Madison Square Garden Entertainment Corp. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Executive Chairman and Chief Executive Officer and our Executive Vice President and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act. Based on that evaluation, our Executive Chairman and Chief Executive Officer and our Executive Vice President and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2024. Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of this evaluation, our management concluded that our internal control over financial reporting was effective as of June 30, 2024. The effectiveness of our internal control over financial reporting as of June 30, 2024 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein. Changes in Internal Control over Financial Reporting There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 45 PART III Item 10. Directors, Executive Officers and Corporate Governance Information relating to our directors, executive officers, corporate governance and insider trading policies and procedures will be included in the proxy statement for the 2024 annual meeting of the Company’s stockholders, which is expected to be filed within 120 days of our fiscal year end, and is incorporated herein by reference. Item 11. Executive Compensation Information relating to executive compensation will be included in the proxy statement for the 2024 annual meeting of the Company’s stockholders, which is expected to be filed within 120 days of our fiscal year end, and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information relating to the beneficial ownership of our common stock will be included in the proxy statement for the 2024 annual meeting of the Company’s stockholders, which is expected to be filed within 120 days of our fiscal year end, and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence Information relating to certain relationships and related transactions and director independence will be included in the proxy statement for the 2024 annual meeting of the Company’s stockholders, which is expected to be filed within 120 days of our fiscal year end, and is incorporated herein by reference. Item 14. Principal Accountant Fees and Services Information relating to principal accountant fees and services will be included in the proxy statement for the 2024 annual meeting of the Company’s stockholders, which is expected to be filed within 120 days of our fiscal year end, and is incorporated herein by reference. 46 PART IV Item 15. Exhibits and Financial Statement Schedules Page No. The following documents are filed as part of this report: 1. The financial statements as indicated in the index set forth on page F-1 2. Financial statement schedule: Schedule supporting consolidated and combined financial statements: Schedule II — Valuation and Qualifying Accounts 52 Schedules other than that listed above have been omitted, since they are either not applicable, not required or the information is included elsewhere herein. 3. Exhibits: The following documents are filed as exhibits hereto: EXHIBIT NO. DESCRIPTION 2.1 Distribution Agreement, dated as of March 29, 2023, between Sphere Entertainment Co. (formerly Madison Square Garden Entertainment Corp.) and Madison Square Garden Entertainment Corp. (formerly MSGE Spinco Inc.) (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form 10 (file No. 001-41627) filed on March 30 , 2023). 2.2 Contribution Agreement, dated as of March 29, 2023, between Sphere Entertainment Co. (formerly Madison Square Garden Entertainment Corp.), Sphere Entertainment Group, LLC (formerly MSG Entertainment Group, LLC) and Madison Square Garden Entertainment Corp. (formerly MSGE Spinco Inc.) (incorporated by reference to Exhibit 2.2 to the Company’s Registration Statement on Form 10 (file No. 001-41627) filed on March 30 , 2023). 3.1 Second Amended and Restated Certificate of Incorporation of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.), dated April 20, 2023 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on April 24, 2023). 3.2 Amended By-Laws of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.), dated April 20, 2023 (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on April 24, 2023). 4.1 Registration Rights Agreement, dated March 31, 2023, by and among Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) and The Charles F. Dolan Children Trusts (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on April 24, 2023). 4.2 Registration Rights Agreement, dated March 31, 2023, by and among Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) and The Dolan Family Affiliates (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on April 24, 2023). 4.3 Description of Capital Stock (incorporated by reference to Exhibit 4.4 to the Company ’ s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 filed on August 18, 2023) . 10.1 Transition Services Agreement, dated as of March 29, 2023, between Sphere Entertainment Co. (formerly Madison Square Garden Entertainment Corp.) and Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form 10 (file No. 001-41627) filed on March 30 , 2023). 10.2 Tax Disaffiliation Agreement, dated as of March 29, 2023, between Sphere Entertainment Co. (formerly Madison Square Garden Entertainment Corp.) and Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form 10 (file No. 001-41627) filed on March 30 , 2023) . 10.3 Employee Matters Agreement, dated as of March 29, 2023, between Sphere Entertainment Co. (formerly Madison Square Garden Entertainment Corp.) and Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) (incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form 10 (file No. 001-41627) filed on March 30 , 2023) . 10.4 2023 Employee Stock Plan (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-8 filed on April 19, 2023). † 10.5 2023 Stock Plan for Non-Employee Directors (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8 filed on April 19, 2023). † 47 EXHIBIT NO. DESCRIPTION 10. 6 Form of Indemnification Agreement between Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) and its Directors and Officers (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10. 7 Form of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) Non-Employee Director Award Agreement (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). † 10. 8 Form of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed May 18, 2023). † 10. 9 Form of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) Performance Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed May 18, 2023). † 10.1 0 Form of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) Option Agreement (incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q filed May 18, 2023). † 10.1 1 Form of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) Performance Option Agreement (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q filed May 18, 2023). † 10.1 2 Form of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) Restricted Stock Units Agreement in respect of Sphere Entertainment Co. Restricted Stock Units (incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed May 18, 2023). † 10.1 3 Form of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) Option Agreement in respect of Sphere Entertainment Co. Options (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q filed May 18, 2023). † 10.1 4 Form of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) Performance Restricted Stock Units in respect of Sphere Entertainment Co. Performance Restricted Stock Units (incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q filed May 18, 2023). † 10.1 5 Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) Executive Deferred Compensation Plan, as amended and restated (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on April 24, 2023). † 10.1 6 Lease Agreement, between RCPI Trust and Radio City Productions LLC, relating to Radio City Music Hall, dated December 4, 1997 (incorporated by reference to Exhibit 10.17 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). * 10.1 7 First Amendment to Lease Agreement, dated December 4, 1997, between RCPI Trust and Radio City Productions LLC, dated February 19, 1999 (incorporated by reference to Exhibit 10.18 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.1 8 Second Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC, dated November 6, 2002 (incorporated by reference to Exhibit 10.19 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). * 10. 19 Third Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC, dated August 14, 2008 (incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). * 10.2 0 Fourth Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC, dated January 24, 2011 (incorporated by reference to Exhibit 10.21 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). * 10.2 1 Fifth Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC, dated July 18, 2018 (incorporated by reference to Exhibit 10.22 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.22 Sixth Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC, dated July 1, 2021 (incorporated by reference to Exhibit 10.23 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). * 10.2 3 Seventh Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC, dated April 18, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 24, 2023). * 48 EXHIBIT NO. DESCRIPTION 10.2 4 First Renewal Option Extension Letter amending Lease Agreement, dated December 4, 1997, by and between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC (as amended), dated February 24, 2021 (incorporated by reference to Exhibit 10.24 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.2 5 Second Renewal Option Extension Letter amending Lease Agreement, dated December 4, 1997, by and between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC (as amended), dated March 25, 2021 (incorporated by reference to Exhibit 10.25 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.2 6 Third Renewal Option Extension Letter amending Lease Agreement, dated December 4, 1997, by and between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC (as amended), dated April 29, 2021 (incorporated by reference to Exhibit 10.26 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.2 7 Guaranty of Lease, dated April 18, 2023, by Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 24, 2023). * 10.2 8 Summary of Office Space Arrangement, between MSG Entertainment Group, LLC (formerly MSG Sports & Entertainment, LLC) and the Knickerbocker Group LLC. (incorporated by reference to Exhibit 10.28 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10. 29 Aircraft Support Services Agreement, dated December 17, 2018, between MSG Entertainment Group, LLC (formerly MSG Sports & Entertainment, LLC) and the Dolan Family Members (for the DFO G550) (incorporated by reference to Exhibit 10.29 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.3 0 Amendment No. 1 to Aircraft Support Services Agreement, dated December 17, 2018, between MSG Entertainment Group, LLC (formerly MSG Sports & Entertainment, LLC) and the Dolan Family Members (for the DFO G550), effective as of May 10, 2022 (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.3 1 Amendment No. 2 to Aircraft Support Services Agreement, effective as of May 16, 2023, by and between MSG Entertainment Holdings, LLC (as successor-in-interest to MSG Entertainment Group, LLC) and the Dolan Family Members (for the DFO G550) (incorporated by reference to Exhibit 10.32 to the Company’s Registration Statement on Form S-1 filed on June 20, 2023). 10.3 2 Flight Crew Services Agreement, dated May 6, 2019, between DFO and MSG Entertainment Group, LLC (formerly MSG Sports & Entertainment, LLC) (for the Challenger) (incorporated by reference to Exhibit 10.31 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.3 3 Dry Lease Agreement, dated December 17, 2018, between Sterling2K LLC and MSG Entertainment Group, LLC (formerly MSG Sports & Entertainment, LLC) (for the DFO G550) (incorporated by reference to Exhibit 10.32 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.3 4 Amendment No. 1 to Dry Lease Agreement, dated as of December 20, 2021, between Sterling2K LLC and MSG Entertainment Group, LLC (for the DFO G550) (incorporated by reference to Exhibit 10.33 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.3 5 Amendment No. 2 to Dry Lease Agreement, dated December 17, 2018, between Sterling2K LLC and MSG Entertainment Group, LLC (formerly MSG Sports & Entertainment, LLC) (for the DFO G550), effective as of November 4, 2022 (incorporated by reference to Exhibit 10.34 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.3 6 Dry Lease Agreement, dated May 6, 2019, between Brighid Air, LLC and MSG Entertainment Group, LLC (formerly MSG Sports & Entertainment, LLC) (for the Challenger) (incorporated by reference to Exhibit 10.35 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.3 7 Amendment No. 1 to Dry Lease Agreement, dated as of May 6, 2019, between Brighid Air, LLC and MSG Entertainment Group, LLC (formerly MSG Sports & Entertainment, LLC) (for the Challenger), effective as of August 18, 2022 (incorporated by reference to Exhibit 10.36 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.3 8 Time Sharing Agreement, dated as of December 20, 2021, between MSG Entertainment Group, LLC and Charles F. Dolan (for the New G550) (incorporated by reference to Exhibit 10.37 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10. 39 Time Sharing Agreement, dated as of December 20, 2021, between Patrick F. Dolan and MSG Entertainment Group, LLC (for the Challenger) (incorporated by reference to Exhibit 10.38 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 49 EXHIBIT NO. DESCRIPTION 10.4 0 Form of Time Sharing Agreement between MSG Entertainment Holdings, LLC and Sphere Entertainment Group, LLC (formerly MSG Entertainment Group, LLC) (for the G550) (incorporated by reference to Exhibit 10.39 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.4 1 Form of Time Sharing Agreement between MSG Entertainment Holdings, LLC and Sphere Entertainment Group, LLC (formerly MSG Entertainment Group, LLC) (for the Challenger) (incorporated by reference to Exhibit 10.40 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.4 2 Credit Agreement, dated as of June 30, 2022, among MSG National Properties, LLC, MSG Entertainment Group, LLC and certain subsidiaries of MSG National Properties, LLC, as guarantors, the lenders and L/C issuers party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.41 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.4 3 Security Agreement, dated as of June 30, 2022, among MSG National Properties, LLC, and the other grantors referred to therein, as grantors, and JP Morgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.42 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.4 4 Arena License Agreement, dated as of April 15, 2020, between MSG Arena, LLC and New York Knicks, LLC (incorporated by reference to Exhibit 10.43 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). * 10.4 5 Arena License Agreement, dated as of April 15, 2020, between MSG Arena, LLC and New York Rangers, LLC (incorporated by reference to Exhibit 10.44 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). * 10.4 6 Sponsorship Sales and Representation Agreement, dated as of April 15, 2020, between New York Rangers, LLC and MSG Entertainment Group, LLC (incorporated by reference to Exhibit 10.45 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.4 7 Sponsorship Sales and Representation Agreement, dated as of April 15, 2020, between Knicks Holdings, LLC and MSG Entertainment Group, LLC (incorporated by reference to Exhibit 10.46 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). 10.4 8 Transaction Agreement, dated as of April 18, 2023, among MSG Arena, LLC, MSG Arena Holdings, LLC, MSG National Properties, LLC, MSG Entertainment Holdings, LLC, Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc.), Sphere Entertainment Co. (formerly Madison Square Garden Entertainment Corp.), Sphere Entertainment Group, LLC (formerly MSG Entertainment Group, LLC), and the National Basketball Association (incorporated by reference to Exhibit 10.49 to the Company’s Registration Statement on Form S-1 filed on June 20, 2023). 10.49 Employment Agreement, dated as of June 20, 2024, between Madison Square Garden Entertainment Corp. and James L. Dolan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 21, 2024). † 10.50 Employment Agreement, dated as of February 1, 2024, between Madison Square Garden Entertainment Corp. and Michael Grau (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 5, 2024). † 10.51 Employment Agreement, dated as of December 18, 2023, between Madison Square Garden Entertainment Corp. and Laura Franco (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on February 7, 2024). † 10.5 2 Employment Agreement, dated December 20, 2021, between Madison Square Garden Entertainment Corp. and David F. Byrnes, as assigned to MSGE Spinco, Inc. (incorporated by reference to Exhibit 10.51 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). † 10.5 3 Employment Agreement, dated October 26, 2021, between Madison Square Garden Entertainment Corp. and Jamal Haughton, as assigned to MSGE Spinco, Inc. (incorporated by reference to Exhibit 10.50 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). † 10.54 Employment Agreement, effective April 1, 2023, between Madison Square Garden Entertainment Corp. and Philip D’Ambrosio (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 2, 2023). † 10.55 Employment Agreement, dated March 23, 2022, between Madison Square Garden Entertainment Corp. and Courtney Zeppetella, as assigned to MSGE Spinco, Inc. (incorporated by reference to Exhibit 10.52 to the Company’s Registration Statement on Form 10 filed on March 30, 2023). † 10.5 6 Release, dated April 18, 2023, between Sphere Entertainment Co. (formerly Madison Square Garden Entertainment Corp.) and RCPI Landmark Properties, L.L.C. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 24, 2023). 50 EXHIBIT NO. DESCRIPTION 10.5 7 Amendment No. 1 to Credit Agreement and Waiver, dated as of April 18, 2023, among MSG National Properties, LLC, the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on April 24, 2023). 10.5 8 Amendment No. 2 to Credit Agreement, dated as of May 25, 2023, among MSG National Properties, LLC, the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.59 to the Company’s Registration Statement on Form S-1 filed on June 20, 2023). 10.59 Amendment No. 3 to Credit Agreement, dated as of September 15, 2023, among MSG National Properties, LLC, the guarantors party thereto, the lender party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 21, 2023). 19.1 Insider Trading Policy 21.1 Subsidiaries of the Registrant. 23.1 Consent of Deloitte and Touche LLP. 24.1 Power of Attorney (included on signature page to this Annual Report on Form 10-K). 31.1 Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification by the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** 32.2 Certification by the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** 97.1 Clawback Policy 101 The following materials from Madison Square Garden Entertainment Corp. Annual Report on Form 10-K for the fiscal year ended June 30, 2024, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) consolidated balance sheets, (ii) consolidated and combined statements of operations, (iii) consolidated and combined statements of comprehensive income (loss), (iv) consolidated and combined statements of cash flows, (v) consolidated and combined statements of equity (deficit), and (vi) notes to consolidated and combined financial statements. 104 The cover page from the Company’s Annual Report on Form 10-K for the year ended June 30, 2024 formatted in Inline XBRL and contained in Exhibit 101. _________________ * Certain confidential information, identified by bracketed asterisks “[*****]” has been omitted from this exhibit pursuant to Item 601(b)(10) of Regulation S-K because it is both (i) not material and (ii) would be competitively harmful to the Company if publicly disclosed. ** Furnished herewith. These exhibits shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibits shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934. † This exhibit is a management contract or a compensatory plan or arrangement. Item 16. Form 10-K Summary The Company has elected not to provide summary information. 51 MADISON SQUARE GARDEN ENTERTAINMENT CORP. SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (in thousands) (Additions) / Deductions Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period Year Ended June 30, 2024 Allowance for doubtful accounts / credit losses $ ( 472 ) $ ( 579 ) $ — $ 469 $ ( 582 ) Deferred tax valuation allowance ( 95,352 ) 108,506 ( 13,154 ) (a) — — $ ( 95,824 ) $ 107,927 $ ( 13,154 ) $ 469 $ ( 582 ) Year Ended June 30, 2023 Allowance for doubtful accounts / credit losses $ ( 3,710 ) $ ( 81 ) $ — $ 3,319 $ ( 472 ) Deferred tax valuation allowance ( 151,043 ) 34,147 21,544 (b) — ( 95,352 ) $ ( 154,753 ) $ 34,066 $ 21,544 $ 3,319 $ ( 95,824 ) Year Ended June 30, 2022 Allowance for doubtful accounts / credit losses $ ( 4,167 ) $ ( 166 ) $ — $ 623 $ ( 3,710 ) Deferred tax valuation allowance ( 119,135 ) ( 31,679 ) ( 229 ) — ( 151,043 ) $ ( 123,302 ) $ ( 31,845 ) $ ( 229 ) $ 623 $ ( 154,753 ) _________________ (a) During Fiscal Year 2024, $ 13,513 was recorded to other deferred taxes with an equal and offsetting entry to the valuation allowance. (b) Prior to the MSGE Distribution, the Company’s collection for ticket sales, sponsorships and suite rentals in advance were recorded as deferred revenue and were recognized as revenues when earned for both accounting and tax purposes. The tax recognition on most of this deferred revenue was accelerated to the date of the MSGE Distribution and is the responsibility of Sphere Entertainment. The Company will not reimburse Sphere Entertainment for such taxes. At the time of the MSGE Distribution, the Company recorded a deferred tax asset and a corresponding valuation allowance of $ 71,395 with regard to the deferred revenue acceleration for income tax purposes. Additionally, the Company’s historical consolidated and combined financial statements for periods prior to the MSGE Distribution reflect net operating losses (“NOLs”) and tax credits calculated on a separate return basis. These NOL carryforwards were calculated as if the Company operated as a separate standalone entity. Due to the MSGE Distribution, the NOLs and tax credits did not carry over to the Company in the amount of $ 106,272 and was recorded to deferred tax liability with an equal and offsetting entry to the valuation allowance. Additionally, $ 13,333 was recorded related to other deferred taxes with an equal and offsetting entry to the valuation allowance. 52 SIGNATURES Pursuant to the requirements of the Section 13 or 15(d) the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 16 th day of August 2024. Madison Square Garden Entertainment Corp. By: /s/ MICHAEL J. GRAU Name: Michael J. Grau Title: Executive Vice President and Chief Financial Officer (Principal Financial Officer and Interim Principal Accounting Officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael J. Grau, Laura Franco and Mark C. Cresitello, and each of them, as such person’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such person in such person’s name, place and stead, in any and all capacities, to sign this report, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons in the capacities and on the dates indicated. Name Title Date /s/ JAMES L. DOLAN Executive Chairman and Chief Executive Officer (Principal Executive Officer) and Director August 16, 2024 James L. Dolan /s/ MICHAEL J. GRAU Executive Vice President and Chief Financial Officer (Principal Financial Officer and Interim Principal Accounting Officer) August 16, 2024 Michael J. Grau /s/ MARTIN BANDIER Director August 16, 2024 Martin Bandier /s/ DONNA M. COLEMAN Director August 16, 2024 Donna M. Coleman /s/ CHARLES F. DOLAN Director August 16, 2024 Charles F. Dolan /s/ CHARLES P. DOLAN Director August 16, 2024 Charles P. Dolan 53 Name Title Date /s/ MARIANNE DOLAN WEBER Director August 16, 2024 Marianne Dolan Weber /s/ PAUL J. DOLAN Director August 16, 2024 Paul J. Dolan /s/ QUENTIN F. DOLAN Director August 16, 2024 Quentin F. Dolan /s/ RYAN T. DOLAN Director August 16, 2024 Ryan T. Dolan /s/ THOMAS C. DOLAN Director August 16, 2024 Thomas C. Dolan /s/ FREDERIC V. SALERNO Director August 16, 2024 Frederic V. Salerno /s/ BRIAN G. SWEENEY Director August 16, 2024 Brian G. Sweeney 54 INDEX TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm ( Deloitte & Touche LLP , New York, NY , Auditor Firm ID: 34 ) F - 2 Consolidated Balance Sheets as of June 30, 202 4 and 202 3 F - 5 Consolidated and Combined Statements of Operations for the fiscal years ended June 30, 202 4 , 202 3 and 202 2 F - 6 Consolidated and Combined Statements of Comprehensive Income (Loss) for the fiscal years ended June 30, 202 4 , 202 3 , and 202 2 F - 7 Consolidated and Combined Statements of Cash Flows for the fiscal years ended June 30, 202 4 , 202 3 and 202 2 F- 8 Consolidated and Combined Statements of Equity (Deficit) for the fiscal years ended June 30, 202 4 , 202 3 and 202 2 F- 9 Notes to the Consolidated and Combined Financial Statements F- 10 F - 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Madison Square Garden Entertainment Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Madison Square Garden Entertainment Corp. and subsidiaries (the "Company") as of June 30, 2024 and 2023, the related consolidated and combined statements of operations, comprehensive income (loss), cash flows, and equity (deficit), for each of the three years in the period ended June 30, 2024, and the related notes and financial statement Schedule II listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 16, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Related Party Transactions — Refer to Note 17 to the financial statements Critical Audit Matter Description The Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the Dolan Family Group), as of June 30, 2024, is the majority beneficial owner of the Company, Sphere Entertainment Co. (“Sphere Entertainment”), Madison Square Garden Sports Corp. (“MSG Sports”), AMC Networks Inc., and other related entities. In addition, there are certain overlapping directors and executive officers between the companies. Each of these entities has been identified as a related party at June 30, 2024. The Company had entered into a number of transactions with related parties, including, but not limited to agreements for use of the Madison Square Garden Arena, sponsorship, and advertising sales and service representation, team sponsorship allocation agreements, and service agreements, which include certain shared executive support costs for (i) the Company’s Executive Chairman and Chief Executive Officer with Sphere Entertainment and MSG Sports and (ii) the Company’s Vice Chairman with Sphere Entertainment, MSG Sports and AMC Networks. We identified the evaluation of the Company’s identification of related parties and related party transactions as a critical audit matter. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s procedures performed to identify related parties and related party transactions of the Company. How the Critical Audit Matter Was Addressed in the Audit F - 2 Our audit procedures related to the Company’s identification of related parties and related party transactions included the following, among others: • We tested the effectiveness of internal controls over the Company’s related party process, including controls over the identification of the Company’s related party relationships and transactions, the authorization and approval of transactions with related parties, the allocation of revenues and operating expenses among related parties, and the accounting, classification and disclosure of relationships and transactions with related parties in the financial statements; • Inquired with executive officers including the Company’s internal legal counsel, key members of management, including non-finance and accounting personnel, and the Audit Committee of the Board of Directors regarding related party transactions; • Read agreements and contracts with and between related parties and evaluated whether authorization and approvals were obtained and the terms and other information about transactions are consistent with explanations from inquiries and other audit evidence obtained about the business purpose of the transactions; • With the assistance of our data specialists, we analyzed the general ledger detail to identify potential undisclosed transactions with related parties; • Compared the Company’s reconciliation of applicable accounts to related parties’ records of transactions and balances; • For new or amended revenue arrangements among related parties, evaluated the reasonableness of management’s allocation of the transaction price to each performance obligation identified in the arrangement; • Received confirmations from related parties and compared responses to the Company’s records; • Performed the following procedures to identify information related to potential undisclosed transactions between the Company and related parties that may also include third parties: • Read the Company’s minutes from meetings of the Board of Directors and related committees of the Board of Directors; • Inspected annual compliance questionnaires completed by the Company’s directors and officers; • Read publicly available sources including the Company’s public filings and press releases as well as certain analyst and industry reports; and • Listened to or read transcripts of the Company’s earnings calls. /s/ Deloitte & Touche LLP New York, New York August 16, 2024 We have served as the Company's auditor since 2022. F - 3 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Madison Square Garden Entertainment Corp. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Madison Square Garden Entertainment Corp. and subsidiaries (the “Company”) as of June 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2024, of the Company and our report dated August 16, 2024, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Report on Internal Control over Financial Reporting” appearing in Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP New York, New York August 16, 2024 F - 4 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) June 30, 2024 2023 ASSETS Current Assets: Cash, cash equivalents and restricted cash $ 33,555 $ 84,355 Accounts receivable, net 77,259 63,898 Related party receivables, current 17,469 69,466 Prepaid expenses and other current assets 90,801 77,562 Total current assets 219,084 295,281 Non-Current Assets: Property and equipment, net 633,533 628,888 Right-of-use lease assets 388,658 235,790 Goodwill 69,041 69,041 Indefinite-lived intangible assets 63,801 63,801 Deferred tax assets, net 68,307 — Other non-current assets 110,283 108,356 Total assets $ 1,552,707 $ 1,401,157 LIABILITIES AND DEFICIT Current Liabilities: Accounts payable, accrued and other current liabilities $ 203,750 $ 214,725 Related party payables, current 42,506 47,281 Long-term debt, current 16,250 16,250 Operating lease liabilities, current 27,736 36,529 Deferred revenue 215,581 225,855 Total current liabilities 505,823 540,640 Non-Current Liabilities: Long-term debt, net of deferred financing costs 599,248 630,184 Operating lease liabilities, non-current 427,014 219,955 Deferred tax liabilities, net — 23,518 Other non-current liabilities 43,787 56,332 Total liabilities 1,575,872 1,470,629 Commitments and contingencies (see Note 11) Deficit: Class A Common Stock (a) 456 450 Class B Common Stock (b) 69 69 Additional paid-in capital 33,481 17,727 Treasury stock at cost ( 4,365 and 840 shares as of June 30, 2024 and June 30, 2023, respectively) ( 140,512 ) ( 25,000 ) Retained earnings (deficit) 115,603 ( 28,697 ) Accumulated other comprehensive loss ( 32,262 ) ( 34,021 ) Total deficit ( 23,165 ) ( 69,472 ) Total liabilities and deficit $ 1,552,707 $ 1,401,157 _________________ (a) Class A Common Stock, $ 0.01 par value per share, 120,000 shares authorized; 45,556 and 45,024 shares issued as of June 30, 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 June 30, 2024 and June 30, 2023. See accompanying notes to the consolidated and combined financial statements. F - 5 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (in thousands, except per share data) Years Ended June 30, 2024 2023 2022 Revenues (a) Revenues from entertainment offerings $ 723,897 $ 643,885 $ 483,340 Food, beverage, and merchandise revenues 162,092 135,933 98,740 Arena license fees and other leasing revenue 73,276 71,678 71,410 Total revenues 959,265 851,496 653,490 Direct operating expenses (a) Entertainment offerings, arena license fees, and other leasing direct operating expenses ( 475,502 ) ( 420,301 ) ( 359,547 ) Food, beverage, and merchandise direct operating expenses ( 93,334 ) ( 79,628 ) ( 57,754 ) Total direct operating expenses ( 568,836 ) ( 499,929 ) ( 417,301 ) Selling, general and administrative expenses (a) ( 206,963 ) ( 180,216 ) ( 167,132 ) Depreciation and amortization ( 53,876 ) ( 60,463 ) ( 69,534 ) Gains, net on dispositions — 4,361 — Restructuring charges ( 17,649 ) ( 10,241 ) ( 5,171 ) Operating income (loss) 111,941 105,008 ( 5,648 ) Interest income (a) 2,976 7,244 7,150 Interest expense ( 57,954 ) ( 51,869 ) ( 53,110 ) Loss on extinguishment of debt — — ( 35,629 ) Other (expense) income, net ( 4,672 ) 17,389 ( 49,033 ) Income (loss) from operations before income taxes 52,291 77,772 ( 136,270 ) Income tax benefit (expense) 92,009 ( 1,728 ) 70 Net income (loss) 144,300 76,044 ( 136,200 ) Less: Net loss attributable to nonredeemable noncontrolling interest — ( 553 ) ( 2,864 ) Net income (loss) attributable to MSG Entertainment’s stockholders $ 144,300 $ 76,597 $ ( 133,336 ) Earnings (loss) per share attributable to MSG Entertainment’s stockholders: Basic $ 2.99 $ 1.48 $ ( 2.58 ) Diluted $ 2.97 $ 1.47 $ ( 2.58 ) Weighted-average number of shares of common stock: Basic 48,275 51,819 51,768 Diluted 48,589 52,278 51,768 _________________ (a) See Note 17. Related Party Transactions for further information on related party arrangements. See accompanying notes to the consolidated and combined financial statements. F - 6 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) Years Ended June 30, 2024 2023 2022 Net income (loss) $ 144,300 $ 76,044 $ ( 136,200 ) Other comprehensive (income) loss, before income taxes: Pension plans and postretirement plans: Net unamortized gain (loss) arising during the period 315 ( 1,496 ) ( 2,805 ) Amortization of net actuarial loss included in net periodic benefit cost 1,809 520 1,420 Settlement loss 7 5 — Other comprehensive income (loss), before income taxes 2,131 ( 971 ) ( 1,385 ) Income tax (expense) benefit related to items of other comprehensive income ( 372 ) 176 243 Other comprehensive income (loss), net of income taxes 1,759 ( 795 ) ( 1,142 ) Comprehensive income (loss) 146,059 75,249 ( 137,342 ) Less: Comprehensive loss attributable to nonredeemable noncontrolling interests — ( 553 ) ( 2,864 ) Comprehensive income (loss) attributable to MSG Entertainment’s stockholders $ 146,059 $ 75,802 $ ( 134,478 ) See accompanying notes to the consolidated and combined financial statements. F - 7 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (in thousands) Years Ended June 30, 2024 2023 2022 OPERATING ACTIVITIES: Net income (loss) $ 144,300 $ 76,044 $ ( 136,200 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 53,876 60,463 69,534 Share-based compensation expense 31,168 31,813 39,357 Amortization of deferred financing costs 3,351 3,221 6,781 Deferred income tax (benefit) expense ( 92,197 ) 720 225 Related party paid in kind interest ( 512 ) ( 3,189 ) ( 3,582 ) Net unrealized and realized loss (gain) on equity investments with readily determinable fair value 1,242 ( 16,050 ) 49,842 Loss on extinguishment of debt — — 35,629 Other non-cash adjustments 1,556 ( 4,280 ) 166 Change in assets and liabilities: Accounts receivable, net ( 13,940 ) 38,844 ( 34,861 ) Related party receivables and payables, net 47,222 ( 43,037 ) 19,535 Prepaid expenses and other current and non-current assets ( 44,195 ) ( 31,363 ) ( 42,408 ) Accounts payable, accrued and other current and non-current liabilities ( 55,730 ) ( 696 ) 87,556 Deferred revenue ( 10,274 ) 24,254 4,173 Operating lease right-of-use assets and lease liabilities 45,399 ( 1,050 ) ( 396 ) Net cash provided by operating activities $ 111,266 $ 135,694 $ 95,351 INVESTING ACTIVITIES Capital expenditures ( 24,181 ) ( 15,188 ) ( 15,797 ) Proceeds from sale (purchase) of investments 28,465 24,289 ( 350 ) Proceeds from dispositions, net — 27,904 — Proceeds from loan receivable — — 68,367 Loan to related parties ( 65,000 ) ( 6,700 ) ( 6,780 ) Other investing activities ( 1,655 ) — — Net cash (used in) provided by investing activities $ ( 62,371 ) $ 30,305 $ 45,440 FINANCING ACTIVITIES Proceeds from issuance of loans $ — $ 304 $ 650,000 Principal repayments on long-term debt ( 106,350 ) ( 20,126 ) ( 646,750 ) Repayments on related party loan ( 304 ) — — Proceeds from revolving credit facilities 73,000 — 29,100 Stock repurchases ( 50,874 ) ( 25,000 ) — Debt extinguishment costs — — ( 12,838 ) Taxes paid in lieu of shares issued for equity-based compensation ( 14,534 ) — — Payments for debt financing costs ( 633 ) — ( 16,060 ) Net transfers to Sphere Entertainment and its subsidiaries — ( 99,395 ) ( 399,739 ) Net cash used in financing activities $ ( 99,695 ) $ ( 144,217 ) $ ( 396,287 ) Net (decrease) increase in cash, cash equivalents and restricted cash ( 50,800 ) 21,782 ( 255,496 ) Cash, cash equivalents and restricted cash, beginning of period 84,355 62,573 318,069 Cash, cash equivalents and restricted cash, end of period $ 33,555 $ 84,355 $ 62,573 Non-cash investing and financing activities: Capital expenditures incurred but not yet paid or paid by landlord $ 34,765 $ 761 $ 1,585 Related party loan payable assigned to the Company $ — $ 53,656 $ — Non-cash stock repurchases in lieu of payment of loan due from related party $ 65,512 $ 5,350 $ 4,019 See accompanying notes to the consolidated and combined financial statements. F - 8 MADISON SQUARE GARDEN ENTERTAINMENT CORP. CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY (DEFICIT) (in thousands) Common Stock Sphere Entertainment Co. Investment Additional paid-in capital Treasury Stock Retained earnings (deficit) Accumulated Other Comprehensive Loss Total Madison Square Garden Entertainment Corp. Stockholders’ Equity (Deficit) Non-redeemable Noncontrolling Interests Total Equity (Deficit) Balance as of June 30, 2021 $ — $ 529,500 $ — $ — $ — $ ( 33,598 ) $ 495,902 $ 2,750 $ 498,652 Net loss — ( 133,336 ) — — — — ( 133,336 ) ( 2,864 ) ( 136,200 ) Other comprehensive loss — — — — — ( 1,142 ) ( 1,142 ) — ( 1,142 ) Comprehensive loss — — — — — — ( 134,478 ) ( 2,864 ) ( 137,342 ) Net decrease in Sphere Entertainment Co. Investment — ( 362,899 ) — — — — ( 362,899 ) — ( 362,899 ) Balance as of June 30, 2022 $ — $ 33,265 $ — $ — $ — $ ( 34,740 ) $ ( 1,475 ) $ ( 114 ) $ ( 1,589 ) Net income — 105,294 — — ( 28,697 ) — 76,597 ( 553 ) 76,044 Other comprehensive loss — — — — — ( 795 ) ( 795 ) — ( 795 ) Comprehensive income (loss) — — — — — — 75,802 ( 553 ) 75,249 Share-based compensation — — 5,981 — — — 5,981 — 5,981 BCE Disposition — — — — — — — 667 667 Net decrease in Sphere Entertainment Co. Investment — ( 105,794 ) — — — — ( 105,794 ) — ( 105,794 ) Issuance of common stock and reclassification of Sphere Entertainment Co. Investment 519 ( 32,765 ) 11,996 — — 1,514 ( 18,736 ) — ( 18,736 ) Stock repurchases, inclusive of tax — — ( 250 ) ( 25,000 ) — — ( 25,250 ) — ( 25,250 ) Balance as of June 30, 2023 $ 519 $ — $ 17,727 $ ( 25,000 ) $ ( 28,697 ) $ ( 34,021 ) $ ( 69,472 ) $ — $ ( 69,472 ) Net income — — — — 144,300 — 144,300 — 144,300 Other comprehensive income — — — — — 1,759 1,759 — 1,759 Comprehensive income — — — — — — 146,059 — 146,059 Share-based compensation — — 31,168 — — — 31,168 — 31,168 Tax withholding associated with shares issued for share-based compensation 6 — ( 14,540 ) — — — ( 14,534 ) — ( 14,534 ) Stock repurchases, inclusive of tax — — ( 874 ) ( 115,512 ) — — ( 116,386 ) — ( 116,386 ) Balance as of June 30, 2024 $ 525 $ — $ 33,481 $ ( 140,512 ) $ 115,603 $ ( 32,262 ) $ ( 23,165 ) $ — $ ( 23,165 ) See accompanying notes to the consolidated and combined financial statements. F - 9 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS All amounts included in the following Notes to Consolidated and Combined Financial Statements are presented in thousands, except as otherwise noted. Note 1. Description of Business and Basis of Presentation Description of Business Madison Square Garden Entertainment Corp., (together with its subsidiaries, as applicable, the “Company” or “MSG Entertainment”) is a live entertainment company comprised of iconic venues and marquee entertainment content. Utilizing the Company’s powerful brands and live entertainment expertise, the Company delivers unique experiences that set the standard for excellence and innovation while forging deep connections with diverse and passionate audiences. The Company operates and reports financial information in one reportable segment. The Company’s decision to organize as one reportable segment is based upon its internal organizational structure, the manner in which its operations are managed, and the criteria used by the Company’s Executive Chairman and Chief Executive Officer, its Chief Operating Decision Maker (“CODM”), to evaluate segment performance. The Company’s CODM reviews total company operating results to assess overall performance and allocate resources. The Company’s portfolio of venues includes: Madison Square Garden (“The Garden”), The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. The Company also owns and produces the original production, the Christmas Spectacular Starring the Radio City Rockettes (the “ Christmas Spectacular ”). 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. The Company conducts a significant portion of its operations at venues that it either owns or operates under long-term leases. The Company owns The Garden, The Theater at Madison Square Garden and The Chicago Theatre, and leases Radio City Music Hall and the Beacon Theatre. All of the Company’s revenues and assets are attributed to or located in the United States and are primarily concentrated in the New York City metropolitan area. MSG Entertainment Distribution On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment Co. (“Sphere Entertainment”), distributed approximately 67 % of the outstanding common stock of Madison Square Garden Entertainment Corp. (“MSG Entertainment” or the “Company”), to its stockholders (the “MSGE Distribution”), with Sphere Entertainment retaining approximately 33 % of the outstanding common stock of MSG Entertainment (in the form of Class A common stock) (the “MSGE Retained Interest”) immediately following the MSGE Distribution. As a result, the Company became an independent publicly traded company on April 21, 2023 through the MSGE Distribution. In the MSGE Distribution, stockholders of Sphere Entertainment received (a) one share of MSG Entertainment’s Class A common stock, par value $ 0.01 per share (“Class A common stock”), for every share of Sphere Entertainment’s Class A common stock, par value $ 0.01 per share, held of record as of the close of business, New York City time, on April 14, 2023 (the “Record Date”), and (b) one share of MSG Entertainment’s Class B common stock (“Class B common stock”), par value $ 0.01 per share, for every share of Sphere Entertainment’s Class B common stock, par value $ 0.01 per share, held of record as of the close of business, New York City time, on the Record Date. 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. Unless the context otherwise requires, all references to Sphere Entertainment refer to Sphere Entertainment together with its direct and indirect subsidiaries. Basis of Presentation The Company reports on a fiscal year basis ending on June 30th. In these consolidated and combined financial statements, the fiscal years ended June 30, 2024, 2023 and 2022 are referred to as “Fiscal Year 2024”, “Fiscal Year 2023”, and “Fiscal Year 2022”, respectively, and the fiscal year ending June 30, 2025 is referred to as “Fiscal Year 2025”. The Company’s financial statements as of and for the period ended June 30, 2024 are presented on a consolidated basis. Subsequent to the MSGE Distribution, the Company’s financial statements as of June 30, 2023 and for the period from April 21, 2023 to June 30, 2023 included in the year ended June 30, 2023 are presented on a consolidated basis, as the Company became a standalone public company on April 21, 2023. The Company’s combined financial statements for the year ended June 30, 2022, as well as the financial information from July 1, 2022 through April 20, 2023 that is included in the results of operations for the year ended June 30, 2023 were prepared on a standalone basis derived from the consolidated financial statements and accounting records of Sphere F-10 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Entertainment. These financial statements reflect the combined historical results of operations, financial position and cash flows of the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) and Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (SAB) Topic 1-B, Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity . References to U.S. GAAP issued by the Financial Accounting Standards Board (“FASB”) in these footnotes are to the FASB Accounting Standards Codification, also referred to as “ASC.” Prior to April 21, 2023, separate financial statements had not been prepared for the Company and it had not operated as a standalone business from Sphere Entertainment. The combined financial statements include certain assets and liabilities that have historically been held by Sphere Entertainment or by other Sphere Entertainment subsidiaries but are specifically identifiable or otherwise attributable to the Company. The combined financial statements are presented as if the Company’s businesses had been combined for all periods presented. The assets and liabilities in the combined financial statements have been reflected on a historical cost basis, as immediately prior to the MSGE Distribution all of the assets and liabilities presented were wholly owned by Sphere Entertainment and were transferred to the Company at a carry-over basis. The financial information from July 1, 2022 through April 20, 2023 that is included in the results of operations for the year ended June 30, 2023 and the combined statement of operations for the year ended June 30, 2022 include allocations for certain support functions that were provided on a centralized basis and not historically recorded at the business unit level by Sphere Entertainment, such as expenses related to executive management, finance, legal, human resources, government affairs, information technology, and venue operations, among others. As part of the MSGE Distribution, certain corporate and operational support functions were transferred to the Company and therefore, charges were reflected in order to burden all business units comprising Sphere Entertainment’s historical operations. These expenses have been allocated to Sphere Entertainment on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis of combined assets, headcount or other measures of the Company or Sphere Entertainment, which are recorded as a reduction of either direct operating expenses or selling, general and administrative expense. After the MSGE Distribution, the Company has been providing certain of these services to Sphere Entertainment through a transition services agreement (“TSA”), since certain employees providing support functions were transferred to the Company as part of the MSGE Distribution. 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 standalone company during the periods presented. Actual costs that would have been incurred if the Company had been a standalone 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 standalone basis. See Note 17. Related Party Transactions for more information regarding allocations of certain costs from the Company to Sphere Entertainment. As of the MSGE Distribution Date, Sphere Entertainment’s net investment in the Company was contributed to Sphere Entertainment’s stockholders through the distribution of approximately 67 % of the common stock of the Company. The par value of the Company’s stock was recorded as a component of common stock, with the remaining balance recorded as retained deficit in the consolidated balance sheet on the MSGE Distribution Date. 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 consolidated and combined financial statements for the Fiscal Years ended 2024, 2023 and 2022 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 Beginning April 21, 2023, the consolidated financial statements of the Company include the accounts of the Company and its subsidiaries. All significant intercompany accounts and balances within the Company’s combined 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 F-11 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Sphere Entertainment’s investment in the 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 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 combined financial statements at the time the transaction was recorded, with the offset recorded against Sphere Entertainment’s investment in the Company. See Note 17. Related Party Transactions, for further information on related party arrangements. The Company disposed of its controlling interest in Boston Calling Events, LLC (“BCE”) on December 2, 2022 and these consolidated and combined financial statements reflect the results of operations of BCE until its disposition. See Note 3. Dispositions, for details regarding the disposal. B. Use of Estimates The preparation of the accompanying consolidated and combined financial statements in conformity with U.S. 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 consolidated and combined financial statements in future periods. C. Revenue Recognition and Direct Operating Expenses The Company generates revenue from the provision of services and sale of tangible products, as well as leasing transactions. Revenues are presented under these three categories in the 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 F - 12 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Lease revenue, presented as “Arena license fees and other leasing revenue”, includes: • Rental fees related to the arena license agreements that require the Knicks and the Rangers to play their home games at The Garden (the “Arena License Agreements”) with MSG Sports • Sublease income _________________ (a) Leasing direct operating expenses materially consist of venue operations and infrastructure costs. Venue operations and infrastructure costs are not specifically allocated to each revenue category, but are instead attributed in their entirety to service revenue, which is the Company’s principal revenue category. As a result, the Company combines service and leasing direct operating expenses within “Entertainment offerings, arena license fees, and other leasing direct operating expenses” for presentation purposes. The Company recognizes revenue when, or as, performance obligations under the terms of a contract are satisfied, which generally occurs when, or as, control of promised goods or services is transferred to customers. Revenue is measured as the amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services (“transaction price”). To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and the determination of whether to include such estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available. The Company accounts for taxes collected from customers and remitted to governmental authorities on a net basis and excludes these amounts from revenues. In addition, the Company defers certain costs to fulfill the Company’s contracts with customers to the extent such costs relate directly to the contracts, are expected to generate resources that will be used to satisfy the Company’s performance obligations under the contracts, and are expected to be recovered through revenue generated under the contracts. Contract fulfillment costs are expensed as the Company satisfies the related performance obligations. Arrangements with Multiple Performance Obligations The Company enters into arrangements with multiple performance obligations, such as multi-year sponsorship agreements, which may derive revenues for the Company, as well as Sphere Entertainment and MSG Sports within a single arrangement. The Company also derives revenue from similar types of arrangements which are entered into by Sphere Entertainment and MSG Sports. Payment terms for such arrangements can vary by contract, but payments are generally due in installments throughout the contractual term. The performance obligations included in each sponsorship agreement vary and may include advertising and other benefits such as, but not limited to, signage at The Garden and the Company’s other venues, digital advertising, event or property-specific advertising, as well as non-advertising benefits such as suite licenses and event tickets. 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 F - 13 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) 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 consolidated and combined statement of operations. Deferred production costs are subject to recoverability assessments whenever there is an indication of potential impairment. Revenue Sharing Expenses Revenue sharing expenses are determined based on contractual agreements between the Company and MSG Sports, primarily related to suite licenses, certain internal signage and in-venue food and beverage sales and are recorded as a component of Entertainment offerings, arena license fees, and other leasing direct operating expenses on the Company’s consolidated and combined statement of operations. D. Advertising Expenses Advertising costs are typically charged to expense when incurred. Total advertising costs expensed were $ 11,027 , $ 8,832 , and $ 7,995 for Fiscal Years 2024, 2023 and 2022, respectively. E. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC Topic 740”). The Company’s provision for income taxes is based on current period income, changes in deferred tax assets and liabilities, and changes in estimates with regard to uncertain tax positions. Deferred tax assets are subject to an ongoing assessment of realizability. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company’s ability to realize its deferred tax assets depends upon the generation of sufficient future taxable income to allow for the realization of its deductible temporary differences. Interest and penalties, if any, associated with uncertain tax positions are included in income tax expense. Prior to the MSGE Distribution and for periods presented prior to April 21, 2023, income tax expense has been recorded as if the Company filed tax returns on a standalone basis separate from Sphere Entertainment. This separate return methodology applies to accounting guidance for income taxes in the combined financial statements as if the Company was a standalone public company for the periods prior to the MSGE Distribution. Therefore, cash tax payments and items of current and deferred taxes may not be reflective of the Company’s actual tax balances prior to or subsequent to the MSGE Distribution. Prior to the MSGE Distribution, the Company's operating results were included in Sphere Entertainment’s consolidated U.S. federal and state income tax returns. Pursuant to rules promulgated by the Internal Revenue Service and various state taxing authorities, the Company filed its initial U.S. income tax return for the period from April 21, 2023 through June 30, 2023. F. Share-based Compensation For periods prior to the MSGE Distribution Date, certain employees of the Company participated in Sphere Entertainment’s share-based compensation plans. Share-based compensation expense has been attributed to the Company based on the awards and terms previously granted to Sphere Entertainment’s employees. For purposes of the consolidated and combined financial statements, an allocation to Sphere Entertainment of share-based compensation expense related to corporate employees was recorded. In addition, Share-based compensation expense attributed to the Company’s direct employees was recorded in the combined financial statements. F - 14 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Share-based compensation expense related to directors and corporate executives of Sphere Entertainment has been allocated on a proportional basis, which management has deemed to be reasonable. Following the MSGE Distribution, the Company measures the cost of employee services received in exchange for an award of equity-based instruments based on the grant date fair value of the award. Share-based compensation cost is recognized in earnings over the period during which an employee is required to provide service in exchange for the award, except for restricted stock units granted to non-employee directors which, unless otherwise provided under the applicable award agreement, are fully vested, and are expensed at the grant date. The Company accounts for forfeitures as they occur, rather than estimating expected forfeitures. G. Earnings (Loss) Per Share For the periods after the MSGE Distribution Date, basic earnings per share (“EPS”) attributable to the Company’s common stockholders is based upon net income (loss) attributable to the Company’s common stockholders divided by the weighted-average number of shares of common stock outstanding during the period. Diluted EPS reflects the effect of the assumed vesting of restricted stock units and exercise of stock options only in the periods in which such effect would have been dilutive. For the periods when a net loss is reported, the computation of diluted EPS equals the basic EPS calculation since common stock equivalents would be antidilutive due to losses from continuing operations. Holders of Class A common stock and Class B common stock are entitled to receive dividends equally on a per-share basis if and when such dividends are declared. As the holders of Class A and Class B common stock are entitled to identical dividend and liquidation rights, the undistributed earnings are allocated on a proportionate basis to each class of common stock and the resulting basic and diluted net earnings (loss) per share attributable to common stockholders are, therefore, the same for both Class A and Class B common stock on both an individual and combined basis. On the MSGE Distribution Date, 51,768 shares of common stock of the Company, inclusive of 17,021 shares of Class A common stock related to the MSGE Retained Interest, were outstanding. This share amount was utilized for the calculation of basic earnings (loss) per share for Fiscal Year 2022 because the Company was not a standalone public company prior to the MSGE Distribution. In addition, for Fiscal Year 2022 the computation of diluted earnings per share equals the basic earnings (loss) per share calculation since there was no stock trading information available to compute dilutive effect of shares issuable under share-based compensation plans needed under the treasury method in accordance with ASC Topic 260, Earnings Per Share (“ASC Topic 260”) . H. Cash and Cash Equivalents The Company considers the balance of its investment in funds that substantially hold highly liquid securities that mature within three months or less from the date the fund purchases these securities to be cash equivalents. The carrying amount of cash and cash equivalents either approximates fair value due to the short-term maturity of these instruments or is at fair value. Checks outstanding in excess of related book balances are included in accounts payable in the accompanying consolidated and combined balance sheets. The Company presents the change in these book cash overdrafts as cash flows from operating activities. I. Restricted Cash The Company’s restricted cash includes cash deposited in escrow accounts related to general liability insurance obligations.The carrying amount of restricted cash approximates fair value due to the short-term maturity of these instruments. J. Short-Term Investments Short-term investments include investments that (i) have original maturities of greater than three months and (ii) the Company has the ability to convert into cash within one year. K. Accounts Receivable Accounts receivable are recorded at net realizable value. The Company maintains an allowance for credit losses to reserve for potentially uncollectible receivables. The allowance for credit losses is estimated based on the Company’s consideration of credit risk and analysis of receivables aging, specific identification of certain receivables that are at risk of not being paid, past collection experience and other factors. The Company recognized an allowance of $ 582 and $ 472 for Fiscal Years 2024 and 2023, respectively. L. Investments For the Company’s equity investments with readily determinable fair values, changes in the fair value of those investments are measured quarterly and are recorded within Other income (expense), net in the accompanying consolidated and combined statements of operations. F - 15 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) The Company’s investments accounted for using the equity method of accounting are carried at cost, plus or minus the Company’s share of net earnings or losses of the investment, subject to certain other adjustments. The cost of equity method investments includes transaction costs of the acquisition. As required by GAAP, to the extent that there is a basis difference between the cost and the underlying equity in the net assets of an equity investment, the Company allocates such differences between tangible and intangible assets. The Company’s share of net earnings or losses of the investment, inclusive of amortization expense for intangible assets associated with the investment, is reflected in Other income (expense), net within the Company’s consolidated and combined statements of operations. Dividends received from the investee reduce the carrying amount of the investment. Due to the timing of receiving financial information from certain of its nonconsolidated affiliates, the Company records its share of net earnings or losses of such affiliates on a three-month lag basis, with the exception of the amortization expense of intangible assets which are recorded currently. The Company reviews its equity method investments periodically to determine whether a decline in fair value below the cost basis is other-than-temporary. The primary factors the Company considers in its determination are the length of time that the fair value of the investment is below the Company’s carrying value; future prospects of the investee; and the Company’s intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. In addition, the Company considers other factors such as general market conditions, industry conditions, and analysts’ ratings. If the decline in fair value is deemed to be other-than-temporary, the cost basis of the investment is written down to fair value and the loss is realized as a component of net income. In addition to equity method investments, the Company also has other equity investments without readily determinable fair values. The Company measures equity investments without readily determinable fair values at cost, less any impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. Changes in observable price are reflected within Other income (expense), net in the accompanying consolidated and combined statements of operations. M. Property and Equipment and Other Long-Lived Assets Property and equipment and other long-lived assets, including amortizable intangible assets, are stated at cost or acquisition date fair value, if acquired. Expenditures for new facilities or equipment, and expenditures that extend the useful lives of existing facilities or equipment, are capitalized and recorded at cost. The useful lives of the Company’s long-lived assets are based on estimates of the period over which the Company expects the assets to be of economic benefit to the Company. In estimating the useful lives, the Company considers factors such as, but not limited to, risk of obsolescence, anticipated use, plans of the Company, and applicable laws and permit requirements. Depreciation starts on the date when the asset is available for its intended use. Construction in progress assets are not depreciated until available for their intended use. Costs of maintenance and repairs are expensed as incurred. The major categories of property and equipment are depreciated on a straight-line basis using the estimated lives indicated below: Estimated Useful Lives Buildings Up to 40 years Equipment 1 year to 22 years Furniture and fixtures 1 year to 10 years Leasehold improvements Shorter of term of lease or useful life of improvement N. Goodwill and Indefinite-Lived Assets Under the acquisition method of accounting, the Company recognizes separately from goodwill the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquiree, generally at the acquisition date fair value. The Company measures goodwill as of the acquisition date as the excess of consideration transferred, which is also measured at fair value over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed. Costs that the Company incurs to complete a business combination such as investment banking, legal, and other professional fees are not considered part of consideration and the Company charges these costs to selling, general and administrative expense as they are incurred. In addition, the Company recognizes measurement-period adjustments in the period in which the amount is determined, including the effect on earnings of any amounts the Company would have recorded in previous periods if the accounting had been completed at the acquisition date. Goodwill and identifiable intangible assets that have indefinite useful lives are not amortized. O. Impairment of Long-Lived and Indefinite-Lived Assets In assessing the recoverability of the Company’s long-lived and indefinite-lived assets, the Company must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets. These estimates and assumptions could have a significant impact on whether an impairment charge is recognized and the magnitude of any such charge. Fair value estimates are made based on relevant information at a specific point in time, and are subjective in nature and involve F - 16 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) significant uncertainties and judgments. If these estimates or assumptions change materially, the Company may be required to record impairment charges related to its long-lived and/or indefinite-lived assets. Goodwill is tested annually for impairment as of August 31 st and at any time upon the occurrence of certain events or changes in circumstances. The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. If the Company can support the conclusion that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would not need to perform a quantitative impairment test for that reporting unit. If the Company cannot support such a conclusion or the Company does not elect to perform the qualitative assessment, the Company would identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company generally determines the fair value of a reporting unit using an income approach, such as the discounted cash flow method, or other acceptable valuation techniques, including the cost approach, in instances when it does not perform the qualitative assessment of goodwill. The amount of an impairment loss is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Identifiable indefinite-lived intangible assets are tested annually for impairment as of August 31 st and at any time upon the occurrence of certain events or substantive changes in circumstances. The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. In the qualitative assessment, the Company must evaluate the totality of qualitative factors, including any recent fair value measurements, that impact whether an indefinite-lived intangible asset other than goodwill has a carrying amount that more likely than not exceeds its fair value. The Company must proceed to conducting a quantitative analysis if the Company (i) determines that such an impairment is more likely than not to exist, or (ii) foregoes the qualitative assessment entirely. Under the quantitative assessment, the impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, then an impairment loss is recognized in an amount equal to that excess. The Company generally determines the fair value of an indefinite-lived intangible asset using an income approach, such as the relief from royalty method, in instances when it does not perform the qualitative assessment of the intangible asset. For other long-lived assets, including property and equipment, right-of-use (“ROU”) lease assets and intangible assets that are amortized, the Company evaluates assets for recoverability when there is an indication of potential impairment. If the undiscounted cash flows from a group of assets being evaluated is less than the carrying value of that group of assets, the fair value of the asset group is determined and the carrying value of the asset group is written down to fair value. The Company generally determines the fair value of a finite-lived intangible asset using an income approach, such as the discounted cash flow method. See Note 10. Goodwill and Intangible Assets for further discussion of impairment of goodwill and indefinite-lived intangibles. P. Leases The Company’s leases primarily consist of certai n venues, c orporate office space, storage and, to a lesser extent, office and other equipment. The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the lease term is assessed based on the date when the underlying asset is made available by the lessor for the Company’s use. The Company’s assessment of the lease term reflects the non-cancellable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain not to exercise, as well as periods covered by renewal options which the Company is reasonably certain to exercise. The Company’s lease agreements do not contain material residual value guarantees or material restrictive covenants. The Company determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated and combined statements of operations and statements of cash flows over the lease term. For leases with a term exceeding 12 months, a lease liability is recorded on the Company’s consolidated and combined balance sheets at lease commencement reflecting the present value of the fixed minimum payment obligations over the lease term. A corresponding ROU asset equal to the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. In addition, the ROU asset is adjusted to reflect any above or below market lease terms under acquired lease contracts. The Company includes fixed payment obligations related to non-lease components in the measurement of ROU assets and lease liabilities, as the Company has elected to account for lease and non-lease components together as a single lease component. ROU assets associated with finance leases are presented separate from ROU assets associated with operating leases and are included within Property and equipment, net on the Company’s consolidated and combined balance sheets. For purposes of measuring the present value of the Company’s fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in the underlying leasing arrangements are typically not F - 17 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) readily determinable. The Company’s incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment surrounding the associated lease. For operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For finance leases, the initial ROU asset is depreciated on a straight-line basis over the lease term, along with recognition of interest expense associated with accretion of the lease liability, which is ultimately reduced by the related fixed payments. For leases with a term of 12 months or less, any fixed lease payments are recognized on a straight-line basis over the lease term and are not recognized on the consolidated and combined balance sheets. Variable lease costs for both operating and finance leases, if any, are recognized as incurred and such costs are excluded from lease balances recorded on the consolidated and combined balance sheets. Q. Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. R. Defined Benefit Pension Plans and Other Postretirement Benefit Plans As more fully described in Note 13, Pension Plans and Other Postretirement Benefit Plans, certain employees of the Company participated in defined benefit pension plans sponsored by Sphere Entertainment prior to the MSGE Distribution. After the MSGE Distribution, Sphere Entertainment transferred the sponsorship of certain funded defined benefit plans to the Company, The Company accounts for the defined benefit Pension Plans under the guidance of ASC Topic 715, Compensation — Retirement Benefits (“ASC Topic 715”). Accordingly, for the defined benefit Pension Plans liabilities, the consolidated and combined financial statements reflected the full impact of such plans on both the consolidated and combined statements of operations and the consolidated and combined balance sheets and the Company recorded an asset or liability to recognize the funded status of the defined benefit Pension Plans (other than multiemployer plans), as well as a liability only for any required contributions to the defined benefit Pension Plans that were accrued and unpaid at the balance sheet date. The related pension expenses attributed to the Company were based primarily on pension-eligible compensation of active participants. Actuarial gains and losses that have not yet been recognized through the consolidated and combined statements of operations are recorded in accumulated other comprehensive income (loss) until they are amortized as a component of net periodic benefit cost through other comprehensive income (loss). After the MSGE Distribution Date, the Company has both funded and unfunded defined benefit plans, as well as a contributory other postretirement benefit plan, covering certain full-time employees and retirees. The expense recognized by the Company is determined using certain assumptions, including the expected long-term rate of return and discount rates, among others. The Company recognizes the funded status of its defined benefit pension and other postretirement plans (other than multiemployer plans) as an asset or liability in the consolidated and combined balance sheets and recognizes changes in the funded status in the year in which the changes occur through other comprehensive income (loss). S. Fair Value Measurements The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: • Level I — Quoted prices for identical instruments in active markets. • Level II — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level III — Instruments whose significant value drivers are unobservable. T. Concentrations of Risk Financial instruments that may potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents are invested in money market accounts and time deposits. The Company monitors the financial institutions and money market funds where it invests its cash and cash equivalents with diversification among counterparties to mitigate exposure to any single financial institution. The Company’s emphasis is primarily on safety of principal and liquidity, and secondarily on maximizing the yield on its investments. F - 18 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) U. Recently Issued 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 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 consolidated and combined financial statements. Note 3. Dispositions The Company did not have 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 “BCE Disposition”). The transaction closed on December 2, 2022, resulting in a total gain on sale of $ 8,744 , net of transaction costs. BCE meets the definition of a business under SEC Regulation S-X Rule 11-01(d)-1 and ASC Topic 805 — Business Combinations . This 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 Gains, net on dispositions in the 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 Gains, net on dispositions in the consolidated and combined statements of operations. Note 4. Revenue Recognition All revenue recognized in the 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 (“ASC Topic 606”), except for revenues from the Arena License Agreements and leases and subleases that are accounted for in accordance with ASC Topic 842, Leases (“ASC Topic 842”). The Company’s revenues by category are outlined in Note 2. Summary of Significant Accounting Policies. In Fiscal Years 2024 and 2023, the Company did not have any material provisions for credit losses on receivables or contract assets arising from contracts with customers. Revenues from entertainment offerings The Company’s performance obligations with respect to revenues from entertainment offerings are generally satisfied at the point in time or as the related event occurs or as the underlying benefits are delivered over the term of the respective agreements. Revenues from entertainment offerings include revenue from the license of The Garden’s suites for the Company’s or MSG Sports’ events. Suite license arrangements are generally multi-year fixed-fee arrangements that include annual fee increases. Payment terms for suite license arrangements can vary by contract, but payments are generally due in installments prior to each license year. The Company’s performance obligation under such arrangements is to provide the licensee with access to the suite when events occur at The Garden. The Company accounts for the performance obligation under these types of arrangements as a series and, as a result, the related suite license fees for all years during the license term are aggregated and revenue is recognized proportionately over the license period as the Company satisfies the related performance obligation. Progress toward satisfaction of the Company’s annual suite license F - 19 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) performance obligation is measured as access to the suite that is provided to the licensee for each event throughout the contractual term of the license. Food, beverage, and merchandise revenues The Company’s performance obligations with respect to revenue from food, beverage, and merchandise are satisfied at the point in time the related goods are transferred to the customer. Arena License fees and other leasing revenue In Fiscal Year 2020, the Company entered into Arena License Agreements with MSG Sports that require the Knicks and the Rangers to play their home games at The Garden. These agreements also provide for the provision of certain services by the Company to MSG Sports for MSG Sports events that are held at The Garden and include revenue-sharing provisions for certain agreements entered into by the Company and MSG Sports. The Arena License Agreements contain both lease and non-lease components. The revenue to be recognized with respect to the lease components of the Arena License Agreements is accounted for as operating lease revenue in accordance with ASC Topic 842. The non-lease components are accounted for in accordance with ASC Topic 606, as further discussed below. During Fiscal Years 2024, 2023 and 2022, the Company recognized $ 68,068 , $ 68,068 and $ 68,072 , respectively, of revenues under the Arena License Agreements. Principal vs. Agent Considerations Revenue for the Company’s suite license arrangements is recorded on a gross basis, as the Company is the principal in such transactions and controls the related goods or services before transfer to the customer. MSG Sports is entitled to a share of the Company’s suite license revenue pursuant to the terms of the Arena License Agreements, which is recognized in the consolidated and combined statements of operations as a component of direct operating expenses. For sponsorship agreements entered into by the Company or by MSG Sports that contain performance obligations satisfied solely by the Company, revenue is generally recorded on a gross basis as the Company is the principal with respect to such performance obligations and controls the related goods or services before transfer to the customer. In accordance with the Arena License Agreements, MSG Sports is entitled to a share of the revenue generated from certain signage performance obligations where the Company is the principal. The Company records this signage revenue on a gross basis and MSG Sports’ share of such revenue as a component of direct operating expenses within the consolidated and combined statements of operations. For Fiscal Years 2024, 2023 and 2022, the Company recorded revenue-sharing expense of $ 137,053 , $ 119,017 and $ 92,086 , respectively, for MSG Sports’ share of the Company’s revenues from (i) suite licenses, (ii) certain signage and sponsorships, and (iii) food and beverage based upon the provisions of the underlying contractual arrangements, and on the basis of direct usage when specifically identified or allocated proportionally for all prior periods. In Fiscal Year 2020, the Company entered into advertising sales representation agreements with certain subsidiaries of MSG Sports. Pursuant to these agreements, the Company has the exclusive right and obligation to sell sponsorship assets on behalf of the respective subsidiaries of MSG Sports. The Company is entitled to both fixed and variable commissions under the terms of these agreements. The Company recognizes the fixed component ratably over the term of the arrangement which corresponds with the Company’s satisfaction of its service-based performance obligations. Variable commissions are earned and recognized as the related sponsorship performance obligations are satisfied by MSG Sports. The Company is not the principal in such arrangements as it does not control the related goods or services prior to transfer to the customer. As an agent under these arrangements, the Company recognizes the advertising commission revenue on a net basis in the Revenues from entertainment offerings line on the consolidated and combined statement of operations. The Company was also party to an advertising sales representation agreement (the “Networks Advertising Sales Representation Agreement”) with MSGN Holdings, L.P. (“MSG Networks”) until December 31, 2022. See Note 17. Related Party Transactions for more information regarding the advertising sales representation agreements with subsidiaries of MSG Sports and Sphere Entertainment. F - 20 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) 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 Fiscal Years 2024, 2023 and 2022: Year Ended June 30, 2024 2023 2022 Event-related offerings (a) $ 625,364 $ 532,308 $ 372,552 Sponsorship, signage and suite licenses (b) 228,851 209,831 166,221 Other (c) 31,774 37,679 43,307 Total revenues from contracts with customers 885,989 779,818 582,080 Arena license fees and other leasing revenue 73,276 71,678 71,410 Total revenues $ 959,265 $ 851,496 $ 653,490 _______________ (a) Event-related entertainment offerings revenues are recognized at a point in time. (b) See Note 2. Summary of Significant Accounting Policies, Revenue Recognition 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 from MSG Networks prior to 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 consolidated and combined revenues by type of goods or services in accordance with the required entity-wide disclosure requirements of ASC Subtopic 280-10-50-38 to 40 and the disaggregation of revenue required disclosures in accordance with ASC Subtopic 606-10-50-5 for Fiscal Years 2024, 2023 and 2022. Year Ended June 30, 2024 2023 2022 Ticketing and venue license fee revenues (a) $ 463,272 $ 396,375 $ 273,812 Sponsorship and signage, suite, and advertising commission revenues ( b) 254,079 243,079 208,543 Food, beverage, and merchandise revenues 162,092 135,933 98,740 Other 6,546 4,431 985 Total revenues from contracts with customers 885,989 779,818 582,080 Arena license fees and other leasing revenue 73,276 71,678 71,410 Total revenues $ 959,265 $ 851,496 $ 653,490 _________________ (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) live entertainment and other sporting events. (b) Amounts include (i) revenues from sponsorship sales and representation agreements with MSG Sports and (ii) advertising commission revenues recognized from MSG Networks until the termination of this 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 June 30, 2024, 2023 and 2022. As of June 30, 2024 2023 2022 Receivables from contracts with customers, net (a) $ 74,113 $ 69,295 $ 106,664 Contract assets, current (b) 7,844 11,254 5,503 Deferred revenue, including non-current portion (c) 215,581 226,029 203,256 ________________ (a) As of June 30, 2024, 2023, and 2022, the Company’s receivables from contracts with customers above included $ 2,432 , $ 5,397 and $ 4,163 , respectively, related to various related parties. See Note 17. Related Party Transactions for further details on these related party arrangements. (b) Contract assets 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) Revenue recognized for Fiscal Year 2024 relating to the deferred revenue balance as of June 30, 2023 was $ 191,397 . F - 21 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Transaction Price Allocated to the Remaining Performance Obligations The Company’s remaining performance obligations under contracts primarily relate to performance obligations under sponsorship and suite license agreements that have original expected durations longer than one year and for which the considerations are 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. The following table depicts the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2024: As of June 30, 2024 Fiscal year ending June 30, 2025 $ 172,149 Fiscal year ending June 30, 2026 118,530 Fiscal year ending June 30, 2027 75,347 Fiscal year ending June 30, 2028 46,608 Fiscal year ending June 30, 2029 30,769 Thereafter 24,972 Total $ 468,375 Note 5. Restructuring Charges During Fiscal Year 2024, the Company recorded restructuring charges related to termination benefits for certain corporate executives and employees. As a result, the Company recognized restructuring charges of $ 17,649 , inclusive of $ 6,788 of share-based compensation expenses, shown in accounts payable, accrued and other current liabilities and additional paid-in-capital on the consolidated balance sheet. For Fiscal Year 2023, the Company recognized restructuring charges related to termination benefits for certain corporate executives and employees of $ 10,241 , net of contributory credits from the Company to Sphere Entertainment. Restructuring charges are inclusive of $ 2,293 of share-based compensation expenses, shown in accounts payable, accrued and other current liabilities and additional paid-in-capital on the consolidated balance sheet. For Fiscal Year 2022, the Company recorded restructuring charges of $ 5,171 , net of contributory credits from the Company to Sphere Entertainment for the Company’s corporate employees. Restructuring charges are inclusive of $ 1,612 of share-based compensation expenses, recorded in accounts payable, accrued and other current liabilities and additional paid-in-capital on the consolidated balance sheet. Restructuring Liability June 30, 2023 $ 2,530 Restructuring charges (excluding share-based compensation expense) 10,861 Payments ( 6,251 ) June 30, 2024 $ 7,140 Note 6. Computation of Earnings per-Share On the MSGE Distribution Date, 51,768 shares of common stock of the Company, inclusive of 17,021 shares of Class A common stock related to the MSGE Retained Interest. This share amount is being utilized for the calculation of basic earnings (loss) per share for Fiscal Year 2022 because the Company was not a standalone public company prior to the MSGE Distribution. In addition, for Fiscal Year 2022 the computation of diluted earnings per share equals the basic earnings (loss) per share calculation since there was no stock trading information available to compute dilutive effect of shares issuable under share-based compensation plans needed under the treasury method in accordance with ASC Topic 260 and since common stock equivalents were antidilutive due to losses from operations . F - 22 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) The following table presents a reconciliation of weighted-average shares used in the calculations of basic and diluted earnings (loss) per share attributable to the Company’s stockholders. Years Ended June 30, 2024 2023 2022 Weighted-average shares (denominator): Weighted-average shares for basic EPS 48,275 51,819 51,768 Dilutive effect of shares issuable under share-based compensation plans (a) 314 459 — Weighted-average shares for diluted EPS 48,589 52,278 51,768 Weighted-average anti-dilutive shares (a) 551 740 — _________________ (a) For Fiscal Year 2022, all restricted stock units and stock options were excluded from the above table because there was no stock trading information available to compute dilutive effect of shares issuable under share-based compensation plans under the treasury method in accordance with ASC Topic 260 . Note 7. Investments As of June 30, 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 (the “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.” As of June 30, 2024, the Company also held 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. The carrying fair value of these investments, which is reported under Other non-current assets in the accompanying consolidated and combined balance sheets as of June 30, 2024 and 2023, is as follows: As of June 30, Ownership Percentage as of June 30, 2024 2024 2023 Equity investments with readily determinable fair values: Townsquare Class A common stock $ 1,438 $ 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 4,226 2,954 Equity method investments: Crown Properties Collection (a) 8 % 60 — Equity investments without readily determinable fair values 596 475 Total investments $ 6,320 $ 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. F - 23 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) 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 in the accompanying consolidated and combined statements of operations: Years ended June 30, 2024 2023 2022 Unrealized (loss) gain — Townsquare $ ( 1,591 ) $ 7,644 $ ( 14,629 ) Unrealized gain (loss) — DraftKings — 8,406 ( 35,213 ) Unrealized gain — Executive Deferred Compensation Plan 495 225 $ — Total Unrealized (loss) gain $ ( 1,096 ) $ 16,275 $ ( 49,842 ) Gain (loss) from shares sold — DraftKings 1,548 2,608 — (Loss) gain from shares sold — Townsquare ( 1,694 ) 975 — Total realized and unrealized (loss) gain $ ( 1,242 ) $ 19,858 $ ( 49,842 ) Supplemental information on realized gain (loss): Shares of common stock sold — DraftKings 425 444 — Cash proceeds from common stock sold — DraftKings $ 12,844 $ 9,864 $ — Shares of common stock sold — Townsquare 1,577 1,500 — Cash proceeds from common stock sold — Townsquare $ 15,621 $ 14,550 $ — Note 8. Property and Equipment, Net As of June 30, 2024 and 2023, property and equipment, net consisted of the following assets: As of June 30, 2024 2023 Land $ 62,768 $ 62,768 Buildings 1,011,308 999,205 Equipment, furniture and fixtures 348,075 351,596 Leasehold improvements 133,267 105,877 Construction in progress 10,193 2,828 Total Property and equipment 1,565,611 1,522,274 Less accumulated depreciation and amortization ( 932,078 ) ( 893,386 ) Property and equipment, net $ 633,533 $ 628,888 Depreciation and amortization expense on property and equipment was $ 53,876 , $ 59,709 and $ 63,696 for Fiscal Years 2024, 2023 and 2022, respectively. Note 9. Leases The following table summarizes the ROU assets and lease liabilities recorded on the Company’s consolidated and combined balance sheets as of June 30, 2024 and 2023: As of June 30, 2024 2023 ROU assets $ 388,658 $ 235,790 Lease liabilities: Operating leases, current 27,736 36,529 Operating leases, non-current 427,014 219,955 Total lease liabilities $ 454,750 $ 256,484 F - 24 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) The following table summarizes the activity related to lease costs recorded within the Company’s consolidated and combined statements of operations for Fiscal Years 2024, 2023 and 2022: Classification within the Company’s Consolidated and Combined Statements of Operations Years Ended June 30, 2024 2023 2022 Operating lease cost Direct operating expenses $ 21,071 $ 20,729 $ 22,360 Operating lease cost Selling, general and administrative expenses 26,023 11,176 9,782 Variable lease cost Direct operating expenses 716 346 147 Variable lease cost Selling, general and administrative expenses — 39 41 Total lease cost $ 47,810 $ 32,290 $ 32,330 In November 2021, Sphere Entertainment executed an agreement with the existing landlord for its New York corporate office space, which was assigned to the Company in connection with the MSGE Distribution, pursuant to which the Company would relocate from the space that it previously occupied to newly renovated office space within the same building. Throughout Fiscal Year 2024, the Company took possession of certain of the newly renovated space. 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. Upon obtaining possession of the space, the Company recognized an additional lease obligation of $ 206,410 and a ROU lease asset of $ 198,294 , 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. Supplemental cash flow information related to operating leases is as follows: Years Ended June 30, 2024 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 37,908 $ 35,400 $ 33,312 Lease assets obtained in exchange for new lease obligations $ 198,294 $ 478 $ 298,100 For Fiscal Year 2024, the Company received $ 33,905 of tenant incentives from a landlord for capital expenditures on behalf of the Company. There were no tenant incentives received in Fiscal Years 2023 and 2022. Maturities of operating lease liabilities as of June 30, 2024 were as follows: As of June 30, 2024 Fiscal year ending June 30, 2025 $ 7,353 Fiscal year ending June 30, 2026 34,536 Fiscal year ending June 30, 2027 49,749 Fiscal year ending June 30, 2028 50,122 Fiscal year ending June 30, 2029 39,731 Thereafter 708,235 Total lease payments 889,726 Less: imputed interest 434,976 Total lease liabilities $ 454,750 The weighted average remaining lease term and weighted average discount rate for our operating leases are as follows: As of June 30, 2024 2023 Weighted average remaining lease term (in years) 17.36 12.85 Weighted average discount rate 7.09 % 4.77 % As of June 30, 2024, the Company’s existing operating leases, which are recorded on the accompanying consolidated and combined financial statements, had remaining lease terms ranging from 0.3 years to 21.6 years. F - 25 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Lessor Arrangements The Company is party to Arena License Agreements with MSG Sports that, among other things, require the Knicks and the Rangers to play their home games at The Garden in exchange for fixed annual license fees scheduled to be paid monthly over the term of the agreements. The Company accounts for these license fees as operating lease revenue given that the Company provides MSG Sports with the right to direct the use of and obtain substantially all of the economic benefit from The Garden during Knicks and Rangers home games. Operating lease revenue is recognized on a straight-line basis over the lease term, adjusted pursuant to the terms of the Arena License Agreements. In the case of the Arena License Agreements, the lease terms relate to non-consecutive periods of use when MSG Sports uses The Garden for their professional sports teams’ home games, and operating lease revenue is therefore recognized ratably as events occur. The Arena License Agreements provide that license fees are not required to be paid by MSG Sports during periods when The Garden is unavailable for use due to a force majeure event. The following table summarizes the Company’s revenues recognized under Arena License Agreements and revenues from third party and related party lease and sublease arrangements for Fiscal Years 2024, 2023, and 2022. Years Ended June 30, 2024 2023 2022 Arena License Agreements $ 68,068 $ 68,068 $ 68,072 Third party and related party lease and sublease arrangements 5,208 3,610 3,338 Total Arena license fees and other leasing revenue $ 73,276 $ 71,678 $ 71,410 Note 10. Goodwill and Intangible Assets As of June 30, 2024 and 2023, the carrying amount of goodwill was $ 69,041 . The Company has one reportable segment and one reporting unit. The Company’s indefinite-lived intangible assets as of June 30, 2024 and 2023 were as follows: As of June 30, 2024 2023 Trademarks $ 61,881 $ 61,881 Photographic related rights 1,920 1,920 Total indefinite-lived intangible assets $ 63,801 $ 63,801 On August 31, 2023 and 2022, the Company performed its annual impairment tests of goodwill and indefinite-lived intangible assets and determined that there were no impairments of goodwill or indefinite-lived intangible assets identified as of the impairment test date. No amortization expense was recognized in Fiscal Year 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 $ 754 , and $ 5,838 for Fiscal Years 2023, and 2022, respectively, which is recognized in Depreciation and amortization in the consolidated and combined statements of operations. Note 11. Commitments and Contingencies Commitments As of June 30, 2024, commitments of the Company in the normal course of business in excess of one year were as follows: Commitments June 30, 2025 June 30, 2026 June 30, 2027 June 30, 2028 June 30, 2029 Thereafter Total Contractual obligations $ 12,924 $ 5,272 $ 12,701 $ 12,823 $ 12,896 $ 247,735 $ 304,351 Letters of credit 18,827 — — — — — 18,827 Total commitments $ 31,751 $ 5,272 $ 12,701 $ 12,823 $ 12,896 $ 247,735 $ 323,178 See Note 9. Leases for more information regarding the Company’s contractually obligated minimum lease payments for operating leases having an initial non-cancelable term in excess of one year for the Company’s venues and various corporate offices. These commitments are presented exclusive of the imputed interest used to reflect the payment’s present value. F - 26 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) See Note 12. Credit Facilities for more information regarding the principal repayments required under the National Properties 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. 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. Legal Matters The Company is a defendant in various lawsuits. Although the outcome of these lawsuits cannot be predicted with certainty (including the extent of available insurance, if any), management does not believe that resolution of these lawsuits will have a material adverse effect on the Company. Note 12. Credit Facilities The following table summarizes the presentation of the outstanding balances under the Company’s credit and other debt agreements as of June 30, 2024 and 2023: As of June 30, 2024 2023 Current Portion National Properties Term Loan Facility $ 16,250 $ 16,250 Current portion of long-term debt $ 16,250 $ 16,250 As of June 30, 2024 June 30, 2023 Principal Unamortized Deferred Financing Costs Net Principal Unamortized Deferred Financing Costs Net Non-current Portion National Properties Term Loan Facility $ 609,375 $ ( 9,624 ) $ 599,751 $ 625,625 $ ( 12,845 ) $ 612,780 National Properties Revolving Credit Facility — ( 503 ) ( 503 ) 17,100 — 17,100 Other debt — — — 304 — 304 Long-term debt, net of deferred financing costs $ 609,375 $ ( 10,127 ) $ 599,248 $ 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 with JP Morgan Chase Bank, N.A., as administrative agent and the lenders and letter of credit issuers party thereto (as amended, the “National Properties Credit Agreement”), providing for a five-year , $ 650,000 senior secured term loan facility (the “National Properties Term Loan Facility”) and a five-year , $ 150,000 revolving credit facility (the “National Properties Revolving Credit Facility” and, together with the National Properties Term Loan Facility, the “National Properties Facilities”). Up to $ 25,000 of the National Properties Revolving Credit Facility is available for the issuance of letters of credit. As of June 30, 2024, outstanding letters of credit were $ 18,826 and the remaining balance available under the National Properties Revolving Credit Facility was $ 131,174 . Proceeds. The proceeds of the National Properties Facilities were used on the closing date to repay in full the obligations outstanding under MSG National Properties’ prior term loan facility (the “Prior National Properties Loan Facility”) and to pay fees and expenses in connection with the National Properties Facilities and the refinancing of the Prior National Properties Loan Facility. Proceeds of the National Properties Revolving Credit Facility may be used to fund working capital needs, for general corporate purposes of MSG National Properties and its subsidiaries and to make distributions to MSG Entertainment Holdings. F - 27 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) 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, 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 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 June 30, 2024 was 7.94 %. 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 ended 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 facility. 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, which stepped down to 5.5 :1 in the fiscal quarter ended June 30, 2024 and steps down to 4.5 :1 in the fiscal quarter ending June 30, 2026. As of June 30, 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. Accounting Treatment. The Company evaluated the terms of the National Properties Term Loan Facility and the Prior National Properties Term Loan Facility and concluded such facilities to be substantially different for accounting purposes. As a result, the Company recorded a loss on extinguishment of $ 35,629 in connection with the above financing transactions for Fiscal Year 2022. F - 28 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Debt Maturities Maturities for the outstanding debt balances as of June 30, 2024 were as follows: National Properties Facilities Fiscal year ending June 30, 2025 $ 16,250 Fiscal year ending June 30, 2026 32,500 Fiscal year ending June 30, 2027 576,875 $ 625,625 Interest payments and loan principal repayments made by the Company under the National Properties Credit Agreement were as follows: Interest Payments Loan Principal Repayments Year Ended June 30, Year Ended June 30, 2024 2023 2022 2024 2023 2022 National Properties Facilities 53,864 48,548 52,163 106,350 20,125 646,750 The carrying value and fair value of the Company’s debt reported in the accompanying consolidated balance sheets were as follows: As of June 30, 2024 June 30, 2023 Carrying Value (a) Fair Value Carrying Value (a) Fair Value Liabilities: National Properties Facilities $ 625,625 $ 622,497 $ 658,975 $ 655,509 Other debt — — 304 304 Total Long-term debt $ 625,625 $ 622,497 $ 659,279 $ 655,813 _________________ (a) The total carrying value of the Company’s debt as of June 30, 2024 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 $ 10,127 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 13. Pension Plans and Other Postretirement Benefit Plans Prior to the MSGE Distribution, Sphere Entertainment sponsored both funded and unfunded defined benefit plans, as well as a postretirement benefit plan, covering certain full-time employees and retirees of the Company. In connection with the MSGE Distribution, the sponsorship of certain plans was transferred to the Company as described below. In connection with the MSGE Distribution, the Company also established certain non-qualified excess plans covering certain employees as described below. Defined Benefit Pension Plans and Postretirement Benefit Plans After the MSGE Distribution, sponsorship of a non-contributory, qualified cash balance retirement plan covering the Company’s non-union employees (the “Cash Balance Pension Plan”) and an u nfunded non-contributory, non-qualified excess cash balance plan covering certain employees who participate in the underlying qualified plan (collectively, the “Cash Balance Plans”) was transferred from Sphere Entertainment to MSG Entertainment. Since March 1, 2011, the Cash Balance Pension Plan has also included the assets and liabilities of a frozen (as of December 31, 2007) non-contributory qualified defined benefit pension plan covering non-union employees hired prior to January 1, 2001 (the “Retirement Pension Plan”). The Cash Balance Plans were amended to freeze participation and future benefit accruals effective December 31, 2015 for all employees. Therefore, since December 31, 2015, no new participants have been able to participate in the Cash Balance Plans and no further annual pay credits will be made for any future year. Existing account balances under the plans will continue to be credited with monthly interest in accordance with the terms of the plans. MSG Entertainment also sponsors an unfunded non-contributory, non-qualified defined benefit pension plan for the benefit of certain employees who participated in the Retirement Pension Plan on March 1, 2011 (the “Excess Plan”). As of December 31, 2007, the Excess Plan was amended to freeze all benefits earned through December 31, 2007 and to eliminate the ability of participants to earn benefits for future service under these plans. F - 29 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Lastly, in connection with the MSGE Distribution, sponsorship of a non-contributory, qualified defined benefit pension plan covering certain of the Company’s union employees (the “Union Plan”) was transferred from Sphere Entertainment to MSG Entertainment. Benefits payable to retirees under the Union Plan are based upon years of Benefit Service (as defined in the Union Plan document). The Cash Balance Plans, Union Plan, and Excess Plan are collectively referred to as the “Pension Plans.” MSG Entertainment also sponsors a welfare plan (the “Postretirement Plan”) which provides certain postretirement healthcare benefits to certain employees of the Company hired prior to January 1, 2001, who are eligible to commence receipt of early or normal benefits under the Cash Balance Pension Plan, and their dependents, as well as certain union employees. Prior to the MSGE Distribution, Sphere Entertainment was the legal sponsor of the Pension Plans and Postretirement Plan. For purposes of the combined financial statements, it was determined that these plans’ assets and liabilities were attributable to the Company. Therefore, the combined financial statements for periods prior to the MSGE Distribution reflect the full impact of the Pension Plans and Postretirement Plan on both the combined statements of operations and combined balance sheets. As discussed above, the Pension Plans and Postretirement Plan were transferred to the Company. The following table summarizes the projected benefit obligations, assets, funded status and the amounts recorded on the Company’s consolidated and combined balance sheets as of June 30, 2024 and 2023, associated with the Pension Plans and Postretirement Plan based upon actuarial valuations as of those measurement dates. Pension Plans Postretirement Plan June 30, June 30, 2024 2023 2024 2023 Change in benefit obligation: Benefit obligation at beginning of period $ 130,725 $ 135,916 $ 2,517 $ 2,463 Service cost 71 68 21 25 Interest cost 6,673 5,874 120 97 Actuarial (gain) loss (a) ( 2,859 ) ( 3,753 ) ( 85 ) 304 Benefits paid ( 7,902 ) ( 7,139 ) ( 311 ) ( 372 ) Plan settlements paid ( 103 ) ( 97 ) — — Other — ( 144 ) — — Benefit obligation at end of period 126,605 130,725 2,262 2,517 Change in plan assets: Fair value of plan assets at beginning of period 102,236 108,978 — — Actual return on plan assets 4,562 1,782 — — Employer contributions 13,280 250 — — Benefits paid ( 7,791 ) ( 7,080 ) — — Administrative expenses paid ( 1,979 ) ( 1,694 ) — — Fair value of plan assets at end of period 110,308 102,236 — — Funded status at end of period $ ( 16,297 ) $ ( 28,489 ) $ ( 2,262 ) $ ( 2,517 ) _____________________ (a) In Fiscal Year 2024, the actuarial gains on the benefit obligations were primarily due to an increase in discount rate partially offset by an increase in the interest crediting rates. In Fiscal Year 2023, the actuarial gains on the benefit obligations were primarily due to an increase in discount rate partially offset by an increase in the interest crediting rates. Amounts recognized in the consolidated and combined balance sheets as of June 30, 2024 and 2023 consist of: Pension Plans Postretirement Plan June 30, June 30, 2024 2023 2024 2023 Current liabilities (included in Accounts payable, accrued and other current liabilities) $ ( 349 ) $ ( 270 ) $ ( 326 ) $ ( 318 ) Non-current liabilities (included in Other non-current liabilities) ( 15,948 ) ( 28,219 ) ( 1,936 ) ( 2,199 ) $ ( 16,297 ) $ ( 28,489 ) $ ( 2,262 ) $ ( 2,517 ) F - 30 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Accumulated other comprehensive loss, before income tax, as of June 30, 2024 and 2023 consists of the following amounts that have not yet been recognized in net periodic benefit cost: Pension Plans Postretirement Plan June 30, June 30, 2024 2023 2024 2023 Actuarial loss $ ( 38,558 ) $ ( 40,625 ) $ ( 447 ) $ ( 555 ) The following table presents components of net periodic benefit cost for the Pension Plans and Postretirement Plan included in the accompanying consolidated and combined statements of operations for Fiscal Years 2024, 2023 and 2022 . Service cost is recognized in direct operating expenses and selling, general and administrative expenses. All other components of net periodic benefit cost are reported in Other income (expense), net. Pension Plans Postretirement Plan Year Ended June 30, Year Ended June 30, 2024 2023 2022 2024 2023 2022 Service cost $ 71 $ 68 $ 120 $ 21 $ 25 $ 32 Interest cost 6,673 5,874 3,708 120 97 42 Expected return on plan assets ( 5,167 ) ( 4,362 ) ( 6,016 ) — — — Recognized actuarial loss 1,786 1,800 1,386 23 — 34 Settlement loss recognized (a) 7 5 — — — — Net periodic benefit cost reported in the consolidated and combined statements of operations $ 3,370 $ 3,385 $ ( 802 ) $ 164 $ 122 $ 108 _________________ (a) For Fiscal Years 2024, 2023 and 2022, lump-sum payments totaling $ 103 , $ 97 and $ 0 , respectively, were distributed to vested participants of the non-qualified excess cash balance plan, triggering the recognition of settlement losses in accordance with ASC Topic 715. The discount rates used for the projected benefit obligation and interest cost were 5.47 % and 4.13 %, as of June 30, 2024, respectively, 5.44 % and 5.41 % as of June 30, 2023, respectively, and 1.96 % and 1.30 % as of June 30, 2022, respectively. Additionally, settlement charges of $ 7 , $ 5 and $ 0 were recognized in Other income (expense), net for Fiscal Years 2024, 2023 and 2022, respectively. Other pre-tax changes in plan assets and benefit obligations recognized in other comprehensive income (loss) for Fiscal Years 2024, 2023 and 2022 were as follows: Pension Plans Postretirement Plan Years Ended June 30, Years Ended June 30, 2024 2023 2022 2024 2023 2022 Actuarial (loss) gain, net $ ( 1,742 ) $ ( 1,800 ) $ ( 3,306 ) $ ( 23 ) $ 304 $ 501 Recognized actuarial (gain) loss ( 288 ) 520 1,386 ( 85 ) — 34 Settlement loss recognized 7 5 — — — — Total recognized in other comprehensive income (loss) $ ( 2,023 ) $ ( 1,275 ) $ ( 1,920 ) $ ( 108 ) $ 304 $ 535 Funded Status The accumulated benefit obligation for the Pension Plans aggregated t o $ 126,605 and $ 130,725 at June 30, 2024 and 2023, respectively. As of June 30, 2024 and 2023, each of the Pension Plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets. Pension Plans and Postretirement Plan Assumptions Weighted-average assumptions used to determine benefit obligations (made at the end of the period) as of June 30, 2024 and 2023 were as follows: F - 31 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Pension Plans Postretirement Plan June 30, June 30, 2024 2023 2024 2023 Discount rate 5.55 % 5.34 % 5.40 % 5.40 % Interest crediting rate 4.55 % 3.77 % n/a n/a Healthcare cost trend rate assumed for next year n/a n/a 6.75 % 7.00 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) n/a n/a 5.00 % 5.00 % Year that the rate reaches the ultimate trend rate n/a n/a 2032 2032 Weighted-average assumptions used to determine net periodic benefit cost (made at the beginning of the period) for Fiscal Years 2024, 2023 and 2022 were as follows: Pension Plans Postretirement Plan Years Ended June 30, Years Ended June 30, 2024 2023 2022 2024 2023 2022 Discount rate - projected benefit obligation 5.34 % 4.86 % 2.87 % 5.40 % 4.63 % 2.17 % Discount rate - service cost 5.44 % 4.97 % 3.11 % 5.39 % 4.89 % 2.65 % Discount rate - interest cost 5.37 % 4.56 % 1.92 % 5.49 % 4.28 % 1.51 % Expected long-term return on plan assets 6.41 % 5.92 % 4.94 % n/a n/a n/a Interest crediting rate 3.77 % 2.76 % 2.32 % n/a n/a n/a Healthcare cost trend rate assumed for next year n/a n/a n/a 7.00 % 6.00 % 6.25 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) n/a n/a n/a 5.00 % 5.00 % 5.00 % Year that the rate reaches the ultimate trend rate n/a n/a n/a 2032 2027 2027 The discount rates were determined (based on the expected duration of the benefit payments for the plans) from the Willis Towers Watson U.S. Rate Link: 40-90 Discount Rate Model as of June 30, 2024 and 2023 to select a rate at which the Company believed the plans’ benefits could be effectively settled. This model was developed by examining the yields on selected highly rated corporate bonds. The expected long-term return on plan assets is based on a periodic review and modeling of the plans’ asset allocation structures over a long-term horizon. Expectations of returns for each asset class are the most important of the assumptions used in the review and modeling and are based on comprehensive reviews of historical data, forward-looking economic outlook, and economic/financial market theory. The expected long-term rate of return was selected from within the reasonable range of rates determined by (i) historical returns for the asset classes covered by the investment policy and (ii) projections of returns over the long-term period during which benefits are payable to plan participants. Plan Assets and Investment Policy The weighted-average asset allocation of the Pension Plans’ assets at June 30, 2024 and 2023 was as follows: As of June 30, Asset Classes (a) : 2024 2023 Fixed income securities 79 % 75 % Equity securities 15 % 15 % Cash equivalents 6 % 10 % 100 % 100 % _____________________ (a) The Company’s target allocation for the Cash Balance Plan assets is 85 % fixed income securities and 15 % equity as of June 30, 2024 and the Company’s target allocation for the Union Plan assets is 100 % fixed income securities. Investment allocation decisions have been made by (i) Sphere Entertainment’s Investment & Benefits Committee prior to the MSGE Distribution and (ii) the Company’s Investment & Benefits Committee after the MSGE Distribution. Each Investment & Benefits Committee utilized the services of an investment manager to actively manage the assets of the Pension Plans. The Company has established asset allocation targets and investment policies and guidelines with the investment manager. The investment manager takes into account expected long-term risks, returns, correlation, and other prudent investment assumptions when recommending asset classes and investment managers to the Company’s Investment & Benefits Committee. The investment manager also considers each applicable Pension Plans’ liabilities when making investment allocation recommendations. F - 32 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Investments at Estimated Fair Value The cumulative fair values of the individual plan assets at June 30, 2024 and 2023 by asset class were as follows: Fair Value Hierarchy As of June 30, 2024 2023 U.S. Treasury securities (a) I $ 2,313 $ 3,673 Money market fund (a) I 4,345 6,511 U.S. Gov’t Agency Obligations (b) II 285 308 Mutual fund - equity (c) II 16,349 15,296 Common collective trust (c) II 87,016 76,448 Total investments measured at fair value $ 110,308 $ 102,236 _____________________ (a) U.S. Treasury Securities and the money market fund are classified within Level I of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets. (b) U.S. Government Agency Obligations are classified within Level II of the fair value hierarchy as they are valued daily using institutional bond quotes based on evaluations based on various market and industry inputs. (c) The common collective trust (“CCT”) and the mutual fund, which are non-exchange traded funds, are classified within Level II of the fair value hierarchy at their net asset value (“NAV”) as reported by the Trustee and investment manager, respectively. The NAV is based on the fair value of the underlying investments held by the funds which are based on quoted market prices less their liabilities. Both the CCT and the mutual fund publish their daily NAV and use such value as the basis for current transactions. Contributions for Qualified Defined Benefit Pension Plans During Fiscal Year 2024, the Company contributed $ 12,850 and $ 430 to the Cash Balance Plan and Union Plan, respectively. The Company expects to contribute $ 5,700 and $ 250 to the Cash Balance Plan and Union Plan, respectively in Fiscal Year 2025. Estimated Future Benefit Payments The following table presents estimated future fiscal year benefit payments for the Pension Plans and Postretirement Plan: Pension Plans Postretirement Plan Fiscal year ending June 30, 2025 $ 12,310 $ 335 Fiscal year ending June 30, 2026 $ 8,306 $ 314 Fiscal year ending June 30, 2027 $ 8,457 $ 270 Fiscal year ending June 30, 2028 $ 8,334 $ 262 Fiscal year ending June 30, 2029 $ 8,481 $ 268 Fiscal years ending June 30, 2030 – 2034 $ 46,126 $ 965 Defined Contribution Plans MSG Entertainment sponsors The Madison Square Garden 401(k) Savings Plan (the “401(k) Plan”) and the MSG Entertainment Holdings, LLC Excess Savings Plan (collectively referred to as the “Savings Plans”). The 401(k) Plan is a multiple employer plan. For Fiscal Years 2024, 2023 and 2022 , expenses related to the Savings Plans, excluding expenses related to MSG Sports employees and for Fiscal Years 2024 excluded expenses related to Sphere Entertainment employees , that are included in the accompanying consolidated and combined statements of operations wer e $ 7,981 , $ 5,187 and $ 4,284 , res pectively. In addition, MSG Entertainment sponsors The Madison Square Garden 401(k) Union Plan (the “Union Savings Plan”). The Union Savings Plan is a multiple employer plan. For Fiscal Years 2024, 2023 and 2022 , expenses related to the Union Savings Plan included in the accompanying consolidated and combined statements of operations were $ 701 , $ 428 and $ 394 , res pectively. Multiemployer Plans The Company contributes to a number of multiemployer defined benefit pension plans, multiemployer defined contribution pension plans, and multiemployer health and welfare plans that provide benefits to retired union-represented employees under the terms of collective bargaining agreements (“CBAs”). Multiemployer Defined Benefit Pension Plans The multiemployer defined benefit pension plans to which the Company contributes generally provide for retirement and death benefits for eligible union-represented employees based on specific eligibility/participant requirements, vesting periods and benefit F - 33 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) formulas. The risks to the Company of participating in these multiemployer defined benefit pension plans are different from single-employer defined benefit pension plans in the following aspects: • Assets contributed to a multiemployer defined benefit pension plan by one employer may be used to provide benefits to employees of other participating employers. • If a participating employer stops contributing to a multiemployer defined benefit pension plan, the unfunded obligations of the plan may be borne by the remaining participating employers. • If the Company chooses to stop participating in some of these multiemployer defined benefit pension plans, the Company may be required to pay those plans an amount based on the Company’s proportion of the underfunded status of the plan, referred to as a withdrawal liability. However, cessation of participation in a multiemployer defined benefit pension plan and subsequent payment of any withdrawal liability is subject to the collective bargaining process. The following table outlines the Company’s participation in multiemployer defined benefit pension plans for Fiscal Years 2024, 2023 and 2022 , and summarizes the contributions that the Company has made during each period. The “EIN” and “Pension Plan Number” columns provide the Employer Identification Number and the three-digit plan number for each applicable plan. The most recent Pension Protection Act zone status available as of June 30, 2024 and 2023 relates to the plan’s two most recent years ended which are indicated. Among other factors, plans in the red zone are generally less than 65 % funded, plans in the orange zone are both less than 80 % funded and have an accumulated funding deficiency or are expected to have a deficiency in any of the next six plan years, plans in the yellow zone are less than 80 % funded, and plans in the green zone are at least 80 % funded. The “FIP/RP Status Pending/Implemented” column indicates whether a funding improvement plan (“FIP”) for yellow/orange zone plans or a rehabilitation plan (“RP”) for red zone plans is either pending or has been implemented by the trustees of such plan. The zone status and any FIP or RP information is based on information that the Company received from the plan, and the zone status is as certified by the plan’s actuary. The last column lists the expiration date(s) or a range of expiration dates of the CBA to which the plans are subject. There are no other significant changes that affect such comparability. PPA Zone Status FIP/RP Status Pending / Implemented Company Contributions As of June 30, Year Ended June 30, Plan Name EIN Pension Plan Number 2024 2023 2024 2023 2022 Surcharge Imposed Expiration Date of CBA Pension Fund of Local No. 1 of I.A.T.S.E. 136414973 001 Green as of 2023-12-31 Green as of 2022-12-31 No $ 2,784 $ 2,550 $ 1,999 No 9/30/2025 All Other Multiemployer Defined Benefit Pension Plans 3,198 2,897 1,907 $ 5,982 $ 5,447 $ 3,906 The Company was listed in the following plans’ Form 5500’s as providing more than 5% of the total contributions for the following plans and plan years: Fund Name Exceeded 5 Percent of Total Contributions Year Contributions to Plan Exceeded 5 Percent of Total Contributions (As of Plan’s Year-End) Pension Fund of Local No. 1 of I.A.T.S.E True December 31, 2022, 2021, and 2020 32BJ/Broadway League Pension Fund True December 31, 2022, 2021, and 2020 Treasurers and Ticket Sellers Local 751 Pension Fund True August 31, 2023, 2022 and 2021 Pension Fund of Wardrobe Attendants Union Local 764 True December 31, 2022 Multiemployer Defined Contribution Pension Plans The Company contributed $ 7,919 , $ 7,316 and $ 5,641 fo r Fiscal Years 2024, 2023 and 2022 , respectively, to multiemployer defined contribution pension plans. Executive Deferred Compensation Plan The Company assumed the sponsorship of the Madison Square Garden Entertainment Corp. Executive Deferred Compensation Plan from Sphere Entertainment in connection with the MSGE Distribution (the “Deferred Compensation Plan”). The Deferred Compensation Plan was established to permit a select group of highly-compensated employees to defer the employee’s annual base salary and bonus into the Deferred Compensation Plan with returns on such deferrals tracking the performance of certain investments. Following the MSGE Distribution accounts attributable to the Sphere Entertainment’s current employees as of the Distribution Date were transferred to a deferred compensation plan established by Sphere Entertainment in connection with the MSGE Distribution. Amounts deferred and invested by employees under the Deferred Compensation Plan are placed in an irrevocable trust established by the Company and all assets of the trust are subject to the creditors of the Company in the event of insolvency. In accordance with ASC F - 34 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Topic 710, Compensation – General (“ASC Topic 710”), the assets of the trust are consolidated with the accounts of the Company and are recognized in the Company’s consolidated balance sheet. In accordance with ASC Topic 710, the Company remeasures the deferred compensation liability, with a charge (or credit) to compensation cost in the Company’s consolidated and combined statements of operations, to reflect changes in the fair value of the assets owed to the participants of the Deferred Compensation Plan. The Company remeasures the fair value of the assets held in trust in accordance with ASC Topic 321, Investments – Equity Securities , and recognizes unrealized gains and losses in Miscellaneous income (expense), net in the Company’s consolidated and combined statements of operations. The Company recorded compensation expense/(compensation cost credits) of $ 495 and $ 225 , for the years ended June 30, 2024 and 2023, respectively, within Selling, general and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability. In addition, the Company recorded gains/(losses) of $ 495 and $ 225 , for the year ended June 30, 2024 and 2023, respectively, within Other income (expense), net to reflect the remeasurement of the fair value of assets under the Deferred Compensation Plan. The investments made from employee contributions and investments sold for employee distributions of trust assets are classified as operating activities in the Company’s consolidated and combined statements of cash flows. Amounts recognized in the consolidated balance sheets as of June 30, 2024 and 2023, related to the Deferred Compensation Plan consist of: As of June 30, 2024 2023 Non-current assets (included in Other non-current assets) $ 4,226 $ 2,954 Non-current liabilities (included in Other non-current liabilities) $ ( 4,226 ) $ ( 2,976 ) Note 14. Share-based Compensation Prior to the MSGE Distribution Date, certain employees of the Company participated in the share-based compensation plans of Sphere Entertainment (“Sphere Entertainment Employee Stock Plans”). The plans provide for discretionary grants of incentive stock options and non-qualified stock options, restricted shares, restricted stock units, performance stock units, stock appreciation rights and other share-based awards. All awards granted under the Sphere Entertainment Employee Stock Plans will settle in shares of Sphere Entertainment’s Class A common stock, or, at the option of the Compensation Committee of the Sphere Entertainment Board of Directors, in cash. Prior to the MSGE Distribution Date, the consolidated and combined financial statements only reflect the expenses for the awards provided to the Company’s direct employees, net of expenses related to the Company’s corporate employees who participate in the Sphere Entertainment Employee Stock Plans that were charged to Sphere Entertainment. Effective as of the MSGE Distribution Date, the Company adopted two share-based compensation plans: the 2023 Employee Stock Plan (the “Employee Stock Plan”) and the 2023 Stock Plan for Non-Employee Directors (the “Non-Employee Director Plan). Under the Employee Stock Plan, the Company is authorized to grant incentive stock options, non-qualified stock options, restricted shares, restricted stock units (“RSUs”), performance stock units (“PSUs”), stock appreciation rights and other equity-based awards. The Company may grant awards under the Employee Stock Plan for up to an aggregate number of 11,000 shares of Class A Common stock, which may be either treasury shares or authorized but unissued shares. Options and stock appreciation rights under the Employee Stock Plan must be granted with an exercise price of not less than the fair market value of a share of the Company’s Class A common stock on the date of grant and must expire no later than 10 years from the date of grant (or up to one additional year in the case of the death of a holder). The terms and conditions of awards granted under the Employee Stock Plan, including vesting and exercisability, are determined by the Compensation Committee of the Board of Directors (“Compensation Committee”) and may include terms or conditions based upon performance criteria. RSUs that were awarded by the Company to its employees will settle in shares of the Company's Class A common stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash. Under the Non-Employee Director Plan, the Company is authorized to grant non-qualified stock options, RSUs, restricted shares, stock appreciation rights and other equity-based awards. The Company may grant awards under this plan for up to an aggregate number of 750 shares of Class A common stock, which may be either treasury shares or authorized but unissued shares. Options under the Non-Employee Director Plan must be granted with an exercise price of not less than the fair market value of a share of the Company’s Class A common stock on the date of grant and must expire no later than 10 years from the date of grant (or up to one additional year in the case of the death of a holder). The terms and conditions of awards granted under the Non-Employee Director Plan, including vesting and exercisability, are determined by the Compensation Committee. Unless otherwise provided in an applicable award agreement, options granted under this plan will be fully vested and exercisable upon the date of grant. Unless otherwise provided in an applicable award agreement, RSUs granted under this plan will be fully vested upon the date of grant and will settle in shares of the Company's Class A common stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash. F - 35 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Treatment After the MSGE Distribution of Share-based Payment Awards Initially Granted Under Sphere Entertainment Equity Award Programs Prior to the MSGE Distribution, certain employees and the non-employee directors of Sphere Entertainment (some of whom are now employees or non-employee directors of the Company) participated in Sphere Entertainment equity award programs (the “Sphere Entertainment Stock Plans”). In connection with the MSGE Distribution, each option to purchase Sphere Entertainment’s Class A common stock became two options: one option to acquire Sphere Entertainment Class A common stock and one option to acquire the Company’s Class A common stock granted under the Employee Stock Plan. The exercise price of the option was allocated between the existing Sphere Entertainment options and new Company options based upon the weighted average price of each of the Sphere Entertainment Class A common stock and the Company’s Class A Common Stock over the ten trading days immediately following the Distribution. In connection with the MSGE Distribution, each holder of a Sphere Entertainment RSU received one MSG Entertainment RSU in respect of every one Sphere Entertainment RSU owned on the record date and continues to be entitled to a share of Sphere Entertainment Class A common stock (or cash or other property) for each Sphere Entertainment RSU in accordance with the Sphere Entertainment award agreement. Additionally, each holder of a Sphere Entertainment employee PSU received one Company PSU (at target performance) in respect of every one Sphere Entertainment PSU (at target performance) owned on the Record Date and continues to be entitled to a share of Sphere Entertainment Class A common stock (or cash or other property) for each Sphere Entertainment PSU in accordance with the Sphere Entertainment award agreement. Further, in connection with the MSGE Distribution, each holder of a Sphere Entertainment director RSU received one share of the Company’s Class A common stock in respect of every one Sphere Entertainment RSU owned on the Record Date and continues to be entitled to a share of Sphere Entertainment Class A common stock (or cash or other property) in accordance with the Sphere Entertainment award agreement. Share-based Compensation Expense Share-based compensation expense is generally recognized straight-line over the vesting term of the award, which typically provides for three-year cliff or graded vesting subject to continued employment with the Company, Sphere Entertainment or MSG Sports. The Company’s RSUs, PSUs and/or stock options held by individuals who are solely Sphere Entertainment and/or MSG Sports employees are not expensed by the Company; however, such RSUs/PSUs and/or stock options do have a dilutive effect on earnings (loss) per share available to the Company’s common stockholders. Share-based compensation expense was recognized in the consolidated and combined statements of operations as a component of direct operating expenses or selling, general and administrative expenses. The following table presents the share-based compensation expense recorded during Fiscal Years 2024, 2023 and 2022: Years Ended June 30, 2024 2023 2022 Share-based compensation expense (a) $ 24,544 $ 29,521 $ 37,746 _____________________ (a) For Fiscal Years 2024, 2023 and 2022 share-based compensation excludes costs of $ 6,788 , $ 2,293 , and $ 1,612 , respectively, that have been reclassified to Restructuring charges in the consolidated and combined statements of operations, as detailed in Note 5, Restructuring Charges . RSU and PSU Award Activity The following table summarizes activity related to MSG Entertainment’s RSUs and PSUs held by the Company, MSG Sports, and Sphere’s employees for Fiscal Year 2024: Number of Weighted-Average Grant-date Fair Value (a) RSUs PSUs Unvested award balance as of June 30, 2023 903 1,084 $ 65.78 Granted 683 529 $ 31.55 Vested (a) ( 688 ) ( 338 ) $ 33.56 Forfeited ( 83 ) ( 93 ) $ 31.47 Unvested award balance as of June 30, 2024 815 1,182 $ 64.58 _____________________ (a) The fair value of RSUs and PSUs that vested and were distributed during Fiscal Year 2024 was $ 33,504 . Upon delivery, RSUs granted by the Company were net share-settled to cover the required statutory tax withholding obligations. To fulfill the employees’ statutory minimum tax withholding obligations for the applicable income and other employment taxes, 437 of these awards, with an aggregate value of $ 14,325 were retained by MSG Entertainment. As of June 30, 2024, there was $ 29,927 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 1.9 years. F - 36 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Stock Options Award Activity Compensation expense for MSG Entertainment stock options held by the Company’s employees is determined based on the grant date fair value of the award calculated using the Black-Scholes options-pricing model. Stock options generally vest over a three year service period and expire 7.5 to 10 years from the date of grant. The following table summarizes activity related to the Company’s stock options during Fiscal Year 2024: Number of Time Vesting Options Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Balance as of June 30, 2023 724 $ 55.87 Forfeited ( 184 ) $ 55.69 Balance as of June 30, 2024 540 $ 55.93 2.06 $ — Exercisable on June 30, 2024 540 $ 55.93 2.06 $ — Note 15. 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 Fiscal Year 2024, the Company repurchased 3,525 shares of Class A Common Stock for $ 115,512 . As of June 30, 2024, the Company had approximately $ 110,000 remaining available for repurchases under the Stock Repurchase Program. Accumulated Other Comprehensive Loss The following table details the components of accumulated other comprehensive loss: June 30, 2024 2023 2022 Balance at beginning of period $ ( 34,021 ) $ ( 34,740 ) $ ( 33,598 ) Other comprehensive loss: Amounts reclassified from accumulated other comprehensive loss (a) 2,131 ( 971 ) ( 1,385 ) Income tax (expense) benefit ( 372 ) 176 243 Other comprehensive loss, total 1,759 ( 795 ) ( 1,142 ) Adjustment related to the transfer of pension plans and postretirement plan liabilities as a result of the MSGE Distribution — 1,514 — Balance at end of period $ ( 32,262 ) $ ( 34,021 ) $ ( 34,740 ) ________________ (a) Amounts reclassified from accumulated other comprehensive loss represent curtailments, settlement losses recognized, the amortization of net actuarial gain (loss) and net unrecognized prior service credit included in net periodic benefit cost, which is reflected under Other income (expense), net in the accompanying consolidated and combined statements of operations (see Note 13. Pension Plans and Other Postretirement Benefit Plans). F - 37 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Note 16. Income Taxes Income tax benefit (expense) is comprised of the following components: Year Ended June 30, 2024 2023 2022 Current (expense) benefit: Federal $ ( 97 ) $ ( 1,008 ) $ 515 State and other ( 91 ) — ( 220 ) ( 188 ) ( 1,008 ) 295 Deferred benefit (expense): Federal 47,607 6,198 ( 4,711 ) State and other 44,590 ( 6,918 ) 4,486 92,197 ( 720 ) ( 225 ) Income tax benefit (expense) $ 92,009 $ ( 1,728 ) $ 70 The income tax benefit (expense) differs from the amount derived by applying the statutory federal rate to pre-tax income (loss) principally due to the effect of the following items: Year Ended June 30, 2024 2023 2022 Federal tax (expense) benefit at statutory federal rate $ ( 10,981 ) $ ( 16,332 ) $ 28,617 State income taxes, net of federal benefit ( 9,039 ) ( 13,033 ) 12,141 Change in valuation allowance 108,506 34,147 ( 31,679 ) Return to provision 4,487 — — Federal tax credits 1,139 — — Capital loss carryover — 3,960 — Nondeductible transaction costs — ( 206 ) — GAAP income of consolidated partnership attributable to non-controlling interest — ( 116 ) ( 601 ) Change in the estimated applicable tax rate used to determine deferred taxes 280 ( 557 ) — Nondeductible officers’ compensation ( 2,385 ) ( 3,861 ) ( 8,125 ) Nondeductible expenses ( 413 ) ( 266 ) ( 373 ) Excess tax benefit related to share-based payment awards 412 ( 5,457 ) 93 Other, net 3 ( 7 ) ( 3 ) Income tax benefit (expense) $ 92,009 $ ( 1,728 ) $ 70 F - 38 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) The tax effects of temporary differences which give rise to significant portions of the deferred tax assets and liabilities at June 30, 2024 and 2023 were as follows: June 30, 2024 2023 Deferred tax assets: Net operating losses (NOLs) $ 15,736 $ 18,684 Federal tax credits 1,295 — Accrued employee benefits 25,219 28,271 Restricted stock units and stock options 8,337 8,571 Deferred revenue 3,498 34,914 Right-of-use lease assets and lease liabilities, net 22,696 7,071 Deferred interest 20,367 3,299 Property and equipment 38,564 38,703 Investments 921 — Other, net 9,248 5,853 Total gross deferred tax assets $ 145,881 $ 145,366 Less valuation allowance — ( 95,352 ) Net deferred tax assets $ 145,881 $ 50,014 Deferred tax liabilities: Intangibles and other assets $ ( 40,022 ) $ ( 40,143 ) Prepaid expenses ( 5,746 ) ( 4,854 ) Investments — ( 5,530 ) Straight line rent ( 31,806 ) ( 23,005 ) Total deferred tax liabilities $ ( 77,574 ) $ ( 73,532 ) Net deferred tax asset (liability) $ 68,307 $ ( 23,518 ) In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company’s ability to realize its deferred tax assets depends upon the generation of sufficient future taxable income to allow for the utilization of its NOLs and future deductible temporary differences . In determining the likelihood of future realization of the deferred tax assets as of June 30, 2024, the Company considered both positive and negative evidence and weighted the effect of such evidence based upon its objectivity. This included consideration of both cumulative pretax income, including permanent items, for current fiscal year and the two preceding years; and projected future pretax income. Based on current facts and circumstances, management believes that it is more likely than not that the Company will realize its deferred tax assets and the valuation allowance was reversed in the fourth quarter of the fiscal year ended June 30, 2024. The Company will continue to assess the realizability of its deferred tax assets on a quarterly basis. Prior to the MSGE Distribution, the Company and Sphere Entertainment entered into a Tax Disaffiliation Agreement (“TDA”) that governs the parties’ respective rights, responsibilities and obligations with respect to taxes and tax benefits. Under the TDA, Sphere Entertainment will generally be responsible for all U.S. federal, state, local and other applicable income taxes of the Company for any taxable period or portion of such period ending on or before the MSGE Distribution Date. The federal NOL carryforward as of June 30, 2024 was $ 52,000 . The NOL has an unlimited carryforward period. Prior to the MSGE Distribution, the Company’s collections for ticket sales, sponsorships and suite rentals in advance were recorded as deferred revenue and were recognized as revenues when earned for both accounting and tax purposes. The tax recognition on most of these deferred revenues was accelerated to the date of the MSGE Distribution and is the responsibility of Sphere Entertainment. The Company will not reimburse Sphere Entertainment for such taxes. At the time of the MSGE Distribution, the Company recorded a deferred tax asset of $ 71,395 and a corresponding valuation allowance of $ 71,395 with regard to the deferred revenue acceleration for income tax purposes. As of June 30, 2024, the Company has a deferred tax asset of $ 3,498 with regard to the deferred revenue acceleration and the remaining tax deduction will be recorded as deferred revenue is earned and the associated events occur or upon F - 39 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) payment of refunds. Income tax payments, net of refunds, were $ 58 for Fiscal Year 2024. Income tax refunds, net of payments, were $ 2,031 and $ 10,281 for Fiscal Years 2023 and 2022 , respectively, as if the Company was on a standalone basis prior to the MSGE Distribution. Note 17. Related Party Transactions As of June 30, 2024, members of the Dolan family, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, 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 3.9 % of the Company’s outstanding Class A Common Stock (inclusive of options exercisable within 60 days of June 30, 2024). Such shares of Class A Common Stock and Class B Common Stock, collectively, represent approximately 63.7 % of the aggregate voting power of Company’s outstanding common stock. Members of the Dolan family are also the controlling stockholders of Sphere Entertainment, MSG Sports and AMC Networks Inc. (“AMC Networks”). Current Related Party Arrangements The Company is party to the following agreements and/or arrangements with MSG Sports: • Sponsorship sales and service representation agreements pursuant to which the Company has the exclusive right and obligation to sell MSG Sports’ sponsorships for an initial stated term of ten years for a commission; • A team sponsorship allocation agreement, pursuant to which MSG Sports receives an allocation of sponsorship and signage revenues associated with the sponsorship agreements; • Arena License Agreements pursuant to which the Company (i) provides MSG Sports the right to use The Garden for games of the Knicks and Rangers for a 35 -year term in exchange for venue license fees, (ii) shares revenues collected for suite licenses, (iii) operates and manages the sale of the sports teams merchandise at The Garden for a commission, (iv) operates and manages the sale of food and beverage sales and catering services during the Knicks and Rangers games for a portion of net profits (as defined under the Arena License Agreements), (v) provides day of game services, and (vi) provides other general services within The Garden; • A services agreement pursuant to which the Company provides certain corporate and other transition services to MSG Sports, such as information technology, security, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, government affairs, investor relations, corporate communications, benefit plan administration and reporting, and internal audit functions as well as certain marketing functions, in exchange for service fees. MSG Sports also provides certain services to the Company, including certain legal functions, communications, ticket, sponsorship and premium hospitality-related sales and certain operational and marketing services, in exchange for service fees; • A sublease agreement, pursuant to which the Company subleases office space to MSG Sports; • A group ticket sales representation agreement, pursuant to which the Company appointed MSG Sports as its sales and service representative to sell group ticket packages related to the Company’s events in exchange for a commission; • A single night rental commission agreement, pursuant to which MSG Sports may, from time to time, sell (or make referrals for sales of) licenses for the use of suites at The Garden for individual Company events in exchange for a commission; • 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 outstanding advances were fully repaid (including interest) in the second quarter of Fiscal Year 2024. As of June 30, 2024 and 2023, MSG Sports had advanced $ 0 and $ 304 , respectively, to the Company in connection with the arrangement. This advance had been recognized in Long-term debt, net of deferred financing costs in the accompanying consolidated and combined balance sheets; • Aircraft arrangements (discussed below); • Arrangements pursuant to which MSG Sports provides certain premium hospitality and other business operations services to the Company, and pursuant to which MSG Sports previously provided certain sponsorship services to the Company; and • Other agreements such as a trademark license agreement and certain other arrangements. The Company is party to the following agreements and/or arrangements with Sphere Entertainment: • A Transition Services Agreement (“TSA”) pursuant to which the Company provides certain corporate and other transition services to Sphere Entertainment, such as information technology, security, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, government affairs, investor relations, corporate communications, benefit plan administration and reporting, and internal audit functions as well as certain marketing functions, in exchange for service fees. Sphere Entertainment also provides certain services to the Company, including certain studios and corporate technology services, in exchange for service fees; F - 40 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) • Arrangements pursuant to which the Company provides certain sponsorship account management services to Sphere Entertainment in exchange for service fees; • Aircraft arrangements (discussed below); and • Other agreements with Sphere Entertainment entered into in connection with the MSGE Distribution such as a distribution agreement, a tax disaffiliation agreement, an employee matters agreement, a stockholder and registration rights agreement, a trademark license agreement and certain other arrangements. The Company was also party to the DDTL Facility, which provided for a $ 65,000 senior unsecured delayed draw term loan facility to Sphere Entertainment, which was fully drawn on July 14, 2023 and repaid by Sphere Entertainment on August 9, 2023. See Note 11. Commitments and Contingencies for more information regarding the DDTL. In addition, the Company historically had various agreements with MSG Networks, including an advertising sales representation agreement and a services agreement (the “MSG Networks Services Agreement”). • Pursuant to the Networks Advertising Sales Representation Agreement, the Company had the exclusive right and obligation to sell advertising on behalf of MSG Networks in exchange for a commission. The Networks Advertising Sales Representation Agreement was terminated effective as of December 31, 2022. • Through the MSGE Distribution Date, pursuant to the MSG Networks Services Agreement, the Company also provided certain services to MSG Networks, such as information technology, accounts payable and payroll, human resources, and other corporate functions, as well as the executive support services described below, in exchange for service fees. MSG Networks also provided certain services to the Company, in exchange for service fees. Following the MSGE Distribution, the Company continues to provide these services pursuant to the TSA with Sphere Entertainment and the MSG Networks Services Agreement is no longer in place. Further, the Company shares certain executive support costs, including office space, executive assistants, security and transportation costs, for (i) the Company’s Executive Chairman and Chief Executive Officer with Sphere Entertainment and MSG Sports and (ii) the Company’s Vice Chairman with Sphere Entertainment, MSG Sports and AMC Networks. Prior to April 1, 2022, the Company also shared costs for Sphere Entertainment’s former President with Sphere Entertainment and MSG Sports. The Company is a party to various aircraft arrangements: • Pursuant to certain Aircraft Support Services Agreements (the “Support Agreements”), the Company provides certain aircraft support services to (i) Charles F. Dolan, a director, and certain of his children, including James L. Dolan, the Company’s Executive Chairman, Chief Executive Officer and a director, Deborah Dolan-Sweeney, Patrick F. Dolan, Marianne Dolan Weber (a director of the Company), and Kathleen M. Dolan, and (ii) an entity controlled by Patrick F. Dolan, the son of Charles F. Dolan and brother of James L. Dolan. • The Company is party to reciprocal time sharing/dry lease agreements with Charles F. Dolan and Sterling2k LLC (collectively, “CFD”), an entity owned and controlled by Deborah Dolan-Sweeney, the daughter of Charles F. Dolan and the sister of James L. Dolan, pursuant to which the Company has agreed from time to time to make its aircraft available to CFD and CFD has agreed from time to time to make its aircraft available to the Company. Pursuant to the terms of the agreements, CFD may lease on a non-exclusive, “time sharing” basis, certain Company aircraft. • The Company is also party to a dry lease agreement and a time sharing agreement with Brighid Air, LLC (“Brighid Air”), a company owned and controlled by Patrick F. Dolan, the son of Charles F. Dolan and the brother of James L. Dolan, pursuant to which Brighid Air has agreed from time to time to make its Bombardier BD100-1A10 Challenger 350 aircraft (the “Challenger”) available to the Company on a non-exclusive basis. In connection with the dry lease agreement, the Company also entered into a Flight Crew Services Agreement (the “Flight Crew Agreement”) with Dolan Family Office, LLC (“DFO”), an entity owned and controlled by Charles F. Dolan, pursuant to which the Company may utilize pilots employed by DFO for purposes of flying the Challenger when the Company is leasing that aircraft under the Company’s dry lease agreement with Brighid Air. • Prior to December 21, 2021, the Company was also party to (i) a reciprocal time sharing/dry lease agreement with Quart 2C, LLC (“Q2C”), a company controlled by James L. Dolan and Kristin A. Dolan, his spouse, pursuant to which the Company from time to time made its aircraft available to Q2C, and Q2C, from time to time made its aircraft available to the Company, and (ii) an aircraft support services agreement with an entity controlled by James L. Dolan, pursuant to which the Company provided certain aircraft support services. These agreements were no longer effective as of December 21, 2021. • The Company is party to various arrangements with each of Sphere Entertainment and MSG Sports, pursuant to which (i) Sphere Entertainment and MSG Sports each have the right to lease on a “time-sharing” basis certain aircraft to which the Company has access, (ii) the Company has the right to dry lease certain aircraft leased by MSG Sports and (iii) the Company provides certain aircraft support services. The Company, Sphere Entertainment, and MSG Sports have agreed to allocate expenses in connection with the use by each company (or their executives) of aircraft leased by the Company and MSG F - 41 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Sports. The Company is also party to various arrangements with AMC Networks pursuant to which AMC Networks has the right to lease on a “time-sharing” basis certain aircraft to which the Company has access. Additionally, the Company, Sphere Entertainment, MSG Sports and AMC Networks have agreed on an allocation of the costs of certain aircraft and helicopter use by their shared executives. The Company has also entered into a commercial agreement with CPC, under which CPC provides sponsorship sales services. The Company recorded commission expense of $ 1,507 for the year ended June 30, 2024, and did not record any commission expense for the years ended June 30, 2023 and 2022, as the arrangement was not yet in place during those periods . As of June 30, 2024 and 2023, prepaid expenses associated with this arrangement were $ 5,993 and $ 0 , respectively, and are reported under Prepaid expenses and other current assets, and Other non-current assets in the accompanying 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 50 % of 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 $ 34 and $ 272 of expense for the years ended June 30, 2024 and 2023. No expense was recognized for Fiscal Year 2022. 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. As of June 30, 2022 , the Company had $ 637 of notes payable with respect to a loan received by BCE from its noncontrolling interest holder. The BCE Disposition was completed on December 2, 2022 and as a result, as of June 30, 2023 , the Company had no notes payable to related parties. Revenues and Operating Expenses The following table summarizes the composition and amounts of the transactions with the Company’s related parties. The significant components of these amounts are discussed below. These amounts are reflected in revenues and operating expenses in the accompanying consolidated and combined statements of operations for Fiscal Years 2024, 2023 and 2022: Year Ended June 30, 2024 2023 2022 Revenues $ 101,835 $ 105,862 $ 115,370 Operating expenses (credits): Revenue sharing expenses 21,567 19,056 17,279 Reimbursement under Arena License Arrangements ( 25,107 ) ( 22,279 ) ( 25,827 ) Cost reimbursement from MSG Sports ( 37,409 ) ( 38,473 ) ( 38,254 ) Corporate reimbursement from Sphere Entertainment (after April 20, 2023) and Corporate allocations to Sphere Entertainment (before April 21, 2023) ( 108,767 ) ( 151,219 ) ( 161,189 ) Other operating expenses, net ( 824 ) 3,949 4,995 Total operating expenses (credits), net (a) $ ( 150,540 ) $ ( 188,966 ) $ ( 202,996 ) _____________________ (a) Of the total operating expenses (credits), net, $ 1,453 , $( 1,019 ) and $( 9,347 ) of net expenses (credits) for Fiscal Years 2024, 2023 and 2022, respectively, are included in direct operating expenses in the accompanying consolidated and combined statements of operations, and $( 151,993 ), $( 187,947 ) and $( 193,649 ) for Fiscal Years 2024, 2023 and 2022, respectively, are included as net credits in selling, general and administrative expenses. Revenues In Fiscal Year 2024, the Knicks and the Rangers played a total of 105 home games at The Garden and the Company recorded $ 68,068 of revenues under the Arena License Agreements for Fiscal Year 2024. In addition, for Fiscal Year 2024 the Company recorded revenues under sponsorship sales and service representation agreements with MSG Sports of $ 19,481 , and merchandise sharing revenues with MSG Sports of $ 7,200 . The Company also earned $ 3,758 of sublease revenue from related parties during Fiscal Year 2024. In Fiscal Year 2023, the Knicks and the Rangers played a total of 96 home games at The Garden and the Company recorded $ 68,068 of revenues under the Arena License Agreements. In addition, for Fiscal Year 2023, the Company recorded revenues under sponsorship sales and service representation agreements with MSG Sports of $ 19,063 and merchandise sharing revenues with MSG F - 42 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Sports of $ 5,550 . The Company recorded revenues under the Networks Advertising Sales Representation Agreement of $ 8,802 for Fiscal Year 2023. The Company also earned $ 2,847 of sublease revenue from related parties during Fiscal Year 2023. In Fiscal Year 2022, the Knicks and the Rangers played a total of 98 home games at The Garden and the Company recorded $ 68,072 of revenues under the Arena License Agreements for Fiscal Year 2022. In addition, for Fiscal Year 2022, the Company recorded revenues under sponsorship sales and service representation agreements with MSG Sports of $ 17,570 and merchandise sharing revenues with MSG Sports of $ 4,412 . The Company recorded revenues under the Networks Advertising Sales Representation Agreement of $ 20,878 for Fiscal Year 2022. The Company also earned $ 2,444 of sublease revenue from related parties during Fiscal Year 2022. Operating Expenses Revenue sharing expenses Revenue sharing expenses include MSG Sports’ share of the Company’s in-venue food and beverage sales and certain venue signage agreements. Reimbursements under Arena License Arrangements Fees recognized by the Company under the Arena License Agreements with MSG Sports for use of The Garden are reported as operating lease revenues in accordance with ASC Topic 842. In addition, the Company records credits to direct operating expenses as a reimbursement under the Arena License Agreements. Cost reimbursement from MSG Sports Per the services agreement described above, the Company’s corporate overhead expenses that are charged to MSG Sports are primarily related to centralized functions, including information technology, security, accounts payable, payroll, tax, legal, human resources, insurance and risk management, investor relations, corporate communications, benefit plan administration and reporting, and internal audit. Corporate reimbursement from Sphere Entertainment (after April 20, 2023) and Corporate allocations to Sphere Entertainment (before April 21, 2023) As part of the MSGE Distribution, certain corporate and operational support functions were transferred to the Company and therefore, charges were reflected in order to burden all business units comprising Sphere Entertainment’s historical operations. Allocations of corporate overhead and shared services expense to Sphere Entertainment from the Company were recorded for corporate and operational functions based on direct usage when identifiable, with the remainder allocated on a pro rata basis of combined assets, headcount or other measures of the Company or Sphere Entertainment, which is recorded as a reduction of either direct operating expenses or selling, general and administrative expense. The aforementioned allocations for certain support functions that are provided on a centralized basis and not historically recorded at the business unit level by Sphere Entertainment related to departments such as executive management, finance, legal, human resources, government affairs, and information technology, among others. In addition, corporate allocations to Sphere Entertainment include charges to MSG Networks under the MSG Networks Services Agreement prior to the MSGE Distribution. Other Operating Expenses, net The Company and its related parties enter into transactions with each other in the ordinary course of business. Amounts charged to the Company for other transactions with its related parties are net of amounts charged by the Company to the Knickerbocker Group, LLC, an entity owned by James L. Dolan, the Executive Chairman, Chief Executive Officer and a director of the Company, for office space and the cost of certain technology services. In addition, other operating expenses primarily include net charges relating to (i) reciprocal aircraft arrangements between the Company and each of Q2C and CFD, (ii) the aircraft arrangements described above (iii) commission under the group ticket sales representation agreement with MSG Sports, and (iv) expenses for advertising and promotional services rendered by MSG Networks. The reciprocal aircraft arrangement between the Company and Q2C and the related aircraft support services arrangement between them was no longer effective as of December 21, 2021. Other Related Party Matters Loans Receivable from Sphere Entertainment The Company’s captive insurance entity, Eden Insurance Company, Inc. (“Eden”), entered into a loan agreement with Sphere Entertainment (the “Eden Loan Agreement”), under which Eden granted Sphere Entertainment an unsecured loan bearing interest at a rate of LIBOR plus 350 basis points with a principal amount not exceeding $ 60,000 . This loan is in the form of a demand promissory note, payable immediately upon order from Eden. The loan payable to the Company held by Sphere Entertainment under the Eden F - 43 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Loan Agreement was assigned by Sphere Entertainment to the Company in connection with the MSGE Distribution, and is 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 Years 2024 and 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 , $ 3,177 and $ 2,117 related to the Eden Loan Agreement in Fiscal Years 2024, 2023 and 2022. On May 23, 2019, the Company entered into a subordinated credit agreement with TAO Group Sub-Holdings, LLC (“TAOG Sub-Holdings”), which was a subsidiary of Sphere Entertainment (the “TAO Subordinated Credit Agreement”), under which the Company granted TAOG Sub-Holdings a $ 49,000 subordinated loan. This loan had a maturity date of August 22, 2024. On June 15, 2020, the TAO Subordinated Credit Agreement was amended to provide an additional $ 22,000 of borrowing capacity and subsequently, the Company provided additional proceeds of $ 19,000 under the TAO Subordinated Credit Agreement. There were no mandatory repayments of principal until the maturity date. Subject to customary notice and minimum amount conditions, TAOG Sub-Holdings could voluntarily prepay outstanding loans under the TAO Subordinated Credit Agreement at any time, in whole or in part, without premium or penalty. Interest was due monthly in cash or paid-in-kind based on the terms of the TAO Senior Credit Agreement. On June 9, 2022, Sphere Entertainment paid the full outstanding principal amount of this TAO Subordinated Credit Agreement. The cash flows related to this loan receivable are reflected as investing activities, as these balances represent amounts loaned by the Company to Sphere Entertainment. The Company recorded related party interest income of $ 4,420 related to the TAO Subordinated Credit Agreement during the Fiscal Year 2022. Cash Management Prior to the MSGE Distribution, Sphere Entertainment used a centralized approach to cash management and financing of operations. The Company’s and Sphere Entertainment’s other su bsidiaries’ cash was available for use and was regularly “swept” historically. Cash and cash equivalents were attributed to the Company for each of the periods presented, as such cash was held in accounts legally owned by the Company. Transfers o f cash both to and from Sphere Entertainment were included as components of Sphere Entertainment’s Investment on the combined statements of equity (deficit). The main components of the net transfers (to)/from Sphere Entertainment were cash pooling/general financing activities, various expense allocations to/from Sphere Entertainment, and receivables/payables from/(to) Sphere Entertainment deemed to be effectively settled upon the distribution of the Company by Sphere Entertainment. Sphere Entertainment Investment Prior to the MSGE Distribution, certain significant balances and transactions among the Company and Sphere Entertainment and its subsidiaries, which include allocations of corporate general and administrative expenses, share-based compensation expense and other historical intercompany activities, were recorded as components of Equity (Deficit), except for the transactions noted above related to historically cash-settled loans between the Company and Sphere Entertainment. The changes in Sphere Entertainment Investment also included financing activities for capital transfers, cash sweeps, and other treasury services. As part of this activity, cash balances were swept to Sphere Entertainment regularly as part of the Sphere Entertainment cash management policy. Note 18. Additional Financial Information The following table provides a summary of the amounts recorded as cash and cash equivalents, and restricted cash: As of June 30, 2024 2023 Cash and cash equivalents $ 33,255 $ 76,089 Restricted cash 300 8,266 Total cash, cash equivalents and restricted cash $ 33,555 $ 84,355 The Company’s cash equivalents consist of money market accounts and time deposits of $ 29,501 and $ 58,132 for Fiscal Years 2024 and 2023, respectively. Cash equivalents are measured at fair value within Level I of the fair value hierarchy on a recurring basis using observable inputs that reflect quoted prices for identical assets in active markets. The Company’s restricted cash includes cash deposited in an escrow account related to general liability insurance obligations. F - 44 MADISON SQUARE GARDEN ENTERTAINMENT CORP. NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued) Prepaid expenses and other current assets consisted of the following: As of June 30, 2024 2023 Prepaid revenue sharing expense $ 54,326 $ 42,774 Other prepaid expenses 19,632 15,814 Current contract assets (a) 7,844 11,254 Inventory (b) 3,871 2,557 Other 5,128 5,163 Total prepaid expenses and other current assets $ 90,801 $ 77,562 _________________ (a) See Note 4. Revenue Recognition for more information on contract assets. (b) Inventory is primarily comprised of food and liquor for venues. Other non-current assets consisted of the following: As of June 30, 2024 2023 Unbilled lease receivable (a) $ 98,473 $ 67,325 Investments (b) 6,320 35,070 Deferred costs 3,649 4,120 Other 1,841 1,841 Total other non-current assets $ 110,283 $ 108,356 _________________ (a) Unbilled lease receivable relates to the amounts recorded under the Arena License Agreement. (b) See Note 7. Investments for more information on long-term investments. Accounts payable, accrued and other current liabilities consisted of the following: As of June 30, 2024 2023 Accounts payable $ 26,594 $ 15,628 Accrued payroll and employee related liabilities 71,145 64,532 Cash due to promoters 67,697 90,538 Accrued expenses 38,314 44,027 Total accounts payable, accrued and other current liabilities $ 203,750 $ 214,725 Other income (expense), net includes the following: Years Ended June 30, 2024 2023 2022 Gains from shares sold — DraftKings $ 1,548 $ 2,608 $ — (Loss) gain from shares sold - Townsquare ( 1,694 ) 975 — Net unrealized (loss) gain on equity investments with readily determinable fair value ( 1,096 ) 16,275 ( 49,842 ) Other ( 3,430 ) ( 2,469 ) 809 Total other (expense) income, net $ ( 4,672 ) $ 17,389 $ ( 49,033 ) Concentration of Risk As of June 30, 2024, the Company had one customer that made up 12 % of total accounts receivable, net. During Fiscal Year 2024 the Company had no customers that made up 10% of total revenues. As of June 30, 2024, approximately 4,700 full-time and part-time employees, who represent approximately 70 % of our workforce, were represented by unions. Approximately 9 % of such union employees are subject to CBAs that expired as of June 30, 2024 and approximately 12 % are subject to CBAs that will expire by June 30, 2025 if they are not extended prior thereto. F - 45