Madison Square Garden Entertainment Corp. 10-Q

Item 1. Financial Statements MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except per share data) As of March 31, June 30, 2024 2023 ASSETS Current Assets: Cash, cash equivalents, and restricted cash $ 28,308 $ 84,355 Accounts receivable, net 108,560 63,898 Related party receivables, current 29,690 69,466 Prepaid expenses and other current assets 89,240 77,562 Total current assets 255,798 295,281 Non-Current Assets: Property and equipment, net 636,014 628,888 Right-of-use lease assets 307,435 235,790 Goodwill 69,041 69,041 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 DEFICIT Current Liabilities: Accounts payable, accrued and other current liabilities $ 205,076 $ 214,725 Related party payables, current 46,596 47,281 Long-term debt, current 16,250 16,250 Operating lease liabilities, current 31,570 36,529 Deferred revenue 251,270 225,855 Total current liabilities 550,762 540,640 Non-Current Liabilities: Long-term debt, net of deferred financing costs 602,468 630,184 Operating lease liabilities, non-current 330,902 219,955 Deferred tax liabilities, net 24,151 23,518 Other non-current liabilities 44,851 56,332 Total liabilities 1,553,134 1,470,629 Commitments and contingencies (see Note 9) Deficit: Class A Common Stock (a) 455 450 Class B Common Stock (b) 69 69 Additional paid-in-capital 29,656 17,727 Treasury stock at cost ( 4,365 and 840 shares outstanding as of March 31, 2024 and June 30, 2023, respectively) ( 140,512 ) ( 25,000 ) Retained earnings (deficit) 48,676 ( 28,697 ) Accumulated other comprehensive loss ( 32,907 ) ( 34,021 ) Total deficit ( 94,563 ) ( 69,472 ) Total liabilities and deficit $ 1,458,571 $ 1,401,157 _________________ (a) Class A Common Stock, $ 0.01 par value per share, 120,000 shares authorized; 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 March 31, 2024 and June 30, 2023. See accompanying notes to the unaudited condensed consolidated and combined financial statements. 2 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data) Three Months Ended Nine Months Ended March 31, March 31, 2024 2023 2024 2023 Revenues (a) 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) ( 53,945 ) ( 44,122 ) ( 151,156 ) ( 127,537 ) Depreciation and amortization ( 13,182 ) ( 14,798 ) ( 39,972 ) ( 46,369 ) (Loss) gains, net on dispositions — ( 51 ) — 4,361 Restructuring charges ( 2,362 ) ( 2,461 ) ( 14,803 ) ( 9,820 ) Operating income 16,803 24,664 120,801 126,798 Interest income (a) 341 2,482 2,275 5,804 Interest expense ( 14,425 ) ( 13,423 ) ( 43,761 ) ( 38,055 ) Other income (expense), net 78 8,070 ( 1,545 ) 6,784 Income from operations before income taxes 2,797 21,793 77,770 101,331 Income tax expense ( 2 ) ( 73 ) ( 397 ) ( 804 ) Net income 2,795 21,720 77,373 100,527 Less: Net loss attributable to nonredeemable noncontrolling interest — — — ( 553 ) Net income attributable to MSG Entertainment’s stockholders $ 2,795 $ 21,720 $ 77,373 $ 101,080 Income per share attributable to MSG Entertainment’s stockholders: Basic $ 0.06 $ 0.42 $ 1.59 $ 1.95 Diluted $ 0.06 $ 0.42 $ 1.58 $ 1.95 Weighted-average number of shares of common stock: Basic (b) 48,109 51,768 48,675 51,768 Diluted (b) 48,447 51,768 48,883 51,768 _________________ (a) See Note 14 . Related Party Transactions for further information on related party arrangements. (b) On April 20, 2023, 51,768 common shares were distributed to Sphere Entertainment Co. 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 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. 3 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands) Three Months Ended Nine Months Ended March 31, March 31, 2024 2023 2024 2023 Net income $ 2,795 $ 21,720 $ 77,373 $ 100,527 Other comprehensive income, before income taxes: Amortization of net actuarial loss included in net periodic benefit cost 450 323 1,350 1,063 Other comprehensive income, before income taxes 450 323 1,350 1,063 Income tax expense ( 78 ) ( 56 ) ( 236 ) ( 185 ) Other comprehensive income, net of income taxes 372 267 1,114 878 Comprehensive income 3,167 21,987 78,487 101,405 Less: Comprehensive loss attributable to nonredeemable noncontrolling interest — — — ( 553 ) Comprehensive income attributable to MSG Entertainment $ 3,167 $ 21,987 $ 78,487 $ 101,958 See accompanying notes to the unaudited condensed consolidated and combined financial statements. 4 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended March 31, 2024 2023 OPERATING ACTIVITIES: Net income $ 77,373 $ 100,527 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 39,972 46,369 Share-based compensation expense 26,186 24,273 Deferred income tax expense 397 — Provision for doubtful accounts 158 — Amortization of deferred financing costs 2,508 2,409 Related party paid in kind interest ( 512 ) ( 2,939 ) Net unrealized and realized gains on equity investments with readily determinable fair value ( 391 ) ( 4,307 ) Gains, net on dispositions — ( 4,361 ) Change in assets and liabilities: Accounts receivable, net ( 44,820 ) ( 27,890 ) Related party receivables and payables, net 39,091 ( 5,292 ) Prepaid expenses and other current and non-current assets ( 41,434 ) ( 29,855 ) Accounts payable, accrued and other current, and non-current liabilities ( 18,687 ) ( 20,812 ) Deferred revenue 25,415 56,531 Operating lease right-of-use assets and lease liabilities 5,798 ( 2,312 ) Net cash provided by operating activities $ 111,054 $ 132,341 INVESTING ACTIVITIES: Capital expenditures ( 19,646 ) ( 12,187 ) Proceeds from dispositions, net — 27,904 Proceeds from sale of investments 13,484 4,244 Loans to related parties ( 65,000 ) ( 6,700 ) Other investing activities ( 1,463 ) — Net cash (used in) provided by investing activities $ ( 72,625 ) $ 13,261 FINANCING ACTIVITIES: Proceeds from revolving credit facility 73,000 168 Principal repayments on term loan and revolving credit facilities ( 102,288 ) ( 6,063 ) Repayments on related party loan, net ( 304 ) — Payments for debt financing costs ( 632 ) — Taxes paid in lieu of shares issued for equity-based compensation ( 13,378 ) — Stock repurchases ( 50,874 ) — Net transfers to Sphere Entertainment and Sphere Entertainment’s subsidiaries — ( 79,299 ) Net cash used in financing activities $ ( 94,476 ) $ ( 85,194 ) Net (decrease) increase in cash, cash equivalents, and restricted cash ( 56,047 ) 60,408 Cash, cash equivalents, and restricted cash, beginning of period 84,355 62,573 Cash, cash equivalents, and restricted cash, end of period $ 28,308 $ 122,981 Non-cash investing and financing activities: 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 party $ 65,512 $ 5,350 See accompanying notes to the unaudited condensed consolidated and combined financial statements. 5 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF (DEFICIT) EQUITY (Unaudited) (in thousands) Common Stock Sphere Entertainment Co. Investment Additional Paid- Capital Treasury Stock Retained Earnings (Deficit) Accumulated Other Comprehensive Loss Total Madison Square Garden Entertainment Corp. Stockholders’ (Deficit) Equity Nonredeemable Noncontrolling Interest Total (Deficit) Equity 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 Other comprehensive income — — — — — 372 372 — 372 Comprehensive income — — — — — — 3,167 — 3,167 Share-based compensation — — 5,448 — — — 5,448 — 5,448 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 Net income — 21,720 — — — — 21,720 — 21,720 Other comprehensive income — — — — — 267 267 — 267 BCE Disposition — — — — — — — — — Comprehensive income — — — — — — 21,987 — 21,987 Net decrease in Sphere Entertainment Co. Investment — ( 77,373 ) — — — — ( 77,373 ) — ( 77,373 ) Balance as of March 31, 2023 $ — $ 77,365 $ — $ — $ — $ ( 33,862 ) $ 43,503 $ — $ 43,503 6 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF (DEFICIT) EQUITY (Unaudited) (in thousands) Common Stock Sphere Entertainment Co. Investment Additional Paid- Capital Treasury Stock Retained Earnings (Deficit) Accumulated Other Comprehensive Loss Total Madison Square Garden Entertainment Corp. Stockholders’ (Deficit) Equity Nonredeemable Noncontrolling Interest Total (Deficit) Equity Balance as of June 30, 2023 $ 519 $ — $ 17,727 $ ( 25,000 ) $ ( 28,697 ) $ ( 34,021 ) $ ( 69,472 ) $ — $ ( 69,472 ) Net income — — — — 77,373 — 77,373 — 77,373 Other comprehensive income — — — — — 1,114 1,114 — 1,114 Comprehensive income — — — — — — 78,487 — 78,487 Share-based compensation — — 26,186 — — — 26,186 — 26,186 Tax withholding associated with shares issued for share-based compensation 5 — ( 13,383 ) — — — ( 13,378 ) — ( 13,378 ) Stock repurchases, inclusive of tax — — ( 874 ) ( 115,512 ) — — ( 116,386 ) — ( 116,386 ) 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 ) Net income — 101,080 — — — — 101,080 ( 553 ) 100,527 Other comprehensive income — — — — — 878 878 — 878 BCE disposition — — — — — — — 667 667 Comprehensive income — — — — — — 101,958 114 102,072 Net increase in Sphere Entertainment Co. Investment — ( 56,980 ) — — — — ( 56,980 ) — ( 56,980 ) 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. 7 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED) All amounts included in the following Notes to Condensed Consolidated and Combined Financial Statements (unaudited) are presented in thousands, except per share data or as otherwise noted. Note 1. Description of Business and Basis of Presentation Description of Business Madison Square Garden Entertainment Corp. (together with its subsidiaries, as applicable, the “Company” or “MSG Entertainment”), is a live entertainment company comprised of iconic venues and marquee entertainment content. Utilizing the Company’s powerful brands and live entertainment expertise, the Company delivers unique experiences that set the standard for excellence and innovation while forging deep connections with diverse and passionate audiences. The Company operates and reports financial information in one reportable segment. The Company’s portfolio of venues includes: Madison Square Garden (“The Garden”), The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. The Company also owns and produces the original production, the Christmas Spectacular Starring the Radio City Rockettes (the “ Christmas Spectacular ”). The Company also has an entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually. MSG Entertainment Distribution On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment Co. (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. See Note 1. 