What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-02-03 compared with 2021-11-09 · 125 added, 80 removed, 188 unchanged (52% of the section changed)

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

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

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

After giving effect to the MSGE Distribution, the Company operates and reports financial information in one segment.

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Impact of COVID-19 on Our Business

COVID-19 disruptions have materially impacted the Company’s revenues and the Company recognized materially less revenues, or in some cases no revenues, across a number of areas during the fiscal year ended June 30, 2021.

In March 2020, the NBA and NHL suspended their 2019-20 seasons due to COVID-19.

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

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

The Garden was not available for use between April 17, 2020 (the date of the MSGE Distribution) 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 was available at reduced capacity through May 2021.

As a result, the Company was not required to pay license fees to MSG Entertainment under the Arena License Agreements until games resumed at The Garden, and the Company continued to pay substantially reduced fees while attendance was limited.

Effective July 1, 2021, the Company began paying license fees to MSG Entertainment under the Arena License Agreements in their full contractual amounts.

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.

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 materially impacted the Company’s revenues across a number of areas, including, ticket sales;

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signage and in-venue advertising at The Garden;

local media rights fees;

and food, beverage and merchandise sales.

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

Effective July 1, 2021, the Company began paying license fees to MSG Entertainment under the Arena License Agreements in their full contractual amounts.

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, in addition to the reduced payments to MSG Entertainment under the Arena License Agreements described above, (i) NBA league assessments and day-of-game expenses for Knicks and Rangers games, and (ii) league revenue sharing, net of escrow and team personnel expense.

In addition, as a result of the disruptions caused by COVID-19, certain operating expenses were reduced, including, in addition to the reduced payments to MSG Entertainment under the

Arena License Agreements described above, (i) NBA league assessments and day-of-game expenses for Knicks and Rangers games, and (ii) league revenue sharing, net of escrow and team personnel expense.

These expense reductions did not fully offset revenue losses.

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

Guests are also required to wear masks unless they show proof of full COVID-19 vaccination (i.e., at least 14 days have passed after their final vaccine dose).

Children under age 12 can attend events with a vaccinated adult, but ages 2 to 11 need to wear a mask while inside our venues.

As a result of New York City regulations effective August 17, 2021, indoor entertainment venues such as The Garden were permitted to host guests at full capacity, subject to certain restrictions, including that all guests 12 years of age and older were required to show proof they had received at least one dose of a COVID-19 vaccine.

Following updated New York City regulations, effective January 29, 2022, all guests five years of age and older and employees must provide proof that they have received either two doses of a two-shot COVID-19 vaccination, or one dose of a single-shot vaccine.

Children under age five can attend events with a vaccinated adult, but ages two to four need to wear a mask while inside venues such as The Garden.

At this time, the Company’s management is unable to predict if there will be any longer-term effects due to these COVID-19 related disruptions.

Fan attendance for the 2021-22 NBA and NHL seasons could be impacted by a resurgence in the COVID-19 pandemic such as the Delta variant, governmental and league restrictions on attendance of games at The Garden, reduced tourism, as well as general hesitancy among the public to return to pre-COVID-19 activity levels.

Fan attendance for the 2021-22 NBA and NHL seasons has been and may continue to be impacted by a resurgence in the COVID-19 pandemic, such as the Delta and Omicron variants, , reduced tourism, as well as general hesitancy among the public to return to pre-COVID-19 activity levels, and may also be impacted by new governmental and league restrictions on attendance of games at The Garden and vaccination requirements for fans.

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

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Results of Operations.

This section provides an analysis of our unaudited results of operations for the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

This section provides an analysis of our unaudited results of operations for the three and six months ended December 31, 2021 compared to the three and six months ended December 31, 2020.

Liquidity and Capital Resources.

This section focuses primarily on (i) the liquidity and capital resources of the Company, (ii) an analysis of the Company’s cash flows for the three months ended September 30, 2021 compared to the three months ended September 30, 2020, and (iii) certain contractual obligations.

This section focuses primarily on (i) the liquidity and capital resources of the Company, (ii) an analysis of the Company’s cash flows for the six months ended December 31, 2021 compared to the six months ended December 31, 2020, and (iii) certain contractual obligations.

Seasonality of Our Business.

