Sports Business Risks
−Removed: Our Operations and Operating Results Have Been, and May in the Future be, Materially Impacted by the COVID-19 Pandemic and Government and League Actions Taken in Response.
−Removed: In March 2020, the NBA and NHL suspended their 2019-20 seasons due to COVID-19, and as a result, virtually all of our business operations were suspended.
−Removed: In addition, the start of the 2020-21 NBA and NHL regular seasons were delayed, and 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.
−Removed: Even once Knicks and Rangers games resumed at The Garden, there were varying levels of restrictions on fan attendance and professional athletes due to New York City and New York State regulations.
−Removed: For example, fans were initially prohibited from attending games due to government-mandated assembly restrictions through February 2021, and home games at The Garden were then limited to 10% capacity through May 2021.
−Removed: 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.
−Removed: New York City did not lift vaccination requirements applicable to fan attendance and professional athletes competing at The Garden until March 2022.
−Removed: As a result of the foregoing, COVID-19 disruptions materially impacted our operations and operating results for fiscal years 2020 and 2021, with us recognizing materially less revenues, or over certain periods of time no revenues, across a number of areas, including, ticket sales;
−Removed: our share of suite licenses;
−Removed: sponsorships;
−Removed: signage and in-venue advertising at The Garden;
−Removed: local media rights fees;
−Removed: and food, beverage and merchandise sales.
−Removed: For example, a significant portion of our revenue is earned from media rights fees from the local broadcast of Knicks and Rangers games and our share of fees paid for league-wide media rights, which are not recognized if those games are not played.
−Removed: As a result of the shortened 2020-21 NBA and NHL seasons, the Company’s revenues earned from local media rights fees were reduced by approximately $16 million and revenues earned by the Company for league-wide media rights were reduced by approximately $1 million.
−Removed: Our operations and operating results continued to be impacted by COVID-19 during fiscal year 2022, but to a lesser extent.
−Removed: Even though full attendance at Knicks and Rangers games was permitted during fiscal year 2022, results were 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.
−Removed: 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, demand for our sponsorship, tickets and other premium inventory.
−Removed: Accordingly, no assurances can be made as to whether and when the 2022-23 seasons will occur, the number of games played for the 2022-23 seasons, that the games will be played at The Garden or will be played with any in-arena audiences or without capacity limitations.
−Removed: If, due to a resurgence in COVID-19 or otherwise, the NBA and the NHL do not play a minimum number of games required under the league-wide media rights agreements or the Knicks or the Rangers do not make available to MSG Networks the number of games during the season required under the local media rights agreements, the amounts of revenues we earn could be substantially reduced depending upon the number of games not played or not made available to MSG Networks and an event of default may occur under the Knicks and the Rangers credit agreements.
−Removed: See “— Economic and Business Relationship Risks — Certain of Our Subsidiaries Have Incurred Substantial Indebtedness, and the Occurrence of an Event of Default Under Our Subsidiaries’ Credit Facilities or Our Inability to Repay Such Indebtedness When Due Could Substantially Impair the Assets of Those Subsidiaries and Have a Negative Effect on Our Business ” and “— Economic and Business Relationship Risks — We Do Not Own The Garden and Our Failure to Renew the Arena License Agreements or MSG Entertainment’s Failure to Operate The Garden in Compliance with the Arena License Agreements or Extensive Governmental Regulations May Have a Material Negative Effect on Our Business and Results of Operations .”
−Removed: Our business is also particularly sensitive to discretionary business and consumer spending.
−Removed: A pandemic such as COVID-19 could also 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 our business.
−Removed: In addition, remote and/or hybrid in-office work arrangements in the New York City metropolitan area could result in reduced attendance at Knicks and Rangers games.
−Removed: To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those relating to our liquidity, indebtedness, and our ability to comply with the covenants contained in the agreements that govern our indebtedness.
Our Business Faces Intense and Wide-Ranging Competition, Which May Have a Material Negative Effect on Our Business and Results of Operations.
The success of a sports business, like ours, is dependent upon the performance and/or popularity of its franchises.
−Removed: Our Knicks and Rangers and other sports franchises compete, in varying respects and degrees, with other live sporting events, and with sporting events delivered over television networks, radio, the Internet and online services, mobile applications and other alternative sources.
+Added: Our Knicks and Rangers and other sports franchises compete, in varying respects and degrees, with other live sporting events, and with sporting events delivered over television networks, radio, the Internet and online services, streaming devices and applications and other alternative sources.
For example, our sports teams compete for attendance, viewership and advertising with a wide range of alternatives available in the New York City metropolitan area.
−Removed: During some or all of the basketball and hockey seasons, our sports teams face competition, in varying respects and degrees, from professional baseball (including the Yankees and the Mets), professional football (including the Giants and the Jets), professional soccer (including the New York Red Bulls and the New York City Football Club), collegiate sporting events, such as the National Collegiate Athletic Association basketball tournament, other sporting events, including those held by MSG Entertainment, and each other.
+Added: During some or all of the basketball and hockey seasons, our sports teams face competition, in varying respects and degrees, from professional baseball (including the Yankees and the Mets), professional football (including the Giants and the Jets), professional soccer (including the New York Red Bulls and the New York City Football Club), collegiate sporting events, such as the Big East basketball tournament, other sporting events, including those held by MSG Entertainment, and each other.
For fans who prefer the unique experience of NHL hockey, we must compete with two other NHL hockey teams located in the New York City metropolitan area (the Islanders and the Devils) as well as, in varying respects and degrees, with other NHL hockey teams and the NHL itself.
Similarly, for those fans attracted to the equally unique experience of NBA basketball, we must compete with another NBA team located in the New York City metropolitan area (the Nets) as well as, in varying respects and degrees, with other NBA teams and the NBA itself.
−Removed: As a result of the large number of options available, we face strong competition for the New York City metropolitan area sports fan.
+Added: As a result of the large number of options available, we face strong competition for the New York City metropolitan area sports fan base.
We must compete with these other sports teams and sporting events, in varying respects and degrees, including on the basis of the quality of the teams we field, their success in the leagues in which they compete, our ability to provide an entertaining environment at our games, prices we charge for tickets and the viewing availability of our teams on multiple media alternatives.
1 unchanged sentence
The success of our business is largely dependent on our ability to attract strong attendance to our professional sports franchises’ home games at The Garden.
−Removed: Our business also competes, in certain respects and to varying degrees, with other leisure-time activities and entertainment options in the New York City metropolitan area, such as television, motion pictures, concerts and other live performances, restaurants and nightlife venues, the Internet, social media and social networking platforms and online and mobile services, including sites for online content distribution, video on demand and other alternative sources of entertainment.
+Added: Our business also competes, in certain respects and to varying degrees, with other leisure-time activities and entertainment options in the New York City metropolitan area, such as television, motion pictures, concerts, music festivals and other live performances, restaurants and nightlife venues, the Internet, social media and social networking platforms and online and mobile services, including sites for online content distribution, video on demand and other alternative sources of entertainment.
Our sports teams also compete with other teams in their leagues to attract players.
6 unchanged sentences
Furthermore, success in the regular season may qualify one or both of our sports teams for participation in post-season playoffs, which provides us with additional revenue by increasing the number of games played by our sports teams and, more importantly, by generating increased excitement and interest in our sports teams, which can help drive a number of our revenue streams, including by improving attendance and sponsorships, in subsequent seasons.
−Removed: The Knicks last qualified for the post-season during the 2020-21 NBA season and the Rangers last qualified for the post-season during the 2021-22 NHL season.
+Added: Our teams qualified for the post-seasons during their respective 2022-23 seasons.
In addition, league, team and/or player actions or inactions, including protests, may impact the popularity of the Knicks, the Rangers or the leagues in which they play.
8 unchanged sentences
A significant factor in our ability to attract and retain talented players is player compensation.
−Removed: NBA and NHL player salaries have generally increased significantly and may continue to increase.
+Added: NBA and NHL player salaries have generally increased significantly and may continue to increase in the future.
Although CBAs between the NBA and the NBPA and the NHL and the NHLPA generally cap league-wide player salaries at a prescribed percentage of league-wide revenues, we may pay our players different aggregate salaries and a different proportion of our revenues than other NBA or NHL franchises.
1 unchanged sentence
Future CBAs may increase the percentage of league-wide revenues to which NBA or NHL players are entitled or impose other conditions, which may further increase our costs.
−Removed: In addition, we have paid the NBA a luxury tax in the past and we may also be obligated to pay the NBA a luxury tax in future years, the calculation of which is determined by a formula based on the aggregate salaries paid to our NBA players.
+Added: In addition, we have paid the NBA a luxury tax in the past and we may also be obligated to pay the NBA a luxury tax in future years, the calculation of which is determined by a formula based on the aggregate salaries paid to our Knicks players.
See “Part II — Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Expenses — Player Salaries, Escrow System/Revenue Sharing and NBA Luxury Tax.”
−Removed: We have incurred, and may in the future incur, significant charges for costs associated with transactions relating to players on our sports teams for season-ending and career-ending injuries and for trades, waivers and contract terminations of players and other team personnel, including team executives.
+Added: We have incurred, and may incur in the future, significant charges for costs associated with transactions relating to players on our sports teams for season-ending and career-ending injuries and for trades, waivers and contract terminations of players and other team personnel, including team executives.
See “— Injuries to, and Illness of, Players on Our Sports Teams Could Hinder Our Success .” These transactions can result in significant charges as the Company recognizes the estimated ultimate costs of these events in the period in which they occur, although amounts due to these individuals may be paid over their remaining contract terms.
These expenses add to the volatility of our results.
−Removed: The Actions of the NBA, NHL and Esports Leagues May Have a Material Negative Effect on Our Business and Results of Operations.
+Added: The Actions of the NBA and NHL May Have a Material Negative Effect on Our Business and Results of Operations.
The governing bodies of the NBA (including the NBAGL) and the NHL (including the AHL) have certain rights under certain circumstances to take actions that they deem to be in the best interests of their respective leagues, which may not necessarily be consistent with maximizing our results of operations and which could affect our sports teams in ways that are different than the impact on other sports teams.
Decisions by the NBA or the NHL could have a material negative effect on our business and results of operations.
−Removed: For example, failure to follow rules and regulations of the NBA or NHL could result in fines, loss of draft picks or other actions by the leagues.
+Added: For example, failure to follow rules and regulations of the NBA or NHL has in the past and may in the future result in loss of draft picks, fines or other actions by the leagues.
From time to time, we may disagree with or challenge actions the leagues take or the power and authority they assert.
5 unchanged sentences
We receive significant revenues from MSG Networks for the right to telecast games of the Knicks and the Rangers.
−Removed: Changes to league rules, regulations and/or agreements, including changes to league schedules and national and international media rights, could impact the availability of games covered by our local media rights and could negatively affect the rights fees we receive from MSG Networks and our business and results of operations.
+Added: Changes to league rules, regulations and/or agreements, including changes to league schedules and national and international media rights, have in the past and could in the future impact the availability of games covered by our local media rights and negatively affect the rights fees we receive from MSG Networks and our business and results of operations.
• The NBA and NHL impose certain rules that define, under certain circumstances, the territories in which our sports teams operate, including the markets in which our games may be telecast.
−Removed: The sports leagues have also asserted control over other important decisions, such as the length and format of, and the number of games in, the playing season, preseason and playoff schedules, admission of new members, franchise relocations, labor relations with the players associations, collective bargaining, free agency, luxury taxes and revenue sharing.
+Added: The sports leagues have also asserted control
+Added: over other important decisions, such as the length and format of, and the number of games in, the playing season, preseason and playoff schedules, admission of new members, franchise relocations, labor relations with the players associations, collective bargaining, free agency, luxury taxes and revenue sharing.
Changes to these rules could have a material negative effect on our business and results of operations.
2 unchanged sentences
• The NBA imposes a luxury tax and escrow system with respect to player salaries and a revenue sharing plan, and the NHL imposes an escrow system with respect to player salaries and a revenue sharing plan.
−Removed: For fiscal year 2022, the Knicks and the Rangers recorded approximately $82.4 million in estimated revenue sharing expenses, net of escrow receipts.
+Added: For fiscal year 2023, the Knicks and the Rangers recorded approximately $62.5 million in estimated revenue sharing expenses, net of escrow.
The actual amounts for the 2022-23 season may vary significantly from the estimate based on actual operating results for the respective leagues and all teams for the season and other factors.
2 unchanged sentences
The NBA and NHL have also imposed significant restrictions on amounts of financing and/or certain types of financings and the rights of those financing providers.
−Removed: See “Part II — Management’s Discussion and Analysis of Financial Condition and Results of Operation — Liquidity and Capital Resources — Financing Agreements and Stock Repurchases” and Note 13 to the consolidated financial statements.
+Added: See “Part II — Management’s Discussion and Analysis of Financial Condition and Results of Operation — Liquidity and Capital Resources — Financing Agreements and Stock Repurchases” and Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
In certain instances, these restrictions could impair our ability to proceed with a transaction that is in the best interest of the Company and its stockholders if we were unable to obtain any required league approvals in a timely manner or at all.
11 unchanged sentences
See “Economic and Business Relationship Risks — Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations.”
−Removed: The esports leagues may also assert control over certain matters, that may affect our revenues.
−Removed: For example, they have adopted a number of rules and regulations governing the length and format of the playing season, how teams may generate revenue and player rosters.
Injuries to, and Illness of, Players on Our Sports Teams Could Hinder Our Success.
To the degree that our financial results are dependent on our sports teams’ popularity and/or on-court and on-ice success, the likelihood of achieving such popularity or competitive success may be substantially impacted by serious and/or untimely injuries to or illness of key players.
−Removed: In addition, even with team and league-wide health and safety precautions in place and compliance with governmental and other COVID-19 protocols we may adopt, our players may nevertheless contract COVID-19 and, as a result, our ability to participate in games may be substantially impacted.
+Added: Even if we take health and safety precautions and comply with government protocols, our players may nevertheless contract serious illness, such as COVID-19 and, as a result, our ability to participate in games may be substantially impacted.
Nearly all of our Knicks and Rangers players, including those with multi-year contracts, have partially or fully guaranteed contracts, meaning that in some cases (subject to the terms of the applicable player contract and CBA), a player or his estate may be entitled to receive his salary even if the player dies or is unable to play as a result of injury.
−Removed: These salaries represent significant financial commitments for our sports
−Removed: We maintain insurance to mitigate some of the risk of paying certain player salaries in the event of a player’s death or disability.
+Added: These salaries represent significant financial commitments for our sports teams.
+Added: We maintain insurance policies to mitigate some of the risk of paying certain player salaries in the event of a player’s death or disability.
In the event of injuries sustained resulting in lost services (as defined in the applicable insurance policies), generally the insurance policies provide for payment to us of a portion of the player’s salary for the remaining term of the contract or until the player can resume play, in each case following a deductible number of missed games.
−Removed: Such insurance may not be available in every circumstance or on terms that are commercially feasible and such insurance may contain significant dollar limits and/or exclusions from coverage for pre-existing medical conditions.
+Added: Such insurance may not be available in every circumstance or on terms that are commercially feasible and such insurance may contain significant dollar limits and/or exclusions from coverage for pre-existing
+Added: medical conditions.
We may choose not to obtain (or may not be able to obtain) such insurance in some cases and we may change coverage levels (or be unable to change coverage levels) in the future.
−Removed: In the absence of disability insurance, we may be obligated to pay all of an injured player’s salary.
+Added: In the absence of disability insurance, we have in the past and may in the future be obligated to pay all of an injured player’s salary.
In addition, player disability insurance policies do not cover any NBA luxury tax that we may be required to pay under the NBA CBA.
1 unchanged sentence
Replacement of an injured player may result in an increase in our salary and NBA luxury tax expenses.
+Added: Our Operations and Operating Results Were Materially Impacted by the COVID-19 Pandemic and Government and League Actions Taken in Response, and a Resurgence of the Pandemic or Another Pandemic or Other Public Health Emergency Could Adversely Affect Our Business and Results of Operations.
+Added: The Company’s operations and operating results were materially impacted by the COVID-19 pandemic and actions taken in response by governmental authorities and the NBA and NHL.
+Added: For example, in March 2020 the NBA and NHL suspended their 2019-20 seasons due to COVID-19, and as a result, virtually all of our business operations were suspended.
+Added: In addition, the start of the 2020-21 NBA and NHL regular seasons were delayed, and the Knicks and the Rangers played 10 and 26 fewer games, respectively, than their traditional regular season schedules.
+Added: The Company’s operations and operating results were also impacted by government-mandated assembly restrictions during fiscal year 2021 and temporary declines in attendance due to ongoing reduced tourism levels as well as an increase in COVID-19 cases during certain months during fiscal year 2022.
+Added: It is unclear to what extent COVID-19, including variants thereof, or another pandemic or public health emergency, could result in renewed governmental and/or league restrictions on attendance or otherwise impact attendance of games at The Garden, demand for our sponsorship, tickets and other premium inventory or otherwise impact the Company’s operations and operating results.
+Added: If, due to a resurgence in COVID-19 or another pandemic or public health emergency, the NBA and the NHL do not play a minimum number of games required under the league-wide media rights agreements or the Knicks or the Rangers do not make available to MSG Networks the number of games during the season required under the local media rights agreements, the amounts of revenues we earn could be substantially reduced depending upon the number of games not played or not made available to MSG Networks and an event of default may occur under the Knicks and the Rangers credit agreements.
+Added: Our business is also particularly sensitive to discretionary business and consumer spending.
+Added: A pandemic such as COVID-19, or the fear of a new pandemic or public health emergency, has in the past and could in the future impede economic activity in impacted regions or globally over the long-term, leading to a 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 our business.
+Added: To the extent a pandemic or other public health emergency adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those relating to our liquidity, indebtedness, and our ability to comply with the covenants contained in the agreements that govern our indebtedness.
+Added: See “— Economic and Business Relationship Risks — Certain of Our Subsidiaries Have Incurred Substantial Indebtedness, and the Occurrence of an Event of Default Under Our Subsidiaries’ Credit Facilities or Our Inability to Repay Such Indebtedness When Due Could Substantially Impair the Assets of Those Subsidiaries and Have a Negative Effect on Our Business ” and “— Economic and Business Relationship Risks — We Do Not Own The Garden and Our Failure to Renew the Arena License Agreements or MSG Entertainment’s Failure to Operate The Garden in Compliance with the Arena License Agreements or Extensive Governmental Regulations May Have a Material Negative Effect on Our Business and Results of Operations .”
Economic and Business Relationship Risks
+Added: Our Business Has Been Adversely Impacted and May, in the Future, Be Materially Adversely Impacted by an Economic Downturn, Recession, Financial Instability or Inflation.
+Added: Our business depends upon the ability and willingness of consumers and businesses to purchase tickets (including season tickets) to our games, license suites at The Garden, spend on food and beverages and merchandise and drive continued advertising and sponsorship revenues, and these revenues are sensitive to general economic conditions and consumer buying patterns.
+Added: Consumer and corporate spending has in the past declined and may in the future decline at any time for reasons beyond our control.
+Added: The risks associated with our businesses may become more acute in periods of a slowing economy or recession, which may lead to reductions in, among other things, corporate sponsorship and advertising and decreases in attendance at live sports events, demand for suite licenses and food and beverage and merchandise sales, some of which we have experienced in the past and may experience in the future.
+Added: In addition, inflation, which has significantly risen, has increased and may continue to increase operational costs, and continued increases in interest rates in response to concerns about inflation may have the effect of further increasing economic uncertainty and heightening these risks.
+Added: As a result, instability and weakness of the U.S.
+Added: and global economies, disruptions to financial markets, inflation, recession, high unemployment, reduced tourism and other geopolitical events, including any prolonged effects caused by the COVID-19 or other similar outbreak, and the resulting negative effects on consumers’ and businesses’ discretionary spending have in the past materially negatively affected, and may in the future materially negatively affect our business and results of operations.
Certain of Our Subsidiaries Have Incurred Substantial Indebtedness, and the Occurrence of an Event of Default Under Our Subsidiaries’ Credit Facilities or Our Inability to Repay Such Indebtedness When Due Could Substantially Impair the Assets of Those Subsidiaries and Have a Negative Effect on Our Business.
1 unchanged sentence
New York Knicks, LLC and New York Rangers, LLC, which own the assets of the Knicks and the Rangers franchises, respectively, have entered into revolving credit facilities.
−Removed: As of June 30, 2022, the outstanding balance under the Knicks Revolving Credit Facility was $220 million, while there was no outstanding balance under the Rangers Revolving Credit Facility.
+Added: As of June 30, 2023, the outstanding balance under the 2021 Knicks Revolving Credit Facility (as defined below) was $235 million and the outstanding balance under the 2021 Rangers Revolving Credit Facility (as defined below) was $60 million.
Both credit facilities expire in December 2026.
2 unchanged sentences
Our ability to make payments on, or repay or refinance, such indebtedness, and to fund our operations, depends largely upon our future operating performance.
−Removed: Our future operating performance is subject to the impacts of the COVID-19 pandemic, including any resurgence in cases, and general economic, financial, competitive, regulatory and other factors that are beyond our control.
+Added: Our future operating performance is subject to general economic, financial, competitive, regulatory and other factors that are beyond our control.
See “— We May Require Financing to Fund Our Ongoing Operations, the Availability of Which is Highly Uncertain .”
−Removed: Furthermore, a resurgence in the COVID-19 pandemic may cause our interest expense to be substantial relative to our revenues and cash outflows.
−Removed: Our interest expense could also increase if interest rates increase (including in connection with rising inflation) as our indebtedness bears interest at floating rates (or to the extent we have to refinance existing debt with higher cost debt).
+Added: Furthermore, our interest expense could also increase if interest rates increase (including in connection with rising inflation) as our indebtedness bears interest at floating rates (or to the extent we have to refinance existing debt with higher cost debt), causing our interest expense to be substantial relative to our revenues and cash outflows.
The 2021 Knicks Revolving Credit Facility includes covenants and events of default that may be implicated by a shortfall in the amount of national media rights revenue received by the Knicks.
The 2021 Rangers Revolving Credit Facility includes covenants and events of default that may be implicated by a shortfall in the amount of national and local media rights revenue received by the Rangers.
−Removed: If, due to the impact of the COVID-19 pandemic, protests or otherwise, the NBA and/or NHL 2022-23 seasons are delayed, shortened, suspended or cancelled, the Knicks or the Rangers may be required, absent a cure or waiver, to repay certain amounts borrowed under the revolving credit facilities.
+Added: If, the NBA and/or NHL 2023-24 seasons are delayed, shortened, suspended or cancelled, the Knicks or the Rangers may be required, absent a cure or waiver, to repay certain amounts borrowed under the revolving credit facilities.
If we are unable to repay such amounts due to liquidity constraints, we may need to pursue other sources of financing, including through issuances of equity and/or asset sales.
−Removed: The United Kingdom’s Financial Conduct Authority (“FCA”), which regulates the London Interbank Offered Rate (“LIBOR”), has announced that it will not compel panel banks to contribute to LIBOR after 2021.
−Removed: In November 2020, the ICE Benchmark Administration Limited announced a plan to extend the date as of which most U.S.
−Removed: LIBOR values would cease being computed from December 31, 2021 to June 30, 2023.
−Removed: On July 29, 2021, the Alternative Reference Rates Committee announced that it was recommending the forward-looking Secured Overnight Financing Rate (“SOFR”) term rate.
−Removed: In connection with the refinancing of our revolving credit facilities in December 2021, we amended our revolving credit facilities to adjust to SOFR-based rates.
−Removed: However, the consequences of using the SOFR term rate cannot be entirely predicted but may result in the level of interest payments on the portion of our indebtedness that bears interest at variable rates to be affected, which may adversely impact the amount of our interest payments under such debt.
−Removed: Our Business Has Been Adversely Impacted and May, in the Future, Be Materially Adversely Impacted by an Economic Downturn, Recession, Financial Instability or Inflation.
−Removed: Our business depends upon the ability and willingness of consumers and businesses to purchase tickets (including season tickets) to our games, license suites at The Garden, spend on food and beverages and merchandise and drive continued advertising and sponsorship revenues, and these revenues are sensitive to general economic conditions and consumer buying patterns.
−Removed: Consumer and corporate spending may decline at any time for reasons beyond our control, and the risks associated with our businesses may become more acute in periods of a slowing economy or recession, which may lead to reductions in, among other things, corporate sponsorship and advertising and decreases in attendance at live sports events, demand for suite licenses and food and beverage and merchandise sales, some of which we have experienced in the past.
−Removed: In addition, inflation, which has significantly risen, has and may continue to increase operational costs, and continued increases in interest rates in response to concerns about inflation may have the effect of further increasing economic uncertainty and heightening these risks.
−Removed: As a result, instability and weakness of the U.S.
−Removed: and global economies, including any prolonged effects caused by the COVID-19 pandemic, disruptions to financial markets, inflation, recession, high unemployment, reduced tourism and other geopolitical events and the resulting negative effects on consumers’ and businesses’ discretionary spending may materially negatively affect our business and results of operations.
We Have Incurred Substantial Operating Losses, Adjusted Operating Losses and Negative Cash Flow and There is No Assurance We Will Have Operating Income, Adjusted Operating Income or Positive Cash Flow in the Future.
−Removed: We incurred operating losses of approximately $78 million and $94 million in fiscal years 2021 and 2020, respectively.
+Added: We incurred an operating loss of approximately $78 million in fiscal year 2021.
In addition, we have, in prior periods, incurred adjusted operating losses and negative cash flow and there is no assurance that we will have operating income, adjusted operating income or positive cash flow in the future.
−Removed: If we are unable to play games at The Garden at or near full capacity due to a resurgence in COVID-19 cases or otherwise, our fiscal year 2023 operating results will also be materially impacted.
Significant operating losses may limit our ability to raise necessary financing, or to do so on favorable terms, as such losses will likely be considered by potential investors, lenders and the organizations that issue investment ratings on indebtedness.
7 unchanged sentences
If MSG Entertainment were to breach or become unable to satisfy this obligation under the Arena License Agreements, we could suffer operational difficulties and/or significant losses.
−Removed: See “— We Rely on MSG Entertainment’s Performance Under Various Agreements .”
−Removed: In addition, MSG Entertainment is subject to federal, state and local regulation relating to the operation of The Garden.
+Added: See “— We Rely on Affiliated Entities’ Performance, Including Performance of Financial Obligations, Under Various Agreements.
+Added: In addition, MSG Entertainment is subject to federal, state and local regulations relating to the operation of The Garden.
