

The Company has also entered into a commercial agreement with CPC, under which CPC provides sponsorship sales services.

The Company recorded commission expense of $ 854 and $ 1,013 for the three and nine months ended March 31, 2024 , respectively.

and did not record any commission expense for three and nine months ended March 31, 2023 as the arrangement was not yet in place

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

during those periods .

As of March 31, 2024 and June 30, 2023, prepaid expenses associated with this arrangement were $ 4,237 and $ 0 , respectively, and are reported under Prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets.

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

4 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 $ 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.

Pursuant to this arrangement, the Company recognized $ 0 and $ 34 of expense for the three and nine months ended March 31, 2024, respectively, and $ 68 and $ 204 of expense for the three and nine months ended March 31, 2023 , respectively.

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

4 unchanged sentences

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)

As of March 31, 2024 and June 30, 2023, the other debt balance was $ 0 and $ 304 , respectively.

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.

2 unchanged sentences

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 and six months ended December 31, 2023 and 2022:

Three Months Six Months Ended

December 31, December 31,

These amounts are reflected in revenues and operating expenses in the accompanying condensed consolidated and combined statements of operations for the three and nine months ended March 31, 2024 and 2023:

Three Months Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

9 unchanged sentences

_________________

(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 .

(a) Of the total operating expenses (credits), net, $( 1,661 ) and $ 895 for the three and nine months ended March 31, 2024, respectively, and $( 804 ) and $( 1,329 ) for the three and nine months ended March 31, 2023 , respectively, are included in direct operating expenses in the accompanying condensed consolidated and combined statements of operations, and $( 36,488 ) and $( 113,095 ) for the three and nine months ended March 31, 2024, respectively, and $( 51,010 ) and $( 141,653 ) for the three and nine months ended March 31, 2023 , respectively, are included in selling, general, and administrative expenses.

(b) Other operating expenses, net, includes CPC professional expenses.

The Company recorded $ 35,588 and $ 61,441 of revenues under the Arena License Agreements for the three and nine months ended March 31, 2024, respectively .

In addition to the Arena License Agreements, during the three and nine months ended March 31, 2024, the Company’s revenues from related parties primarily reflected sponsorship sales and service representation agreements of $ 7,234

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

and $ 15,503 , respectively, and merchandise sharing revenues of $ 2,789 and $ 5,087 , respectively, with MSG Sports.

The Company also earned sublease revenue from related parties of $ 761 and $ 2,258 during the three and nine months ended March 31, 2024 , respectively.

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, during the three and nine months ended March 31, 2023, the Company recorded revenues under sponsorship sales and service representation agreements of $ 7,079 and $ 15,643 , respectively, and merchandise sharing revenues of $ 2,160 and $ 4,451 , respectively, with MSG Sports.

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 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 $ 716 and $ 2,100 during the three and nine months ended March 31, 2023, respectively .

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 $ 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.

The Company recorded related party interest income of $ 0 and $ 0 related to the Eden Loan Agreement in the three and nine months ended March 31, 2024, respectively, and $ 1,121 and $ 2,925 in the three and nine months ended March 31, 2023, respectively.

Additional Financial Information

8 unchanged sentences

The Company has deposited cash in an interest-bearing escrow account related to credit support, debt facilities, and collateral to workers compensation and general liability insurance obligations.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Prepaid expenses and other current assets consisted of the following:

2024 June 30,

Prepaid expenses $ 52,595 $ 58,588

Prepaid revenue sharing expense

$ 42,530 $ 42,774

Other prepaid expenses

29,383 15,814

Current contract assets 8,584 11,254

8 unchanged sentences

$ 96,689 $ 67,325

Equity investments with readily determinable fair value (b)

Investments (b)

23,968 35,070

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(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.

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

Investments for more information on long-term investments.

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

6 unchanged sentences

Other income (expense), net includes the following:

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2024 2023 2024 2023

5 unchanged sentences

$ 78 $ 8,070 $ ( 1,545 ) $ 6,784

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 .

During the nine months ended March 31, 2024, the Company made income tax payments of $ 58 .

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

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Subsequent Events

In April and May 2024, the Company sold approximately 1,577 of its shares of Townsquare’s Class A common stock and received aggregate net cash proceeds of approximately $ 15,620 .

In April 2024, the Company recognized an additional lease obligation of $ 104,668 and ROU lease asset of $ 104,284 as the Company took possession of additional space in the New York corporate office.

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