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Results of Operations

Comparison of the three months ended September 30, 2021 versus the three months ended September 30, 2020

Comparison of the three and six months ended December 31, 2021 versus the three and six months ended December 31, 2020

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

Three Months Ended

September 30, Change (a)

Three Months Ended Six Months Ended

December 31, Change (a)

2021 2020 $ % 2021 2020 $ %

Revenues $ 18,794 $ 57,038 $ (38,244) (67) %

Direct operating expenses 8,578 39,786 (31,208) (78) %

Revenues $ 289,581 $ 28,771 $ 260,810 NM $ 308,375 $ 85,809 $ 222,566 NM

Direct operating expenses 192,847 16,661 176,186 NM 201,425 56,447 144,978 NM

Selling, general and administrative expenses 59,600 48,909 10,691 22 % 103,328 91,905 11,423 12 %

Depreciation and amortization 1,215 1,607 (392) (24) % 2,641 3,267 (626) (19) %

Operating loss (34,938) (27,404) (7,534) (27) %

Operating income (loss) 35,919 (38,406) 74,325 NM 981 (65,810) 66,791 NM

Other expense:

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Miscellaneous expense, net (64) (70) 6 9 % (127) (190) 63 33 %

Loss from operations before income taxes (38,054) (29,513) (8,541) (29) %

Income tax benefit 21,169 498 20,671 NM

Net loss (16,885) (29,015) 12,130 42 %

Income (loss) from operations before income taxes 32,313 (40,963) 73,276 NM (5,741) (70,476) 64,735 92 %

Income tax (expense) benefit (17,115) (170) (16,945) NM 4,054 328 3,726 NM

Net income (loss) 15,198 (41,133) 56,331 NM (1,687) (70,148) 68,461 98 %

Net loss attributable to nonredeemable noncontrolling interests (647) (508) (139) (27) % (1,127) (1,106) (21) (2) %

Net loss attributable to Madison Square Garden Sports Corp.’s stockholders $ (16,405) $ (28,417) $ 12,012 42 %

Net income (loss) attributable to Madison Square Garden Sports Corp.’s stockholders $ 15,845 $ (40,625) $ 56,470 NM $ (560) $ (69,042) $ 68,482 99 %

_________________

NM – Percentage is not meaningful

(a) Operating results in the prior year period were materially impacted by the COVID-19 pandemic.

Please see “— Factors Affecting Results of Operations — Impact of COVID-19 on Our Business” for more information.

Revenues decreased $38,244, or 67%, to $18,794 for the three months ended September 30, 2021 as compared to the prior year period.

The net decrease was attributable to the following:

Decrease in revenues from league distributions $ (41,215)

Decrease in local media rights fees (1,764)

Revenues increased $260,810 to $289,581 for the three months ended December 31, 2021 as compared to the prior year period.

Revenues increased $222,566 to $308,375 for the six months ended December 31, 2021 as compared to the prior year period.

The net increases were attributable to the following:

Months Months

Increase in pre/regular season ticket-related revenues $ 100,802 $ 104,484

Increase in local media rights fees 50,871 49,107

Increase in revenues from league distributions 44,790 3,575

Increase in suite license fee revenues 34,349 34,613

Increase in sponsorship and signage revenues 20,190 20,146

Increase in pre/regular season food, beverage and merchandise sales 8,522 8,827

Other net increases 1,286 1,814

The decrease in revenues from league distributions for the three months ended September 30, 2021 was primarily due to the recognition of the remainder of national media rights fees related to the 2019-20 NBA and NHL seasons during the three months ended September 30, 2020 that otherwise would have been recognized during the third and fourth quarters of fiscal year 2020.

$ 260,810 $ 222,566

The increases in pre/regular season ticket-related revenues for the three and six months ended December 31, 2021 were a result of fans being prohibited from attending events at The Garden due to government-mandated assembly restrictions in the prior year periods.

The increases in local media rights fees for the three and six months ended December 31, 2021 were due to the delayed start of the 2020-21 NBA and NHL regular seasons and the impact of the shortened 2020-21 NHL regular season schedule in the prior year

period, as well as contractual rate increases.

In addition, the increase for the six months ended December 31, 2021 was slightly offset by the recognition of local media rights fees in the prior year period associated with the Rangers’ participation in the Stanley Cup Qualifiers.

The increases in revenues from league distributions for the three and six months ended December 31, 2021 were primarily due to (i) higher national media rights fees and other league distributions as a result of the delayed start of the 2020-21 NBA and NHL regular seasons in the prior year period and to a lesser extent (ii) increased NHL national media rights fees in the current year period.

