Item 1. Financial Statements
Item 1. Financial Statements
MADISON SQUARE GARDEN SPORTS CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
December 31,
2025 June 30,
2025
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 81,302 $ 144,617
Restricted cash — 8,571
Accounts receivable, net of allowance for doubtful accounts of $ 0 as of December 31, 2025 and June 30, 2025
90,184 25,855
Net related party receivables 20,375 3,582
Prepaid expenses 82,818 43,417
Other current assets 24,881 25,053
Total current assets 299,560 251,095
Property and equipment, net of accumulated depreciation and amortization of $ 54,294 and $ 53,635 as of December 31, 2025 and June 30, 2025, respectively
28,597 28,962
Right-of-use lease assets 750,978 760,456
Indefinite-lived intangible assets 103,644 103,644
Goodwill 226,523 226,523
Investments 72,365 54,720
Deferred tax assets, net 36,644 34,821
Other assets 26,429 12,753
Total assets $ 1,544,740 $ 1,472,974
See accompanying notes to consolidated financial statements.
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MADISON SQUARE GARDEN SPORTS CORP.
CONSOLIDATED BALANCE SHEETS (Continued)
(in thousands, except per share data)
December 31,
2025 June 30,
2025
(Unaudited)
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable $ 7,977 $ 9,336
Net related party payables 4,986 4,807
Debt 24,000 24,000
Accrued liabilities:
Employee-related costs 99,300 98,924
League-related accruals 192,235 196,567
Other accrued liabilities 8,119 13,093
Operating lease liabilities, current 55,875 52,618
Deferred revenue 249,117 164,178
Total current liabilities 641,609 563,523
Long-term debt 267,000 267,000
Operating lease liabilities, noncurrent 841,014 841,050
Other employee-related costs 76,591 82,178
Deferred revenue, noncurrent 606 662
Total liabilities 1,826,820 1,754,413
Commitments and contingencies (see Note 11)
Madison Square Garden Sports Corp. Stockholders’ Equity:
Class A Common Stock, par value $ 0.01 , 120,000 shares authorized; 19,540 and 19,488 shares outstanding as of December 31, 2025 and June 30, 2025, respectively
204 204
Class B Common Stock, par value $ 0.01 , 30,000 shares authorized; 4,530 shares outstanding as of December 31, 2025 and June 30, 2025
45 45
Preferred stock, par value $ 0.01 , 15,000 shares authorized; none outstanding as of December 31, 2025 and June 30, 2025
— —
Additional paid-in capital 6,598 15,348
Treasury stock, at cost, 908 and 960 shares as of December 31, 2025 and June 30, 2025, respectively
( 149,858 ) ( 158,543 )
Accumulated deficit ( 138,175 ) ( 137,596 )
Accumulated other comprehensive loss ( 894 ) ( 897 )
Total equity ( 282,080 ) ( 281,439 )
Total liabilities and equity $ 1,544,740 $ 1,472,974
See accompanying notes to consolidated financial statements.
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MADISON SQUARE GARDEN SPORTS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
Revenues (a)
$ 403,424 $ 357,759 $ 442,878 $ 411,066
Operating expenses:
Direct operating expenses (b)
311,389 275,753 319,668 283,964
Selling, general and administrative expenses (c)
69,065 67,900 126,854 120,487
Depreciation and amortization 790 791 1,601 1,573
Operating income (loss) 22,180 13,315 ( 5,245 ) 5,042
Other income (expense):
Interest income 496 690 1,074 1,554
Interest expense ( 6,210 ) ( 5,587 ) ( 11,801 ) ( 11,642 )
Miscellaneous (expense) income, net ( 1,506 ) ( 6,609 ) 13,579 ( 7,735 )
( 7,220 ) ( 11,506 ) 2,852 ( 17,823 )
Income (loss) before income taxes 14,960 1,809 ( 2,393 ) ( 12,781 )
Income tax (expense) benefit ( 6,717 ) ( 698 ) 1,838 6,350
Net income (loss) $ 8,243 $ 1,111 $ ( 555 ) $ ( 6,431 )
Basic earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 0.34 $ 0.05 $ ( 0.02 ) $ ( 0.27 )
Diluted earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 0.34 $ 0.05 $ ( 0.02 ) $ ( 0.27 )
Weighted-average number of common shares outstanding:
Basic 24,165 24,100 24,141 24,074
Diluted 24,223 24,167 24,141 24,074
_________________
(a) Includes revenues from related parties of $ 58,057 and $ 80,217 for the three months ended December 31, 2025 and 2024, respectively, and $ 64,817 and $ 89,121 for the six months ended December 31, 2025 and 2024, respectively.
(b) Includes net charges from related parties of $ 45,151 and $ 38,757 for the three months ended December 31, 2025 and 2024, respectively, and $ 47,605 and $ 41,052 for the six months ended December 31, 2025 and 2024, respectively.
(c) Includes net charges from related parties of $ 20,344 and $ 19,693 for the three months ended December 31, 2025 and 2024, respectively, and $ 35,076 and $ 31,555 for the six months ended December 31, 2025 and 2024, respectively.
See accompanying notes to consolidated financial statements.
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MADISON SQUARE GARDEN SPORTS CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(in thousands)
Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
Net income (loss) $ 8,243 $ 1,111 $ ( 555 ) $ ( 6,431 )
Other comprehensive income, before income taxes:
Pension plans:
Amounts reclassified from accumulated other comprehensive loss:
Amortization of actuarial loss included in net periodic benefit cost 2 20 4 40
Other comprehensive income, before income taxes 2 20 4 40
Income tax expense related to items of other comprehensive income — ( 7 ) ( 1 ) ( 13 )
Other comprehensive income, net of income taxes 2 13 3 27
Comprehensive income (loss) $ 8,245 $ 1,124 $ ( 552 ) $ ( 6,404 )
See accompanying notes to consolidated financial statements.
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MADISON SQUARE GARDEN SPORTS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended December 31,
2025 2024
Cash flows from operating activities:
Net loss $ ( 555 ) $ ( 6,431 )
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization 1,601 1,573
Benefit from deferred income taxes ( 1,824 ) ( 10,125 )
Share-based compensation expense 11,032 10,259
Unrealized (gain) loss on equity investments with readily determinable fair value and warrants ( 16,353 ) 5,831
Other non-cash adjustments 5,408 3,497
Change in assets and liabilities:
Accounts receivable, net ( 64,329 ) ( 45,614 )
Net related party receivables ( 16,793 ) 12,261
Prepaid expenses and other assets ( 49,109 ) ( 25,904 )
Investments ( 2,437 ) ( 2,321 )
Accounts payable ( 1,351 ) ( 3,499 )
Net related party payables 189 747
Accrued and other liabilities ( 15,570 ) ( 29,592 )
Deferred revenue 84,883 118,877
Operating lease right-of-use assets and lease liabilities 12,699 6,062
Net cash (used in) provided by operating activities ( 52,509 ) 35,621
Cash flows from investing activities:
Capital expenditures ( 1,228 ) ( 892 )
Purchases of investments ( 1,515 ) ( 1,410 )
Net cash used in investing activities ( 2,743 ) ( 2,302 )
Cash flows from financing activities:
Dividends paid ( 472 ) ( 600 )
Taxes paid in lieu of shares issued for equity-based compensation ( 11,097 ) ( 11,773 )
Payments for financing costs ( 5,065 ) —
Net cash used in financing activities ( 16,634 ) ( 12,373 )
Net (decrease) increase in cash, cash equivalents and restricted cash ( 71,886 ) 20,946
Cash, cash equivalents and restricted cash at beginning of period 153,188 94,907
Cash, cash equivalents and restricted cash at end of period $ 81,302 $ 115,853
Non-cash investing and financing activities:
Capital expenditures incurred but not yet paid $ 36 $ 40
See accompanying notes to consolidated financial statements.
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MADISON SQUARE GARDEN SPORTS CORP.
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(in thousands)
Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
Common Stock Issued $ 249 $ 249 $ 249 $ 249
Additional Paid-In Capital
Beginning Balance 4,403 8,353 15,348 19,079
Share-based compensation 6,188 5,991 11,032 10,259
Tax withholding associated with shares issued for equity-based compensation ( 2,327 ) ( 2,711 ) ( 11,097 ) ( 10,662 )
Common stock issued under stock incentive plans ( 1,666 ) ( 1,857 ) ( 8,685 ) ( 8,900 )
Ending Balance 6,598 9,776 6,598 9,776
Treasury Stock
Beginning Balance ( 151,524 ) ( 162,504 ) ( 158,543 ) ( 169,547 )
Common stock issued under stock incentive plans 1,666 1,857 8,685 8,900
Ending Balance ( 149,858 ) ( 160,647 ) ( 149,858 ) ( 160,647 )
Accumulated Deficit
Beginning Balance ( 146,410 ) ( 122,689 ) ( 137,596 ) ( 115,139 )
Net income (loss) 8,243 1,111 ( 555 ) ( 6,431 )
Dividends declared ($ 7.00 per share)
( 8 ) ( 11 ) ( 24 ) ( 19 )
Ending Balance ( 138,175 ) ( 121,589 ) ( 138,175 ) ( 121,589 )
Accumulated Other Comprehensive Loss
Beginning Balance ( 896 ) ( 938 ) ( 897 ) ( 952 )
Other comprehensive income 2 13 3 27
Ending Balance ( 894 ) ( 925 ) ( 894 ) ( 925 )
Total Equity $ ( 282,080 ) $ ( 273,136 ) $ ( 282,080 ) $ ( 273,136 )
See accompanying notes to consolidated financial statements.
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
All amounts included in the following Notes to Consolidated Financial Statements are presented in thousands, except per share data or as otherwise noted.
Note 1. Description of Business and Basis of Presentation
Description of Business
Madison Square Garden Sports Corp. (together with its subsidiaries, collectively, “we,” “us,” “our,” “MSG Sports,” or the “Company”) owns and operates a portfolio of assets featuring some of the most recognized teams in all of sports, including the New York Knickerbockers (“Knicks”) of the National Basketball Association (“NBA”) and the New York Rangers (“Rangers”) of the National Hockey League (“NHL”). Both the Knicks and the Rangers play their home games in Madison Square Garden Arena (“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. These professional sports franchises are collectively referred to herein as the “sports teams” or the “teams.” The Company also operates a professional sports team performance center — the Madison Square Garden Training Center in Greenburgh, NY.
The Company operates and reports financial information in one segment. The Company’s decision to organize as one operating segment and report in one 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 was originally incorporated in Delaware on March 4, 2015 as an indirect, wholly-owned subsidiary of MSG Networks Inc. (“MSG Networks”). All the outstanding common stock of the Company was distributed to MSG Networks stockholders (the “MSGS Distribution”) on September 30, 2015.
On April 17, 2020, the Company distributed all of the outstanding common stock of Sphere Entertainment Co. (“Sphere Entertainment”) to its stockholders (the “Sphere Distribution”).
On July 9, 2021, MSG Networks merged with a subsidiary of Sphere Entertainment and became a wholly-owned subsidiary of Sphere Entertainment. Accordingly, agreements between the Company and MSG Networks are now effectively agreements with Sphere Entertainment on a consolidated basis.
On June 10, 2025, the Company completed its conversion from a corporation organized under the laws of the State of Delaware to a corporation organized under the laws of the State of Nevada.
Unless the context otherwise requires, all references to Madison Square Garden Entertainment Corp. (“MSG Entertainment”), Sphere Entertainment and MSG Networks refer to such entity, together with its direct and indirect subsidiaries.
Basis of Presentation
The accompanying unaudited consolidated interim financial statements (referred to as the “Financial Statements” herein) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and Article 10 of Regulation S-X of the Securities and Exchange Commission for interim financial information, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (“fiscal year 2025”). Certain information and note disclosures normally included in the annual financial statements have been condensed or omitted from these Financial Statements. The Financial Statements presented in this Quarterly Report on Form 10-Q are unaudited; however, in the opinion of management, the Financial Statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. The results of operations for the periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full fiscal year. The dependence of MSG Sports on revenues from its NBA and NHL sports teams generally means it earns a disproportionate share of its revenues in the second and third quarters of the Company’s fiscal year, which is when the majority of the sports teams’ games are played.
Reclassifications
Certain reclassifications have been made in order to conform to the current period’s presentation and relate to the combination of Defined benefit obligations and Other employee-related costs in non-current liabilities in the consolidated balance sheets.
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 2. Accounting Policies
Principles of Consolidation
The consolidated financial statements of the Company include the accounts of Madison Square Garden Sports Corp. and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of the accompanying Financial Statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, other current assets, goodwill, intangible assets, other long-lived assets, fair value of investments, deferred tax valuation allowance, tax accruals, and other liabilities. In addition, estimates are used in revenue recognition, revenue sharing expense (net of escrow), luxury tax expense, income tax expense (benefit), performance and share-based compensation, 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 financial statements in future periods.
Recent Accounting Pronouncements
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU enhances annual disclosures related to the effective income tax rate reconciliation and income taxes paid. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ending June 30, 2026 and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its income tax disclosures.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires the disclosure of additional information about specific expense categories in the notes to the financial statements. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ending June 30, 2028 and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) - Targeted Improvements to the Accounting for Internal-Use Software . The ASU modernizes and clarifies the threshold for when an entity is required to start capitalizing software costs and is based on when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The ASU is effective for the Company in the first quarter of fiscal year 2028. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 3. Revenue Recognition
Contracts with Customers
All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers. For the three and six months ended December 31, 2025, the Company did not record any impairment losses on receivables or contract assets arising from contracts with customers. For the three and six months ended December 31, 2024, the Company did not record any impairment losses on receivables arising from contracts with customers. For the three and six months ended December 31, 2024, the Company recorded impairment losses of $ 109 on contract assets arising from contracts with customers.
Disaggregation of Revenue
The following table disaggregates the Company’s revenues by type of goods or services in accordance with the disclosure requirements set forth in Accounting Standards Codification (“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 the three and six months ended December 31, 2025 and 2024:
Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
Event-related (a)
$ 167,238 $ 139,370 $ 173,245 $ 145,455
Media rights (b)
122,345 126,902 127,445 134,255
Sponsorship, signage and suite licenses 98,450 79,413 103,105 84,601
League distributions and other 15,391 12,074 39,083 46,755
Total revenues from contracts with customers $ 403,424 $ 357,759 $ 442,878 $ 411,066
_________________
(a) Consists of (i) ticket sales and other ticket-related revenues, and (ii) food, beverage and merchandise sales at The Garden.
(b) Consists of (i) local media rights fees from MSG Networks, (ii) revenue from the distribution through league-wide national media contracts, and (iii) other local radio rights fees.