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 The Company reports on a fiscal year basis ending on June 30 th (“Fiscal Year”). In these unaudited condensed consolidated and combined financial statements, the years ending and ended on June 30, 2024 and 2023, respectively, are referred to as “Fiscal Year 2024” and “Fiscal Year 2023,” respectively. The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and Article 10 of Regulation S-X of the 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. References to GAAP issued by the Financial Accounting Standards Board (“FASB”) in these footnotes are to the FASB Accounting Standards Codification, also referred to as “ASC.” Management believes the assumptions underlying the combined financial statements, including the assumptions regarding allocating general corporate expenses, are reasonable. Nevertheless, the combined financial statements may not include all of the actual expenses that would have been incurred by the Company and may not reflect its combined results of operations, financial position and cash flows had it been a stand-alone company during the periods presented on a combined basis. Actual costs that would have been incurred if the Company had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. The Company is unable to quantify the amounts that it would have recorded during the historical periods on a stand-alone basis. See Note 17. Related Party Transactions in 8 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED) 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. The results of operations for the periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year. As a result of the production of the Christmas Spectacular , 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. 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. Note 2. Summary of Significant Accounting Policies A. Principles of Consolidation and Combination All significant intracompany accounts and balances within the Company’s consolidated businesses have been eliminated. For the periods prior to the MSGE Distribution Date, the combined financial statements include certain assets and liabilities that were historically held at Sphere Entertainment’s corporate level but were specifically identifiable or otherwise attributable to the Company. Certain historical intercompany transactions between Sphere Entertainment and the Company have been included as components of Sphere Entertainment’s investment in the condensed consolidated and combined financial statements, as they are considered to be effectively settled upon effectiveness of the MSGE Distribution and were not historically settled in cash. Certain other historical intercompany transactions between Sphere Entertainment and the Company have been classified as related party, rather than intercompany, in the condensed consolidated and combined financial statements as they were historically settled in cash. Expenses related to corporate allocations from the Company to Sphere Entertainment prior to the MSGE Distribution are considered to be effectively settled in the condensed consolidated and combined financial statements at the time the transaction is recorded, with the offset recorded against Sphere Entertainment’s investment. See Note 14. Related Party Transactions, for further information on related party arrangements. 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. See Note 3. Dispositions for further information on the BCE disposition. B. Use of Estimates The preparation of the accompanying condensed consolidated and combined financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the provision for credit losses, goodwill, intangible assets, other long-lived assets, deferred tax assets, pension and other postretirement benefit obligations and the related net periodic benefit cost, and other liabilities. In addition, estimates are used in revenue recognition, depreciation and amortization, litigation matters and other matters. Management believes its use of estimates in the financial statements to be reasonable. Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and, as such, these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the Company’s condensed consolidated financial statements in future periods. 9 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED) C. 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: (a) • Event production costs including direct personnel expenses • Venue operations and infrastructure costs (a) • Venue rental costs for venues not owned by the Company • Sponsorship and signage fulfillment costs • Contractual revenue sharing expenses related to suite licenses and certain internal signage • Event-related marketing and advertising costs Product revenue, presented as “Food, beverage, and merchandise revenues”, includes: • Sales of food and beverage during events held at the Company’s venues • Sales of the Company’s merchandise at the Company’s venues and via traditional retail channels 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 10 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 11 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED) operations. Deferred production costs are subject to recoverability assessments whenever there is an indication of potential impairment. Revenue Sharing Expenses Revenue sharing expenses are determined based on contractual agreements between the Company and MSG Sports, primarily related to suite licenses, certain internal signage and in-venue food and beverage sales and are recorded as a component of Entertainment offerings, arena license fees, and other leasing direct operating expenses on the Company’s condensed consolidated and combined statement of operations. D. 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 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 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. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s condensed consolidated and combined financial statements . Note 3. Dispositions 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 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 On December 30, 2022, the Company sold its owned aircraft for $ 20,375 . In connection with the sale, the Company recognized a loss of $ 4,383 , net of transaction costs. The loss on the aircraft disposition was recorded in (Loss) gains, net on dispositions in the condensed combined statements of operations. Note 4. Revenue Recognition Contracts with Customers 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 . 12 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 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 offerings (a) $ 113,165 $ 95,634 $ 501,211 $ 432,729 Sponsorship, signage, and suite licenses (b) 68,695 64,079 182,339 172,708 Other (c) 9,741 9,501 24,854 31,306 Total revenues from contracts with customers 191,601 169,214 708,404 636,743 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 _________________ (a) Event-related and entertainment offerings revenues are recognized at a point in time. (b) See Note 2. Summary of Significant Accounting Policies and Note 4. 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 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 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 Nine Months Ended March 31, March 31, 2024 2023 2024 2023 Ticketing and venue license fee revenues (a) $ 64,859 $ 48,179 $ 361,458 $ 304,637 Sponsorship and signage, suite, and advertising commission revenues (b) 80,269 79,493 214,873 216,788 Food, beverage, and merchandise revenues 45,380 39,954 127,379 112,412 Other 1,093 1,588 4,694 2,906 Total revenues from contracts with customers 191,601 169,214 708,404 636,743 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 _________________ (a) Amounts include ticket sales, including other ticket-related revenue, and venue license fees from the Company’s events such as (i) concerts, (ii) the presentation of the Christmas Spectacular and (iii) other live entertainment and sporting events. (b) Amounts include (i) revenues from sponsorship sales and representation agreements with MSG Sports and (ii) advertising commission revenues from MSG Networks until the termination of the Networks Advertising Sales Representation Agreement as of December 31, 2022. Contract Balances 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: As of March 31, 2024 June 30, 2023 Receivables from contracts with customers, net (a) $ 110,480 $ 69,295 Contract assets, current (b) $ 8,584 $ 11,254 Deferred revenue, including non-current portion (c) $ 251,270 $ 226,029 ________________ (a) Receivables from contracts with customers, net, which are reported in Accounts receivable, net and Related party receivables, current in the Company’s 13 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. See Note 14. Related Party Transactions for further details on related party arrangements. (b) Contract assets, current, which are reported as Prepaid expenses and other current assets in the Company’s condensed consolidated balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to customers, for which the Company does not have an unconditional right to bill as of the reporting date. Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional. (c) Deferred revenue primarily relates to the Company’s receipt of consideration from customers in advance of the Company’s transfer of goods or services to the customers. Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to a customer. Revenue recognized for the three 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 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 that have original expected durations of one year or less. Note 5. Restructuring Charges 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 June 30, 2023 $ 2,530 Restructuring charges (excluding share-based compensation expense) 11,378 Payments ( 3,130 ) March 31, 2024 $ 10,778 Note 6. Investments 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. (“DraftKings”), which was subsequently sold during the first quarter of Fiscal Year 2024. • Townsquare is a media, entertainment and digital marketing solutions company that is listed on the New York Stock Exchange (“NYSE”) under the symbol “TSQ.” • 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. 14 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: As of Ownership Percentage as of March 31, 2024 March 31, 2024 June 30, 2023 Equity investments with readily determinable fair values: Townsquare Class A common stock $ 18,755 $ 6,945 Townsquare Class C common stock — 13,399 DraftKings Class A common stock — 11,297 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) 8 % 51 — 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 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: Shares of common stock sold — DraftKings — 29 425 229 Cash proceeds from common stock sold — DraftKings $ — $ 550 $ 12,844 $ 4,369 Note 7. Property and Equipment, Net As of March 31, 2024 and June 30, 2023, property and equipment, net consisted of the following: As of March 31, 2024 June 30, 2023 Land $ 62,768 $ 62,768 Buildings 1,010,034 999,205 Equipment, furniture, and fixtures 358,693 351,596 Leasehold improvements 105,885 105,877 Construction in progress (a) 31,971 2,828 Total Property and equipment $ 1,569,351 $ 1,522,274 Less: accumulated depreciation and amortization ( 933,337 ) ( 893,386 ) Property and equipment, net $ 636,014 $ 628,888 _________________ (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 build out costs incurred after 15 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED) possession. 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. 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. Note 8. Goodwill and Intangible Assets 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: As of March 31, 2024 June 30, 2023 Trademarks $ 61,881 $ 61,881 Photographic related rights 1,920 1,920 Total indefinite-lived intangible assets $ 63,801 $ 63,801 During the first quarter of Fiscal Year 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. 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. Note 9. Commitments and Contingencies Commitments See Note 11. Commitments and Contingencies, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for details on the Company’s commitments. The Company’s commitments as of June 30, 2023 included a total of $ 926,466 (primarily related to contractual obligations). 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). See Note 10. Credit Facilities for details of the principal repayments required under the Company’s credit facilities. Delayed Draw Term Loan Facility On April 20, 2023, a subsidiary of the Company, MSG Entertainment Holdings, LLC (“MSG Entertainment Holdings”), entered into a delayed draw term loan facility (the “DDTL Facility”) with Sphere Entertainment. Pursuant to the DDTL Facility, MSG Entertainment Holdings 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. 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. On August 9, 2023, Sphere Entertainment repaid the full principal amount of the DDTL Facility and accrued interest and commitment fees by delivering 1,923 shares of the Company’s Class A Common Stock held by Sphere Entertainment, as permitted as payment under the DDTL Facility. Such shares have been classified by the Company pursuant to the Stock Repurchase Program (as defined and further explained in Note 13. Stockholders’ Equity) as treasury shares and are no longer outstanding on the date of repayment. Legal Matters The Company is a defendant in various lawsuits. Although the outcome of these lawsuits cannot be predicted with certainty (including 16 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. Note 10. Credit Facilities See Note 12. Credit Facilities, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the Company’s credit facilities. The following table summarizes the presentation of the outstanding balances under the Company’s credit and other debt agreements as of March 31, 2024 and June 30, 2023: As of March 31, 2024 June 30, 2023 Current Portion National Properties Term Loan Facility $ 16,250 $ 16,250 Current portion of long-term debt $ 16,250 $ 16,250 As of March 31, 2024 June 30, 2023 Principal Unamortized Deferred Financing Costs Net Principal Unamortized Deferred Financing Costs Net Non-current Portion National Properties Term Loan Facility $ 613,437 $ ( 10,424 ) $ 603,013 $ 625,625 $ ( 12,845 ) $ 612,780 National Properties Revolving Credit Facility — ( 545 ) ( 545 ) 17,100 — 17,100 Other debt — — — 304 — 304 Long-term debt, net of deferred financing costs $ 613,437 $ ( 10,969 ) $ 602,468 $ 643,029 $ ( 12,845 ) $ 630,184 National Properties Facilities General. 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 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. 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”). The National Properties Credit Agreement requires MSG National Properties to pay a commitment fee ranging from 0.30 % to 0.50 % in respect of the daily unused commitments under the National Properties Revolving Credit Facility. MSG National Properties is also required to pay customary letter of credit fees, as well as fronting fees, to banks that issue letters of credit pursuant to the National Properties Credit Agreement. The interest rate on the National Properties Facilities as of March 31, 2024 was 7.93 %. Principal Repayments . Subject to customary notice and minimum amount conditions, the Company may voluntarily repay outstanding loans under the National Properties Facilities or terminate commitments under the National Properties Revolving Credit Facility, at any time, in whole or in part, subject only to customary breakage costs in the case of