In addition, the increase for the six months ended December 31, 2021 was partially offset by the recognition of the remainder of national media rights fees related to the 2019-20 NBA and NHL seasons during the three months ended September 30, 2020 that otherwise would have been recognized during the third and fourth quarters of fiscal year 2020.

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

The decrease in local media rights fees for the three months ended September 30, 2021 was due to the recognition of local media rights fees in the prior year period associated with the Rangers’ participation in the Stanley Cup Qualifiers.

This decrease was partially offset by contractual rate increases.

The increase in pre/regular season ticket-related revenues for the three months ended September 30, 2021 was due to two Rangers’ preseason home games played during the current year period as compared to no games played during the prior year period as a result of the delayed start of the 2020-21 NHL season.

The increases in suite license fee revenues for the three and six months ended December 31, 2021 were a result of fans being prohibited from attending events at The Garden due to government-mandated assembly restrictions in the prior year periods.

The increases in sponsorship and signage revenues for the three and six months ended December 31, 2021 were due to the delayed start of the 2020-21 NBA and NHL regular seasons and fans being prohibited from attending events at The Garden due to government-mandated assembly restrictions in the prior year periods.

The increases in pre/regular season food, beverage and merchandise sales for the three and six months ended December 31, 2021 were a result of fans being prohibited from attending events at The Garden due to government-mandated assembly restrictions in the prior year periods.

Direct operating expenses

Direct operating expenses decreased $31,208, or 78%, to $8,578 for the three months ended September 30, 2021 as compared to the prior year period.

The net decrease was attributable to the following:

Decrease in team personnel compensation $ (13,462)

Direct operating expenses increased $176,186 to $192,847 for the three months ended December 31, 2021 as compared to the prior year period.

Direct operating expenses increased $144,978 to $201,425 for the six months ended December 31, 2021 as compared to the prior year period.

The net increases were attributable to the following:

Months Months

Increase in team personnel compensation $ 91,147 $ 77,685

Increase in other team operating expenses not discussed elsewhere in this table 36,423 35,752

Increase in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden 25,459 26,770

Increase in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax 20,848 11,967

Decrease in net provisions for certain team personnel transactions (1,551) (11,697)

Decrease in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax (8,881)

Inclusion of operating lease costs associated with the Knicks and the Rangers playing home games at The Garden 1,311

Other net decreases (30)

The decrease in team personnel compensation was primarily due to the recognition of player compensation expense during the prior year period that otherwise would have been recognized during the third and fourth quarters of fiscal year 2020 as a result of the NBA completing the 2019-20 season in October 2020.

Other net increases 3,860 4,501

$ 176,186 $ 144,978

The increases in team personnel compensation for the three and six months ended December 31, 2021 were primarily due to the delayed start of the 2020-21 NBA and NHL regular seasons in the prior year periods.

The increases in other team operating expenses not discussed elsewhere in this table for the three and six months ended December 31, 2021 were driven by fans being prohibited from attending events at The Garden due to government-mandated assembly restrictions and the delayed start of the 2020-21 NBA and NHL regular seasons in the prior year periods.

Net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax were as follows:

Three Months Ended Six Months Ended

December 31, December 31,

2021 2020 Increase 2021 2020 Increase

Net provisions for league revenue sharing expense (net of escrow) and NBA luxury tax $ 19,821 $ (1,027) $ 20,848 $ 21,277 $ 9,310 $ 11,967

The increases in net provisions for league revenue sharing expense (net of escrow) and NBA luxury tax for the three and six months ended December 31, 2021 were primarily due to higher provisions for league revenue sharing expense (net of escrow) of $25,111 and $16,232, respectively, as a result of impact of the COVID-19 pandemic in the prior year period partially offset by higher recoveries of NBA luxury tax.

In addition, the increase in league revenue sharing expense (net of escrow) for the six months ended December 31, 2021 was partially offset by adjustments to revenue sharing expense for the 2019-20 NBA and NHL seasons in the

prior year period.

Based on the completion of the 2019-20 NBA and NHL seasons during the three months ended September 30, 2020, the Company recognized a portion of revenue sharing expense (net of escrow) related to those seasons during that period that otherwise would have been recognized during the third and fourth quarters of fiscal year 2020.

The Knicks were not a luxury tax payer for the 2020-21 season and, therefore, received an equal share of the portion of luxury tax receipts that were distributed to non-tax paying teams.

The Knicks’ roster as of December 31, 2021 would not result in the team being a luxury tax payer for the 2021-22 season.

The actual amounts for the 2021-22 seasons may vary significantly from the recorded provisions based on actual operating results for each league and all teams within each league for the season and other factors.

Net provisions for certain team personnel transactions were as follows:

Three Months Ended

September 30,

2021 2020 Decrease

Three Months Ended Six Months Ended

December 31, December 31,

2021 2020 Increase (Decrease) 2021 2020 Increase (Decrease)

Waivers/contract terminations $ (69) $ 2,756 $ (2,825) $ 658 $ 11,129 $ (10,471)

Player trades — 83 (83) — 2,583 (2,583)

Season-ending player injuries 1,357 — 1,357 1,357 — 1,357

Net provisions for certain team personnel transactions $ 1,288 $ 2,839 $ (1,551) $ 2,015 $ 13,712 $ (11,697)

Net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax were as follows:

Three Months Ended

September 30,

2021 2020 Decrease

Net provisions for league revenue sharing expense (net of escrow) and NBA luxury tax $ 1,456 $ 10,337 $ (8,881)

The decrease in net provisions for league revenue sharing expense (net of escrow) and NBA luxury tax for the three months ended September 30, 2021 was primarily due to adjustments to revenue sharing expense for the 2019-20 NBA and NHL seasons in the prior year period.

This decrease is partially offset by adjustments to revenue sharing expense for the 2020-21 NBA and NHL seasons during the three months ended September 30, 2021.

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended September 30, 2021 increased $732, or 2%, to $43,728 as compared to the prior year period.

Selling, general and administrative expenses for the three months ended December 31, 2021 increased $10,691, or 22%, to $59,600 as compared to the prior year period.

Selling, general and administrative expenses for the six months ended December 31, 2021 increased $11,423, or 12%, to $103,328 as compared to the prior year period.

For the three and six months ended December 31, 2021 the increases were primarily due to higher (i) marketing costs, (ii) fees related to the Company’s sponsorship sales and service representation agreements with MSG Entertainment, and (iii) costs related to the Company’s TSA with MSG Entertainment.

Depreciation and amortization

Depreciation and amortization for the three months ended September 30, 2021 decreased $234, or 14%, to $1,426 as compared to the prior year period.

Operating loss

Operating loss for the three months ended September 30, 2021 increased $7,534, or 27%, to $34,938 as compared to the prior year period primarily due to a decrease in revenues, partially offset by lower direct operating expenses.

Depreciation and amortization for the three months ended December 31, 2021 decreased $392, or 24%, to $1,215 as compared to the prior year period.

Depreciation and amortization for the six months ended December 31, 2021 decreased $626, or 19%, to $2,641 as compared to the prior year period.

Operating income (loss)

Operating income of $35,919 improved $74,325 for the three months ended December 31, 2021 as compared to the prior year period.

For the six months ended December 31, 2021, operating income of $981 improved $66,791 as compared to the period year period.

For the three and six months ended December 31, 2021 the improvements to operating income were primarily due to increases in revenues, partially offset by higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses.

Interest expense, net

Net interest expense for the three months ended September 30, 2021 increased $1,064, or 53%, to $3,053 as compared to the prior year period primarily due to interest expense associated with the Knicks and the Rangers revolving credit facilities.

Net interest expense for the three months ended December 31, 2021 increased $1,055, or 42%, to $3,542 as compared to the prior year period.

Net interest expense for the six months ended December 31, 2021 increased $2,119, or 47%, to $6,595 as compared to the prior year period.

The increases in net interest expense for the three and six months ended December 31, 2021 were primarily due to interest expense associated with the Knicks and the Rangers revolving credit facilities.

During the second quarter of fiscal year 2021, the Company amended and restated the Knicks and the Rangers credit agreements and as a result incurred additional financing costs that are being amortized over the term of the revolving credit facilities.

In addition, during December 2021, the Company terminated the 2020 Knicks Holdings Revolving Credit Facility in its entirety resulting in acceleration of certain previously incurred financing costs.

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

Financial Statements” of this Quarterly Report on Form 10-Q for discussions of the Company’s income taxes.

Adjusted operating loss

Adjusted operating income (loss)

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

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

The following are the reconciliations of operating loss to adjusted operating loss for the three months ended September 30, 2021 as compared to the prior year period:

Three Months Ended

September 30, Change

The following are the reconciliations of operating income (loss) to adjusted operating income (loss) for the three and six months ended December 31, 2021 as compared to the prior year period:

Three Months Ended Six Months Ended

December 31, Change December 31, Change

2021 2020 $ % 2021 2020 $ %

Operating loss $ (34,938) $ (27,404) $ (7,534) (27) %

Operating income (loss) $ 35,919 $ (38,406) $ 74,325 NM $ 981 $ (65,810) $ 66,791 NM

Deferred rent 11,179 1,802 11,708 1,802

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Restructuring charges — — — 1,644

Adjusted operating loss $ (28,132) $ (17,755) $ (10,377) (58) %

Adjusted operating loss for the three months ended September 30, 2021 increased $10,377, or 58%, to $28,132 as compared to the prior year period primarily due to a decrease in revenues and, to a lesser extent, higher selling, general and administrative expenses, partially offset by lower direct operating expenses.

Adjusted operating income (loss) $ 55,667 $ (19,016) $ 74,683 NM $ 27,535 $ (36,771) $ 64,306 NM

For the three months ended December 31, 2021, adjusted operating income of $55,667 improved $74,683 as compared to the prior year period.

For the six months ended December 31, 2021, adjusted operating income of $27,535 improved $64,306 as compared to the prior year period.

For the three and six months ended December 31, 2021 the improvements were primarily due to increases in revenues partially offset by higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses.

Liquidity and Capital Resources

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

On November 6, 2020, the Company amended and extended the 2016 Knicks Credit Agreement and the 2017 Rangers Credit Agreement, and entered into the 2020 Knicks Holdings Credit Agreement (together with the 2020 Knicks Credit Agreement and the 2020 Rangers Credit Agreement, the “New Financing”), which provide for additional liquidity.

In addition, the NHL advanced the Company $30,000, which the league made available to each team following the completion of the NHL’s approximately $1,000,000 private placement in January 2021 (the “2021 Rangers NHL Advance Agreement”).

On December 14, 2021, the Company amended and extended the 2020 Knicks Credit Agreement and the 2020 Rangers Credit Agreement.

In addition, in March 2021, the NHL advanced the Company $30,000, which the league made

available to each team following the completion of the NHL’s approximately $1,000,000 private placement in January 2021, pursuant to the 2021 Rangers NHL Advance Agreement.

See Note 11 to the consolidated financial statements included in “Part I - Item 1.

Financial Statements” of this Quarterly Report on Form 10-Q for a discussion of the 2020 Knicks Credit Agreement, 2020 Knicks Holdings Credit Agreement, 2020 Rangers Credit Agreement and 2021 Rangers NHL Advance Agreement.

Financial Statements” of this Quarterly Report on Form 10-Q for a discussion of the 2021 Knicks Credit Agreement, 2021 Rangers Credit Agreement, and 2021 Rangers NHL Advance Agreement.

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

As of September 30, 2021, we had approximately $33,600 in Cash and cash equivalents.

In addition, as of September 30, 2021, the Company’s deferred revenue obligations were approximately $231,507, net of billed, but not yet collected deferred revenue.

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

As of December 31, 2021, we had approximately $54,800 in Cash and cash equivalents.

In addition, as of December 31, 2021, the Company’s deferred revenue obligations were approximately $167,438, net of billed, but not yet collected deferred revenue.

The current portion of this balance is primarily comprised of obligations in connection with tickets, suites and local media rights.

In addition, the Company's deferred revenue obligations included $30,000 from the NBA, which the league provided to each team following the completion of the NBA’s $900,000 private placement in December 2020.

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

We believe we have sufficient liquidity, including approximately $33,600 in Cash and cash equivalents as of September 30, 2021, along with $245,000 of additional available borrowing capacity under existing credit facilities, to fund our operations and satisfy any obligations, including with respect to the return or application of deferred revenue over the next 12 months.

We believe we have sufficient liquidity, including approximately $54,800 in Cash and cash equivalents as of December 31, 2021, along with $195,000 of additional available borrowing capacity under existing credit facilities, to fund our operations and satisfy any obligations, including with respect to the return or application of deferred revenue for the foreseeable future.

