What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-08-18 compared with 2021-08-19 · 347 added, 544 removed, 1489 unchanged (37% of the section changed)

57 unchanged sentences

(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.

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, 2021 filed on August 19, 2021).

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

9 unchanged sentences

Madison Square Garden Sports Corp.

(formerly, The Madison Square Garden Company) 2015 Cash Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-K for the fiscal year ended June 30, 2016 filed on August 19, 2016).

Madison Square Garden Sports Corp.

(formerly, The Madison Square Garden Company) 2015 Stock Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.6 to the Company’s Form 10-K for the fiscal year ended June 30, 2016 filed on August 19, 2016).

5 unchanged sentences

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

Form of Madison Square Garden Sports Corp.

(formerly, The Madison Square Garden Company) Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.10 to Amendment No.

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

Form of Madison Square Garden Sports Corp.

(formerly, The Madison Square Garden Company) Performance Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.11 to Amendment No.

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

Form of Madison Square Garden Sports Corp.

(formerly, The Madison Square Garden Company) Restricted Stock Units Agreement (2018) (incorporated by reference to Exhibit 10.12 to the Company’s Form 10-K for the fiscal year ended June 30, 2018 filed on August 17, 2018).

Form of Madison Square Garden Sports Corp.

(formerly, The Madison Square Garden Company) Performance Restricted Stock Units Agreement (2018) (incorporated by reference to Exhibit 10.13 to the Company’s Form 10-K for the fiscal year ended June 30, 2018 filed on August 17, 2018).

Madison Square Garden Sports Corp.

Executive Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 19, 2021).

Form of Madison Square Garden Sports Corp.

4 unchanged sentences

(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).

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

Dolan (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on March 31, 2020).

Employment Agreement dated as of November 17, 2021, between Madison Square Garden Sports Corp.

and Victoria M.

Mink (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 19, 2021).

Employment Agreement dated as of December 16, 2021, between Madison Square Garden Sports Corp.

and Andrew Lustgarten (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 21, 2021).

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

1 unchanged sentence

Employment Agreement dated as of December 27, 2021, between Madison Square Garden Sports Corp.

(formerly, The Madison Square Garden Company) and Victoria M.

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

Dolan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 30, 2021).

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

2 unchanged sentences

Employment Agreement dated as of March 17, 2022, between Madison Square Garden Sports Corp.

and Andrew Lustgarten (incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on March 31, 2020).

and Jamaal Lesane (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 filed on May 5, 2022).

Option Agreement, dated December 15, 2017, between Madison Square Garden Sports Corp.

2 unchanged sentences

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).

Amendment No.

2 to Amended and Restated Credit Agreement, dated as of December 14, 2021, 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 December 16, 2021).

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 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.

2 unchanged sentences

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).

Amendment No.

3 to Amended and Restated Credit Agreement, dated as of December 14, 2021, 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 10.2 to the Company’s Current Report on Form 8-K filed on December 16, 2021).

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).

14 unchanged sentences

(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 (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).

Policy Concerning Certain Matters Relating to Madison Square Garden Entertainment Corp.

and AMC Networks Inc., including Responsibilities of Overlapping Directors and Officers (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed on November 9, 2021).

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).

26 unchanged sentences

$ — $ — $ — $ — $ —

Deferred tax valuation allowance — — — — —

$ — $ — $ — $ — $ —

Year ended June 30, 2021

Allowance for doubtful accounts $ ( 180 ) $ 175 $ — $ 5 $ —

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

6 unchanged sentences

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

Year ended June 30, 2019

Allowance for doubtful accounts

_________________

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

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

_________________

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

8 unchanged sentences

/ s / VICTORIA M.

Executive Vice President and Chief Financial Officer and Treasurer

Executive Vice President, Chief Financial Officer and Treasurer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Andrew Lustgarten, Victoria M.

Mink and Lawrence J.

Burian, and each of them, as such person’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such person in such person’s name, place and stead, in any and all capacities, to sign this report, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Andrew Lustgarten, Victoria M.

Mink and Jamaal Lesane, and each of them, as such person’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such person in such person’s name, place and stead, in any and all capacities, to sign this report, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof.

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.

4 unchanged sentences

/ s / VICTORIA M.

Executive Vice President and

Executive Vice President,

Chief Financial Officer (Principal Financial Officer) and Treasurer August 18, 2022

9 unchanged sentences

Director August 18, 2022

/ s / KRISTIN A.

Director August 19, 2021

Name Title Date

3 unchanged sentences

DOLAN Director August 18, 2022

/ s / QUENTIN F.

Director August 18, 2022

DOLAN Director August 18, 2022

21 unchanged sentences

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (Deloitte & Touche LLP, New York, NY, Auditor Firm ID:

KPMG LLP, New York, NY, Auditor Firm ID:

Consolidated Balance Sheets as of June 30, 2022 and 2021

7 unchanged sentences

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

and subsidiaries (the "Company") as of June 30, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), cash flows, and equity and redeemable noncontrolling interests, for each of the two years in the period ended June 30, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2022, 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, 2022, 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 18, 2022 expressed an unqualified opinion on the Company's internal control over financial reporting.

1 unchanged sentence

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.

Our responsibility is to express an opinion on the Company's 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 audit in accordance with the standards of 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 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.

Our audits 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.

Our audits 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 audits provide a reasonable basis for our opinion.

Critical Audit Matter

3 unchanged sentences

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 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.

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

Each of these entities has been identified as a related party at June 30, 2022.

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 other 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.

16 unchanged sentences

/s/ Deloitte & Touche LLP

New York, New York

August 18, 2022

24 unchanged sentences

/s/ Deloitte & Touche LLP

New York, New York

August 18, 2022

3 unchanged sentences

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.

We have audited the accompanying consolidated statements of operations, comprehensive loss, cash flows, and equity and redeemable noncontrolling interests of Madison Square Garden Sports Corp.

and subsidiaries (the “Company”) for the year 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 results of operations of the Company and its cash flows for the year 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.

Our responsibility is to express an opinion on these consolidated 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.

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 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.

Our audit 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.

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

Our audit 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 audit provides a reasonable basis for our opinion.

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

New York, New York

30 unchanged sentences

Employee related costs 119,279 90,269

League-related accruals 75,269 39,276

Other accrued liabilities 6,796 16,442

42 unchanged sentences

Depreciation and amortization 5,042 5,574 17,540

Operating loss ( 78,443 ) ( 93,866 ) ( 58,195 )

Operating income (loss) 86,080 ( 78,443 ) ( 93,866 )

Other income (expense):

1 unchanged sentence

Interest expense ( 11,735 ) ( 10,561 ) ( 4,461 )

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

Miscellaneous expense, net ( 726 ) ( 346 ) ( 421 )

( 12,148 ) ( 10,875 ) ( 4,182 )

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

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

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

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

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

Income (loss) from continuing operations before income taxes 73,932 ( 89,318 ) ( 98,048 )

Income tax (expense) benefit ( 25,052 ) 73,421 ( 20,593 )

Income (loss) from continuing operations 48,880 ( 15,897 ) ( 118,641 )

Loss from discontinued operations, net of taxes — — ( 90,222 )

Net income (loss) 48,880 ( 15,897 ) ( 208,863 )

Net loss attributable to nonredeemable noncontrolling interests from continuing operations

3 unchanged sentences

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 $ 51,131 $ ( 13,954 ) $ ( 182,388 )

2 unchanged sentences

Discontinued operations

— ( 2.76 ) 2.40

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

3 unchanged sentences

Discontinued operations

— ( 2.76 ) 2.39

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

5 unchanged sentences

(a) Include revenues from related parties of $ 178,696 , $ 147,029 and $ 138,881 for the years ended June 30, 2022, 2021 and 2020, 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.

(b) Include net charges from related parties of $ 98,422 , $ 46,995 and $ 77 for the years ended June 30, 2022, 2021 and 2020, respectively.

(c) Include net charges from related parties of $ 67,776 , $ 55,059 and $ 3,380 for the years ended June 30, 2022, 2021 and 2020, respectively.

See accompanying notes to consolidated financial statements.

4 unchanged sentences

2022 2021 2020

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

Net income (loss) $ 48,880 $ ( 15,897 ) $ ( 208,863 )

Other comprehensive income (loss), before income taxes:

Pension plans and postretirement plan:

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

Benefit plans:

Net unamortized gains (losses) arising during the period $ 1,078 $ ( 38 ) $ ( 321 )

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

3 unchanged sentences

Other comprehensive income (loss), before income taxes 1,220 112 ( 4,128 )

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

Income tax expense related to items of other comprehensive income (loss) ( 379 ) — —

Other comprehensive income (loss), net of income taxes 841 112 ( 4,128 )

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

Comprehensive income (loss) 49,721 ( 15,785 ) ( 212,991 )

Comprehensive loss attributable to nonredeemable noncontrolling interests from continuing operations ( 2,251 ) ( 1,943 ) ( 2,342 )

9 unchanged sentences

Cash flows from operating activities:

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

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

Net income (loss) $ 48,880 $ ( 15,897 ) $ ( 208,863 )

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

Depreciation and amortization 5,042 5,574 93,362

1 unchanged sentence

Share-based compensation expense 24,245 30,437 56,996

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

Loss in equity method investments, net of income distributions — — 3,901

Provision for (benefit from) deferred income taxes 24,480 ( 73,664 ) ( 8,033 )

2 unchanged sentences

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

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

Other non-cash adjustments 1,833 1,084 469

19 unchanged sentences

Loan repayment received from subordinated debt — — 58,735

Cash received / (paid) for notes receivable — 750 ( 9,176 )

Cash received for notes receivable — — 750

Other investing activities ( 2,000 ) — —

Net cash used in investing activities ( 2,932 ) ( 466 ) ( 514,863 )

11 unchanged sentences

Distributions to noncontrolling interest holders — — ( 535 )

Loans from noncontrolling interest holders — — 606

Payment of contingent consideration — ( 200 ) ( 200 )

1 unchanged sentence

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

Proceeds from loan facility — — 40,000

Proceeds from revolving credit facility — — 15,000

Repayment of revolving credit facility ( 135,000 ) ( 25,000 ) ( 15,000 )

Repayment on long-term debt — — ( 5,000 )

Payments for extinguishment of debt — — ( 1,151 )

Payments for financing costs ( 2,836 ) ( 4,562 ) —

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

Net cash (used in) provided by financing activities ( 156,142 ) 17,155 ( 520,588 )

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

Net decrease in cash, cash equivalents and restricted cash ( 18,637 ) ( 1,027,228 ) ( 138,719 )

Net increase (decrease) in cash, cash equivalents and restricted cash 18,982 ( 18,637 ) ( 1,027,228 )

Cash, cash equivalents and restricted cash from continuing operations, beginning of period 72,036 90,673 25,836

9 unchanged sentences

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

Acquisition of assets not yet paid — — 500

See accompanying notes to consolidated financial statements.

13 unchanged sentences

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

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 )

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

Other comprehensive loss

Comprehensive income (loss) — — — — — 5,852 ( 7,245 ) ( 1,393 ) ( 7,299 )

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

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

Share-based compensation

3 unchanged sentences

Common stock issued under stock incentive plans

Distributions to noncontrolling interest holders

— ( 22,906 ) 22,906 — — — — — —

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

Noncontrolling interest non-cash acquisition

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

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

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 ) $ —

6 unchanged sentences

Capital Treasury

Stock Retained Earnings (Accumulated Deficit) Accumulated

Stock Accumulated Deficit Accumulated

Comprehensive

Loss Total Madison Square Garden Sports Corp.

Stockholders ’ Equity

Nonredeemable

Stockholders’ Equity Nonredeemable

Noncontrolling

Interests Total Equity 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 )

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

Other comprehensive loss

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

Other comprehensive income — — — — 112 112 — 112

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

5 unchanged sentences

— ( 1,418 ) 20,697 ( 18,471 ) — 808 — 808

Noncontrolling interest non-cash acquisition

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

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

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

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, 2021 $ 249 $ 23,102 $ ( 146,734 ) $ ( 78,898 ) $ ( 2,027 ) $ ( 204,308 ) $ 2,442 $ ( 201,866 )

14 unchanged sentences

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

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

Net income (loss) — — — 51,131 — 51,131 ( 2,251 ) 48,880

Other comprehensive income — — — — 841 841 — 841

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

Comprehensive income (loss) — — — — — 51,972 ( 2,251 ) 49,721

Share-based compensation — 24,245 — — — 24,245 — 24,245

11 unchanged sentences

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”).

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

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

12 unchanged sentences

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

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

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

Reclassifications

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.

The historical results of MSG Entertainment have been reflected in the accompanying statements of operations for the year ended June 30, 2020 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.

In addition, certain reclassifications have been made in order to conform to the current period’s presentation and relate to the separation of League-related accruals, which was previously reported in Other accrued liabilities in the consolidated balance sheet as of June 30, 2021.

Impact of COVID-19

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.

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.

During fiscal years 2020 and 2021, COVID-19 disruptions materially impacted the Company’s revenues and the Company recognized materially less revenues, or in some cases, no revenues, across a number of areas.

In fiscal year 2022, the Company’s operations and operating results were also impacted by temporary declines in attendance due to ongoing reduced tourism levels as well as an increase in COVID-19 cases during certain months of the fiscal year.

Fiscal Years 2020 and 2021

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

As a result of the suspension of the 2019-20 NBA and NHL seasons and subsequent resumption of play in July and August 2020, respectively, during the first quarter of fiscal year 2021, the Company recognized certain revenues that otherwise would have been recognized during the third and fourth quarters 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.

In addition, the start of the 2020-21 NBA and NHL regular seasons were delayed.

The Knicks and the Rangers did not start their seasons until December 16, 2020 and January 14, 2021, respectively, initially with no fans and then with fan attendance limited to 10% capacity starting on February 23 and February 26, respectively, due to government-mandated assembly restrictions.

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;

During the 2020-2021 season, the Knicks and the Rangers each played fewer games than their traditional 82-game regular season schedules, with the NBA playing a 72-game regular season schedule and the NHL playing a 56-game regular season schedule.

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

the Company’s share of suite licenses;

1 unchanged sentence

signage and in-venue advertising at The Garden;

local media rights fees;

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.

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

At the time of the MSGE Distribution, the Garden was not available for use due to the government-mandated suspension of events in response to COVID-19, and was only available at reduced capacity beginning in December 2020 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 paid 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.

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

These expense reductions did not fully offset revenue losses.

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.

Fiscal Year 2022

Starting August 17, 2021, indoor entertainment venues such as The Garden were permitted to host guests at full capacity, subject to certain restrictions, including vaccination and/or mask requirements for guests.

In March 2022, New York City lifted all COVID-19 vaccination requirements pertaining to guests and professional athletes at indoor entertainment venues such as The Garden.

There are no capacity restrictions or vaccination requirements applicable to fan attendance at games at The Garden as of the date of this filing.

The Knicks and the Rangers each completed their full 82-game regular season schedules for the 2021-22 season in April 2022 and the Rangers competed in the playoffs in May and June 2022, playing ten home playoff games in total.

Fan attendance during fiscal year 2022 was impacted by the COVID-19 pandemic, including the emergence of certain variants and ongoing reduced tourism levels.

It is unclear to what extent COVID-19 concerns, including with respect to new variants, could result in renewed governmental and league restrictions on attendance or otherwise impact attendance of games at The Garden.

Summary of Significant Accounting Policies

11 unchanged sentences

These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses.

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

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

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

6 unchanged sentences

Revenue Recognition

See Note 4 for details of accounting policies related to revenue recognition and other disclosures required under Accounting Standards Codification (“ASC”) Topic 606.

The Company adopted ASC Topic 606 on July 1, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption.

See Note 4 for details of accounting policies related to revenue recognition and other disclosures required under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers .

Direct Operating Expenses

6 unchanged sentences

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.

In instances where a player sustains what is deemed to be a season-ending or career-ending injury, a provision is recorded, when that determination can be reasonably made, for the remainder of the player’s seasonal or contractual salary and related costs, together with any associated NBA luxury tax, net of any anticipated insurance recoveries.

In instances where a player sustains what is deemed to be a season-ending or career-ending injury, a provision is recorded, when that determination can be reasonably made, for the remainder of the player’s seasonal or contractual salary and related costs, including any associated NBA luxury tax, net of any anticipated insurance recoveries.

When players are traded, waived or contracts are terminated, any remaining unamortized signing bonuses and prepaid salaries are expensed to current operations.

3 unchanged sentences

The NBA and NHL each have collective bargaining agreements (each a “CBA”) with the respective league’s players association, to which the Company is subject.

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).

The NBA CBA expires after the 2023-24 season (although the NBA and the National Basketball Players Association (“NBPA”) each have the right (which must be exercised by December 15, 2022) to terminate the CBA following the 2022-23 season.

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

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

MADISON SQUARE GARDEN SPORTS CORP.

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).

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).

32 unchanged sentences

(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

(b) then from payments by teams participating in the playoffs, with each team contributing 35% of its gate receipts for each home playoff game (although this provision was waived for the 2020-21 season);

and (c) the remainder from

MADISON SQUARE GARDEN SPORTS CORP.

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.

centrally-generated NHL sources.

The Rangers are consistently among the top ten revenue teams and, accordingly, have consistently contributed to the top ten revenue teams component of the plan.

The Company recognizes the amount of its estimated revenue sharing expense associated with the preseason and regular season, net of the amount the Company expects to receive from the escrow, on a straight-line basis over the applicable NBA and NHL seasons as a component of direct operating expenses.

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.

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

As of June 30, 2022 and 2021, the Company had net revenue sharing liabilities, recorded within League-related accruals, of $ 64,717 and $ 28,860 , respectively.

In addition, as of June 30, 2022, the Company had receivable balances related to escrow and player compensation recoveries of $ 12,464 and $ 6,782 , 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.

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.

League Assessments

6 unchanged sentences

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.

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

2 unchanged sentences

Total advertising costs classified in selling, general and administrative expenses were $ 4,840 , $ 2,291 and $ 3,064 for the years ended June 30, 2022, 2021 and 2020, respectively.

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

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

The Company’s provision for income taxes is based on current period income, changes in deferred tax assets and liabilities and changes in estimates with regard to uncertain tax positions.

11 unchanged sentences

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.

MADISON SQUARE GARDEN SPORTS CORP.

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.

2 unchanged sentences

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

Treasury interest rate which term is consistent with the expected term of the stock options.

Treasury interest rate where the term is consistent with the expected term of the stock options.

• The expected volatility is based on the historical volatility of the Company’s stock price.

6 unchanged sentences

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.

Earnings (Loss) Per Common Share

3 unchanged sentences

Holders of Class A Common Stock and Class B Common Stock are entitled to receive dividends equally on a per-share basis if and when such dividends are declared.

As the holders of Class A and Class B common stock are entitled to identical dividend and liquidation rights, the undistributed earnings are allocated on a proportionate basis to each class of common stock and the resulting basic and diluted net earnings (loss) per share attributable to common stockholders are, therefore, the same for both Class A and Class B common stock on both an individual and combined basis.

Cash and Cash Equivalents

4 unchanged sentences

Restricted Cash

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

The Company’s restricted cash includes cash deposited in escrow accounts and, prior to the December 2021 credit facility amendments described below, 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.

That escrow account will be distributed 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.

3 unchanged sentences

Accounts Receivable

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

Accounts receivable are 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.

The Company had no allowance for doubtful accounts as of June 30, 2022 and 2021.

Long-Lived and Indefinite-Lived Assets

39 unchanged sentences

The Company generally determines the fair value of a finite-lived intangible asset using an income approach, such as the discounted cash flow method.

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

“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.

Investments in Equity Securities

The Company has equity investments with and without readily determinable fair values.

The Company measures equity investments without readily determinable fair values at cost, less any impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer.

Changes in observable price are reflected within Miscellaneous income (expense), net in the accompanying consolidated statements of operations.

For equity investments with readily determinable fair values, changes in the fair value of those investments are measured at each reporting date and are recorded within Miscellaneous income (expense), net in the accompanying consolidated statements of operations.

The Company recognizes the value of the equity investments within Other assets in the accompanying consolidated balance sheets.

Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Contingent Consideration

The Company’s acquisition agreement for CLG included a contingent earn-out arrangement, which is based on the achievement of future operating targets.

The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates.

For each transaction, the Company estimates the fair value of contingent earn-out payments as part of the initial purchase price and records the estimated fair value of contingent consideration that the Company expects to pay to the former owners as a liability in “Other accrued liabilities” and “Other liabilities” on the consolidated balance sheets.

The Company measures its contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level III of the fair value hierarchy, which can result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent earn-out obligation.

Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings as operating expense.

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 Postretirement Benefit Plans

13 unchanged sentences

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments - Credit Losses .

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, Codification Improvements to Topic 326, Financial

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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.

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.

2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement as part of the FASB’s broader disclosure framework project.

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 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.

2018-14, Compensation-Retirement Benefits-Defined Benefit Plans - General (Subtopic 715-20):

Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans.

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

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.

2018-15, Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.

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, 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.”

In November 2018, the FASB issued ASU No.

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

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

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

The proportionate basis approach is consistent with the treatment of indirect interests held by a related party under common control when evaluating the primary beneficiary of a VIE.

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 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.

2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 - Financial Instruments.

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

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.

2019-08, Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606):

Codification Improvements - Share-Based Consideration Payable to a Customer.

This ASU requires that share-based payment awards issued to a customer in connection with a revenue arrangement be recorded as a reduction of the transaction price in revenue.

The amount recorded as a reduction of the transaction price is measured using the grant-date fair value of the award and is classified in accordance with ASC Topic 718.

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,

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO 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.

2020-01, Investments-Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815):

Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.

The amendments in this ASU clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method.

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

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 (“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.

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2019-12, Income Taxes (Topic 740):

1 unchanged sentence

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.

The Company adopted this standard as of the beginning of fiscal year 2022, and the adoption did not have a material impact on its consolidated financial statements.

Discontinued Operations

4 unchanged sentences

See Note 17 for additional information on the related party arrangements.

Prior to the MSGE Distribution, the Company’s results from discontinued operations reflect a number of inter-company arrangements that dictate the allocable amounts of shared revenue and operating expenses.

Prior to the MSGE Distribution, the Company’s results from discontinued

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

operations reflect a number of inter-company arrangements that dictate the allocable amounts of shared revenue and operating expenses.

The Company’s continuing revenues include event related revenues for ticket sales and a portion of shared suite license fees generated in connection with the games played at The Garden.

Pursuant to the Arena License Agreements, effective as of the MSGE Distribution Date, the Company’s aggregate share of the suite license fees is 67.5 %.

Thus, for the periods prior to the MSGE Distribution, the allocated percentage of suite license fees of 32.5 % is reported within results of discontinued operations.

Thus, for the period prior to the MSGE Distribution, the allocated percentage of suite license fees of 32.5 % is reported within results of discontinued operations.

In addition, the Company’s multi-year sponsorship agreements may include performance obligations of the Company’s continuing and discontinued operations (see Note 4).

3 unchanged sentences

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.

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.

1 unchanged sentence

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 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.

Various types of indirect corporate and administrative expenses that continue after the MSGE Distribution Date and are covered under the services agreement with MSG Entertainment, 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 periods after the completion of the MSGE Distribution, and the Company does not expect to incur such expenses in future periods.

Discontinued operations include all depreciation expense for MSG Entertainment’s venues and other operating assets.

Depreciation expense on certain corporate property and equipment that was transferred to MSG Entertainment in connection with the MSGE Distribution, remained in continuing operations as it did not qualify for discontinued operations reporting.

The table below sets forth, for the periods presented, operating results of discontinued operations.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below sets forth, for the fiscal year ended June 30, 2020, operating results of discontinued operations.

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

Years Ended June 30,

Year Ended June 30,

Revenues $ 669,096

3 unchanged sentences

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

Operating income (loss) ( 123,874 ) 44,321

Operating loss ( 123,874 )

Other income (expense):

Earnings (loss) in equity method investments ( 3,901 ) 7,062

Loss in equity method investments ( 3,901 )

Interest income 16,754

1 unchanged sentence

Miscellaneous expense, net ( 3,863 )

Income (loss) from discontinued operations before income taxes ( 118,454 ) 58,873

Income tax benefit (expense) 28,232 ( 13,968 )

Net income (loss) from discontinued operations ( 90,222 ) 44,905

Loss from discontinued operations before income taxes ( 118,454 )

Income tax benefit 28,232

Net loss from discontinued operations ( 90,222 )

Net loss attributable to redeemable noncontrolling interests ( 24,013 )

Net loss attributable to nonredeemable noncontrolling interests ( 120 )

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.

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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:

Years Ended June 30,

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

Net loss from discontinued operations attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 66,089 )

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

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

The table below sets forth, for the fiscal year ended June 30, 2020, significant selected financial information related to MSG Entertainment included in the accompanied consolidated statements of cash flows:

Year Ended June 30,

Non-cash items included in net loss:

Depreciation and amortization $ 75,822

6 unchanged sentences

Capital expenditures incurred but not yet paid 104,137

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

17 unchanged sentences

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

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

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.

9 unchanged sentences

When the Company concludes that it does not control the good or service before transfer to the customer but arranges for another entity to provide the good or service, the Company acts as an agent and records revenue on a net basis in the amount it earns for its agency service.

The Company’s revenue recognition policies that summarize the nature, amount, timing and uncertainty associated with each of the Company’s revenue sources are discussed further in discussion below.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s revenue recognition policies that summarize the nature, amount, timing and uncertainty associated with each of the Company’s revenue sources are discussed further below.

The Company’s professional sports teams derive event-related revenues principally from ticket sales which are recognized as the related games occur.

6 unchanged sentences

The Company accounts for the performance obligation under these types of arrangements as a series and, as a result, the related suite license fees for all years during the license term are aggregated and revenue is recognized proportionately over the license period as the Company satisfies the related performance obligation.

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.

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

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.

For the year ended 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.

Subsequent to the MSGE Distribution Date, pursuant to the Arena License Agreements, the Knicks and the Rangers receive 50 % of net profits from the sales of food and beverages during their games at The Garden.

Payment is received at the point of sale and sales tax collected from customers is excluded from revenue.

In addition to event-related revenue, MSG Sports maintains local media rights arrangements which provide for the licensing of team-related programming to MSG Networks.

4 unchanged sentences

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.

4 unchanged sentences

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.

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

The Company’s performance obligations with respect to this advertising are satisfied as the related benefits are delivered over the term of the respective agreements.

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.

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:

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table disaggregates the Company’s revenues by type of goods or services in accordance with the 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, 2022, 2021 and 2020:

Years Ended June 30,

8 unchanged sentences

_________________

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

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

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contract Balances

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

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

The following table provides information about contract balances from the Company’s contracts with customers as of June 30, 2022, 2021 and 2020.

20 unchanged sentences

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Transaction Price Allocated to the Remaining Performance Obligations

8 unchanged sentences

Thereafter 23,057

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Computation of Earnings (Loss) per Common Share

25 unchanged sentences

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

In addition, the Company accounts for the rights of use of The Garden pursuant to the Arena License Agreements as leases under the Accounting Standards Codification Topic 842, Leases.

In addition, the Company accounts for the rights of use of The Garden pursuant to the Arena License Agreements as leases under the ASC Topic 842, Leases .

The Company determines whether an arrangement contains a lease at the inception of the arrangement.

5 unchanged sentences

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.

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.

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

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.

5 unchanged sentences

On April 17, 2020, in connection with the MSGE Distribution, the Company entered into a sublease agreement with MSG Entertainment for the Company’s principal executive offices at Two Pennsylvania Plaza in New York.

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 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.

In November 2021, MSG Entertainment entered into a new lease for principal executive offices at Two Pennsylvania Plaza in New York (the “New MSGE Lease Agreement”).

In accordance with the terms of the Sublease Agreement and the New MSGE Lease Agreement, the lease term of the Sublease Agreement was extended until October 31, 2024.

The Company has accounted for this extension as a lease remeasurement and remeasured the right-of-use asset and operating lease liability utilizing the Company’s incremental borrowing rate as of the date of remeasurement.

As a result of the remeasurement, non-cash additions to the right-of-use asset and operating lease liability of $ 1,244 were recorded during the fiscal year ended June 30, 2022.

In accordance with the terms of the Sublease Agreement, the Company has committed to enter into a new sublease agreement with MSG Entertainment for a lease term equivalent to the New MSGE Lease Agreement term, which ends January 31, 2046.

In addition, in connection with the New MSGE Lease Agreement, the Company has entered into a commitment whereby if the New MSGE Lease Agreement were terminated under certain circumstances, the Company would be required to enter into a new lease for executive offices in Two Pennsylvania Plaza directly with the landlord, with a consistent lease term through January 31, 2046.

As the Company has not yet entered into a new sublease for or taken possession of the new executive office space at Two Pennsylvania Plaza, no additional right-of-use assets or operating lease liabilities have been recorded as of June 30, 2022 related to the commitments discussed above.

In addition, in connection with the MSGE Distribution we entered into long term leases with MSG Entertainment through June 30, 2055 and allow the Knicks and the Rangers 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.

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.

The contracted license fee for the first full contract year ended June 30, 2021 was approximately $ 22,500 for the Knicks and

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 .

At the time of the MSGE Distribution, the Garden was not available for use due to the government-mandated suspension of events in response to COVID-19.

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.

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.

6 unchanged sentences

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

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

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.

1 unchanged sentence

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 operating lease costs should be recorded by each team equally over the home game days as each takes place.

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.

As such, the Company concluded that the related straight-line operating lease costs should be recorded by each team equally over each team’s individual event days.

As of June 30, 2022, the Company’s existing operating leases, which are recorded in the accompanying consolidated financial statements, have remaining lease terms ranging from 2 months to 33 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

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

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, 2022 and 2021:

10 unchanged sentences

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.

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

The following table summarizes the activity recorded within the Company’s consolidated statement of operations for the years ended June 30, 2022, 2021, and 2020:

Years Ended June 30,

Line Item in the Company’s Consolidated Statement of Operations 2022 2021 2020

Operating lease cost Direct operating expenses $ 68,311 $ 35,801 $ 341

6 unchanged sentences

Supplemental Information

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.

For the years ended June 30, 2022 and 2021, cash paid for amounts included in the measurement of lease liabilities was $ 43,846 and $ 10,016 , respectively.

The weighted average remaining lease term for operating leases recorded on the accompanying consolidated balance sheet as of June 30, 2022 and 2021 was 32.7 years and 33.7 years, respectively.

26 unchanged sentences

$ 32,892 $ 35,716

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.

Depreciation and amortization expense on property and equipment for continuing operations was $ 3,982 , $ 4,515 and $ 13,979 for the years ended June 30, 2022, 2021 and 2020, respectively, which, prior to the MSGE Distribution, 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

7 unchanged sentences

During the first quarter of fiscal year 2022, 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” which would require the Company to assess the carrying value of its goodwill and intangible assets for impairment.

MADISON SQUARE GARDEN SPORTS CORP.

25 unchanged sentences

Time deposit I 56,082 5,000

Equity investments I 2,736 —

Total assets measured at fair value $ 84,836 $ 38,820

11 unchanged sentences

_________________

(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.

(a) The Company’s debt, current is classified within Level II of the fair value hierarchy as it is valued using quoted indices of similar securities for which the inputs are readily observable.

The fair value of the Company’s debt, current is the same as its carrying amount as the advance bears interest at a variable rate indexed to current market conditions.

3 unchanged sentences

See Note 13 for more information.

Contingent Consideration Liabilities

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.

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

Balance as of June 30, 2020 $ 336

Contingent consideration payment ( 200 )

Change in fair value of contingent consideration (a)

Balance as of June 30, 2021 $ —

_________________

(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

14 unchanged sentences

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

See Note 14 for further information on the Company’s 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, 2022.

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Legal Matters

5 unchanged sentences

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

On December 14, 2021, Knicks LLC entered into Amendment No.

2 to the 2020 Knicks Credit Agreement, which amended and restated the 2020 Knicks Credit Agreement (the “2021 Knicks Credit Agreement”).

The 2021 Knicks Credit Agreement provides for a senior secured revolving credit facility of up to $ 275,000 (the “2021 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 .

The maturity date of the 2021 Knicks Credit Agreement is December 14, 2026 .

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

All borrowings under the 2021 Knicks Revolving Credit Facility are subject to the satisfaction of certain customary conditions.

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.

Borrowings under the 2021 Knicks Credit Agreement bear interest at a floating rate, which at the option of Knicks LLC may be either (i) a base rate plus a margin ranging from 0.250 % to 0.500 % per annum or (ii) term Secured Overnight Financing Rate (“SOFR”) plus a credit spread adjustment of 0.100 % per annum plus a margin ranging from 1.250 % to 1.500 % per annum depending on the credit rating applicable to the NBA’s league-wide credit facility.

Knicks LLC is required to pay a commitment fee ranging from 0.250 % to 0.300 % per annum in respect of the average daily unused commitments under the 2021 Knicks Revolving Credit Facility.

The outstanding balance under the 2020 Knicks Revolving Credit Facility was $ 220,000 as of June 30, 2021 and was recorded as Long-term debt in the accompanying consolidated balance sheet.

The outstanding balance under the 2021 Knicks Revolving Credit Facility was $ 220,000 as of June 30, 2022, which was recorded as Long-term debt in the accompanying consolidated balance sheet.

The interest rate on the 2021 Knicks Revolving Credit Facility as of June 30, 2022 was 2.68 %.

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

During the year ended June 30, 2022 the Company made interest payments of $ 3,341 in respect of the 2021 Knicks Revolving Credit Facility (including in respect of obligations under the 2020 Knicks Credit Agreement prior to the amendment and restatement thereof).

All obligations under the 2021 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).

Subject to customary notice and minimum amount conditions, Knicks LLC may voluntarily prepay outstanding loans under the 2021 Knicks Revolving Credit Facility at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to SOFR-based loans).

Knicks LLC is required to make mandatory prepayments in certain circumstances, including without limitation if the maximum available amount under the 2021 Knicks Revolving Credit Facility is greater than 350 % of qualified revenues.

7 unchanged sentences

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.

The 2021 Knicks Revolving Credit Facility requires Knicks LLC to comply with a debt service ratio of at least 1.5 :1.0 over a trailing four quarter period.

As of June 30, 2022, 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 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

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.

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 credit agreement with a syndicate of lenders (the “2020 Knicks Holdings Credit Agreement”).

The 2020 Knicks Holdings Credit Agreement provided 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.

On December 14, 2021, the Company terminated the 2020 Knicks Holdings Revolving Credit Facility in its entirety.

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.

On January 25, 2017, New York Rangers, LLC (“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”).

On December 14, 2021, Rangers LLC entered into Amendment No.

3 to the 2020 Rangers Credit Agreement, which amended and restated the 2020 Rangers Credit Agreement (the “2021 Rangers Credit Agreement”).

The 2021 Rangers Credit Agreement provides for a senior secured revolving credit facility of up to $ 250,000 (the “2021 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.

The maturity date of the 2021 Rangers Credit Agreement is December 14, 2026 .

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

All borrowings under the 2021 Rangers Revolving Credit Facility are subject to the satisfaction of certain customary conditions.

Borrowings under the 2021 Rangers Revolving Credit Facility bear interest at a floating rate, which at the option of Rangers LLC may be either (i) a base rate plus a margin ranging from 0.500 % to 1.000 % per annum or (ii) term SOFR plus a credit spread adjustment of 0.100 % per annum plus a margin ranging from 1.500 % to 2.000 % per annum depending on the credit rating applicable to the NHL’s league-wide credit facility.

Rangers LLC is required to pay a commitment fee ranging from 0.375 % to 0.625 % per annum in respect of the average daily unused commitments under the 2021 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 .

During the year ended June 30, 2022, the Company made principal payments of $ 135,000 .

There was no borrowing under the 2021 Rangers Revolving Credit Facility as of June 30, 2022.

The interest rate on the 2021 Rangers Revolving Credit Facility as of June 30, 2022 was 2.63 %.

During the year ended June 30, 2021, the Company made interest payments of $ 3,075 .

During the year ended June 30, 2022 the Company made interest payments of $ 2,127 in respect of the 2021 Rangers Revolving Credit Facility (including in respect of obligations under the 2020 Rangers Credit Agreement prior to the amendment and restatement thereof).

All obligations under the 2021 Rangers Revolving Credit Facility are, subject to the 2021 Rangers NHL Advance Agreement (as defined below), secured by a first lien security interest in certain of Rangers LLC’s assets, including, but not limited to, (i) Rangers LLC’s membership rights in the NHL, (ii) revenues to be paid to Rangers LLC by the NHL pursuant to certain U.S.

and Canadian national broadcast agreements, and (iii) revenues to be paid to Rangers LLC pursuant to local media contracts.

Subject to customary notice and minimum amount conditions, Rangers LLC may voluntarily prepay outstanding loans under the 2020 Rangers Revolving Credit Facility at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to Eurocurrency loans).

Subject to customary notice and minimum amount conditions, Rangers LLC may voluntarily prepay outstanding loans under the 2021 Rangers Revolving Credit Facility at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to SOFR-based loans).

Rangers LLC is required to make mandatory prepayments in certain circumstances, including without limitation if qualified revenues are less than 17 % of the maximum available amount under the 2021 Rangers Revolving Credit Facility.

7 unchanged sentences

and (vi) taking certain actions that would invalidate the secured lenders’ liens on any of Rangers LLC’s assets securing the obligations under the 2021 Rangers Revolving Credit Facility.

The 2021 Rangers Revolving Credit Facility requires Rangers LLC to comply with a debt service ratio of at least 1.5 :1.0 over a trailing four quarter period.

As of June 30, 2022, Rangers LLC was in compliance with this financial covenant.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

5 unchanged sentences

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.

The outstanding balance under the 2021 Rangers NHL Advance Agreement was $ 30,000 as of June 30, 2022 and was recorded as Debt in the accompanying consolidated balance sheet.

During the year ended June 30, 2022 the Company made interest payments of $ 900 .

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 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 Company’s credit facilities 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 sheets:

Other current assets $ 1,145 $ 1,759

Other assets 3,954 2,345

(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.

(a) In connection with the 2021 Knicks Revolving Credit Facility and 2021 Rangers Revolving Credit Facility, the Company incurred $ 2,836 in deferred financing costs during the year ended June 30, 2022.

Benefit Plans

7 unchanged sentences

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”).

3 unchanged sentences

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

Under the Employee Matters Agreement, the MSGE Pension Plans and Postretirement Plan were transferred to MSG Entertainment.

Under the Employee Matters Agreement, the

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MSGE Pension Plans and Postretirement Plan were transferred to MSG Entertainment.

However, the Company has retained liabilities from the Excess Cash Balance Plan and Excess Plan that related to its current employees, former employees (other than employees transferred to MSG Entertainment in connection with the MSGE Distribution) and employees that are employed in a senior executive capacity by both the MSG Sports and MSG Entertainment.

Such liabilities were transferred to the MSG Sports, LLC Excess Cash Balance Plan (the “MSGS Excess Cash Balance Plan”) and MSG Sports, LLC Excess Retirement Plan (the “MSGS Excess Retirement Plan”), which the Company established in connection with the MSGE Distribution and are collectively referred to the “MSGS Pension Plans”.

The following table 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

June 30, June 30,

2021 2020 2021 2020

The following table summarizes the projected benefit obligations, assets, and the amounts recorded on the Company’s consolidated balance sheets as of June 30, 2022 and 2021, associated with the MSGS Pension Plans based upon actuarial valuations as of those measurement dates.

Change in benefit obligation:

Benefit obligation at beginning of period $ 9,600 $ 10,057

Service cost — 75 — 44

Interest cost 123 145

Actuarial loss 38 895 — 805

Actuarial loss (gain) ( 1,078 ) 38

Benefits paid ( 248 ) ( 312 )

Plan settlements paid ( 83 ) ( 328 )

Transfer due to the MSGE Distribution — ( 162,901 ) — ( 4,217 )

Benefit obligation at end of period $ 8,314 $ 9,600

Change in plan assets:

Fair value of plan assets at beginning of period — 132,965 — —

Actual return on plan assets — 10,017 — —

Employer contributions — 7,811 — —

Benefits paid — ( 5,315 ) — —

Plan settlements paid — ( 551 ) — —

Transfer due to the MSGE Distribution — ( 144,927 ) — —

Fair value of plan assets at end of period — — — —

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The actuarial gain of $ 1,078 , included in the change in benefit obligation for pension benefits in the year ended June 30, 2022, is primarily the result of increases in the discount rate and demographic experience as of June 30, 2022.

Amounts recognized in the consolidated balance sheets as of June 30, 2022 and 2021 consist of:

Current liabilities (included in accrued employee related costs) $ ( 3,309 ) $ ( 3,317 )

Non-current liabilities (included in defined benefit and other postretirement obligations) ( 6,283 ) ( 7,014 )

Non-current liabilities (included in Defined benefit obligations) ( 5,005 ) ( 6,283 )

$ ( 8,314 ) $ ( 9,600 )

1 unchanged sentence

Actuarial loss $ ( 807 ) $ ( 2,027 )

$ ( 2,027 ) $ ( 2,139 )

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2022, 2021 and 2020.

8 unchanged sentences

Recognized actuarial loss 133 103 930 — — 5

Amortization of unrecognized prior service credit — — — — — ( 7 )

Settlement loss recognized (a)

9 47 67 — — —

Other — — — — — ( 1,513 )

Net periodic benefit cost $ 265 $ 295 $ 1,117 $ — $ — $ 135

1 unchanged sentence

(a) For the years ended June 30, 2022, 2021 and 2020, lump-sum payments totaling $ 83 , $ 328 and $ 551 , 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.

Due to these pension settlements, the Company was required to remeasure its pension plan liability as of June 30, 2022, June 30, 2021, and March 31, 2020 for the years ended June 30, 2022, 2021 and 2020, respectively.

Discount rates used for the projected benefit obligation and interest cost were 1.89 % and 0.86 % as of June 30, 2022, respectively, 1.73 % and 0.91 % as of June 30, 2021, respectively, and 3.21 % and 2.55 % as of June 30, 2020, respectively.

6 unchanged sentences

Discontinued Operations — — 722 — — 135

Total net periodic benefit cost (credit) $ 295 $ 1,117 $ 4,186 $ — $ 135 $ ( 1,308 )

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total net periodic benefit cost $ 265 $ 295 $ 1,117 $ — $ — $ 135

Other pre-tax changes in plan assets and benefit obligations recognized in other comprehensive income (loss) for the years ended June 30, 2022, 2021 and 2020 are as follows:

3 unchanged sentences

Actuarial gain (loss), net $ 1,078 $ ( 38 ) $ ( 321 ) $ — $ — $ —

Recognized actuarial gain 103 930 1,281 — 5 5

Recognized prior service credit

— — — — — ( 7 )

Recognized actuarial loss 133 103 930 — — 5

Settlement loss recognized

6 unchanged sentences

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, 2022 and 2021 are as follows:

5 unchanged sentences

2022 2021 2020 2022 2021 2020

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 %

Discount rate - projected benefit obligation 2.35 % 2.35 % 3.58 % n/a n/a 3.18 %

Discount rate - service cost n/a n/a 3.78 % n/a n/a 3.45 %

Discount rate - interest cost 1.84 % 1.84 % 3.10 % n/a n/a 2.84 %

Expected long-term return on plan assets

n/a 5.52 % 3.72 % n/a n/a n/a

n/a n/a 5.52 % 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 %

n/a n/a n/a n/a n/a 6.75 %

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 %

n/a n/a n/a n/a n/a 5.00 %

Year that the rate reaches the ultimate trend rate

n/a n/a n/a n/a 2027 2027

n/a n/a n/a n/a n/a 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.

4 unchanged sentences

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.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Plan Assets and Investment Policy

9 unchanged sentences

Fiscal years ending June 30, 2028 – 2032 1,998

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Defined Contribution Pension Plans

9 unchanged sentences

Total Savings Plan Expenses $ 4,956 $ 2,310 $ 6,085

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.

For the year ended June 30, 2020, expenses related to the Union Savings Plan included in the accompanying consolidated statements of operations were $ 526 and have been classified in the consolidated statements of operations as discontinued operations.

Multiemployer Plans

5 unchanged sentences

• 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.

8 unchanged sentences

There are no other significant changes that affect such comparability.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PPA Zone Status FIP/RP Status Pending / Implemented MSG Sports

13 unchanged sentences

In addition, the Company contributed $ 278 , $ 3,526 and $ 2,559 for the years ended June 30, 2022, 2021 and 2020, respectively, to multiemployer plans that provide health and welfare benefits to retired employees.

Executive Deferred Compensation Plan

On November 16, 2021, the Company established the Madison Square Garden Sports Corp.

Executive Deferred Compensation Plan (the “Deferred Compensation Plan”) for the purpose of permitting a select group of highly-compensated employees to defer the employee’s annual base salary and bonus into the Deferred Compensation Plan with returns on such deferrals tracking the performance of certain investments.

Amounts deferred and invested by employees under the Deferred Compensation Plan are placed in an irrevocable trust established by the Company and all assets of the trust are subject to the creditors of the Company in the event of insolvency.

In accordance with ASC Topic 710, Compensation – General (“ASC Topic 710”), the assets of the trust are consolidated with the accounts of the Company and are recognized in the Company’s consolidated balance sheet.

In accordance with ASC Topic 710, the Company remeasures the deferred compensation liability, with a charge (or credit) to compensation cost in the Company’s consolidated statements of operations, to reflect changes in the fair value of the assets owed to the participants of the Deferred Compensation Plan.

The Company remeasures the fair value of the assets held in trust in accordance with ASC Topic 321, Investments – Equity Securities , and recognizes unrealized gains and losses in Miscellaneous income (expense), net in the Company’s consolidated statements of operations.

For the year ended June 30, 2022 the Company recorded compensation cost of $ 461 within Selling, general and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability.

In addition, for the year ended June 30, 2022, the Company recorded gains of $ 461 within Miscellaneous income (expense), net to reflect the remeasurement of the fair value of assets under the Deferred Compensation Plan.

Amounts recognized in the consolidated balance sheets as of June 30, 2022 related to the Deferred Compensation Plan consist of:

Non-current assets (included in other assets)

Current liabilities (included in accrued employee related costs)

Non-current liabilities (included in other employee related costs)

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Share-based Compensation

1 unchanged sentence

the 2015 Employee Stock Plan (the “Employee Stock Plan”) and the 2015 Stock Plan for Non-Employee Directors (the “Non-Employee Director Plan”).

Under the Employee Stock Plan, the Company is authorized to grant incentive stock options, non-qualified stock options, restricted shares, restricted stock units (“RSUs”), stock appreciation rights and other equity-based awards.

Under the Employee Stock Plan, the Company is authorized to grant incentive stock options, non-qualified stock options, restricted shares, restricted stock units (“RSUs”), performance RSUs (“PSUs”), stock appreciation rights and other equity-based awards.

The Company may grant awards for up to 2,650 shares of the Company’s Class A Common Stock (subject to certain adjustments).

1 unchanged sentence

The terms and conditions of awards granted under the Employee Stock Plan, including vesting and exercisability, are determined by the Compensation Committee of the Board of Directors (“Compensation Committee”) and may include terms or conditions based upon performance criteria.

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

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.

RSUs that were awarded under the Employee Stock Plan generally vest ratably over three years , with PSUs generally subject to three-year cliff vesting, subject to certain performance conditions.

RSUs and PSUs 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.

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.

4 unchanged sentences

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:

In connection with the MSGE Distribution, pursuant to the terms of the incentive plans and award agreements, (i) each holder of an RSU and 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:

one option to acquire MSG Entertainment Class A Common Stock and one option to acquire the Company’s Class A Common Stock.

7 unchanged sentences

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

Share-based compensation expense recorded during the years ended June 30, 2021, 2020 and 2019 was $ 30,437 , $ 48,693 and $ 49,113 , respectively.

Share-based compensation expense recorded during the years

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ended June 30, 2022, 2021 and 2020 was $ 24,245 , $ 30,437 and $ 48,693 , respectively.

There were no costs related to share-based compensation in continuing operations that were capitalized for the years ended June 30, 2022, 2021 and 2020.

1 unchanged sentence

The cost is expected to be recognized over a weighted-average period of approximately 1.9 years for unvested RSUs and PSUs.

Share-based compensation expense for discontinued operations during the years ended June 30, 2020 and 2019 was $ 8,303 and $ 10,361 , respectively.

Share-based compensation expense for discontinued operations during the year ended June 30, 2020 was $ 8,303 .

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.

1 unchanged sentence

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.

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

The Settlement became effective October 8, 2020 and therefore, upon cancellation, the Company recorded previously unrecognized share-based compensation expense of approximately $ 7,400 related to this award during the year ended June 30, 2021.

18 unchanged sentences

The weighted-average fair value per share at grant date of RSUs and PSUs granted during the years ended June 30, 2021 and 2020 was $ 162.81 and $ 243.55 , respectively.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Options Award Activity

11 unchanged sentences

See above for a discussion of the treatment of options in connection with the MSGE Distribution.

During the year ended June 30, 2019, the Company granted 449 stock options that consisted of market priced stock options and premium priced stock options.

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-

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 4.98 years 5.10 years 5.29 years

Expected volatility 22.11 % 22.11 % 22.11 %

Risk-free interest rate 3.02 % 3.11 % 3.11 %

The expected terms of the premium priced options were estimated using the simplified method but takes into account that the options are out-of-the-money at grant date and therefore likely to be exercised later.

The risk-free interest rate for the premium priced options was determined using a 7.50 year rate, different from the 4.98 year rate used to determine the market priced stock options.

Stock Repurchase Program

13 unchanged sentences

Current Related Party Arrangements

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

The Company is party to the following agreements and/or arrangements with MSG Entertainment (including its subsidiary MSG Networks):

• 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;

5 unchanged sentences

• 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;

• Services Agreement (the “Services Agreement”) pursuant to which the Company (i) 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 and (ii) provides certain services to MSGE Entertainment, such as certain communications, legal (including certain services the Company provided to MSG Networks prior to the MSGE-MSGN Merger) and ticketing services, in exchange for service fees;

• Sublease agreement, pursuant to which the Company leases office space from MSG Entertainment;

5 unchanged sentences

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.

(i) the Company’s Executive Chairman with MSG Entertainment;

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

The Company also previously shared such costs for the Company’s President and Chief Executive Officer with MSG Entertainment through March 31, 2022.

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

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, a former director of the Company and spouse of James L.

Dolan, the Company’s Executive Chairman and a director, is the founder and Chief Executive Officer of 605, LLC.

5 unchanged sentences

However, the amounts associated with such arrangements are reflected in the Company’s results of operations for the periods prior to the MSGE Distribution.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company had various agreements with MSG Networks, including an advertising sales representation agreement and a services agreement (the “Prior MSGN Services Agreement”).

2 unchanged sentences

Effective as of the MSGE Distribution, this agreement was between MSG Entertainment and MSG Networks.

The Company separately entered into the MSGN Services Agreement.

The Company separately entered into the Services Agreement with MSG Networks.

See “— Current Related Party Arrangements.”

The Company shared certain executive support costs, including office space, executive assistants, security and transportation costs, for (i) the Company’s Executive Chairman with MSG Networks and (ii) the Company’s Vice Chairman with MSG Networks and AMC Networks.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Networks and AMC Networks.

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

1 unchanged sentence

See “— Current Related Party Arrangements.”

Prior to September 2018, the Company had an arrangement with the Dolan Family Office, LLC (“DFO”), an entity owned and controlled by Charles F.

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 prior to the MSGE-MSGN Merger, and a director of AMC Networks), Charles F.

Dolan (the father of James L.

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.

12 unchanged sentences

Dolan and Kristin A.

Dolan, his spouse and a director of the Company, and (ii) Charles F.

Dolan, his spouse and a former director of the Company, and (ii) Charles F.

Dolan and Sterling Aviation, LLC, a company controlled by Charles F.

Dolan (collectively, “CFD”), pursuant to which the Company has agreed from time to time to make its aircraft available to each of Q2C and CFD, and Q2C and CFD have agreed from time to time to make their aircraft available to the Company.

Pursuant to the terms of the agreements, Q2C and/or CFD may lease on a non-exclusive, “time sharing” basis, the Company’s Gulfstream Aerospace G550 aircraft (the “G550 Aircraft”).

Dolan (collectively, “CFD”), pursuant to which the Company had agreed from time to time to make its aircraft available to each of Q2C and CFD, and Q2C and CFD have agreed from time to time to make their aircraft available to the Company.

Pursuant to the terms of the agreements, Q2C and/or CFD could lease on a non-exclusive, “time sharing” basis, the Company’s Gulfstream Aerospace G550 aircraft (the “G550 Aircraft”).

On December 17, 2018, in connection with the purchase of a new aircraft (as noted above), the Company replaced the dry lease agreement with CFD with a new dry lease agreement with Sterling2k LLC, an entity owned and controlled by Deborah Dolan-Sweeney, the daughter of CFD and the sister of James L.

Dolan, which provides for the Company’s usage of the new aircraft on the same terms as the prior agreement.

Dolan, which provided for the Company’s usage of the new aircraft on the same terms as the prior agreement.

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

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

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

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

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

10 unchanged sentences

Operating expenses (credits):

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 —

Corporate general and administrative expenses, net 41,080 38,491 1,154

Costs associated with the Sponsorship sales and service representation agreements

2 unchanged sentences

Other operating expenses (credits), net 1,288 573 ( 337 )

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.

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.

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

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 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.

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

Corporate general and administrative expenses, net

Corporate general and administrative expenses, net reflects net charges of $ 38,102 , $ 36,730 , and $ 8,916 from MSG Entertainment pursuant to the Services Agreement for certain business functions that were previously performed by internal resources for the years ended June 30, 2022, 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.

In addition, Corporate general and administrative expenses, net reflects rent expense of $ 2,978 , $ 2,636 , and $ 593 , associated with the lease of office space from MSG Entertainment for years ended June 30, 2022, 2021, and 2020, respectively.

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

Corporate general and administrative expenses, net also reflects charges of $ 875 and $ 8,474 from the Company to MSG Networks for the period prior to the MSGE-MSGN Merger pursuant to a services agreement between the Company and MSG Networks for the years ended June 30, 2021 and 2020, respectively.

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.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

For the years ended June 30, 2022 and 2021, costs associated with the Arena License Agreements include $ 67,620 and $ 36,629 , respectively, recorded as operating lease cost.

See Note 8 for more information regarding Arena License Agreements.

4 unchanged sentences

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.

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 2021-22 and 2020-21 seasons.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Discontinued operations

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.

For the year ended June 30, 2020, related party transactions included in 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 , (ii) operating expenses charged by related parties of $ 897 , and (iii) equity in loss of equity-method investments of $ 3,739 .

Income tax expense (benefit) attributable to continuing operations is comprised of the following components:

10 unchanged sentences

Income tax expense (benefit) $ 25,052 $ ( 73,421 ) $ 20,593

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The income tax expense (benefit) attributable to continuing operations differs from the amount derived by applying the statutory federal rate to pre-tax income principally due to the effect of the following items:

1 unchanged sentence

2022 2021 2020

Federal tax benefit at statutory federal rate $ ( 18,757 ) $ ( 20,590 ) $ ( 12,734 )

Federal tax expense (benefit) at statutory federal rate $ 15,525 $ ( 18,757 ) $ ( 20,590 )

State income taxes, net of federal benefit 8,763 ( 7,331 ) ( 7,332 )

1 unchanged sentence

( 3,191 ) ( 896 ) 391

Nondeductible disability insurance premiums expense

392 1,027 482

Federal tax credits — — ( 1,480 )

1 unchanged sentence

Tax effect of indefinite-lived intangible amortization — — 204

Return to provision ( 2,476 ) — —

Change in valuation allowance — ( 52,108 ) 46,310

Nondeductible officers’ compensation 5,156 4,081 4,287

Nondeductible expenses 862 762 596

Nondeductible disability insurance premiums expense

964 392 1,027

Other nondeductible expenses 379 862 762

Excess tax benefit related to shared based-payments awards ( 678 ) ( 72 ) ( 3,478 )

1 unchanged sentence

Income tax expense (benefit) $ 25,052 $ ( 73,421 ) $ 20,593

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, 2022 and 2021 are as follows:

14 unchanged sentences

Prepaid expenses ( 9,746 ) ( 7,767 )

Investments — ( 4,937 )

Other — ( 447 )

Total deferred tax liabilities $ ( 107,399 ) $ ( 110,889 )

Net deferred tax asset (liability) $ 15,943 $ ( 57,721 )

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net deferred tax (liability) asset $ ( 8,917 ) $ 15,943

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.

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.

As of June 30, 2022, the Company determined there is sufficient positive evidence to conclude that it is more likely than not that its deferred income tax assets are realizable.

The Company will continue to assess the realizability of its deferred tax assets on a quarterly basis.

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 NOL as of June 30, 2022 was approximately $ 23,000 and will primarily expire in 2036 and 2038.

The Company does no t have any uncertain tax positions as of June 30, 2022 and 2021.

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 is the responsibility of the Company.

MSG Entertainment will not reimburse the Company for such taxes.

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

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

Therefore, both the deferred tax asset and valuation allowance were reduced by $ 68,000 with no residual tax expense.

In addition, during the quarter ended June 30, 2020 the Company recorded a valuation allowance increase of $ 46,310 that is included in tax expense attributable to continuing operations, which partially offsets the decrease recorded in discontinued operations.

As of June 30, 2019, the valuation allowance attributable to continuing operations equals the amount of historical valuation allowance in excess of the amount required for discontinued operations.

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.

1 unchanged sentence

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.

The Company was notified during the third quarter of fiscal year 2018 that the Internal Revenue Service (“IRS”) was commencing an audit of the federal income tax return for the year ended June 30, 2016.

In October 2019, the Company was informed by the IRS that the audit resulted in no changes.

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

The Company does not expect the examination, when finalized, to result in material changes.

The Company was notified in April 2020 and in February 2022 that the City of New York was commencing an audit of the local income tax returns for the fiscal years ended June 30, 2016 and 2017 and for fiscal years ended June 30, 2018 and 2019, respectively.

The Company does not expect the examinations, when finalized, to result in material changes.

The federal and state statute of limitations are currently open for tax returns for years starting with 2019 and 2016, respectively.

6 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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:

The following individual non-related parties 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 % 35 %

1 unchanged sentence

Entity C — % 16 %

The following individual non-affiliated entities accounted for the following percentages of the Company’s consolidated revenue balances:

The following individual non-related parties accounted for the following percentages of the Company’s consolidated revenue balances:

Years Ended June 30,

2022 2021 2020

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).

Entity B 14 % 32 % 13 %

Entity A 3 % 12 % 1 %

Revenues from MSG Networks amounted to $ 163,037 , $ 145,098 and $ 138,173 for the years ended June 30, 2022, 2021 and 2020, which represented 20 %, 35 % and 23 %, respectively, of the Company’s consolidated revenues (see Note 17).

As of June 30, 2022, approximately 105 full-time and part-time employees, which represent approximately 12 % 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.

There are no union employees subject to CBAs that expired as of June 30, 2022 and there are no union employees subject to CBAs that will expire by June 30, 2023.

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