prepayment of Term SOFR loans. The National Properties Facilities will mature on June 30, 2027. The principal obligations under the National Properties Term Loan Facility are to be repaid in quarterly installments beginning with the fiscal quarter ending March 31, 2023, in an aggregate amount equal to 2.50 % per annum ( 0.625 % per quarter), stepping up to 5.0 % per annum ( 1.25 % per quarter) in the fiscal quarter ending September 30, 2025, with the balance due at the maturity of the facility. The principal obligations under the National Properties Revolving Credit Facility 17 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. Covenants. The National Properties Credit Agreement includes financial covenants requiring MSG National Properties and its restricted subsidiaries to maintain a specified minimum liquidity level, a specified minimum debt service coverage ratio and specified maximum total leverage ratio. The minimum liquidity level is set at $ 50,000 , and is tested based on the level of average daily liquidity, consisting of cash and cash equivalents and available revolving commitments, over the last month of each quarter over the life of the National Properties Facilities. The debt service coverage ratio covenant began testing in the fiscal quarter ended December 31, 2022, and is set at a ratio of 2 :1 before stepping up to 2.5 :1 in the fiscal quarter ending September 30, 2024. The leverage ratio covenant began testing in the fiscal quarter ended June 30, 2023. It is tested based on the ratio of MSG National Properties and its restricted subsidiaries’ consolidated total indebtedness to adjusted operating income, with an initial maximum ratio of 6 :1, stepping down to 5.5 :1 in the fiscal quarter ending June 30, 2024 and 4.5 :1 in the fiscal quarter ending June 30, 2026. As of March 31, 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. The National Properties Credit Agreement contains certain restrictions on the ability of MSG National Properties and its restricted subsidiaries to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the National Properties Credit Agreement, including the following: (i) incur additional indebtedness; (ii) create liens on certain assets; (iii) make investments, loans or advances in or to other persons; (iv) pay dividends and distributions or repurchase capital stock (which will restrict the ability of MSG National Properties to make cash distributions to the Company); (v) repay, redeem or repurchase certain indebtedness; (vi) change its lines of business; (vii) engage in certain transactions with affiliates; (viii) amend their respective organizational documents; (ix) merge or consolidate; and (x) make certain dispositions. Guarantors and Collateral. All obligations under the National Properties Facilities are guaranteed by MSG Entertainment Holdings and MSG National Properties’ existing and future direct and indirect domestic subsidiaries, other than the subsidiaries that own The Garden and certain other excluded subsidiaries (the “Subsidiary Guarantors”). All obligations under the National Properties Facilities, including the guarantees of those obligations, are secured by certain of the assets of MSG National Properties and the Subsidiary Guarantors (collectively, “Collateral”) including, but not limited to, a pledge of some or all of the equity interests held directly or indirectly by MSG National Properties in each Subsidiary Guarantor. The Collateral does not include, among other things, any interests in The Garden or the leasehold interests in Radio City Music Hall and the Beacon Theatre. Interest payments and loan principal repayments made by the Company under the National Properties Credit Agreement were as follows: Interest Payments Principal Repayments Nine Months Ended Nine Months Ended March 31, March 31, 2024 2023 2024 2023 National Properties Facilities $ 40,742 $ 35,283 $ 102,288 $ 6,063 The carrying value and fair value of the Company’s debt reported in the accompanying condensed consolidated balance sheets were as follows: As of March 31, 2024 June 30, 2023 Carrying Value (a) Fair Value Carrying Value (a) Fair Value Liabilities: National Properties Facilities $ 629,687 $ 620,242 $ 658,975 $ 655,509 Other debt — — 304 304 Total Long-term debt $ 629,687 $ 620,242 $ 659,279 $ 655,813 ________________ (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 18 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. Note 11. Pension Plans and Other Postretirement Benefit Plans Prior to the MSGE Distribution, Sphere Entertainment sponsored both funded and unfunded and qualified and non-qualified defined benefit plans (the “Pension Plans”), as well as a postretirement benefit plan (the “Postretirement Plan”), covering certain full-time employees and retirees of the Company. In connection with the MSGE Distribution, the sponsorship of the Pension Plans and Postretirement Plan was transferred to the Company. See Note 13. 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 nine months ended March 31, 2024 and 2023. Service cost is recognized in direct operating expenses and selling, general and administrative expenses. 