In addition, on February 2, 2022, the Company made a principal repayment of $25,000 under the 2021 Rangers Revolving Credit Facility using cash on hand.

Financing Agreements and Stock Repurchases

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Contractual Obligations

The Company did not have any material changes in its contractual obligations since the end of fiscal year 2021 other than activities in the ordinary course of business.

See Note 7 to the consolidated financial statements included in “Part I — Item 1.

Financial Statements” of this Quarterly Report on Form 10-Q for discussions of the Company’s contractual obligations related to future lease payments.

The Company did not have any material changes in its contractual obligations, including off-balance sheet commitments, since the end of fiscal year 2021 other than the lease commitments discussed in Note 7 and activities in the ordinary course of business.

Cash Flow Discussion

The following table summarizes the Company’s cash flow activities for the three months ended September 30, 2021 and 2020:

Three Months Ended September 30,

The following table summarizes the Company’s cash flow activities for the six months ended December 31, 2021 and 2020:

Six Months Ended December 31,

Net loss $ (1,687) $ (70,148)

Adjustments to reconcile net loss to net cash used in operating activities (14,455) 7,459

Adjustments to reconcile net loss to net cash provided by (used in) operating activities 12,053 25,461

10,366 (44,687)

Changes in working capital assets and liabilities 13,664 23,054

Net cash used in operating activities (19,310) (57,485)

Net cash provided by (used in) operating activities 24,030 (21,633)

Net cash used in investing activities (627) (141)

Net cash used in financing activities (12,142) (6,902)

Net cash (used in) provided by financing activities (39,879) 11,363

Net decrease in cash, cash equivalents and restricted cash $ (16,476) $ (10,411)

Operating Activities

Net cash used in operating activities for the three months ended September 30, 2021 decreased by $38,175 to $19,310 as compared to the prior year period primarily due to changes in working capital assets and liabilities driven by the COVID-19 pandemic in the prior year period.

The change was slightly offset by the increase in net loss adjusted for non-cash items.

Net cash provided by operating activities for the six months ended December 31, 2021 was $24,030 as compared to net cash used in operating activities in the prior year period of $21,633.

This was primarily due to the decrease in net loss adjusted for non-cash items slightly offset by changes in working capital assets and liabilities driven by the COVID-19 pandemic in the prior year period.

Investing Activities

Net cash used in investing activities for the three months ended September 30, 2021 increased by $226 to $306 as compared to the prior year period primarily due to other investing activities in the current year period and higher capital expenditures in current year period as compared to prior year period.

Net cash used in investing activities for the six months ended December 31, 2021 increased by $486 to $627 as compared to the prior year period primarily due to higher other investing activities and capital expenditures in the current year period as compared to prior year period.

Financing Activities

Net cash used in financing activities for the three months ended September 30, 2021 increased by $5,240 to $12,142 as compared to the prior year period primarily due to higher taxes paid in lieu of shares issued for equity-based compensation in the current year period as compared to the prior year period.

Net cash used in financing activities for the six months ended December 31, 2021 was $39,879 as compared to net cash provided by financing activities in the prior year period of $11,363.

This was due to additional borrowings in the prior year period under the amended and extended 2021 Knicks Credit Agreement and 2021 Rangers Credit Agreement (prior to the amendment and restatement thereof) as compared to no borrowings in the current year period and a partial repayment on the 2021 Rangers Credit Agreement in the current year period.

Seasonality of Our Business

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There have been no material changes to the Company’s critical accounting policies from those set forth in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021.

The carrying amount of goodwill as of September 30, 2021 is $226,955.

The carrying amount of goodwill as of December 31, 2021 is $226,955.

Goodwill is tested annually for impairment as of August 31 st and at any time upon the occurrence of certain events or changes in circumstances.

22 unchanged sentences

Identifiable indefinite-lived intangible assets are tested annually for impairment as of August 31 st and at any time upon the occurrence of certain events or substantive changes in circumstances.

The following table sets forth the amount of identifiable indefinite-lived intangible assets reported in the Company’s consolidated balance sheet as of September 30, 2021:

The following table sets forth the amount of identifiable indefinite-lived intangible assets reported in the Company’s consolidated balance sheet as of December 31, 2021:

Sports franchises $ 111,064

17 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis