What changed in this filing

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Item 9A. Controls and Procedures

2021-08-19 compared with 2020-08-31 · 754 added, 804 removed, 1279 unchanged (55% of the section changed)

13 unchanged sentences

Based on the results of this evaluation, our management concluded that our internal control over financial reporting was effective as of June 30, 2021.

The effectiveness of our internal control over financial reporting as of June 30, 2020 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included herein.

The effectiveness of our internal control over financial reporting as of June 30, 2021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Changes in Internal Control over Financial Reporting

Following the MSGE Distribution , we entered into a transition services agreement and other agreements with MSG Entertainment which provide certain business and administrative functions to the Company that were previously performed by internal resources.

Such services include support with respect to information technology, accounting, accounts payable, payroll, tax, human resources, treasury, insurance and risk management, investor relations, corporate communications, benefit plan administration and reporting, and internal audit.

The Company continues to review and document its internal controls over financial reporting, and may, from time to time, make changes aimed at enhancing their effectiveness.

There were no changes in the Company’s internal control over financial reporting during the fiscal quarter ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other Information

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(formerly, The Madison Square Garden Company) and The Dolan Family Affiliates (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on October 1, 2015).

Description of Capital Stock (incorporated by reference to Exhibit 4.5 to the Company’s Form 10-K for the fiscal year ended June 30, 2019 filed on August 20, 2019).

Description of Capital Stock.

Tax Disaffiliation Agreement, dated September 11, 2015, between MSG Networks Inc.

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(formerly, The Madison Square Garden Company) Option Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q for the quarter ended December 31, 2017 filed on February 8, 2018).

Lease Agreement, dated December 4, 1997, between RCPI Trust and Radio City Productions LLC, relating to Radio City Music Hall, (incorporated by reference to Exhibit 10.14 to Amendment No.

3 to the Company’s Registration Statement on Form 10 filed on July 24, 2015).

First Amendment to Lease Agreement, dated December 4, 1997, between RCPI Trust and Radio City Productions LLC, dated February 19, 1999 (incorporated by reference to Exhibit 10.15 to Amendment No.

3 to the Company’s Registration Statement on Form 10 filed on July 24, 2015).

Second Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C.

and Radio City Productions LLC, dated November 6, 2002 (incorporated by reference to Exhibit 10.16 to Amendment No.

3 to the Company’s Registration Statement on Form 10 filed on July 24, 2015).

Third Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C.

and Radio City Productions LLC, dated August 14, 2008 (incorporated by reference to Exhibit 10.17 to Amendment No.

3 to the Company’s Registration Statement on Form 10 filed on July 24, 2015).

Fourth Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C.

and Radio City Productions LLC, dated January 24, 2011 (incorporated by reference to Exhibit 10.18 to Amendment No.

3 to the Company’s Registration Statement on Form 10 filed on July 24, 2015).

Guaranty of Lease, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and RCPI Landmark Properties, L.L.C.

(incorporated by reference to Exhibit 10.19 to Amendment No.

3 to the Company’s Registration Statement on Form 10 filed on July 24, 2015).

Employment Agreement dated as of March 31, 2020 between Madison Square Garden Sports Corp.

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Employment Agreement dated as of April 17, 2020 between Madison Square Garden Sports Corp.

(formerly, The Madison Square Garden Company) and Alexander Shvartsman.

(formerly, The Madison Square Garden Company) and Alexander Shvartsman (incorporated by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K for the year ended June 30, 2020 filed on August 31, 2020).

Employment Agreement dated as of December 6, 2018, between Madison Square Garden Sports Corp.

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Mink (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 10, 2018).

Employment Agreement, dated October 25, 2018, between Madison Square Garden Sports Corp.

(formerly, The Madison Square Garden Company) and Philip D’Ambrosio (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended December 31, 2018 filed on February 1, 2019).

Employment Agreement, dated September 6, 2018, between Madison Square Garden Sports Corp.

(formerly, The Madison Square Garden Company) and Lawrence J.

Burian (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 7, 2018).

Letter Agreement, dated June 19, 2020, between Madison Square Garden Sports Corp.

Employment Agreement, dated December 18, 2020, between Madison Square Garden Sports Corp.

and Lawrence J.

Burian (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 19, 2020).

Burian (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 18, 2020).

Employment Agreement dated as of March 31, 2020 between Madison Square Garden Sports Corp.

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(formerly, The Madison Square Garden Company) and Andrew Lustgarten (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 18, 2017).

Employment Agreement dated as of January 23, 2020 between Madison Square Garden Sports Corp.

and Joseph Yospe.

Dry Lease Agreement, dated January 11, 2017, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and Quart 2C, LLC for the G550 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 13, 2017).

Dry Lease Agreement, dated January 11, 2017 between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and Quart 2C, LLC for the G450 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 13, 2017).

Credit Agreement, dated as of September 30, 2016, by and among New York Knicks, LLC, JPMorgan Chase Bank, N.A.

as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 6, 2016).

Amended and Restated Credit Agreement, dated as of November 6, 2020, by and among New York Knicks, LLC, JPMorgan Chase Bank, N.A.

as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed on November 9, 2020).

Security Agreement, dated as of September 30, 2016, between New York Knicks, LLC and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 6, 2016).

Credit Agreement, dated as of January 25, 2017, by and among New York Rangers, LLC, JPMorgan Chase Bank, N.A.

as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 27, 2017).

Security Agreement, dated as of January 25, 2017, between New York Rangers, LLC and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 27, 2017).

Transaction Agreement, dated as of January 31, 2017, between MSG TG, LLC, TG Merger Sub, LLC, TG Rollover Holdco LLC, TAO Group Holdings LLC, TAO Group Intermediate Holdings LLC, TAO Group Operating LLC, TAO Group Management LLC, TG Member Representative LLC, certain other parties thereto, and solely with respect to specific provisions MSG Entertainment Holdings, LLC and Madison Square Garden Sports Corp.

(formerly, The Madison Square Garden Company) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 1, 2017).

Credit and Guaranty Agreement, dated as of January 31, 2017, among TAO Group Operating LLC, TAO Group Intermediate Holdings LLC, certain subsidiaries of TAO Group Operating LLC, the various lenders thereto, and Goldman Sachs Specialty Lending Group, L.P.

(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 1, 2017).

Second Amended and Restated Limited Liability Company Agreement of TAO Group Holdings LLC, dated as of January 31, 2017 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 1, 2017).

Credit Agreement, dated as of November 6, 2020, by and among Knicks Holdings, LLC, JP Morgan Chase Bank, N.A.

as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed on November 9, 2020).

Security Agreement, dated as of November 6, 2020, between Knicks Holdings, LLC and JP Morgan Chase Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed on November 9, 2020).

Amended and Restated Credit Agreement, dated as of November 6, 2020, by and among New York Rangers, LLC, JPMorgan Chase Bank, N.A.

as administrative agent and collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed on November 9, 2020).

Amendment No.

1 to Second Amended and Restated Limited Liability Company Agreement of TAO Group Holdings LLC, dated as of May 23, 2019.(incorporated by reference to Exhibit 10.39 to the Company’s Form 10-K for the fiscal year ended June 30, 2019 filed on August 20, 2019).

First Amendment to the Credit and Guaranty Agreement, dated as of January 31, 2017, among TAO Group Operating LLC, TAO Group Intermediate Holdings LLC, certain subsidiaries of TAO Group Operating LLC, the various lenders thereto, and Goldman Sachs Specialty Lending Group, L.P., entered into as of May 19, 2017 (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q for the quarter ended December 31, 2017 filed on February 8, 2018).

Second Amendment to the Credit and Guaranty Agreement, dated as of January 31, 2017, among TAO Group Operating LLC, TAO Group Intermediate Holdings LLC, certain subsidiaries of TAO Group Operating LLC, the various lenders thereto, and Goldman Sachs Specialty Lending Group, L.P., entered into as of January 22, 2018 (incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q for the quarter ended December 31, 2017 filed on February 8, 2018).

Summary of Office Space Arrangement, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and the Knickerbocker Group LLC (incorporated by reference to Exhibit 10.30 to the Company’s Form 10-K for the fiscal year ended June 30, 2016 filed on August 19, 2016).

Time Sharing Agreement, dated December 15, 2017, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and Andrew Lustgarten (for the G450) (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended December 31, 2017 filed on February 8, 2018).

Time Sharing Agreement, dated December 15, 2017, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and Andrew Lustgarten (for the G550) (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended December 31, 2017 filed on February 8, 2018).

Time Sharing Agreement, dated December 15, 2017, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and Andrew Lustgarten (for the GV) (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended December 31, 2017 filed on February 8, 2018).

Aircraft Support Services Agreement, effective July 1, 2018, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC), Sterling Aviation, LLC and Charles F.

Dolan (for the GV) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 29, 2018).

Aircraft Support Services Agreement, effective July 1, 2018, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC)and JDSS (for the G450) (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on June 29, 2018).

Time Sharing Agreement, effective July 1, 2018, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and Charles F.

Dolan (for the G550) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on June 29, 2018).

Time Sharing Agreement, effective July 1, 2018, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC)and QUART 2C, LLC (for the G550) (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on June 29, 2018).

Dry Lease Agreement, effective July 1,2018, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC)C and Sterling Aviation, LLC (for the GV) (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on June 29, 2018).

Dry Lease Agreement, effective July 1, 2018, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and QUART 2C, LLC (for the G450) (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on June 29, 2018).

Ground Lease Agreement, dated July 16, 2018, by and among Sands Arena Landlord LLC, Venetian Casino Resort, LLC, MSG Las Vegas, LLC, and MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) (incorporated by reference to Exhibit 10.60 to the Company’s Form 10-K for the fiscal year ended June 30, 2018 filed on August 17, 2018).

First Amendment to Ground Lease, dated July 16, 2018, by and among Sands Arena Landlord LLC, Venetian Casino Resort, LLC, MSG Las Vegas, LC, and MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC), dated November 24, 2018 (incorporated by reference to Exhibit 10.56 to the Company’s Form 10-K for the fiscal year ended June 30, 2019 filed on August 20, 2019).

Aircraft Support Services Agreement, dated December 17, 2018, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and the Dolan Family Members (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 21, 2018).

Dry Lease Agreement, dated December 17, 2018, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and Sterling2k LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 21, 2018).

Time Sharing Agreement, dated December 17, 2018, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and Andrew Lustgarten (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 21, 2018).

Dry Lease Agreement, dated May 6, 2019, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and Brighid Air, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended March 31, 2019 filed on May 8, 2019).

Flight Crew Services Agreement, dated May 6, 2019, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and Dolan Family Office, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended March 31, 2019 filed on May 8, 2019).

Time Sharing Agreement, dated May 6, 2019, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and Andrew Lustgarten (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended March 31, 2019 filed on May 8, 2019).

Credit Agreement, dated as of May 23, 2019, among TAO Group Operating LLC, TAO Group Intermediate Holdings LLC, the various lenders thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 23, 2019).

Security Agreement, dated as of May 23, 2019, TAO Group Operating LLC, TAO Group Intermediate Holdings LLC, certain subsidiaries of TAO Group Intermediate Holdings LLC and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 23, 2019).

Construction Agreement, dated as of May 31, 2019, by and between MSG Las Vegas, LLC and Hunt Construction Group Inc.

(incorporated by reference to Exhibit 10.65 to the Company’s Form 10-K for the fiscal year ended June 30, 2019 filed on August 20, 2019).

2 dated as of March 19, 2021, to the Credit Agreement, dated as of January 25, 2017, by and among New York Rangers, LLC, the lenders party thereto and JPMorgan Chase Bank N.A., as agent (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 filed on May 6, 2021).

Contribution Agreement, dated as of March 31, 2020, between Madison Square Garden Sports Corp., MSG Entertainment Group, LLC and Madison Square Garden Entertainment Corp.

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(formerly, MSG Entertainment Spinco, Inc.) (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on March 31, 2020).

Delayed Draw Term Loan Credit Agreement, dated April 17, 2020, between MSG NYK Holdings, LLC and MSG Entertainment Group, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 23, 2020).

Delayed Draw Term Loan Credit Agreement, dated April 17, 2020, between MSG NYR Holdings, LLC and MSG Entertainment Group, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 23, 2020).

Arena License Agreement, dated April 15, 2020, between MSG Arena, LLC and New York Knicks, LLC.**

Arena License Agreement, dated April 15, 2020, between MSG Arena, LLC and New York Rangers, LLC.**

Arena License Agreement, dated April 15, 2020, between MSG Arena, LLC and New York Knicks, LLC (incorporated by reference to Exhibit 10.69 to the Company's Annual Report on Form 10-K for the year ended June 30, 2020 filed on August 31, 2020).**

Arena License Agreement, dated April 15, 2020, between MSG Arena, LLC and New York Rangers, LLC (incorporated by reference to Exhibit 10.70 to the Company's Annual Report on Form 10-K for the year ended June 30, 2020 filed on August 31, 2020).**

NBA Transaction Agreement, dated April 15, 2020, with the NBA and Madison Square Garden Entertainment Corp.

(formerly, MSG Entertainment Spinco, Inc.).

(formerly, MSG Entertainment Spinco, Inc.) (incorporated by reference to Exhibit 10.71 to the Company's Annual Report on Form 10-K for the year ended June 30, 2020 filed on August 31, 2020).

NHL Transaction Agreement, dated April 15, 2020, with the NHL and Madison Square Garden Entertainment Corp.

(formerly, MSG Entertainment Spinco, Inc.).

Time Sharing Agreement, dated April 15, 2020, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and MSG Sports, LLC (for the G450).

Time Sharing Agreement, dated April 15, 2020, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and MSG Sports, LLC (for the G550).

(formerly, MSG Entertainment Spinco, Inc.) (incorporated by reference to Exhibit 10.72 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 filed on August 31, 2020).

Time Sharing Agreement, dated April 15, 2020, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and MSG Sports, LLC (for the G450) (incorporated by reference to Exhibit 10.73 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 filed on August 31, 2020).

Time Sharing Agreement, dated April 15, 2020, between MSG Entertainment Group, LLC (formerly, MSG Sports & Entertainment, LLC) and MSG Sports, LLC (for the G550) (incorporated by reference to Exhibit 10.74 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 filed on August 31, 2020).

Madison Square Garden Sports Corp.

Policy Concerning Certain Matters Relating to Madison Square Garden Entertainment Corp., MSG Networks Inc.

and AMC Networks Inc., including Responsibilities of Overlapping Directors and Officers.

Sponsorship Sales and Service Representation Agreement, dated April 15, 2020, between Knicks Holdings, LLC and MSG Entertainment Group, LLC.

Sponsorship Sales and Service Representation Agreement, dated April 15, 2020, between New York Rangers, LLC and MSG Entertainment Group, LLC.

Letter Agreement, dated August 21, 2020, between Madison Square Garden Sports Corp.

and Lawrence J.

and AMC Networks Inc., including Responsibilities of Overlapping Directors and Officers (incorporated by reference to Exhibit 10.75 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 filed on August 31, 2020).

Sponsorship Sales and Service Representation Agreement, dated April 15, 2020, between Knicks Holdings, LLC and MSG Entertainment Group, LLC (incorporated by reference to Exhibit 10.76 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 filed on August 31, 2020).

Sponsorship Sales and Service Representation Agreement, dated April 15, 2020, between New York Rangers, LLC and MSG Entertainment Group, LLC (incorporated by reference to Exhibit 10.77 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 filed on August 31, 2020).

Letter from KPMG LLP (incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K filed on November 24, 2020).

Subsidiaries of the Registrant.

Consent of KPMG LLP.

Consent of Deloitte & Touche LLP.

Powers of Attorney (included on the signature page to this Annual Report on Form 10-K).

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Certification by the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

XBRL Taxonomy Extension Schema.

XBRL Taxonomy Extension Calculation Linkbase.

XBRL Taxonomy Extension Definition Linkbase.

XBRL Taxonomy Extension Label Linkbase.

XBRL Taxonomy Extension Presentation Linkbase.

The cover page form the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 formatted in Inline XBRL and contained in Exhibit 101.

101 The following materials from Madison Square Garden Sports Corp.

Annual Report on Form 10-K for the year ended June 30, 2021, formatted in Inline Extensible Business Reporting Language (iXBRL):

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Equity and Redeemable Noncontrolling Interests, and (vi) Notes to Consolidated Financial Statements.

104 Cover Page Interactive Data File (formatted in iXBRL and included in Exhibit 101).

_________________

Confidential treatment has been granted with respect to certain portions of this exhibit.

Omitted portions have been filed separately with the Securities and Exchange Commission.

** Certain confidential information, identified by bracketed asterisks “[*****]” has been omitted from this exhibit pursuant to Item 601(b)(10) of Regulation S-K because it is both (i) not material and (ii) would be competitively harmful to the Company if publicly disclosed.

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(Additions) / Deductions

Charged to Costs and Expenses

Charged to Other Accounts

of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at

Year ended June 30, 2021

Allowance for doubtful accounts (a)

Allowance for doubtful accounts

$ ( 180 ) $ 175 $ — $ 5 $ —

Deferred tax valuation allowance ( 48,133 ) 51,496 ( 3,363 ) (a)

$ ( 48,313 ) $ 51,671 $ ( 3,363 ) $ 5 $ —

Year ended June 30, 2020

Allowance for doubtful accounts

Deferred tax valuation allowance

Allowance for doubtful accounts (b)

$ ( 1,814 ) $ ( 7,170 ) $ — $ 8,804 (c)

Deferred tax valuation allowance (b)

( 75,701 ) ( 46,514 ) — 74,082 (d)

$ ( 77,515 ) $ ( 53,684 ) $ — $ 82,886 $ ( 48,313 )

Year ended June 30, 2019

Allowance for doubtful accounts

$ ( 777 ) $ ( 1,426 ) $ — $ 389 $ ( 1,814 )

Deferred tax valuation allowance ( 88,246 ) 8,708 3,837 — ( 75,701 )

$ ( 89,023 ) $ 7,282 $ 3,837 $ 389 $ ( 77,515 )

Includes amounts classified as discontinued operations on the consolidated balance sheet.

Includes amounts reflected in discontinued operations of $ 8,769 .

The Company completely offset the taxable income of discontinued operations, including taxable income resulting from the acceleration of deferred revenue with NOLs.

_________________

(a) Includes amounts related to return to provision adjustments.

(b) Includes amounts classified as discontinued operations on the consolidated balance sheet.

(d) The Company completely offset the taxable income of discontinued operations, including taxable income resulting from the acceleration of deferred revenue with NOLs.

The deferred tax assets for such NOLs had a full valuation allowance.

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The valuation allowance reduction relating to the NOL utilization was $ 68,000 .

Net decrease in valuation allowance reflects $ 51,015 of reduction to net deferred tax liabilities in connection with the lower federal income tax rate of 21 % and other of $ 2,453 .

Pursuant to the requirements of the Section 13 or 15(d) the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 19 th day of August 2021.

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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons in the capacities and on the dates indicated.