For example, The Garden holds a liquor license to sell alcoholic beverages at concession stands in The Garden.
Failure by MSG Entertainment to retain, or the suspension of, the liquor license could interrupt or terminate the ability to serve alcoholic beverages at The Garden and may have a negative effect on our business and our results of operations.
−Removed: The Garden is subject to zoning and building regulations, including a special zoning permit.
−Removed: The original permit was granted by the New York City Planning Commission in 1963 and renewed in July 2013 for 10 years.
−Removed: In connection with the renewal, certain government officials and special interest groups sought to use the renewal process to pressure MSG Entertainment to improve Penn Station or to relocate The Garden.
−Removed: There can be no assurance regarding the future renewal of the permit or the terms thereof.
−Removed: In addition, The Garden is, and may in the future be, subject to a variety of other laws and regulations, including environmental, working conditions, labor, immigration and employment laws, and health, safety and sanitation requirements.
−Removed: For example, governmental regulations adopted in the wake of the COVID-19 pandemic impacted the permitted occupancy of The Garden for games of the Knicks and the Rangers and the manner in which we use or maintain The Garden on game days, which impacted the revenue we derive from games and the expenses that we incur on game days.
+Added: The Garden is subject to zoning and building regulations, including a zoning special permit.
+Added: The original permit was granted by the New York City Planning Commission in 1963 and renewed in July 2013 for 10 years (while MSG Entertainment’s current application for renewal of the zoning special permit remains pending, we and MSG Entertainment have been advised that MSG Entertainment can continue to use and operate The Garden as normal until the renewal review process concludes).
+Added: Relevant rail agencies are considering proposals to redevelop Penn Station, which proposed redevelopment would impact The Garden, which sits atop Penn Station.
+Added: Certain government officials and special interest groups have used and may continue to use the renewal process for the zoning special permit to pressure MSG Entertainment to contribute to the redevelopment of Penn Station, relocate The Garden or sell all or portions of The Garden complex.
+Added: For example, in June 2023 the New York Metropolitan Transportation Authority, New Jersey Transit and Amtrak, which operate commuter rail services from Penn Station, issued a compatibility report asserting that The Garden imposes severe constraints on Penn Station that restrict efforts to make its desired improvements.
+Added: There can be no assurance regarding the future renewal of the permit or the terms thereof, and the failure to obtain such renewal or to do so on favorable terms could have a material negative effect on our business.
+Added: In addition, The Garden is, and will in the future continue to be, subject to a variety of other laws and regulations, including environmental, working conditions, labor, immigration and employment laws, and health, safety and sanitation requirements.
+Added: For example, governmental regulations adopted in the wake of the COVID-19 pandemic impacted the permitted occupancy of The Garden for games of the Knicks and the Rangers and the manner in which we use or maintain The Garden on game days during the 2019-20 and 2020-21 seasons, which impacted the revenue we derive from games and the expenses that we incur on game days.
MSG Entertainment’s failure to comply with governmental laws and regulations applicable to the operation of The Garden, or to maintain necessary permits or licenses, could have a material negative effect on our business and results of operations.
3 unchanged sentences
For fiscal year 2023, the tax exemption was $42.4 million.
−Removed: From time to time there
−Removed: have been calls to repeal or amend the tax exemption.
−Removed: Repeal or amendment would require legislative action by New York State.
−Removed: We have entered into Arena License Agreements with subsidiaries of MSG Entertainment, pursuant to which the Knicks and the Rangers play their home games at The Garden.
−Removed: Under the Arena License Agreements, the teams are responsible for 100% of any real estate or similar taxes applicable to The Garden.
+Added: From time to time there have been calls to repeal or amend the tax exemption.
+Added: For example, in January 2023, a number of elected representatives from New York issued a public letter and in July 2023, the New York City Independent Budget Office issued a public report, in each case noting the tax exemption status should be reexamined.
+Added: Any repeal of the tax exemption status would require legislative action by the New York State legislature.
+Added: Under the Arena License Agreements with subsidiaries of MSG Entertainment, pursuant to which the Knicks and the Rangers play their home games at The Garden, the teams are responsible for 100% of any real estate or similar taxes applicable to The Garden.
If the tax exemption is repealed or a team is otherwise subject to the property tax due to no fault of that team, certain revenue allocations that we receive under the applicable Arena License Agreement would be increased as set forth in the applicable Arena License Agreement.
2 unchanged sentences
We May Require Financing to Fund Our Ongoing Operations, the Availability of Which is Highly Uncertain.
+Added: We may require financing to fund our ongoing operations or otherwise engage in transactions that depend on our ability to obtain financing.
The public and private capital and credit markets can experience volatility and disruption.
1 unchanged sentence
For example, the global economy, including credit and financial markets, has recently experienced extreme volatility and disruptions, including diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
−Removed: We may require financing to fund our ongoing operations, including as a result of any impact of the COVID-19 pandemic on our business.
−Removed: In the future we may also engage in transactions that depend on our ability to obtain financing.
Depending upon conditions in the financial markets and/or the Company’s financial performance, we may not be able to raise additional capital on favorable terms, or at all.
3 unchanged sentences
NHL players are covered by a CBA between the NHLPA and the NHL.
−Removed: Both the NBA and the NHL have experienced labor difficulties in the past and may have labor issues in the future.
Labor difficulties may include players’ strikes or protests or management lockouts.
−Removed: For example, the NHL has experienced labor difficulties, including (i) a lockout during the 1994-95 NHL season, which resulted in a regular season that was shortened from 84 to 48 games, (ii) a lockout beginning in September 2004, which resulted in the cancellation of the entire 2004-05 NHL season, and (iii) a lockout during the 2012-13 NHL season, which resulted in a regular season that was shortened from 82 to 48 games.
+Added: Both the NBA and the NHL have experienced labor difficulties in the past and may have labor issues in the future.
+Added: For example, the NHL has experienced lockouts in the past that resulted in a regular season being shortened and the cancellation of the entire season, with a more recent lockout during the 2012-13 NHL season, which resulted in a regular season that was shortened from 82 to 48 games.
The current NHL CBA expires on September 15, 2026 (with the possibility of a one-year extension in certain circumstances).
−Removed: The NBA has also experienced labor difficulties, including (i) a lockout during the 1998-99 season, which resulted in a regular season that was shortened from 82 to 50 games, and (ii) a lockout during the 2011-12 season, which resulted in a regular season that was shortened from 82 games to 66 games.
−Removed: The current NBA CBA expires after the 2023-24 season, but each of the NBA and NBPA has the right (which must be exercised by December 15, 2022) to terminate the CBA effective following the 2022-23 season.
−Removed: Any labor disputes, such as players’ strikes, protests or lockouts, with the unions with which we have CBAs could have a material negative effect on our business and results of operations.
−Removed: In addition, as a result of ongoing labor market disruptions due to the COVID-19 pandemic and otherwise, we and MSG Entertainment (which provides services to us through various commercial agreements as discussed under “—We Rely on MSG Entertainment’s Performance Under Various Agreements”) have faced difficulty in maintaining staffing on Knicks and Rangers game days and have been operating in an increasingly competitive labor market.
−Removed: If we and/or MSG Entertainment are unable to attract and retain qualified people or to do so on reasonable terms, we could suffer operational difficulties and the fan experience at Knicks and Rangers games may be adversely impacted.
−Removed: Competition for qualified employees could require higher wages, which could result in higher labor costs and could have an adverse effect on our business and results of operations.
−Removed: We Rely on MSG Entertainment’s Performance Under Various Agreements.
−Removed: We have various agreements with MSG Entertainment, including a distribution agreement, a tax disaffiliation agreement, a services agreement, an employee matters agreement, arena license agreements, media rights agreements, sponsorship sales and service representation agreements, a team sponsorship allocation agreement, a group ticket sales agreement, a single night rental commission agreement and service representation agreement, as well as certain other arrangements with MSG Entertainment and its subsidiary MSG Networks.
−Removed: These agreements include the allocation of employee benefits, taxes and certain other
−Removed: liabilities and obligations attributable to periods prior to the MSGE Distribution.
−Removed: In connection with the MSGE Distribution, we agreed to provide MSG Entertainment with indemnities with respect to liabilities arising out of our businesses and MSG Entertainment agreed to provide us with indemnities with respect to liabilities arising out of the businesses we transferred to MSG Entertainment.
−Removed: These agreements also include arrangements with respect to support services and a number of ongoing commercial relationships, including our use of The Garden and the allocation of certain revenues and expenses from games played by our sports teams at The Garden.
−Removed: MSG Entertainment provides certain business services that were performed by internal resources prior to the MSGE Distribution, such as information technology, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, investor relations, corporate communications, benefit plan administration and reporting and internal audit functions.
−Removed: These services include the collection and storage of certain personal information regarding employees and/or customers as well as information regarding the Company, advertisers and others.
+Added: The NBA has also experienced lockouts in the past that resulted in regular seasons being shortened, with a most recent lockout during the 2011-12 season, which resulted in a regular season that was shortened from 82 games to 66 games.
