What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-06 compared with 2021-02-03 · 260 added, 214 removed, 823 unchanged (37% of the section changed)

12 unchanged sentences

Total current assets 202,364 128,278

Property and equipment, net of accumulated depreciation and amortization of $ 41,098 and $ 38,361 as of December 31, 2020 and June 30, 2020, respectively

Property and equipment, net of accumulated depreciation and amortization of $ 42,406 and $ 38,361 as of March 31, 2021 and June 30, 2020, respectively

35,955 39,597

14 unchanged sentences

Net related party payables 20,700 17,952

Debt 30,000 —

Accrued liabilities:

16 unchanged sentences

Class A Common stock, par value $ 0.01 , 120,000 shares authorized;

19,582 and 19,466 shares outstanding as of December 31, 2020 and June 30, 2020, respectively

19,587 and 19,466 shares outstanding as of March 31, 2021 and June 30, 2020, respectively

Class B Common stock, par value $ 0.01 , 30,000 shares authorized;

4,530 shares outstanding as of December 31, 2020 and June 30, 2020

4,530 shares outstanding as of March 31, 2021 and June 30, 2020

Preferred stock, par value $ 0.01 , 15,000 shares authorized;

none outstanding as of December 31, 2020 and June 30, 2020

none outstanding as of March 31, 2021 and June 30, 2020

Additional paid-in capital 19,327 5,940

Treasury stock, at cost, 866 and 982 shares as of December 31, 2020 and June 30, 2020, respectively

Treasury stock, at cost, 861 and 982 shares as of March 31, 2021 and June 30, 2020, respectively

( 146,734 ) ( 167,431 )

10 unchanged sentences

(in thousands, except per share data)

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

6 unchanged sentences

Depreciation and amortization 1,573 5,573 4,840 15,338

Operating loss ( 38,406 ) ( 233 ) ( 65,810 ) ( 59,557 )

Operating income (loss) 8,124 10,625 ( 57,686 ) ( 48,932 )

Other income (expense):

3 unchanged sentences

( 2,976 ) ( 844 ) ( 7,642 ) ( 1,865 )

Loss from continuing operations before income taxes ( 40,963 ) ( 884 ) ( 70,476 ) ( 60,578 )

Income (loss) from continuing operations before income taxes 5,148 9,781 ( 65,328 ) ( 50,797 )

Income tax benefit (expense) ( 53 ) ( 5,598 ) 275 11,132

Loss from continuing operations ( 41,133 ) ( 3,657 ) ( 70,148 ) ( 43,848 )

Income from discontinued operations, net of taxes — 96,006 — 55,531

Income (loss) from continuing operations 5,095 4,183 ( 65,053 ) ( 39,665 )

Loss from discontinued operations, net of taxes — ( 145,249 ) — ( 89,718 )

Net income (loss) 5,095 ( 141,066 ) ( 65,053 ) ( 129,383 )

1 unchanged sentence

Net loss attributable to redeemable noncontrolling interests from discontinued operations — ( 22,447 ) — ( 23,851 )

Net loss attributable to nonredeemable noncontrolling interests from discontinued operations — ( 86 ) — ( 158 )

Net income attributable to nonredeemable noncontrolling interests from discontinued operations — 195 — 37

Net income (loss) attributable to Madison Square Garden Sports Corp.’s stockholders $ 5,468 $ ( 118,029 ) $ ( 63,574 ) $ ( 103,869 )

13 unchanged sentences

_________________

(a) Includes revenues from related parties of $ 14,369 and $ 61,119 for the three months ended December 31, 2020 and 2019, respectively, and $ 23,430 and $ 67,446 for the six months ended December 31, 2020 and 2019, respectively.

(b) Includes net charges from (to) related parties of $ 2,650 and $( 137 ) for the three months ended December 31, 2020 and 2019, respectively, and $ 3,264 and $( 137 ) for the six months ended December 31, 2020 and 2019, respectively.

(c) Includes net charges from (to) related parties of $ 10,455 and $( 2,742 ) for the three months ended December 31, 2020 and 2019, respectively, and $ 24,202 and $( 5,399 ) for the six months ended December 31, 2020 and 2019, respectively.

(a) Includes revenues from related parties of $ 80,322 and $ 57,827 for the three months ended March 31, 2021 and 2020, respectively, and $ 103,752 and $ 125,273 for the nine months ended March 31, 2021 and 2020, respectively.

(b) Includes net charges from (to) related parties of $ 24,855 and $( 125 ) for the three months ended March 31, 2021 and 2020, respectively, and $ 28,119 and $( 262 ) for the nine months ended March 31, 2021 and 2020, respectively.

(c) Includes net charges from (to) related parties of $ 14,957 and $( 2,729 ) for the three months ended March 31, 2021 and 2020, respectively, and $ 39,214 and $( 8,128 ) for the nine months ended March 31, 2021 and 2020, respectively.

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

5 unchanged sentences

57 342 77 1,027

Settlement loss recognized — 67 — 67

Cumulative translation adjustments — ( 19,946 ) — ( 6,778 )

Other comprehensive income, before income taxes 10 23,532 20 13,853

Other comprehensive income (loss), before income taxes 57 ( 19,537 ) 77 ( 5,684 )

Income tax benefit (expense) related to items of other comprehensive income (loss)

Other comprehensive income, net of income taxes 10 23,532 20 13,853

Other comprehensive income (loss), net of income taxes 57 ( 19,537 ) 77 ( 5,684 )

Comprehensive income (loss) 5,152 ( 160,603 ) ( 64,976 ) ( 135,067 )

1 unchanged sentence

Comprehensive loss attributable to redeemable noncontrolling interests from discontinued operations — ( 22,447 ) — ( 23,851 )

Comprehensive loss attributable to nonredeemable noncontrolling interests from discontinued operations — ( 86 ) — ( 158 )

Comprehensive income attributable to nonredeemable noncontrolling interests from discontinued operations — 195 — 37

Comprehensive income (loss) attributable to Madison Square Garden Sports Corp.’s stockholders $ 5,525 $ ( 137,566 ) $ ( 63,497 ) $ ( 109,553 )

3 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

Net income (loss) $ ( 70,148 ) $ 11,683

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

Net loss $ ( 65,053 ) $ ( 129,383 )

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

Depreciation and amortization 4,840 86,869

Provision (benefits) from deferred income taxes ( 328 ) 682

Impairment of intangibles, long-lived assets and goodwill — 102,211

Benefits from deferred income taxes ( 275 ) ( 9,805 )

Share-based compensation expense 26,193 47,440

1 unchanged sentence

Purchase accounting adjustments associated with leases

Unrealized gains on equity investment with readily determinable fair value — ( 14,725 )

Unrealized loss on equity investment with readily determinable fair value — 2,471

(Recovery of) provision for doubtful accounts ( 175 ) 6,990

26 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

Cash flows from financing activities:

Taxes paid in lieu of shares issued for equity-based compensation ( 13,891 ) ( 26,447 )

Proceeds from share issuance 808 —

Noncontrolling interest holders’ capital contribution — 4,000

1 unchanged sentence

Proceeds from revolving credit facilities 30,000 350,000

Proceeds from NHL advance 30,000 —

Repayment of revolving credit facility — ( 15,000 )

2 unchanged sentences

Payments for financing costs ( 4,562 ) —

Net cash provided by (used in) financing activities 11,363 ( 43,749 )

Net cash provided by financing activities 42,155 306,818

Effect of exchange rates on cash, cash equivalents and restricted cash — 3,916

8 unchanged sentences

Non-cash investing and financing activities:

Non-cash acquisition of additional redeemable noncontrolling interests $ — $ 37,715

Capital expenditures incurred but not yet paid $ 38 $ 75,846

5 unchanged sentences

(in thousands)

Three Months Ended December 31, 2020

Three Months Ended March 31, 2021

Issued Additional

6 unchanged sentences

Interests Total Equity

Balance as of September 30, 2020 $ 249 $ — $ ( 147,605 ) $ ( 93,361 ) $ ( 2,129 ) $ ( 242,846 ) $ 2,953 $ ( 239,893 )

Net loss — — — ( 40,625 ) — ( 40,625 ) ( 508 ) ( 41,133 )

Balance as of December 31, 2020 $ 249 $ 15,432 $ ( 147,585 ) $ ( 133,986 ) $ ( 2,119 ) $ ( 268,009 ) $ 2,881 $ ( 265,128 )

Net income (loss) — — — 5,468 — 5,468 ( 373 ) 5,095

Other comprehensive income — — — — 57 57 — 57

Comprehensive loss — — — — — ( 40,615 ) ( 508 ) ( 41,123 )

Comprehensive income (loss) — — — — — 5,525 ( 373 ) 5,152

Share-based compensation

— 3,867 — — — 3,867 — 3,867

Tax withholding associated with shares issued for equity-based compensation

— ( 93 ) — — — ( 93 ) — ( 93 )

Common stock issued under stock incentive plans

1 unchanged sentence

Adjustments to noncontrolling interests — 71 — — — 71 ( 71 ) —

Balance as of December 31, 2020 $ 249 $ 15,432 $ ( 147,585 ) $ ( 133,986 ) $ ( 2,119 ) $ ( 268,009 ) $ 2,881 $ ( 265,128 )

Balance as of March 31, 2021 $ 249 $ 19,327 $ ( 146,734 ) $ ( 128,518 ) $ ( 2,062 ) $ ( 257,738 ) $ 2,437 $ ( 255,301 )

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended December 31, 2019

Three Months Ended March 31, 2020

Common Stock Issued Additional

6 unchanged sentences

Noncontrolling

Balance as of September 30, 2019 $ 249 $ 2,819,449 $ ( 186,583 ) $ ( 50,978 ) $ ( 56,602 ) $ 2,525,535 $ 19,447 $ 2,544,982 $ 67,464

Net income (loss) — — — 94,141 — 94,141 ( 551 ) 93,590 ( 1,241 )

Other comprehensive income — — — — 23,532 23,532 — 23,532 —

Comprehensive income (loss)

— — — — — 117,673 ( 551 ) 117,122 ( 1,241 )

Balance as of December 31,2019 $ 249 $ 2,833,867 $ ( 185,893 ) $ 43,163 $ ( 33,070 ) $ 2,658,316 $ 20,361 $ 2,678,677 $ 66,223

Net loss — — — ( 118,029 ) — ( 118,029 ) ( 590 ) ( 118,619 ) ( 22,447 )

Other comprehensive loss — — — — ( 19,537 ) ( 19,537 ) — ( 19,537 ) —

Comprehensive loss — — — — — ( 137,566 ) ( 590 ) ( 138,156 ) ( 22,447 )

Share-based compensation

4 unchanged sentences

— ( 374 ) 374 — — — — — —

Contribution from noncontrolling interest holders

Adjustments to noncontrolling interests — ( 1,424 ) — — — ( 1,424 ) 1,424 — —

Noncontrolling interest non-cash acquisition

— 20,262 17,453 — — 37,715 — 37,715 ( 37,715 )

Distributions to noncontrolling interest holders

Redeemable noncontrolling interest adjustment to redemption fair value

— ( 16,939 ) — — — ( 16,939 ) — ( 16,939 ) 16,939

Balance as of December 31, 2019 $ 249 $ 2,833,867 $ ( 185,893 ) $ 43,163 $ ( 33,070 ) $ 2,658,316 $ 20,361 $ 2,678,677 $ 66,223

Balance as of March 31, 2020 $ 249 $ 2,850,372 $ ( 168,066 ) $ ( 74,866 ) $ ( 52,607 ) $ 2,555,082 $ 21,195 $ 2,576,277 $ 23,000

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended December 31, 2020

Nine Months Ended March 31, 2021

Issued Additional

18 unchanged sentences

Adjustments to noncontrolling interests — ( 365 ) — — — ( 365 ) 365 —

Balance as of December 31, 2020 $ 249 $ 15,432 $ ( 147,585 ) $ ( 133,986 ) $ ( 2,119 ) $ ( 268,009 ) $ 2,881 $ ( 265,128 )

Balance as of March 31, 2021 $ 249 $ 19,327 $ ( 146,734 ) $ ( 128,518 ) $ ( 2,062 ) $ ( 257,738 ) $ 2,437 $ ( 255,301 )

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended December 31, 2019

Nine Months Ended March 31, 2020

Common Stock Issued Additional

Capital Treasury

Stock Retained Earnings Accumulated

Stock Retained Earnings (Accumulated Deficit) Accumulated

Comprehensive Loss Total Madison Square Garden Sports Corp.

4 unchanged sentences

Balance as of June 30, 2019 $ 249 $ 2,845,961 $ ( 207,790 ) $ 29,003 $ ( 46,923 ) $ 2,620,500 $ 18,260 $ 2,638,760 $ 67,627

Net income (loss) — — — 14,160 — 14,160 ( 1,073 ) 13,087 ( 1,404 )

Other comprehensive income — — — — 13,853 13,853 — 13,853 —

Comprehensive income (loss) — — — — — 28,013 ( 1,073 ) 26,940 ( 1,404 )

Net loss — — — ( 103,869 ) — ( 103,869 ) ( 1,663 ) ( 105,532 ) ( 23,851 )

Other comprehensive loss — — — — ( 5,684 ) ( 5,684 ) — ( 5,684 ) —

Comprehensive loss — — — — — ( 109,553 ) ( 1,663 ) ( 111,216 ) ( 23,851 )

Share-based compensation

4 unchanged sentences

— ( 22,271 ) 22,271 — — — — — —

Adjustments to noncontrolling interests — ( 1,424 ) — — — ( 1,424 ) 1,424 — —

Contribution from noncontrolling interest holders

2 unchanged sentences

— — — — — — ( 535 ) ( 535 ) —

Balance as of December 31, 2019 $ 249 $ 2,833,867 $ ( 185,893 ) $ 43,163 $ ( 33,070 ) $ 2,658,316 $ 20,361 $ 2,678,677 $ 66,223

Noncontrolling interest non-cash acquisition

— 20,262 17,453 — — 37,715 — 37,715 ( 37,715 )

Redeemable noncontrolling interest adjustment to redemption fair value

— ( 16,939 ) — — — ( 16,939 ) — ( 16,939 ) 16,939

Balance as of March 31, 2020 $ 249 $ 2,850,372 $ ( 168,066 ) $ ( 74,866 ) $ ( 52,607 ) $ 2,555,082 $ 21,195 $ 2,576,277 $ 23,000

See accompanying notes to consolidated financial statements.

4 unchanged sentences

Description of Business

Madison Square Garden Sports Corp., formerly The Madison Square Garden Company (together with its subsidiaries, the “Company” or “MSG Sports”) owns and operates a portfolio 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”).

Madison Square Garden Sports Corp., formerly The Madison Square Garden Company (together with its subsidiaries, the “Company” or “MSG Sports”) 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”).

24 unchanged sentences

However, on March 11 and 12, 2020, the NBA and NHL, respectively, suspended their 2019-20 seasons due to COVID-19.

In July and August 2020, the NBA and NHL, respectively, restarted their seasons.

In July and August 2020, the NBA and NHL, respectively, resumed their seasons.

As a result, the Company recognized certain revenues that otherwise would have been recognized during the third and fourth quarter of fiscal year 2020 during the first quarter of fiscal year 2021.

In addition, on December 16, 2020 and January 14, 2021, respectively, the Knicks and Rangers resumed playing their home games at The Garden as part of the 2020-21 seasons.

Due to the delayed start of the 2020-21 NBA and NHL seasons, the Company will recognize certain revenues during the third and fourth quarters of fiscal year 2021 that otherwise would have been recognized during the second and third quarters of fiscal year 2021, respectively.

Due to the delayed start of the 2020-21 NBA and NHL seasons, the Company recognized certain revenues during the third quarter of fiscal year 2021 and will recognize certain revenues during the fourth quarter of fiscal year 2021, that otherwise would have been recognized during the second and third quarters of fiscal year 2021, respectively.

MADISON SQUARE GARDEN SPORTS CORP.

1 unchanged sentence

Reclassifications

The historical results of MSG Entertainment have been reflected in the accompanying consolidated statements of operations for the three and six months ended December 31, 2019 as discontinued operations.

The historical results of MSG Entertainment have been reflected in the accompanying consolidated statements of operations for the three and nine months ended March 31, 2020 as discontinued operations.

See Note 3 for more information.

11 unchanged sentences

While The Garden was closed due to the government mandated suspension of events as a result of COVID-19, the Knicks and Rangers were not required to pay license fees to MSG Entertainment under the Arena License Agreements.

On December 16, 2020 and January 14, 2021, respectively, the Knicks and Rangers resumed playing their homes games at The Garden as part of the 2020-21 seasons.

However, fans are currently prohibited from attending events due to ongoing government-mandated assembly restrictions.

No assurances can be made that games at The Garden this season will be played with any in-arena audiences or, that if fans are permitted, that audience capacity would not be limited.

When games are played at The Garden by the Knicks and Rangers either without fans in attendance or with limited fans in attendance due to government mandated capacity constraints, the applicable rent paid to MSG Entertainment is reduced by up to 80 %.

During the six months ended December 31, 2020, as a result of COVID-19, the Company implemented cost-reduction measures that included workforce reductions and limits on discretionary spending.

On December 16, 2020 and January 14, 2021, respectively, the Knicks and Rangers resumed playing their homes games at The Garden as part of the 2020-21 seasons.

However, fans were initially prohibited from attending events due to government-mandated assembly restrictions.

Effective February 23, 2021, New York venues with at least a 10,000-person capacity were permitted to operate at 10% capacity, and the Knicks and Rangers began playing games at The Garden with a limited number of fans in attendance on February 23 and 26, respectively.

Effective May 19, 2021, The Garden will be permitted to operate at up to 30% capacity, which would be after the end of the 2020-21 regular seasons.

No assurances can be made that attendance will remain permissible or at stated capacity limits during the remainder of the 2020-21 regular seasons and postseasons.

During the nine months ended March 31, 2021, as a result of COVID-19, the Company implemented cost-reduction measures that included workforce reductions and limits on discretionary spending.

In addition, as a result of the disruptions caused by COVID-19, certain operating expenses are reduced including (i) rent payments to MSG Entertainment under the Arena License Agreements, (ii) NBA league assessments and day-of-game expenses for the Knicks and Rangers games, and (iii) league revenue sharing and team personnel expense.

These expense reductions will not fully offset revenue losses.

Additionally, as the Knicks and Rangers returned to play in December 2020 and January 2021, respectively, and in anticipation of fans returning to the building in the future, certain costs will increase including day-of-game expenses and certain selling, general and administrative costs.

The Company believes that it has sufficient liquidity, including approximately $ 70,800 in Cash and cash equivalents as of December 31, 2020, along with available borrowing capacity under existing credit facilities, to fund its operations and satisfy any obligations with respect to the return or application of deferred revenue over the next 12 months.

Additionally, as the Knicks and Rangers returned to play in December 2020 and January 2021, respectively, and with fans having returned to The Garden in February 2021, certain costs increased and will continue to increase, to the extent that attendance capacity increases, including day-of-game expenses and certain selling, general and administrative costs.

The Company believes that it has sufficient liquidity, including $ 69,128 in Cash and cash equivalents as of March 31, 2021, along with available borrowing capacity under existing credit facilities, to fund its operations and satisfy any obligations with respect to the return or application of deferred revenue over the next 12 months.

At this time, the Company’s management is unable to predict when the Company will be able to resume normal business operations and if there will be any longer-term effects due to these COVID-related disruptions.

1 unchanged sentence

COVID-19 could impede economic activity in impacted regions or globally over the long-term, causing a global recession and leading to a further decline in discretionary spending on sporting events and other leisure activities, including declines in domestic and international tourism, which could result in long-term effects on the Company’s business.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Accounting Policies

6 unchanged sentences

CLG is consolidated with the equity owned by other shareholders shown as nonredeemable noncontrolling interests in the accompanying consolidated balance sheets, and the other shareholders’ portion of net earnings (loss) and other comprehensive income (loss) shown as net income (loss) or comprehensive income (loss) attributable to nonredeemable noncontrolling interests in the accompanying consolidated statements of operations and consolidated statements of comprehensive income (loss), respectively.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Use of Estimates

1 unchanged sentence

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, goodwill, intangible assets, other long-lived assets, deferred tax valuation allowance, tax accruals and other liabilities.

Such estimates include the valuation of accounts receivable, goodwill, intangible assets, other long-lived assets, deferred tax valuation allowance, and other liabilities.

In addition, estimates are used in revenue recognition, revenue sharing expense (net of escrow), luxury tax expense, income tax expense, performance and share-based compensation, depreciation and amortization, litigation matters and other matters, as well as in the valuation of contingent consideration and noncontrolling interests resulting from business combination transactions.

26 unchanged sentences

The Company adopted this standard as of the beginning of fiscal year 2021, and the adoption did not have an impact on its consolidated financial statements.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In August 2018, the FASB issued ASU No.

7 unchanged sentences

2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities.

2018-17 amends the variable interest entities (“VIE”) guidance to align the evaluation of a decision

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

maker’s or service provider’s fee in assessing a variable interest with the guidance in the primary beneficiary test.

2018-17 amends the variable interest entities (“VIE”) guidance to align the evaluation of a decision maker’s or service provider’s fee in assessing a variable interest with the guidance in the primary beneficiary test.

Specifically, indirect interests held by a related party that is under common control will now be considered on a proportionate basis, rather than in their entirety, when assessing whether the fee qualifies as a variable interest.

29 unchanged sentences

The adoption of this standard, which relates to disclosure, is not expected to have a material impact on the Company’s consolidated financial statements.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In December 2019, the FASB issued ASU No.

10 unchanged sentences

The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Discontinued Operations

As a result of the MSGE Distribution, the results of the entertainment business previously owned and operated by the Company through its MSG Entertainment business segment and the sports booking business previously owned and operated by the Company through its MSG Sports business segment through the MSGE Distribution Date, as well as transaction costs related to the MSGE Distribution, have been classified in the accompanying consolidated statement of operations for the three and six months ended December 31, 2019 as discontinued operations.

As a result of the MSGE Distribution, the results of the entertainment business previously owned and operated by the Company through its MSG Entertainment business segment and the sports booking business previously owned and operated by the Company through its MSG Sports business segment through the MSGE Distribution Date, as well as transaction costs related to the MSGE Distribution, have been classified in the accompanying consolidated statement of operations for the three and nine months ended March 31, 2020 as discontinued operations.

See Note 3 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 for more information.

The table below sets forth operating results of discontinued operations for the three and six months ended December 31, 2019.

The table below sets forth operating results of discontinued operations for the three and nine months ended March 31, 2020.

Amounts presented below differ from historically reported results for the MSG Entertainment business segment due to reclassifications and adjustments made for purposes of discontinued operations.

Three Months Ended Six Months Ended

December 31, 2019 December 31, 2019

Three Months Ended Nine Months Ended

March 31, 2020 March 31, 2020

Revenues $ 157,010 $ 658,385

2 unchanged sentences

Depreciation and amortization 24,094 71,531

Operating income 81,075 51,081

Impairment of intangibles, long-lived assets and goodwill 102,211 102,211

Operating loss ( 145,829 ) ( 94,748 )

Other income (expense):

2 unchanged sentences

Interest expense ( 1,014 ) ( 3,197 )

Miscellaneous income, net 9,387 14,551

Income from discontinued operations before income taxes 94,409 73,865

Miscellaneous expense, net ( 17,306 ) ( 2,755 )

Loss from discontinued operations before income taxes ( 161,751 ) ( 87,886 )

Income tax benefit (expense) 16,502 ( 1,832 )

Net income from discontinued operations 96,006 55,531

Net loss from discontinued operations ( 145,249 ) ( 89,718 )

Net loss attributable to redeemable noncontrolling interests ( 22,447 ) ( 23,851 )

Net loss attributable to nonredeemable noncontrolling interests ( 86 ) ( 158 )

Net income from discontinued operations attributable to Madison Square Garden Sports Corp.’s stockholders $ 97,333 $ 57,093

As permitted under ASU 2014-08, the Company has elected not to adjust the consolidated statement of cash flows for the six months ended December 31, 2019 to exclude cash flows attributable to discontinued operations.

Net income attributable to nonredeemable noncontrolling interests 195 37

Net loss from discontinued operations attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 122,997 ) $ ( 65,904 )

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

As permitted under ASU 2014-08, the Company has elected not to adjust the consolidated statement of cash flows for the nine months ended March 31, 2020 to exclude cash flows attributable to discontinued operations.

The table below sets forth, for the period presented, significant selected financial information related to the MSG Entertainment business segment and the sports booking business previously owned and operated by the Company through its MSG Sports business segment through the MSGE Distribution Date, which is included in the accompanied consolidated statements of cash flows:

Six Months Ended

December 31, 2019

Nine Months Ended

March 31, 2020

Non-cash items included in net income (loss):

Depreciation and amortization $ 71,531

Impairment of intangibles, long-lived assets and goodwill 102,211

Share-based compensation expense 7,881

2 unchanged sentences

Non-cash investing activities:

Non-cash acquisition of additional redeemable noncontrolling interests $ 37,715

Capital expenditures incurred but not yet paid 75,656

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Revenue Recognition

1 unchanged sentence

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, 2020 and 2019, the Company did not have any material impairment losses on receivables or contract assets arising from contracts with customers.

For the three and nine months ended March 31, 2021 and 2020, the Company did not have any material impairment losses on receivables or 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 required entity-wide disclosure requirements set forth in 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, 2020 and 2019:

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

12 unchanged sentences

The timing of revenue recognition, billings and cash collections results in billed receivables, contract assets and contract liabilities on the consolidated balance sheet.

The following table provides information about contract balances from the Company’s contracts with customers as of December 31, 2020 and June 30, 2020.

December 31, June 30,

The following table provides information about contract balances from the Company’s contracts with customers as of March 31, 2021 and June 30, 2020.

March 31, June 30,

Receivables from contracts with customers, net (a)

5 unchanged sentences

(a) Receivables from contracts with customers, net, which are reported in Accounts receivable, net and Net related party receivables in the Company’s accompanying consolidated balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers.

As of December 31, 2020 and June 30, 2020, the Company’s receivables reported above included $ 990 and $ 632 , respectively, related to various related parties associated with contracts with customers.

As of March 31, 2021 and June 30, 2020, the Company’s receivables reported above included $ 911 and $ 632 , respectively, related to various related parties associated with contracts with customers.

See Note 16 for further details on 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 and luxury tax payments.

(b) Contract assets, current, which are reported as Other current assets in the Company’s 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.

3 unchanged sentences

The non-current portion of deferred revenue primarily consists of a $ 30,000 receipt from the NBA in December 2020 of league distributions in advance of the Company’s recognition.

The Company’s deferred revenue related to local media rights with MSG Networks was $ 56,341 and $ 0 as of December 31, 2020 and June 30, 2020, respectively.

The Company’s deferred revenue related to local media rights with MSG Networks was $ 4,620 and $ 0 as of March 31, 2021 and June 30, 2020, respectively.

See Note 16 for further details on these related party arrangements.

(d) Revenue recognized for the six months ended December 31, 2020 relating to the deferred revenue balance as of June 30, 2020 was $ 44,392 .

(d) Revenue recognized for the nine months ended March 31, 2021 relating to the deferred revenue balance as of June 30, 2020 was $ 53,397 .

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, 2020 and is based on current projections.

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 March 31, 2021 and is based on current projections.

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.

10 unchanged sentences

The following table presents 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 Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

5 unchanged sentences

24,344 24,004 24,120 23,914

Weighted-average shares excluded from diluted earnings per share 152 510 403 507

Weighted-average shares excluded from diluted earnings (loss) per share — 778 331 597

Team Personnel Transactions

Direct operating expenses in the accompanying consolidated statements of operations include a net expense for transactions relating to the Company’s sports teams for waiver/contract termination costs and player trades (“Team personnel transactions”).

Team personnel transactions expense was $ 2,839 and $ 17,644 for the three months ended December 31, 2020 and 2019, respectively, and $ 13,712 and $ 27,887 for the six months ended December 31, 2020 and 2019, respectively.

Direct operating and selling, general and administrative expenses in the accompanying consolidated statements of operations include a net expense for transactions relating to the Company’s sports teams for waiver/contract termination costs and player trades (“Team personnel transactions”).

Team personnel transactions expense was $ 3,305 and $ 5,711 for the three months ended March 31, 2021 and 2020, respectively, and $ 17,003 and $ 33,598 for the nine months ended March 31, 2021 and 2020, respectively.

As a result of certain team personnel contract terminations in May 2021, the Company will record a pre-tax charge of approximately $ 21,000 in the fourth quarter of fiscal year 2021.

This charge will be reflected in selling, general and administrative expenses in the Company’s consolidated statements of operations for the year ending June 30, 2021.

Cash, Cash Equivalents and Restricted Cash

1 unchanged sentence

2021 June 30,

2020 December 31,

2020 March 31,

2020 June 30,

6 unchanged sentences

_________________

(a) Restricted cash as of December 31, 2020 relates to the Company’s revolving credit facilities (see Note 12 for more information).

For all prior periods, restricted cash primarily included cash deposited in escrow account (see Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 for more information).

(a) Restricted cash as of March 31, 2021 relates to the Company’s revolving credit facilities (see Note 12 for more information) and cash deposited in an escrow account.

For all prior periods, restricted cash primarily 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 year ended June 30, 2020 for more information).

The Company’s leases primarily consist of the lease of the Company’s principal executive offices under the Sublease Agreement with MSG Entertainment (the “Sublease Agreement”) and the lease of CLG Performance Center.

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On April 17, 2020, in connection with the MSGE Distribution, the Company entered into the Sublease Agreement.

The sublease right of use (“ROU”) assets and liabilities are recorded on the balance sheet at lease commencement based on the present value of minimum base rent and other fixed payments over the reasonably certain lease term, which ends April 30, 2024.

The sublease right of use (“ROU”) assets and liabilities are recorded on the balance sheet at lease commencement based on the

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

present value of minimum base rent and other fixed payments over the reasonably certain lease term, which ends April 30, 2024.

In addition, in connection with the MSGE Distribution, the Company entered into the Arena License Agreements with MSG Entertainment that end on June 30, 2055 and allow the Knicks and the Rangers to continue to play their home games at The Garden.

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The Company was not required to make license payments while The Garden was unavailable for use.

During the three months ended December 31, 2020, the Company recognized operating lease costs associated with the Knicks Arena License Agreement with respect to Knicks games played at The Garden in December 2020.

On December 31, 2020 the assets and liabilities associated with the Rangers Arena License Agreement were remeasured utilizing the same discount rate as of April 17, 2020, taking into account the unpaid monthly installments during the lease period as a resolution of a lease contingency, since the Rangers did not resume play at The Garden until January 2021.

As of December 31, 2020, the Company’s existing operating leases, which are recorded in the accompanying financial statements, have remaining lease terms ranging from 20 months to 35 years.

During the three and nine months ended March 31, 2021, the Company recognized operating lease costs associated with the Knicks and Rangers Arena License Agreements with respect to games played at The Garden beginning in December 2020 and January 2021, respectively.

As of March 31, 2021, the Company’s existing operating leases, which are recorded in the accompanying financial statements, have remaining lease terms ranging from 17 months to 34 years.

In certain instances, leases include options to renew, with varying option terms.

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The Company’s lease agreements do not contain material residual value guarantees or material restrictive covenants.

The following table summarizes the ROU assets and lease liabilities recorded on the Company’s accompanying consolidated balance sheets as of December 31, 2020 and June 30, 2020:

Line Item in the Company’s Consolidated Balance Sheet December 31,

The following table summarizes the ROU assets and lease liabilities recorded on the Company’s accompanying consolidated balance sheets as of March 31, 2021 and June 30, 2020:

Line Item in the Company’s Consolidated Balance Sheet March 31,

2021 June 30,

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_________________

(a) As of December 31, 2020, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $ 26,403 and $ 686,978 , respectively, that are payable to MSG Entertainment.

(a) As of March 31, 2021, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $ 33,922 and $ 691,783 , respectively, that are payable to MSG Entertainment.

As of June 30, 2020, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $ 38,770 and $ 678,366 , respectively, that are payable to MSG Entertainment.

The following table summarizes the activity recorded within the Company’s accompanying consolidated statements of operations for the three and six months ended December 31, 2020 and 2019:

Line Item in the Company’s Consolidated Statement of Operations Three Months Ended December 31, Six Months Ended December 31,

The following table summarizes the activity recorded within the Company’s accompanying consolidated statements of operations for the three and nine months ended March 31, 2021 and 2020:

Line Item in the Company’s Consolidated Statement of Operations Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

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Supplemental Information

For the six months ended December 31, 2020 and 2019, cash paid for amounts included in the measurement of lease liabilities was $ 1,299 and $ 200 , respectively.

The weighted average remaining lease term for operating leases recorded on the accompanying consolidated balance sheet as of December 31, 2020 was 34.1 years.

The weighted average discount rate was 7.13 % as of December 31, 2020 and represented the Company’s estimated incremental borrowing rate, assuming a secured borrowing, based on the remaining lease term at the time of either (i) adoption of the standard or (ii) the period in which the lease term expectation commenced or was modified.

For the nine months ended March 31, 2021 and 2020, cash paid for amounts included in the measurement of lease liabilities was $ 2,717 and $ 300 , respectively.

The weighted average remaining lease term for operating leases recorded on the accompanying consolidated balance sheet as of March 31, 2021 was 33.9 years.

The weighted average discount rate was 7.13 % as of March 31, 2021 and represented the Company’s estimated incremental borrowing rate, assuming a secured borrowing, based on the remaining lease term at the time of either (i) adoption of the standard or (ii) the period in which the lease term expectation commenced or was modified.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Maturities of operating lease liabilities as of December 31, 2020 are as follows:

Maturities of operating lease liabilities as of March 31, 2021 are as follows:

Fiscal Year 2021 (remainder) $ 3,226

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During the first quarter of fiscal year 2021, 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, 2020 and June 30, 2020 is $ 226,955 .

The Company’s indefinite-lived intangible assets as of December 31, 2020 and June 30, 2020 are as follows:

The carrying amount of goodwill as of March 31, 2021 and June 30, 2020 is $ 226,955 .

The Company’s indefinite-lived intangible assets as of March 31, 2021 and June 30, 2020 are as follows:

Sports franchises $ 111,064

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The Company’s intangible assets subject to amortization are as follows:

December 31, 2020 Gross Accumulated

March 31, 2021 Gross Accumulated

Amortization Net

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$ 5,900 $ ( 3,146 ) $ 2,754

For the three months ended December 31, 2020 and 2019, amortization expense of intangible assets was $ 265 and $ 1,103 , respectively.

For the six months ended December 31, 2020 and 2019, amortization expense of intangible assets was $ 530 and $ 2,205 , respectively.

For the three months ended March 31, 2021 and 2020, amortization expense of intangible assets was $ 265 and $ 1,090 , respectively.

For the nine months ended March 31, 2021 and 2020, amortization expense of intangible assets was $ 795 and $ 3,295 , respectively.

MADISON SQUARE GARDEN SPORTS CORP.

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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 March 31,

2021 June 30,

Money market accounts I $ 60,008 $ —

Total assets measured at fair value $ 60,008 $ —

Assets listed above are classified within Level I of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets.

The carrying amount of the Company’s money market accounts approximates fair value due to their short-term maturities.

The carrying value and fair value of the Company’s financial instruments reported in the accompanying consolidated balance sheets are as follows:

December 31, 2020 June 30, 2020

March 31, 2021 June 30, 2020

Value Carrying

Long-term debt (a)

Debt, current (a)

$ 30,000 $ 30,000 $ — $ —

Long-term debt (b)

$ 380,000 $ 380,000 $ 350,000 $ 350,000

(a) 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.

_________________

(a) On March 25, 2021, the NHL advanced $ 30,000 to Rangers LLC.

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 as the advance bears interest at current market conditions.

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 facilities bear interest at a variable rate indexed to current market conditions.

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The following table provides a reconciliation of the deferred and contingent consideration liabilities in connection with the CLG acquisition:

Six Months Ended December 31, 2020

Nine Months Ended March 31, 2021

Balance as of June 30, 2020 $ 336

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Change in fair value of contingent consideration (a)

Balance as of December 31, 2020 $ —

Balance as of March 31, 2021 $ —

_________________

(a) The change in fair value of contingent consideration, including accretion, was recorded within Selling, general and administrative expenses in the accompanying consolidated statement of operations for the six months ended December 31, 2020.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Commitments and Contingencies

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In addition, see Note 8 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 2020 other than the amended and extended credit facilities described in Note 12 and activities in the ordinary course of business.

The Company did not have any material changes in its contractual obligations, including off-balance sheet commitments, since the end of fiscal year 2020 other than the amended and extended credit facilities and NHL advance described in Note 12 and activities in the ordinary course of business.

Legal Matters

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Credit Facilities

Knicks Revolving Credit Facility

8 unchanged sentences

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 2020 Knicks Revolving Credit Facility.

The outstanding balance under the 2020 Knicks Revolving Credit Facility was $ 220,000 as of December 31, 2020.

The interest rate on the 2020 Knicks Revolving Credit Facility as of December 31, 2020 was 1.65 %.

During the six months ended December 31, 2020 the Company made interest payments of $ 1,394 .

All obligations under the 2020 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 and (ii) revenues to be paid to the Knicks LLC by the NBA pursuant to certain U.S.

national broadcast agreements.

The outstanding balance under the 2020 Knicks Revolving Credit Facility was $ 220,000 as of March 31, 2021.

The interest rate on the 2020 Knicks Revolving Credit Facility as of March 31, 2021 was 1.61 %.

During the nine months ended March 31, 2021 the Company made interest payments of $ 2,313 .

All obligations under the 2020 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 the 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 2020 Knicks Revolving Credit Facility at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to Eurocurrency loans).

8 unchanged sentences

and (vi) taking certain actions that would invalidate the secured lenders’ liens on any Knicks LLC’s collateral.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The 2020 Knicks Revolving Credit Facility requires Knicks LLC to comply with a debt service ratio of 1.5 :1.0 over a trailing four quarter period.

As of December 31, 2020, Knicks LLC was in compliance with this financial covenant.

As of March 31, 2021, Knicks LLC was in compliance with this financial covenant.

Knicks Unsecured Credit Facility

5 unchanged sentences

The 2020 Knicks Holdings Credit Agreement provides for a revolving credit facility of up to $ 75,000 (the “2020 Knicks Holdings Revolving Credit Facility” to fund working capital needs and for general corporate purposes.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The 2020 Knicks Holdings Revolving Credit Facility requires Knicks Holdings to comply with a debt service ratio of 1.1 :1.0 over a trailing four quarter period.

As of December 31, 2020, Knicks Holdings was in compliance with this financial covenant.

As of March 31, 2021, Knicks Holdings was in compliance with this financial covenant.

The 2020 Knicks Holdings Revolving Credit Facility will mature and any unused commitments thereunder will expire on November 6, 2023 .

2 unchanged sentences

Knicks Holdings is required to pay a commitment fee ranging from 0.375 % to 0.500 % per annum in respect of the average daily unused commitments under the 2020 Knicks Holdings Revolving Credit Facility .

There was no borrowing under the 2020 Knicks Holdings Revolving Credit Facility as of December 31, 2020.

There was no borrowing under the 2020 Knicks Holdings Revolving Credit Facility as of March 31, 2021.

All obligations under the 2020 Knicks Holdings Revolving Credit Facility are secured by debt service and distribution accounts maintained by Knicks Holdings, and includes a guarantee from MSG NYK Holdings, LLC, an indirect wholly-owned subsidiary of the Company and the direct parent of Knicks Holdings.

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Amounts borrowed may have been distributed to the Company except during an event of default.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

All borrowings under the 2020 Rangers Revolving Credit Facility were subject to the satisfaction of certain customary conditions.

1 unchanged sentence

Rangers LLC is required to pay a commitment fee ranging from 0.375 % to 0.625 % per annum in respect of the average daily unused commitments under the 2020 Rangers Revolving Credit Facility.

The outstanding balance under the 2020 Rangers Revolving Credit Facility was $ 160,000 as of December 31, 2020.

The interest rate on the 2020 Rangers Revolving Credit Facility as of December 31, 2020 was 2.15 %.

During the six months ended December 31, 2020 the Company made interest payments of $ 1,361 .

All obligations under the 2020 Rangers Revolving Credit Facility are 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.

The outstanding balance under the 2020 Rangers Revolving Credit Facility was $ 160,000 as of March 31, 2021.

The interest rate on the 2020 Rangers Revolving Credit Facility as of March 31, 2021 was 2.11 %.

During the nine months ended March 31, 2021 the Company made interest payments of $ 2,233 .

All obligations under the 2020 Rangers Revolving Credit Facility are, subject to the 2021 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 2020 Rangers Revolving Credit Facility at any time, in whole or in part, without premium or penalty (except for customary

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

breakage costs with respect to Eurocurrency 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 2020 Rangers Revolving Credit Facility.

8 unchanged sentences

The 2020 Rangers Revolving Credit Facility requires Rangers LLC to comply with a debt service ratio of 1.5 :1.0 over a trailing four quarter period.

As of December 31, 2020, Rangers LLC was in compliance with this financial covenant.

As of March 31, 2021, Rangers LLC was in compliance with this financial covenant.

2021 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 “2021 Rangers NHL Advance Agreement”) pursuant to which the NHL advanced $ 30,000 to Rangers LLC.

The advance is to be utilized solely and exclusively to pay for Rangers LLC operating expenses.

All obligations under the 2021 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 2021 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 2021 Rangers NHL Advance Agreement are payable upon demand by the NHL.

It is expected that the 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 2021 Rangers NHL Advance Agreement was $ 30,000 as of March 31, 2021.

Delayed Draw Term Loan Credit Facilities

2 unchanged sentences

On November 6, 2020 , the Company terminated the DDTL Facilities in their entirety.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Deferred Financing Costs

The following table summarizes deferred financing costs, net of amortization, related to the Company’s credit facilities as reported on the accompanying consolidated balance sheet:

December 31, 2020 (a)

March 31, 2021 (a)

Other current assets $ 1,759 $ 675

Other assets 2,784 264

(a) In connection with the 2020 Knicks Revolving Credit Facility , 2020 Knicks Holdings Revolving Credit Facility and 2020 Rangers Revolving Credit Facility, the Company incurred $ 4,553 in deferred financing costs during the six months ended December 31, 2020.

(a) In connection with the 2020 Knicks Revolving Credit Facility , 2020 Knicks Holdings Revolving Credit Facility and 2020 Rangers Revolving Credit Facility, the Company incurred $ 4,562 in deferred financing costs during the nine months ended March 31, 2021.

Benefit Plans

6 unchanged sentences

In addition, the Company also sponsored a contributory welfare plan which provided certain postretirement healthcare benefits to certain employees hired prior to January 1, 2001 who are eligible to commence receipt of early or normal benefits under the Cash Balance Pension Plan and their dependents, as well as certain union employees (“Postretirement Plan”).

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

As of the MSGE Distribution Date, the Company and MSG Entertainment entered into an employee matters agreement (the “Employee Matters Agreement”) which determined each company’s obligations after the MSGE Distribution with regard to historical liabilities under the Company’s former pension and postretirement plans.

See Note 14 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 for more information with regard to the liabilities retained by the Company from the Excess Cash Balance Plan and Excess Plan, which were transferred to the MSG Sports, LLC Excess Cash Balance Plan and MSG Sports, LLC Excess Retirement Plan, which the Company established in connection with the MSGE Distribution and are collectively referred to the “MSGS Pension Plans.”

The following table presents components of net periodic benefit cost for the MSGE Pension Plans, MSGS Pension Plans and Postretirement Plan included in the accompanying consolidated statements of operations for the three and six months ended December 31, 2020 and 2019.

Service cost is recognized in direct operating expenses and selling, general and administrative expenses.

All other components of net periodic benefit cost are reported in Miscellaneous expense, net.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MSGE Pension Plans & MSGS Pension Plans Postretirement Plan

Three Months Ended Three Months Ended

December 31, December 31,

March 31, March 31,

2021 2020 2021 2020

Service cost $ — $ 24 $ — $ 18

Interest cost 60 1,328 — 27

Interest cost (credit) ( 11 ) 1,326 — 28

Expected return on plan assets — ( 1,330 ) — —

Recognized actuarial loss 57 339 — 3

Settlement loss recognized — 67 — —

Net periodic benefit cost $ 46 $ 426 $ — $ 49

MSGE Pension Plans & MSGS Pension Plans Postretirement Plan

Six Months Ended Six Months Ended

December 31, December 31,

Nine Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

3 unchanged sentences

Recognized actuarial loss 77 1,019 — 8

Settlement loss recognized — 67 — —

Net periodic benefit cost $ 186 $ 1,151 $ — $ 144

2 unchanged sentences

Three Months Ended Three Months Ended

December 31, December 31,

March 31, March 31,

2021 2020 2021 2020

3 unchanged sentences

$ 46 $ 426 $ — $ 49

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MSGE Pension Plans & MSGS Pension Plans Postretirement Plan

Six Months Ended Six Months Ended

December 31, December 31,

Nine Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

6 unchanged sentences

As a result of the MSGE Distribution, the Savings Plans and Union Savings Plan were transferred to MSG Entertainment.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

However, MSG Sports employees continue to participate in the 401(k) Plan.

1 unchanged sentence

Expenses related MSG Sports LLC Excess Savings Plan and Savings Plans that are included in the accompanying consolidated statements of operations for the three and six months ended December 31, 2020 and 2019 are as follows:

Three Months Ended Six Months Ended

December 31, December 31,

Expenses related MSG Sports LLC Excess Savings Plan and Savings Plans that are included in the accompanying consolidated statements of operations for the three and nine months ended March 31, 2021 and 2020 are as follows:

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

3 unchanged sentences

$ 426 $ ( 804 ) $ 1,530 $ 4,706

For the three and six months ended December 31, 2019, expenses related to the Union Savings Plan of $ 31 and $ 53 , respectively, have been classified in the accompanying consolidated statement of operations as discontinued operations.

For the three and nine months ended March 31, 2020, expenses related to the Union Savings Plan of $ 469 and $ 522 , respectively, have been classified in the accompanying consolidated statement of operations as discontinued operations.

Share-based Compensation

See Note 15 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 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 was $ 15,981 and $ 22,326 for the three and six months ended December 31, 2020, respectively.

Share-based compensation expense was $ 14,255 and $ 28,051 for the three and six months ended December 31, 2019, respectively.

There were no costs related to share-based compensation in continuing operations that were capitalized for the three and six months ended December 31, 2020 and 2019, respectively.

Share-based compensation expense for discontinued operations was $ 2,439 and $ 5,534 for the three and six months ended December 31, 2019, respectively.

Share-based compensation expense was recognized in the consolidated statements of operations as a component of direct operating expenses or selling, general and administrative expenses.

Share-based compensation expense was $ 3,867 and $ 26,193 for the three and nine months ended March 31, 2021, respectively.

Share-based compensation expense was $ 11,508 and $ 39,559 for the three and nine months ended March 31, 2020, respectively.

There were no costs related to share-based compensation in continuing operations that were capitalized for the three and nine months ended March 31, 2021 and 2020, respectively.

Share-based compensation expense for discontinued operations was $ 2,347 and $ 7,881 for the three and nine months ended March 31, 2020, respectively.

As a result of an agreement to settle an action (the “Settlement”) filed by a purported stockholder of the Company derivatively on behalf of the Company against certain directors of the Company who are members of the Dolan family and against the directors of the Company who were members of the Compensation Committee, Mr.

2 unchanged sentences

32 target performance stock units and three grants of stock options to purchase an aggregate of 449 shares of Class A Common Stock, which were to vest over a four-year period.

The Settlement became effective October 8, 2020 and therefore, upon cancellation, the Company recorded previously unrecognized share-based compensation expense of approximately $ 7,400 related to this award during the three and six months ended December 31, 2020.

MADISON SQUARE GARDEN SPORTS CORP.

1 unchanged sentence

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 the Company and MSG Entertainment employees, for the six months ended December 31, 2020:

Number of Weighted-Average

8 unchanged sentences

Forfeited / Cancelled ( 16 ) ( 54 ) $ 275.81

Unvested award balance, December 31, 2020 276 227 $ 235.04

Unvested award balance, March 31, 2021 263 221 $ 235.32

_____________________

(a) Weighted-average fair value per share at date of grant does not reflect any adjustments to awards granted prior to the MSGE Distribution.

The fair value of RSUs that vested during the six months ended December 31, 2020 was $ 34,668 .

The fair value of RSUs that vested during the nine months ended March 31, 2021 was $ 36,099 .

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 and MSG Entertainment’s employees’ required statutory tax withholding obligations for the applicable income and other employment taxes, 84 of these RSUs, with an aggregate value of $ 13,891 , inclusive of $ 7,106 related to MSG Entertainment 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, 2020.

The fair value of RSUs that vested during the six months ended December 31, 2019 was $ 59,032 .

The weighted-average fair value per share at grant date of RSUs granted during the six months ended December 31, 2019 was $ 247.18 .

To fulfill the Company’s and MSG Entertainment’s employees’ required statutory tax withholding obligations for the applicable income and other employment taxes, 88 of these RSUs, with an aggregate value of $ 13,891 , inclusive of $ 7,106 related to MSG Entertainment 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 nine months ended March 31, 2021.

The fair value of RSUs that vested during the nine months ended March 31, 2020 was $ 59,215 .

The weighted-average fair value per share at grant date of RSUs granted during the nine months ended March 31, 2020 was $ 247.18 .

Stock Options Award Activity

The following table summarizes activity related to the Company’s stock options for the six months ended December 31, 2020:

The following table summarizes activity related to the Company’s stock options for the nine months ended March 31, 2021:

Time Vesting Options Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value

2 unchanged sentences

Cancelled ( 449 ) $ 242.51

Balance as of December 31, 2020 94 $ 145.78 6.96 $ 3,595

Exercisable as of December 31, 2020 94 $ 145.78 6.96 $ 3,595

Balance as of March 31, 2021 94 $ 145.78 6.71 $ 3,160

Exercisable as of March 31, 2021 94 $ 145.78 6.71 $ 3,160

Stock Repurchase Program

2 unchanged sentences

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

During the three and six months ended December 31, 2020, the Company did no t engage in any share repurchase activities under its share repurchase program.

As of December 31, 2020, the Company had $ 259,639 of availability remaining under its stock repurchase authorization.

During the three and nine months ended March 31, 2021, the Company did no t engage in any share repurchase activities under its share repurchase program.

As of March 31, 2021, the Company had $ 259,639 of availability remaining under its stock repurchase authorization.

MADISON SQUARE GARDEN SPORTS CORP.

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Related Party Transactions

As of December 31, 2020, members of the Dolan family including trusts for members of the Dolan family (collectively, the “Dolan Family Group”), for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, collectively beneficially own 100 % of the Company’s outstanding Class B Common Stock and own approximately 3.0 % of the Company’s outstanding Class A Common Stock.

As of March 31, 2021, members of the Dolan family including trusts for members of the Dolan family (collectively, the “Dolan Family Group”), for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, collectively beneficially own 100 % of the Company’s outstanding Class B Common Stock and own approximately 3.0 % 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, represent approximately 70.7 % of the aggregate voting power of the Company’s outstanding common stock.

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The Company is party to the following agreements and/or arrangements with MSG Entertainment and MSG Networks, as applicable:

• Arena License Agreements pursuant to which MSG Entertainment (i) provides the right to use The Garden for games of the Knicks and Rangers for a 35 -year term in exchange for arena license fees, (ii) shares revenues collected for suite licenses, (iii) operates and manages the sale of the sports teams merchandise at The Garden for a commission, (iv) operates and manages the sale of food and beverage concessions and catering services during the Knicks and Rangers home games, (v) provides day of game services that were historically provided prior to the MSGE Distribution, and (vi) provides other general services within The Garden;

• Arena License Agreements pursuant to which MSG Entertainment (i) provides the right to use The Garden for games of the Knicks and Rangers for a 35 -year term in exchange for arena license fees, (ii) shares revenues collected for suite licenses, (iii) operates and manages the sale of the sports teams merchandise at The Garden for a commission, (iv) operates and manages the sales of food and beverage concessions in exchange for 50% of net profits from the sales and catering services during the Knicks and Rangers home games, (v) provides day of game services that were historically provided prior to the MSGE Distribution, and (vi) provides other general services within The Garden;

• Media rights agreements, that the Company and MSG Networks entered into in July 2015 with stated terms of 20 years, providing MSG Networks with local telecast rights for the Knicks and Rangers games in exchange for media rights fees;

• 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 this agreement, 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 teams continue receiving an allocation of sponsorship and signage revenues associated with the sponsorship agreements that existed at the MSGE Distribution Date;

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• 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;

• 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 reimbursement for sales and service staff and overhead associated with the ticket sales on behalf of MSG Entertainment;

• Aircraft sharing agreements pursuant to which MSG Entertainment has agreed from time to time to make its aircraft and an aircraft it leases from another related party available to the Company for lease on a “time sharing” basis;

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• Other agreements with MSG Networks entered into in connection with the MSGS Distribution, including a distribution agreement, a tax disaffiliation agreement, an employee matters agreement and certain other arrangements.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In addition, the Company shares certain executive support costs, including office space, executive assistants, security and transportation costs for:

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(ii) the Company’s Vice Chairman with AMC Networks, MSG Entertainment and MSG Networks;

and (iii) the Company’s President

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

and Chief Executive Officer with MSG Entertainment.

and (iii) the Company’s President and Chief Executive Officer with MSG Entertainment.

Additionally, the Company, MSG Entertainment, MSG Networks and AMC Networks agreed on an allocation of the costs of certain personal aircraft and helicopter use by their shared executives.

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On May 6, 2019, the Company entered into a dry lease agreement with Brighid Air, LLC (“Brighid Air”), a company owned and controlled by Patrick F.

Dolan, pursuant to which the Company was permitted to lease on a non-exclusive basis Brighid Air’s Bombardier BD100-1A10 Challenger 350 aircraft (the “Challenger”).

In connection with the dry lease agreement, on May 6, 2019, the Company also entered into a Flight Crew Services Agreement (the “Flight Crew Agreement”) with DFO, an entity owned and controlled by Charles F.

Dolan, pursuant to which the Company was permitted to utilize pilots employed by DFO

Dolan, pursuant to which the Company was permitted to lease on a non-exclusive basis Brighid

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

for purposes of flying the Challenger when the Company was leasing that aircraft under the Company’s dry lease agreement with Brighid Air.

Air’s Bombardier BD100-1A10 Challenger 350 aircraft (the “Challenger”).

Dolan, pursuant to which the Company was permitted to utilize pilots employed by DFO for purposes of flying the Challenger when the Company was leasing that aircraft under the Company’s dry lease agreement with Brighid Air.

The Company and each of MSG Networks and AMC Networks were party to certain aircraft time sharing agreements, pursuant to which the Company agreed from time to time to make its aircraft available to MSG Networks and/or AMC Networks for lease on a “time sharing” basis.

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Revenues and Operating Expenses (Credits)

The following table summarizes the composition and amounts of the transactions with the Company’s affiliates, primarily with MSG Networks.

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, 2020 and 2019:

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

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 nine months ended March 31, 2021 and 2020:

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

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Revenues from related parties primarily consist of local media rights recognized from the licensing of team-related programming to MSG Networks under the media rights agreements covering the Knicks and Rangers, which provide MSG Networks with exclusive media rights to team games in their local markets.

Corporate General and Administrative Expenses, net — MSG Networks

Corporate general and administrative credits, net — MSG Networks

The Company’s corporate overhead expenses that were charged to MSG Networks prior to MSGE Distribution are primarily related to centralized functions, including executive compensation, finance, treasury, tax, internal audit, legal, information technology, human resources and risk management functions.

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Except for certain legal services, following the MSGE Distribution, the Company no longer provides these services to MSG Networks.

Corporate general and administrative expenses, net — MSG Networks reflects charges from the Company to MSG Networks under the Current MSGN Services Agreement of $ 219 and $ 438 for the three and six months ended December 31, 2020, net of general and administrative costs charged to the Company by MSG Networks, respectively.

In addition, it reflects charges from the Company to MSG Networks under the Prior MSGN Services Agreement of $ 2,641 and $ 5,282 , for the three and six months ended December 31, 2019, net of general and administrative costs charged to the Company by MSG Networks, respectively.

Corporate general and administrative credits, net — MSG Networks reflects charges from the Company to MSG Networks under the Current MSGN Services Agreement of $ 219 and $ 656 for the three and nine months ended March 31, 2021, respectively.

In addition, it reflects charges from the Company to MSG Networks under the Prior MSGN Services Agreement of $ 2,700 and $ 7,982 , for the three and nine months ended March 31, 2020, net of general and administrative costs charged to the Company by MSG Networks, respectively.

Corporate general and administrative expenses, net — MSG Entertainment

Corporate general and administrative expense, net — MSG Entertainment reflects net charges of $ 7,913 and $ 18,949 from MSG Entertainment pursuant to the TSA for certain business functions that were previously performed by internal resources for the three and six months ended December 31, 2020, respectively.

These services include information technology, accounting, accounts payable, payroll, tax, legal, human resources, insurance and risk management, investor relations, corporate communications, benefit plan administration and reporting, and internal audit.

In addition, Corporate general and administrative expense, net — MSG Entertainment reflects rent expense of $ 674 and $ 1,369 associated with the lease of office space from

Corporate general and administrative expenses, net — MSG Entertainment reflects net charges of $ 8,822 and $ 27,771 from MSG Entertainment pursuant to the TSA for certain business functions that were previously performed by internal resources for the three and nine months ended March 31, 2021, respectively.

These services include information technology, accounting,

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MSG Entertainment for the three and six months ended December 31, 2020, respectively.

accounts payable, payroll, tax, legal, human resources, insurance and risk management, investor relations, corporate communications, benefit plan administration and reporting, and internal audit.

In addition, Corporate general and administrative expenses, net — MSG Entertainment reflects rent expense of $ 678 and $ 2,047 associated with the lease of office space from MSG Entertainment for the three and nine months ended March 31, 2021, respectively.

See Note 8 for more information regarding the lease of office space from MSG Entertainment.

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Costs associated with the Arena License Agreements

For the three and six months ended December 31, 2020, costs associated with the Arena License Agreements include $ 2,210 recorded as operating lease cost.

For the three and nine months ended March 31, 2021, costs associated with the Arena License Agreements include $ 20,357 and $ 22,567 respectively, recorded as operating lease cost.

See Note 8 for more information regarding Arena License Agreements.

Other Operating Expenses, net

Other operating expenses (credits), net

The Company and its related parties enter into transactions with each other in the ordinary course of business.

Other operating expenses, net include net charges relating to (i) reciprocal aircraft arrangements between the Company and each of Q2C and CFD and (ii) time sharing agreements with MSG Networks and AMC Networks.

Other operating expenses (credits), net includes net charges relating to (i) reciprocal aircraft arrangements between the Company and each of Q2C and CFD and (ii) time sharing agreements with MSG Networks and AMC Networks.

Following the MSGE Distribution, the Company no longer provides these services to MSG Networks.

However, these charges are reflected in the Company’s results of operations for the periods prior to the MSGE Distribution as they do not meet the criteria for inclusion in discontinued operations.

In addition, Other operating expenses (credits), net includes fees paid by the Company to MSG Networks for insertion of virtual signage during the Knicks home and away games during the 2020-21 season.

Discontinued operations

Related party transactions included in Income from discontinued operations, net of taxes in the accompanying consolidated statements of operations for the three months ended December 31, 2019 include (i) revenues from related parties of $ 6,381 , (ii) operating expenses charged by related parties of $ 275 , and (iii) loss in equity-method investments of $ 1,170 .

Related party transactions included in Income from discontinued operations, net of taxes in the accompanying consolidated statements of operations for the six months ended December 31, 2019 include (i) revenues from related parties of $ 7,119 , (ii) operating expenses charged by related parties of $ 462 , and (iii) loss in equity-method investments of $ 2,643 .

Income tax expense for the three months ended December 31, 2020 of $ 170 differs from income tax benefit derived from applying the statutory federal rate of 21 % to the pretax loss primarily due to tax expense of $ 9,842 related to an increase in the valuation allowance, tax expense of $ 1,558 resulting from the acceleration of share-based compensation expense in connection with the cancellation of certain awards and tax expense of $ 533 resulting from nondeductible officers’ compensation, partially offset by state income tax benefit of $ 3,427 .

Income tax benefit for the six months ended December 31, 2020 of $ 328 differs from income tax benefit derived from applying the statutory federal rate of 21 % to the pretax loss primarily due to tax expense of $ 17,463 related to an increase in the valuation allowance, tax expense of $ 1,558 resulting from the acceleration of share-based compensation expense in connection with the cancellation of certain awards and tax expense of $ 1,393 resulting from nondeductible officers’ compensation, partially offset by state income tax benefit of $ 6,261 .

Income tax expense for the three months ended December 31, 2019 of $ 2,773 differs from income tax benefit derived from applying the statutory federal rate of 21 % to the pretax loss primarily due to tax expense of $ 1,547 resulting from nondeductible officers’ compensation and state income tax expense of $ 1,099 .

Income tax benefit for the six months ended December 31, 2019 of $ 16,730 differs from income tax benefit derived from applying the statutory federal rate of 21 % to the pretax loss primarily due to state income tax benefit of $ 4,380 and excess tax benefit of $ 3,185 related to share-based compensation awards, partially offset by tax expense of $ 3,008 resulting from nondeductible officers’ compensation.

Related party transactions included in Loss from discontinued operations, net of taxes in the accompanying consolidated statements of operations for the three months ended March 31, 2020 include (i) revenues from related parties of $ 5,937 , (ii) operating expenses charged by related parties of $ 547 , and (iii) loss in equity-method investments of $ 1,096 .

Related party transactions included in Loss from discontinued operations, net of taxes in the accompanying consolidated statements of operations for the nine months ended March 31, 2020 include (i) revenues from related parties of $ 13,056 , (ii) operating expenses charged by related parties of $ 1,009 , and (iii) loss in equity-method investments of $ 3,739 .

Income tax expense for the three months ended March 31, 2021 of $ 53 differs from income tax expense derived from applying the statutory federal rate of 21 % to pretax income primarily due to tax benefit of $ 4,295 related to a decrease in the valuation allowance, partially offset by state income tax expense of $ 1,507 and tax expense of $ 561 resulting from nondeductible officers’ compensation.

Income tax benefit for the nine months ended March 31, 2021 of $ 275 differs from income tax benefit derived from applying the statutory federal rate of 21 % to the pretax loss primarily due to tax expense of $ 13,168 related to an increase in the valuation allowance, tax expense of $ 1,954 resulting from nondeductible officers’ compensation and tax expense of $ 1,558 resulting from the acceleration of share-based compensation expense in connection with the cancellation of certain awards, partially offset by state income tax benefit of $ 4,754 .

Income tax expense for the three months ended March 31, 2020 of $ 5,598 differs from income tax benefit derived from applying the statutory federal rate of 21 % to the pretax loss primarily due to state income tax expense of $ 2,207 and tax expense of $ 1,523 resulting from nondeductible officers’ compensation.

Income tax benefit for the nine months ended March 31, 2020 of $ 11,132 differs from income tax benefit derived from applying the statutory federal rate of 21 % to the pretax loss primarily due to excess tax benefit of $ 3,180 related to share-based compensation awards and state income tax benefit of $ 2,173 , partially offset by tax expense of $ 4,531 resulting from nondeductible officers’ compensation.

On April 19, 2021, the state of New York enacted a corporate tax rate increase that will become effective starting with the fiscal year ended June 30, 2022.

The impact of enacted tax changes is recognized in the period of enactment.

Accordingly, the Company will remeasure deferred tax assets and liabilities at the higher applicable tax rate in the fourth quarter of the fiscal year ended June 30, 2021.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company was notified in April 2020 that the City of New York was commencing an audit of the state income tax returns for the fiscal years ended June 30, 2016 and 2017.

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

What changed 10-Q

Item 1. Financial Statements