On June 27, 2025, the media rights agreements between subsidiaries of MSG Networks, on the one hand, and New York Knicks, LLC (“Knicks LLC”) and New York Rangers, LLC (“Rangers LLC”), on the other hand, were amended, as follows:
• New York Knicks:
◦ A modification to the annual rights fee to effect a 28 % reduction as of January 1, 2025;
◦ an elimination of the annual rights fee escalator; and
◦ a change to the contract expiration date to the end of the 2028-29 season, subject to a right of first refusal in favor of MSG Networks;
• New York Rangers:
◦ A modification to the annual rights fee to effect an 18 % reduction as of January 1, 2025;
◦ an elimination of the annual rights fee escalator; and
◦ a change to the contract expiration date to the end of the 2028-29 season, subject to a right of first refusal in favor of MSG Networks.
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.
The amendments were accounted for as a modification under ASC Subtopic 606 with revenue for the fiscal year ended June 30, 2025 reflecting the change in the transaction price in the media rights agreements. The penny warrants issued to the Company were considered non-cash consideration under ASC Subtopic 606 and the fair value of consideration received was included in the change in transaction price as a result of the modification. Refer to Note 9 for further details regarding the penny warrant investment and corresponding fair value.
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed receivables, contract assets and contract liabilities on the consolidated balance sheets. The following table provides information about contract balances from the Company’s contracts with customers as of December 31, 2025 and June 30, 2025:
December 31, June 30,
2025 2025
Receivables from contracts with customers, net (a)
$ 88,922 $ 25,214
Contract assets, current (b)
9,782 14,095
Deferred revenue, including non-current portion (c), (d)
249,723 164,840
_________________
(a) Receivables from contracts with customers, net, which are reported in Accounts receivable, net and Net related party receivables in the accompanying consolidated balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers. As of December 31, 2025 and June 30, 2025, the Company’s receivables reported above included $ 3,392 and $ 0 , respectively, related to contracts with customers that are related parties. See Note 15 for further details on these related party arrangements. Receivables from contracts with customers, net, excludes amounts recorded in Accounts receivable, net, associated with amounts due from the NBA and NHL related to escrow.
(b) Contract assets, current, which are reported as Other current assets in the accompanying consolidated balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to the customer, 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. The Company had contract asset balances related to local media rights of $ 337 and $ 0 as of December 31, 2025 and June 30, 2025, respectively. See Note 15 for further details on these related party arrangements.
(c) Deferred revenue, including the non-current portion, primarily relates to the Company’s receipt of consideration from customers, inclusive of sales tax collected, or billing customers in advance of the Company’s transfer of goods or services to those customers. Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to a customer. The Company’s deferred revenue related to local media rights was $ 1,375 and $ 0 as of December 31, 2025 and June 30, 2025, respectively. See Note 15 for further details on these related party arrangements.
(d) Revenue recognized for the six months ended December 31, 2025 relating to the deferred revenue balance as of July 1, 2025 was $ 86,572 .
Transaction Price Allocated to the Remaining Performance Obligations
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 December 31, 2025. 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. Additionally, the Company has elected to exclude variable consideration from its disclosure related to the remaining performance obligations under its local media rights arrangements with MSG Networks, league-wide national and international media contracts, and certain other arrangements with variable consideration.
Fiscal year ending June 30, 2026 (remainder) $ 113,547
Fiscal year ending June 30, 2027 156,494
Fiscal year ending June 30, 2028 113,379
Fiscal year ending June 30, 2029 71,180
Fiscal year ending June 30, 2030 45,750
Thereafter 29,974
$ 530,324
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 4. Computation of Earnings (Loss) per Common Share
The following table presents a reconciliation of earnings (loss) allocated to common shares and a reconciliation of weighted-average shares used in the calculations of basic and diluted earnings (loss) per common share attributable to the Company’s stockholders (“EPS”) and the number of shares excluded from diluted earnings (loss) per common share, as they were anti-dilutive.
Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
Net income (loss) allocable to common shares, basic and diluted (numerator):
Net income (loss) $ 8,243 $ 1,111 $ ( 555 ) $ ( 6,431 )
Less: Dividends to other-than-common stockholders (a)
8 11 24 19
Net income (loss) allocable to common shares, basic and diluted (numerator): $ 8,235 $ 1,100 $ ( 579 ) $ ( 6,450 )
Weighted-average shares (denominator):
Weighted-average shares for basic EPS 24,165 24,100 24,141 24,074
Dilutive effect of shares issuable under share-based compensation plans 58 67 — —
Weighted-average shares for diluted EPS 24,223 24,167 24,141 24,074
Weighted-average shares excluded from diluted EPS — — 69 79
Basic earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 0.34 $ 0.05 $ ( 0.02 ) $ ( 0.27 )
Diluted earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 0.34 $ 0.05 $ ( 0.02 ) $ ( 0.27 )
_________________
(a) Dividends to other-than-common stockholders consists of forfeitable rights to dividends declared and payable to holders of the Company’s unvested restricted stock units and performance restricted stock units.
Note 5. Team Personnel Transactions
Direct operating and selling, general and administrative expenses in the accompanying consolidated statements of operations include a net provision or credit for transactions relating to the Company’s sports teams for waiver/contract termination costs, player trades and season-ending injuries (“Team personnel transactions”). There were no Team personnel transactions for the three months ended December 31, 2025. Team personnel transactions were a net provision of $ 2,382 for the six months ended December 31, 2025. Team personnel transactions were a net provision of $ 7,586 and $ 8,419 for the three and six months ended December 31, 2024, respectively.
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 6. Cash, Cash Equivalents and Restricted Cash
The following table provides a summary of the amounts recorded as cash, cash equivalents and restricted cash.
As of
December 31,
2025 June 30,
2025 December 31,
2024
Captions on the consolidated balance sheets:
Cash and cash equivalents $ 81,302 $ 144,617 $ 107,823
Restricted cash (a)
— 8,571 8,030
Cash, cash equivalents and restricted cash on the consolidated statements of cash flows
$ 81,302 $ 153,188 $ 115,853
_________________
(a) Restricted cash as of June 30, 2025 and December 31, 2024 included cash deposited in an escrow account (see Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 for more information).
Note 7. Leases
The Company’s leases primarily consist of the lease of the Company’s principal executive offices at Two Pennsylvania Plaza in New York under the Sublease Agreement with MSG Entertainment (as defined below) and a lease agreement for an aircraft. In addition, the Company accounts for the rights of use of The Garden pursuant to the Arena License Agreements (as defined below) as leases under the ASC Topic 842, Leases. See Note 7 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 for more information regarding the Company’s accounting policies associated with its leases.
During the second quarter of fiscal year 2025, the Company amended and restated its prior sublease agreement with MSG Entertainment (the “Prior Sublease Agreement”) to enter into a short-term lease for new principal executive offices through December 31, 2024. The Company recorded the short-term operating lease costs for this amendment within Selling, general and administrative expenses in the accompanying consolidated statements of operations for the three and six months ended December 31, 2024.
In January 2025, the Company entered into a new sublease agreement with MSG Entertainment for new principal executive offices at Two Pennsylvania Plaza in New York with a lease term which ends January 31, 2046 (the “New Sublease Agreement” and together with the Prior Sublease Agreement, the “Sublease Agreement”) and fixed lease payment obligations of $ 167,444 over the lease term. The Company recorded a lease right-of-use asset and liability based on the present value of minimum fixed lease payments over the lease term utilizing the Company’s incremental borrowing rate as of the lease commencement date. In addition, the Company entered into a commitment whereby if MSG Entertainment’s lease for principal executive offices at Two Pennsylvania Plaza in New York were terminated under certain circumstances, the Company would be required to enter into a new lease for executive offices at Two Pennsylvania Plaza directly with the landlord, with a consistent lease term ending January 31, 2046.
As of December 31, 2025, the Company’s exis ting operating leases, which are recorded in the accompanying financial statements, have remaining lease terms ranging from 6 to 30 years. In certain ins tances, leases include options to renew, with varying option terms. The exercise of lease renewals, if available under the lease options, is generally at the Company’s discretion and is considered in the Company’s assessment of the respective lease term. The Company’s lease agreements do not contain material residual value guarantees or material restrictive covenants.
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
The following table summarizes the right-of-use assets and lease liabilities recorded in the accompanying consolidated balance sheets as of December 31, 2025 and June 30, 2025:
Line Item in the Company’s Consolidated Balance Sheet December 31,
2025 June 30,
2025
Right-of-use assets:
Operating leases
Right-of-use lease assets $ 750,978 $ 760,456
Lease liabilities:
Operating leases, current (a)
Operating lease liabilities, current $ 55,875 $ 52,618
Operating leases, noncurrent (a)
Operating lease liabilities, noncurrent 841,014 841,050
Total lease liabilities $ 896,889 $ 893,668
_________________
(a) As of December 31, 2025, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances o f $ 49,296 and $ 813,546 , r espectively, that are payable to MSG Entertainment. As of June 30, 2025, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $ 46,040 and $ 811,190 , respectively, that are payable to MSG Entertainment.
The following table summarizes the activity recorded within the accompanying consolidated statements of operations for the three and six months ended December 31, 2025 and 2024:
Line Item in the Company’s Consolidated
Statement of Operations Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
Operating lease costs Direct operating expenses $ 30,081 $ 26,781 $ 31,392 $ 28,092
Operating lease costs Selling, general and administrative expenses
3,693 1,962 7,386 4,433
Short-term lease costs Selling, general and administrative expenses — 3,971 — 3,971
Total lease cost $ 33,774 $ 32,714 $ 38,778 $ 36,496
Supplemental Information
For the six months ended December 31, 2025 and 2024, cash paid for amounts included in the measurement of lease liabilities was $ 26,078 and $ 26,463 , respectively.
For the six months ended December 31, 2025 and 2024, there were no non-cash additions to right-of-use assets and operating lease liabilities.
The weighted average remaining lease term for operating leases recorded in the accompanying consolidated balance sheet as of December 31, 2025 was 27.7 years. The weighted average discount rate was 7.05 % as of December 31, 2025.
Maturities of operating lease liabilities as of December 31, 2025 were as follows:
Fiscal year ending June 30, 2026 (remainder) $ 28,292
Fiscal year ending June 30, 2027 59,716
Fiscal year ending June 30, 2028 62,388
Fiscal year ending June 30, 2029 63,874
Fiscal year ending June 30, 2030 65,361
Thereafter 2,063,935
Total lease payments 2,343,566
Less imputed interest ( 1,446,677 )
Total lease liabilities $ 896,889
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 8. Goodwill and Intangible Assets
During the first quarter of fiscal year 2026, the Company performed its annual impairment test of goodwill and determined that there were no impairments identified as of the impairment test date. The carrying amount of goodwill as of December 31, 2025 and June 30, 2025 was $ 226,523 .
The Company’s indefinite-lived intangible assets as of December 31, 2025 and June 30, 2025 were as follows:
Sports franchises $ 102,564
Photographic related rights 1,080
$ 103,644
During the first quarter of fiscal year 2026, the Company performed its annual impairment test of identifiable indefinite-lived intangible assets and determined that there were no impairments identified as of the impairment test date.
Note 9. Investments
The Company’s Investments reported in the accompanying consolidated balance sheets, consisted of the following:
December 31,
2025 June 30,
2025
Equity method investments:
Hard Carry Gaming, Inc. (“HCG”) $ 6,166 $ 6,607
MSG Networks — —
Other equity method investments (a)
2,094 4,421
Equity investments with readily determinable fair values:
Xtract One Technologies Inc. (“Xtract One”) common stock 18,408 9,290
Other equity investments with readily determinable fair values held in trust under the Company’s Executive Deferred Compensation Plan 27,452 23,536
Equity investments without readily determinable fair values (b)
10,777 9,262
Derivative instruments:
Xtract One warrants 7,468 1,604
Total investments $ 72,365 $ 54,720
_________________
(a) During the three and six months ended December 31, 2025, the Company recorded other than temporary impairments of $ 2,073 related to its other equity method investments in Miscellaneous (expense) income, net within the accompanying consolidated statements of operations. During the three and six months ended December 31, 2024, the Company did not record any impairments related to its other equity method investments.
(b) During the three and six months ended December 31, 2025, the Company did not record any impairment charges or changes in carrying value of its equity securities without readily determinable fair values in the accompanying consolidated statements of operations. During the three and six months ended December 31, 2024, the Company recorded impairment charges and reductions in carrying value resulting from observable price changes of $ 894 related to its equity securities without readily determinable fair values in Miscellaneous (expense) income, net within the accompanying consolidated statements of operations.
Equity Method Investments
HCG
The Company holds preferred shares of the capital stock of HCG, an online video production company. During the three and six months ended December 31, 2025, the Company recognized its net share of losses of $ 167 and $ 441 , respectively, in Miscellaneous (expense) income, net within the accompanying consolidated statements of operations. During the three and six months ended December 31, 2024, the Company recognized its net share of losses of $ 286 and $ 516 , respectively, in Miscellaneous (expense) income, net within the accompanying consolidated statements of operations. As of December 31, 2025 and June 30, 2025, the Company’s ownership in HCG was approximately 25 %.
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
MSG Networks
In June 2025, the media rights agreements between subsidiaries of MSG Networks, on the one hand, and Knicks LLC and Rangers LLC, on the other hand, were amended as further described in Note 3. 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. The Company has accounted for the penny warrants issued to the Company as in-substance common stock in accordance with ASC Topic 323, Investments — Equity Method and Joint Ventures, and the Company determined that it has the ability to exert significant influence over the investee. The Company recorded the investment in MSG Networks penny warrants at fair value as an equity method investment. The Company estimated the fair value of the MSG Networks warrants based on a discounted cash flow model (income approach). This approach relied on numerous assumptions and judgments within the model that were subject to various risks and uncertainties. Principal assumptions utilized, all of which are considered Level III inputs under the fair value hierarchy, include the Company’s estimates of future revenue, estimates of future operating cost, margin assumptions, terminal growth rates and the discount rate applied to estimated future cash flows. During the three and six months ended December 31, 2025, the Company recognized no income or loss related to the MSG Networks equity method investment.
Equity Investments with Readily Determinable Fair Values
The Company holds investments in equity instruments with readily determinable fair value:
• Xtract One, a technology-driven threat detection and security solution company that is listed on the Toronto Stock Exchange under the symbol “XTRA”. The Company holds common stock of Xtract One and holds warrants entitling the Company to acquire additional shares of common stock of Xtract One which are considered derivative instruments. Refer to Note 10 for further details regarding the Company’s warrants, including the inputs used in determining the fair value of the warrants.
• Other equity investments held in trust under the Company’s Executive Deferred Compensation Plan (the “Deferred Compensation Plan”). See Note 14 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 for more information regarding Deferred Compensation Plan. The Company recorded compensation expense of $ 516 and $ 1,479 for the three and six months ended December 31, 2025, respectively, and $ 142 and $ 1,107 for the three and six months ended December 31, 2024, respectively, in Selling, general and administrative expenses within the accompanying consolidated statements of operations to reflect the remeasurement of the Deferred Compensation Plan liability. In addition, the Company recorded gains of $ 516 and $ 1,479 for the three and six months ended December 31, 2025, respectively, and $ 142 and $ 1,107 for the three and six months ended December 31, 2024, respectively, in Miscellaneous (expense) income, net within the accompanying consolidated statements of operations to reflect the remeasurement of the fair value of assets under the Deferred Compensation Plan.
The fair value of the Company’s investments in common stock of Xtract One and other investments held in trust are determined based on quoted market prices in active markets, which are classified within Level I of the fair value hierarchy.
The cost basis and carrying value of equity investments with readily determinable fair values are as follows:
December 31, 2025 June 30, 2025
Cost Basis Carrying Value/Fair Value Cost Basis Carrying Value/Fair Value
Xtract One common stock $ 7,721 $ 18,408 $ 7,721 $ 9,290
Other equity investments with readily determinable fair values 22,216 27,452 19,263 23,536
$ 29,937 $ 45,860 $ 26,984 $ 32,826
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
The following table summarizes amounts recognized related to the Deferred Compensation Plan in the consolidated balance sheets:
December 31,
2025 June 30,
2025
Non-current assets (included in investments) $ 27,452 $ 23,536
Current liabilities (included in accrued employee-related costs) ( 1,433 ) ( 1,333 )
Non-current liabilities (included in other employee-related costs) ( 26,019 ) ( 22,203 )
The following table summarizes the realized and unrealized gains (losses) on equity investments with readily determinable fair values, recorded within Miscellaneous (expense) income, net within the accompanying consolidated statements of operations, for the three and six months ended December 31, 2025 and 2024:
Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
Unrealized gain (loss) - Xtract One common stock $ 292 $ ( 3,183 ) $ 9,118 $ ( 3,716 )
Unrealized gain - other equity investments with readily determinable fair values 408 77 1,371 1,042
Realized gain - other equity investments with readily determinable fair values 108 66 108 66
$ 808 $ ( 3,040 ) $ 10,597 $ ( 2,608 )
Note 10. Fair Value Measurements
The following table presents the Company’s assets that are measured at fair value on a recurring basis, which include cash equivalents:
Fair Value Hierarchy December 31,
2025 June 30,
2025
Assets:
Money market accounts I $ 64,325 $ 95,367
Time deposits I 15,758 48,263
Equity investments I 45,860 32,826
Warrants III 7,468 1,604
Total assets measured at fair value $ 133,411 $ 178,060
Level I Inputs
Assets that are classified within Level I of the fair value hierarchy are valued using observable inputs that reflect quoted prices for identical assets in active markets. The carrying amount of the Company’s money market accounts and time deposits approximates fair value due to their short-term maturities. Refer to Note 9 for further details regarding equity investments.
Level III Inputs
The Company’s Level III assets consist of warrants entitling the Company to acquire additional common stock of Xtract One. The Company’s warrants are included within Investments in the accompanying consolidated balance sheets. Changes in the fair value of derivative instruments are measured at each reporting date and are recorded within Miscellaneous (expense) income, net in the accompanying consolidated statements of operations. The fair value of the Company’s warrants in Xtract One were
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
determined using the Black-Scholes option pricing model. The following are key assumptions used to calculate the fair value of the warrants as of December 31, 2025 and June 30, 2025:
December 31,
2025 June 30,
2025
Expected term 1.05 years 1.30 years
Expected volatility 84.40 % 70.78 %
Risk-free interest rate 3.49 % 3.85 %
The following table presents additional information about our assets for which we utilize Level III inputs to determine fair value:
Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
Balance at beginning of period $ 7,315 $ 5,951 $ 1,604 $ 6,995
Unrealized gains (losses) on warrants 153 ( 2,113 ) 5,864 ( 3,157 )
Balance at end of period $ 7,468 $ 3,838 $ 7,468 $ 3,838
The carrying value and fair value of the Company’s debt reported in the accompanying consolidated balance sheets are as follows:
December 31, 2025 June 30, 2025
Carrying
Value Fair
Value Carrying
Value Fair
Value
Liabilities
Debt, current (a)
$ 24,000 $ 24,000 $ 24,000 $ 24,000
Long-term debt (b)
$ 267,000 $ 267,000 $ 267,000 $ 267,000
_________________
(a) The Company’s debt, current is classified within Level II of the fair value hierarchy as it is valued using quoted indices of similar securities for which the inputs are readily observable. The fair value of the Company’s debt, current is the same as its carrying amount based on valuation of similar securities. See Note 12 for further details.
(b) 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 securities for which the inputs are readily observable. The fair value of the Company’s long-term debt is the same as its carrying amount as the debt bears interest at a variable rate indexed to current market conditions. See Note 12 for further details .
Note 11. Commitments and Contingencies
Commitments
As more fully described in Note 12 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, the Company’s commitments consist primarily of the Company’s obligations under employment agreements that the Company has with its professional sports teams’ personnel that are generally guaranteed regardless of employee injury or termination. In addition, see Note 7 for more information on the contractual obligations related to future lease payments. The Company did not have any material changes in its contractual obligations, including off-balance sheet commitments, since the end of fiscal year 2025, other than activities in the ordinary course of business.
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.
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 12. Debt
Knicks Revolving Credit Facility
On September 30, 2016, Knicks LLC, a wholly owned subsidiary of the Company, entered into a credit agreement (the “2016 Knicks Credit Agreement”) with a syndicate of lenders providing for a senior secured revolving credit facility of up to $ 200,000 with a term of five years to fund working capital needs and for general corporate purposes.
On November 6, 2020, the Company amended and restated the 2016 Knicks Credit Agreement (the “2020 Knicks Credit Agreement”). On December 14, 2021, Knicks LLC entered into Amendment No. 2 to the 2020 Knicks Credit Agreement, which amended and restated the 2020 Knicks Credit Agreement (as amended and restated, the “2021 Knicks Credit Agreement”).
On November 6, 2025, Knicks LLC entered into Amendment No. 1 to the 2021 Knicks Credit Agreement, which amended and restated the 2021 Knicks Credit Agreement (as amended and restated, the “2025 Knicks Credit Agreement”).
The 2025 Knicks Credit Agreement provides for a senior secured revolving credit facility of up to $ 425,000 (the “Knicks Revolving Credit Facility”) to fund working capital needs and for general corporate purposes. The maturity date of the 2025 Knicks Credit Agreement is November 6, 2030. Amounts borrowed may be distributed to the Company except during an event of default.
All borrowings under the Knicks Revolving Credit Facility are subject to the satisfaction of certain customary conditions. Borrowings under the 2025 Knicks Credit Agreement bear interest at a floating rate, which at the option of Knicks LLC may be either (i) a base rate plus a margin ranging from 0.250 % to 0.375 % per annum or (ii) term Secured Overnight Financing Rate (“SOFR”) plus a credit spread adjustment of 0.100 % per annum plus a margin ranging from 1.250 % to 1.375 % per annum depending on the credit rating applicable to the NBA’s league-wide credit facility. Knicks LLC is required to pay a commitment fee ranging from 0.250 % to 0.300 % per annum in respect of the average daily unused commitments under the Knicks Revolving Credit Facility. The outstanding balance under the Knicks Revolving Credit Facility was $ 267,000 as of December 31, 2025, which was recorded as Long-term debt in the accompanying consolidated balance sheet. The interest rate on the Knicks Revolving Credit Facility as of December 31, 2025 was 5.08 %. During the six months ended December 31, 2025 and 2024, the Company made interest payments in respect of the Knicks Revolving Credit Facility of $ 7,477 and $ 9,029 , respectively. In addition, on February 3, 2026, the Company made a principal repayment of $ 25,000 under the Knicks Revolving Credit Facility.
All obligations under the Knicks Revolving Credit Facility are secured by a first lien security interest in certain of Knicks LLC’s assets, including, but not limited to, (i) the Knicks LLC’s membership rights in the NBA, (ii) revenues to be paid to Knicks LLC by the NBA pursuant to certain U.S. national broadcast agreements, and (iii) revenues to be paid to Knicks LLC pursuant to local media contracts.
Subject to customary notice and minimum amount conditions, Knicks LLC may voluntarily prepay outstanding loans under the Knicks Revolving Credit Facility at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to SOFR-based loans). Knicks LLC is required to make mandatory prepayments in certain circumstances, including without limitation if the maximum available amount under the Knicks Revolving Credit Facility is greater than 350 % of qualified revenues.
In addition to the financial covenant described above, the 2025 Knicks Credit Agreement and related security agreement contain certain customary representations and warranties, affirmative covenants and events of default. The Knicks Revolving Credit Facility contains certain restrictions on the ability of Knicks LLC to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the Knicks Revolving Credit Facility, including the following: (i) incurring additional indebtedness and contingent liabilities; (ii) creating liens on certain assets; (iii) making restricted payments during the continuance of an event of default under the Knicks Revolving Credit Facility; (iv) engaging in sale and leaseback transactions; (v) merging or consolidating; and (vi) taking certain actions that would invalidate the secured lenders’ liens on any Knicks LLC’s collateral.
The Knicks Revolving Credit Facility requires Knicks LLC to comply with a debt service ratio of at least 1.5 :1.0 over a trailing four quarter period. As of December 31, 2025, Knicks LLC was in compliance with this financial covenant.
Rangers Revolving Credit Facility
On January 25, 2017, Rangers LLC, a wholly owned subsidiary of the Company, entered into a credit agreement (the “2017 Rangers Credit Agreement”) with a syndicate of lenders providing for a senior secured revolving credit facility of up to $ 150,000 with a term of five years to fund working capital needs and for general corporate purposes.
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
On November 6, 2020, the Company amended and restated the 2017 Rangers Credit Agreement (the “2020 Rangers Credit Agreement”). On December 14, 2021, Rangers LLC entered into Amendment No. 3 to the 2020 Rangers Credit Agreement, which amended and restated the 2020 Rangers Credit Agreement (as amended and restated, the “2021 Rangers Credit Agreement”).
On November 6, 2025, Rangers LLC entered into Amendment No. 1 to the 2021 Rangers Credit Agreement, which amended the 2021 Rangers Credit Agreement (as amended, the “2025 Rangers Credit Agreement”).
The 2025 Rangers Credit Agreement provides for a senior secured revolving credit facility of up to $ 250,000 (the “Rangers Revolving Credit Facility”) to fund working capital needs and for general corporate purposes. The maturity date of the 2025 Rangers Credit Agreement is November 6, 2030. Amounts borrowed may be distributed to the Company except during an event of default.
All borrowings under the Rangers Revolving Credit Facility are subject to the satisfaction of certain customary conditions. Borrowings under the Rangers Revolving Credit Facility bear interest at a floating rate, which at the option of Rangers LLC may be either (i) a base rate plus a margin ranging from 0.375 % to 0.625 % per annum or (ii) term SOFR plus a credit spread adjustment of 0.100 % per annum plus a margin ranging from 1.375 % to 1.625 % per annum depending on the credit rating applicable to the NHL’s league-wide credit facility. Rangers LLC is required to pay a commitment fee ranging from 0.350 % to 0.400 % per annum in respect of the average daily unused commitments under the Rangers Revolving Credit Facility . There were no borrowings under the Rangers Revolving Credit Facility as of December 31, 2025. The Company did not make any interest payments in respect of the Rangers Revolving Credit Facility during the six months ended December 31, 2025 and 2024.
All obligations under the Rangers Revolving Credit Facility are, subject to the Rangers NHL Advance Agreement (as defined below), secured by a first lien security interest in certain of Rangers LLC’s assets, including, but not limited to, (i) Rangers LLC’s membership rights in the NHL, (ii) revenues to be paid to Rangers LLC by the NHL pursuant to certain U.S. and Canadian national broadcast agreements, and (iii) revenues to be paid to Rangers LLC pursuant to local media contracts.
Subject to customary notice and minimum amount conditions, Rangers LLC may voluntarily prepay outstanding loans under the Rangers Revolving Credit Facility at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to SOFR-based loans). Rangers LLC is required to make mandatory prepayments in certain circumstances, including without limitation if qualified revenues are less than 17 % of the maximum available amount under the 2025 Rangers Credit Agreement.
In addition to the financial covenant described above, the 2025 Rangers Credit Agreement and related security agreement contain certain customary representations and warranties, affirmative covenants and events of default. The Rangers Revolving Credit Facility contains certain restrictions on the ability of Rangers LLC to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the Rangers Revolving Credit Facility , including the following: (i) incurring additional indebtedness and contingent liabilities; (ii) creating liens on certain assets; (iii) making restricted payments during the continuance of an event of default under the Rangers Revolving Credit Facility ; (iv) engaging in sale and leaseback transactions; (v) merging or consolidating; and (vi) taking certain actions that would invalidate the secured lenders’ liens on any of Rangers LLC’s assets securing the obligations under the Rangers Revolving Credit Facility .
The Rangers Revolving Credit Facility requires Rangers LLC to comply with a debt service ratio of at least 1.5 :1.0 over a trailing four quarter period. As of December 31, 2025, Rangers LLC was in compliance with this financial covenant .
Rangers NHL Advance Agreement
On March 19, 2021, Rangers LLC, Rangers Holdings, LLC and MSG NYR Holdings LLC entered into an advance agreement with the NHL (the “Rangers NHL Advance Agreement”) pursuant to which the NHL advanced $ 30,000 to Rangers LLC. The advance is required to be utilized solely and exclusively to pay for Rangers LLC operating expenses.
All obligations under the Rangers NHL Advance Agreement are senior to and shall have priority over all secured and other indebtedness of Rangers LLC, Rangers Holdings, LLC and MSG NYR Holdings LLC. All borrowings under the Rangers NHL Advance Agreement were made on a non-revolving basis and bear interest at 3.00 % per annum, ending on the date any such advances are fully repaid. Advances received under the Rangers NHL Advance Agreement are payable upon demand by the NHL. It is expected that the remaining advanced amount will be set off against funds that would otherwise be paid, distributed or transferred by the NHL to Rangers LLC. The outstanding balance under the Rangers NHL Advance Agreement was $ 24,000 as of December 31, 2025 and was recorded as Debt in the accompanying consolidated balance sheet. During the six months ended December 31, 2025 and 2024 , the Company made interest p ayments in respect of the Rangers NHL Advance Agreement
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
of $ 360 and $ 450 , respectively. In addition, on January 5, 2026, the Company made a principal repayment of $ 7,500 under the Rangers NHL Advance Agreement.
Deferred Financing Costs
The following table summarizes deferred financing costs, net of amortization, related to the Company’s credit facilities as reported in the accompanying consolidated balance sheets:
December 31,
2025 (a)
June 30,
2025
Other current assets $ 1,130 $ 1,145
Other assets 4,330 520
_________________
(a) In connection with the 2025 Knicks Revolving Credit Facility and 2025 Rangers Revolving Credit Facility, the Company incurred $ 5,065 in deferred financing costs during the six months ended December 31, 2025.
Note 13. Share-based Compensation
See Note 15 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 for more information regarding the Company’s 2015 Employee Stock Plan (the “Employee Stock Plan”) and its 2015 Stock Plan for Non-Employee Directors.
Share-based compensation expense is recognized in the consolidated statements of operations as a component of Selling, general and administrative expenses. Share-based compensation expense was $ 6,188 and $ 11,032 for the three and six months ended December 31, 2025, respectively, and $ 5,991 and $ 10,259 for the three and six months ended December 31, 2024, respectively. There were no costs related to share-based compensation that were capitalized for the three and six months ended December 31, 2025 and 2024.
Restricted Stock Units Award Activity
The following table summarizes activity related to the Company’s restricted stock units and performance restricted stock units, collectively referred to as “RSUs,” held by current and former employees of the Company and non-employee directors, for the six months ended December 31, 2025:
Number of Weighted-Average
Fair Value
Per Share at
Date of Grant (a)
Nonperformance
Based Vesting
RSUs Performance
Based Vesting
RSUs
Unvested award balance, June 30, 2025 95 139 $ 184.56
Granted 55 48 $ 198.04
Vested ( 55 ) ( 58 ) $ 175.63
Forfeited / Cancelled ( 3 ) ( 3 ) $ 195.07
Unvested award balance, December 31, 2025 92 126 $ 195.30
_____________________
(a) Weighted-average fair value per share at date of grant does not reflect any adjustments to awards granted prior to the Sphere Distribution.
The fair value of RSUs that vested during the six months ended December 31, 2025 was $ 24,092 . Upon delivery, RSUs granted under the Employee Stock Plan were net share-settled to cover the required statutory tax withholding obligations. To fulfill the Company’s current and former employees’ required statutory tax withholding obligations for the applicable income and other employment taxes, 52 of these RSUs, with an aggregate value of $ 11,097 , inclusive of $ 36 related to the Company’s former employees (who vested in the Company’s RSUs), were retained by the Company and the taxes paid are reflected as a financing activity in the accompanying consolidated statement of cash flows for the six months ended December 31, 2025.
The fair value of RSUs that vested during the six months ended December 31, 2024 was $ 23,527 . The weighted-average fair value per share at grant date of RSUs granted during the six months ended December 31, 2024 was $ 207.95 .
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Stock Options Award Activity
The following table summarizes activity related to the Company’s stock options for the six months ended December 31, 2025:
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, 2025 94 $ 138.78
Granted — $ —
Cancelled — $ —
Balance as of December 31, 2025 94 $ 138.78 1.96 $ 11,247
Exercisable as of December 31, 2025 94 $ 138.78 1.96 $ 11,247
Note 14. Stock Repurchase Program
Effective as of October 1, 2015, the Company’s board of directors authorized the repurchase of up to $ 525,000 of the Company’s Class A Common Stock, par value $ 0.01 per share (“Class A Common Stock”). Under the authorization, 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.
During the six months ended December 31, 2025 and 2024, the Company did not repurchase any shares under its share repurchase program. As of December 31, 2025, the Company had $ 184,639 of availability remaining under its stock repurchase authorization .
Note 15. Related Party Transactions
As of December 31, 2025, certain members of the Dolan family, including certain trusts for the benefit of members of the Dolan family, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, collectively beneficially owned 100 % of the Company’s outstanding Class B Common Stock, par value $ 0.01 per share (“Class B Common Stock”) and approximately 3.2 % of the Company’s outstanding Class A Common Stock. Such shares of the Company’s Class A Common Stock and Class B Common Stock, collectively, represented approximately 70.8 % of the aggregate voting power of the Company’s outstanding common stock. Members of the Dolan family are also the controlling stockholders of Sphere Entertainment, MSG Entertainment and AMC Networks Inc. (“AMC Networks”).
The Company was party to the following agreements and/or arrangements with MSG Entertainment as of December 31, 2025:
• Arena license agreements, entered into in April 2020 (the “Arena License Agreements”), pursuant to which MSG Entertainment (i) provides the right to use The Garden for games of the Knicks and the Rangers for a 35-year term in exchange for arena license fees, (ii) shares revenues collected for suite and club licenses, (iii) operates and manages the sale of the sports teams’ merchandise at The Garden for a commission, (iv) operates and manages the sales of food and beverage concessions in exchange for 50 % of net profits from sales and catering services during Knicks and Rangers home games, (v) shares revenues collected for the sale of venue indoor signage space and sponsorship rights at The Garden that are not specific to our teams, (vi) provides day of game services, and (vii) provides other general services within The Garden;
• Sponsorship sales and service representation agreements, entered into in April 2020 (the “Sponsorship Sales and Service Representation Agreements”), pursuant to which MSG Entertainment has the exclusive right and obligation to sell the Company’s sponsorships for an initial stated term of 10 years for a commission. In addition, under these agreements, the Company is charged by MSG Entertainment for sales and service staff and overhead associated with the sales of sponsorship assets;
• Team sponsorship allocation agreement with MSG Entertainment, pursuant to which the teams receive an allocation of certain sponsorship and signage revenues associated with sponsorship agreements that include the assets of the Company, MSG Entertainment, and Sphere Entertainment, based on the percentage of revenue each company earns relative to the total contract value;
• Services agreement (the “Services Agreement”) pursuant to which the Company (i) receives certain services from MSG Entertainment, such as information technology, executive support, accounts payable, payroll, human resources, and other corporate functions, and communications, marketing and facilities-related services, in exchange for service
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
fees and (ii) provides certain services to MSG Entertainment, such as certain communications and legal services, in exchange for service fees;
• Arrangements pursuant to which the Company provides MSG Entertainment certain services associated with the management of ticketing, premium hospitality sales, sponsorship sales and other business operations services;
• The Sublease Agreement, pursuant to which the Company leases office space from MSG Entertainment;
• Group ticket sales representation agreement, pursuant to which MSG Entertainment appointed the Company as its sales and service representative to sell group ticket packages related to MSG Entertainment events in exchange for a commission and reimbursement for sales and service staff and overhead associated with the ticket sales on behalf of MSG Entertainment;
• Single night rental commission agreement, pursuant to which the Company may, from time to time, sell (or make referrals for sales of) licenses for the use of suites at The Garden for individual MSG Entertainment events in exchange for a commission; and
• Other agreements with MSG Entertainment entered into in connection with the Sphere Distribution, including a trademark license agreement and certain other arrangements.
The Company was also party to the following agreements and/or arrangements with Sphere Entertainment (including through its subsidiary MSG Networks) as of December 31, 2025 :
• Media rights agreements between the Company and MSG Networks, as amended in June 2025 and set to expire after the 2028-29 seasons, providing MSG Networks with local telecast rights for Knicks and Rangers games in exchange for media rights fees;
• An agreement with MSG Networks pursuant to which the Company was issued penny warrants exercisable for 19.9 % of the equity interests in MSG Networks, as further described in Note 9;
• Arrangements with MSG Networks pursuant to which the Knicks and the Rangers have allocated revenues with MSG Networks related to virtual advertising inventory;
• Arrangements pursuant to which the Company provides Sphere Entertainment with certain business operations services;
• Other agreements with Sphere Entertainment in connection with the Sphere Distribution, including a distribution agreement, a tax disaffiliation agreement and an employee matters agreement and certain other arrangements; and
• Other agreements with MSG Networks entered into in connection with the MSGS Distribution, including an employee matters agreement, agreements related to audio-only distribution rights for Knicks and Rangers games, and certain other arrangements.
The Company is also party to time-sharing and dry lease arrangements with MSG Entertainment in connection with aircraft leased by the Company and MSG Entertainment as well as arrangements with MSG Entertainment and Sphere Entertainment pursuant to which the three companies have agreed to allocate expenses in connection with the use by each company of such aircraft.
In addition, 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 Entertainment, (ii) the Company’s Vice Chairman with AMC Networks, Sphere Entertainment and MSG Entertainment, and (iii) the Company’s Executive Vice President with Sphere Entertainment and AMC Networks. Additionally, the Company, Sphere Entertainment, AMC Networks and MSG Entertainment allocate the costs of certain personal aircraft and helicopter usage by their shared executives.
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Revenues and Operating Expenses (Credits)
The following table summarizes the composition and amounts of the transactions with the Company’s affiliates. These amounts are reflected in revenues and operating expenses in the accompanying consolidated statements of operations for the three and six months ended December 31, 2025 and 2024:
Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
Revenues (a)
$ 58,057 $ 80,217 $ 64,817 $ 89,121
Operating expenses:
Expense pursuant to the Services Agreement $ 9,823 $ 7,976 $ 20,246 $ 16,453
Rent expense pursuant to Sublease Agreement 2,051 4,284 4,126 5,178
Costs associated with the Sponsorship Sales and Service Representation Agreements 6,841 6,029 9,445 8,641
Operating lease expense associated with the Arena License Agreements 30,081 26,781 31,392 28,092
Other costs associated with the Arena License Agreements 17,388 13,806 18,581 14,819
Other operating credits, net ( 689 ) ( 426 ) ( 1,109 ) ( 576 )
___________________
(a) Primarily consist of local media rights recognized from the licensing of team-related programming under the media rights agreements covering the Knicks and the Rangers.
Note 16. Income Taxes
In general, the Company is required to use an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in an interim period. The estimated annual effective tax rate exceeds the statutory federal tax rate of 21 % primarily due to state taxes, nondeductible officers’ compensation, and players’ disability insurance premiums expense, partially offset by the impact of dividends received. The estimated annual effective tax rate is revised on a quarterly basis.
Income tax expense for the three months ended December 31, 2025 of $ 6,717 reflects an effective tax rate of 45 %. Income tax benefit for the six months ended December 31, 2025 of $ 1,838 reflects an effective tax rate of 77 %.
Income tax expense for the three months ended December 31, 2024 of $ 698 reflects an effective tax rate of 39 %. Income tax benefit for the six months ended December 31, 2024 of $ 6,350 reflects an effective tax rate of 50 %.
During the six months ended December 31, 2025 and 2024, the Company made income tax payments, net of refunds, of $ 15,143 and $ 17,831 , respectively.
The Company was notified in March 2025 that the State of New York was commencing an audit of the state income tax returns for the fiscal years ended June 30, 2022 and 2023. The audit was finalized in July 2025 and resulted in no material changes.
On July 4, 2025, the Reconciliation Bill, commonly known as the “One Big Beautiful Bill Act” (the “OBBBA”), was enacted into law. The OBBBA includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions (both domestic and international), expanding certain Inflation Reduction Act incentives and accelerating the phase-out of others. The Company evaluated these provisions and concluded the provisions did not have a material impact on the accompanying consolidated financial statements.
Note 17. Additional Financial Information
The following table summarizes the composition and amounts of prepaid expenses included in the accompanying consolidated balance sheets as of December 31, 2025 and June 30, 2025:
December 31,
2025 June 30,
2025
Prepaid employee-related costs $ 54,248 $ 34,850
Other prepaid expenses 28,570 8,567
Total prepaid expenses $ 82,818 $ 43,417
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MADISON SQUARE GARDEN SPORTS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 18. Segment Information
The Company operates as one operating segment. The Company’s CODM is its Executive Chairman and Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated net income (loss) to assess financial performance and allocate resources. Consolidated net income (loss) is used by the CODM to make key operating decisions, such as entering into significant contracts, setting strategic objectives for the Company, and approving annual operating budgets, including approving significant investments in team personnel, and other key executive leadership positions. The CODM does not review segment assets at a different asset level or category than those disclosed in the accompanying consolidated balance sheets.
The following table presents selected financial information with respect to the Company’s single operating segment for the three and six months ended December 31, 2025 and 2024:
Three Months Ended December 31, Six Months Ended December 31,
2025 2024 2025 2024
Revenues
$ 403,424 $ 357,759 $ 442,878 $ 411,066
Significant segment expenses:
Ticketing and sponsorship sales related expenses (a)
( 24,006 ) ( 20,699 ) ( 32,184 ) ( 29,214 )
Marketing & event-related expenses (b)
( 21,639 ) ( 18,924 ) ( 30,561 ) ( 27,075 )
Corporate & administrative (c)
( 25,376 ) ( 27,694 ) ( 51,771 ) ( 50,931 )
Operating lease expenses and other rental expenses associated with the Arena License Agreements (d)
( 30,868 ) ( 27,461 ) ( 32,213 ) ( 28,805 )
Team operating expenses (e)
( 215,635 ) ( 197,184 ) ( 228,644 ) ( 208,831 )
Other segment items (f)
( 62,930 ) ( 51,691 ) ( 71,149 ) ( 59,595 )
Depreciation and amortization ( 790 ) ( 791 ) ( 1,601 ) ( 1,573 )
Interest income 496 690 1,074 1,554
Interest expense ( 6,210 ) ( 5,587 ) ( 11,801 ) ( 11,642 )
Miscellaneous (expense) income, net ( 1,506 ) ( 6,609 ) 13,579 ( 7,735 )
Income tax (expense) benefit ( 6,717 ) ( 698 ) 1,838 6,350
Net income (loss) $ 8,243 $ 1,111 $ ( 555 ) $ ( 6,431 )
_________________
(a) Ticketing and sponsorship sales related expenses consist of (i) expenses related to selling tickets to our sports teams’ home games and primarily include employee compensation and related benefits, credit card fees, and other general and administrative expenses, and (ii) fees related to the Company’s Sponsorship Sales and Service Representation Agreements and sponsorship fulfillment costs. See Note 15 for further details related to the Sponsorship Sales and Service Representation Agreements.
(b) Marketing & event-related expenses primarily relate to marketing and production expenses and services provided to the Company by MSG Entertainment pursuant to the Arena License Agreements.
(c) Corporate & administrative expenses include certain selling, general, and administrative costs.
(d) Operating lease expenses and other rental expenses associated with the Arena License Agreements primarily consist of operating lease costs, commercial rent tax, and other expenses associated with the Arena License Agreements. See Note 15 for further details related to the Arena License Agreements.
(e) Team operating expenses primarily consist of team personnel compensation (net of escrow), NBA luxury tax, expenses associated with day-to-day team operations, including for travel and player insurance, and operating costs of the Company’s training center in Greenburgh, NY.
(f) Other segment items primarily consist of net provisions for league revenue sharing expense (excluding playoffs), league assessments, playoff related expenses, cost of goods sold and commission expense related to merchandise revenues, and share-based compensation expense.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.