+Added: The current NBA CBA expires after the 2029-30 season, but each of the NBA and NBPA has the right to terminate the CBA effective following the 2028-29 season.
+Added: Any labor disputes, such as players’ strikes, protests or lockouts, with the unions with which we have CBAs have in the past had and could in the future have a material negative effect on our business and results of operations.
+Added: MSG Entertainment provides certain services to us through various commercial agreements, including day-of-game services.
+Added: These services are provided by MSG Entertainment employees that are subject to CBAs.
+Added: Any labor disputes, such as strikes or lockouts, with the unions with which MSG Entertainment has CBAs could impact staffing on Knicks and Rangers game days.
+Added: In addition, we and MSG Entertainment have in the past faced difficulty in maintaining staffing on Knicks and Rangers game days and have been operating in an increasingly competitive labor market.
+Added: If we and/or MSG Entertainment are unable to attract and retain qualified people or to do so on reasonable terms, or if game day staffing is impacted due to a labor dispute, we could suffer operational difficulties and the fan experience at Knicks and Rangers games may be adversely impacted.
+Added: Competition for qualified employees has required higher wages, which has resulted in higher labor costs.
+Added: If wages and labor costs increase further, this could have an adverse effect on our business and results of operations.
+Added: See “— We Rely on Affiliated Entities’ Performance, Including Performance of Financial Obligations, Under Various Agreements.
+Added: We Rely on Affiliated Entities’ Performance, Including Performance of Financial Obligations, Under Various Agreements.
+Added: We have various agreements with MSG Entertainment, which include arena license agreements, sponsorship sales and service representation agreements, a team sponsorship allocation agreement, a group ticket sales agreement, and a single night rental commission agreement.
+Added: These agreements provide for a number of ongoing commercial relationships, including our use of The Garden and the allocation of certain revenues and expenses from games played by our sports teams at The Garden.
+Added: In addition, we also have a services agreement and sublease agreement.
+Added: The services agreement provides certain business services to the Company, such as information technology, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, investor relations, corporate communications, benefit plan administration and reporting and internal audit functions.
The services agreement and certain of the commercial arrangements are subject to potential termination by MSG Entertainment in the event MSG Entertainment and the Company are no longer affiliates.
−Removed: The Company relies on MSG Entertainment to perform its obligations under these agreements.
−Removed: If MSG Entertainment were to breach, become unable to satisfy its material obligations under these agreements as a result of ongoing labor market disruptions or otherwise, fail to satisfy its indemnification or other financial obligations, or these agreements otherwise terminate or expire and we do not enter into replacement agreements, we could suffer operational difficulties and/or significant losses.
+Added: We have various agreements with Sphere Entertainment, which include local media rights agreements with MSG Networks (a wholly owned subsidiary of Sphere Entertainment) which provide MSG Networks with exclusive local linear and digital rights to home and away games of the Knicks and the Rangers, as well as other team-related programming.
+Added: These media rights agreements provide a significant recurring and growing revenue stream for the Company.
+Added: In recent years, certain regional sports networks have experienced financial difficulties.
+Added: For example, Diamond Sports Group, an unconsolidated subsidiary of Sinclair Broadcasting Group Inc., which licenses and distributes sports content in a number of regional markets, filed for protection under Chapter 11 of the bankruptcy code in March 2023.
+Added: If MSG Networks were to experience financial difficulties,
+Added: MSG Networks may be unable or unwilling to fulfill its contractual obligations under the media rights agreements and regional broadcasting of Knicks and Rangers games may be interrupted, any of which could have a material negative effect on our business and results of operations.
+Added: In addition, in connection with the Sphere Distribution, we agreed to provide Sphere Entertainment with indemnities with respect to liabilities arising out of our businesses and Sphere Entertainment agreed to provide us with indemnities with respect to liabilities arising out of the businesses we transferred to Sphere Entertainment.
+Added: The Company and its affiliated entities each rely on the other to perform its respective obligations under these agreements.
+Added: If one of the affiliated entities were to breach, become unable to satisfy their material obligations under these agreements because of financial difficulties, ongoing labor market disruptions or otherwise, fail to satisfy their indemnification or other financial obligations, or these agreements otherwise terminate or expire and we do not enter into replacement agreements, we could suffer operational difficulties and/or significant losses.
Our Business is Subject to Seasonal Fluctuations and our Operating Results and Cash Flow Can Vary Substantially from Period to Period.
13 unchanged sentences
Any such activity or threatened activity at or near The Garden or other similar venues in other locations could result in reduced attendance at our games and, more generally, have a material negative effect on our business and results of operations.
−Removed: Similarly, a major epidemic or pandemic, or the threat of such an event, could adversely affect attendance at our games or, depending on its severity, halt our operations entirely.
−Removed: See “— Sports Business Risks — Our Operations and Operating Results Have Been, and May in the Future be, Materially Impacted by the COVID-19 Pandemic and Government and League Actions Taken in Response .” Moreover, the costs of protecting against such incidents, including any costs of protecting against the spread of COVID-19, reduce the profitability of our operations.
−Removed: In addition, such events or the threat of such events may harm our ability to obtain or renew insurance coverage on favorable terms or at all.
+Added: Similarly, a major epidemic or pandemic, or the threat of such an event, has in the past materially affected, and could in the future materially adversely affect attendance at our games or, depending on its severity, halt our operations entirely.
+Added: See “— Sports Business Risks — Our Operations and Operating Results Were Materially Impacted by the COVID-19 Pandemic and Government and League Actions Taken in Response, and a Resurgence of the Pandemic or Another Pandemic or Other Public Health Emergency Could Adversely Affect Our Business and Results of Operations.
+Added: ” Moreover, the costs of protecting against such incidents could reduce the profitability of our operations.
+Added: In addition, such events or the threat of such events may harm our or our affiliates’ ability to obtain or renew insurance coverage on favorable terms or at all.
We Are Subject to Governmental Regulation, Which Can Change, and Any Failure to Comply With These Regulations May Have a Material Negative Effect on Our Business and Results of Operations.
4 unchanged sentences
As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities.
−Removed: For example, California has passed a comprehensive data privacy law, the CCPA, and other states including Virginia and Colorado have also passed similar laws.
−Removed: Additionally, the CPRA will impose additional data protection obligations on covered businesses, including additional consumer rights procedures and obligations, limitations on data uses, new audit requirements for higher risk data, and constraints on certain uses of sensitive data.
−Removed: The majority of the CPRA provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required.
+Added: For example, California has passed a comprehensive data privacy law, the CCPA, and a number of other states including Virginia, Colorado, Utah and Connecticut have also passed similar laws, and various additional states may do so in the near future.
+Added: Additionally, the CPRA imposes additional data protection obligations on covered businesses, including additional consumer rights procedures and obligations, limitations on data uses, new audit requirements for higher risk data, and constraints on certain uses of sensitive data.
+Added: The majority of the CPRA provisions went into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required.
Further, there are several legislative proposals in the United States, at both the federal and state level, that could impose new privacy and security obligations.
6 unchanged sentences
Our failure to comply with applicable governmental laws and regulations, or to maintain necessary permits or licenses, could result in liability that could have a material negative effect on our business and results of operations.
−Removed: Our business has also been materially impacted by government actions taken in response to the COVID-19 pandemic.
−Removed: See “— Sports Business Risks — Our Operations and Operating Results Have Been, and May in the Future be, Materially Impacted by the COVID-19 Pandemic and Government and League Actions Taken in Response .”
+Added: Our business was also materially impacted by government actions taken in response to the COVID-19 pandemic, and could be materially impacted by government actions in response to a pandemic or other public health emergency in the future.
+Added: See “— Sports Business Risks — Our Operations and Operating Results Were Materially Impacted by the COVID-19 Pandemic and Government and League Actions Taken in Response, and a Resurgence of the Pandemic or Another Pandemic or Other Public Health Emergency Could Adversely Affect Our Business and Results of Operations.
Weather or Other Conditions May Impact Our Games, Which May Have a Material Negative Effect on Our Business and Results of Operations.
3 unchanged sentences
We Face Continually Evolving Cybersecurity and Similar Risks, Which Could Result in Loss, Disclosure, Theft, Destruction or Misappropriation of, or Access to, Our Confidential Information and Cause Disruption to Our Business, Damage to Our Brands and Reputation, Legal Exposure and Financial Losses.
−Removed: We may collect and store, including by electronic means, certain personal, proprietary and other sensitive information, including payment card information, that is provided to us through purchases, registration on our websites or mobile applications, or otherwise in communication or interaction with us.
−Removed: These activities require the use of centralized data storage, including through third-party service providers.
−Removed: Data maintained in electronic form is subject to the risk of security incidents, including breach, compromise, intrusion, tampering, theft, misappropriation or other malicious activity.
+Added: We collect and store, including by electronic means, certain personal, proprietary and other sensitive information, including payment card information, that is provided to us through purchases, registration on our websites or mobile applications, or otherwise in communication or interaction with us.
+Added: These activities require the use of online services and centralized data storage, including through third-party service providers.
+Added: Data maintained in electronic form is subject to the risk of security incidents, including breach, compromise, intrusion, tampering, theft, destruction, misappropriation or other malicious activity.
Our ability to safeguard such personal and other sensitive information, including information regarding the Company and our customers, sponsors, partners and employees, independent contractors and vendors, is important to our business.
1 unchanged sentence
These protections are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated.
−Removed: Despite our efforts, the risks of a security incident cannot be entirely eliminated and our information technology and other systems that maintain and transmit customer, sponsor, partner, Company, employee and other confidential and proprietary information may be compromised due to employee error or other action, computer malware or ransomware, viruses, hacking and phishing attacks, denial-of-service attacks, business email compromises, or otherwise.
−Removed: Such compromise could affect the security of information on our network, or that of a third-party service provider, including MSG Entertainment to which we
−Removed: outsource information technology services, including technology relating to season ticket holders and purchases of individual game tickets, and certain payment processing.
−Removed: For example, in November 2016, a payment card issue that affected cards used at merchandise and food and beverage locations at several of the Company’s pre-MSGE Distribution venues, including its New York venues and The Chicago Theatre, was identified and addressed with the assistance of security firms.
+Added: Despite our efforts, the risks of a security incident cannot be entirely eliminated and our information technology and other systems that maintain and transmit customer, sponsor, partner, Company, employee and other confidential and proprietary information may be compromised due to employee error or other circumstances such as malware or ransomware, viruses,
+Added: hacking and phishing attacks, denial-of-service attacks, business email compromises, or otherwise.
+Added: Such compromise could affect the security of information on our network, or that of a third-party service provider, including MSG Entertainment to which we outsource information technology services, including technology relating to season ticket holders and purchases of individual game tickets, and certain payment processing.
+Added: For example, in November 2016, a payment card issue that affected cards used at merchandise and food and beverage locations at several of the Company’s pre-Sphere Distribution venues, including its New York venues and The Chicago Theatre, was identified and addressed with the assistance of security firms.
The issue was promptly fixed and enhanced security measures were implemented.
Additionally, outside parties may attempt to fraudulently induce employees, vendors or users to disclose sensitive, proprietary or confidential information in order to gain access to data and systems.
−Removed: As a result of any of these actions, such sensitive, proprietary and/or confidential information may be lost, disclosed, accessed or taken without authorization.
−Removed: See “— Economic and Business Relationship Risks — We Rely on MSG Entertainment’s Performance Under Various Agreements ” for a discussion of services MSG Entertainment performs on our behalf.
+Added: As a result of any of these actions, such sensitive, proprietary and/or confidential information may be lost, disclosed, accessed or taken without consent.
+Added: See “— Economic and Business Relationship Risks— We Rely on Affiliated Entities’ Performance, Including Performance of Financial Obligations, Under Various Agreements.
+Added: ” for a discussion of services MSG Entertainment performs on our behalf.
The Company also continues to review and enhance our security measures in light of the constantly evolving techniques used to gain unauthorized access to networks, data, software and systems.
3 unchanged sentences
In addition, in the event of a security incident, changes in legislation may increase the risk of potential litigation.
−Removed: For example, the CCPA, which provides a private right of action (in addition to statutory damages) for California residents whose sensitive personal information is breached as a result of a business’ violation of its duty to reasonably secure such information, took effect on January 1, 2020 and will be expanded by the CPRA once it takes effect in January 2023.
+Added: For example, the CCPA, which provides a private right of action (in addition to statutory damages) for California residents whose sensitive personal information is breached as a result of a business’ violation of its duty to reasonably secure such information, took effect on January 1, 2020 and was expanded by the CPRA which took effect in January 2023.
+Added: A number of other states have passed similar laws and additional states may do so in the near future.
Our insurance coverage may not be adequate to cover the costs of a data breach, indemnification obligations, or other liabilities.
2 unchanged sentences
The Unavailability of Systems Upon Which We Rely May Have a Material Negative Effect on Our Business and Results of Operations.
−Removed: We rely upon various internal and third-party software or systems in the operation of our business, including, with respect to ticket sales, credit card processing, email marketing, point of sale transactions, database, inventory, human capital management and financial systems.
+Added: We rely upon various internal and third-party software or systems in the operation of our business, including, with respect to ticket sales, credit card processing, email marketing, point of sale transactions, database, inventory, human resource management and financial systems.
From time to time, certain of the arrangements for these systems may not be covered by long-term agreements.
−Removed: The failure or unavailability of these internal or third-party services or systems, depending upon its severity and duration, could have a material negative effect on our business and results of operations.
−Removed: See also “— Economic and Business Relationship Risks — We Rely on MSG Entertainment’s Performance Under Various Agreements ” for a discussion of services MSG Entertainment performs on our behalf.
+Added: System interruption and the lack of integration and redundancy in the information systems and infrastructure, both of our own websites and other computer systems and of affiliate and third-party software, computer networks, apps and other communications systems service providers on which we rely may adversely affect our ability to operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.
+Added: Such interruptions could occur by virtue of natural disaster, malicious actions, such as hacking or acts of terrorism or war, or human error.
+Added: See also “— Economic and Business Relationship Risks — We Rely on Affiliated Entities’ Performance, Including Performance of Financial Obligations, Under Various Agreements.
+Added: ” for a discussion of services MSG Entertainment performs on our behalf.
+Added: While we have backup systems and offsite data centers for certain aspects of our operations, disaster recovery planning by its nature cannot be for all eventualities.
+Added: In addition, we may not have adequate insurance coverage to compensate for any or all losses from a major interruption.
+Added: If any of these adverse events were to occur, it could adversely affect our business, financial condition and results of operations.
We May Become Subject to Infringement or Other Claims Relating to Our Content or Technology.
−Removed: From time to time, third parties may assert against us alleged intellectual property (e.g., copyright, trademark and patent) or other claims relating to our technologies or other material, some of which may be material to our business.
+Added: From time to time, third parties have in the past and may in the future assert against us alleged intellectual property (e.g., copyright, trademark and patent) or other claims relating to our technologies or other material, some of which may be material to our business.
Any such claims, regardless of their merit, could cause us to incur significant costs that could harm our results of operations.
−Removed: These claims may not be covered by insurance or could involve exposures that exceed the limits of any applicable insurance policy.
+Added: These claims may not be covered by insurance or could involve exposures that exceed the limits of any
+Added: applicable insurance policy.
In addition, if we are unable to continue use of certain intellectual property rights, our business and results of operations could be materially negatively impacted.
There Is a Risk of Personal Injuries and Accidents at The Garden, Which Could Subject Us to Personal Injury or Other Claims;
−Removed: We are Subject to the Risk of Adverse Outcomes in Other Types of Litigation.
+Added: We are Subject to the Risk of Adverse Outcomes or Negative Publicity in Other Types of Litigation.
There are inherent risks associated with having customers attend our teams’ games.
2 unchanged sentences
Incidents in connection with one of our games or an event hosted by MSG Entertainment at The Garden could also reduce attendance at our other games, and may have a negative impact on our revenue and results of operations.
−Removed: Under the Arena License Agreements, MSG Entertainment and the Company have reciprocal indemnity obligations to each other in
−Removed: connection with their respective acts or omissions in or about The Garden during the home games of the Knicks and the Rangers.
+Added: Under the Arena License Agreements, MSG Entertainment and the Company have reciprocal indemnity obligations to each other in connection with their respective acts or omissions in or about The Garden during the home games of the Knicks and the Rangers.
We, the NBA, and the NHL maintain insurance policies that provide coverage for incidents in the ordinary course of business, but there can be no assurance that such indemnities or insurance will be adequate at all times and in all circumstances.
−Removed: From time to time, the Company and its subsidiaries are involved in various legal proceedings, including proceedings or lawsuits brought by governmental agencies, stockholders, customers, employees, other private parties and other stakeholders.
−Removed: The outcome of litigation is inherently unpredictable and, regardless of the merits of the claims, litigation may be expensive, time-consuming, disruptive to our operations, harmful to our reputation and distracting to management.
+Added: From time to time, the Company, its subsidiaries and/or our affiliates are involved in various legal proceedings, including proceedings or lawsuits brought by governmental agencies, stockholders, customers, employees, other private parties and other stakeholders.
+Added: The outcome of litigation is inherently unpredictable and, regardless of the merits of the claims, litigation may be expensive, time-consuming, disruptive to our operations and distracting to management.
+Added: In addition, publicity from these matters could negatively impact our business or reputation, regardless of the accuracy of such publicity.
As a result, we may incur liability from litigation (including in connection with settling such litigation) which could be material and for which we may not have available or adequate insurance coverage or be subject to other forms of non-monetary relief which may adversely affect the Company.
1 unchanged sentence
Corporate Governance Risks
−Removed: We Could Have Significant Tax Liability as a Result of the MSGE Distribution.
−Removed: We have obtained an opinion from Sullivan & Cromwell LLP substantially to the effect that, among other things, the MSGE Distribution qualifies as a tax-free distribution under the Internal Revenue Code (the “Code”).
+Added: We Could Have Significant Tax Liability as a Result of the Sphere Distribution.
+Added: We have obtained an opinion from Sullivan & Cromwell LLP substantially to the effect that, among other things, the Sphere Distribution qualifies as a tax-free distribution under the Internal Revenue Code.
The opinion is not binding on the Internal Revenue Service (the “IRS”) or the courts.
The opinion relies on factual representations and reasonable assumptions, which if incorrect or inaccurate may jeopardize the ability to rely on such opinion.
−Removed: If the MSGE Distribution does not qualify for tax-free treatment for U.S.
−Removed: federal income tax purposes, then, in general, we would be subject to tax as if we had sold the MSG Entertainment common stock in a taxable sale for its fair value.
−Removed: MSG Entertainment stockholders would be subject to tax as if they had received a distribution equal to the fair value of MSG Entertainment common stock that was distributed to them, which generally would be treated first as a taxable dividend to the extent of our earnings and profits, then as a non-taxable return of capital to the extent of each holder’s tax basis in its MSG Entertainment common stock, and thereafter as capital gain with respect to any remaining value.
−Removed: It is expected that the amount of any such taxes to MSG Entertainment stockholders and us would be substantial.
−Removed: We May Have a Significant Indemnity Obligation to MSG Entertainment if the MSGE Distribution Is Treated as a Taxable Transaction.
−Removed: We have entered into a Tax Disaffiliation Agreement with MSG Entertainment, which sets out each party’s rights and obligations with respect to deficiencies and refunds, if any, of federal, state, local or foreign taxes for periods before and after the MSGE Distribution and related matters such as the filing of tax returns and the conduct of IRS and other audits.
−Removed: Pursuant to the Tax Disaffiliation Agreement, we are required to indemnify MSG Entertainment for losses and taxes of MSG Entertainment resulting from our breach of certain covenants and for certain taxable gain recognized by MSG Entertainment, including as a result of certain acquisitions of our stock or assets.
−Removed: If we are required to indemnify MSG Entertainment under the circumstances set forth in the Tax Disaffiliation Agreement, we may be subject to substantial liabilities, which could adversely affect our financial position.
−Removed: The MSGS Distribution Could Result in Significant Tax Liability.
−Removed: We have received an opinion from Sullivan & Cromwell LLP substantially to the effect that, among other things, the MSGS Distribution qualified as a tax-free distribution under the Code.
−Removed: The opinion is not binding on the IRS or the courts.
−Removed: Additionally, MSG Networks received a private letter ruling from the IRS concluding that certain limited aspects of the MSGS Distribution do not prevent the MSGS Distribution from satisfying certain requirements for tax-free treatment under the Code.
−Removed: The opinion and the private letter ruling relied on factual representations and reasonable assumptions, which if incorrect or inaccurate may jeopardize the ability to rely on such opinion and letter ruling.
−Removed: If the MSGS Distribution does not qualify for tax-free treatment for U.S.
−Removed: federal income tax purposes, then, in general, MSG Networks (which is a wholly-owned subsidiary of MSG Entertainment following the completion of the MSGE-MSGN Merger in July 2021) would recognize taxable gain in an amount equal to the excess of the fair market value of the common stock of our Company over MSG Networks’ tax basis therein (i.e., as if it had sold the common stock of our Company in a taxable sale for its fair market value).
−Removed: In addition, the receipt by MSG Networks’ former stockholders of common stock of our Company would be a taxable distribution, and each U.S.
−Removed: holder that participated in the MSGS Distribution would recognize a taxable distribution as if the U.S.
−Removed: holder had received a distribution equal to the fair market value of our common stock that was distributed to it, which generally would be treated first as a taxable dividend to the extent of MSG Networks’ earnings and profits, then as a non-taxable return of capital to the extent of each U.S.
−Removed: holder’s tax basis in its MSG Networks common stock, and thereafter as capital gain with respect to any remaining value.
−Removed: It is expected that the amount of any such taxes to MSG Networks’ former stockholders and MSG Networks would be substantial.
−Removed: See “— We May Have a Significant Indemnity Obligation to MSG Entertainment if the MSGE Distribution Is Treated as a Taxable Transaction .”
−Removed: We May Have a Significant Indemnity Obligation to MSG Networks if the MSGS Distribution Is Treated as a Taxable Transaction.
−Removed: We entered into a Tax Disaffiliation Agreement with MSG Networks in connection with the MSGS Distribution, which sets out each party’s rights and obligations with respect to deficiencies and refunds, if any, of federal, state, local or foreign taxes for periods before and after the MSGS Distribution and related matters such as the filing of tax returns and the conduct of IRS and other audits.
−Removed: Pursuant to the Tax Disaffiliation Agreement, we are required to indemnify MSG Networks for losses and taxes of MSG Networks resulting from the breach of certain covenants and for certain taxable gain recognized by MSG Networks, including as a result of certain acquisitions of our stock or assets.
−Removed: If we are required to indemnify MSG Networks under the circumstances set forth in the Tax Disaffiliation Agreement, we may be subject to substantial liabilities, which could materially adversely affect our financial position.
+Added: If the Sphere Distribution does not qualify for tax-free treatment for U.S.
+Added: federal income tax purposes, then, in general, we would be subject to tax as if we had sold the Sphere Entertainment common stock in a taxable sale for its fair value.
+Added: Sphere Entertainment stockholders would be subject to tax as if they had received a distribution equal to the fair value of Sphere Entertainment common stock that was distributed to them, which generally would be treated first as a taxable dividend to the extent of our earnings and profits, then as a non-taxable return of capital to the extent of each holder’s tax basis in its Sphere Entertainment common stock, and thereafter as capital gain with respect to any remaining value.
+Added: It is expected that the amount of any such taxes to MSG Sphere stockholders and us would be substantial.
+Added: We May Have a Significant Indemnity Obligation to Sphere Entertainment if the Sphere Distribution Is Treated as a Taxable Transaction.
+Added: We have entered into a Tax Disaffiliation Agreement with Sphere Entertainment which sets out each party’s rights and obligations with respect to deficiencies and refunds, if any, of federal, state, local or foreign taxes for periods before and after the Sphere Distribution and related matters such as the filing of tax returns and the conduct of IRS and other audits.
+Added: Pursuant to the Tax Disaffiliation Agreement, we are required to indemnify Sphere Entertainment for losses and taxes of Sphere Entertainment resulting from our breach of certain covenants and for certain taxable gain recognized by MSG Sphere, including as a result of certain acquisitions of our stock or assets.
+Added: If we are required to indemnify Sphere Entertainment under the circumstances set forth in the Tax Disaffiliation Agreement, we may be subject to substantial liabilities, which could adversely affect our financial position.
We are Controlled by the Dolan Family.
3 unchanged sentences
• Class B Common Stock, par value $0.01 per share (“Class B Common Stock”), which is entitled to ten votes per share and is entitled collectively to elect the remaining 75% of our Board of Directors.
−Removed: As of July 29, 2022, the Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”), collectively own all of our Class B Common Stock, approximately 3.2% of our outstanding Class A Common Stock (inclusive of options exercisable and RSUs vesting within 60 days of July 29, 2022) and approximately 70.7% of the total voting power of all our outstanding common stock.
+Added: As of July 31, 2023, the Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”), collectively own all of our Class B Common Stock, approximately 3.3% of our outstanding Class A Common Stock and approximately 71.0% of the total voting power of all our outstanding common stock (in each case, inclusive of options exercisable and RSUs vesting within 60 days of July 31, 2023).
The members of the Dolan Family Group holding Class B Common Stock have executed a stockholders agreement (the “Stockholders Agreement”) that has the effect of causing the voting power of the holders of our Class B Common Stock to be cast as a block with respect to all matters to be voted on by holders of Class B Common Stock.
17 unchanged sentences
Shares of Class B Common Stock owned by Excluded Trusts are to be voted on all matters in accordance with the determination of the Excluded Trusts holding a majority of the Class B Common Stock held by all Excluded Trusts, except in the case of a vote on a going-private transaction or a change in control transaction, in which case a vote of trusts holding two-thirds of the Class B Common Stock owned by Excluded Trusts is required.
−Removed: The Dolan Family Group is able to prevent a change in control of our Company and no person interested in acquiring us would be able to do so without obtaining the consent of the Dolan Family Group.
+Added: The Dolan Family Group is able to prevent a change in control of the Company and no person interested in acquiring us would be able to do so without obtaining the consent of the Dolan Family Group.
The Dolan Family Group, by virtue of their stock ownership, have the power to elect all of our directors subject to election by holders of Class B Common Stock and are able collectively to control stockholder decisions on matters on which holders of all classes of our common stock vote together as a single class.
4 unchanged sentences
As a result, the Dolan Family Group also has the power to prevent such issuance or amendment.
−Removed: The Dolan Family Group also controls MSG Entertainment (including its subsidiary MSG Networks) and AMC Networks Inc.
+Added: The Dolan Family Group also controls MSG Entertainment, Sphere Entertainment and AMC Networks Inc.
(“AMC Networks”).
9 unchanged sentences
We have entered into registration rights agreements with Charles F.
−Removed: Dolan, members of his family, certain Dolan family interests, and the Dolan Family Foundation that provide them with “demand” and “piggyback” registration rights with respect to approximately 5.1 million shares of Class A Common Stock, including shares issuable upon conversion of shares of Class B Common Stock.
+Added: Dolan, members of his family, certain Dolan family interests, and the Dolan Family Foundation that provide
+Added: them with “demand” and “piggyback” registration rights with respect to approximately 5.2 million shares of Class A Common Stock, including shares issuable upon conversion of shares of Class B Common Stock.
Sales of a substantial number of shares of Class A Common Stock, including sales pursuant to these registration rights, could adversely affect the market price of the Class A Common Stock and could impair our future ability to raise capital through an offering of our equity securities.
1 unchanged sentence
The Company is the owner of professional sports franchises in the NBA and NHL.
−Removed: As a result, transfers and ownership of our common stock are subject to certain restrictions under the governing documents of the NBA and NHL as well as the Company’s consent and other agreements with the NBA and NHL in connection with their approval of the MSGS Distribution and the MSGE Distribution.
+Added: As a result, transfers and ownership of our common stock are subject to certain restrictions under the governing documents of the NBA and NHL as well as the Company’s consent and other agreements with the NBA and NHL in connection with their approval of the MSGS Distribution and the Sphere Distribution.
These restrictions are described under “Description of Capital Stock — Class A Common Stock and Class B Common Stock — Transfer Restrictions” in Exhibit 4.5 to this annual report on Form 10-K.
1 unchanged sentence
If a holder fails to comply with such a notice, in addition to any other remedies that may be available, the Company may redeem the shares at 85% of the fair market value of those shares.
−Removed: We Share Certain Directors, Officers and Employees with MSG Entertainment and/or AMC Networks, Which Means Those Officers and Directors Do Not Devote Their Full Time and Attention to Our Affairs and the Overlap May Give Rise to Conflicts.
+Added: We Share Certain Directors, Officers and Employees with MSG Entertainment, Sphere Entertainment and/or AMC Networks, Which Means Those Officers and Directors Do Not Devote Their Full Time and Attention to Our Affairs and the Overlap May Give Rise to Conflicts.
Our Executive Chairman, James L.
−Removed: Dolan, also serves as the Executive Chairman and Chief Executive Officer of MSG Entertainment and Non-Executive Chairman of AMC Networks.
+Added: Dolan, also serves as the Executive Chairman and Chief Executive Officer of MSG Entertainment and Sphere Entertainment and as Non-Executive Chairman of AMC Networks and our Executive Vice President, David Granville-Smith, also serves as the Executive Vice President of Sphere Entertainment and AMC Networks.
+Added: Our President and Chief Operating Officer, David Hopkinson, also provides sponsorship-related services to MSG Entertainment, for which the Company is fully reimbursed.
In addition, one of our directors, Charles F.
−Removed: Dolan, is the Chairman Emeritus of AMC Networks and a director of MSG Entertainment.
−Removed: Furthermore, ten members of our Board of Directors (including James L.
+Added: Dolan, is the Chairman Emeritus of AMC Networks and a director of MSG Entertainment and Sphere Entertainment.
+Added: Furthermore, nine members of our Board of Directors (including James L.
Dolan and Charles F.
−Removed: Dolan) are also directors of MSG Entertainment and seven members of our Board of Directors are also directors of AMC Networks (including James L.
+Added: Dolan) are also directors of MSG Entertainment, ten members of our Board of Directors (including James L.
Dolan and Charles F.
+Added: Dolan) are also directors of Sphere Entertainment and six members of our Board of Directors (including James L.
+Added: Dolan and Charles F.
+Added: Dolan) are also directors of AMC Networks.
Our Vice Chairman, Gregg G.
−Removed: Seibert, also serves as the Vice Chairman of MSG Entertainment and AMC Networks and our Senior Vice President, Associate General Counsel and Secretary, Mark C.
−Removed: Cresitello, also serves as Secretary of MSG Entertainment.
+Added: Seibert, also serves as the Vice Chairman of MSG Entertainment, Sphere Entertainment and AMC Networks.
+Added: Further, our Senior Vice President, Associate General Counsel and Secretary, Mark C.
+Added: Cresitello, also serves as Secretary of Sphere Entertainment.
As a result, these individuals do not devote their full time and attention to the Company’s affairs.
The overlapping directors, officers and employees may have actual or apparent conflicts of interest with respect to matters involving or affecting each company.
−Removed: For example, the potential for a conflict of interest exists when we on the one hand, and MSG Entertainment and/or AMC Networks on the other hand, look at certain acquisitions and other corporate opportunities that may be suitable for more than one of the companies.
−Removed: Also, conflicts may arise if there are issues or disputes under the commercial arrangements that exist between MSG Entertainment or AMC Networks and us.
−Removed: In addition, certain of our directors, officers and employees hold MSG Entertainment and/or AMC Networks stock, stock options and/or restricted stock units.
−Removed: These ownership interests could create actual, apparent or potential conflicts of interest when these individuals are faced with decisions that could have different implications for our Company and MSG Entertainment or AMC Networks.
−Removed: See “Certain Relationships and Potential Conflicts of Interest” in our Proxy Statement filed with the SEC on October 22, 2021 for a discussion of certain procedures we instituted to help ameliorate such potential conflicts with MSG Entertainment and/or AMC Networks that may arise.
−Removed: Our Overlapping Directors and Executive Officers with MSG Entertainment and/or AMC Networks May Result in the Diversion of Corporate Opportunities to MSG Entertainment and/or AMC Networks and Other Conflicts and Provisions in Our Amended and Restated Certificate of Incorporation May Provide Us No Remedy in That Circumstance.
−Removed: The Company acknowledges that directors and officers of the Company may also be serving as directors, officers, employees, consultants or agents of MSG Entertainment and/or AMC Networks and their respective subsidiaries and that the Company may engage in material business transactions with such entities.
−Removed: The Company’s Board of Directors has adopted resolutions putting in place policies and arrangements whereby the Company has renounced its rights to certain business opportunities and no director or officer of the Company who is also serving as a director, officer, employee, consultant or agent of MSG Entertainment and/or AMC Networks and their subsidiaries will be liable to the Company or its stockholders for breach of any fiduciary duty that would otherwise occur by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of opportunities set forth in such policies) to MSG Entertainment and/or AMC Networks or any of their subsidiaries instead of the Company, or does not refer or communicate information regarding such corporate opportunities to the Company.
+Added: For example, the potential for a conflict of interest exists when we on the one hand, and MSG Entertainment, Sphere Entertainment and/or AMC Networks on the other hand, look at certain acquisitions and other corporate opportunities that may be suitable for more than one of the companies.
+Added: Also, conflicts may arise if there are issues or disputes under the commercial arrangements that exist between MSG Entertainment, Sphere Entertainment or AMC Networks and us.
+Added: In addition, certain of our directors, officers and employees hold MSG Entertainment, Sphere Entertainment and/or AMC Networks stock, stock options and/or restricted stock units.
+Added: These ownership interests could create actual, apparent or potential conflicts of interest when these individuals are faced with decisions that could have different implications for the Company and MSG Entertainment, Sphere Entertainment or AMC Networks.
+Added: See “Certain Relationships and Potential Conflicts of Interest” in our Current Report on Form 8-K filed with the SEC on April 15, 2023 for a discussion of certain procedures we instituted to help ameliorate such potential conflicts with MSG Entertainment, Sphere Entertainment and/or AMC Networks that may arise.
+Added: Our Overlapping Directors and Executive Officers with MSG Entertainment, Sphere Entertainment and/or AMC Networks May Result in the Diversion of Corporate Opportunities to MSG Entertainment, Sphere Entertainment and/or AMC Networks and Other Conflicts and Provisions in Our Amended and Restated Certificate of Incorporation May Provide Us No Remedy in That Circumstance.
+Added: The Company acknowledges that directors and officers of the Company may also be serving as directors, officers, employees, consultants or agents of MSG Entertainment, Sphere Entertainment and/or AMC Networks and their respective subsidiaries and that the Company may engage in material business transactions with such entities.
+Added: The Company’s Board of Directors has adopted resolutions putting in place policies and arrangements whereby the Company has renounced its rights to certain business opportunities and no director or officer of the Company who is also serving as a director, officer, employee, consultant or agent of MSG Entertainment, Sphere Entertainment and/or AMC Networks and their subsidiaries will be liable to the
+Added: Company or its stockholders for breach of any fiduciary duty that would otherwise occur by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of opportunities set forth in such policies) to MSG Entertainment, Sphere Entertainment and/or AMC Networks or any of their subsidiaries instead of the Company, or does not refer or communicate information regarding such corporate opportunities to the Company.
Unresolved Staff Comments
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.