What changed in this filing

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Item 1. Business

2021-08-19 compared with 2020-08-31 · 127 added, 80 removed, 136 unchanged (60% of the section changed)

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These materials become available as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the Securities and Exchange Commission (“SEC”).

Copies of these filings are also available on the SEC’s website (www.sec.gov).

References to our website in this report are provided as a convenience and the information contained on, or available through, our website is not part of this or any other report we file with or furnish to the SEC.

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On April 17, 2020 (the “MSGE Distribution Date”), the Company distributed all of the outstanding common stock of Madison Square Garden Entertainment Corp.

(formerly MSG Entertainment Spinco, Inc., and referred to herein as “ MSG Entertainment ”) to its stockholders (the “ MSGE Distribution ”).

MSG Entertainment owns, directly or indirectly, the entertainment businesses 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.

(formerly MSG Entertainment Spinco, Inc.

and referred to herein as “MSG Entertainment”) to its stockholders (the “MSGE Distribution”).

MSG Entertainment owns, directly or indirectly, 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.

In the MSGE Distribution, (a) each holder of the Company’s Class A common stock received one share of MSG Entertainment Class A common stock, par value $0.01 per share, for every share of the Company’s Class A common stock held of record as of the close of business, New York City time, on April 13, 2020 (the “Record Date”), and (b) each holder of the Company’s Class B common stock received one share of MSG Entertainment Class B common stock, par value $0.01 per share, for every share of the Registrant’s Class B common stock held of record as of the close of business, New York City time, on the Record Date.

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 (the “Knicks”) of the National Basketball Association (the “NBA”) and the New York Rangers (the “Rangers”) of the National Hockey League (the “NHL”).

Both the Knicks and the Rangers play their home games in Madison Square Garden Arena (“T he Garden ”), also known as The World’s Most Famous Arena.

The Company’s other professional franchises include two development league teams — the Hartford Wolf Pack of the American Hockey League (the “AHL”) and the Westchester Knicks of the NBA G League (the “ NBAGL ”).

On July 9, 2021 MSG Networks merged with a subsidiary of MSG Entertainment and became a wholly-owned subsidiary of MSG Entertainment (the “MSGE-MSGN Merger”).

Accordingly, agreements between the Company and MSG Networks are now effectively agreements with MSG Entertainment on a consolidated basis.

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”), also known as The World’s Most Famous Arena.

The Company’s other professional franchises include two development league teams — the Hartford Wolf Pack of the American Hockey League (“AHL”) and the Westchester Knicks of the NBA G League (“NBAGL”).

In addition, the Company owns Knicks Gaming, an esports franchise that competes in the NBA 2K League, as well as a controlling interest in Counter Logic Gaming (“CLG”), a North American esports organization.

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Competitive teams help support and drive revenue streams across the Company during the regular season and, when our teams qualify for the postseason, the Company benefits from incremental home playoff games.

The ownership and operation of NBA and NHL development teams — the Westchester Knicks and the Hartford Wolf Pack — as well as the operation of our two state-of-the-art performance centers, are part of our strategy to develop championship-caliber teams.

Employ a ticketing policy that gives the Company a direct relationship with a broader fanbase.

Our large and loyal fan bases have placed us among the league leaders in ticket sales receipts as our teams consistently play to at-or-near capacity crowds at The Garden.

For the 2016-17 Knicks and Rangers seasons, we introduced a new ticketing policy that significantly reduced our reliance on third party brokers.

Through this ticketing policy, we decreased the number of full season tickets sold and increased the number of partial plans and individual and group tickets sold.

This shift in our ticket mix delivered a positive impact on revenue and provided fans with more opportunities to purchase tickets to home games giving us a direct relationship with a broader fanbase.

In addition, this ticketing policy provided us with more inventory that we could dynamically price to better align with fan demand.

We have continued to utilize this ticketing approach, and plan to build on it further in the seasons ahead by thoughtfully increasing the number of partial plans and individual and group tickets we sell.

The ownership and operation of NBA and NHL development teams — the Westchester Knicks and the Hartford Wolf Pack — as well as the operation of our two state-of-the-art professional sports teams performance centers, are part of our strategy to develop championship-caliber teams.

• Employ a ticketing policy that gives the Company a direct relationship with our fanbases .

Our large and loyal fan bases have placed us among the league leaders in ticket sales as our teams consistently play to at or near capacity crowds at The Garden.

Tickets to our sports teams’ home games are sold through membership plans (full season and partial plans);

and single-game tickets, which are purchased by fans on an individual basis (as opposed to third-party sales).

We generally review and set the price of our tickets before the start of each team’s season;

however, we dynamically price our single-game tickets to better align with fan demand.

• Maximize the value of our exclusive live sports content.

With today’s rapidly evolving media landscape, live sports telecasts have become increasingly valuable to distributors and advertisers.

In October 2015, the Knicks and Rangers entered into 20-year local media rights agreements with MSG Networks, creating a significant recurring and growing revenue stream for the Company.

These agreements provide MSG Networks with exclusive local linear and digital rights to home and away games of the Knicks and Rangers, as well as other team-related programming.

In October 2015, the Knicks and the Rangers entered into 20-year local media rights agreements with MSG Networks, creating a significant recurring and growing revenue stream for the Company.

These agreements provide MSG Networks with exclusive local linear and digital rights to home and away games of the Knicks and the Rangers, as well as other team-related programming.

MSG Networks makes this content available to our fans on its regional sports networks, MSG Network and MSG+, and through its live streaming and on-demand platform, MSG GO.

In addition, our Company also receives a pro-rata share of fees related to the NBA’s and NHL’s national media rights agreements.

The NHL’s agreements with NBC Sports and Rogers Communications (Canada) expire following the 2020-21 and 2025-26 regular seasons, respectively, while the NBA’s agreements with Disney and WarnerMedia expire after the 2024-25 regular season.

Following the 2020-21 season, the NHL entered into national media rights agreements with The Walt Disney Company and WarnerMedia, LLC that will expire following the 2027-28 season.

The NHL’s agreement with Rogers Communications (Canada) expires following the 2025-26 season.

The NBA’s agreements with The Walt Disney Company and WarnerMedia, LLC expire after the 2024-25 regular season.

• Utilize our unique assets and an integrated approach to drive sponsorship and suite sales.

Our Company possesses powerful and attractive assets that also benefit from being part of a broader sports, entertainment and media offering as a result of our Company’s various agreements with MSG Entertainment .

These agreements enable us to partner with MSG Entertainment and MSG Networks on an integrated approach to marketing partnerships and corporate hospitality solutions to drive sponsorship, signage and suite sales.

These agreements enable us to partner with MSG Entertainment on an integrated approach to marketing partnerships and corporate hospitality solutions to drive sponsorship, signage and suite sales.

◦ Our assets are highly sought after by companies that value the popularity of our sports franchises, the demographic makeup of our fans, and our unique position in the New York market.

The attractiveness of our assets is further strengthened by the Sponsorship Sales and Service Representation Agreements and Arena License Agreements with MSG Entertainment which create compelling, broad-based marketing platforms by combining our professional sports brands and MSG Entertainment ’s live entertainment assets, as well as MSG Networks’ media inventory.

This integrated approach to marketing partnerships — which delivers unrivaled sports, entertainment and media exposure in the New York market — has already attracted world-class partners such as JPMorgan Chase, Anheuser-Busch, Charter Communications, Delta Air Lines, DraftKings, Kia, Lexus, PepsiCo, and Squarespace.

This integrated approach to marketing partnerships — which delivers unrivaled sports, entertainment and media exposure in the New York market — has already attracted world-class partners such as JPMorgan Chase, Anheuser-Busch, Spectrum, Delta Air Lines, DraftKings, Kia, Lexus, PepsiCo, and Squarespace.

In addition, our presence in esports with CLG and Knicks Gaming provides us with the opportunity to introduce both our existing marketing partners and new brands to esports’ global fan base, primarily comprised of millennials and Generation Z — attractive, yet hard-to-reach, demographics for advertisers.

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For example, The Garden offers a variety of suite and club products, including 21 Event Level suites, 58 Lexus Madison Level suites, 18 Signature Level suites, the Madison Club, Suite Sixteen and the Loft Club.

These suites and clubs — which provide exclusive private spaces, first-class amenities and some of the best seats in The Garden — are primarily licensed to corporate customers with the majority being multi-year agreements, most of which have

annual escalators.

We believe the unique combination of our live sporting events and MSG Entertainment ’s live entertainment offerings, along with the continued importance of corporate hospitality to our guests, positions us well to continue to grow this area of the business.

We believe the unique combination of our live sporting events and MSG Entertainment’s

live entertainment offerings, along with the continued importance of corporate hospitality to our guests, positions us well to continue to grow this area of the business.

• Continue to invest in the fan experience.

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As an original franchise of the NBA, the Knicks have a rich history that includes eight trips to the NBA Finals and two NBA Championships, as well as some of the greatest athletes to ever play the game.

With President Leon Rose at the helm and new Head Coach, Tom Thibodeau, the Knicks head into the 2020-21 season fielding a young and exciting team that includes center Mitchell Robinson and guard RJ Barrett.

The team will also have the opportunity to add talented young players through its two first-round picks in the 2020 NBA Draft.

The Knicks, which have a large and passionate fan base that spans a wide demographic mix, ranked in the top three in the NBA for ticket sales receipts for the 2019-20 regular season.

The team also has a large and passionate fan base that spans a wide demographic mix.

The Knicks 2020-21 season was highlighted by a return to the playoffs, as the team secured the fourth seed in the Eastern Conference.

Head coach Tom Thibodeau won the NBA’s Coach of the Year award, while forward Julius Randle was named the NBA’s Most Improved Player before also being selected for the 2020-21 All-NBA Second Team.

The Knicks will look to build on this success in the 2021-22 season.

New York Rangers

The Rangers hockey club is one of the NHL’s “Original Six” franchises.

Heading into its 93 rd season, the Rangers are a storied franchise and one of the league’s marquee teams, with four Stanley Cup Championships.

Under the leadership of President, John Davidson, the Rangers are seeking to continue building the foundation for its next championship-caliber team, which for the 2020-21 season includes elite forward Artemi Panarin, as well as dynamic center Mika Zibanejad.

In addition, the Rangers will have the first overall pick in the 2020 NHL Entry Draft.

The Rangers, which have one of the most passionate, loyal and enthusiastic fan bases in all of sports, ranked in the top three in the NHL for ticket sales receipts for the 2019-20 regular season.

Heading into its 95th season, the Rangers are a storied franchise and one of the league’s marquee teams, with four Stanley Cup Championships and one of the most passionate, loyal and enthusiastic fan bases.

For the 2020-21 season, Adam Fox became the fourth Ranger in franchise history to win the Norris Trophy for best defenseman in the NHL.

The Rangers announced in May 2021 that Chris Drury had been promoted to President and General Manager and in June 2021, introduced a new head coach, Gerard Gallant.

Westchester Knicks

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“League of Legends,” “Fortnite,” “Counter-Strike:

Global Offensive,” “Apex Legends,” and “Super Smash Bros.” CLG has won multiple championships throughout its history — most notably the League of Legends LCS North American Championship in Summer 2015 and Spring 2016, and has represented North America in the League of Legends World Championships four times.

Global Offensive,” “Apex Legends,” “Super Smash Bros,” and “Valorant.” CLG has won multiple championships throughout its history — most notably the League of Legends LCS North American Championship in Summer 2015 and Spring 2016, and has represented North America in the League of Legends World Championships four times.

Knicks Gaming

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Arena License Agreements

Madison Square Garden, the World’s Most Famous Arena (“The Garden”), is the home for the Knicks and Rangers pursuant to Arena License Agreements with MSG Entertainment.

The Arena License Agreements provide revenue opportunities through the sharing of certain suite, sponsorship, food and beverage, merchandise and sales arrangements with MSG Entertainment.

Arena License Agreements have a term of 35 years.

Madison Square Garden, the World’s Most Famous Arena (“The Garden”), is the home for the Knicks and the Rangers pursuant to Arena License Agreements with MSG Entertainment.

The Arena License Agreements provide revenue opportunities through the sharing of certain suites and clubs, sponsorship and signage, food and beverage, merchandise and sales arrangements with MSG Entertainment.

The Arena License Agreements have a term of 35 years.

See Note 8 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for more information.

Our Performance Centers

Our Professional Sports Teams Performance Centers

The Company owns the state-of-the-art Madison Square Garden Training Center in Greenburgh, NY.

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Impact of COVID-19

COVID-19 disruptions have materially impacted the Company’s revenues and the Company recognized materially less revenues, or in some cases no revenues, across a number of areas.

Those areas include:

ticket sales;

the Company’s share of suite licenses;

sponsorships;

signage and in-venue advertising at The Garden;

and food, beverage and merchandise sales.

In addition, the Knicks and the Rangers played fewer games during the 2020-21 regular seasons, with the NBA playing a 72-game regular season schedule and the NHL playing a 56-game regular season schedule.

These compare to traditional 82-game regular season schedules for both the NBA and NHL.

In addition, while games have resumed at The Garden, until May 2021, fan attendance was limited due to ongoing government-mandated assembly restrictions.

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

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The Knicks were not among the teams that returned to competition.

As a result of government-mandated assembly limitations and closures due to the COVID-19 pandemic, no events are currently permitted to be held at The Garden where the Knicks and Rangers play their home games, and some or all of these mandated restrictions may remain in effect even after the NBA and/or NHL resume for the 2020-21 seasons.

No assurances can be made that games will be played at The Garden or will be played with any in-arena audiences or without limited-capacity in-arena audiences.

COVID-19 disruptions have materially impacted the Company’s revenues and we are recognizing materially less revenues across a number of areas.

Those areas include:

ticket sales;

media rights fees;

our share of suite licenses;

sponsorships;

signage and in-venue advertising at The Garden;

and food, beverage and merchandise sales.

With the ongoing uncertainty due to COVID-19, earlier this month, the Company implemented cost-reduction measures.

These measures included workforce reductions, limits on third-party vendor use and additional cuts to discretionary spending.

As of June 30, 2020 , we had approximately 450 full-time union and non-union employees and 430 part-time union and non-union employees.

As of August 21, 2020, due to layoffs as a result of the COVID-19 pandemic, we had approximately 420 full-time union and non-union employees and 430 part-time union and non-union employees.

At this time, we are unable to predict when we will be able to resume normal business operations and if there will be any longer-term effects, due to these COVID-related disruptions.

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

In connection with the MSGE Distribution, we entered into the Arena License Agreements with MSG Entertainment.

The Garden was not available for use between April 17, 2020 and the start of the NBA and NHL 2020-21 seasons in December 2020 and January 2021, respectively, due to the government-mandated suspension of events in response to COVID-19, and as a result, the Company was 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 the Rangers resumed playing their homes games at The Garden as part of their 2020-21 seasons.

However, fans were initially prohibited from attending games 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 the Rangers began playing games at The Garden with a limited number of fans in attendance on February 23 and 26, respectively.

When games were played at The Garden by the Knicks and the Rangers either without fans in attendance or with limited fans in attendance due to government mandated capacity constraints, the applicable license fees paid to MSG Entertainment under the Arena License Agreements were substantially reduced.

Effective May 19, 2021, event venues such as The Garden were permitted to host guests at full capacity, subject to certain restrictions, including, for example, restrictions for unvaccinated guests.

As a result, the Knicks played three home playoff games with ticket sales of approximately 15,000-16,500 per game during the fiscal year ended June 30, 2021.

During the fiscal year 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 were reduced including (i) payments to MSG Entertainment under the Arena License Agreements, (ii) NBA league assessments and day-of-game expenses for Knicks and Rangers games, and (iii) league revenue sharing, net of escrow and team personnel expense.

These expense reductions did not fully offset revenue losses.

As a result of New York City regulations effective August 17, 2021, subject to certain exceptions, all guests 12 years of age or older and employees (other than players who are not residents of New York City) at indoor entertainment venues such as The Garden must show proof that they have received at least one dose of a COVID-19 vaccine.

Guests under the age of 12 must wear masks, provide proof of a negative COVID test and are permitted to enter only when accompanied by a vaccinated parent or guardian.

At this time, we are unable to predict if there will be any longer-term effects due to these COVID-related disruptions.

See “Item 1A.

Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Government and League Actions Taken in Response ” and “Item 7.

Management’s Discussion and Analysis — Introduction — Factors Affecting Results of Operations — Impact of COVID-19 on Our Business .”

Risk Factors — Sports Business Risks — Our Operations and Operating Results Have Been, and May Continue to be, Materially Impacted by the COVID-19 Pandemic and Government and League Actions Taken in Response ” and “Item 7.

Management’s Discussion and Analysis — Introduction — Factors Affecting Operating Results — Impact of COVID-19 on Our Business.”

The Role of the Leagues in Our Operations

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Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Overview — Expenses.” Additionally, CLG operates multiple teams that participate in several different esports leagues.

rights and obligations of each CLG team (and member teams generally) vary from league to league.

The rights and obligations of each CLG team (and member teams generally) vary from league to league.

The leagues are generally empowered to and have implemented rules with respect to our league participation, as well as operation, and monetization of the CLG teams and brand.

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We generally license the local media rights for our sports teams’ home and away games.

Subsidiaries of the Company have entered into media rights agreements with MSG Networks covering the local telecast and radio rights for the Knicks and Rangers.

Subsidiaries of the Company have entered into media rights agreements with MSG Networks covering the local telecast and radio rights for the Knicks and the Rangers.

Each agreement has a remaining term of approximately 14 years.

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The Company is committed to leveraging the power of its brands to benefit communities across the tri-state area.

The Knicks and Rangers both run grassroots programs - Junior Knicks and Junior Rangers - dedicated to creating opportunities for the next generation of athletes to enjoy basketball and hockey.

This commitment includes a wide-ranging series of free clinics, skills development programs, recreational leagues, and an initiative focused on empowering girls of all ages through the sport of hockey.

Both teams also celebrate home-grown heroes throughout the year, recognizing them through awards which pay tribute to individuals who have made a difference in the lives of others and honor the brave men and women who have served or are currently serving in the United States Armed Forces.

The Knicks and the Rangers both run grassroots programs - Junior Knicks and Junior Rangers - focused on eliminating barriers and creating more inclusive opportunities for all kids to enjoy basketball and hockey.

The Company is also dedicated to affecting positive change through social impact and cause-related initiatives including food donations, providing free educational resources to local schools and supporting non-profits and fundraising efforts across the region.

In February 2021, the Rangers helped make history by working with the Professional Women’s Hockey Players Association to bring women’s hockey to The Garden for the first time ever as part of the Association’s “Dream Gap Tour” to advance gender equality in the sport of hockey.

Our Company also has a close association with The Garden of Dreams Foundation (the “Foundation”), a non-profit organization that assists young people in need.

In partnership with the Company, MSG Entertainment, and MSG Networks, the Foundation provides young people in our communities with access to educational and skills opportunities;

In partnership with the Company and MSG Entertainment, the Foundation provides young people in our communities with access to educational and skills opportunities;

mentoring programs and memorable experiences that enhance their lives, help shape their futures and create lasting joy.

The Foundation focuses on young people facing illness or financial challenges, as well as children of uniformed personnel who have been lost or injured while serving our communities.

Since it was established in 2006, the Foundation has impacted more than 375,000 children and their families.

Since it was established in 2006, the Foundation has impacted nearly 400,000 children and their families.

Our sports and entertainment businesses are subject to legislation governing the sale and resale of tickets and consumer protection statutes generally.

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See “Item 1A.

Risk Factors — We Do Not Own The Garden and Our Failure to Renew the Arena License Agreements or MSG Entertainment’s Failure to Operate The Garden in Compliance with the Arena License Agreements or Extensive Governmental Regulations May Have a Material Negative Effect on Our Business and Results of Operations .”

Risk Factors — Economic and Business Relationship Risks — We Do Not Own The Garden and Our Failure to Renew the Arena License Agreements or MSG Entertainment’s Failure to Operate The Garden in Compliance with the Arena License Agreements or Extensive Governmental Regulations May Have a Material Negative Effect on Our Business and Results of Operations .”

The professional sports leagues in which we operate, primarily the NBA and NHL, have the right under certain circumstances to regulate important aspects of our business, including, without limitation, our team-related online and mobile businesses.

See “Item 1A.

Risk Factors — The Actions of the NBA, NHL and Esports Leagues May Have a Material Negative Effect on Our Business and Results of Operations.

Risk Factors — Sports Business Risks — The Actions of the NBA, NHL and Esports Leagues May Have a Material Negative Effect on Our Business and Results of Operations.

Our business is also subject to certain regulations applicable to our Internet websites and mobile applications, including data privacy laws in various jurisdictions.

These include, but are not limited to, the California Consumer Privacy Act (the “CCPA”).

These include, but are not limited to, the California Consumer Privacy Act (the “CCPA”) and the recently passed California Privacy Rights Act (the “CPRA”).

These laws obligate us to comply with certain consumer and employee rights concerning data we may collect about these individuals.

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The operation of these websites and applications may be subject to a range of other federal, state and local laws such as accessibility for persons with disabilities and consumer protection regulations.

In addition, to the extent any of our websites collect information from children under 13 years of age or are intended primarily for children under 13 years of age, we must comply with additional federal regulations designed to protect children’s privacy and safety online, including restrictions on marketing.

In addition, to the extent any of our websites seek to collect information from children under 13 years of age or are intended primarily for children under 13 years of age, they may be subject to the Children’s Online Privacy Protection Act which places restrictions on websites’ and online services’ collection and use of personally identifiable information from children under 13 years of age without prior parental consent.

Our business is also subject to a variety of laws and regulations, including working conditions, labor, immigration and employment laws and health, safety and sanitation requirements.

See “Item 1A.

Risk Factors “— We Are Subject to Governmental Regulation, Which Can Change and Any Failure to Comply With These Regulations May Have a Material Negative Effect on Our Business and Results of Operations .”

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

Our business operates in a market in which numerous sports and entertainment opportunities are available.

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In addition, there are a number of other amateur and professional teams that compete in other sports, including at the collegiate and minor league levels.

New York is also home to the U.S.

Open tennis event each summer, as well as many other non-sports related entertainment options.

New York is also home many other non-sports related entertainment options.

As a result of the large number of options available, we face strong competition for the New York area sports fan.

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In addition, due to the NBA and NHL playing seasons, revenues from our business are typically concentrated in the second and third quarters of each fiscal year.

The concentration of our revenues and expenses, however, may be different due to the effects of the COVID-19 pandemic.

The concentration of our revenues and expenses, however, was different in fiscal year 2021 due to the effects of the COVID-19 pandemic.

We own a controlling interest in CLG, a North American esports organization.

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See “Item 1A.

Risk Factors — Our Business Faces Intense and Wide-Ranging Competition, Which May Have a Material Negative Effect on Our Business and Results of Operations ” and “— Our Business Is Substantially Dependent on the Continued Popularity and/or Competitive Success of the Knicks and Rangers, Which Cannot Be Assured .”

Risk Factors — Sports Business Risks — Our Business Faces Intense and Wide-Ranging Competition, Which May Have a Material Negative Effect on Our Business and Results of Operations ” and “— Our Business Is Substantially Dependent on the Continued Popularity and/or Competitive Success of the Knicks and the Rangers, Which Cannot Be Assured .”

Human Capital Resources

At MSG Sports, we believe the strength of our workforce is one of the significant contributors to our success.

Our key human capital management objectives are to invest in and support our employees in order to attract, develop and retain a high performing and diverse workforce.

Diversity, Equity and Inclusion

We believe the diverse perspectives and experiences of our employees enhance the value of the Company and produce a more vibrant, constructive, and engaging place to work, and we are committed to fostering an inclusive workplace.

To advance these efforts, the Company, together with MSG Entertainment, established a Diversity and Inclusion Council (the “D&I Council”) in 2019.

The D&I Council is a joint council comprised of employees from the Company and MSG Entertainment who have demonstrated a high level of passion and commitment to diversity and inclusion.

The contributions of the D&I Council span both the Company and MSG Entertainment, providing strategic guidance to senior management of each company on diversity and inclusion initiatives, serving as a resource for all employees, and working to promote environments that foster inclusivity and employee engagement while enhancing communication among companies, departments, and employees.

Since its inception, several initiatives have advanced these objectives under the D&I Council’s guidance, including:

• Creation of employee resource groups such as the Black Employee Network, LatinX Employee Network, Pride Employee Network, Women’s Employee Network, Asian American Pacific Islander Network and Veterans Network, to build an internal support system for employees of different backgrounds and advance efforts in attracting, developing and retaining talent by promoting leadership and encouraging diversity and inclusion among all employees;

• Facilitation of a series of employee focus groups as well as ongoing listening sessions allowing employees to candidly address topics core to diversity and inclusion;

• Training programs including Conscious Inclusion Awareness Training and Interview Skills training with a focus on unconscious bias, a career development tool, and a learning system with comprehensive resources and training for employees and hiring managers;

• Focus on hiring of diverse employees including increasing the hiring of diverse entry level employees through external partnership programs;

• Ongoing partnerships with local and national organizations dedicated to supporting diverse communities;

• Fostering broader awareness-building of diversity and inclusion efforts by facilitating community-focused panels, discussions and cultural events.

As of June 30, 2021, we had approximately 415 full-time union and non-union employees and 242 part-time union and non-union employees.

Approximately 11% of our employees were represented by unions as of June 30, 2020 , all of whom are our players.

With the ongoing uncertainty due to COVID-19, earlier this month, the Company implemented cost-reduction measures.

These measures included workforce reductions, limits on third-party vendor use and additional cuts to discretionary spending.

As of August 21, 2020, due to layoffs as a result of the COVID-19 pandemic, we had approximately 420 full-time union and non-union employees and 430 part-time union and non-union employees.

There are no union employees subject to CBAs that expired as of June 30, 2020 and no union employees subject to CBAs that will expire by June 30, 2021 if they are not extended prior thereto (although the NBA and the National Basketball Players Association (“NBPA”) currently have the right to terminate the CBA through October 15, 2020 (unless extended)).

See Note 21 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for summary of the principal aspects of the new NHL CBA and revenue sharing plan.

We aim to attract top talent through our brands, as well as through the many benefits we offer.

We aim to retain our talent by emphasizing our competitive rewards;

offering opportunities that support employees both personally and professionally;

and our commitment to fostering career development in a positive corporate culture.

Our performance management practice includes ongoing feedback and conversations between managers and team members, and talent reviews designed to identify potential future leaders and inform succession plans.

We value continuous learning and development opportunities for our employees, which include:

a career development tool;

leadership development programs;

a learning platform;

and tuition assistance.

Our benefit offerings are designed to meet the range of needs of our diverse workforce and include:

domestic partner coverage;

medical, dental and vision plan options;

life insurance benefits for the employee and their dependents;

a generous 401k plan with 100% employer match;

an employee assistance program which also provides assistance with child and elder care resources;

legal support;

wellness programs and financial planning seminars.

These resources are intended to support the physical, emotional and financial well-being of our employees.

In addition, approximately 16% of our employees were represented by unions as of June 30, 2021, all of whom are our players.

There are no union employees subject to CBAs that expired as of June 30, 2021 and no union employees subject to CBAs that will expire by June 30, 2022.

Labor relations in general and in the sports industry in particular can be volatile, though our current relationships with our unions taken as a whole are positive.

The NBA players and the NHL players are covered by CBAs between the NBPA and the NBA and between the NHL Players’ Association (“NHLPA”) and the NHL, respectively.

The NBA players and the NHL players are covered by CBAs between the National

Basketball Players Association (“NBPA”) and the NBA and between the NHL Players’ Association (“NHLPA”) and the NHL, respectively.

Both the NBA and the NHL have experienced labor difficulties in the past and may have labor issues in the future.

On June 30, 2011 the prior CBA between the NBA and NBPA expired and there was a work stoppage for approximately five months until a new CBA was entered into in December 2011.

The NBA CBA expires after the 2023-24 season (although each of the NBA and the NBPA has the right to

terminate the CBA effective following the 2022-23 season).

In addition, the NBA and the NBPA currently have the right to terminate the CBA through October 15, 2020 (unless extended).

The NBA CBA expires after the 2023-24 season (although each of the NBA and the NBPA has the right to terminate the CBA effective following the 2022-23 season).

On September 15, 2012 the prior CBA between the NHL and NHLPA expired and there was a work stoppage for approximately four months until a new CBA was entered into in January 2013.

The current NHL CBA was set to expire on September 15, 2022, but the NHL and NHLPA have recently agreed on terms by which the CBA will be extended through and including September 15, 2026 (with the possibility of an additional one year extension in certain circumstances).

The NBA and NHL playoff games for the 2019-20 seasons have experienced postponements due to player, team and/or league protests and decisions .

The current NHL CBA expires after 2025-26 season (with the possibility of a one year extension in certain circumstances) .

The NBA and NHL playoff games for the 2019-20 seasons experienced postponements due to player, team and/or league protests and decisions.

See “Item 1A.

Risk Factors — Organized Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations .”

Risk Factors — Economic and Business Relationship Risks — Organized Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations .”

At MSG Sports, the health and safety of our employees and athletes is our top priority.

In response to COVID-19, significant measures have been taken to ensure that best practice health and safety protocols are in place and enforced throughout our offices, the Madison Square Garden Training Center, CLG Performance Center and team personnel areas at The Garden.

We have also supported our employees through our relief fund, wellness programming and remote working capabilities.

We believe that we have maintained our business operations without sacrificing this commitment to keeping our employees and athletes safe while working on-site.

Financial Information about Geographic Areas

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What changed 10-K

Item 1. Business