What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-02-06 compared with 2025-10-31 · 140 added, 70 removed, 167 unchanged (56% of the section changed)

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In this MD&A, there are statements concerning the future operating and future financial performance of Madison Square Garden Sports Corp.

and its direct and indirect subsidiaries (collectively, “we,” “us,” “our,” “MSG Sports,” or the “Company”), including stated annual local media rights fees for the fiscal year ended June 30, 2026.

Words such as “expects,” “anticipates,” “believes,” “estimates,” “may,” “will,” “should,” “could,” “potential,” “continue,” “intends,” “plans,” and similar words and terms used in the discussion of future operating and future financial performance identify forward-looking statements.

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This MD&A is organized as follows:

Business Overview.

This section provides a general description of our business, as well as other matters that we believe are important in understanding our results of operations and financial condition and in anticipating future trends.

Results of Operations.

This section provides an analysis of our unaudited results of operations for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

This section provides an analysis of our unaudited results of operations for the three and six months ended December 31, 2025 compared to the three and six months ended December 31, 2024.

Liquidity and Capital Resources.

This section focuses primarily on (i) the liquidity and capital resources of the Company, (ii) an analysis of the Company’s cash flows for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, and (iii) certain contractual obligations.

This section focuses primarily on (i) the liquidity and capital resources of the Company, (ii) an analysis of the Company’s cash flows for the six months ended December 31, 2025 compared to the six months ended December 31, 2024, and (iii) certain contractual obligations.

Seasonality of Our Business.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recently Issued Accounting Pronouncements and Critical Accounting Policies — Critical Accounting Policies” and in the notes to the consolidated financial statements of the Company included therein.

Business Overview

The Company owns and operates a portfolio of assets featuring some of the most recognized teams in all of sports, including the Knicks of the NBA and the Rangers of the NHL.

Both the Knicks and the Rangers play their home games at The Garden.

The Company’s other professional sports franchises include two development league teams — the Hartford Wolf Pack of the American Hockey League and the Westchester Knicks of the NBA G League.

The Company also operates a professional sports team performance center — the Madison Square Garden Training Center in Greenburgh, NY.

Factors Affecting Operating Results

Our operating results are largely dependent on the continued popularity and/or on-court or on-ice competitiveness of our Knicks and Rangers teams, which have a direct effect on ticket sales for the teams’ home games and are each team’s largest single source of revenue.

As with other sports teams, the competitive positions of our sports teams depend primarily on our ability to

develop, obtain and retain talented players, for which we compete with other professional sports teams.

A significant factor in our ability to attract and retain talented players is player compensation.

The Company’s operating results reflect the impact of high costs for player salaries (including NBA luxury tax, if any) and salaries of non-player team personnel.

In addition, we have incurred significant charges for costs associated with transactions relating to players on our sports teams for season-ending and career-ending injuries and for trades, waivers and contract terminations of players and other team personnel, including team executives.

Waiver and termination costs reflect our efforts to improve the competitiveness of our sports teams.

These transactions can result in significant charges as the Company recognizes the estimated ultimate costs of these events in the period in which they occur, although amounts due to these individuals are generally paid over their remaining contract terms.

We expect to continue to pursue opportunities to improve the overall quality of our sports teams and our efforts may result in continued significant expenses and charges.

Such expenses and charges may result in future operating losses although it is not possible to predict their timing or amount.

Our performance has been, and may in the future be, impacted by work stoppages.

See “Part I — Item 1A.

Risk Factors — Economic and Business Relationship Risks —Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations.” in our 2025 Form 10-K.

In addition, our future performance is also dependent on general economic conditions, in particular those in the New York City metropolitan area, and the effect of these conditions on our customers.

An economic downturn could adversely affect our business and results of operations as it may lead to lower demand for suite licenses and tickets to the games of our sports teams, which would also negatively affect merchandise and concession sales, as well as decrease levels of sponsorship and venue signage revenues.

Amendments to Media Rights Agreements

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Concurrent with the amendments to the media rights agreements, MSG Networks issued penny warrants to the Company exercisable for 19.9% of the equity interests in MSG Networks.

As a result of the amendments to the media rights agreements, media rights fees revenues for the three months ended September 30, 2025 have been recorded at the applicable reduced rate described above.

As a result of the amendments to the media rights agreements, media rights fees revenues for the three and six months ended December 31, 2025 have been recorded at the applicable reduced rate described above.

The Company also expects to record media rights fees reflecting the reduced rates described above in future periods.

Knicks and Rangers Home Games at The Garden

The Company’s operating results are impacted by the number of home games the Knicks and the Rangers play at The Garden during each quarter of the fiscal year.

For the three and six months ended December 31, 2025, the Knicks and the Rangers played a combined four additional home games at The Garden during the current year periods as compared to the prior year periods.

The Knicks played 20 games at The Garden during the three and six months ended December 31, 2025 as compared to 17 games during the prior year periods.

The Rangers played 19 games at The Garden during the three months ended December 31, 2025 and 21 games at The Garden during the six months ended December 31, 2025 as compared to 18 and 20 games, respectively, during the prior year periods.

Results of Operations

Comparison of the three months ended September 30, 2025 versus the three months ended September 30, 2024

Comparison of the three and six months ended December 31, 2025 versus the three and six months ended December 31, 2024

The table below sets forth, for the periods presented, certain historical financial information.

Three Months Ended September 30, Change

Three Months Ended December 31, Change Six Months Ended December 31, Change

2025 2024 $ % 2025 2024 $ %

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Depreciation and amortization 790 791 (1) — % 1,601 1,573 28 2 %

Operating loss (27,425) (8,273) (19,152) NM

Operating income (loss) 22,180 13,315 8,865 67 % (5,245) 5,042 (10,287) NM

Other income (expense):

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Interest expense (6,210) (5,587) (623) 11 % (11,801) (11,642) (159) 1 %

Miscellaneous income (expense), net 15,085 (1,126) 16,211 NM

Loss before income taxes (17,353) (14,590) (2,763) (19) %

Income tax benefit 8,555 7,048 1,507 21 %

Net loss $ (8,798) $ (7,542) $ (1,256) (17) %

Miscellaneous (expense) income, net (1,506) (6,609) 5,103 77 % 13,579 (7,735) 21,314 NM

Income (loss) before income taxes 14,960 1,809 13,151 NM (2,393) (12,781) 10,388 81 %

Income tax (expense) benefit (6,717) (698) (6,019) NM 1,838 6,350 (4,512) (71) %

Net income (loss) $ 8,243 $ 1,111 $ 7,132 NM $ (555) $ (6,431) $ 5,876 91 %

______________

NM - Percentage is not meaningful

Revenues decreased $13,853, or 26%, to $39,454 for the three months ended September 30, 2025 as compared to the prior year period.

The n et decrease was attributable to the following:

Decrease in revenues from league distributions $ (11,429)

Revenues increased $45,665, or 13%, to $403,424 for the three months ended December 31, 2025 as compared to the prior year period.

Revenues increased $31,812 , or 8% , to $442,878 for the six months ended December 31, 2025 as compared to the prior year period.

The n et increases were attributable to the following:

Months Months

Increase in pre/regular season ticket-related revenues $ 25,644 $ 25,316

Increase in revenues from league distributions 18,603 7,174

Increase in suite revenues 11,808 11,905

Increase in sponsorship and signage revenues 7,229 6,598

Increase in pre/regular season food, beverage and merchandise sales 4,048 4,374

Decrease in revenues from local media rights fees (21,939) (24,192)

Other net decreases (171)

The decrease in revenues from league distributions for the three months ended September 30, 2025 was primarily due to a decrease in certain league distributions unrelated to national media rights fees.

The decrease in revenues from local media rights fees for the three months ended September 30, 2025 was primarily due to reduced local media rights fees as a result of amendments to the Knicks’ and Rangers’ local media rights agreements with MSG Networks entered into in the fourth quarter of fiscal year 2025, and to a lesser extent, a reduction in rights fees due to a decrease in the number of games exclusively available to MSG Networks during the current fiscal year as compared to the prior fiscal year.

Stated annual local media rights fees, subject to adjustments in certain circumstances, including if the Company does not make available a minimum number of games in the year, after consideration of the media rights amendments are $139,237 for the year ending June 30, 2026 as compared to $162,939 in stated annual local media rights fees for the fiscal year ended June 30, 2025.

Other net increase 272 637

$ 45,665 $ 31,812

The increases in pre/regular season ticket-related revenues for the three and six months ended December 31, 2025 were primarily due to the Knicks and the Rangers playing a combined four additional home games at The Garden during the current year periods as compared to the prior year periods and higher average per-game revenue.

The increases in revenues from league distributions for the three and six months ended December 31, 2025 were primarily due to increased rights fees under the NBA’s new national media rights agreements, which began with the 2025-26 NBA regular season, in the current year periods.

In addition, for the six months ended December 31, 2025, the increase was partially offset by a decrease in certain league distributions unrelated to national media rights fees.

The increases in suite revenues for the three and six months ended December 31, 2025 were primarily due to higher net sales of suite products and the Knicks and the Rangers playing a combined four additional home games at The Garden during the current year periods as compared to the prior year periods.

The increases in sponsorship and signage revenues for the three and six months ended December 31, 2025 were primarily due to higher net sales of existing sponsorship and signage inventory and the Knicks and the Rangers playing a combined four additional home games at The Garden during the current year periods as compared to the prior year periods.

The increases in pre/regular season food, beverage and merchandise sales for the three and six months ended December 31, 2025 were primarily due to higher online sales of merchandise, the Knicks and the Rangers playing a combined four additional home games at The Garden during the current year periods as compared to the prior year periods, and higher average per-game revenue.

Merchandise sales for the three and six months ended December 31, 2025 included the positive impact of new Rangers’ jersey launches.

The decreases in revenues from local media rights fees for the three and six months ended December 31, 2025 were primarily due to reduced local media rights fees as a result of amendments to the Knicks’ and Rangers’ local media rights agreements with MSG Networks entered into in the fourth quarter of fiscal year 2025, and, to a lesser extent, a reduction in rights fees due to a decrease in the number of games exclusively available to MSG Networks during the current fiscal year as compared to the prior fiscal year.

Stated annual local media rights fees, subject to adjustments in certain circumstances, including if the Company does not make available a minimum number of games in the year, after consideration of the media rights amendments are $139,237 for the fiscal year ending June 30, 2026 as compared to $162,939 in stated annual local media rights fees for the fiscal year ended June 30, 2025.

Direct operating expenses

Direct operating expenses increased $68, or 1%, to $8,279 for the three months ended September 30, 2025 as compared to the prior year period.

The net increase was attributable to the following:

Increase in net provisions for certain team personnel transactions $ 1,549

Decrease in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax (2,428)

Other net increases 947

Net provisions for certain team personnel transactions for the three months ended September 30, 2025 and 2024 reflect provisions recorded for waiver/contract terminations of $2,382 and $833, respectively.

The decrease in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for the three months ended September 30, 2025 was due to the net impact of adjustments to prior seasons’ revenue sharing expense (net of escrow).

Direct operating expenses increased $35,636, or 13%, to $311,389 for the three months ended December 31, 2025 as compared to the prior year period.

Direct operating expenses increased $35,704 , or 13%, for the six months ended December 31, 2025 as compared to the prior year period.

The net increases were attributable to the following:

Months Months

Increase in team personnel compensation $ 18,792 $ 18,792

Increase in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax 12,989 10,562

Increase in other team operating expenses 5,772 6,557

Increase in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden 3,300 3,300

Increase in pre/regular season expense associated with merchandise sales 2,369 2,530

Decrease in net provisions for certain team personnel transactions (7,586) (6,037)

$ 35,636 $ 35,704

The increases in team personnel compensation for the three and six months ended December 31, 2025 were primarily due to changes in the Knicks and the Rangers rosters.

Three Months Ended Six Months Ended

December 31, December 31,

2025 2024 Increase 2025 2024 Increase

Net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax $ 51,446 $ 38,457 $ 12,989 $ 51,979 $ 41,417 $ 10,562

The increases in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for the three and six months ended December 31, 2025 were primarily due to higher provisions for league revenue sharing expense (net of escrow and excluding playoffs) and higher NBA luxury tax expense.

In addition, for the six months ended December 31, 2025, the increase was partially offset by the net impact of adjustments to prior seasons’ revenue sharing expense (net of escrow).

The actual net provisions for league revenue sharing expense (net of escrow and excluding playoffs) for the 2025-26 seasons may vary significantly from the recorded provisions based on actual operating results for each league and all teams within each league for the season and other factors.

Other team operating expenses primarily consist of expenses associated with day-to-day operations, including variable day-of-event costs incurred at The Garden, team travel, player insurance, and league assessments.

The increases in other team operating expenses for the three and six months ended December 31, 2025 were primarily due to higher average per-game expenses and the Knicks and the Rangers playing a combined four additional home games at The Garden during the current year periods as compared to the prior year periods.

The increases in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden for the three and six months ended December 31, 2025 were a result of the Knicks and the Rangers playing a combined four additional home games at The Garden during the current year periods as compared to the prior year periods.

Recognition of operating lease costs is recorded on a straight-line basis over the term of the applicable agreement based upon the value of total future payments under the arrangement.

Operating lease costs associated with the Knicks and the Rangers playing home games at The Garden includes operating lease costs of (i) $20,185 and $21,064 of expense paid in cash for the three and six months ended December 31, 2025, respectively, and $17,447 and $18,301 of expense paid in cash for the three and six months ended December 31, 2024, respectively, and (ii) a non-cash expense of $9,896 and $10,327 for the three and six months ended December 31, 2025, respectively, and $9,334 and $9,791 for the three and six months ended December 31, 2024, respectively.

The increases in pre/regular season expense associated with merchandise sales for the three and six months ended December 31, 2025 were primarily due to higher online sales of merchandise, the Knicks and the Rangers playing a combined four additional home games at The Garden during the current year periods as compared to the prior year periods, and higher average per-game revenue.

Net provisions for certain team personnel transactions were as follows:

Three Months Ended Six Months Ended

December 31, December 31,

2025 2024 (Decrease)

Increase 2025 2024 (Decrease) Increase

Player trades $ — $ 7,586 $ (7,586) $ — $ 7,586 $ (7,586)

Waivers/contract terminations — — — 2,382 833 1,549

Net provisions for certain team personnel transactions $ — $ 7,586 $ (7,586) $ 2,382 $ 8,419 $ (6,037)

Selling, general and administrative expenses

Selling, general and administrative expenses primarily consist of (i) administrative costs, including compensation, costs under the Services Agreement, professional fees, and operating lease costs, (ii) fees related to the Sponsorship Sales and Service Representation Agreements, and (iii) sales and marketing costs.

Selling, general and administrative expenses primarily consist of (i) administrative costs, including compensation, costs under the Services Agreement with MSG Entertainment (the “Services Agreement”), professional fees, and operating lease costs, (ii) fees related to the Sponsorship Sales and Service Representation Agreements, and (iii) sales and marketing costs.

Selling, general and administrative expenses generally do not fluctuate in line with changes in the Company’s revenues and direct operating expenses.

Selling, general and administrative expenses for the three months ended September 30, 2025 increased $5,202, or 10%, to $57,789 as compared to the prior year period driven by (i) higher costs related to the Services Agreement of $1,614, (ii) higher operating lease costs of $1,222, (iii) higher employee compensation and related benefits of $1,008, and (iv) higher other general and administrative expenses.

Operating loss

Operating loss for the three months ended September 30, 2025 increased $19,152 to $27,425 as compared to the prior year period primarily due to lower revenues and higher selling, general and administrative expenses.

Selling, general and administrative expenses for the three months ended December 31, 2025 increased $1,165, or 2%, to $69,065 as compared to the prior year period driven by (i) higher employee compensation and related benefits of $2,096, (ii) higher costs related to the Services Agreement of $1,424, (iii) higher sales and marketing costs of $1,227, and (iv) higher other general and administrative expenses, partially offset by the timing of lower operating lease costs of $2,240, and lower professional fees of $2,070.

Selling, general and administrative expenses for the six months ended December 31, 2025 increased $6,367, or 5%, to $126,854 as compared to the prior year period driven by (i) higher employee compensation and related benefits of $3,103, (ii) higher costs related to the Services Agreement of $3,038, (iii) higher sales and marketing costs of $1,389, and (iv) higher other general and administrative expenses, partially offset by lower professional fees of $1,982.

Operating income (loss)

Operating income for the three months ended December 31, 2025 increased $8,865, or 67%, to $22,180 as compared to the prior year period primarily due to higher revenues, partially offset by higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses.

Operating income (loss) for the six months ended December 31, 2025 decreased $10,287 to an operating loss of $5,245 as compared to the prior year period driven by higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, partially offset by higher revenues.

Interest income

Interest income for the three months ended September 30, 2025 decreased $286, or 33%, to $578 as compared to the prior year period primarily due to lower average interest rates and lower average cash balances in the current year period.

Interest income for the three months ended December 31, 2025 decreased $194, or 28%, to $496 as compared to the prior year period.

Interest income for the six months ended December 31, 2025 decreased $480, or 31%, to $1,074 as compared to the prior year period.

Interest expense

Interest expense for the three months ended September 30, 2025 decreased $464, or 8%, to $5,591 as compared to the prior year period primarily due to lower average interest rates and lower average borrowings under the Knicks Revolving Credit Facility in the current year period, partially offset by higher other interest expense.

Miscellaneous income (expense), net

Miscellaneous income (expense), net for the three months ended September 30, 2025 reflected net income of $15,085 and miscellaneous income (expense), net for the three months ended September 30, 2024 reflected net expense of $1,126.

The increase in miscellaneous income (expense), net relates to changes in fair value in the Company’s investments.

Interest expense for the three months ended December 31, 2025 increased $623, or 11%, to $6,210 as compared to the prior year period.

Interest expense for the six months ended December 31, 2025 increased $159, or 1%, to $11,801 as compared to the prior year period.

Miscellaneous (expense) income, net

Miscellaneous (expense) income, net for the three months ended December 31, 2025 and 2024 reflected net expense of $1,506 and $6,609, respectively.

The decrease in miscellaneous (expense) income, net relates to changes in fair value in the Company’s investments.

Miscellaneous (expense) income, net for the six months ended December 31, 2025 reflected net income of $13,579 and miscellaneous (expense) income, net for the six months ended December 31, 2024 reflected net expense of $7,735.

The increase in miscellaneous (expense) income, net relates to changes in fair value in the Company’s investments.

See Note 16 to the consolidated financial statements included in “Part I — Item 1.

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See “Item 1A.

Risk Factors—Operational Risks—We Are Subject to Governmental Regulation, Which Can Change, and Any

Failure to Comply With These Regulations May Have a Material Negative Effect on Our Business and Results of Operations” in our 2025 Form 10-K.

Adjusted operating loss

Risk Factors—Operational Risks—We Are Subject to Governmental Regulation, Which Can Change, and Any Failure to Comply With These Regulations May Have a Material Negative Effect on Our Business and Results of Operations” in our 2025 Form 10-K.

Adjusted operating income (loss)

The Company evaluates performance based on several factors, of which the key financial measure is operating income (loss) excluding (i) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits, (iv) gains or losses on sales or dispositions of businesses, (v) the impact of purchase accounting adjustments related to business acquisitions, and (vi) gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan, which is referred to as adjusted operating income (loss), a non-GAAP measure.

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Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze the Company’s performance.

The Company uses revenues and adjusted operating income (loss) measures as the most important indicators of its business performance and evaluates management’s effectiveness with specific reference to these indicators.

The Company uses revenues and adjusted operating income (loss) measures as the most important indicators of its business performance and evaluates management’s effectiveness

with specific reference to these indicators.

Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP.

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The Company has presented the components that reconcile operating income (loss), the most directly comparable GAAP financial measure, to adjusted operating income (loss).

The following are the reconciliations of operating loss to adjusted operating loss for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30, Change

The following are the reconciliations of operating income (loss) to adjusted operating income for the three and six months ended December 31, 2025 and 2024:

Three Months Ended December 31, Change Six Months Ended December 31, Change

2025 2024 $ % 2025 2024 $ %

Operating loss $ (27,425) $ (8,273) $ (19,152) NM

Operating income (loss) $ 22,180 $ 13,315 $ 8,865 67 % $ (5,245) $ 5,042 $ (10,287) NM

Depreciation and amortization 790 791 1,601 1,573

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Remeasurement of deferred compensation plan liabilities 516 142 1,479 1,107

Adjusted operating loss $ (20,807) $ (2,258) $ (18,549) NM

For the three months ended September 30, 2025, adjusted operating loss increased $18,549 to $20,807 as compared to the prior year period.

The increase in adjusted operating loss was primarily due to lower revenues and higher selling, general and administrative expenses.

Adjusted operating income $ 29,674 $ 20,239 $ 9,435 47 % $ 8,867 $ 17,981 $ (9,114) (51) %

For the three months ended December 31, 2025, adjusted operating income increased $9,435, or 47%, to $29,674 as compared to the prior year period.

The increase in adjusted operating income was primarily due to higher revenues, partially offset by higher direct operating expenses.

For the six months ended December 31, 2025, adjusted operating income decreased $9,114, or 51%, to $8,867 as compared to the prior year period.

The decrease in adjusted operating income was primarily due to higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, partially offset by higher revenues.

Liquidity and Capital Resources

Our primary sources of liquidity are cash and cash equivalents, cash flow from operations and available borrowing capacity under our credit facilities.

On November 6, 2025, the Company amended and extended the 2021 Knicks Credit Agreement and the 2021 Rangers Credit Agreement.

See Note 12 to the consolidated financial statements included in “Part I - Item 1.

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Our principal uses of cash include the operation of our businesses, working capital-related items, the repayment of outstanding debt, repurchases of shares of the Company’s Class A Common Stock, dividends, if declared, and investments.

As of September 30, 2025, we had $48,634 in C ash and cash equivale nts.

In addition, as of September 30, 2025, the Company’s deferred revenue obligations were $302,021, net of billed, but not yet collected deferred revenue.

This balance is primarily comprised of obligations in connection with tickets, suites, sponsorships, and local media rights.

As of December 31, 2025, we had $81,302 in C ash and cash equivale nts.

In addition, as of December 31, 2025, the Company’s deferred revenue obligations were $205,141, net of billed, but not yet collected deferred revenue.

This balance is primarily comprised of obligations in connection with tickets and suites.

We regularly monitor and assess our ability to meet our net funding and investing requirements.

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and global economic and market conditions could adversely impact its ability to do so at that time.

We believe we have sufficient liquidity, including approximately $48,634 in Cash and cash equivalents as of September 30, 2025, along with $258,000 of additional available borrowing capacity under existing credit facilities (as of September 30, 2025), to fund our operations and satisfy any obligations for the foreseeable future.

If MSG Networks were to experience a bankruptcy or insolvency event (as set forth in each of the credit facilities), we would be prevented, absent a cure or waiver, from making borrowings under our revolving credit facilities.

The Rangers Credit Agreement also includes an event of default upon a bankruptcy or insolvency event with respect to a material media rights counterparty, including MSG Networks.

There were no borrowings outstanding under the Rangers Revolving Credit Facility as of September 30, 2025.

See “Item 1A.

Risk Factors — Economic and Business Relationship Risks — Certain of Our Subsidiaries Have Incurred Substantial Indebtedness, and the Occurrence of an Event of Default Under Our Subsidiaries’ Credit Facilities or Our Inability to Repay Such Indebtedness When Due Could Substantially Impair the Assets of Those Subsidiaries and Have a Negative Effect on Our Business.

” in our 2025 Form 10-K.

We believe we have sufficient liquidity, including approximately $81,302 in Cash and cash equivalents as of December 31, 2025, along with $408,000 of additional available borrowing capacity under existing credit facilities (as of December 31, 2025), to fund our operations and satisfy any obligations for the foreseeable future.

On January 5, 2026, the Company made a principal repayment of $7,500 under the Rangers NHL Advance Agreement and on February 3, 2026, the Company made a principal repayment of $25,000 under the Knicks Revolving Credit Facility.

Financing Agreements and Stock Repurchases

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Cash Flow Discussion

The following table summarizes the Company’s cash flow activities for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30,

The following table summarizes the Company’s cash flow activities for the six months ended December 31, 2025 and 2024:

Six Months Ended December 31,

Net loss $ (555) $ (6,431)

Adjustments to reconcile net loss to net cash used in operating activities:

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

Changes in working capital assets and liabilities (51,818) 31,017

Net cash used in operating activities (84,954) (26,158)

Net cash (used in) provided by operating activities (52,509) 35,621

Net cash used in investing activities (2,743) (2,302)

Net cash used in financing activities (16,634) (12,373)

Net decrease in cash, cash equivalents and restricted cash $ (95,912) $ (36,823)

Net (decrease) increase in cash, cash equivalents and restricted cash $ (71,886) $ 20,946

Operating Activities

Net cash used in operating activities for the three months ended September 30, 2025 increased by $58,796 to $84,954 as compared to the prior year period.

The increase in net cash used in operating activities was primarily due to changes in working capital assets and liabilities and the decrease in net loss adjusted for non-cash items.

The changes in working capital assets and liabilities were primarily driven by (i) an increase in net related party receivables of $29,339 primarily due to the timing of collections related to the Company’s Arena License Agreements., (ii) a higher increase in prepaid expenses and other assets of $16,478 primarily due to higher prepayments related to team personnel compensation and income taxes in the current year period, and (iii) a higher increase in accounts receivable, net, of $5,242 primarily due to the lack of receipts related to NBA luxury tax in the current year period, partially offset by higher collections of sponsorship sales in the current year period.

These changes were partially offset by a higher increase in deferred revenue of $8,247 primarily due to higher collections of ticket sales in advance of recognition in the current year period.

Net cash used in operating activities for the six months ended December 31, 2025 was $52,509 as compared to net cash provided by operating activities in the prior year period of $35,621.

This change was primarily due to changes in working capital assets and liabilities and the change in net loss adjusted for non-cash items.

The changes in working capital assets and liabilities were primarily driven by (i) a lower increase in deferred revenue of $33,994 primarily due to the timing of recognition of ticket-related and sponsorship and signage revenues, as well as the impact of lower revenues from local media rights fees, including the impact of amendments to the media rights agreements, (ii) an increase in net related party receivables of $29,054 primarily due to the timing of collections related to the Company’s Arena License Agreements and sponsorship sales and service representation agreements, (iii) a higher increase in prepaid expenses and other assets of $23,205 primarily due to higher prepayments related to team personnel compensation and income taxes in the current year period and (iv) a higher increase in accounts receivable, net, of $18,715 primarily due to the lack of receipts related to NBA luxury tax in the current year period and the timing of collections of sponsorship sales in the current year period.

These changes were partially offset by a lower decrease in accrued and other liabilities of $14,022 primarily due to higher accruals for employee compensation in the current year period, partially offset by the impact of NBA luxury tax payments in the current year period.

Investing Activities

Net cash used in investing activities for the three months ended September 30, 2025 increased by $685 to $1,848 as compared to the prior year period primarily due to higher purchases of investments in the current year period.

Net cash used in investing activities for the six months ended December 31, 2025 increased by $441 to $2,743 as compared to the prior year period primarily due to higher capital expenditures and higher purchases of investments in the current year period.

Financing Activities

Net cash used in financing activities for the three months ended September 30, 2025 decreased by $392 to $9,110 as compared to the prior year period primarily due to lower taxes paid in lieu of shares issued for equity-based compensation and lower dividends paid in the current year period.

Net cash used in financing activities for the six months ended December 31, 2025 increased by $4,261 to $16,634 as compared to the prior year period primarily due to payments for financing costs in the current year period, partially offset by lower taxes paid in lieu of shares issued for equity-based compensation in the current year period.

Seasonality of Our Business

7 unchanged sentences

There have been no material changes to the Company’s critical accounting policies from those set forth in our 2025 Form 10-K.

The carrying amount of goodwill as of September 30, 2025 was $226,523.

The carrying amount of goodwill as of December 31, 2025 was $226,523.

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.

19 unchanged sentences

The Company performed its most recent annual impairment test of goodwill during the first quarter of fiscal year 2026, and there was no impairment of goodwill.

Based on this impairment test, the Company concluded it was not more likely than not

that the fair value of the reporting unit was less than its carrying amount.

Based on this impairment test, the Company concluded it was not more likely than not that the fair value of the reporting unit was less than its carrying amount.

Identifiable Indefinite-Lived Intangible Assets

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 following table sets forth the amount of identifiable indefinite-lived intangible assets reported in the Company’s consolidated balance sheet as of September 30, 2025:

The following table sets forth the amount of identifiable indefinite-lived intangible assets reported in the accompanying consolidated balance sheet as of December 31, 2025:

Sports franchises $ 102,564

1 unchanged sentence

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.

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) forgoes the qualitative assessment entirely.

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis