What changed in this filing

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Item 1. Financial Statements

2022-10-27 compared with 2022-05-05 · 167 added, 286 removed, 496 unchanged (48% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

September 30,

2022 June 30,

1 unchanged sentence

Cash and cash equivalents $ 81,036 $ 91,018

Restricted cash 979 7,134

Accounts receivable, net of allowance for doubtful accounts of $ 0 and $ 0 as of March 31, 2022 and June 30, 2021, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 0 and $ 0 as of September 30, 2022 and June 30, 2022, respectively

37,267 47,240

3 unchanged sentences

Total current assets 220,002 205,269

Property and equipment, net of accumulated depreciation and amortization of $ 45,869 and $ 42,673 as of March 31, 2022 and June 30, 2021, respectively

Property and equipment, net of accumulated depreciation and amortization of $ 47,710 and $ 46,794 as of September 30, 2022 and June 30, 2022, respectively

32,165 32,892

10 unchanged sentences

(in thousands, except per share data)

September 30,

2022 June 30,

23 unchanged sentences

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

19,697 and 19,587 shares outstanding as of March 31, 2022 and June 30, 2021, respectively

19,803 and 19,697 shares outstanding as of September 30, 2022 and June 30, 2022, respectively

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

4,530 shares outstanding as of March 31, 2022 and June 30, 2021

4,530 shares outstanding as of September 30, 2022 and June 30, 2022

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

none outstanding as of March 31, 2022 and June 30, 2021

none outstanding as of September 30, 2022 and June 30, 2022

Additional paid-in capital — 17,573

Treasury stock, at cost, 751 and 861 shares as of March 31, 2022 and June 30, 2021, respectively

Treasury stock, at cost, 645 and 751 shares as of September 30, 2022 and June 30, 2022, respectively

( 109,981 ) ( 128,026 )

10 unchanged sentences

(in thousands, except per share data)

Three Months Ended Nine Months Ended

March 31, March 31,

2022 2021 2022 2021

Three Months Ended

September 30,

$ 24,089 $ 18,794

1 unchanged sentence

Direct operating expenses (b)

206,273 126,510 407,698 182,957

Selling, general and administrative expenses (c)

1 unchanged sentence

Depreciation and amortization 1,025 1,426

Operating income (loss) 61,393 8,124 62,374 ( 57,686 )

Operating loss ( 35,898 ) ( 34,938 )

Other income (expense):

3 unchanged sentences

( 3,122 ) ( 3,116 )

Income (loss) from operations before income taxes 58,912 5,148 53,171 ( 65,328 )

Income tax (expense) benefit ( 34,993 ) ( 53 ) ( 30,939 ) 275

Net income (loss) 23,919 5,095 22,232 ( 65,053 )

Loss from operations before income taxes ( 39,020 ) ( 38,054 )

Income tax benefit 20,493 21,169

Net loss ( 18,527 ) ( 16,885 )

Net loss attributable to nonredeemable noncontrolling interests ( 707 ) ( 480 )

Net income (loss) attributable to Madison Square Garden Sports Corp.’s stockholders $ 24,503 $ 5,468 $ 23,943 $ ( 63,574 )

Basic earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 1.01 $ 0.23 $ 0.99 $ ( 2.64 )

Diluted earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 1.00 $ 0.22 $ 0.98 $ ( 2.64 )

Net loss attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 17,820 ) $ ( 16,405 )

Basic loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.73 ) $ ( 0.68 )

Diluted loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.73 ) $ ( 0.68 )

Weighted-average number of common shares outstanding:

2 unchanged sentences

_________________

(a) Includes revenues from related parties of $ 75,851 and $ 80,322 for the three months ended March 31, 2022 and 2021, respectively, and $ 153,229 and $ 103,752 for the nine months ended March 31, 2022 and 2021, respectively.

(b) Includes net charges from related parties of $ 40,796 and $ 24,855 for the three months ended March 31, 2022 and 2021, respectively, and $ 80,828 and $ 28,119 for the nine months ended March 31, 2022 and 2021, respectively.

(c) Includes net charges from related parties of $ 20,493 and $ 14,957 for the three months ended March 31, 2022 and 2021, respectively, and $ 51,620 and $ 39,214 for the nine months ended March 31, 2022 and 2021, respectively.

(a) Includes revenues from related parties of $ 8,174 and $ 7,247 for the three months ended September 30, 2022 and 2021, respectively.

(b) Includes net charges from related parties of $ 2,184 and $ 2,158 for the three months ended September 30, 2022 and 2021, respectively.

(c) Includes net charges from related parties of $ 13,308 and $ 12,247 for the three months ended September 30, 2022 and 2021, respectively.

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended Nine Months Ended

March 31, March 31,

2022 2021 2022 2021

Net income (loss) $ 23,919 $ 5,095 $ 22,232 $ ( 65,053 )

Three Months Ended

September 30,

Net loss $ ( 18,527 ) $ ( 16,885 )

Other comprehensive income, before income taxes:

5 unchanged sentences

Other comprehensive income, net of income taxes 3 22

Comprehensive income (loss) 23,942 5,152 22,299 ( 64,976 )

Comprehensive loss ( 18,524 ) ( 16,863 )

Comprehensive loss attributable to nonredeemable noncontrolling interests ( 707 ) ( 480 )

Comprehensive income (loss) attributable to Madison Square Garden Sports Corp.’s stockholders $ 24,526 $ 5,525 $ 24,010 $ ( 63,497 )

Comprehensive loss attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 17,817 ) $ ( 16,383 )

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended

Three Months Ended

September 30,

Cash flows from operating activities:

Net income (loss) $ 22,232 $ ( 65,053 )

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

Net loss $ ( 18,527 ) $ ( 16,885 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 1,025 1,426

Provision for (benefit from) deferred income taxes 30,939 ( 275 )

Benefits from deferred income taxes ( 20,525 ) ( 21,169 )

Share-based compensation expense 7,220 4,851

Recovery of doubtful accounts — ( 175 )

Other non-cash adjustments 286 437

15 unchanged sentences

Taxes paid in lieu of shares issued for equity-based compensation ( 10,996 ) ( 12,142 )

Proceeds from share issuance — 808

Proceeds from revolving credit facilities — 30,000

Proceeds from NHL advance — 30,000

Repayment of revolving credit facility ( 70,000 ) —

Payment of contingent consideration — ( 200 )

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

Net cash (used in) provided by financing activities ( 84,978 ) 42,155

Net cash used in financing activities ( 10,996 ) ( 12,142 )

Net decrease in cash, cash equivalents and restricted cash ( 9,982 ) ( 31,758 )

7 unchanged sentences

(in thousands)

Three Months Ended March 31, 2022

Issued Additional

Capital Treasury

Stock Accumulated Deficit Accumulated

Comprehensive

Loss Total Madison Square Garden Sports Corp.

Stockholders ’ Equity

Noncontrolling

Interests Total Equity

Balance as of December 31, 2021 $ 249 $ 6,460 $ ( 129,426 ) $ ( 87,390 ) $ ( 1,983 ) $ ( 212,090 ) $ 2,480 $ ( 209,610 )

Net income (loss) — — — 24,503 — 24,503 ( 584 ) 23,919

Other comprehensive income — — — — 23 23 — 23

Comprehensive income (loss) — — — — — 24,526 ( 584 ) 23,942

Share-based compensation

— 6,973 — — — 6,973 — 6,973

Common stock issued under stock incentive plans

— ( 571 ) 1,400 — — 829 — 829

Balance as of March 31, 2022 $ 249 $ 12,862 $ ( 128,026 ) $ ( 62,887 ) $ ( 1,960 ) $ ( 179,762 ) $ 1,896 $ ( 177,866 )

See accompanying notes to consolidated financial statements.

MADISON SQUARE GARDEN SPORTS CORP.

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(in thousands)

Three Months Ended March 31, 2021

Common Stock Issued Additional

Capital Treasury

Stock Accumulated Deficit Accumulated

Comprehensive Loss Total Madison Square Garden Sports Corp.

Stockholders ’ Equity

Noncontrolling

Interests Total Equity

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

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

Other comprehensive income — — — — 57 57 — 57

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

Share-based compensation

— 3,867 — — — 3,867 — 3,867

Common stock issued under stock incentive plans

— ( 43 ) 851 — — 808 — 808

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

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

See accompanying notes to consolidated financial statements.

MADISON SQUARE GARDEN SPORTS CORP.

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(in thousands)

Nine Months Ended March 31, 2022

Three Months Ended September 30, 2022

Issued Additional

7 unchanged sentences

Balance as of June 30, 2022 $ 249 $ 17,573 $ ( 128,026 ) $ ( 35,699 ) $ ( 1,186 ) $ ( 147,089 ) $ 1,712 $ ( 145,377 )

Net income (loss) — — — 23,943 — 23,943 ( 1,711 ) 22,232

Net loss — — — ( 17,820 ) — ( 17,820 ) ( 707 ) ( 18,527 )

Other comprehensive income — — — — 3 3 — 3

Comprehensive income (loss) — — — — — 24,010 ( 1,711 ) 22,299

Comprehensive loss — — — — — ( 17,817 ) ( 707 ) ( 18,524 )

Share-based compensation

5 unchanged sentences

Adjustments to noncontrolling interests — ( 447 ) — — — ( 447 ) 447 —

Balance as of March 31, 2022 $ 249 $ 12,862 $ ( 128,026 ) $ ( 62,887 ) $ ( 1,960 ) $ ( 179,762 ) $ 1,896 $ ( 177,866 )

Balance as of September 30, 2022 $ 249 $ — $ ( 109,981 ) $ ( 62,447 ) $ ( 1,183 ) $ ( 173,362 ) $ 1,452 $ ( 171,910 )

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended March 31, 2021

Three Months Ended September 30, 2021

Common Stock Issued Additional

16 unchanged sentences

Adjustments to noncontrolling interests — ( 271 ) — — — ( 271 ) 271 —

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

Balance as of September 30, 2021 $ 249 $ — $ ( 129,426 ) $ ( 103,235 ) $ ( 2,005 ) $ ( 234,417 ) $ 2,233 $ ( 232,184 )

See accompanying notes to consolidated financial statements.

7 unchanged sentences

Both the Knicks and the Rangers play their home games in Madison Square Garden Arena (“The Garden”).

The Company’s other professional sports 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 sports 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

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

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

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

Basis of Presentation

5 unchanged sentences

The dependence of MSG Sports on revenues from its NBA and NHL sports teams generally means it earns a disproportionate share of its revenues in the second and third quarters of the Company’s fiscal year.

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

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

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

Reclassifications

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.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Impact of COVID-19

COVID-19 disruptions have materially impacted the Company’s operations and operating results, with the Company recognizing materially less revenues, or in some cases no revenues, across a number of areas during fiscal years 2020 and 2021.

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

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.

In addition, the start of the 2020-21 NBA and NHL regular seasons were delayed, and the Knicks and the Rangers played fewer games, 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.

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

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

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

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

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

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

the Company’s share of suite licenses;

sponsorships;

signage and in-venue advertising at The Garden;

local media rights fees;

and food, beverage and merchandise sales.

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

The Garden was not available for use between April 17, 2020 (the date of the MSGE Distribution) and the start of the NBA and NHL 2020-21 seasons in December 2020 and January 2021, respectively, due to the government-mandated suspension of events in response to COVID-19, and was available at reduced capacity through May 2021.

As a result, the Company was not required to pay license fees to MSG Entertainment under the Arena License Agreements until games resumed at The Garden, and the Company 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, in addition to the reduced payments to MSG Entertainment under the Arena License Agreements described above, (i) NBA league assessments and day-of-game expenses for Knicks and Rangers games, and (ii) league revenue sharing, net of escrow and team personnel expense.

These expense reductions did not fully offset revenue losses.

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

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

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

Effective March 7, 2022, New York City lifted all COVID-19 vaccination requirements pertaining to guests in attendance at indoor entertainment venues, followed by a lifting of vaccination requirements applicable to professional athletes competing in such venues effective March 24, 2022.

Also, in April 2022, New York State terminated the last of its mandatory COVID-19 rules for indoor venues.

As a result, 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 are currently competing in the playoffs.

Fan attendance during the regular season was impacted by the COVID-19 pandemic including the emergence of certain variants and ongoing reduced tourism levels.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

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

A pandemic such as 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.

Impact of COVID-19 on our Business

During fiscal years 2020 and 2021, COVID-19 disruptions and actions taken in response by governmental authorities and the leagues 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.

See Note 1, Description of Business and Basis of Presentation, to the Company’s audited consolidated financial statements and notes thereto for the year ended June 30, 2022 included in the Company’s Annual Report on Form 10-K for more information regarding the impact of the COVID-19 pandemic on our business during fiscal years 2020, 2021 and 2022.

It is unclear to what extent COVID-19, including new variants, could result in renewed governmental and league restrictions on attendance or otherwise impact the Company’s operations and operating results.

Accounting Policies

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

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

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

5 unchanged sentences

Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the Company’s financial statements in future periods.

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

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

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

This ASU eliminates certain exceptions to the general approach in Accounting Standards Codification (“ASC”) Topic 740 and includes methods of simplification to the existing guidance.

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.

MADISON SQUARE GARDEN SPORTS CORP.

3 unchanged sentences

All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers.

For the three and nine months ended March 31, 2022 and 2021, the Company did not have any material impairment losses on receivables or contract assets arising from contracts with customers.

For the three months ended September 30, 2022 and 2021, the Company did not have any material impairment losses on receivables or contract assets arising from contracts with customers.

Disaggregation of Revenue

The following table disaggregates the Company’s revenues by type of goods or services in accordance with the required entity-wide disclosure requirements set forth in ASC Subtopic 280-10-50-38 to 40 and the disaggregation of revenue required disclosures in accordance with ASC Subtopic 606-10-50-5 for the three and nine months ended March 31, 2022 and 2021:

Three Months Ended Nine Months Ended

March 31, March 31,

2022 2021 2022 2021

Three Months Ended

September 30,

Event-related (a)

1 unchanged sentence

Media rights (b)

124,803 139,963 243,697 212,458

Sponsorship, signage and suite licenses 4,814 3,170

7 unchanged sentences

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

The following table provides information about contract balances from the Company’s contracts with customers as of March 31, 2022 and June 30, 2021.

March 31, June 30,

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

September 30, June 30,

Receivables from contracts with customers, net (a)

5 unchanged sentences

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

As of March 31, 2022 and June 30, 2021, the Company’s receivables reported above included $ 9,344 and $ 213 , respectively, related to various related parties associated with contracts with customers.

As of September 30, 2022 and June 30, 2022, the Company’s receivables reported above incl uded $ 922 and $ 1,258 , respectively, related to various related parties associated with contracts with customers.

See Note 15 for further details on related party arrangements.

Receivables from contracts with customers, net, excludes amounts recorded in Accounts receivable, net, associated with amounts due from the NBA and NHL related to escrow and player compensation recoveries and luxury tax payments.

As of March 31, 2022, the Company had receivable balances related to escrow and player compensation recoveries of $ 23,790 and $ 7,511 , recorded in Accounts receivable, net and Other assets, respectively.

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

As of September 30, 2022, the Company had receivable balances related to escrow and player compensation recoveries of $ 11,694 and $ 6,782 , recorded in Account s receivable, net and Other assets, respectively.

As of June 30, 2022, the Company had receivable balances related to escrow and player compensation recover ies of $ 12,464 and $ 6,782 , reco rded in Accounts receivable, net and Other assets, respectively.

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

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

The Company had contract asset balances related to local media rights of $ 21,238 and $ 0 as of March 31, 2022 and June 30, 2021, respectively.

See Note 15 for further details on these related party arrangements.

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

1 unchanged sentence

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

The Company’s deferred revenue related to local media rights was $ 0 and $ 260 as of March 31, 2022 and June 30, 2021, respectively.

The Company’s deferred revenue related to local media rights was $ 36,169 and $ 0 as of September 30, 2022 and June 30, 2022, respectively.

See Note 15 for further details on these related party arrangements.

(d) Revenue recognized for the nine months ended March 31, 2022 relating to the deferred revenue balance as of June 30, 2021 was $ 111,580 .

(d) Revenue recognized for the three months ended September 30, 2022 relating to the deferred revenue balance as of June 30, 2022 was $ 5,356 .

MADISON SQUARE GARDEN SPORTS CORP.

1 unchanged sentence

Transaction Price Allocated to the Remaining Performance Obligations

The following table depicts the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2022 and is based on current projections.

The following table depicts the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2022 and is based on current projections.

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

8 unchanged sentences

The following table presents a reconciliation of weighted-average shares used in the calculations of basic and diluted earnings (loss) per common share attributable to the Company’s stockholders (“EPS”) and the number of shares excluded from diluted earnings (loss) per common share, as they were anti-dilutive.

Three Months Ended Nine Months Ended

March 31, March 31,

2022 2021 2022 2021

Three Months Ended

September 30,

Weighted-average shares (denominator):

2 unchanged sentences

Dilutive effect of shares issuable under share-based compensation plans

119 188 142 —

Weighted-average shares for diluted EPS

2 unchanged sentences

Team Personnel Transactions

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

Team personnel transactions were net provisions of $ 304 (net of insurance recovery of $ 656 ), and $ 3,305 for the three months ended March 31, 2022 and 2021, respectively, and net provisions of $ 729 (net of insurance recovery of $ 656 ), and $ 17,003 for the nine months ended March 31, 2022 and 2021, respectively.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Team personnel transactions were a net credit of $ 329 and a net provision of $ 727 for the three months ended September 30, 2022 and 2021, respectively.

Cash, Cash Equivalents and Restricted Cash

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

September 30,

2022 June 30,

2021 March 31,

2022 September 30,

2021 June 30,

6 unchanged sentences

_________________

(a) Restricted cash as of March 31, 2022 and June 30, 2020 primarily included cash deposited in an escrow account (see Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2021 for more information).

For all other periods, restricted cash relates to the Company’s revolving credit facilities (see Note 11 for more information).

(a) Restricted cash as of September 30, 2021 and June 30, 2021 relates to the Company’s revolving credit facilities (see Note 11 for more information).

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

1 unchanged sentence

See Note 8 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022 for more information regarding the Company’s accounting policies associated with its leases.

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 nine months ended March 31, 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 March 31, 2022 related to the commitments discussed above.

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

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 the reduced payments due to the government-mandated suspension of events at The Garden in response to COVID-19 described below, the stated license fee for the first full contract year ended 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.

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.

During the three and nine months ended March 31, 2022 and 2021, the Company recognized operating lease costs associated with the Arena License Agreements with respect to games played at The Garden.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

As of March 31, 2022, the Company’s existing operating leases, which are recorded in the accompanying financial statements, have remaining lease terms ranging from 5 months to 33 years.

As of September 30, 2022, the Company’s existing operating leases, which are recorded in the accompanying financial statements, have remaining lease terms ranging from 8 months to 33 years.

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

1 unchanged sentence

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

The following table summarizes the ROU assets and lease liabilities recorded on the Company’s accompanying consolidated balance sheets as of March 31, 2022 and June 30, 2021:

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

The following table summarizes the ROU assets and lease liabilities recorded on the Company’s accompanying consolidated balance sheets as of September 30, 2022 and June 30, 2022:

Line Item in the Company’s Consolidated Balance Sheet September 30,

2022 June 30,

9 unchanged sentences

_________________

(a) As of March 31, 2022, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $ 42,713 and $ 703,269 , respectively, that are payable to MSG Entertainment.

(a) As of September 30, 2022, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $ 43,225 and $ 689,302 , respectively, that are payable to MSG Entertainment.

As of June 30, 2022, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $ 43,028 and $ 699,587 , respectively, that are payable to MSG Entertainment.

The following table summarizes the activity recorded within the Company’s accompanying consolidated statements of operations for the three and nine months ended March 31, 2022 and 2021:

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

2022 2021 2022 2021

The following table summarizes the activity recorded within the Company’s accompanying consolidated statements of operations for the three months ended September 30, 2022 and 2021:

Line Item in the Company’s Consolidated Statement of Operations Three Months Ended September 30,

Operating lease cost Direct operating expenses $ 1,403 $ 1,407

Operating lease cost Selling, general and administrative expenses

613 611 1,837 1,833

Short-term lease cost Direct operating expenses 45 36

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Supplemental Information

For the nine months ended March 31, 2022 and 2021, cash paid for amounts included in the measurement of lease liabilities was $ 32,580 and $ 2,717 , respectively.

The weighted average remaining lease term for operating leases recorded on the accompanying consolidated balance sheet as of March 31, 2022 was 32.9 years.

The weighted average discount rate was 7.13 % as of March 31, 2022 and represented the Company’s estimated incremental borrowing rate, assuming a secured borrowing, based on the remaining lease term at the time of either (i) adoption of the standard or (ii) the period in which the lease term expectation commenced or was modified.

For the three months ended September 30, 2022 and 2021, cash paid for amounts included in the measurement of lease liabilities was $ 11,263 and $ 10,768 , respectively.

The weighted average remaining lease term for operating leases recorded on the accompanying consolidated balance sheet as of September 30, 2022 was 32.5 years.

The weighted average discount rate was 7.13 % as of September 30, 2022 and represented the Company’s estimated incremental borrowing rate, assuming a secured borrowing, based on the remaining lease term at the time of either (i) adoption of the standard or (ii) the period in which the lease term expectation commenced or was modified.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Maturities of operating lease liabilities as of March 31, 2022 are as follows:

Maturities of operating lease liabilities as of September 30, 2022 are as follows:

Fiscal Year 2023 (remainder) $ 34,072

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During the first quarter of fiscal year 2023, the Company performed its annual impairment test of goodwill and determined that there were no impairments identified as of the impairment test date.

The carrying amount of goodwill as of March 31, 2022 and June 30, 2021 is $ 226,955 .

The Company’s indefinite-lived intangible assets as of March 31, 2022 and June 30, 2021 are as follows:

The carrying amount of goodwill as of September 30, 2022 and June 30, 2022 is $ 226,955 .

The Company’s indefinite-lived intangible assets as of September 30, 2022 and June 30, 2022 are as follows:

Sports franchises $ 111,064

2 unchanged sentences

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

March 31, 2022 Gross Accumulated

September 30, 2022 Gross Accumulated

Amortization Net

9 unchanged sentences

$ 5,900 $ ( 5,264 ) $ 636

For the three months ended March 31, 2022 and 2021, amortization expense of intangible assets was $ 265 and $ 265 , respectively.

For the nine months ended March 31, 2022 and 2021, amortization expense of intangible assets was $ 795 and $ 795 , respectively.

For the three months ended September 30, 2022 and 2021, amortization expense o f intangible assets was $ 108 and $ 265 , respectively.

MADISON SQUARE GARDEN SPORTS CORP.

2 unchanged sentences

The following table presents the Company’s assets that are measured at fair value on a recurring basis, which include cash equivalents:

Fair Value Hierarchy March 31,

Fair Value Hierarchy September 30,

2022 June 30,

Money market account I $ 14,003 $ 33,820

Time deposits I 34,017 5,000

Money market accounts I $ 23,022 $ 26,018

Time deposit I 54,316 56,082

Equity investments I 10,269 2,736

Total assets measured at fair value $ 87,607 $ 84,836

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

The carrying amount of the Company’s money market account and time deposits approximate fair value due to their short-term maturities.

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

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

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Value Carrying

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In addition, see Note 7 for more information on the contractual obligations related to future lease payments.

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

The Company did not have any material changes in its contractual obligations, including off-balance sheet commitments, since the end of fiscal year 2022 other than activities in the ordinary course of business.

Legal Matters

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Knicks Revolving Credit Facility

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

7 unchanged sentences

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

The outstanding balance under the 2021 Knicks Revolving Credit Facility was $ 220,000 as of March 31, 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 March 31, 2022 was 1.65 %.

During the nine months ended March 31, 2022 the Company made interest payments of $ 2,418 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.

The outstanding balance under the 2021 Knicks Revolving Credit Facility was $ 220,000 as of September 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 September 30, 2022 was 4.37 %.

During the three months ended September 30, 2022 t he Company made interest payments of $ 1,892 in respect of the 2021 Knicks Revolving Credit Facility.

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

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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 March 31, 2022, Knicks LLC was in compliance with this financial covenant.

As of September 30, 2022, Knicks LLC was in compliance with this financial covenant.

Knicks Holdings Credit Facility

2 unchanged sentences

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Rangers Revolving Credit Facility

1 unchanged sentence

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

7 unchanged sentences

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.

During the nine months ended March 31, 2022, the Company made principal repayments of $ 70,000 and the outstanding balance under the 2021 Rangers Revolving Credit Facility was $ 65,000 as of March 31, 2022, which was recorded as Long-term debt in the accompanying consolidated balance sheet.

The interest rate on the 2021 Rangers Revolving Credit Facility as of March 31, 2022 was 2.15 %.

During the nine months ended March 31, 2022 the Company made interest payments of $ 1,816 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).

In addition, on April 27, 2022, the Company made an additional principal repayment of $ 15,000 under the 2021 Rangers Revolving Credit Facility.

There was no borrowing under the 2021 Rangers Revolving Credit Facility as of September 30, 2022 and accordingly the Company did not make any interest payments during the three months ended September 30, 2022 in respect of the 2021 Rangers Revolving Credit Facility.

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.

11 unchanged sentences

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 March 31, 2022, Rangers LLC was in compliance with this financial covenant.

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

2021 Rangers NHL Advance Agreement

4 unchanged sentences

Advances received under the 2021 Rangers NHL Advance Agreement are payable upon demand by the NHL.

It is expected that the advanced amount will be set off against funds that would otherwise be paid, distributed or transferred by the NHL to Rangers LLC.

The outstanding balance under the 2021 Rangers NHL Advance Agreement was $ 30,000 as of March 31, 2022 and was recorded as Debt in the accompanying consolidated balance sheet.

During the nine months ended March 31, 2022 the Company made interest payments of $ 675 .

It is expected that the advanced amount will be set off against funds that would otherwise be paid,

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

distributed or transferred by the NHL to Rangers LLC.

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

During the three months ended September 30, 2022 the Company made interest payments of $ 225 .

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:

September 30,

2022 June 30,

Other current assets $ 1,145 $ 1,145

Other assets 3,668 3,954

(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 nine months ended March 31, 2022.

Benefit Plans

3 unchanged sentences

See Note 14 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022 for more information with regard to the liabilities retained by the Company from certain plans, which were transferred to the MSG Sports, LLC Excess Cash Balance Plan and MSG Sports, LLC Excess Retirement Plan, which the Company established in connection with the MSGE Distribution and are collectively referred to the “MSGS Pension Plans.”

The following table presents components of net periodic benefit cost for the MSGS Pension Plans included in the accompanying consolidated statements of operations for the three and nine months ended March 31, 2022 and 2021.

Net periodic benefit cost is reported in Miscellaneous expense, net.

Three Months Ended Nine Months Ended

March 31, March 31,

2022 2021 2022 2021

Interest cost (credit) $ 31 $ ( 11 ) $ 93 $ 109

Three Months Ended

September 30,

Interest cost $ 60 $ 31

Recognized actuarial loss 4 33

6 unchanged sentences

Expenses related to the Savings Plans that are included in the accompanying consolidated statements of operations were $ 1,238 and $ 3,076 for the three and nine months ended March 31, 2022, respectively, and $ 426 and $ 1,530 for the three and nine months ended March 31, 2021, respectively.

Expenses related to the Savings Plans that are included in the accompanying consolidated statements of operations for the three months ended September 30, 2022 and 2021 were $ 1,065 and $ 939 , respectively.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Executive Deferred Compensation Plan

See Note 14 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022 for more information regarding the Company’s Executive Deferred Compensation Plan (the “Deferred Compensation Plan”).

For the three months ended September 30, 2022, the Company recorded compensation cost credits of $ 103 within Selling, general and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability.

In addition, for the three months ended September 30, 2022, the Company recorded losses of $ 103 within Miscellaneous income (expense), net to reflect the remeasurement of the fair value of assets under the Deferred Compensation Plan.

The following table summarizes amounts recognized related to the Deferred Compensation Plan in the consolidated balance sheets:

September 30,

2022 June 30,

Non-current assets (included in other assets) $ 10,269 $ 2,736

Current liabilities (included in accrued employee related costs) ( 982 ) ( 123 )

Non-current liabilities (included in other employee related costs) ( 9,287 ) ( 2,613 )

Share-based Compensation

1 unchanged sentence

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

Share-based compensation expense was $ 6,973 and $ 19,178 for the three and nine months ended March 31, 2022, respectively, and $ 3,867 and $ 26,193 for the three and nine months ended March 31, 2021, respectively.

There were no costs related to share-based compensation that were capitalized for the three and nine months ended March 31, 2022 and 2021, respectively.

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

Dolan voluntarily relinquished a one-time equity award granted by the Company in October 2018 pursuant to his 2018 employment agreement, and the related award agreements were canceled.

The one-time equity award included:

32 target performance stock units and three grants of stock options to purchase an aggregate of 449 shares of Class A Common Stock, which were to vest over a 4 -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 nine months ended March 31, 2021.

Share-based compensation expense was $ 7,220 and $ 4,851 for the three months ended September 30, 2022 and 2021, respectively.

There were no costs related to share-based compensation that were capitalized for the three months ended September 30, 2022 and 2021, respectively.

Restricted Stock Units Award Activity

The following table summarizes activity related to the Company’s restricted stock units and performance restricted stock units, collectively referred to as “RSUs,” held by the Company and MSG Entertainment employees, for the nine months ended March 31, 2022:

Number of Weighted-Average

8 unchanged sentences

Forfeited / Cancelled ( 1 ) ( 1 ) $ 158.01

Unvested award balance, March 31, 2022 187 177 $ 200.10

Unvested award balance, September 30, 2022 136 158 $ 167.12

_____________________

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

The fair value of RSUs that vested during the nine months ended March 31, 2022 was $ 40,490 .

The fair value of RSUs that vested during the three months ended September 30, 2022 was $ 31,766 .

Upon delivery, RSUs granted under the Employee Stock Plan were net share-settled to cover the required statutory tax withholding obligations.

To fulfill the Company’s and MSG Entertainment’s employees’ required statutory tax withholding obligations for the applicable income and other employment taxes, 105 of these RSUs, with an aggregate value of $ 18,945 , inclusive of $ 6,803 related to MSG Entertainment employees (who vested in the Company’s RSUs), were retained by the Company and the taxes paid are reflected as a financing activity in the accompanying consolidated statement of cash flows for the nine months ended March 31, 2022.

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

The weighted-average fair value per share at grant date of RSUs granted during the nine months ended March 31, 2021 was $ 162.22 .

To fulfill the Company’s and MSG Entertainment’s employees’ required statutory tax withholding obligations for the applicable income and other employment taxes, 99 of these RSUs, with an aggregate value of $ 15,229 , inclusive of $ 4,233 related to MSG Entertainment employees (who vested in the Company’s RSUs), were retained by the Company and the taxes paid are reflected as a financing activity in the accompanying consolidated statement of cash flows for the three months ended September 30, 2022.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The fair value of RSUs that vested during the three months ended September 30, 2021 was $ 36,380 .

The weighted-average fair value per share at grant date of RSUs granted during the three months ended September 30, 2021 w as $ 262.08 .

Stock Options Award Activity

The following table summarizes activity related to the Company’s stock options for the nine months ended March 31, 2022:

The following table summarizes activity related to the Company’s stock options for the three months ended September 30, 2022:

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

2 unchanged sentences

Cancelled — $ —

Balance as of March 31, 2022 94 $ 145.78 5.71 $ 3,151

Exercisable as of March 31, 2022 94 $ 145.78 5.71 $ 3,151

Balance as of September 30, 2022 94 $ 145.78 5.21 $ —

Exercisable as of September 30, 2022 94 $ 145.78 5.21 $ —

Stock Repurchase Program

On September 11, 2015, the Company’s board of directors authorized the repurchase of up to $ 525,000 of the Company’s Class A Common Stock once the shares of the Company’s Class A Common Stock began “regular way” trading on October 1, 2015.

Under the authorization, shares of Class A Common Stock may be purchased from time to time in accordance with applicable insider trading and other securities laws and regulations.

Effective as of October 1, 2015, the Company’s board of directors authorized the repurchase of up to $ 525,000 of the Company’s Class A Common Stock.

Under the authorization, shares of Class A Common Stock may be purchased from time to time in open market or private transactions, block trades or such other manner as the Company may determine, in accordance with applicable insider trading and other securities laws and regulations.

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

During the nine months ended March 31, 2022 and 2021, the Company did no t engage in any share repurchase activities under its share repurchase program.

As of March 31, 2022, the Company had $ 259,639 of availability remaining under its stock repurchase authorization.

During the three months ended September 30, 2022 and 2021, the Company did no t engage in any share repurchase activities under its share repurchase program.

As of September 30, 2022, the Company had $ 259,639 of availability remaining under its stock repurchase authorization .

Related Party Transactions

1 unchanged sentence

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

As of March 31, 2022, members of the Dolan family including trusts for members of the Dolan family (collectively, the “Dolan Family Group”), for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, collectively beneficially own 100 % of the Company’s outstanding Class B Common Stock and own approximately 3.1 % of the Company’s outstanding Class A Common Stock.

As of September 30, 2022, members of the Dolan family including trusts for members of the Dolan family (collectively, the “Dolan Family Group”), for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, collectively beneficially own 100 % of the Company’s outstanding Class B Common Stock and own approximately 3.1 % of the Company’s outstanding Class A Common Stock.

Such shares of the Company’s Class A Common Stock and Class B Common Stock, collectively, represent approximately 70.5 % of the aggregate voting power of the Company’s outstanding common stock.

2 unchanged sentences

Members of the Dolan family were the direct controlling stockholders of MSG Networks prior to the MSGE-MSGN Merger and indirectly control MSG Networks through MSG Entertainment’s ownership of MSG Networks.

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

• Arena License Agreements entered into in April 2020 pursuant to which MSG Entertainment (i) provides the right to use The Garden for games of the Knicks and the Rangers for a 35 -year term in exchange for arena license fees, (ii) shares revenues collected for suite licenses, (iii) operates and manages the sale of the sports teams merchandise at The Garden for a commission, (iv) operates and manages the sales of food and beverage concessions in exchange for 50% of net profits from the sales and catering services during Knicks and Rangers home games, (v) provides day of game services that were historically provided prior to the MSGE Distribution, and (vi) provides other general services within The Garden;

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

• Sponsorship sales and service representation agreements entered into in April 2020 pursuant to which MSG Entertainment has the exclusive right and obligation to sell the Company’s sponsorships for an initial stated term of 10 years for a commission.

In addition, under this agreement, the Company is charged by MSG Entertainment for sales and service staff and overhead associated with the sales of sponsorship assets;

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

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

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

• Sponsorship sales and service representation agreements pursuant to which MSG Entertainment has the exclusive right and obligation to sell the Company’s sponsorships for an initial stated term of 10 years for a commission.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

under this agreement, the Company is charged by MSG Entertainment for sales and service staff and overhead associated with the sales of sponsorship assets;

• Team sponsorship allocation agreement with MSG Entertainment, pursuant to which teams continue receiving an allocation of sponsorship and signage revenues associated with the sponsorship agreements that existed at the MSGE Distribution Date;

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

• 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 MSG 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;

7 unchanged sentences

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.

The Company also previously shared costs for the Company’s 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.

5 unchanged sentences

605, LLC provides audience measurement and data analytics services to the Company and its subsidiaries in the ordinary course of business.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Revenues and Operating Expenses

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

These amounts are reflected in revenues and operating expenses in the accompanying consolidated statements of operations for the three and nine months ended March 31, 2022 and 2021:

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

These amounts are reflected in revenues and operating expenses in the accompanying consolidated statements of operations for the three months ended September 30, 2022 and 2021:

Three Months Ended September 30,

$ 8,174 $ 7,247

Revenues $ 75,851 $ 80,322 $ 153,229 $ 103,752

Operating expenses:

Corporate general and administrative expenses, net $ 10,225 $ 9,281 $ 31,579 $ 29,162

Corporate expenses pursuant to Services Agreement with MSG Entertainment $ 9,513 $ 8,884

Rent expense (sublease) due to MSG Entertainment 698 715

Costs associated with the Sponsorship sales and service representation agreements 2,933 2,733

Costs associated with the Arena License Agreements 42,196 24,843 83,212 27,697

Operating lease expense associated with the Arena License Agreements 1,311 1,311

Other costs associated with the Arena License Agreements 970 649

Other operating expenses, net 67 113

____________________

(a) 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.

Income tax benefit for the three months ended September 30, 2022 of $ 20,493 reflects an effective tax rate of 52.5 % and income tax benefit for the three months ended September 30, 2021 of $ 21,169 reflects an effective tax rate of 55.6 % .

In general, the Company is required to use an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in an interim period.

The estimated annual effective tax rate exceeds the statutory federal tax rate of 21 % in the current and prior year period primarily due to state taxes and nondeductible officers’ compensation and disability insurance premiums expense.

The estimated annual effective tax rate is revised on a quarterly basis.

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.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 $ 9,473 and $ 29,347 from MSG Entertainment pursuant to the TSA for certain business functions that were previously performed by internal resources for the three and nine months ended March 31, 2022, respectively, and $ 8,822 and $ 27,771 for the three and nine months ended March 31, 2021, 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 reflects rent expense associated with the lease of office space from MSG Entertainment of $ 752 and $ 2,232 for the three and nine months ended March 31, 2022, respectively, and $ 678 and $ 2,047 for the three and nine months ended March 31, 2021, respectively.

See Note 7 for more information regarding the lease of office space from MSG Entertainment.

Corporate general and administrative expenses, net for the three and nine months ended March 31, 2021 also reflects charges 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.

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.

Costs associated with the Arena License Agreements

For the three and nine months ended March 31, 2022, costs associated with the Arena License Agreements include $ 29,425 and $ 58,422 , respectively, recorded as operating lease cost.

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

See Note 7 for more information regarding Arena License Agreements.

In general, the Company is required to use an estimated annual effective tax rate to measure the tax benefit or expense recognized in an interim period.

The estimated annual effective tax rate exceeds the statutory federal tax rate of 21 % primarily due to state taxes, nondeductible officers’ compensation, and players’ disability insurance premiums expense.

The estimated annual effective tax rate is revised on a quarterly basis.

Income tax expense for the three and nine months ended March 31, 2022 of $ 34,993 and $ 30,939 , respectively, reflect an effective tax rate of 59 % and 58 %.

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

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

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.

Subsequent Events

Special Dividend and Accelerated Share Repurchase

On October 6, 2022, the Company announced that its Board of Directors has declared a special, one-time cash dividend of $7.00 per share (expected to be approximately $ 172,749 ).

The special dividend is payable on October 31, 2022 to shareholders of record on October 17, 2022.

In addition, the Company’s Board of Directors has authorized a $ 75,000 accelerated share repurchase (“ASR”) program, under the Company’s existing share repurchase authorization.

As discussed in Note 14, the Company had $ 259,639 of availability remaining under its stock repurchase authorization as of September 30, 2022 and prior to the execution of the ASR program.

Borrowings under Revolving Credit Facilities

In connection with the special dividend and ASR, on October 27, 2022, the Company borrowed an additional $ 55,000 under the 2021 Knicks Revolving Credit Facility and $ 160,000 under the 2021 Rangers Revolving Credit Facility.

See Note 11 for more information with regards to these revolving credit facilities.

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

What changed 10-Q

Item 1. Financial Statements