/s/ ANDREW LUSTGARTEN

President and Chief Executive Officer

(Principal Executive Officer)

August 28, 2020

Name Title Date

/s/ ANDREW LUSTGARTEN President and Chief Executive Officer

(Principal Executive Officer) August 19, 2021

Andrew Lustgarten

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Executive Vice President and

Chief Financial Officer (Principal Financial Officer) and Treasurer

August 28, 2020

Chief Financial Officer (Principal Financial Officer) and Treasurer August 19, 2021

/ s / ALEXANDER SHVARTSMAN

Senior Vice President, Controller and

Principal Accounting Officer

August 28, 2020

Principal Accounting Officer August 19, 2021

Alexander Shvartsman

/ s / JAMES L.

Executive Chairman (Director)

August 28, 2020

Executive Chairman (Director) August 19, 2021

/ s / CHARLES F.

August 28, 2020

Director August 19, 2021

/ s / CHARLES P.

August 28, 2020

Director August 19, 2021

/ s / KRISTIN A.

August 28, 2020

Director August 19, 2021

Name Title Date

/ s / MARIANNE DOLAN WEBER

August 28, 2020

Director August 19, 2021

Marianne Dolan Weber

August 28, 2020

DOLAN Director August 19, 2021

/ s / THOMAS C.

August 28, 2020

Director August 19, 2021

/ s / JOSEPH M.

August 28, 2020

Director August 19, 2021

/s/ STEPHEN C.

August 28, 2020

MILLS Director August 19, 2021

/ s / RICHARD D.

August 28, 2020

Director August 19, 2021

/ s / NELSON PELTZ

August 28, 2020

Director August 19, 2021

/ s / ALAN D.

August 28, 2020

Director August 19, 2021

/ s / IVAN SEIDENBERG

August 28, 2020

Director August 19, 2021

Ivan Seidenberg

/ s / BRIAN G.

August 28, 2020

Director August 19, 2021

/ s / VINCENT TESE

August 28, 2020

Director August 19, 2021

/s/ ANTHONY J.

August 28, 2020

VINCIQUERRA Director August 19, 2021

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

Consolidated Balance Sheets as of June 30, 202 1 and 20 20

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Madison Square Garden Sports Corp.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Madison Square Garden Sports Corp.

and subsidiaries (the “Company”) as of June 30, 2020 and 2019 , the related consolidated statements of operations, comprehensive income (loss), cash flows, and equity and redeemable noncontrolling interests for each of the years in the three-year period ended June 30, 2020 , and the related notes and financial statement schedule II (collectively, the “ consolidated financial statements ”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2020 and 2019 , and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2020 , in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“ PCAOB ”), the Company’s internal control over financial reporting as of June 30, 2020 , based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated August 28, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Changes in Accounting Principle

As described in Note 2 to the consolidated financial statements, effective July 1, 2019, the Company changed its method of accounting for leases due to the adoption of ASC Topic 842, Leases, and effective July 1, 2018, the Company changed its method of accounting for revenue due to the adoption of ASC Topic 606, Revenue from Contracts with Customers.

To the shareholders and the Board of Directors of Madison Square Garden Sports Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Madison Square Garden Sports Corp.

and subsidiaries (the "Company") as of June 30, 2021, the related consolidated statements of operations, comprehensive income (loss), cash flows, and equity and redeemable noncontrolling interests, in the period ended June 30, 2021, and the related notes and the consolidated financial statement Schedule II listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 19, 2021 expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of the identification of related parties and related party transactions

As discussed in Note 17 to the consolidated financial statements, the Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the Dolan Family Group) is the majority beneficial owner of the Company, MSG Networks Inc.

(MSG Networks), Madison Square Garden Entertainment Corp.

(MSG Entertainment), and AMC Networks Inc.

(AMC Networks).

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Related Party Transactions — Refer to Note 17 to the financial statements

Critical Audit Matter Description

The Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the Dolan Family Group) is the majority beneficial owner of the Company, Madison Square Garden Entertainment Corp.

(“MSG Entertainment”), MSG Networks Inc.

(until merger with MSG Entertainment), and AMC Networks, Inc.

In addition, there are certain overlapping directors and executive officers between the companies.

Each of these entities is a related party.

Following the distribution of MSG Entertainment, the Company has entered into a number of transactions with MSG Entertainment, including agreements for use of the Madison Square Garden Arena, sales and service representation agreements, sponsorship allocation, transition services and delayed draw term loans, as well as certain shared executive support costs for the Company’s Executive Chairman and Vice Chairman.

The Company has entered into agreements for media rights and other transactions with MSG Networks and the Company has also entered into transactions with AMC

Further, the Company has entered into several arrangements with members of the Dolan Family Group for shared office space and aircraft services and timesharing.

We identified the evaluation of the identification of related parties and related party transactions as a critical audit matter.

Auditor judgment was involved in assessing the sufficiency of the procedures performed to identify related parties and related party transactions of the Company.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s related party process, including controls over the identification of the Company’s related party relationships and transactions.

We performed the following procedures to evaluate the identification of related parties and related party transactions by the Company:

Read new agreements and contracts between the Company and related parties

Queried the accounts payable system for transactions with related parties;

Inspected director and officer questionnaires from the Company’s directors and officers;

Evaluated the Company’s reconciliation of its applicable accounts to the related parties’ records of transactions and balances;

Read the Company’s minutes from meetings of the Board of Directors and related committees;

Inquired with executive officers, key members of management, and the Audit Committee of the Board of Directors regarding related party transactions.

Received confirmations from related parties and compared responses to the Company’s records;

Read public filings, external news, and research sources for information related to transactions between the Company and related parties;

Listened to the Company’s quarterly investor relations calls.

Assessment of the results from discontinued operations

As discussed in Notes 1 and 3 to the consolidated financial statements, on April 17, 2020, the Company distributed all the outstanding common stock of MSG Entertainment to its stockholders.

MSG Entertainment owns, directly or indirectly, the entertainment and sports booking businesses previously owned and operated by the Company through its Entertainment and Sports business segments, respectively.

Management determined that the allocable shared revenue and expenses of MSG Entertainment should be presented as discontinued operations in the consolidated statements of operations for all periods presented.

We identified the assessment of the results from discontinued operations as a critical audit matter.

Given the nature of the transactions and the degree of integration of MSG Entertainment with the Company’s continuing operations in the periods before the distribution, there was a high degree of subjective auditor judgment required to assess management’s identification, segregation, and recording of the allocable shared revenue and expenses for the discontinued businesses.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s discontinued operations assessment process, including controls related to the identification, segregation, and recording of allocable shared revenue and expenses, and the resulting entries made to the income statement account balances.

Specifically, we read the distribution agreements and evaluated the Company’s discontinued operations accounting memorandums that document management’s accounting conclusions.

We tested the recognition and classification of amounts included in discontinued operations by recalculating revenue and expenses using the Company’s historical accounting records.

We read the Company’s disclosure and assessed whether the disclosure appropriately described the determination of discontinued operations.

We have served as the Company’s auditor since 2015.

New York, New York

Each of these entities is a listed related party at June 30, 2021.

The Company has entered into a number of transactions with related parties, including, but not limited to agreements for use of the Madison Square Garden Arena, media rights, sales and service representation, team sponsorship allocation, and transition services, as well as certain shared executive support costs for the Company’s Executive Chairman, the Company’s Vice Chairman and the Company’s President and Chief Executive Officer.

We identified the evaluation of the Company’s identification of related parties and related party transactions as a critical audit matter.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s procedures performed to identify related parties and related party transactions of the Company.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s identification of related parties and related party transactions included the following, among others:

• We tested the operating effectiveness of certain internal controls over the Company’s related party process, including controls over the identification of the Company’s related party relationships and transactions;

the authorization and approval of transactions with related parties, the allocation of revenues and operating expenses among related parties, and the accounting for and disclosure of relationships and transactions with related parties in the financial statements;

• Inquired with executive officers including the Company’s internal legal counsel, key members of management, the Audit Committee of the Board of Directors and others within the Company regarding related party relationships and transactions;

• Read agreements and contracts with and between related parties and, in certain cases third parties, and evaluated whether authorization and approvals were obtained and the terms and other information about transactions are consistent with explanations from inquiries and other audit evidence obtained about the business purpose of the transactions;

• With the assistance of our data specialists, we analyzed the general ledger detail to identify potential additional transactions with related parties;

• Compared the Company’s reconciliation of applicable accounts to related parties’ records of transactions and balances;

• For new or amended revenue arrangements among related parties, evaluated the reasonableness of management’s allocation of the transaction price to each performance obligation identified in the arrangement;

• Received confirmations from related parties, and, in certain cases third parties, and compared responses to the Company’s records;

• Performed the following procedures to identify information related to potential additional transactions between the Company and related parties that may also include third parties:

◦ Read the Company’s minutes from meetings of the Board of Directors and related committees of the Board of Directors;

◦ Inspected annual compliance questionnaires completed by the Company’s directors and officers;

◦ Read publicly available sources including the Company’s public filings and press releases as well as certain analyst and industry reports;

◦ Listened to or read transcripts of the Company’s quarterly earnings calls.

/s/ Deloitte & Touche LLP

August 19, 2021

We have served as the Company's auditor since 2020.

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Madison Square Garden Sports Corp.:

To the shareholders and the Board of Directors of Madison Square Garden Sports Corp.

Opinion on Internal Control over Financial Reporting

We have audited Madison Square Garden Sports Corp.

and subsidiaries’ (the “Company”) internal control over financial reporting as of June 30, 2020 , based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2020 , based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“ PCAOB ”), the consolidated balance sheets of the Company as of June 30, 2020 and 2019 , the related consolidated statements of operations, comprehensive income (loss), cash flows, and equity and redeemable noncontrolling interests for each of the years in the three-year period ended June 30, 2020 , and the related notes and financial statement schedule II (collectively, the “ consolidated financial statements ”), and our report dated August 28, 2020 expressed an unqualified opinion on those consolidated financial statements .

We have audited the internal control over financial reporting of Madison Square Garden Sports Corp.

and subsidiaries (the “Company”) as of June 30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2021 of the Company (the “financial statements”), and our report dated August 19, 2021, expressed an unqualified opinion on those financial statements.

Basis for Opinion

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

August 19, 2021

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Madison Square Garden Sports Corp.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Madison Square Garden Sports Corp.

and subsidiaries (the “Company”) as of June 30, 2020, the related consolidated statements of operations, comprehensive income (loss), cash flows, and equity and redeemable noncontrolling interests for each of the years in the two-year period ended June 30, 2020, and the related notes and financial statement schedule II (collectively, the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2020, in conformity with U.S.

generally accepted accounting principles.

Change in Accounting Principle

As described in Note 2 to the consolidated financial statements, effective July 1, 2019, the Company changed its method of accounting for leases due to the adoption of ASC Topic 842, Leases.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor from 2015 to 2020.

New York, New York

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Other current assets 15,869 9,433

Current assets of discontinued operations

Total current assets 185,246 128,278

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Indefinite-lived intangible assets 112,144 112,144

Non-current assets of discontinued operations

Goodwill 226,955 226,955

Deferred income tax assets, net 15,943 —

Other assets 28,719 6,019

Total assets $ 1,309,939 $ 1,233,798

See accompanying notes to consolidated financial statements.

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(in thousands, except per share data)

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

LIABILITIES AND EQUITY

Current Liabilities:

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Net related party payables 17,089 17,952

Debt 30,000 —

Accrued liabilities:

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Deferred revenue 131,025 126,348

Current liabilities of discontinued operations

Total current liabilities 368,278 290,254

Related party payables, noncurrent

Long-term debt 355,000 350,000

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Deferred tax liabilities, net — 57,721

Deferred revenue, noncurrent 31,603 2,014

Other liabilities 1,749 1,150

Non-current liabilities of discontinued operations

Total liabilities 1,511,805 1,437,233

Commitments and contingencies (see Note 12)

Redeemable noncontrolling interests of discontinued operations

Madison Square Garden Sports Corp.

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

Retained earnings (accumulated deficit)

Accumulated other comprehensive income (loss)

( 146,734 ) ( 167,431 )

Accumulated deficit ( 78,898 ) ( 43,605 )

Accumulated other comprehensive loss ( 2,027 ) ( 2,139 )

Total Madison Square Garden Sports Corp.

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Nonredeemable noncontrolling interests 2,442 3,551

Total liabilities, redeemable noncontrolling interests and equity

Total equity ( 201,866 ) ( 203,435 )

Total liabilities and equity $ 1,309,939 $ 1,233,798

See accompanying notes to consolidated financial statements.

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Years Ended June 30,

2021 2020 2019

$ 415,721 $ 603,319 $ 729,404

Operating expenses:

Direct operating expenses (b)

281,890 359,970 440,081

Selling, general and administrative expenses (c)

206,700 319,675 327,441

Depreciation and amortization 5,574 17,540 20,077

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Miscellaneous income (expense), net ( 346 ) ( 421 ) 1,333

( 10,875 ) ( 4,182 ) ( 2,446 )

Loss from continuing operations before income taxes ( 89,318 ) ( 98,048 ) ( 60,641 )

Income tax benefit (expense) 73,421 ( 20,593 ) 12,619

Income (loss) from continuing operations

Loss from continuing operations ( 15,897 ) ( 118,641 ) ( 48,022 )

Income (loss) from discontinued operations, net of taxes — ( 90,222 ) 44,905

Net income (loss)

Net loss ( 15,897 ) ( 208,863 ) ( 3,117 )

Net loss attributable to nonredeemable noncontrolling interests from continuing operations

( 1,943 ) ( 2,342 ) ( 2,300 )

Net loss attributable to redeemable noncontrolling interests from discontinued operations

— ( 24,013 ) ( 7,299 )

Net loss attributable to nonredeemable noncontrolling interests from discontinued operations

— ( 120 ) ( 4,945 )

Net income (loss) attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 13,954 ) $ ( 182,388 ) $ 11,427

Continuing operations

$ ( 0.58 ) $ ( 4.86 ) $ ( 1.92 )

Discontinued operations

— ( 2.76 ) 2.40

Basic earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders

$ ( 0.58 ) $ ( 7.62 ) $ 0.48

Continuing operations

$ ( 0.58 ) $ ( 4.86 ) $ ( 1.91 )

Discontinued operations

— ( 2.76 ) 2.39

Diluted earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders

$ ( 0.58 ) $ ( 7.62 ) $ 0.48

Weighted-average number of common shares outstanding:

Basic 24,129 23,942 23,767

Diluted 24,129 23,942 23,900

_______________

Include revenues from related parties of $ 138,881 , $ 148,207 and $ 142,319 for the years ended June 30, 2020 , 2019 and 2018 , respectively.

Include net charges to related parties of $ 77 , $ 311 and $ 310 for the years ended June 30, 2020 , 2019 and 2018 , respectively.

Include net charges from (to) related parties of $ 3,380 , $( 10,744 ) and $( 9,884 ) for the years ended June 30, 2020 , 2019 and 2018 , respectively.

(a) Include revenues from related parties of $ 147,029 , $ 138,881 and $ 148,207 for the years ended June 30, 2021, 2020 and 2019, respectively.

(b) Include net charges to related parties of $ 46,995 , $ 77 and $ 311 for the years ended June 30, 2021, 2020 and 2019, respectively.

(c) Include net charges from (to) related parties of $ 55,059 , $ 3,380 and $( 10,744 ) for the years ended June 30, 2021, 2020 and 2019, respectively.

See accompanying notes to consolidated financial statements.

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Years Ended June 30,

Net income (loss)

Other comprehensive loss, before income taxes:

2021 2020 2019

Net loss $ ( 15,897 ) $ ( 208,863 ) $ ( 3,117 )

Other comprehensive income (loss), before income taxes:

Pension plans and postretirement plan:

Net unamortized gains (losses) arising during the period

Net unamortized losses arising during the period $ ( 38 ) $ ( 321 ) $ ( 2,565 )

Amounts reclassified from accumulated other comprehensive loss:

Amortization of net actuarial loss included in net periodic benefit cost

103 935 1,286

Amortization of net prior service credit included in net periodic benefit cost

Settlement loss

47 112 67 681 52 ( 1,234 )

Cumulative translation adjustments

Net changes related to available-for-sale securities

Other comprehensive loss, before income taxes

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

Other comprehensive loss, net of income taxes

Comprehensive income (loss)

— ( 4,809 ) ( 4,341 )

Other comprehensive income (loss), before income taxes 112 ( 4,128 ) ( 5,575 )

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

Other comprehensive income (loss), net of income taxes 112 ( 4,128 ) ( 5,575 )

Comprehensive loss ( 15,785 ) ( 212,991 ) ( 8,692 )

Comprehensive loss attributable to nonredeemable noncontrolling interests from continuing operations ( 1,943 ) ( 2,342 ) ( 2,300 )

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Years Ended June 30,

2021 2020 2019

Cash flows from operating activities:

Net income (loss)

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

Net loss $ ( 15,897 ) $ ( 208,863 ) $ ( 3,117 )

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

Depreciation and amortization 5,574 93,362 119,193

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Share-based compensation expense 30,437 56,996 59,474

(Earnings) loss in equity method investments, net of income distributions

Loss (earnings) in equity method investments, net of income distributions — 3,901 ( 6,312 )

Provision for (benefit from) deferred income taxes ( 73,664 ) ( 8,033 ) 150

Purchase accounting adjustments associated with rent-related intangibles and deferred rent

Purchase accounting adjustments associated with leases — 4,621 4,240

Unrealized loss on equity investment with readily determinable fair value — 3,562 3,496

Provision for doubtful accounts

Provision for (recovery of) doubtful accounts ( 175 ) 7,170 1,426

Loss on extinguishment of debt including deferred financing costs — — 3,977

Other non-cash adjustments 1,084 469 ( 1,322 )

Change in assets and liabilities, net of acquisitions:

Change in assets and liabilities:

Accounts receivable, net ( 66,619 ) ( 36,758 ) 2,734

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Operating lease right-of-use assets and lease liabilities 29,449 ( 3,152 ) —

Net cash provided by operating activities

Net cash provided by (used in) operating activities ( 35,326 ) 3,568 161,253

Cash flows from investing activities:

Capital expenditures, net of acquisitions

Capital expenditures ( 466 ) ( 362,475 ) ( 188,834 )

Proceeds from insurance recoveries — 476 —

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Proceeds from maturity of short-term investments — 176,661 —

Payments for acquisition of businesses, net of cash acquired

Payments for acquisition of assets

Investments and loans to nonconsolidated affiliates — ( 75 ) ( 52,707 )

Proceeds from sales of nonconsolidated affiliates — 18,000 125,750

Loan repayments received from nonconsolidated affiliates

Loan repayment received from subordinated debt — 58,735 4,765

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Years Ended June 30,

2021 2020 2019

Cash flows from financing activities:

Repurchases of common stock

Cash distributed with MSG Entertainment — ( 827,076 ) —

Taxes paid in lieu of shares issued for equity-based compensation ( 13,891 ) ( 26,777 ) ( 19,525 )

Proceeds from share issuance 808 — —

Noncontrolling interest capital contributions — 4,000 6,310

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Payment of contingent consideration ( 200 ) ( 200 ) —

Proceeds from NHL advance 30,000 — —

Proceeds from revolving credit facilities 30,000 350,000 —

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Payments for financing costs ( 4,562 ) — ( 1,488 )

Net cash used in financing activities

Net cash provided by (used in) financing activities 17,155 ( 520,588 ) ( 71,746 )

Effect of exchange rates on cash, cash equivalents and restricted cash — 4,655 4,669

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Non-cash investing and financing activities:

Investments and loans to nonconsolidated affiliates

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

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Share-based compensation capitalized in property and equipment — 4,011 3,946

Accrued earn-out liability and other contingencies

Acquisition of assets not yet paid — — 500

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(in thousands)

Accumulated Deficit

Issued Additional

Capital Treasury

Stock Retained Earnings (Accumulated Deficit) Accumulated

Comprehensive

Total Madison Square Garden Sports Corp.

Loss Total Madison Square Garden Sports Corp.

Stockholders ’ Equity

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Noncontrolling

Redeemable Noncontrolling Interests

Interests Total Equity Redeemable Noncontrolling Interests

Balance as of June 30, 2018 $ 249 $ 2,817,873 $ ( 223,662 ) $ ( 11,059 ) $ ( 46,918 ) $ 2,536,483 $ 17,552 $ 2,554,035 $ 76,684

Adoption of ASU No.

2016-01 — — — ( 5,570 ) 5,570 — — — —

Adoption of ASC Topic 606

— — — 34,205 — 34,205 — 34,205 —

Net income (loss) — — — 11,427 — 11,427 ( 7,245 ) 4,182 ( 7,299 )

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Share-based compensation

— 63,420 — — — 63,420 — 63,420 —

Tax withholding associated with shares issued for equity-based compensation

— ( 19,525 ) — — — ( 19,525 ) — ( 19,525 ) —

Common stock issued under stock incentive plans — ( 15,872 ) 15,872 — — — — — —

Repurchases of common stock

Distributions to noncontrolling interest holders

— — — — — — ( 428 ) ( 428 ) ( 1,758 )

Noncontrolling interests from acquisitions — — — — — — 8,446 8,446 —

Contribution of joint venture interests

— 65 — — — 65 ( 65 ) — —

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

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(in thousands)

Retained Earnings (Accumulated Deficit)

Issued Additional

Capital Treasury

Stock Retained Earnings (Accumulated Deficit) Accumulated

Comprehensive

Total Madison Square Garden Sports Corp.

Loss Total Madison Square Garden Sports Corp.

Stockholders ’ Equity

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Noncontrolling

Redeemable Noncontrolling Interests

Interests Total Equity Redeemable Noncontrolling Interests

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

Adoption of ASU No.

Adoption of ASC Topic 606

Net income (loss)

Net loss — — — ( 182,388 ) — ( 182,388 ) ( 2,462 ) ( 184,850 ) ( 24,013 )

Other comprehensive loss

Comprehensive income (loss)

— — — — ( 4,128 ) ( 4,128 ) — ( 4,128 ) —

Comprehensive loss — — — — — ( 186,516 ) ( 2,462 ) ( 188,978 ) ( 24,013 )

Share-based compensation

— 61,007 — — — 61,007 — 61,007 —

Tax withholding associated with shares issued for equity-based compensation

— ( 26,777 ) — — — ( 26,777 ) — ( 26,777 ) —

Common stock issued under stock incentive plans

— ( 22,906 ) 22,906 — — — — — —

Noncontrolling interest non-cash acquisition

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

Distributions to noncontrolling interest holders — — — — — — ( 535 ) ( 535 ) —

Noncontrolling interests from acquisition

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

Contribution of joint venture interests — — — — — — 3,709 3,709 —

Redeemable noncontrolling interest adjustment to redemption fair value

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

Distribution of Madison Square Garden Entertainment Corp.

— ( 2,853,244 ) — 109,780 48,912 ( 2,694,552 ) ( 16,845 ) ( 2,711,397 ) ( 22,838 )

Balance as of June 30, 2020 $ 249 $ 5,940 $ ( 167,431 ) $ ( 43,605 ) $ ( 2,139 ) $ ( 206,986 ) $ 3,551 $ ( 203,435 ) $ —

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(in thousands)

Retained Earnings (Accumulated Deficit)

Issued Additional

Capital Treasury

Stock Accumulated Deficit Accumulated

Comprehensive

Total Madison Square Garden Sports Corp.

Loss Total Madison Square Garden Sports Corp.

Stockholders ’ Equity

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Noncontrolling

Redeemable Noncontrolling Interests

Interests Total Equity

Balance as of June 30, 2020 $ 249 $ 5,940 $ ( 167,431 ) $ ( 43,605 ) $ ( 2,139 ) $ ( 206,986 ) $ 3,551 $ ( 203,435 )

Other comprehensive loss

Net loss — — — ( 13,954 ) — ( 13,954 ) ( 1,943 ) ( 15,897 )

Other comprehensive income — — — — 112 112 — 112

Comprehensive loss — — — — — ( 13,842 ) ( 1,943 ) ( 15,785 )

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Common stock issued under stock incentive plans — ( 1,418 ) 20,697 ( 18,471 ) — 808 — 808

Noncontrolling interest non-cash acquisition

Distributions to noncontrolling interest holders

Noncontrolling interests from acquisition

Contribution of joint venture interests

Redeemable noncontrolling interest adjustment to redemption fair value

Distribution of Madison Square Garden Entertainment Corp.

Adjustments to noncontrolling interests — ( 834 ) — — — ( 834 ) 834 —

Balance as of June 30, 2021 $ 249 $ 23,102 $ ( 146,734 ) $ ( 78,898 ) $ ( 2,027 ) $ ( 204,308 ) $ 2,442 $ ( 201,866 )

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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”).

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”).

These professional sports franchises are collectively referred to herein as the “sports teams.” During the periods prior to fiscal year 2020, MSG Sports also included the New York Liberty (the “Liberty”) of the Women’s National Basketball Association (the “WNBA”), which was sold in January 2019.

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.

These professional sports franchises are collectively referred to herein as the “sports teams.” 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.

The Company also operates two professional sports team performance centers — the Madison Square Garden Training Center in Greenburgh, NY and the CLG Performance Center in Los Angeles, CA.

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The Company operates and reports financial information in one segment.

The Company’s decision to report in one segment is based upon its internal organizational structure;

The Company’s decision to organize as one operating segment and report in one segment is based upon its internal organizational structure;

the manner in which its operations are managed;

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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”) 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.

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Reclassifications

Assets and liabilities related to the MSGE Distribution on the Company’s consolidated balance sheet as of June 30, 2019 have been reclassified as assets and liabilities of discontinued operations (see Note 3 ).

All assets and liabilities related to discontinued operations are excluded from the footnotes unless otherwise noted.

In addition, the historical results of Madison Square Garden Entertainment Corp.

have been reflected in the accompanying statements of operations for the years ended June 30, 2020, 2019 and 2018 as discontinued operations.

The historical results of MSG Entertainment have been reflected in the accompanying statements of operations for the years ended June 30, 2020 and 2019 as discontinued operations.

See Note 3 for more information.

In addition, certain reclassifications have been made in order to conform to the current period’s presentation and relate to the separation of Deferred revenue, noncurrent, which was previously reported in Other liabilities in the consolidated balance sheet as of June 30, 2020.

Impact of COVID-19

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

These disruptions have materially impacted the Company’s revenues and the Company is recognizing materially less revenues across a number of areas.

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.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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.

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

Those areas include:

ticket sales;

media rights fees;

the Company’s share of suite licenses;

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signage and in-venue advertising at The Garden;

and food, beverage and merchandise sales for home games played at The Garden.

The Company will not earn certain of these revenues until the Knicks and the Rangers again play

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

home games at The Garden with fans in attendance.

In addition, as a result of government-mandated assembly limitations and closures, 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 their games.

While the Company currently has the ability to reduce certain operating expenses as a result of the disruptions caused by COVID-19, including (i) rent payments to MSG Entertainment under the Arena License Agreements while The Garden remains closed, (ii) NBA league assessments and day-of-game expenses for the Knicks and Rangers games, (iii) reduction in headcount and a companywide hiring freeze and (iv) certain other selling, general and administrative and discretionary expenses, those expense reduction opportunities will not fully offset revenue losses.

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

If The Garden reopens without capacity limitations, future monthly rent payments due under the Arena License Agreements will be payable by the Knicks and the Rangers, even if the NBA or NHL seasons do not resume simultaneously or at all.

If the Knicks or Rangers play games at The Garden subject to government mandated capacity constraints due to COVID-19, the applicable rent for such periods will be reduced by up to 80 % depending on the size of the capacity constraint.

The Company believes, however, that it has sufficient liquidity, including approximately $ 78,000 in unrestricted cash and cash equivalents as of June 30, 2020, along with available borrowing capacity under existing credit facilities, to fund its operations and repay its outstanding debt that becomes due over the next 12 months.

The Company expects to refinance the Knicks Revolving Credit Facility, as defined in Note 13 , (which is currently due on September 30, 2021) and the Rangers Revolving Credit Facility, as defined in Note 13 (which is currently due on January 25, 2022) prior to the maturity thereof.

If we were not able to do so, $ 350,000 of indebtedness outstanding as of June 30, 2020 (plus any amount borrowed under the DDTL Facilities, as define in Note 13 ) will be due during fiscal year 2022.

Additionally, as a result of operating disruptions due to COVID-19, the Company’s projected cash flows were directly impacted.

As a result of this disruption along with the macroeconomic industry and market conditions, the Company performed impairment test of goodwill identifiable indefinite-lived intangible assets and determined that there were no impairments identified.

However, the duration and impact of the COVID-19 pandemic may result in future impairment charges that management will evaluate as facts and circumstances evolve through time.

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.

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 the Knicks and Rangers games, and (iii) league revenue sharing and team personnel expense.

These expense reductions did not fully offset revenue losses.

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, including day-of-game expenses and certain selling, general and administrative costs.

The Company believes, however, that it has sufficient liquidity, including $ 64,902 in Cash and cash equivalents as of June 30, 2021, along with $ 245,000 of additional available borrowing capacity under existing credit facilities, to fund its operations and repay its outstanding debt that becomes due over the next 12 months.

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, the Company’s management is unable to predict if there will be any longer-term effects due to these COVID-related disruptions.

The Company’s business is also particularly sensitive to discretionary business and consumer spending.

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.

Summary of Significant Accounting Policies

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All significant intracompany transactions and accounts within the Company’s consolidated financial statements have been eliminated.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Use of Estimates

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Management believes its use of estimates in the financial statements to be reasonable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future.

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Direct Operating Expenses

After the MSGE Distribution Date , Direct operating expenses include compensation expense for the Company’s professional sports teams’ players and certain other team personnel, as well as NBA luxury tax, if applicable, NBA and NHL revenue sharing (net of escrow) and league assessments for the Company, event costs related to the presentation and production of the Company’s sporting events and other operating expenses, including expenses related to the Arena License Agreements which require the Company to pay arena license fees to MSG Entertainment in exchange for the right to use The Garden for games of the Knicks and Rangers for a 35 -year term.

After the MSGE Distribution Date, Direct operating expenses include compensation expense for the Company’s professional sports teams’ players and certain other team personnel, as well as NBA luxury tax, if applicable, NBA and NHL revenue sharing (net of escrow) and league assessments for the Company, event costs related to the presentation and production of the Company’s sporting events and other operating expenses, including expenses related to the Arena License Agreements which require the Company to pay arena license fees to MSG Entertainment in exchange for the right to use The Garden for games of the Knicks and the Rangers for a 35 -year term.

Player Costs and Other Team Personnel Transactions, NBA Luxury Tax, NBA and NHL Escrow System/Revenue Sharing, League Assessments, and Arena License Expenses

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The NBA and NHL seasons are typically from mid-October through mid-April and October through mid-April, respectively.

Annual contractual player salaries are expensed over the applicable NBA, NHL or WNBA regular season typically on a straight-line basis.

Annual contractual player salaries are expensed over the applicable NBA, or NHL regular season typically on a straight-line basis.

In certain player contracts the annual contractual salary amounts (including any applicable signing bonuses) may fluctuate such that expensing the salary for the entire fixed contract period on a straight-line basis over each regular season more appropriately reflects the economic benefit of the services provided.

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The NBA CBA expires after the 2023-24 season (although the NBA and the National Basketball Players Association (“NBPA”) each have the right to terminate the CBA 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 current NHL CBA was set to expire on September 15, 2022, but the NHL and NHL Players’ Association (“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).

See Note 21 for summary of the principal aspects of the new NHL CBA and revenue sharing plan.

The NBA CBA contains a salary floor (i.e., a floor on each team’s aggregate player salaries with a requirement that the team pay any deficiency to the players on its roster) and a “soft” salary cap (i.e., a cap on each team’s aggregate player salaries but with certain exceptions that enable teams to pay more, sometimes substantially more, than the cap).

The NHL CBA provides for a salary floor (i.e., a floor on each team’s aggregate player salaries) and a “hard” salary cap (i.e., teams may not exceed a stated maximum, which has been adjusted each season thereafter based upon league-wide revenues).

The current NHL CBA is set to expire on September 15, 2026 (with the possibility of a one year extension in certain circumstances).

The NBA CBA contains a salary floor (i.e., a floor on each team’s aggregate player salaries with a requirement that the team pay

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

any deficiency to the players on its roster) and a “soft” salary cap (i.e., a cap on each team’s aggregate player salaries but with certain exceptions that enable teams to pay more, sometimes substantially more, than the cap).

NBA Luxury Tax

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NBA and NHL Escrow System/Revenue Sharing

The NBA CBA also provides that players collectively receive a designated percentage of league-wide revenues (net of certain direct expenses) as compensation (approximately 51%), and the teams retain the remainder.

The NBA CBA also provides that players collectively receive a designated percentage of league-wide revenues (net of certain direct expenses) as compensation (approximately 49% to 51%), and the teams retain the remainder.

The percentage of league-wide revenues paid as compensation and retained by the teams does not apply evenly across all teams and accordingly the Company may pay its players a higher or lower percentage of the Knicks’ revenues than other NBA teams.

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In the event that the league’s aggregate player compensation is below the designated percentage of league-wide revenues, the teams will remit the shortfall to the NBPA for distribution to the players.

For the 2020-21 season and the remainder of the CBA, the escrow system above was eliminated and a new “Ten-and-Spread” system was put in place.

Under the Ten-and-Spread system, based upon league-wide revenues, aggregate player compensation will be reduced by up to 10% of each player’s salary.

If, for a particular season, compensation reductions in excess of 10% are needed, the excess will be divided by three and recouped via reductions to players’ compensation over the same season, and the subsequent two seasons.

The reduction of players’ salary for any one season is capped at 20% and carried over to the subsequent season as additional compensation reductions.

Each team is entitled to receive an equal one-thirtieth share of the compensation reductions up to 10% and the excess above 10% is allocated in proportion to each team’s player payroll.

The NBA also has a revenue sharing plan that generally requires the distribution of a pool of funds to teams with below-average net revenues (as defined in the plan), subject to reduction or elimination based on individual team market size and profitability.

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Because the aggregate amount to be paid to the players is based upon league-wide revenues and not on a team-by-team basis, the Company may pay its players a higher or lower percentage of the Rangers’ revenues than other NHL teams pay of their own revenues.

In order to implement the salary cap system, NHL teams withhold a portion of each player’s salary and contribute the withheld amounts to an escrow account.

In order to implement the escrow system, NHL teams withhold a portion of each player’s salary and contribute the withheld amounts to an escrow account.

If the league’s aggregate player compensation for a season exceeds the designated percentage (50%) of that season’s league-wide revenues, the excess is retained by the league.

Any such excess funds are distributed to all teams in equal shares.

As of July 2020, the NHL CBA limits the amount of deductions to be withheld from player salaries each year.

The NHL CBA limits the amount of deductions to be withheld from player salaries each year.

If annual excess deductions from player salaries are insufficient to limit league-wide player salaries to 50% of that season’s league-wide revenues, any shortfall will be carried forward to future seasons and remain due from the players to the league.

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(a) 50% from contributions by the top ten revenue earning teams (based on preseason and regular season revenues) in accordance with a formula;

(b) then from payments by teams participating in the playoffs, with each team contributing 35% of its gate receipts for each home playoff game;

(b) then from payments by teams participating in the playoffs, with each team contributing 35% of its gate

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

receipts for each home playoff game (although this provision was waived for the 2020-21 season);

and (c) the remainder from centrally-generated NHL sources.

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In years when the Knicks or Rangers participate in the playoffs, the Company recognizes its estimate of the playoff revenue sharing contribution in the periods when the playoffs occur.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2021 and June 30, 2020, the Company had net revenue sharing liabilities, recorded within Other accrued liabilities, of $ 28,860 and $ 15,119 , respectively.

In addition, as of June 30, 2021, the Company had receivable balances related to escrow and player compensation recoveries of $ 36,525 and $ 10,700 , recorded in Accounts receivable, net and Other assets, respectively.

As of June 30, 2020, the Company had receivable balances of $ 0 related to escrow and player compensation recoveries.

League Assessments

As members of the NBA and NHL, the Knicks and Rangers, respectively, are also subject to annual league assessments.

As members of the NBA and NHL, the Knicks and the Rangers, respectively, are also subject to annual league assessments.

The governing bodies of each league determine the amount of each season’s league assessments that are required from each member team.

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The Knicks and the Rangers play their home games at The Garden pursuant to the Arena License Agreements with MSG Entertainment, which owns and operates The Garden.

The Arena License Agreements are viewed as a continuation of an existing pre-spin relationship where the Knicks and Rangers used The Garden through an inter-company cost-sharing arrangement.

Prior to the MSGE Distribution , the Company allocated certain costs to the MSG Sports business segment, and attributed direct costs (See Note 3 ).

The Arena License Agreements are viewed as a continuation of an existing pre-spin relationship where the Knicks and the Rangers used The Garden through an inter-company cost-sharing arrangement.

Prior to the MSGE Distribution, the Company allocated certain costs and attributed direct costs to the MSG Sports business (See Note 3).

Generally, the financial statements reflect the monthly payments made for the Arena License Agreements throughout the contract year in equal installments, and straight-line rent expense recorded by each team equally over the home game days as each takes place.

In the event a team were to qualify for the playoffs in a given season, a prospective adjustment may be recorded to adjust for the additional use days within that season, while the total expense for the team’s season would remain the same.

However, the teams are not required to pay the license fee during the period in which The Garden is unavailable for home games due to a force majeure event, and the teams have not made any payments or incurred any arena license expense for the year ended June 30, 2020.

See Note 8 for more information on the accounting for leases.

Advertising Expenses

Advertising costs are typically charged to expense when incurred , Total advertising costs classified in direct operating and selling, general and administrative expenses were $ 3,064 , $ 4,381 and $ 1,516 for the years ended June 30, 2020 , 2019 and 2018 , respectively.

Advertising costs are typically charged to expense when incurred.

Total advertising costs classified in selling, general and administrative expenses were $ 2,291 , $ 3,064 and $ 4,381 for the years ended June 30, 2021, 2020 and 2019, respectively.

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC Topic 740”).

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The Company determines the fair value as of the grant date.

For awards with graded vesting conditions, the values of the awards are determined by valuing all vesting tranches in the aggregate as one award using an average expected term.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

awards with graded vesting conditions, the values of the awards are determined by valuing all vesting tranches in the aggregate as one award using an average expected term.

The Company determines its assumptions for option-pricing models in accordance with ASC Topic 718 and SEC Staff Accounting Bulletin (“SAB”) No.

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• The expected term of stock options is estimated using the simplified method.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• The expected risk-free interest rate is based on the U.S.

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The Company has analyzed the circumstances in which the use of the simplified method is allowed.

The Company has opted to use the simplified method for stock options the Company granted in fiscal years 2019 and 2018 because management believes that the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term.

The Company has opted to use the simplified method for stock options the Company granted in fiscal year 2019 because management believes that the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term.

See Note 15 for more information regarding the Company’s application of the simplified method for stock options the Company granted in fiscal year 2019.

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Restricted Cash

The Company’s restricted cash includes cash deposited in escrow accounts.

The Company’s restricted cash includes cash deposited in escrow accounts and cash required to be held under the Company’s revolving credit facilities.

Cash is required to be withheld from player salaries and deposited in an escrow account which is in the name of the Company pursuant to the NHL CBA.

That escrow account will be distributed subsequent to the end of the season to the players and NHL teams based on the provisions of the NHL CBA.

See Note 13 for more information related to the Company’s revolving credit facilities.

The carrying amount of restricted cash approximates fair value due to the short-term maturity of these instruments.

Changes in restricted cash are reflected on the accompanying combined statement of cash flows in accordance with ASU No.

2016-18, Statement of Cash Flows (Topic 230), which is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Company’s consolidated and combined statements of cash flows.

Changes in restricted cash are reflected on the accompanying consolidated statement of cash flows in accordance with ASU No.

Accounts Receivable

Accounts receivable is recorded at net realizable value.

The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables.

The allowance for doubtful accounts is estimated based on the Company’s analysis of receivables aging, specific identification of certain receivables that are at risk of not being paid, past collection experience and other factors.

Accounts receivable is recorded net of the allowance for doubtful accounts.

The Company maintains an allowance for doubtful accounts to reserve for expected credit losses.

The allowance for doubtful accounts is estimated based on the Company’s analysis of receivables aging, historical experience, as well as current and expected economic conditions and industry trends.

The Company’s allowance for doubtful accounts was $ 0 and $ 180 as of June 30, 2021 and 2020, respectively.

Long-Lived and Indefinite-Lived Assets

The Company’s long-lived and indefinite-lived assets consist of property and equipment, right-of-use assets, goodwill, indefinite-lived intangible assets and amortizable intangible assets.

The Company’s long-lived and indefinite-lived assets consist of property and equipment, right-of-use (“ROU”) assets, goodwill, indefinite-lived intangible assets and amortizable intangible assets.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property and equipment is stated at cost.

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The useful lives of the Company’s long-lived assets are based on estimates of the period over which the Company expects the assets to be of economic benefit to the Company.

In estimating the useful lives, the Company considers factors such as, but

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

not limited to, risk of obsolescence, anticipated use, plans of the Company, and applicable laws and permit requirements.

In estimating the useful lives, the Company considers factors such as, but not limited to, risk of obsolescence, anticipated use, plans of the Company, and applicable laws and permit requirements.

Identifiable intangible assets with finite useful lives are amortized on a straight-line basis over their respective estimated useful lives.

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As a result of operating disruptions due to COVID-19, the Company’s projected cash flows were directly impacted.

This disruption along with the macroeconomic industry and market conditions, resulted in the evaluation of whether there was a “triggering event” as of June 30, 2020.

Based on the assessment, management determined that it was not more likely than not

This disruption along with the macroeconomic industry and market conditions, resulted in the evaluation of whether there was a

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

that an impairment exists and there was no goodwill or intangible asset balance that was impaired as of June 30, 2020.

“triggering event” as of June 30, 2021.

Based on the assessment, management determined that it was not more likely than not that an impairment exists and there was no goodwill or intangible asset balance that was impaired as of June 30, 2021.

However, the duration and impact of the COVID-19 pandemic may result in additional future impairment charges that management will evaluate as facts and circumstances evolve through time.

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See Note 11 for more information regarding the fair value of the Company’s contingent consideration liabilities related to the acquisitions.

Defined Benefit Pension Plans and Other Postretirement Benefit Plan

Defined Benefit Pension Plans and Postretirement Benefit Plans

As more fully described in Note 14, prior to the MSGE Distribution the Company had both funded and unfunded defined benefit plans, as well as a contributory postretirement benefit plan, covering certain full-time employees and retirees.

Currently, the Company has unfunded defined benefit plans, as well as a contributory postretirement benefit plan, covering certain full-time employees and retirees.

The expense recognized by the Company is determined using certain assumptions, including the expected long-term rate of return and discount rates, among others.

The Company recognizes the funded status of its defined benefit pension and other postretirement plans (other than multiemployer plans) as an asset or liability in the consolidated balance sheets and recognizes changes in the funded status in the year in which the changes occur through other comprehensive income (loss).

Currently, the Company has unfunded defined benefit plans.

The expense recognized by the Company is determined using certain assumptions, including discount rates, among others, and prior to the MSGE Distribution, the expected long-term rate of return.

The Company recognizes the benefit obligation of its defined benefit pension plans (other than multiemployer plans) as a liability in the consolidated balance sheets and recognizes changes in the benefit obligation in the year in which the changes occur through other comprehensive income (loss).

Fair Value Measurements

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Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2016-02, Leases (Topic 842) , which supersedes existing guidance on accounting for leases in ASC Topic 840, Leases.

2016-02, among other things, requires (i) lessees to account for leases as either finance leases or operating leases and generally requires all leases to be recorded on the balance sheet, including those leases classified as operating leases under previous accounting guidance, through the recognition of right-of-use assets and corresponding lease liabilities and (ii) extensive

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

qualitative and quantitative disclosures about leasing activities.

The accounting applied by a lessor is largely unchanged from that applied under previous accounting guidance.

In January 2018, the FASB issued ASU No.

2018-01, Leases (Topic 842) - Land Easement Practical Expedient for Transition to Topic 842 , which provides a lessee or lessor the option to not assess at transition whether existing land easements, not currently accounted for as leases under the current lease guidance, should be treated as leases under the new standard.

In July 2018, the FASB issued ASU No.

2018-10, Codification Improvements to Topic 842, Leases and ASU No.

2018-11, Leases (Topic 842) Targeted improvements , which provides an additional (and optional) transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings.

In December 2018, the FASB issued ASU No.

2018-20, Leases (Topic 842) (“ASU 2018-20”), Narrow-Scope Improvements for Lessors , which provided clarification for lessors on how to apply the new leases standard when accounting for sales taxes, certain lessor costs, and certain requirements related to variable payments in contracts.

In March 2019, the FASB issued ASU No.

2019-01, Leases (Topic 842) (“ASU 2019-01”), Codification Improvements , which aligned the new leases guidance with existing guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers.

It also clarified an exemption for lessors and lessees from a certain interim disclosure requirement associated with adopting the board’s new lease accounting standard.

The Company adopted ASU No.

2016-02 on July 1, 2019 and elected to apply the standard as of the beginning of the first quarter of fiscal year 2020 under the modified-retrospective transition approach.

In connection with the adoption of this standard, the Company applied the package of practical expedients intended to ease transition for existing leases by not requiring the Company to reassess (i) its initial lease classification conclusions for existing or expired leases, (ii) whether an existing or expired contract is a lease or contains an embedded lease, and (iii) the capitalization of initial direct costs for existing or expired leases.

In addition, the Company elected not to use “hindsight” in accordance with ASC Subtopic 842-10-65-1 (g) in assessing lease terms and impairment of right-of-use (“ROU”) assets for existing or expired leases under the new standard.

Upon adoption of this standard, the Company recorded initial (i) operating lease ROU assets of $ 1,270 (ii) current operating lease liabilities of $ 393 , and (iii) long-term operating lease liabilities of $ 1,007 .

The Company did not record any adjustment to retained earnings.

As of July 1, 2019, there were no material finance leases for which the Company was a lessee.

See Note 9 for further details on disclosure required under ASC Topic 842.

In January 2017, the FASB issued ASU No.

2017-04, Intangibles - Goodwill and Other (Topic 350):

Simplifying the Accounting for Goodwill Impairment.

2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation.

A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

The Company adopted this standard in the third quarter of fiscal year 2020 and applied it prospectively, beginning with the interim goodwill impairment test performed during the quarter ended March 31, 2020.

See Note 10 for further details.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments - Credit Losses .

2016-13 replaces the incurred loss impairment methodology in current U.S.

GAAP with a methodology that will require the reflection of expected credit losses and will also require consideration of a broader range of reasonable and supportable information to determine credit loss estimates.

2016-13 replaces the incurred loss impairment methodology in U.S.

GAAP with a methodology that requires the reflection of expected credit losses and also requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates.

In May 2019, the FASB issued ASU No.

2019-05, Financial Instruments - Credit Losses (Topic 326):

Targeted Transition Relief , which amends ASC Topic 326 to provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost.

In November 2019, FASB issued ASU No.

2019-11 to provide clarification guidance in a number of areas, including:

2019-11, Codification Improvements to Topic 326, Financial

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Instruments - Credit Losses, to provide clarification guidance in a number of areas, including:

(i) expected recoveries for purchased financial assets with credit deterioration, (ii) transition relief for troubled debt restructuring, (iii) disclosures related to accrued interest receivables, and (iv) financial assets secured by collateral maintenance provisions.

For most financial instruments, the standard will require the use of a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which will generally result in the earlier recognition of credit losses on financial instruments.

For most financial instruments, the standard requires the use of a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which generally results in the earlier recognition of credit losses on financial instruments.

In February 2020, the FASB issued ASU No.

2020-02, Financial Instruments - Credit Losses and Leases , which includes amendments pursuant to SEC Staff Accounting Bulletin No.

This standard will be effective for the Company beginning in the first quarter of fiscal year 2021.

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

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

The impact in future periods is not expected to be material.

In August 2018, the FASB issued ASU No.

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2018-13 removes, modifies and adds certain disclosures providing greater focus on requirements that clearly communicate the most important information to the users of the financial statements with respect to fair value measurements.

The standard is

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted.

Most of the disclosure requirements in ASU No.

2018-13 would need to be applied on a retrospective basis except for the guidance related to (i) unrealized gains and loss included in other comprehensive income, (ii) disclosure related to range and weighted average Level 3 unobservable inputs, and (iii) narrative disclosure requirements on measurement uncertainty, which are required to be applied on a prospective basis.

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

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.

In August 2018, the FASB issued ASU No.

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2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and adds additional disclosures.

The standard will be effective for the Company in the fourth quarter of fiscal year 2021, with early adoption permitted.

The amendments in ASU No.

2018-14 are required to be applied retrospectively.

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

The Company adopted this standard in the fourth quarter of fiscal year 2021 and the adoption did not have a material impact on its consolidated financial statements.

See Note 14 for additional disclosures provided in connection with the adoption of this standard.

In August 2018, the FASB issued ASU No.

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2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

The guidance also specifies that the balance sheet, income statement, and statement of cash flows presentation of capitalized implementation costs and the related amortization should align with the presentation of the hosting (service) element of the arrangement.

The standard is effective for the Company in the first quarter of fiscal year 2021.

Entities have the option to apply the guidance prospectively to all implementation costs incurred after the date of adoption or retrospectively.

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

The guidance also specifies that the balance sheet, statement of operations, and statement of cash flows presentation of capitalized implementation costs and the related amortization should align with the presentation of the hosting (service) element of the arrangement.

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.

However, to the extent future costs incurred in a cloud computing arrangement are capitalizable, the corresponding amortization will be included in “Direct operating expenses” or “Selling, general and administrative expenses” in the consolidated statements of operations, rather than “Depreciation and amortization.”

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This effectively means that when a decision maker or service provider has an interest in a related party, regardless of whether they are under common control, it will consider that related party’s interest in a VIE on a proportionate basis throughout the VIE model for both the assessment of a variable interest and the determination of a primary beneficiary.

The standard will be effective for the Company in the first quarter of fiscal year 2021.

The amendments in ASU No.

2018-17 are required to be applied retrospectively.

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

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.

In April 2019, the FASB issued ASU No.

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This ASU provides narrow-scope amendments to help apply these recent standards.

The transition requirements and effective date of this ASU will be effective for the Company in the first quarter of fiscal year 2021.

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

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

In November 2019, the FASB issued ASU No.

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Changes in the measurement of the share-based payments after the grant date that are due to the form of the consideration are not included in the transaction price and are recorded elsewhere in the statement of operations.

The award is measured and classified under ASC Topic 718 for its entire life, unless the award is modified after it vests and the grantee is no longer a customer.

The new guidance is effective for the Company in the first quarter of fiscal year 2021.

The adoption of this standard is not expected to have an impact on the Company’s consolidated financial statements.

The award is measured and classified under ASC Topic 718 for its entire life,

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

This ASU eliminates certain exceptions to the general approach in ASC Topic 740 and includes methods of simplification to the existing guidance.

The new guidance is effective for the Company in the first quarter of fiscal year 2022, with early adoption permitted.

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

unless the award is modified after it vests and the grantee is no longer a customer.

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.

In January 2020, the FASB issued ASU No.

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In addition, the amendments clarify the accounting for certain forward contracts and purchased options accounted for under Topic 815.

The new guidance is effective for the Company in the first quarter of fiscal year 2021.

The adoption of this standard is not expected to have an impact on the Company’s consolidated financial statements.

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.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

This ASU provides temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate and other interbank offered rates to alternative reference rates.

The new guidance was effective upon issuance, and the Company may elect to apply the amendments prospectively through December 31, 2022.

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

This ASU provides temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848):

Scope, which refines the scope of Topic 848 and clarifies some of its guidance as part of FASB’s monitoring of global reference rate activities.

The new guidance was effective upon issuance, and the adoption did not have an impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

This ASU eliminates certain exceptions to the general approach in ASC Topic 740 and includes methods of simplification to the existing guidance.

The new guidance is effective for the Company in the first quarter of fiscal year 2022.

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

Discontinued Operations

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The Company’s continuing expenses include event costs related to the presentation and production of the Company’s sporting events and other operating expenses, including expenses related to the Arena License Agreements which require the Company to pay arena license fees to MSG Entertainment in exchange for the right to use The Garden for games of the Knicks and the Rangers.

Expenses related to the direct operations of MSG Entertainment , such as The Garden operating expenses related to the presentation and production of events and non-event related costs of operating the venue, are included in discontinued operations on the basis of an allocation of the direct usage of The Garden by the Company’s continuing and discontinued

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Expenses related to the direct operations of MSG Entertainment, such as The Garden operating expenses related to the presentation and production of events and non-event related costs of operating the venue, are included in discontinued operations on the basis of an allocation of the direct usage of The Garden by the Company’s continuing and discontinued businesses.

Unallocated costs of operational support functions that were provided on a centralized basis and not historically recorded at the business unit level by the Company, are also included in discontinued operations, based on a measure of direct usage.

Direct usage was determined based event specific variable expenses for MSG Entertainment events and otherwise on the basis of the proportion of combined revenues, headcount or other objective measures for expenses.

Direct usage was determined based on event specific variable expenses for MSG Entertainment events and otherwise on the basis of the proportion of combined revenues, headcount or other objective measures for expenses.

Indirect corporate and administrative costs, including amounts that were historically allocated to the MSG Entertainment business segment, do not qualify for discontinued operations presentation, and these costs are included in continuing operations for the periods prior to the Distribution.

Various types of indirect corporate and administrative expenses that continue after the MSGE Distribution Date and are covered under the Transitions Services Agreement, are included in continuing operations for the period after the MSGE Distribution .

Various types of indirect corporate and administrative expenses that continue after the MSGE Distribution Date and are covered under the Transition Services Agreement, are included in continuing operations for the period after the MSGE Distribution.

In addition, results from continuing operations, prior to the MSGE Distribution Date, include certain corporate overhead expenses that the Company did not incur in the period after the completion of the MSGE Distribution, and the Company does not expect to incur such expenses in future periods.

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Years Ended June 30,

Revenues $ 669,096 $ 903,196

Direct operating expenses 408,413 557,680

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Net income (loss) from discontinued operations attributable to Madison Square Garden Sports Corp.’s stockholders

$ ( 66,089 ) $ 57,149

The Company’s collections for ticket sales, sponsorships and suite rentals in advance were recorded as deferred revenue and were recognized for tax purposes upon consummation of the MSGE Distribution.

See Note 18 for further information on the tax impact of accelerating deferred revenue for tax purposes.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The assets and liabilities of MSG Entertainment reflect the agreements between the Company and MSG Entertainment concerning the allocation of shared revenue and expense activity prior to the MSGE Distribution .

The assets and liabilities of MSG Entertainment have been classified in the consolidated balance sheet as of June 30, 2019 as assets and liabilities of discontinued operations and consist of the following, by major class:

Cash and cash equivalents

Restricted cash

Short-term investments

Accounts receivable, net

Net related party receivables

Prepaid expenses

Other current assets

Total current assets of discontinued operations

Net related party receivables, noncurrent

Property and equipment, net

Amortizable intangible assets, net

Indefinite-lived intangible assets

Total assets of discontinued operations

Accounts payable

Net related party payables, current

Current portion of long-term debt, net of deferred financing costs

Accrued liabilities:

Employee related costs

Other accrued liabilities

Collections due to promoters

Deferred revenue

Total current liabilities of discontinued operations

Long-term debt, net of deferred financing costs

Defined benefit and other postretirement obligations

Other employee related costs

Deferred tax liabilities, net

Other liabilities

Total liabilities of discontinued operations

Redeemable noncontrolling interests

Net assets of discontinued operations

The amount of cash and restricted cash distributed as of the MSGE Distribution Date to MSG Entertainment is $ 816,896 and $ 10,180 , respectively.

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As permitted under ASU 2014-08, the Company has elected not to adjust the consolidated statements of cash flows for the years ended June 30, 2020 and 2019 to exclude cash flows attributable to discontinued operations.

The table below sets forth, for the periods presented, significant selected financial information related to MSG Entertainment included in the accompanied consolidated statements of cash flows:

The table below sets forth, for

the periods presented, significant selected financial information related to MSG Entertainment included in the accompanied consolidated statements of cash flows:

Years Ended June 30,

21 unchanged sentences

Arrangements with Multiple Performance Obligations

The Company has arrangements with multiple performance obligations, such as multi-year sponsorship agreements which may derive revenues within a single arrangement.

The Company has contracts with customers, including multi-year sponsorship agreements, that contain multiple performance obligations.

Payment terms for such arrangements can vary by contract, but payments are generally due in installments throughout the contractual term.

1 unchanged sentence

To the extent the Company’s multi-year arrangements provide for performance obligations that are consistent over the multi-year contractual term, such performance obligations generally meet the definition of a series as provided for under the accounting guidance.

If performance obligations are concluded to meet the definition of a series, the contractual fees for all years during the contract

If performance obligations meet the definition of a series, the contractual fees for all years during the contract term are aggregated and the related revenue is recognized proportionately as the underlying performance obligations are satisfied.

The timing of revenue recognition for each performance obligation is dependent upon the facts and circumstances surrounding the Company’s satisfaction of its respective performance obligation.

The Company allocates the transaction price for such

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

term are aggregated and the related revenue is recognized proportionately as the underlying performance obligations are satisfied.

The timing of revenue recognition for each performance obligation is dependent upon the facts and circumstances surrounding the Company’s satisfaction of its respective performance obligation.

The Company allocates the transaction price for such arrangements to each performance obligation within the arrangement based on the estimated relative standalone selling price of the performance obligation.

arrangements to each performance obligation within the arrangement based on the estimated relative standalone selling price of the performance obligation.

The Company’s process for determining its estimated standalone selling prices involves management’s judgment and considers multiple factors including company specific and market specific factors that may vary depending upon the unique facts and circumstances related to each performance obligation.

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Progress toward satisfaction of the Company’s suite license performance obligations is measured as access to the suite is provided to the licensee for each event throughout the contractual term of the license.

Due to the NBA and NHL suspending their season on March 11, and 12, 2020, respectively, suite license holders did not have access to their suites and therefore revenue recognition ceased at this time.

For the year ended June 30, 2020, due to the NBA and NHL suspending their season on March 11, and 12, 2020, respectively, suite license holders did not have access to their suites and therefore revenue recognition ceased at that time.

For the year ending June 30, 2021, access to suites for Knicks and Rangers games was primarily sold by way of individual tickets, thus minimal suite license revenue was recognized.

Event-related revenue also includes food, beverage and merchandise sales which are recognized at the point goods are provided to customers.

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The transaction price under these arrangements is variable in nature as certain credit provisions exist to the extent that the teams’ games are unavailable for broadcast during an individual league season.

The Company estimates the transaction price at the beginning of each fiscal year, which coincides with the annual

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

contractual term.

The Company estimates the transaction price at the beginning of each fiscal year, which coincides with the annual contractual term.

In estimating the transaction price, the Company considers the contractually agreed upon license fees as well as qualitative considerations with respect to the number of games expected to be available for broadcast by MSG Networks over the upcoming year.

The resulting transaction price is allocated entirely to the rights provided for the related contract year and revenue is recognized using an output measure of progress toward satisfaction of the Company’s performance obligations within the contract year, as the underlying benefits are conveyed to the licensee.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s professional sports teams also derive revenue from the distribution of league-wide national and international television contracts and other league-wide revenue sources.

2 unchanged sentences

Receipt of league-wide revenues generally occurs at the time of communication or according to a specified timeline.

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

At the time the seasons were suspended, the Knicks had 16 games remaining, including eight home games, and the Rangers had 12 games remaining, including five home games.

On May 26, 2020, the NHL announced return-to-play plans for 24 teams which began August 1, 2020.

The Rangers were among the teams that returned to play in a 24-team tournament.

On June 4, 2020, the NBA announced plans to resume play on July 30, 2020 with 22 teams.

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

At this time, league-wide revenues from the 2019-2020 season have not been finalized.

As a result, approximately $ 42,000 of national media rights fees revenues have not been recognized and are deferred revenue obligations pending the completion of the NBA and NHL seasons.

After suspending the 2019-20 seasons in March 2020 due to COVID-19, the NHL and NBA subsequently restarted their seasons, which were completed in September and October 2020, respectively.

As a result, revenue for the year ended June 30, 2021 includes revenue for league distributions that otherwise would have been recognized during the third and fourth quarters of fiscal year 2020.

MSG Sports also earns revenues from the sale of advertising in the form of venue signage and sponsorships, which are not related to any specific event.

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Amounts collected in advance of the Company’s satisfaction of its contractual performance obligations are recorded as a contract liability within deferred revenue and are recognized as the Company satisfies the related performance obligations.

Amounts collected in advance of events for which the Company is not the promoter or co-promoter do not represent contract liabilities and are recorded as collections due to promoters on the balance sheet.

The following table disaggregates the Company’s revenues by type of goods or services in accordance with the required entity-wide disclosure requirements per FASB 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 years ended June 30, 2021, 2020 and 2019:

Years Ended June 30,

2021 2020 2019

Event-related (a)

$ 28,511 $ 235,605 $ 283,206

Media rights (b)

285,059 190,824 239,140

Sponsorship, signage and suite licenses 52,931 139,414 174,405

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_________________

Consists of (i) ticket sales and other ticket-related revenues, and (ii) food, beverage and merchandise sales.

Consists of (i) local media rights fees from MSG Networks, (ii) revenue from the distribution through league-wide national and international television contracts, and (iii) other local radio rights fees.

(a) Consists of (i) ticket sales and other ticket-related revenues, and (ii) food, beverage and merchandise sales.

(b) Consists of (i) local media rights fees from MSG Networks, (ii) revenue from the distribution through league-wide national and international television contracts, and (iii) other local radio rights fees.

MADISON SQUARE GARDEN SPORTS CORP.

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The following table provides information about contract balances from the Company’s contracts with customers as of June 30, 2021, 2020 and 2019.

June 30, June 30, June 30,

2021 2020 2019

Receivables from contracts with customers, net (a)

$ 30,834 $ 8,035 $ 15,550

Contract assets, current (b)

Deferred revenue, including non-current portion (c)

9,604 4,112 441

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

Deferred revenue, including non-current portion (c) (d)

162,628 128,362 112,511

_________________

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

As of June 30, 2021, 2020 and 2019 the Company’s receivables from contracts with customers above included $ 213 , $ 632 and $ 8 respectively, related to various related parties.

See Note 17 for further details on these related party arrangements.

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

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, which are reported as Other current assets in the Company’s consolidated balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to the customer, for which the Company does not have an unconditional right to bill as of the reporting date.

Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional.

Deferred revenue primarily relates to the Company’s receipt of consideration from a customer in advance of the Company’s transfer of goods or services to that customer.

(c) Deferred revenue, including non-current portion primarily relates to the Company’s receipt of consideration from customers or billing customers in advance of the Company’s transfer of goods or services to those customers.

Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to the customer.

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 with MSG Networks was $ 260 , $ 0 and $ 0 as of June 30, 2021, 2020 and 2019, respectively.

(d) Revenue recognized for the year ended June 30, 2021 relating to the deferred revenue balance as of July 1, 2020 was $ 58,611 .

Revenue recognized for the year ended June 30, 2020 relating to the deferred revenue balance as of July 1, 2019 was $ 101,981 .

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In developing the estimated revenue, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

Additionally, the Company has elected to exclude variable consideration from its disclosure related to the remaining performance obligations under its local media rights arrangements with MSG Networks, league-wide national and international television contracts, and certain other arrangements with variable consideration.

Fiscal year ending June 30, 2022 $ 77,841

3 unchanged sentences

Fiscal year ending June 30, 2026 25,476

Thereafter 31,412

MADISON SQUARE GARDEN SPORTS CORP.

1 unchanged sentence

Computation of Earnings (Loss) per Common Share

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.

Years Ended June 30,

2021 2020 2019

Weighted-average shares (denominator):

Weighted-average shares for basic EPS

24,129 23,942 23,767

Dilutive effect of shares issuable under share-based compensation plans

Weighted-average shares for diluted EPS

Weighted-average anti-dilutive shares

24,129 23,942 23,900

Weighted-average shares excluded from diluted earnings (loss) per share 315 583 368

Team Personnel Transactions

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Team Personnel Transactions amounted to $ 44,242 , $ 33,690 and $ 53,134 for the years ended June 30, 2021, 2020 and 2019, respectively.

Team personnel transactions for the year ended June 30, 2018 are reported net of insurance recoveries of $ 468 .

Cash, Cash Equivalent and Restricted Cash

The following table provides a summary of the amounts recorded as cash, cash equivalents and restricted cash.

2021 June 30,

2020 June 30,

2019 June 30,

Captions on the consolidated balance sheets:

1 unchanged sentence

Restricted cash (a)

7,134 12,821 21,519 24,271

Cash, cash equivalents and restricted cash on the consolidated statements of cash flows

$ 72,036 $ 90,673 $ 25,836 $ 25,366

See Note 2 for more information regarding the nature of restricted cash.

Property and Equipment

As of June 30, 2020 and 2019 , property and equipment consisted of the following assets:

Estimated Useful Lives

Furniture and fixtures

Leasehold improvements

Shorter of term of lease or life of improvement

Construction in progress

Less accumulated depreciation and amortization

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Depreciation and amortization expense on property and equipment for continuing operations was $ 13,979 , $ 15,112 and $ 14,526 for the years ended June 30, 2020 , 2019 and 2018 , respectively, which includes depreciation expense on certain corporate property and equipment that was transferred to MSG Entertainment in connection with the MSGE Distribution , but which did not qualify for discontinued operations reporting.

_________________

(a) See Note 2 for more information regarding the nature of restricted cash.

The Company’s leases primarily consist of the lease of the Company’s corporate offices under the Sublease Agreement with MSG Entertainment (the “Sublease Agreement”) for the Company’s principal executive offices at Two Pennsylvania Plaza in New York and the lease of CLG Performance Center.

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The Company includes fixed payment obligations related to non-lease components in the measurement of ROU assets and lease liabilities, as the Company has elected to account for lease and non-lease components together as a single lease component.

ROU assets associated with finance leases are presented separate from operating leases ROU assets and are included within Property and equipment, net on the Company’s consolidated balance sheet.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

assets associated with finance leases are presented separate from operating leases ROU assets and are included within Property and equipment, net on the Company’s consolidated balance sheet.

For purposes of measuring the present value of the Company’s fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in the underlying leasing arrangements are typically not readily determinable.

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The sublease right of use 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.

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 will allow the Knicks and the Rangers to continue to play their home games at The Garden.

In addition, in connection with the MSGE Distribution we entered into long term leases with MSG Entertainment that end June 30, 2055 and allow the Knicks and the Rangers to continue to play their home games at The Garden.

The Arena License Agreements provide for fixed payments to be made from inception through June 30, 2055 in 12 equal installments during each year of the contractual term.

The Garden was not available for use on April 17, 2020 due to the COVID-19 pandemic and local government restrictions on gatherings;

however, the licenses were viewed as a continuation of an existing pre-spin relationship where the Knicks and Rangers used The Garden through an inter-company cost-sharing arrangement and therefore the licenses were viewed to have commenced on April 17, 2020.

However, due to the force majeure clause, the Company is not required to make payments until The Garden is available for use, and on June 30, 2020 the assets and liabilities 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.

Absent COVID-19, the stated license fee for the first full contract year ending June 30, 2021 would have been approximately $22,500 for the Knicks and approximately $16,700 for the Rangers, and then for each subsequent year, the license fees are 103% of the license fees for the immediately preceding contract year .

Through the period that The Garden not being available for use, the ROU assets and lease liabilities were remeasured utilizing the same discount rate as of April 17, 2020.

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.

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 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.

As a result of the unique circumstances due to COVID-19 during the prior season, the Company agreed to make certain variable lease payments to MSG Entertainment associated with the Knicks playoff games during the 2021 NBA playoffs.

Costs associated with such payments were considered variable lease costs for the year ended June 30, 2021.

The Knicks and the Rangers are entitled to use The Garden on home game days, which are usually nonconsecutive, for a pre-defined period of time from before and after the game.

In evaluating the Company’s lease cost, the Company considered the

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

timing of payments throughout the lease terms and the nonconsecutive periods of use, provided for within each license.

In evaluating the Company’s lease cost, the Company considered the timing of payments throughout the lease terms and the nonconsecutive periods of use, provided for within each license.

While payments are made throughout the contract year in twelve equal installments under each arrangement, the periods of use only span each of the individual team event days.

As such, the Company concluded that the related straight-line rent expense should be recorded by each team equally over the home game days as each takes place.

As such, the Company concluded that the related straight-line operating lease costs should be recorded by each team equally over the home game days as each takes place.

There were no events and thus no rent expense was recorded during the period from lease inception as of April 17, 2020 to June 30, 2020.

As of June 30, 2021, the Company’s existing operating leases, which are recorded on the accompanying financial statements, have remaining lease terms ranging from 14 months to 34 years.

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

The exercise of lease renewal, if available under the lease options, is generally at the Company’s discretion and is considered in the Company’s assessment of the respective lease term.

The exercise of lease renewal, if available under the lease options, is generally at the Company’s discretion

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and is considered in the Company’s assessment of the respective lease term.

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

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

Line Item in the Company’s Consolidated Balance Sheet

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

Line Item in the Company’s Consolidated Balance Sheet June 30, 2021 June 30, 2020

Right-of-use assets:

Operating leases

Right-of-use lease assets

Operating leases Right-of-use lease assets $ 703,521 $ 718,051

Lease liabilities:

Operating leases, current

Operating leases, current (a)

Operating lease liabilities, current 41,951 39,131

Operating leases, noncurrent

Operating leases, noncurrent (a)

Operating lease liabilities, noncurrent 691,152 679,053

Total lease liabilities $ 733,103 $ 718,184

The following table summarizes the activity recorded within the Company’s consolidated statement of operations for the year ended June 30, 2020 :

Line Item in the Company’s Consolidated Statement of Operations

June 30, 2020

Operating lease cost

Direct operating expenses

Operating lease cost

Selling, general and administrative expenses

Short-term lease cost

(a) As of June 30, 2021, Operating lease liabilities, current and Operating leases liabilities, noncurrent included balances of $ 41,541 and $ 690,792 , respectively, that are payable to MSG Entertainment.

As of June 30, 2020, Operating lease liabilities, current and Operating leases 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 consolidated statement of operations for the year ended June 30, 2021 and 2020:

Line Item in the Company’s Consolidated Statement of Operations Year ended June 30, 2021 Year ended June 30, 2020

Operating lease cost Direct operating expenses $ 35,801 $ 341

Operating lease cost Selling, general and administrative expenses 2,444 593

Short-term lease cost Direct operating expenses 122 138

Variable lease cost (a)

Direct operating expenses 1,209 —

Total lease cost $ 39,576 $ 1,072

(a) As a result of the unique circumstances due to COVID-19 during the prior season, the Company agreed to make certain variable lease payments to MSG Entertainment associated with the Knicks playoff games during the 2021 NBA playoffs.

Supplemental Information

For the year ended June 30, 2020 , cash paid for amounts included in the measurement of lease liabilities was $ 877 .

For the year ended June 30, 2020 , the Company had three ROU assets of $ 717,115 obtained in exchange for new operating lease liabilities.

The weighted average remaining lease term for operating leases recorded on the accompanying consolidated balance sheet as of June 30, 2020 was 34.5 years .

The weighted average discount rate was 7.13 % as of June 30, 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 year ended June 30, 2021 and 2020, cash paid for amounts included in the measurement of lease liabilities was $ 10,016 and $ 877 , respectively.

The weighted average remaining lease term for operating leases recorded on the accompanying consolidated balance sheet as of June 30, 2021 and 2020 was 33.7 years and 34.5 years, respectively.

The weighted average discount rate was 7.13 % as of June 30, 2021 and 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 .

MADISON SQUARE GARDEN SPORTS CORP.

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Fiscal year ending June 30, 2026 45,374

Thereafter 2,113,312

Total lease payments 2,336,268

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Total lease liabilities $ 733,103

Property and Equipment

As of June 30, 2021 and 2020, property and equipment consisted of the following assets:

2021 June 30,

2020 Estimated Useful Lives

Land $ 5,153 $ 5,153

Buildings 53,822 53,623 Up to 45 years

Equipment 18,239 18,086 1 year to 20 years

Furniture and fixtures 291 377 4 years to 10 years

Leasehold improvements 653 653 Shorter of term of lease or life of improvement

Construction in progress 231 66

78,389 77,958

Less accumulated depreciation and amortization

( 42,673 ) ( 38,361 )

$ 35,716 $ 39,597

Depreciation and amortization expense on property and equipment for continuing operations was $ 4,515 , $ 13,979 and $ 15,112 for the years ended June 30, 2021, 2020 and 2019, respectively, which includes depreciation expense on certain corporate property and equipment that was transferred to MSG Entertainment in connection with the MSGE Distribution, but which did not qualify for discontinued operations reporting.

Goodwill and Intangible Assets

During the first quarter of fiscal year 2020 , the Company performed its annual impairment test of goodwill and determined that there were no impairments of goodwill identified for any of its reporting units as of the impairment test date, including the goodwill of the MSG Entertainment and TAO Group reporting units that were transferred to MSG Entertainment as part of the MSGE Distribution .

During the first quarter of fiscal year 2021, the Company performed its annual impairment test of goodwill and determined that there were no impairments of goodwill identified as of the impairment test date.

The Company’s goodwill is $ 226,955 and $ 226,955 as of June 30, 2021 and 2020, respectively.

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

2021 June 30,

Sports franchises $ 111,064 $ 111,064

Photographic related rights 1,080 1,080

During the first quarter of fiscal year 2020 , the Company performed its annual impairment test of identifiable indefinite-lived intangible assets and determined that there were no impairments identified, including Trademarks and a portion of Photographic related rights that were transferred to MSG Entertainment as part of the MSGE Distribution .

$ 112,144 $ 112,144

During the first quarter of fiscal year 2021, the Company performed its annual impairment test of identifiable indefinite-lived intangible assets and determined that there were no impairments identified.

As a result of operating disruptions due to COVID-19, the Company’s projected cash flows were directly impacted.

This disruption along with the macroeconomic industry and market conditions, resulted in the evaluation of whether there was a “triggering event”.

This disruption along with the macroeconomic industry and market conditions, resulted in the evaluation of whether there was a “triggering event” which would require the Company to assess the carrying value of its goodwill and intangible assets for impairment.

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

June 30, 2020

Estimated Useful Lives

Non-compete agreements

Other intangibles

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2019

Season ticket holder relationships

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

June 30, 2021 Estimated Useful Lives Gross Accumulated

Amortization Net

Trade names 5 years $ 2,300 $ ( 1,802 ) $ 498

Non-compete agreements 5 years 2,400 ( 1,880 ) 520

Other intangibles 3 years to 9.75 years 1,200 ( 523 ) 677

$ 5,900 $ ( 4,205 ) $ 1,695

June 30, 2020 Gross Accumulated

Amortization Net

Trade names $ 2,300 $ ( 1,342 ) $ 958

Non-compete agreements 2,400 ( 1,400 ) 1,000

Other intangibles 1,200 ( 404 ) 796

Season ticket holder relationship and other intangibles were fully amortized as of June 30, 2020 , and the gross carrying amount and accumulated amortization were written off.

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

Amortization expense for intangible assets was $ 1,059 , $ 3,561 , and $ 4,965 for the years ended June 30, 2021, 2020 and 2019, respectively.

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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 June 30,

Money market accounts I $ 33,820 $ —

Time deposit I 5,000 —

Total assets measured at fair value $ 38,820 $ —

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 and time deposit approximates fair value due to their short-term maturities.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

June 30, 2020

June 30, 2019

Long-term debt (a)

June 30, 2021 June 30, 2020

Value Carrying

Debt, current (a)

$ 30,000 $ 30,000 $ — $ —

On March 12, 2020, the Company borrowed $ 200,000 under the New York Knicks, LLC and $ 150,000 on the New York Rangers, LLC 5 -year revolving credit facilities.

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.

Long-term debt (b)

$ 355,000 $ 355,000 $ 350,000 $ 350,000

_________________

(a) On March 25, 2021, the NHL advanced $ 30,000 to New York Rangers, LLC (“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 a variable rate indexed to current market conditions.

See Note 13 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.

See Note 13 for more information.

Contingent Consideration Liabilities

In connection with the CLG acquisition on July 28, 2017, the Company may be required to make future payments for deferred and contingent consideration up to a total of $ 9,150 based upon the achievement of certain specified objectives during the three years following the transaction as defined under the membership interest purchase agreement.

In connection with the CLG acquisition on July 28, 2017, during the three years following the transaction (as defined in under the membership interest purchase agreement), the Company was required to make future payments for deferred and contingent consideration up to a total of $ 9,150 based upon the achievement of certain specified objectives.

The Company recorded $ 6,586 as the initial fair value of deferred and contingent consideration liabilities as part of the preliminary purchase price allocation.

The fair values of these deferred and contingent consideration liabilities were estimated using weighted probabilities of achievement for the possible objective and earn-out events and adjusted for a discount rate applicable to the deferred and potential cash payouts.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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_________________

The change in fair value of contingent consideration was recorded within Selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended June 30, 2020 .

(a) The change in fair value of contingent consideration was recorded within Selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended June 30, 2021.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Commitments and Contingencies

Contractual Obligations and Off Balance Sheet Arrangements

The Company has certain future cash payments required under contracts entered into by the Company in the normal course of business and outstanding letters of credit.

The Company has certain future cash payments required under contracts entered into by the Company in the normal course of business.

As of June 30, 2021, future cash payments required under contracts entered into by the Company in the normal course of business in excess of one year are as follows:

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8,339 8,248 16,587

Consist principally of the Company’s obligations under employment agreements that the Company has with its professional sports teams’ personnel that are generally guaranteed regardless of employee injury or termination.

Consist primarily of amounts earned under employment agreements that the Company has with certain of its professional sports teams’ personnel.

Pension obligations have been excluded from the table above as the timing of the future cash payments is uncertain.

$ 330,076 $ 111,751 $ 441,827

_________________

(a) Consist principally of the Company’s obligations under employment agreements that the Company has with its professional sports teams’ personnel that are generally guaranteed regardless of employee injury or termination.

(b) Consist primarily of amounts earned under employment agreements that the Company has with certain of its professional sports teams’ personnel.

See Note 14 for information on the future funding requirements under our pension obligations.

In addition, see Note 8 for information on the contractual obligations related to future lease payments, which are reflected on the consolidated balance sheet as lease liabilities as of June 30, 2021.

In connection with the CLG acquisition, the Company has accrued contingent consideration as part of the purchase price.

See Note 11 for further details of the amount recorded in the accompanying consolidated balance sheet as of June 30, 2020 .

In addition, see Note 13 for further details of the outstanding balances under the Knicks Revolving Credit Facility (as defined below) and Rangers Revolving Credit Facility (as defined below).

See Note 13 for further details of the outstanding balances under the 2020 Knicks Revolving Credit Facility, the 2020 Rangers Revolving Credit Facility and the 2021 Rangers NHL Advance Agreement (as defined below).

Legal Matters

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Credit Facilities

Knicks Revolving Credit Facility

On September 30, 2016, New York Knicks, LLC (“Knicks LLC”), a wholly owned subsidiary of the Company, entered into a credit agreement (the “2016 Knicks Credit Agreement”) with a syndicate of lenders providing for a senior secured revolving credit facility of up to $ 200,000 with a term of five years (the “2016 Knicks Revolving Credit Facility”) to fund working capital needs and for general corporate purposes.

The 2016 Knicks Revolving Credit Facility would have matured and any unused commitments thereunder would have expired on September 30, 2021.

On November 6, 2020, the Company amended and restated the 2016 Knicks Credit Agreement in its entirety (the “2020 Knicks Credit Agreement”).

The 2020 Knicks Credit Agreement provides for a senior secured revolving credit facility of up to $ 275,000 (the “2020 Knicks Revolving Credit Facility”) to fund working capital needs and for general corporate purposes.

The maturity date of the 2020 Knicks Credit Agreement is November 6, 2023 .

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

The 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 June 30, 2020 , Knicks LLC was in compliance with this financial covenant .

The Knicks Revolving Credit Facility will mature and any unused commitments thereunder will expire on September 30, 2021.

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

Borrowings bear interest at a floating rate, which at the option of Knicks LLC may be either (i) a base rate plus a margin ranging from 0.00% to 0.125% per annum or (ii) the London Inter-Bank Offered Rate (“LIBOR”) plus a margin ranging from 1.00% to 1.125% per annum.

Borrowings under the 2020 Knicks Credit Agreement bear interest at a floating rate, which at the option of Knicks LLC may be

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

either (i) a base rate plus a margin ranging from 0.500 % to 0.750 % per annum or (ii) the London Inter-Bank Offered Rate (“LIBOR”) plus a margin ranging from 1.500 % to 1.750 % per annum.

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.

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During the year ended June 30, 2021, the Company made interest payments of $ 3,245 .

All obligations under the Knicks Revolving Credit Facility are secured by a first lien security interest in certain of Knicks LLC’s assets, including, but not limited to, (i) the Knicks LLC’s membership rights in the NBA and (ii) revenues to be paid to the Knicks LLC by the NBA pursuant to certain U.S.

national broadcast agreements.

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).

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

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 June 30, 2021, Knicks LLC was in compliance with this financial covenant .

Knicks Unsecured Credit Facility

On September 30, 2016, Knicks LLC entered into an unsecured revolving credit facility with a lender for an initial maximum credit amount of $ 15,000 and a 364 -day term (the “Knicks Unsecured Credit Facility”).

Knicks LLC renewed this facility with the lender on the same terms in successive years and the facility has been renewed for a new term effective as of September 25, 2020.

There was no borrowing under the Knicks Unsecured Credit Facility as of June 30, 2020 .

This facility does not have financial covenants.

Rangers Revolving Credit Facility

On January 25, 2017, New York Rangers, LLC (“ Rangers LLC ”), a wholly owned subsidiary of the Company, entered into a credit agreement (the “ Rangers Credit Agreement ”) with a syndicate of lenders providing for a senior secured revolving credit facility of up to $ 150,000 with a term of five years (the “ Rangers Revolving Credit Facility ”) to fund working capital needs and for general corporate purposes.

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

Knicks LLC renewed this facility with the lender on the same terms in successive years and the facility was renewed for a new term effective as of September 25, 2020.

On November 6, 2020 , the Company terminated the Knicks Unsecured Credit Facility in its entirety.

Knicks Holdings Credit Facility

On November 6, 2020, Knicks Holdings, LLC, an indirect, wholly-owned subsidiary of the Company and the direct parent of Knicks LLC (“Knicks Holdings”), entered into a new credit agreement with a syndicate of lenders (the “2020 Knicks Holdings Credit Agreement”).

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.

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 June 30, 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 .

All borrowings under the 2020 Knicks Holdings Revolving Credit Facility are subject to the satisfaction of certain customary conditions.

Borrowings under the 2020 Knicks Holdings Revolving Credit Facility bear interest at a floating rate, which at the option of Knicks Holdings may be either (i) a base rate plus a margin ranging from 1.000 % to 1.250 % per annum or (ii) LIBOR plus a margin ranging from 2.000 % to 2.250 % per annum.

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 June 30, 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.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The 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 June 30, 2020 , Rangers LLC was in compliance with this financial covenant.

The Rangers Revolving Credit Facility will mature and any unused commitments thereunder will expire on January 25, 2022.

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

Borrowings bear interest at a floating rate, which at the option of Rangers LLC may be either (i) a base rate plus a margin ranging from 0.125% to 0.50% per annum or (ii) LIBOR plus a margin ranging from 1.125% to 1.50% per annum.

Subject to customary notice and minimum amount conditions, Knicks Holdings may voluntarily prepay outstanding loans under the 2020 Knicks Holdings 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).

Knicks Holdings is required to make mandatory prepayments in certain circumstances, including if the amount of commitments under the 2020 Knicks Holdings Revolving Credit Facility increase above $350,000.

In addition to the financial covenant described above, the 2020 Knicks Holdings Revolving Credit Facility and related security agreements contain certain customary representations and warranties, affirmative covenants and events of default.

The 2020 Knicks Holdings Revolving Credit Facility contains certain restrictions on the ability of Knicks Holdings to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the 2020 Knicks Holdings Revolving Credit Facility , including the following:

(i) incurring additional indebtedness and contingent liabilities;

(ii) creating liens on certain assets;

(iii) making restricted payments during the continuance of an event of default under the 2020 Knicks Holdings Revolving Credit Facility ;

(iv) engaging in sale and leaseback transactions;

(v) merging or consolidating;

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

Rangers Revolving Credit Facility

On January 25, 2017, Rangers LLC, a wholly owned subsidiary of the Company, entered into a credit agreement (the “2017 Rangers Credit Agreement”) with a syndicate of lenders providing for a senior secured revolving credit facility of up to $ 150,000 with a term of five years (the “2017 Rangers Revolving Credit Facility”) to fund working capital needs and for general corporate purposes.

The 2017 Rangers Revolving Credit Facility would have matured and any unused commitments thereunder would have expired on January 25, 2022.

On November 6, 2020, the Company amended and restated the 2017 Rangers Credit Agreement in its entirety (the “2020 Rangers Credit Agreement”).

The 2020 Rangers Credit Agreement provides for a senior secured revolving credit facility of up to $ 250,000 (the “2020 Rangers Revolving Credit Facility”) to fund working capital needs and for general corporate purposes.

The maturity date of the 2020 Rangers Credit Agreement is November 6, 2023 .

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

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

Borrowings under the 2020 Rangers Credit Agreement bear interest at a floating rate, which at the option of Rangers LLC may be either (i) a base rate plus a margin ranging from 0.750 % to 1.250 % per annum or (ii) LIBOR plus a margin ranging from 1.750 % to 2.250 % per annum.

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 $ 135,000 as of June 30, 2021 and was recorded as Long-term debt in the accompanying consolidated balance sheet.

During the year ended June 30, 2021, the Company made principal repayments of $ 25,000 .

The interest rate on the 2020 Rangers Revolving Credit Facility as of June 30, 2021 was 2.10 %.

During the year ended June 30, 2021, the Company made interest payments of $ 3,075 .

All obligations under the 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.

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.

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and (vi) taking certain actions that would invalidate the secured lenders’ liens on any of Rangers LLC’s assets securing the obligations under the 2020 Rangers Revolving Credit Facility.

Delayed Draw Term Loan Credit Facilities

As an additional source of liquidity for the Company in response to the COVID-19 pandemic, on April 17, 2020, MSG NYR Holdings, LLC and MSG NYK Holdings, LLC, two indirect wholly-owned subsidiaries of the Company, each entered into a separate delayed draw term loan credit agreement with MSG Entertainment Group, LLC, a wholly-owned subsidiary of MSG Entertainment, as lender (the “DDTL Lender”).

The credit agreement for MSG NYK Holdings, LLC (the “Knicks DDTL Facility Borrower”) provides for a $ 110,000 senior unsecured delayed draw term loan facility (the “Knicks DDTL Facility”) and the credit agreement for MSG NYR Holdings, LLC (the “Rangers DDTL Facility Borrower”) provides for a $ 90,000 senior unsecured delayed draw term loan facility (the “Rangers DDTL Facility” and, together with the Knicks DDTL Facility, the “ DDTL Facilities ”).

The DDTL Facilities will mature and any unused commitments thereunder will expire on October 17, 2021 .

Borrowings under the DDTL Facilities will bear interest at a variable rate equal to either, at the election of the applicable borrower, (i) LIBOR plus 2.00 % per annum or (ii) a base rate plus 1.00 % per annum.

Subject to the borrowing conditions, each of the DDTL Facilities may be drawn in up to four separate borrowings of $ 10,000 or more.

Proceeds of borrowings under the DDTL Facilities will be used for general corporate purposes.

The availability of each of the DDTL Facilities to the respective borrowers is subject to certain conditions, including (a) the liquidity, including cash on hand and availability under revolving credit commitments, of the Company, MSG Sports, LLC, the Knicks DDTL Facility Borrower and its subsidiaries and the Rangers DDTL Facility Borrower and its subsidiaries (other than any liquidity that is restricted by law or contractual obligation from being transferred to the relevant DDTL Facility Borrower or its subsidiaries) must be (i) less than $ 50,000 immediately prior to giving effect to any borrowing, and (ii) less than $ 75,000 immediately after giving effect to any borrowing, and (b) with respect to the Knicks DDTL Facility, the Knicks DDTL Facility

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Borrower and its subsidiaries must have used commercially reasonable efforts to raise additional financing (“New Third-Party Debt”), including additional commitments under existing revolving facilities, prior to drawing on the Knicks DDTL Facility to the extent permitted by the debt policies of the NBA.

In addition, the commitments of the DDTL Lender to make advances under the Knicks DDTL Facility will be permanently reduced and the Knicks DDTL Facility will be subject to mandatory prepayments in an amount equal to the net cash proceeds received by the Company, MSG Sports, LLC, the Knicks DDTL Facility Borrower, or the subsidiaries of the Knicks DDTL Facility Borrower from any New Third-Party Debt.

Pursuant to the NBA debt policies, the NBA has consented (the “NBA Consent Letter”) to the incurrence of the indebtedness under the Knicks DDTL Facility.

The NBA Consent Letter provides that the Knicks DDTL Facility Borrower and its subsidiaries (including the Knicks basketball team) will, among other matters, (i) operate the team in a first class manner, consistent with the manner in which NBA teams generally are operated, as determined by the NBA Commissioner in his sole discretion, and (ii) maintain sufficient net working capital and cash reserves to pay expenses, liabilities and obligations of the team in the ordinary course and in a timely fashion.

In addition, the Knicks DDTL Facility Borrower and its subsidiaries (including the Knicks basketball team) have agreed with the NBA to not transfer certain basketball-related assets and to not make distributions to the Company without first providing the NBA with advance notice and not receiving the objection of the NBA Commissioner.

There was no borrowing under the DDTL Facilities as of June 30, 2020 .

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 June 30, 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 June 30, 2021.

During the year ended June 30, 2021, the Company made interest payments of $ 15 .

Delayed Draw Term Loan Credit Facilities

The credit agreement for MSG NYK Holdings, LLC provided for a $ 110,000 senior unsecured delayed draw term loan facility and the credit agreement for MSG NYR Holdings, LLC provided for a $ 90,000 senior unsecured delayed draw term loan facility.

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

Deferred Financing Costs

The following table summarizes deferred financing costs, net of amortization, related to the Knicks Revolving Credit Facility, Knicks Unsecured Credit Facility, and Rangers Revolving Credit Facility as reported on the accompanying consolidated balance sheet:

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:

Other current assets $ 1,759 $ 675

Pension Plans and Other Postretirement Benefit Plan

Other assets 2,345 264

(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 $ 4,562 in deferred financing costs during the year ended June 30, 2021.

Benefit Plans

Defined Benefit Pension Plans and Postretirement Benefit Plans

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Existing account balances under the plans will continue to be credited with monthly interest in accordance with the terms of the plans.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Prior to the MSGE Distribution the Company sponsored a non-contributory, qualified defined benefit pension plan covering certain of its union employees (the “Union Plan”).

1 unchanged sentence

The Cash Balance Plans, Union Plan, and Excess Plan are collectively referred to as the “MSGE Pension Plans.”

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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”).

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The following table summarizes the projected benefit obligations, assets, funded status and the amounts recorded on the Company’s consolidated balance sheets as of June 30, 2021 and 2020, associated with the MSGE Pension Plans, MSGS Pension Plans and Postretirement Plan, based upon actuarial valuations as of those measurement dates.

MSGE Pension Plans & MSGS Pension Plans

Postretirement Plan

MSGE Pension Plans & MSGS Pension Plans Postretirement Plan

June 30, June 30,

2021 2020 2021 2020

Change in benefit obligation:

Benefit obligation at beginning of period $ 10,057 $ 173,569 $ — $ 4,307

Service cost — 75 — 44

Interest cost 145 4,285 — 86

Actuarial loss (gain)

Actuarial loss 38 895 — 805

Benefits paid ( 312 ) ( 5,315 ) — ( 1,025 )

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Funded status at end of period $ ( 9,600 ) $ ( 10,057 ) $ — $ —

The Actuarial loss of $ 38 , included in the change in benefit obligation for pension benefits in the year ended June 30, 2021, is primarily the result of changes in the interest crediting rate and demographic experience as of June 30, 2021.

MADISON SQUARE GARDEN SPORTS CORP.

1 unchanged sentence

Amounts recognized in the consolidated balance sheets as of June 30, 2021 and 2020 consist of:

MSGE Pension Plans & MSGS Pension Plans

Postretirement Plan

Current liabilities (included in accrued employee related costs) of continuing operations

Non-current liabilities (included in defined benefit and other postretirement obligations) of continuing operations

Current liabilities of discontinued operations

Non-current liabilities of discontinued operations

Current liabilities (included in accrued employee related costs) $ ( 3,317 ) $ ( 3,043 )

Non-current liabilities (included in defined benefit and other postretirement obligations) ( 6,283 ) ( 7,014 )

$ ( 9,600 ) $ ( 10,057 )

Accumulated other comprehensive loss, before income tax, as of June 30, 2021 and 2020 consists of the following amounts that have not yet been recognized in net periodic benefit cost:

MSGE Pension Plans & MSGS Pension Plans

Postretirement Plan

Actuarial loss $ ( 2,027 ) $ ( 2,139 )

In connection with the MSGE Distribution , the Company transferred to MSG Entertainment the accumulated other comprehensive income (loss) related to the MSGE Pension Plans and Postretirement Plan.

$ ( 2,027 ) $ ( 2,139 )

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 years ended June 30, 2021, 2020 and 2019.

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

MSGE Pension Plans & MSGS Pension Plans

Postretirement Plan

Years Ended June 30,

MSGE Pension Plans & MSGS Pension Plans Postretirement Plan

Years Ended June 30, Years Ended June 30,

2021 2020 2019 2021 2020 2019

Service cost $ — $ 75 $ 91 $ — $ 44 $ 57

Interest cost 145 4,285 5,895 — 86 150

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Recognized actuarial loss 103 930 1,281 — 5 5

Amortization of unrecognized prior service cost (credit)

Amortization of unrecognized prior service credit — — — — — ( 7 )

Settlement loss recognized (a)

47 67 52 — — —

Other — — — — — ( 1,513 )

Net periodic benefit cost $ 295 $ 1,117 $ 4,186 $ — $ 135 $ ( 1,308 )

_________________

For the years ended June 30, 2020 , 2019 and 2018, lump-sum payments totaling $ 551 , $ 343 and $ 506 , respectively, were distributed to vested participants of the non-qualified excess cash balance plan , triggering the recognition of settlement losses in accordance with ASC Topic 715.

Due to these pension settlements, the Company was required to remeasure its pension plan liability as of March 31, 2020, June 30, 2019 and March 31, 2018 for the years ended June 30, 2020 , 2019 and 2018, respectively.

Discount rates used for the projected benefit obligation and interest cost were 3.21 % and 2.55 % as

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of June 30, 2020 , respectively, 3.75 % and 3.18 % as of June 30, 2019, respectively, and 3.53 % and 2.16 % as of March 31, 2018, respectively.

(a) For the years ended June 30, 2021, 2020 and 2019, lump-sum payments totaling $ 328 , $ 551 and $ 343 , respectively, were distributed to vested participants of the non-qualified excess cash balance plan, triggering the recognition of settlement losses in accordance with ASC Topic 715.

Due to these pension settlements, the Company was required to remeasure its pension plan liability as of June 30, 2021, March 31, 2020, and June 30, 2019 for the years ended June 30, 2021, 2020 and 2019, respectively.

Discount rates used for the projected benefit obligation and interest cost were 1.73 % and 0.91 % as of June 30, 2021, respectively, 3.21 % and 2.55 % as of June 30, 2020, respectively, and 3.75 % and 3.18 % as of June 30, 2019, respectively.

Additionally, settlement charges of $ 47 , $ 67 and $ 52 were recognized in Miscellaneous income (expense), net for the years ended June 30, 2021, 2020 and 2019, respectively.

Amounts presented in the table above include net periodic benefit cost related to continuing operations and discontinued operations as noted in the following table:

MSGE Pension Plans & MSGS Pension Plans

Postretirement Plan

Years Ended June 30,

MSGE Pension Plans & MSGS Pension Plans Postretirement Plan

Years Ended June 30, Years Ended June 30,

2021 2020 2019 2021 2020 2019

Continuing Operations $ 295 $ 395 $ 434 $ — $ — $ —

Discontinued Operations — 722 3,752 — 135 ( 1,308 )

Total net periodic benefit cost

Total net periodic benefit cost (credit) $ 295 $ 1,117 $ 4,186 $ — $ 135 $ ( 1,308 )

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other pre-tax changes in plan assets and benefit obligations recognized in other comprehensive income (loss) for the years ended June 30, 2021, 2020 and 2019 are as follows:

MSGE Pension Plans & MSGS Pension Plans

Postretirement Plan

Years Ended June 30,

MSGE Pension Plans & MSGS Pension Plans Postretirement Plan

Years Ended June 30, Years Ended June 30,

2021 2020 2019 2021 2020 2019

Actuarial gain (loss), net $ ( 38 ) $ ( 321 ) $ ( 3,137 ) $ — $ — $ 572

Recognized actuarial loss

Recognized actuarial gain 103 930 1,281 — 5 5

Recognized prior service credit

— — — — — ( 7 )

Settlement loss recognized

47 67 52 — — —

Transfer due to the MSGE Distribution

— 37,049 — — 749 —

Total recognized in other comprehensive income (loss)

The estimated net loss for the MSGS Pension Plans expected to be amortized from accumulated other comprehensive income (loss) and recognized as a component of net periodic benefit cost over the next fiscal year is $ 103 .

$ 112 $ 37,725 $ ( 1,804 ) $ — $ 754 $ 570

Funded Status

The accumulated benefit obligation for the MSGE Pension Plans aggregated to $ 173,569 at June 30, 2019 .

As of June 30, 2019 , each of the Pension Plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets.

As a result of the MSGE Distribution, effective the MSGE Distribution Date, the Company sponsors only unfunded non-contributory pension plans.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Weighted-average assumptions used to determine benefit obligations (made at the end of the period) as of June 30, 2021 and 2020 are as follows:

MSGE Pension Plans & MSGS Pension Plans

Postretirement Plan

Discount rate 2.35 % 2.29 %

Healthcare cost trend rate assumed for next year

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)

Year that the rate reaches the ultimate trend rate

Interest crediting rate 2.32 % 1.37 %

Weighted-average assumptions used to determine net periodic benefit cost (made at the beginning of the period) for the years ended June 30, 2021, 2020 and 2019 are as follows:

MSGE Pension Plans & MSGS Pension Plans

Postretirement Plan

Years Ended June 30,

Discount rate - projected benefit obligation

Discount rate - service cost

Discount rate - interest cost

MSGE Pension Plans & MSGS Pension Plans Postretirement Plan

Years Ended June 30, Years Ended June 30,

2021 2020 2019 2021 2020 2019

Discount rate - projected benefit obligation 2.35 % 3.58 % 4.19 % n/a 3.18 % 4.06 %

Discount rate - service cost n/a 3.78 % 4.25 % n/a 3.45 % 4.25 %

Discount rate - interest cost 1.84 % 3.10 % 3.90 % n/a 2.84 % 3.67 %

Expected long-term return on plan assets

n/a 5.52 % 3.72 % n/a n/a n/a

Healthcare cost trend rate assumed for next year

n/a n/a n/a n/a 6.75 % 7.00 %

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)

n/a n/a n/a n/a 5.00 % 5.00 %

Year that the rate reaches the ultimate trend rate

n/a n/a n/a n/a 2027 2027

The discount rates were determined (based on the expected duration of the benefit payments for the plans) from the Willis Towers Watson U.S.

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The expected long-term rate of return was selected from within the reasonable range of rates determined by (a) historical real returns, net of inflation, for the asset classes covered by the investment policy and (b) projections of inflation over the long-term period during which benefits are payable to plan participants.

Assumed healthcare cost trend rates are a key assumption used for the amounts reported for the Postretirement Plan.

A one percentage point change in assumed healthcare cost trend rates would have the following effects:

Increase (Decrease) in Total of Service and Interest Cost Components for the

Increase (Decrease) in Benefit Obligation at

Years Ended June 30,

One percentage point increase

One percentage point decrease

MADISON SQUARE GARDEN SPORTS CORP.

1 unchanged sentence

Plan Assets and Investment Policy

The weighted-average asset allocation of the Pension Plans’ assets at June 30, 2019 was as 81 % fixed income securities and 19 % cash equivalents.

As discussed above, in connection with the MSGE Distribution, the Company only retained liabilities associated with unfunded and unqualified pension plans.

Thus, the MSGS Pension Plans did not carry any investments as of June 30, 2020 .

Prior to the MSGE Distribution , investment allocation decisions had been made by the Company’s Investment and Benefits Committee, which considered investment advice provided by the Company’s external investment consultant.

The investment consultant took into account expected long-term risks, returns, correlation, and other prudent investment assumptions when recommending asset classes and investment managers to the Company’s Investment and Benefits Committee.

The investment consultant also considered the pension plans’ liabilities when making investment allocation recommendations.

The Company’s Investment and Benefits Committee’s decisions were influenced by asset/liability studies conducted by the external investment consultant who combined actuarial considerations and strategic investment advice.

The major investment categories of the pension plan assets are in cash equivalents and long duration fixed income securities that are marked-to-market on a daily basis.

As a result, the pension plan assets are subjected to interest-rate risk, specifically to a rising interest rate environment, as the majority of the pension plan assets are invested in long duration fixed income securities.

However, the pension plan assets are structured in an asset/liability framework, and consequently, an increase in interest rates would cause a corresponding decrease to the overall liability of the pension plans, thus creating a hedge against rising interest rates.

Additional risks involving the asset/liability framework include earning insufficient investment returns to cover future pension plan liabilities and imperfect hedging of such liabilities.

In addition, a portion of the long duration fixed income securities portfolio is invested in non-government securities that are subject to credit risk of the issuers who might default on interest and/or principal payments.

Investments at Estimated Fair Value

The cumulative fair values of the individual plan assets at June 30, 2019 by asset class are as follows:

Fair Value Hierarchy

June 30, 2019

Fixed income securities:

Treasury Securities

corporate bonds

Foreign issued corporate bonds

Municipal bonds

Money market accounts

Total investments measured at fair value

Contributions for Qualified Defined Benefit Pension Plans

During the year ended June 30, 2020 , the Company contributed $ 7,000 to the Cash Balance Pension Plan and $ 260 to the Union Plan.

As a result of the MSGE Distribution , the Company no longer sponsors funded qualified pension plans.

Thus, the MSGS Pension Plans did not carry any investments as of June 30, 2021 and June 30, 2020.

Estimated Future Benefit Payments

6 unchanged sentences

Fiscal years ending June 30, 2027 – 2031 2,049

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Defined Contribution Pension Plans

5 unchanged sentences

Years Ended June 30,

2021 2020 2019

Continuing Operations $ 2,310 $ 4,674 $ 7,925

1 unchanged sentence

Total Savings Plan Expenses $ 2,310 $ 6,085 $ 10,637

For the years ended June 30, 2020 , 2019 and 2018 , expenses related to the Union Savings Plan included in the accompanying consolidated statements of operations were $ 526 , $ 521 and $ 533 , respectively.

These amounts have been classified in the consolidated statements of operations as discontinued operations for all periods presented.

For the years ended June 30, 2020 and 2019, expenses related to the Union Savings Plan included in the accompanying consolidated statements of operations were $ 526 and $ 521 , respectively, and have been classified in the consolidated statements of operations as discontinued operations.

Multiemployer Plans

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• If a participating employer stops contributing to a multiemployer defined benefit pension plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• If the Company chooses to stop participating in some of these multiemployer defined benefit pension plans, the Company may be required to pay those plans an amount based on the Company’s proportion of the underfunded status of the plan, referred to as a withdrawal liability.

5 unchanged sentences

The “FIP/RP Status Pending/Implemented” column indicates whether a funding improvement plan (“FIP”) for yellow/orange zone plans or a rehabilitation plan (“RP”) for red zone plans is either pending or has been implemented by the trustees of such plan.

The zone status and any FIP or RP information is based on information that the

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company received from the plan, and the zone status is as certified by the plan’s actuary.

The zone status and any FIP or RP information is based on information that the Company received from the plan, and the zone status is as certified by the plan’s actuary.

The last column lists the expiration date(s) or a range of expiration dates of the CBA to which the plans are subject.

There are no other significant changes that affect such comparability.

PPA Zone Status

FIP/RP Status Pending / Implemented

Madison Square Garden Contributions

As of June 30,

Years Ended June 30,

Pension Plan Number

Surcharge Imposed

Expiration Date of CBA

PPA Zone Status FIP/RP Status Pending / Implemented MSG Sports

As of June 30, Years Ended June 30,

Plan Name EIN Pension Plan Number 2021 2020 2021 2020 2019 Surcharge Imposed Expiration Date of CBA

National Basketball Association Players’ Pension Plan

6/2024 (with certain termination rights becoming effective 6/2023)

832172122 001 Yellow Yellow Implemented $ 3,526 $ 3,780 $ 3,217 No 6/2024 (with certain termination rights becoming effective 6/2023)

2/1/2020 2/1/2019

National Hockey League Players’ Retirement Benefit Plan

462555356 001 Green Green No 1,153 1,150 1,197 No 9/2026

4/30/2020 4/30/2019

All Other Multiemployer Defined Benefit Pension Plans

$ 5,050 $ 5,328 $ 4,795

The Company was not listed as providing more than 5 percent of the total contributions in any Form 5500 for the years ended June 30, 2021, 2020 and 2019.

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RSUs that were awarded under the Employee Stock Plan are generally subject to three-year cliff vesting, or vest ratably over three years , with some RSUs being subject to certain performance conditions.

RSUs that were awarded by the Company to its employees will settle in shares of the Company’s Class A Common Stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash.

RSUs that were awarded by the Company to its employees will settle

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

in shares of the Company’s Class A Common Stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash.

Under the Non-Employee Director Plan, the Company is authorized to grant non-qualified stock options, restricted shares, restricted stock units, stock appreciation rights and other equity-based awards.

3 unchanged sentences

Unless otherwise provided in an applicable award agreement, options granted under this plan will be fully vested and exercisable upon the date of grant.

Unless otherwise

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

provided in an applicable award agreement, restricted stock units granted under this plan will be fully vested, upon the date of grant and will settle in shares of the Company’s Class A Common Stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash, on the first business day after ninety days from the date the director’s service on the Board of Directors ceases or, if earlier, upon the director’s death.

Unless otherwise provided in an applicable award agreement, restricted stock units granted under this plan will be fully vested, upon the date of grant and will settle in shares of the Company’s Class A Common Stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash, on the first business day after ninety days from the date the director’s service on the Board of Directors ceases or, if earlier, upon the director’s death.

In connection with the MSGE Distribution, pursuant to the terms of the incentive plans and award agreements, (i) each holder of an RSU and performance RSU (“PSU”) granted under the Employee Stock Plan received one MSG Entertainment RSU or PSU in respect of every one Company RSU or PSU owned on the Record Date and continues to be entitled to a share of the Company’s Class A Common Stock (or cash or other property) for each Company RSU or PSU in accordance with the existing award agreement, (ii) one share of MSG Entertainment Class A Common Stock was issued under the MSG Entertainment Non-Employee Director Plan in respect of every one RSU outstanding under the Company’s Non-Employee Director Plan, which remain outstanding and continue to be entitled to a share of the Company’s Class A Common Stock (or cash or other property) in accordance with the existing award agreement, and (iii) each option to purchase the Company’s Class A Common Stock became two options:

12 unchanged sentences

The cost is expected to be recognized over a weighted-average period of approximately 1.8 years for unvested RSUs and PSUs.

In addition, the Company had $ 7,171 of unrecognized compensation cost related to unvested stock options held by the Company’s employees, which is expected to be recognized over a weighted-average period of approximately 2.1 years as of June 30, 2020 .

Share-based compensation expense for discontinued operations during the years ended June 30, 2020 and 2019 was $ 8,303 and $ 10,361 , 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.

Dolan voluntarily relinquished a one-time equity award granted by the Company in October 2018 pursuant to his 2018 employment agreement, and the related award agreements were canceled.

The one-time equity award included:

32 target performance stock units and three grants of stock options to purchase an

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 year ended June 30, 2021.

Restricted Stock Units Award Activity

The following table summarizes activity related to the Company’s RSUs and PSUs, held by the Company and MSG Entertainment employees, for the year ended June 30, 2021:

Weighted-Average

Number of Weighted-Average

Date of Grant (a)

Nonperformance

PSUs and Performance

RSUs PSUs and Performance

Unvested award balance as of June 30, 2020 275 327 $ 262.13

Granted 126 51 $ 162.81

Vested ( 119 ) ( 100 ) $ 239.07

Forfeited ( 18 ) ( 58 ) $ 274.14

Unvested award balance as of June 30, 2021 264 220 $ 234.39

_________________

Weighted-average fair value per share at date of grant as of June 30, 2019 and for activity prior to the MSGE Distribution Date does not reflect any adjustment associated with the MSGE Distribution .

(a) Weighted-average fair value per share at date of grant does not reflect any adjustment associated with the MSGE Distribution.

See above for a discussion of the treatment of RSUs and PSUs in connection with the MSGE Distribution.

1 unchanged sentence

Upon delivery, RSUs and PSUs granted under the Employee Stock Plan were net share-settled to cover the required statutory tax withholding obligations.

To fulfill the employees’ statutory minimum tax withholding obligations for the applicable income and other employment taxes, 104 of these RSUs and PSUs, with an aggregate value of $ 26,777 were retained by the Company and the taxes paid are reflected as financing activity in the accompanying consolidated statement of cash flows for the year ended June 30, 2020 .

To fulfill the employees’ statutory minimum tax withholding obligations for the applicable income and other employment taxes, 88 of these RSUs and PSUs, with an aggregate value of $ 13,891 , inclusive of $ 7,106 related to MSG Entertainment employees (who vested in the Company’s RSUs and PSUs), were retained by the Company and the taxes paid are reflected as financing activity in the accompanying consolidated statement of cash flows for the year ended June 30, 2021.

The fair value of RSUs and PSUs that vested during the years ended June 30, 2020 and 2019 was $ 60,282 and $ 51,350 , respectively.

2 unchanged sentences

The following table summarizes activity related to the Company’s stock options for the year ended June 30, 2021:

Weighted-Average Exercise Price Per Share (a)

Weighted-Average Remaining Contractual Term (In Years)

Aggregate Intrinsic Value

Number of Weighted-Average Exercise Price Per Share (a)

Weighted-Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value

Time Vesting Options

Balance as of June 30, 2020 543 $ 225.79

Granted — $ —

Cancelled ( 449 ) $ 242.51

Balance as of June 30, 2021 94 $ 145.78 6.46 $ 2,514

1 unchanged sentence

_________________

Weighted-average exercise price per share as of June 30, 2019 and for activity prior to the MSGE Distribution Date does not reflect any adjustment associated with the MSGE Distribution .

(a) Weighted-average exercise price per share does not reflect any adjustment associated with the MSGE Distribution.

See above for a discussion of the treatment of options in connection with the MSGE Distribution.

1 unchanged sentence

The exercise prices of the premium priced stock options were set at a 10 % and a 25 % premium to the closing stock price at the date of grant.

These stock options vest ratably over four years and are being expensed on a straight-line basis over the vesting period.

The maximum contractual term is 7.5 years .

The Company calculated the fair value of the market priced options on the date of grant using the Black-Scholes option pricing model and the premium priced options

These stock options vest ratably over four years and are being expensed on a straight-

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

using the Monte Carlo Simulation.

line basis over the vesting period.

The maximum contractual term is 7.5 years.

The Company calculated the fair value of the market priced options on the date of grant using the Black-Scholes option pricing model and the premium priced options using the Monte Carlo Simulation.

The following are key assumptions used to calculate the weighted-average grant date fair value of the stock options:

Market Price 10% Premium 25% Premium

Weighted-average grant date fair value $ 79.99 $ 69.33 $ 55.64

Expected term

Expected term 4.98 years 5.10 years 5.29 years

Expected volatility 22.11 % 22.11 % 22.11 %

6 unchanged sentences

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

During the year ended June 30, 2020 , the Company did not engage in any share repurchase activities under its share repurchase program .

During the year ended June 30, 2021, the Company did no t engage in any share repurchase activities under its share repurchase program.

As of June 30, 2021, the Company had $ 259,639 of availability remaining under its stock repurchase authorization.

Related Party Transactions

As of June 30, 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 all of the Company’s outstanding Class B Common Stock and own approximately 3.5 % of the Company’s outstanding Class A Common Stock (inclusive of options exercisable within 60 days of the date hereof).

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.

As of June 30, 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.

Members of the Dolan family are also the controlling stockholders of MSG Entertainment , MSG Networks and AMC Networks Inc.

Members of the Dolan family are also the controlling stockholders of MSG Entertainment and AMC Networks Inc.

(“AMC Networks”).

Members of the Dolan family were the direct controlling stockholders of MSG Networks prior to the MSGE-MSGN Merger and indirectly control MSG Networks through MSGE’s ownership of MSG Networks.

Current Related Party Arrangements

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

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;

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 ;

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 the 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 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 Knicks and Rangers games in exchange for media rights fees;

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Media rights agreements, that the Company and MSG Networks entered into in connection with the MSGS Distribution , providing MSG Networks with local telecast rights for the Knicks and Rangers Knicks for a 20 -year term in exchange for media rights fees;

Transition Services Agreement (the “ TSA ”) pursuant to which the Company receives certain services from MSG Entertainment , such as information technology, accounts payable and payroll, human resources, and other corporate functions, as well as the executive support services, in exchange for service fees;

A services agreement with MSG Networks , pursuant to which the Company provides certain legal services to MSG Networks (the “ Current MSGN Services Agreement ”);

Sublease agreement, pursuant to which the Company leases an office space from MSG Entertainment ;

• 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;

• Transition Services Agreement (the “TSA”) pursuant to which the Company receives certain services from MSG Entertainment, such as information technology, accounts payable, payroll, human resources, and other corporate functions, as well as the executive support services, in exchange for service fees.

Following the MSGE-MSGN Merger in July 2021, the TSA was amended to provide for the provision of certain legal services by the Company to MSG Entertainment, including its wholly-owned subsidiary, MSG Networks;

• A services agreement with MSG Networks, pursuant to which the Company provides certain legal services to MSG Networks (the “MSGN Services Agreement”).

Following the MSGE-MSGN Merger in July 2021, the MSGN Services Agreement is expected to be terminated, and any services provided to MSG Networks are expected to be provided pursuant to the TSA;

• Sublease agreement, pursuant to which the Company leases office space from MSG Entertainment;

• Group ticket sales representation agreement, pursuant to which MSG Entertainment appointed the Company as its sales and service representative to sell group ticket packages related to MSG Entertainment events in exchange for a commission;

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;

The DDTL Facilities with MSG Entertainment that provide for a $ 110,000 and $ 90,000 senior unsecured delayed draw term loan facilities, for the Knicks and Rangers, respectively.

See Note 13 for more information;

• 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;

• Other agreements with MSG Entertainment entered into in connection with the MSGE Distribution, including a distribution agreement, a tax disaffiliation agreement, an employee matters agreement, a trademark license agreement and certain other arrangements;

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

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

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

• 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.

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

(i) the Company’s Executive Chairman with MSG Entertainment and MSG Networks;

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

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.

Following the MSGE-MSGN Merger, such costs will be reallocated between the Company, MSG Entertainment, and AMC Networks, as applicable, for the 2022 fiscal year.

From time to time the Company has entered into, and is expected to continue to enter into, arrangements with 605, LLC.

Dolan, a director of the Company and spouse of James L.

Dolan, is the founder and Chief Executive Officer of 605, LLC.

Dolan, the Company’s Executive Chairman and a director, and Kristin A.

Dolan, the Company’s Executive Chairman and a director, is the founder and Chief Executive Officer of 605, LLC.

Dolan and Kristin A.

Dolan own 50 % of 605, LLC.

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However, the amounts associated with such arrangements are reflected in the Company’s results of operations for the periods prior to the MSGE Distribution.

The Company had various agreements with MSG Networks , including an advertising sales representation agreement and a services agreement (the “ Prior MSGN Services Agreement ”).

Pursuant to the Prior MSGN Services Agreement , which was effective July 1, 2019, the Company provided certain services to MSG Networks , such as information technology, accounts payable and payroll, human resources, and other corporate functions, as well as the executive support services described below, in exchange for service fees.

MSG Networks also provided certain services to the Company, in exchange for service fees.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Effective as of the MSGE Distribution , this agreement is now between MSG Entertainment and MSG Networks .

The Company separately entered into the Current MSGN Services Agreement .

The Company had various agreements with MSG Networks, including an advertising sales representation agreement and a services agreement (the “Prior MSGN Services Agreement”).

Pursuant to the Prior MSGN Services Agreement, which was effective July 1, 2019, the Company provided certain services to MSG Networks, such as information technology, accounts payable, payroll, human resources, and other corporate functions, as well as the executive support services described below, in exchange for service fees.

MSG Networks also provided certain services to the Company, in exchange for service fees.

Effective as of the MSGE Distribution, this agreement was between MSG Entertainment and MSG Networks.

The Company separately entered into the MSGN Services Agreement.

See “— Current Related Party Arrangements.”

5 unchanged sentences

Dolan, AMC Networks and MSG Networks providing for the sharing of certain expenses associated with executive office space which was available to James L.

Dolan (the Executive Chairman and a director of the Company, the Executive Chairman, Chief Executive Officer and a director of MSG Entertainment , the Executive Chairman and a director of MSG Networks , and a director of AMC Networks), Charles F.

Dolan (the Executive Chairman and a director of the Company, the Executive Chairman, Chief Executive Officer and a director of MSG Entertainment, the Executive Chairman and a director of MSG Networks prior to the MSGE-MSGN Merger, and a director of AMC Networks), Charles F.

Dolan (the father of James L.

Dolan and the Executive Chairman and a director of AMC Networks and a director of the Company, MSG Entertainment and MSG Networks ), and the DFO .

Dolan and the prior Executive Chairman and the current Chairman Emeritus and a director of AMC Networks and a director of the Company, MSG Entertainment and MSG Networks) prior to the MSGE-MSGN Merger, and the DFO.

The Company was a party to various Aircraft Support Services Agreements (the “Support Agreements”), pursuant to which the Company provided certain aircraft support services to entities controlled by (i) James L.

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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.

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 years ended June 30, 2021, 2020 and 2019:

Years Ended June 30,

2021 2020 2019

Revenues $ 147,029 $ 138,881 $ 148,207

Operating expenses (credits):

Corporate general and administrative expenses, net — MSG Networks

Corporate general and administrative credits, net — MSG Networks $ ( 875 ) $ ( 8,376 ) $ ( 10,362 )

Corporate general and administrative expenses, net — MSG Entertainment 39,366 9,530 —

Costs associated with the Sponsorship sales and service representation agreements

16,016 2,486 —

Costs associated with the Arena License Agreements 46,974 — —

Other operating expenses (credits), net 573 ( 337 ) ( 693 )

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.

In addition, pursuant to the group ticket sales representation agreement, the Company charges MSG Entertainment a share of the cost of the Company’s sales and service staff and related overhead, which are included in the revenues from related parties in the fiscal year 2020.

Additionally, pursuant to this agreement, the Company earns commission on group ticket packages sales related to MSG Entertainment events.

The Company has not earned such commission during the fiscal year 2020.

Corporate General and Administrative Expenses, net — MSG Networks

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 the Rangers, which provide MSG Networks with exclusive media rights to team games in their local markets.

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.

1 unchanged sentence

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

Corporate general and administrative expense, net — MSG Networks reflects charges from the Company to MSG Networks under the Current MSGN Services Agreement and Prior MSGN Services Agreement of $ 8,474 , $ 10,467 , and $ 9,474 , net of general and administrative costs charged to the Company by MSG Networks, for the years ended June 30, 2020, 2019 and 2018, respectively.

Corporate general and administrative credits, net — MSG Networks reflects charges from the Company to MSG Networks under the MSGN Services Agreement of $ 875 and $ 492 for the years ended June 30, 2021 and 2020, respectively.

In addition it reflects charges from the Company to MSG Networks under the Prior MSGN Services Agreement of $ 7,982 and $ 10,467 for the years ended June 30, 2020 and 2019, 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 charges of $ 8,916 from MSG Entertainment pursuant to the TSA for certain business functions that were previously performed by internal resources.

Corporate general and administrative expenses, net — MSG Entertainment reflects net charges of $ 36,730 and $ 8,916 from MSG Entertainment pursuant to the TSA for certain business functions that were previously performed by internal resources for the years ended June 30, 2021 and 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 expenses, net — MSG Entertainment reflects rent expense of $ 2,636 and $ 593 associated with the lease of office space from MSG Entertainment for years ended June 30, 2021 and 2020, respectively.

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

Costs associated with the Sponsorship sales and service representation agreements

Pursuant to the Sponsorship sales and service representation agreements, MSG Entertainment charges the Company sales commission fees and sponsorship fulfillment costs, as well as costs of MSG Entertainment sales and service staff and overhead associated with the sales of sponsorship assets.

Other Operating Expenses, 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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CFD and (ii) time sharing agreements with MSG Networks and AMC Networks .

Costs associated with the Arena License Agreements

For the year ended June 30, 2021, costs associated with the Arena License Agreements include $ 36,629 recorded as operating lease cost.

See Note 8 for more information regarding Arena License Agreements.

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 (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 but which do not meet the criteria for inclusion in discontinued operations.

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 Knicks home and away games during the 2021-21 season.

Discontinued operations

Related party transactions included in income (loss) from discontinued operations in the accompanying consolidated statements of operations include the following (i) revenues from related parties of $ 13,106 , $ 16,199 , and $ 14,052 for the years ended June 30, 2020, 2019 and 2018, respectively, (ii) operating expenses charged by related parties of $ 897 , $ 3,542 , and $ 6,088 for the years ended June 30, 2020, 2019 and 2018, respectively, (iii) interest income from nonconsolidated affiliates of $ 3,105 and $ 5,696 , for the years ended June 30, 2019 and 2018, respectively, and (iv) equity in earnings (loss) of equity-method investments of $( 3,739 ) , $ 7,062 , and $( 7,770 ) for the years ended June 30, 2020, 2019 and 2018, respectively.

On December 22, 2017, new tax legislation, commonly referred to as the Tax Cuts and Jobs Act (“ TCJA ”), was enacted, which significantly changed the existing U.S.

tax laws, including a reduction in the corporate federal income tax rate from 35 % to 21 % effective January 1, 2018.

During the second quarter of fiscal year 2018, the Company was required to recognize the effect of tax law changes in the period of enactment even though certain key aspects of the new law became effective January 1, 2018.

For the fiscal year ended June 30, 2018, the Company used a blended statutory federal income tax rate of 28 % based upon the number of days that it was taxed at the former rate of 35 % and the number of days taxed at the new rate of 21 % .

Related party transactions included in income (loss) from discontinued operations, net of taxes in the accompanying consolidated statements of operations include the following (i) revenues from related parties of $ 13,106 and $ 16,199 for the years ended June 30, 2020 and 2019, respectively, (ii) operating expenses charged by related parties of $ 897 and $ 3,542 for the years ended June 30, 2020 and 2019, respectively, (iii) interest income from nonconsolidated affiliates of $ 3,105 for the year ended June 30, 2019, and (iv) equity in earnings (loss) of equity-method investments of $( 3,739 ) and $ 7,062 for the years ended June 30, 2020 and 2019, respectively.

Income tax expense (benefit) attributable to continuing operations is comprised of the following components:

Years Ended June 30,

Current expense:

2021 2020 2019

Current expense (benefit):

Federal $ — $ ( 676 ) $ —

State and other 243 — 357

243 ( 676 ) 357

Deferred expense (benefit):

Federal ( 21,096 ) 13,871 ( 7,320 )

State and other ( 52,568 ) 7,398 ( 5,656 )

( 73,664 ) 21,269 ( 12,976 )

Income tax expense (benefit) $ ( 73,421 ) $ 20,593 $ ( 12,619 )

3 unchanged sentences

Years Ended June 30,

2021 2020 2019

Federal tax benefit at statutory federal rate $ ( 18,757 ) $ ( 20,590 ) $ ( 12,734 )

1 unchanged sentence

Change in the estimated applicable tax rate used to determine deferred taxes

( 896 ) 391 ( 1,055 )

Nondeductible disability insurance premiums expense

392 1,027 482

Federal tax credits — ( 1,480 ) ( 1,900 )

2 unchanged sentences

Change in valuation allowance ( 52,108 ) 46,310 —

Nondeductible officers’ compensation (a)

Nondeductible officers’ compensation 4,081 4,287 8,521

Nondeductible expenses 862 762 596

Excess tax benefit related to shared based-payments awards ( 72 ) ( 3,478 ) ( 4,555 )

Other — — 212

Income tax expense (benefit) $ ( 73,421 ) $ 20,593 $ ( 12,619 )

_________________

The TCJA included changes to Internal Revenue Code Section 162(m), including elimination of the exception for qualified performance-based compensation over the $1,000 annual limit.

Accordingly, effective January 1, 2018, all compensation for certain officers in excess of $1,000 is nondeductible.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The tax effects of temporary differences which give rise to significant portions of the deferred tax assets and liabilities at June 30, 2021 and 2020 are as follows:

5 unchanged sentences

Restricted stock units and stock options 6,603 6,186

Arena deferred rent adjustment 9,134 —

Deferred revenue accelerated for tax purposes 21,069 —

Other — 2,837

Total deferred tax assets $ 126,832 $ 103,715

4 unchanged sentences

Prepaid expenses ( 7,767 ) ( 7,164 )

Investments — ( 4,937 )

Other ( 447 ) —

Total deferred tax liabilities $ ( 110,889 ) $ ( 113,303 )

Net deferred tax liability

Net deferred tax asset (liability) $ 15,943 $ ( 57,721 )

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company’s ability to realize its deferred tax assets depends upon the generation of sufficient future taxable income to allow for the utilization of its federal net operating loss carryforward (“NOL”) and its future deductible temporary differences.

Due primarily to the uncertainty related to operating disruptions due to COVID-19, in the fourth quarter of the fiscal year ended June 30, 2020, management concluded that is more likely than not that the Company will not realize the benefit for a portion of its deferred tax assets.

In the fourth quarter of the fiscal year ended June 30, 2020, due primarily to the uncertainty related to operating disruptions due to COVID-19, management concluded that it was more likely than not that the Company will not realize the benefit for a portion of its deferred tax assets and recorded a valuation allowance of $ 46,310 .

During the year ended June 30, 2021, the Company evaluated evidence to consider the reversal of the valuation allowance on its net deferred income tax assets and determined in the fourth quarter that there was sufficient positive evidence to conclude that it is more likely than not its deferred income tax assets are realizable.

In determining the likelihood of future realization of the deferred income tax assets as of June 30, 2021, the Company considered both positive and negative evidence and weighted the effect of such evidence based upon its objectivity.

This included consideration of revised guidance from the State of New York, in late May and early June 2021, enabling the Knicks to play three playoff games at The Garden with no capacity restrictions with regard to vaccinated guests.

This approach of a fully vaccinated audience continued in other arenas throughout the NBA and NHL playoffs and is expected to continue in the future.

Primarily due to this development, management believes that it is more likely than not that the Company will realize its deferred tax assets and the valuation allowance was reversed in the fourth quarter of the fiscal year ended June 30, 2021.

The Company will continue to assess the realizability of its deferred tax assets on a quarterly basis.

The NOL as of June 30, 2020 is approximately $ 122,000 , including $ 46,000 , that will expire in 2036 .

The Company does not have any recorded unrecognized tax benefit for uncertain tax positions as of June 30, 2020 and 2019 .

The NOL as of June 30, 2021 is approximately $ 84,000 , including $ 11,000 that will expire in 2036 and 2038 .

The remaining NOL is carried forward indefinitely.

The Company does no t have any uncertain tax positions as of June 30, 2021 and 2020.

Prior to the MSGE Distribution, MSG Entertainment's collection for ticket sales, sponsorships and suite rentals in advance were recorded as deferred revenue and were recognized as revenues when earned for both accounting and tax purposes.

The tax recognition on most of these deferred revenues was accelerated to the MSGE Distribution Date.

The estimated amount of tax on the acceleration of such deferred revenue is approximately $ 56,000 and will be the responsibility of the Company.

The estimated amount of tax on the acceleration of such deferred revenue is approximately $ 56,000 and is the responsibility of the Company.

MSG Entertainment will not reimburse the Company for such taxes.

5 unchanged sentences

Prior to the MSGE Distribution, the Company and MSG Entertainment entered into a Tax Disaffiliation Agreement (“TDA”) that governs the parties’ respective rights, responsibilities and obligations with respect to taxes and tax benefits.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TDA , the Company will generally be responsible for all U.S.

Under the TDA, the Company will generally be responsible for all U.S.

federal, state, local and other applicable income taxes of MSG Entertainment for any taxable period or portion of such period ending on or before the MSGE Distribution Date.

3 unchanged sentences

The Company does not expect the examination, when finalized, to result in material changes.

The federal and state statute of limitations are currently open on the Company’s tax returns for 2017 and 2016, respectively, and forward.

The federal and state statute of limitations are currently open for tax returns for years starting with 2018 and 2016, respectively.

Concentrations of Risk

Financial instruments that may potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable.

Cash and cash equivalents are invested in money market accounts and a time deposit.

The Company monitors the financial institutions and money market funds where it invests its cash and cash equivalents with diversification among counterparties to mitigate exposure to any single financial institution.

The Company’s emphasis is primarily on safety of principal and liquidity and secondarily on maximizing the yield on its investments.

The following individual non-affiliated customers accounted for the following percentages of the Company’s consolidated accounts receivable balances:

The Company had non-affiliated revenues from a customer that represented 13 % , 13 % and 12 % of consolidated revenues for the years ended June 30, 2020 , 2019 and 2018 .

Revenues from MSG Networks amounted to $ 138,173 , $ 148,178 and $ 142,281 for the years ended June 30, 2020 , 2019 and 2018 , which represent 23 % , 20 % and 20 % , respectively, of the Company’s consolidated revenues (see Note 17 ).

As of June 30, 2020 , approximately 94 full-time and part-time employees, who represent approximately 11% of the Company’s workforce, are subject to CBAs.

The current NHL CBA expires 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).

See Note 21 for summary of the principal aspects of the new NHL CBA and revenue sharing plan.

The current NBA CBA expires after the 2023-24 season (although the NBA and NBPA each 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).

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.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Interim Financial Information (Unaudited)

The following is a summary of the Company’s selected quarterly financial data for the years ended June 30, 2020 and 2019 :

Three Months Ended

Year ended June 30, 2020

September 30,

Operating expenses

Operating income (loss)

Income (loss) from continuing operations

Income (loss) from discontinued operations, net of taxes

Net income (loss)

Net income (loss) attributable to Madison Square Garden Sports Corp.’s stockholders

Earnings (loss) per share:

Continuing operations

Discontinued operations

Basic earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders

Continuing operations

Discontinued operations

Diluted earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

Year ended June 30, 2019

September 30,

Operating expenses

Operating income (loss)

Income (loss) from continuing operations

Income (loss) from discontinued operations, net of taxes

Net income (loss)

Net income (loss) attributable to Madison Square Garden Sports Corp.’s stockholders

Earnings (loss) per share:

Continuing operations

Discontinued operations

Basic earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders

Continuing operations

Discontinued operations

Diluted earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders

Subsequent Events

In July 2020, the NHL and NHLPA agreed to extend the NHL CBA through and including September 15, 2026 (with the possibility of an additional one-year extension in certain circumstances) with certain modifications.

The principal aspects of the NHL CBA and revenue sharing plan are expected to remain unchanged except that the new NHL CBA limits the amount of deductions to be withheld from player salaries each year;

if annual excess deductions from player salaries are insufficient to limit league-wide player salaries to 50% of that season’s league-wide revenues, any shortfall will be carried forward to future seasons and remain due from the players to the league.

Knicks Unsecured Credit Facility

On August 11, 2020, the Company renewed Knicks Unsecured Credit Facility, which matures on September 24, 2021.

See Note 13 for more information.

The following individual non-affiliated entities accounted for the following percentages of the Company’s consolidated receivable balances recorded in Accounts receivable, net and Other assets in the accompanying consolidated balance sheets:

Entity A 35 % 11 %

Entity B 34 % 55 %

Entity C 16 % — %

The following individual non-affiliated entities accounted for the following percentages of the Company’s consolidated revenue balances:

Years Ended June 30,

2021 2020 2019

Entity 1 32 % 13 % 13 %

Entity 2 12 % 1 % 3 %

Revenues from MSG Networks amounted to $ 145,098 , $ 138,173 and $ 148,178 for the years ended June 30, 2021, 2020 and 2019, which represent 35 %, 23 % and 20 %, respectively, of the Company’s consolidated revenues (see Note 17).

As of June 30, 2021, approximately 105 full-time and part-time employees, which represent approximately 16 % of the Company’s workforce, are subject to CBAs.

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 if they are not extended prior thereto.

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-K

Item 9A. Controls and Procedures