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 March 31, March 31, 2024 2023 2024 2023 Service cost $ 17 $ 30 $ 6 $ 8 Interest cost 1,469 927 24 11 Expected return on plan assets ( 1,090 ) ( 1,504 ) — — Recognized actuarial loss 450 314 — 9 Net periodic cost (benefit) $ 846 $ ( 233 ) $ 30 $ 28 Pension Plans Postretirement Plan Nine Months Ended Nine Months Ended March 31, March 31, 2024 2023 2024 2023 Service cost $ 51 $ 90 $ 18 $ 24 Interest cost 4,407 2,781 72 33 Expected return on plan assets ( 3,273 ) ( 4,512 ) — — Recognized actuarial loss 1,350 1,036 — 27 Net periodic cost (benefit) $ 2,535 $ ( 605 ) $ 90 $ 84 Contributions for Qualified Defined Benefit Pension Plans 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 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 Savings Plans $ 1,526 $ 1,367 $ 5,825 $ 3,553 Union Savings Plan $ 490 $ 371 $ 621 $ 409 19 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED) Executive Deferred Compensation See Note 13. 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: As of March 31, 2024 June 30, 2023 Non-current assets (included in Other non-current assets) $ 4,566 $ 2,954 Non-current liabilities (included in Other non-current liabilities) $ ( 4,593 ) $ ( 2,976 ) Note 12. Share-based Compensation The Company has two share-based compensation plans: the 2023 Employee Stock Plan and the 2023 Stock Plan for Non-Employee Directors. See Note 14. Share Based Compensation, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for more information on these plans. Share-based compensation expense for the Company’s restricted stock units (“RSUs”) and performance stock units (“PSUs”) are recognized in the condensed consolidated and combined statements of operations as a component of direct operating expenses or selling, general, and administrative expenses. The share-based compensation expense recorded by the Company in Fiscal Year 2023 includes the expenses associated with the employees attributable to the Company, net of contributory credits from the Company to Sphere Entertainment for the Company’s corporate employees. The following table summarizes the Company’s share-based compensation expense: Three Months Ended Nine Months Ended March 31, March 31, 2024 2023 2024 2023 Share-based compensation expense (a) $ 5,611 $ 8,014 $ 19,561 $ 21,979 Fair value of awards vested (b) $ 2,004 $ — $ 31,155 $ 2,867 ________________ (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 $ 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 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. 20 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED) Award Activity RSUs 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. PSUs 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. Note 13. Stockholders’ Equity Stock Repurchase Program On March 29, 2023, the Company’s Board of Directors authorized a share repurchase program to repurchase up to $ 250,000 of the Company’s Class A Common Stock (the “Stock Repurchase Program”). Pursuant to the Stock Repurchase Program, shares of Class A Common Stock may be purchased from time to time in open market or private transactions, block trades or such other manner as the Company may determine in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. For the 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 The following table details the components of accumulated other comprehensive loss: Pension Plans and Postretirement Plan Three Months Ended Nine Months Ended March 31, March 31, 2024 2023 2024 2023 Balance at beginning of period $ ( 33,279 ) $ ( 34,129 ) $ ( 34,021 ) $ ( 34,740 ) Other comprehensive income: Amounts reclassified from accumulated other comprehensive loss (a) 450 323 1,350 1,063 Income tax expense ( 78 ) ( 56 ) ( 236 ) ( 185 ) Other comprehensive income, net of income taxes 372 267 1,114 878 Balance at end of period $ ( 32,907 ) $ ( 33,862 ) $ ( 32,907 ) $ ( 33,862 ) ________________ (a) Amounts reclassified from accumulated other comprehensive loss represent the amortization of net actuarial loss included in net periodic benefit cost, which is reflected under Other income (expense), net in the accompanying condensed consolidated and combined statements of operations (see Note 11. Pension Plans and Other Postretirement Benefit Plans). Note 14. Related Party Transactions 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. Members of the Dolan Family Group are also the controlling stockholders of Sphere Entertainment, MSG Sports, and AMC Networks Inc. See Note 17. 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. 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 21 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”). James L. Dolan, the Company’s Executive Chairman, Chief Executive Officer and a director, and his spouse, Kristin A. Dolan, owned 605 until September 13, 2023. Kristin A. Dolan is also the founder and was the Chief Executive Officer of 605. 605 provides audience measurement and data analytics services to the Company and its subsidiaries in the ordinary course of business. 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 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. Dolan and Kristin A. Dolan now hold a minority interest in iSpot.tv. As a result, as of September 13, 2023, 605 is no longer considered to be a related party. 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 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. Revenues and Operating Expenses The following table summarizes the composition and amounts of the transactions with the Company’s affiliates. 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 nine months ended March 31, 2024 and 2023: Three Months Nine Months Ended March 31, March 31, 2024 2023 2024 2023 Revenues $ 46,396 $ 41,594 $ 85,185 $ 96,805 Operating expenses (credits): Revenue sharing expenses $ 8,521 $ 7,353 $ 15,988 $ 15,639 Reimbursement under Arena License Arrangements ( 10,959 ) ( 8,911 ) ( 19,266 ) ( 18,761 ) Cost reimbursement from MSG Sports ( 9,483 ) ( 9,789 ) ( 28,871 ) ( 28,781 ) Cost reimbursement from Sphere Entertainment (after April 20, 2023) and Corporate allocations to Sphere Entertainment (before April 20, 2023) ( 27,494 ) ( 40,794 ) ( 84,171 ) ( 114,761 ) Other operating expenses, net 1,266 327 4,120 3,682 Total operating expenses (credits), net (a) $ ( 38,149 ) $ ( 51,814 ) $ ( 112,200 ) $ ( 142,982 ) _________________ (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. Revenues 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 22 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 Loans Receivable from Sphere Entertainment Prior to the MSGE Distribution, the Company’s captive insurance entity, Eden Insurance Company, Inc. (“Eden”), entered into a loan agreement with Sphere Entertainment (the “Eden Loan Agreement”), under which Eden granted Sphere Entertainment an unsecured loan bearing interest at a rate of SOFR plus 350 basis points with a principal amount not exceeding $ 60,000 . This loan was in the form of a demand promissory note, payable immediately upon order from Eden. The loan payable to the Company held by Sphere Entertainment under the Eden Loan Agreement was assigned by Sphere Entertainment to the Company in connection with the MSGE Distribution, and has been eliminated in consolidation by the Company for periods subsequent to the MSGE Distribution. During Fiscal Year 2023, Eden declared and paid dividends to Sphere Entertainment through a reduction of the loan receivable from Sphere Entertainment. During Fiscal Year 2023, no interest or principal payments were received by Eden. Instead, the accrued but unpaid interest was added to the outstanding principal amount of the loan. The cash flows related to this loan receivable for periods prior to the MSGE Distribution are reflected as investing activities, as these balances represent amounts loaned by the Company to Sphere Entertainment. The Company recorded related party interest income of $ 0 and $ 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. Note 15. Additional Financial Information The following table provides a summary of the amounts recorded as cash, cash equivalents, and restricted cash: As of March 31, 2024 June 30, 2023 Cash and cash equivalents $ 28,008 $ 76,089 Restricted cash 300 8,266 Total cash, cash equivalents, and restricted cash $ 28,308 $ 84,355 The Company’s cash, cash equivalents, and restricted cash are classified within Level I of the fair value hierarchy as it is valued using observable inputs that reflect quoted prices for identical assets in active markets. The Company’s restricted cash includes cash deposited in escrow accounts. 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. 23 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED) Prepaid expenses and other current assets consisted of the following: As of March 31, 2024 June 30, 2023 Prepaid revenue sharing expense $ 42,530 $ 42,774 Other prepaid expenses 29,383 15,814 Current contract assets 8,584 11,254 Inventory (a) 4,314 2,557 Other 4,429 5,163 Total prepaid expenses and other current assets $ 89,240 $ 77,562 _________________ (a) Inventory is mostly comprised of food and liquor for venues. Other non-current assets consisted of the following: As of March 31, 2024 June 30, 2023 Unbilled lease receivable (a) $ 96,689 $ 67,325 Investments (b) 23,968 35,070 Deferred costs 3,984 4,120 Other 1,841 1,841 Total other non-current assets $ 126,482 $ 108,356 _________________ (a) Unbilled lease receivable relates to the amounts recorded under the Arena License Agreement. (b) See Note 6. Investments for more information on long-term investments. Accounts payable, accrued and other current liabilities consisted of the following: As of March 31, 2024 June 30, 2023 Accounts payable $ 23,498 $ 15,628 Accrued payroll and employee related liabilities 61,810 64,532 Cash due to promoters 69,658 90,538 Accrued expenses 50,110 44,027 Total accounts payable, accrued and other current liabilities $ 205,076 $ 214,725 Other income (expense), net includes the following: Three Months Ended Nine Months Ended March 31, March 31, 2024 2023 2024 2023 Gains from shares sold — DraftKings $ — $ 214 $ 1,548 $ 1,703 Net unrealized gains (loss) on equity investments with readily determinable fair value 950 7,639 ( 1,157 ) 4,442 Other ( 872 ) 217 ( 1,936 ) 639 Total other income (expense), net $ 78 $ 8,070 $ ( 1,545 ) $ 6,784 Income Taxes 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 . 24 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED) Note 16. 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. 25