What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-02 compared with 2023-05-04 · 237 added, 318 removed, 471 unchanged (54% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

September 30,

2023 June 30,

2 unchanged sentences

Restricted cash 1,211 61

Accounts receivable, net of allowance for doubtful accounts of $ 0 and $ 0 as of March 31, 2023 and June 30, 2022, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 0 and $ 0 as of September 30, 2023 and June 30, 2023, respectively

34,809 40,139

3 unchanged sentences

Total current assets 200,796 149,233

Property and equipment, net of accumulated depreciation and amortization of $ 49,331 and $ 46,794 as of March 31, 2023 and June 30, 2022, respectively

Property and equipment, net of accumulated depreciation and amortization of $ 49,911 and $ 49,117 as of September 30, 2023 and June 30, 2023, respectively

30,244 30,501

Right-of-use lease assets 713,350 715,283

Amortizable intangible assets, net 469 636

Indefinite-lived intangible assets 103,644 103,644

Goodwill 226,523 226,523

Investments 57,703 67,374

Other assets 33,825 22,459

4 unchanged sentences

(in thousands, except per share data)

September 30,

2023 June 30,

17 unchanged sentences

Deferred revenue, noncurrent 1,605 12,666

Other liabilities 1,004 1,002

Total liabilities 1,724,628 1,652,251

3 unchanged sentences

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

19,364 and 19,697 shares outstanding as of March 31, 2023 and June 30, 2022, respectively

19,404 and 19,364 shares outstanding as of September 30, 2023 and June 30, 2023, respectively

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

4,530 shares outstanding as of March 31, 2023 and June 30, 2022

4,530 shares outstanding as of September 30, 2023 and June 30, 2023

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

none outstanding as of March 31, 2023 and June 30, 2022

none outstanding as of September 30, 2023 and June 30, 2023

Additional paid-in capital 7,553 16,846

Treasury stock, at cost, 1,084 and 751 shares as of March 31, 2023 and June 30, 2022, respectively

Treasury stock, at cost, 1,044 and 1,084 shares as of September 30, 2023 and June 30, 2023, respectively

( 172,605 ) ( 179,410 )

1 unchanged sentence

Accumulated other comprehensive loss ( 1,003 ) ( 1,009 )

Total Madison Square Garden Sports Corp.

stockholders’ equity ( 333,780 ) ( 147,089 )

Nonredeemable noncontrolling interests 772 1,712

Total equity ( 358,543 ) ( 337,234 )

4 unchanged sentences

(in thousands, except per share data)

Three Months Ended Nine Months Ended

March 31, March 31,

2023 2022 2023 2022

Three Months Ended

September 30,

$ 43,046 $ 24,089

1 unchanged sentence

Direct operating expenses (b)

239,051 206,273 468,434 407,698

Selling, general and administrative expenses (c)

1 unchanged sentence

Depreciation and amortization 794 1,025

Operating income 81,751 61,393 97,371 62,374

Operating loss ( 14,824 ) ( 35,898 )

Other income (expense):

1 unchanged sentence

Interest expense ( 6,929 ) ( 3,312 )

Miscellaneous income (expense), net 19,324 ( 63 ) 19,543 ( 190 )

Miscellaneous expense, net ( 12,665 ) ( 166 )

( 19,141 ) ( 3,122 )

Income before income taxes 94,775 58,912 102,146 53,171

Income tax expense ( 42,962 ) ( 34,993 ) ( 47,024 ) ( 30,939 )

Net income 51,813 23,919 55,122 22,232

Loss before income taxes ( 33,965 ) ( 39,020 )

Income tax benefit 15,144 20,493

Net loss ( 18,821 ) ( 18,527 )

Net loss attributable to nonredeemable noncontrolling interests — ( 707 )

Net income attributable to Madison Square Garden Sports Corp.’s stockholders $ 52,379 $ 24,503 $ 57,050 $ 23,943

Basic earnings per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 2.19 $ 1.01 $ 2.28 $ 0.99

Diluted earnings per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 2.18 $ 1.00 $ 2.27 $ 0.98

Net loss attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 18,821 ) $ ( 17,820 )

Basic loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.79 ) $ ( 0.73 )

Diluted loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.79 ) $ ( 0.73 )

Weighted-average number of common shares outstanding:

2 unchanged sentences

_________________

(a) Includes revenues from related parties of $ 84,024 and $ 75,851 for the three months ended March 31, 2023 and 2022, respectively, and $ 167,148 and $ 153,229 for the nine months ended March 31, 2023 and 2022, respectively.

(b) Includes net charges from related parties of $ 43,595 and $ 40,796 for the three months ended March 31, 2023 and 2022, respectively, and $ 91,264 and $ 80,828 for the nine months ended March 31, 2023 and 2022, respectively.

(c) Includes net charges from related parties of $ 18,875 and $ 20,493 for the three months ended March 31, 2023 and 2022, respectively, and $ 49,616 and $ 51,620 for the nine months ended March 31, 2023 and 2022, respectively.

(a) Includes revenues from related parties of $ 8,817 and $ 8,174 for the three months ended September 30, 2023 and 2022, respectively.

(b) Includes net charges from related parties of $ 2,616 and $ 2,184 for the three months ended September 30, 2023 and 2022, respectively.

(c) Includes net charges from related parties of $ 12,125 and $ 13,308 for the three months ended September 30, 2023 and 2022, respectively.

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended Nine Months Ended

March 31, March 31,

2023 2022 2023 2022

Net income $ 51,813 $ 23,919 $ 55,122 $ 22,232

Three Months Ended

September 30,

Net loss $ ( 18,821 ) $ ( 18,527 )

Other comprehensive income, before income taxes:

5 unchanged sentences

Other comprehensive income, net of income taxes 6 3

Comprehensive income 51,816 23,942 55,131 22,299

Comprehensive loss ( 18,815 ) ( 18,524 )

Comprehensive loss attributable to nonredeemable noncontrolling interests — ( 707 )

Comprehensive income attributable to Madison Square Garden Sports Corp.’s stockholders $ 52,382 $ 24,526 $ 57,059 $ 24,010

Comprehensive loss attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 18,815 ) $ ( 17,817 )

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended

Three Months Ended

September 30,

Cash flows from operating activities:

Net income $ 55,122 $ 22,232

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

Net loss $ ( 18,821 ) $ ( 18,527 )

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

Depreciation and amortization 794 1,025

1 unchanged sentence

Share-based compensation expense 4,149 7,220

Unrealized gain on equity investments with readily determinable fair value, warrants, and forward contract ( 19,020 ) —

Unrealized loss on equity investments with readily determinable fair value and warrants 12,101 103

Other non-cash adjustments 571 286

3 unchanged sentences

Prepaid expenses and other assets ( 54,275 ) ( 53,988 )

Investments ( 1,481 ) ( 7,636 )

Accounts payable ( 3,821 ) ( 4,797 )

3 unchanged sentences

Operating lease right-of-use assets and lease liabilities ( 9,442 ) ( 9,250 )

Net cash provided by operating activities 114,801 64,233

Net cash (used in) provided by operating activities ( 54,141 ) 1,285

Cash flows from investing activities:

Capital expenditures ( 391 ) ( 271 )

Purchases of equity securities ( 9,333 ) ( 250 )

Purchases of investments ( 1,338 ) —

Net cash used in investing activities ( 1,729 ) ( 271 )

Cash flows from financing activities:

Accelerated share repurchase ( 75,060 ) —

Dividends paid ( 537 ) —

1 unchanged sentence

Proceeds from revolving credit facilities 75,000 —

Repayment of revolving credit facilities ( 85,000 ) ( 70,000 )

Other financing activities 1,705 ( 2,836 )

Net cash used in financing activities ( 129,618 ) ( 84,978 )

Net decrease in cash, cash equivalents and restricted cash ( 25,183 ) ( 21,881 )

Net cash provided by (used in) financing activities 67,830 ( 10,996 )

Net increase (decrease) in cash, cash equivalents and restricted cash 11,960 ( 9,982 )

Cash, cash equivalents and restricted cash at beginning of period 40,459 91,018

6 unchanged sentences

(in thousands)

Three Months Ended March 31, 2023

Three Months Ended September 30, 2023

Issued Additional

2 unchanged sentences

Comprehensive

Loss Total Madison Square Garden Sports Corp.

Stockholders ’ Equity

Noncontrolling

Interests Total Equity

Balance as of December 31, 2022 $ 249 $ — $ ( 169,772 ) $ ( 217,047 ) $ ( 1,180 ) $ ( 387,750 ) $ 1,338 $ ( 386,412 )

Net income (loss) — — — 52,379 — 52,379 ( 566 ) 51,813

Other comprehensive income — — — — 3 3 — 3

Comprehensive income (loss) — — — — — 52,382 ( 566 ) 51,816

Share-based compensation

— 3,220 — — — 3,220 — 3,220

Tax withholding associated with shares issued for equity-based compensation

— ( 2,457 ) — — — ( 2,457 ) — ( 2,457 )

Common stock issued under stock incentive plans

— ( 1,844 ) 2,729 — — 885 — 885

Accelerated share repurchase — 12,307 ( 12,367 ) — — ( 60 ) — ( 60 )

Balance as of March 31, 2023 $ 249 $ 11,226 $ ( 179,410 ) $ ( 164,668 ) $ ( 1,177 ) $ ( 333,780 ) $ 772 $ ( 333,008 )

See accompanying notes to consolidated financial statements.

MADISON SQUARE GARDEN SPORTS CORP.

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(in thousands)

Three Months Ended March 31, 2022

Common Stock Issued Additional

Capital Treasury

Stock Accumulated Deficit Accumulated

Comprehensive Loss Total Madison Square Garden Sports Corp.

Stockholders ’ Equity

Noncontrolling

Interests Total Equity

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

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

Other comprehensive income — — — — 23 23 — 23

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

Share-based compensation

— 6,973 — — — 6,973 — 6,973

Common stock issued under stock incentive plans

— ( 571 ) 1,400 — 829 — 829

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

See accompanying notes to consolidated financial statements.

MADISON SQUARE GARDEN SPORTS CORP.

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(in thousands)

Nine Months Ended March 31, 2023

Common Stock Issued Additional

Capital Treasury

Stock Accumulated Deficit Accumulated

Comprehensive Loss Total Madison Square Garden Sports Corp.

Stockholders’ Equity Non -

Noncontrolling

Interests Total Equity

Loss Total Equity

Balance as of June 30, 2023 $ 249 $ 16,846 $ ( 179,410 ) $ ( 173,910 ) $ ( 1,009 ) $ ( 337,234 )

Net income (loss) — — — 57,050 — 57,050 ( 1,928 ) 55,122

Net loss — — — ( 18,821 ) — ( 18,821 )

Other comprehensive income — — — — 6 6

Comprehensive income (loss) — — — — — 57,059 ( 1,928 ) 55,131

Comprehensive loss — — — — — ( 18,815 )

Share-based compensation

6 unchanged sentences

— — — ( 6 ) — ( 6 )

Accelerated share repurchase — 1,649 ( 72,367 ) ( 4,342 ) — ( 75,060 ) — ( 75,060 )

Adjustments to noncontrolling interests — ( 988 ) — — — ( 988 ) 988 —

Balance as of March 31, 2023 $ 249 $ 11,226 $ ( 179,410 ) $ ( 164,668 ) $ ( 1,177 ) $ ( 333,780 ) $ 772 $ ( 333,008 )

Balance as of September 30, 2023 $ 249 $ 7,553 $ ( 172,605 ) $ ( 192,737 ) $ ( 1,003 ) $ ( 358,543 )

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended March 31, 2022

Three Months Ended September 30, 2022

Common Stock Issued Additional

2 unchanged sentences

Comprehensive Loss Total Madison Square Garden Sports Corp.

Stockholders’ Equity Non -

Stockholders ’ Equity

Noncontrolling

1 unchanged sentence

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

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

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

Other comprehensive income — — — — 3 3 — 3

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

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

Share-based compensation

5 unchanged sentences

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

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

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

See accompanying notes to consolidated financial statements.

15 unchanged sentences

the manner in which its operations are managed;

the criteria used by the Company’s Executive Chairman, its Chief Operating Decision Maker (“CODM”), to evaluate segment performance.

and the criteria used by the Company’s Executive Chairman, its Chief Operating Decision Maker (“CODM”), to evaluate segment performance.

The Company’s CODM reviews total company operating results to assess overall performance and allocate resources.

2 unchanged sentences

All of the outstanding common stock of the Company was distributed to MSG Networks shareholders (the “MSGS Distribution”) on September 30, 2015.

On April 17, 2020 (the “Sphere Distribution Date”), the Company distributed all of the outstanding common stock of Sphere Entertainment Co.

On April 17, 2020, the Company distributed all of the outstanding common stock of Sphere Entertainment Co.

(formerly Madison Square Garden Entertainment Corp.

1 unchanged sentence

On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment distributed to its stockholders approximately 67% of the issued and outstanding shares of common stock of Madison Square Garden Entertainment Corp.

(formerly, MSGE Spinco, Inc.

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

In connection with the MSGE Distribution, Sphere Entertainment assigned several of its agreements with the Company to MSG Entertainment, as described herein.

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

All agreements between the Company and MSG Entertainment described herein were between the Company and Sphere Entertainment prior to the MSGE Distribution (except agreements entered into after the MSGE Distribution Date).

Unless the context otherwise requires, all references to MSG Entertainment, Sphere Entertainment and MSG Networks refer to such entity, together with its direct and indirect subsidiaries.

Basis of Presentation

4 unchanged sentences

The results of operations for the periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year.

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

Reclassifications

Certain reclassifications have been made in order to conform to the current period’s presentation and relate to the separation of Investments and unrealized loss on equity investments with readily determinable fair value and warrants on the consolidated statements of cash flows for the three months ended September 30, 2022.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Impact of COVID-19 on our Business

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

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

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

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

Accounting Policies

3 unchanged sentences

All significant intercompany transactions and balances have been eliminated in consolidation.

In addition, the consolidated financial statements of the Company include the accounts from CLG, in which the Company had a controlling voting interest.

The Company’s consolidation criteria are based on authoritative accounting guidance for voting interest, controlling interest or variable interest entities.

CLG is consolidated with the equity owned by other shareholders shown as nonredeemable noncontrolling interests in the accompanying consolidated balance sheets, and the other shareholders’ portion of net earnings (loss) and other comprehensive income (loss) shown as net income (loss) or comprehensive income (loss) attributable to nonredeemable noncontrolling interests in the accompanying consolidated statements of operations and consolidated statements of comprehensive income (loss), respectively.

For consolidated subsidiaries where the Company’s ownership is less than 100%, the relevant amounts attributable to investors other than the Company are reflected under “Nonredeemable noncontrolling interests,” “Net income (loss) attributable to nonredeemable noncontrolling interests” and “Comprehensive income (loss) attributable to nonredeemable noncontrolling interests” in the accompanying consolidated balance sheets, the accompanying consolidated statements of operations and consolidated statements of comprehensive income (loss), respectively.

Use of Estimates

1 unchanged sentence

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

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

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

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

Management believes its use of estimates in the Financial Statements to be reasonable.

17 unchanged sentences

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

For the three and nine months ended March 31, 2023 and 2022, the Company did not have any material impairment losses on receivables or contract assets arising from contracts with customers.

For the three months ended September 30, 2023 and 2022, the Company did not have any material impairment losses on receivables or contract assets arising from contracts with customers.

Disaggregation of Revenue

The following table disaggregates the Company’s revenues by type of goods or services in accordance with the required entity-wide disclosure requirements set forth in ASC Subtopic 280-10-50-38 to 40 and the disaggregation of revenue required disclosures in accordance with ASC Subtopic 606-10-50-5 for the three and nine months ended March 31, 2023 and 2022:

Three Months Ended Nine Months Ended

March 31, March 31,

2023 2022 2023 2022

Three Months Ended

September 30,

Event-related (a)

1 unchanged sentence

Media rights (b)

135,200 124,803 260,344 243,697

Sponsorship, signage and suite licenses 5,314 4,814

7 unchanged sentences

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

The following table provides information about contract balances from the Company’s contracts with customers as of March 31, 2023 and June 30, 2022.

March 31, June 30,

The following table provides information about contract balances from the Company’s contracts with customers as of September 30, 2023 and June 30, 2023.

September 30, June 30,

Receivables from contracts with customers, net (a)

5 unchanged sentences

_________________

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

As of March 31, 2023 and June 30, 2022, the Company’s receivables reported above incl uded $ 3,057 and $ 1,258 , respectively, related to various related parties associated with contracts with customers.

See Note 15 for further details on related party arrangements.

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

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

As of March 31, 2023, the Company had receivable balances related to escrow and player compensation recoveries of $ 10,861 recorded in Account s receivable, net.

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

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

As of September 30, 2023 and June 30, 2023, the Company had receivable balances related to escrow and player compensation recoveries of $ 1,244 and $ 1,544 , respectively, reco rded in Accounts receivable, net.

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

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

The Company had contract asset balances related to local media rights of $ 24,065 and $ 0 as of March 31, 2023 and June 30, 2022, respectively.

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

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

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

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

The Company’s deferred revenue related to local media rights was $ 0 and $ 0 as of March 31, 2023 and June 30, 2022, respectively.

The Company’s deferred revenue related to local media rights was $ 36,490 and $ 0 as of September 30, 2023 and June 30, 2023, respectively.

See Note 16 for further details on these related party arrangements.

(d) Revenue recognized for the nine months ended March 31, 2023 relating to the deferred revenue balance as of June 30, 2022 was $ 120,042 .

(d) Revenue recognized for the three months ended September 30, 2023 relating to the deferred revenue balance as of June 30, 2023 was $ 19,233 .

MADISON SQUARE GARDEN SPORTS CORP.

1 unchanged sentence

Transaction Price Allocated to the Remaining Performance Obligations

The following table depicts the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2023 and is based on current projections.

The following table depicts the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2023 and is based on current projections.

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

6 unchanged sentences

Thereafter 18,047

Computation of Earnings per Common Share

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

Three Months Ended Nine Months Ended

March 31, March 31,

2023 2022 2023 2022

Net earnings allocable to common shares, basic and diluted (numerator):

Net income attributable to Madison Square Garden Sports Corp.’s stockholders $ 52,379 $ 24,503 $ 57,050 $ 23,943

Computation of Earnings (Loss) per Common Share

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

Three Months Ended

September 30,

Net earnings (loss) allocable to common shares, basic and diluted (numerator):

Net loss attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 18,821 ) $ ( 17,820 )

Dividends to other-than-common stockholders (a)

Net earnings allocable to common shares, basic and diluted (numerator):

Net loss allocable to common shares, basic and diluted (numerator):

$ ( 18,827 ) $ ( 17,820 )

4 unchanged sentences

Weighted-average shares excluded from diluted EPS 94 128

Basic earnings per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 2.19 $ 1.01 $ 2.28 $ 0.99

Diluted earnings per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 2.18 $ 1.00 $ 2.27 $ 0.98

Basic loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.79 ) $ ( 0.73 )

Diluted loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.79 ) $ ( 0.73 )

_________________

4 unchanged sentences

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

Team personnel transactions were a net provision of $ 81 and $ 304 (net of insurance recovery of $ 656 ) for the three months ended March 31, 2023 and 2022, respectively, and a net credit of $ 219 and a net provision of $ 729 (net of insurance recovery of $ 656 ) for the nine months ended March 31, 2023 and 2022, respectively.

There were no Team personnel transactions for the three months ended September 30, 2023 and Team personnel transactions were a net credit of $ 329 for the three months ended September 30, 2022.

Cash, Cash Equivalents and Restricted Cash

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

September 30,

2023 June 30,

2022 March 31,

2023 September 30,

2022 June 30,

2 unchanged sentences

Restricted cash (a)

653 — 979 7,134

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

1 unchanged sentence

_________________

(a) Restricted cash as of March 31, 2023 and March 31, 2022 primarily included cash deposited in an escrow account (see Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022 for more information).

As of June 30, 2021, restricted cash was related to the Company’s revolving credit facilities (see Note 11 for more information).

As of March 31, 2023, the Company’s leases primarily consist of the lease of the Company’s principal executive offices under the Sublease Agreement with Sphere Entertainment (the “Sublease Agreement”) and, until April 2023, the lease of the CLG performance center in Los Angeles, CA.

As of the MSGE Distribution Date, the Sublease Agreement is now between the Company and MSG Entertainment.

(a) Restricted cash as of September 30, 2023 and June 30, 2023 primarily included cash deposited in an escrow account (see Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023 for more information).

As of September 30, 2023, the Company’s leases primarily consist of the lease of the Company’s principal executive offices under the Sublease Agreement with MSG Entertainment (the “Sublease Agreement”) and a lease agreement for an aircraft.

Prior to the MSGE Distribution Date, the Sublease Agreement was between the Company and Sphere Entertainment.

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

See Note 7 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023 for more information regarding the Company’s accounting policies associated with its leases.

As of March 31, 2023, the Company’s exis ting operating leases, which are recorded in the accompanying financial statements, have remaining lease terms ranging from 2 months to 32 years.

As of September 30, 2023, the Company’s exis ting operating leases, which are recorded in the accompanying financial statements, have remaining lease terms ranging from 1 month to 32 years.

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

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the right-of-use assets and lease liabilities recorded on the Company’s accompanying consolidated balance sheets as of March 31, 2023 and June 30, 2022:

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

The following table summarizes the right-of-use assets and lease liabilities recorded in the accompanying consolidated balance sheets as of September 30, 2023 and June 30, 2023:

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

2023 June 30,

9 unchanged sentences

_________________

(a) As of March 31, 2023, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $ 43,538 and $ 715,511 , respectively, that are payable to Sphere Entertainment.

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

The following table summarizes the activity recorded within the Company’s accompanying consolidated statements of operations for the three and nine months ended March 31, 2023 and 2022:

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

2023 2022 2023 2022

(a) As of September 30, 2023, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances o f $ 43,952 and $ 696,559 , r espectively, that are payable to MSG Entertainment.

As of June 30, 2023, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $ 43,700 and $ 707,124 , respectively, that are payable to MSG Entertainment.

The following table summarizes the activity recorded within the accompanying consolidated statements of operations for the three months ended September 30, 2023 and 2022:

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

Operating lease cost Direct operating expenses $ 1,311 $ 1,403

Operating lease cost Selling, general and administrative expenses

613 613 1,839 1,837

Short-term lease cost Direct operating expenses — 45

1 unchanged sentence

Supplemental Information

For the nine months ended March 31, 2023 and 2022, cash paid for amounts included in the measurement of lease liabilities was $ 33,791 and $ 32,580 , respectively.

The weighted average remaining lease term for operating leases recorded on the accompanying consolidated balance sheet as of March 31, 2023 w as 32.1 years.

The weighted average discount rate was 7.13 % as of March 31, 2023 and represented the Company’s estimated incremental borrowing rate, assuming a secured borrowing, based on the remaining lease term at the time of either (i) adoption of the standard or (ii) the period in which the lease term expectation commenced or was modified.

Maturities of operating lease liabilities as of March 31, 2023 are as follows:

For the three months ended September 30, 2023 and 2022, cash paid for amounts included in the measurement of lease liabilities was $ 13,072 and $ 11,263 , respectively.

The weighted average remaining lease term for operating leases recorded in the accompanying consolidated balance sheet as of September 30, 2023 was 30.3 years.

The weighted average discount rate was 7.1 % as of September 30, 2023 and represented the Company’s estimated incremental borrowing rate, assuming a secured borrowing, based on the remaining lease term at the time of either (i) adoption of the standard or (ii) the period in which the lease term expectation commenced or was modified.

Maturities of operating lease liabilities as of September 30, 2023 are as follows:

Fiscal Year 2024 (remainder) $ 39,070

11 unchanged sentences

During the first quarter of fiscal year 2024, the Company performed its annual impairment test of goodwill and determined that there were no impairments identified as of the impairment test date.

The carrying amount of goodwill as of March 31, 2023 and June 30, 2022 is $ 226,955 .

The Company’s indefinite-lived intangible assets as of March 31, 2023 and June 30, 2022 are as follows:

The carrying amount of goodwill as of September 30, 2023 and June 30, 2023 was $ 226,523 .

The Company’s indefinite-lived intangible assets as of September 30, 2023 and June 30, 2023 are as follows:

Sports franchises $ 102,564

1 unchanged sentence

During the first quarter of fiscal year 2024, the Company performed its annual impairment test of identifiable indefinite-lived intangible assets and determined that there were no impairments identified as of the impairment test date.

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

March 31, 2023 Gross Accumulated

Amortization Net

Trade names $ 2,300 $ ( 2,300 ) $ —

Non-compete agreements 2,400 ( 2,400 ) —

Other intangibles 1,200 ( 731 ) 469

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

There was no amortization expense for the three months ended September 30, 2023 as a result of the disposal of CLG in April 2023.

The Company’s investments in nonconsolidated affiliates which are accounted for under the equity method of accounting, equity investments with readily determinable fair values, equity investments without readily determinable fair values, and derivative instruments, which are reported within Investments in the accompanying consolidated balance sheets, consisted of the following:

September 30,

2023 June 30,

Equity method investments:

NRG $ 11,533 $ 11,948

Equity investments with readily determinable fair values:

Xtract One Technologies Inc.

(“Xtract One”) common stock 15,855 22,408

Other equity investments with readily determinable fair values held in trust under the Company’s Executive Deferred Compensation Plan 15,783 14,406

Equity investments without readily determinable fair values (a)

Derivative instruments:

Xtract One warrants 7,680 13,098

Total investments $ 57,703 $ 67,374

_________________

June 30, 2022 Gross Accumulated

Amortization Net

Trade names $ 2,300 $ ( 2,262 ) $ 38

Non-compete agreements 2,400 ( 2,360 ) 40

Other intangibles 1,200 ( 642 ) 558

(a) For the three months ended September 30, 2023 and 2022, the Company did not record any impairment charges or changes in carrying value of its equity securities without readily determinable fair values in the accompanying consolidated statements of operations.

Equity Method Investments

The Company determined that it has the ability to exert significant influence over the investee and therefore accounts for this investment under the equity method of accounting.

In April 2023, the Company sold its controlling interest in CLG to NRG, a professional gaming and entertainment company, in exchange for a noncontrolling equity interest in the combined NRG/CLG company.

The Company received preferred shares representing approximately 25 % of the capital stock of NRG.

The Company deconsolidated the CLG business and recorded the investment in NRG at fair value as an equity method investment in the fourth quarter of fiscal year 2023.

During the three months ended September 30, 2023, the Company recognized its net share of losses of $ 415 in Miscellaneous expense, net within the Company’s consolidated statement of operations.

As of September 30, 2023 and June 30, 2023, the Company’s ownership in NRG was approximately 25 %.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Equity Investments with Readily Determinable Fair Values

The Company holds investments in equity instruments with readily determinable fair value:

• Xtract One, a technology-driven threat detection and security solution company that is listed on the Toronto Stock Exchange under the symbol “XTRA”.

The Company holds common stock of Xtract One and holds warrants entitling the Company to acquire additional shares of common stock of Xtract One which are considered derivative instruments.

Refer to Note 10 for further details regarding the Company’s warrants, including the inputs used in determining the fair value of the warrants.

• Other equity investments held in trust under the Company’s Executive Deferred Compensation Plan.

Refer to Note 13 for further details regarding the plan.

The fair value of the Company’s investments in common stock of Xtract One and other investments held in trust are determined based on quoted market prices in active markets, which are classified within Level I of the fair value hierarchy.

The cost basis and carrying value of equity investments with readily determinable fair values are as follows:

September 30, 2023 June 30, 2023

Cost Basis Carrying Value/Fair Value Cost Basis Carrying Value/Fair Value

Xtract One common stock $ 6,783 $ 15,855 $ 6,783 $ 22,408

Other equity investments with readily determinable fair values 15,279 15,783 13,772 14,406

$ 22,062 $ 31,638 $ 20,555 $ 36,814

For the three months ended March 31, 2023 and 2022, amortization expense o f intangible assets was $ 29 and $ 265 , respectively.

For the nine months ended March 31, 2023 and 2022, amortization expense of intangible assets was $ 167 and $ 795 , respectively.

The following table summarizes the realized and unrealized gains (losses) on equity investments with readily determinable fair values, recorded within Miscellaneous expense, net within the Company’s consolidated statement of operations, for the three months ended September 30, 2023 and 2022.

Three Month Ended September 30,

Unrealized loss - Xtract One common stock $ ( 6,553 ) $ —

Unrealized loss - other equity investments with readily determinable fair values ( 130 ) ( 103 )

Realized gain - other equity investments with readily determinable fair values 26 —

$ ( 6,657 ) $ ( 103 )

Fair Value Measurements

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

Fair Value Hierarchy March 31,

Fair Value Hierarchy September 30,

2023 June 30,

3 unchanged sentences

Warrants III 7,680 13,098

Forward contract III 7,140 —

Total assets measured at fair value $ 87,951 $ 68,699

Level I Inputs

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

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

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

Equity investments include equity instruments with readily determinable fair value, which are included within Other assets in the accompanying consolidated balance sheets.

The equity investments balance as of March 31, 2023 includes an investment of $ 11,685 in common stock of Xtract One Technologies Inc.

(“Xtract One”), a technology-driven threat detection and security solution company that is listed on the

Refer to Note 9 for further details regarding equity investments.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Toronto Stock Exchange (“TSX”) under the symbol “XTRA.” In addition, the remaining balance as of March 31, 2023 and balance as of June 30, 2022 consists of other equity investments held in trust under the Company’s Executive Deferred Compensation Plan (refer to note 12 for further details regarding the plan).

During the three and nine months ended March 31, 2023, the Company recorded unrealized gains of $ 7,337 related to the investment in Xtract One which is reported in Miscellaneous income (expense).

During the three and nine months ended March 31, 2023, the Company recorded gains of $ 368 and $ 714 , respectively, within Miscellaneous income (expense), net to reflect t he remeasurement of the fair value of assets under the Company’s Executive Deferred Compensation Plan.

Level III Inputs

The Company’s level III assets consist of warrants entitling the Company to acquire additional common shares of Xtract One and a forward contract to acquire additional common stock and warrants of Xtract One.

The Company’s warrants and forward contract are included within Other assets and Other current assets, respectively, in the accompanying consolidated balance sheets.

The Company’s level III assets consist of warrants entitling the Company to acquire additional common stock of Xtract One.

The Company’s warrants are included within Investments in the accompanying consolidated balance sheets.

Changes in the fair value of derivative instruments are measured at each reporting date and are recorded within Miscellaneous expense, net in the accompanying consolidated statements of operations.

The fair value of the Company’s warrants in Xtract One were determined using the Black-Scholes option pricing model.

The fair value of the Company’s forward contract was determined using the number of additional common shares and warrants in the forward contract, the contractual price of the forward contract, the quoted prices of Xtract One, and the fair value of the Xtract One warrants as of March 31, 2023.

The following are key assumptions used to calculated the fair value of the warrants as of March 31, 2023:

Expected term 2.47 years

The following are key assumptions used to calculate the fair value of the warrants as of September 30, 2023 and June 30, 2023:

September 30,

2023 June 30,

Expected term 2.22 years 2.34 years

Expected volatility 74.35 % 74.43 %

1 unchanged sentence

The following table presents additional information about our assets for which we utilize Level III inputs to determine fair value:

Three Months Ended Nine Months Ended

March 31, March 31,

Three Months Ended

September 30,

Balance at beginning of period $ 13,098

Purchases of warrants 1,959 1,959

Unrealized gains on warrants 4,543 4,543

Unrealized gains on forward contract 7,140 7,140

Unrealized losses on warrants ( 5,418 )

Balance at end of period $ 7,680

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

March 31, 2023 June 30, 2022

September 30, 2023 June 30, 2023

Value Carrying

10 unchanged sentences

See Note 12 for further details .

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Commitments and Contingencies

2 unchanged sentences

The Company did not have any material changes in its contractual obligations, including off-balance sheet commitments, since the end of fiscal year 2023 other than activities in the ordinary course of business.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Legal Matters

3 unchanged sentences

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

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

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

7 unchanged sentences

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

During the nine months ended March 31, 2023, the Company borrowed an additional $ 55,000 and made principal repayments of $ 15,000 under the 2021 Knicks Revolving Credit Facility.

The outstanding balance under the 2021 Knicks Revolving Credit Facility was $ 260,000 as of March 31, 2023, which was recorded as Long-term debt in the accompanying consolidated balance sheet.

The interest rate on the 2021 Knicks Revolving Credit Facility as of March 31, 2023 was 6.11 % .

During the nine months ended March 31, 2023 the Company made interest payments of $ 8,865 in respect of the 2021 Knicks Revolving Credit Facility.

During the three months ended September 30, 2023, the Company borrowed an additional $ 40,000 under the Knicks Revolving Credit Facility.

The outstanding balance under the Knicks Revolving Credit Facility was $ 275,000 as of September 30, 2023, which was recorded as Long-term debt in the accompanying consolidated balance sheet.

The interest rate on the Knicks Revolving Credit Facility as of September 30, 2023 was 6.67 % .

During the three months ended September 30, 2023 the Company made interest payments of $ 4,340 in respect of the Knicks Revolving Credit Facility.

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

2 unchanged sentences

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

In addition to the financial covenant described above, the 2021 Knicks Credit Agreement and related security agreements contain certain customary representations and warranties, affirmative covenants and events of default.

The 2021 Knicks

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Revolving Credit Facility contains certain restrictions on the ability of Knicks LLC to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the 2021 Knicks Revolving Credit Facility, including the following:

In addition to the financial covenant described above, the Knicks Credit Agreement and related security agreement contain certain customary representations and warranties, affirmative covenants and events of default.

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

(i) incurring additional indebtedness and contingent liabilities;

5 unchanged sentences

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

As of March 31, 2023, Knicks LLC was in compliance with this financial covenant.

Knicks Holdings Credit Facility

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

The 2020 Knicks Holdings Credit Agreement provided for a revolving credit facility of up to $ 75,000 (the “2020 Knicks Holdings Revolving Credit Facility”) to fund working capital needs and for general corporate purposes.

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

As of September 30, 2023, Knicks LLC was in compliance with this financial covenant.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Rangers Revolving Credit Facility

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

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

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

7 unchanged sentences

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

During the nine months ended March 31, 2023, the Company borrowed $ 160,000 and made principal repayments of $ 70,000 under the 2021 Rangers Revolving Credit Facility.

The outstanding balance under the 2021 Rangers Revolving Credit Facility wa s $ 90,000 as of March 31, 2023, which was recorded as Long-term debt in the accompanying consolidated balance sheet.

The interest rate on the 2021 Rangers Revolving Credit Facility as of March 31, 2023 wa s 6.66 % .

During the nine months ended March 31, 2023 the Company made interest payments of $ 3,669 in respect of the 2021 Rangers Revolving Credit Facility.

In addition, on April 28, 2023, the Company made an additional principal repayment of $ 30,000 under the 2021 Rangers Revolving Credit Facility .

During the three months ended September 30, 2023, the Company borrowed an additional $ 35,000 under the Rangers Revolving Credit Facility.

The outstanding balance under the Rangers Revolving Credit Facility wa s $ 95,000 as of September 30, 2023, which was recorded as Long-term debt in the accompanying consolidated balance sheet.

The interest rate on the Rangers Revolving Credit Facility as of September 30, 2023 wa s 7.17 % .

During the three months ended September 30, 2023 the Company made interest payments of $ 1,077 in respect of the Rangers Revolving Credit Facility.

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

2 unchanged sentences

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In addition to the financial covenant described above, the 2021 Rangers Credit Agreement and related security agreements contain certain customary representations and warranties, affirmative covenants and events of default.

In addition to the financial covenant described above, the Rangers Credit Agreement and related security agreement contain certain customary representations and warranties, affirmative covenants and events of default.

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

6 unchanged sentences

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

As of March 31, 2023, Rangers LLC was in compliance with this financial covenant.

As of September 30, 2023, Rangers LLC was in compliance with this financial covenant.

Rangers NHL Advance Agreement

3 unchanged sentences

All borrowings under the Rangers NHL Advance Agreement were made on a non-revolving basis and bear interest at 3.00 % per annum, ending on the date any such advances are fully repaid.

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

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

The outstanding balance under the 2021 Rangers NHL Advance Agreement was $ 30,000 as of March 31, 2023 and was recorded as Debt in the accompanying consolidated balance sheet.

During the nine months ended March 31, 2023 the Company made interest p ayments of $ 675 .

The outstanding balance under the Rangers NHL Advance Agreement was $ 30,000 as of September 30, 2023 and was recorded as Debt in the accompanying consolidated balance sheet.

During the three months ended September 30, 2023 the Company made interest p ayments of $ 450 .

Deferred Financing Costs

The following table summarizes deferred financing costs, net of amortization, related to the Company’s credit facilities as reported on the accompanying consolidated balance sheets:

The following table summarizes deferred financing costs, net of amortization, related to the Company’s credit facilities as reported in the accompanying consolidated balance sheets:

September 30,

2023 June 30,

1 unchanged sentence

Other assets 2,523 2,810

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Benefit Plans

Defined Benefit Pension Plans

Prior to the Sphere Distribution, the Company sponsored various defined benefit pension plans and a contributory welfare plan.

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

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

The following table presents components of net periodic benefit cost for the MSGS Pension Plans included in the accompanying consolidated statements of operations for the three and nine months ended March 31, 2023 and 2022.

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

Three Months Ended Nine Months Ended

March 31, March 31,

2023 2022 2023 2022

The Company sponsors the MSG Sports, LLC Excess Cash Balance Plan (the “Excess Cash Balance Plan”), an unfunded non-contributory, non-qualified excess cash balance plan and the MSG Sports, LLC Excess Retirement Plan, an unfunded non-contributory, non-qualified defined benefit pension plan for the benefit of certain employees (collectively referred to as the “Pension Plans”).

All benefits in the Pension Plans are frozen and participants are not able to earn benefits for future service under these plans, and no employee of the Company who was not already a participant as of the date the respective plan was frozen may become a participant in the Pension Plans.

Existing account balances under the Excess Cash Balance Plan are credited with monthly interest in accordance with the terms of the plan.

The following table presents components of net periodic benefit cost for the Pension Plans included in the accompanying consolidated statements of operations for the three months ended September 30, 2023 and 2022.

Components of net periodic benefit cost are reported in Miscellaneous expense, net.

Three Months Ended

September 30,

Interest cost $ 68 $ 60

2 unchanged sentences

Defined Contribution Plans

Prior to the Sphere Distribution, the Company sponsored The Madison Square Garden 401(k) Savings Plan (the “401(k) Plan”), which is a multiple employer plan and the MSG S&E, LLC Excess Savings Plan (collectively referred to as the “Savings Plans”).

As a result of the Sphere Distribution, the Savings Plans were transferred to Sphere Entertainment.

However, MSG Sports employees continue to participate in the 401(k) Plan.

In addition, pursuant to the Employee Matters Agreement the Company established the MSG Sports LLC Excess Savings Plan to provide non-qualified retirement benefits to eligible MSG Sports employees.

Expenses related to the Savings Plans that are included in the accompanying consolidated statements of operations were $ 1,465 and $ 3,602 for the three and nine months ended March 31, 2023, respectively, and $ 1,238 and $ 3,076 for the three and nine months ended March 31, 2022 respectively.

MSG Sports employees participate in The Madison Square Garden 401(k) Savings Plan (the “401(k) Plan”), which is a multiple employer plan sponsored by MSG Entertainment Holdings, LLC, a wholly owned subsidiary of MSG Entertainment.

In addition, the Company sponsors the MSG Sports LLC Excess Savings Plan (the “Excess Savings Plan”), which provides non-qualified retirement benefits to eligible MSG Sports employees.

Expense related to the 401(k) Plan and Excess Savings Plan for the three months ended September 30, 2023 and 2022 was $ 1,294 and $ 1,065 , respectively.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Executive Deferred Compensation Plan

See Note 14 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023 for more information regarding the Company’s E xecutive Deferred Compensation Plan (the “Deferred Compensation Plan”).

The Company recorded compensation expense of $ 368 and $ 714 for the three and nine months ended March 31, 2023, respectively, within Selling, general and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability.

In addition, the Company recorded gains of $ 368 and $ 714 for the three and nine months ended March 31, 2023, respectively, within Miscellaneous income (expense), net to reflect t he remeasurement of the fair value of assets under the Deferred Compensation Plan.

The Company recorded compensation cost credits of $ 104 and $ 103 for the three months ended September 30, 2023 and 2022, respectively, within Selling, general and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability.

In addition, the Company recorded losses of $ 104 and $ 103 for the three months ended September 30, 2023 and 2022, respectively, within Miscellaneous expense, net to reflect t he remeasurement of the fair value of assets under the Deferred Compensation Plan.

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

September 30,

2023 June 30,

2 unchanged sentences

Non-current liabilities (included in other employee related costs) ( 15,440 ) ( 13,048 )

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Share-based Compensation

See Note 15 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023 for more information regarding the Company’s 2015 Employee Stock Plan (the “Employee Stock Plan”) and its 2015 Stock Plan for Non-Employee Directors.

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

Share-based compensation expense was $ 3,220 and $ 22,059 for the three and nine months ended March 31, 2023, respectively and $ 6,973 and $ 19,178 for the three and nine months ended March 31, 2022, respectively.

There were no costs related to share-based compensation that were capitalized for the three and nine months ended March 31, 2023 and 2022 respectively.

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

Share-based compensation expense was $ 4,149 and $ 7,220 for the three months ended September 30, 2023 and 2022, respectively.

There were no costs related to share-based compensation that were capitalized for the three months ended September 30, 2023 and 2022, respectively.

Restricted Stock Units Award Activity

The following table summarizes activity related to the Company’s restricted stock units and performance restricted stock units, collectively referred to as “RSUs,” held by the Company and Sphere Entertainment employees and non-employee directors, for the nine months ended March 31, 2023:

The following table summarizes activity related to the Company’s restricted stock units and performance restricted stock units, collectively referred to as “RSUs,” held by current and former employees of the Company and non-employee directors, for the three months ended September 30, 2023:

Number of Weighted-Average

8 unchanged sentences

Forfeited / Cancelled ( 1 ) ( 1 ) $ 163.39

Unvested award balance, March 31, 2023 102 157 $ 165.49

Unvested award balance, September 30, 2023 129 155 $ 172.76

_____________________

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

The fair value of RSUs that vested during the nine months ended March 31, 2023 was $ 40,795 .

The fair value of RSUs that vested during the three months ended September 30, 2023 was $ 16,637 .

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

To fulfill the Company’s and Sphere Entertainment’s employees’ required statutory tax withholding obligations for the applicable income and other employment taxes, 117 of these RSUs, with an aggregate value of $ 18,621 , inclusive of $ 4,956 related to Sphere Entertainment employees (who vested in the Company’s RSUs), were retained by the Company and the taxes paid are reflected as a financing activity in the accompanying consolidated statement of cash flows for the nine months ended March 31, 2023.

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

The weighted-average fair value per share at grant date of RSUs granted during the nine months ended March 31, 2022 was $ 160.22 .

To fulfill the Company’s current and former employees’ required statutory tax withholding obligations for the applicable income and other employment taxes, 37 of these RSUs, with an aggregate value of $ 6,637 , inclusive of $ 4 related to the Company’s former employees (who vested in the Company’s RSUs), were retained by the Company and the taxes paid are reflected as a financing activity in the accompanying consolidated statement of cash flows for the three months ended September 30, 2023.

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

The weighted-average fair value per share at grant date of RSUs granted during the three months ended September 30, 2022 was $ 161.58 .

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Stock Options Award Activity

The following table summarizes activity related to the Company’s stock options for the nine months ended March 31, 2023:

The following table summarizes activity related to the Company’s stock options for the three months ended September 30, 2023:

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

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Cancelled — $ —

Balance as of March 31, 2023 94 $ 138.78 4.71 $ 5,261

Exercisable as of March 31, 2023 94 $ 138.78 4.71 $ 5,261

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Balance as of September 30, 2023 94 $ 138.78 4.21 $ 3,520

Exercisable as of September 30, 2023 94 $ 138.78 4.21 $ 3,520

Stock Repurchase Program

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

On October 6, 2022, the Company’s Board of Directors authorized a $ 75,000 accelerated share repurchase (“ASR”) program under the Company’s existing share repurchase authorization.

On October 28, 2022, the Company entered into a $ 75,000 ASR agreement with JPMorgan Chase Bank, National Association (“JP Morgan”).

Pursuant to the ASR agreement, the Company made a payment of $ 75,000 to JP Morgan and JP Morgan delivered 388,777 initial shares of Class A Common Stock to the Company on November 1, 2022, representing 80 % of the total shares expected to be repurchased under the ASR (determined based on the closing price of the Company’s Class A Common Stock of $ 154.33 on October 28, 2022).

The ASR was completed on January 31, 2023 with JP Morgan delivering 67,681 additional shares of Class A Common Stock to the Company upon final settlement.

The average purchase price per share for shares of Class A Common Stock purchased by the Company pursuant to the ASR was $ 164.31 .

The ASR was accounted for as a repurchase of shares and as an equity forward contract indexed to the Company’s Class A Common Stock.

The equity forward contract was classified as an equity instrument under ASC Subtopic 815-40.

The Company has treated the initial and final shares of Class A Common Stock delivered as treasury shares as of the date the shares were physically delivered in computing the weighted average shares of outstanding Class A Common Stock for both basic and diluted earnings per share.

As of March 31, 2023, the Company had $ 184,639 of availability remaining under its stock repurchase authorization .

During the three months ended September 30, 2023 and 2022, the Company did not make any share repurchases under its share repurchase program.

As of September 30, 2023, the Company had $ 184,639 of availability remaining under its stock repurchase authorization .

Related Party Transactions

On July 9, 2021, MSG Networks merged with a subsidiary of Sphere Entertainment and became a wholly-owned subsidiary of Sphere Entertainment.

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

As of March 31, 2023, members of the Dolan family including trusts for members of the Dolan family (collectively, the “Dolan Family Group”), for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, collectively beneficially own 100 % of the Company ’s outstanding Class B Common Stock and own approximately 3.2 % of the Company’s outstanding Class A Common Stock.

Such shares of the Company’s Class A Common Stock and Class B Common Stock, collectively, represent approximately 71.0 % of th e aggregate voting power of the Company’s outstanding common stock.

Members of the Dolan family are also the controlling stockholders of Sphere Entertainment, MSG Entertainment and AMC Networks Inc.

As of September 30, 2023, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, members of the Dolan family, including trusts for members of the Dolan family (collectively, the “Dolan Family Group”), collectively beneficially own 100 % of the Company’s outstanding Class B Common Stock and own approximately 3.3 % of the Company’s outstanding Class A Common Stock.

Such shares of the Company’s Class A Common Stock and Class B Common Stock, collectively, represent approximately 71.0 % of the aggregate voting power of the Company’s outstanding common stock.

Members of the Dolan Family Group are also the controlling stockholders of Sphere Entertainment, MSG Entertainment and AMC Networks Inc.

(“AMC Networks”).

The Company was party to the following agreements and/or arrangements with Sphere Entertainment as of March 31, 2023, which are now between the Company and MSG Entertainment as of the MSGE Distribution Date:

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

The Company was party to the following agreements and/or arrangements with MSG Entertainment as of September 30, 2023:

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

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

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

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

• Services Agreement (the “Services Agreement”) pursuant to which the Company (i) receives certain services from MSG Entertainment, such as information technology, accounts payable, payroll, human resources, and other corporate

• Team sponsorship allocation agreement with MSG Entertainment, pursuant to which the teams receive an allocation of sponsorship and signage revenues associated with sponsorship agreements that include the assets of both the Company and MSG Entertainment;

• Services agreement (the “Services Agreement”) pursuant to which the Company (i) receives certain services from MSG Entertainment, such as information technology, accounts payable, payroll, human resources, and other corporate functions and executive support services, in exchange for service fees and (ii) provides certain services to MSG Entertainment, such as certain communications, legal and ticketing services, in exchange for service fees;

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

functions and executive support services, in exchange for service fees and (ii) provides certain services to MSG Entertainment, such as certain communications, legal and ticketing services, in exchange for service fees;

• Arrangements pursuant to which the Company provides certain sponsorship, premium hospitality and other business operations services;

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

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• Interest-bearing advances to MSG Entertainment in connection with the construction of new premium hospitality suites at The Garden;

• Aircraft sharing agreements pursuant to which MSG Entertainment has agreed from time to time to make its aircraft and aircraft it leases from other related parties available to the Company for lease on a “time sharing” basis and;

• Other agreements with MSG Entertainment entered into in connection with the Sphere Distribution, including a trademark license agreement and certain other arrangements.

The Company is also party to the following agreements and/or arrangements with Sphere Entertainment (including through its subsidiary MSG Networks) which were not assigned to MSG Entertainment in connection with the MSGE Distribution:

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

The Company is also party to the following agreements and/or arrangements with Sphere Entertainment (including through its subsidiary MSG Networks) as of September 30, 2023 :

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

• Arrangements with MSG Networks pursuant to which the Knicks and the Rangers have allocated revenues with MSG Networks related to virtual advertising inventory;

• Arrangements pursuant to which the Company provides Sphere Entertainment with certain sponsorship and other business operations services;

• Other agreements with Sphere Entertainment in connection with the Sphere Distribution, including a distribution agreement, a tax disaffiliation agreement and an employee matters agreement and certain other arrangements;

• Other agreements with MSG Networks entered into in connection with the MSGS Distribution, including a distribution agreement, a tax disaffiliation agreement, an employee matters agreement and certain other arrangements.

In addition, the Company shared certain executive support costs, including office space, executive assistants, security and transportation costs for:

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

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

Following the MSGE Distribution, such costs are also shared with MSG Entertainment.

The Company also previously shared costs for the Company’s former Chief Executive Officer with Sphere Entertainment through March 31, 2022.

Additionally, the Company, Sphere Entertainment and AMC Networks allocated the costs of certain personal aircraft and helicopter usage by their shared executives.

Following the MSGE Distribution, such costs are also shared with MSG Entertainment.

From time to time the Company has entered into, and is expected to continue to enter into, arrangements with 605, LLC.

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

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

Dolan and Kristin A.

Dolan own 50 % of 605, LLC.

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

• Other agreements with MSG Networks entered into in connection with the MSGS Distribution, including an employee matters agreement, agreements related to audio-only distribution rights for Knicks and Rangers games, and certain other arrangements.

The Company is also party to arrangements with MSG Entertainment and Sphere Entertainment pursuant to which the three companies have agreed to allocate expenses in connection with the use by each company of aircraft owned or leased by the Company and MSG Entertainment.

In addition, the Company shares certain executive support costs, including office space, executive assistants, security and transportation costs for:

(i) the Company’s Executive Chairman with Sphere Entertainment and, following the MSGE Distribution, with MSG Entertainment as well;

(ii) the Company’s Vice Chairman with AMC Networks, Sphere Entertainment and following the MSGE Distribution, with MSG Entertainment as well, and (iii) the Company’s Executive Vice President with Sphere Entertainment and AMC Networks.

Additionally, the Company, Sphere Entertainment, AMC Networks, and, following the MSGE Distribution, MSG Entertainment allocate the costs of certain personal aircraft and helicopter usage by their shared executives.

MADISON SQUARE GARDEN SPORTS CORP.

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

These amounts are reflected in revenues and operating expenses in the accompanying consolidated statements of operations for the three and nine months ended March 31, 2023 and 2022:

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

2023 2022 2023 2022

These amounts are reflected in revenues and operating expenses in the accompanying consolidated statements of operations for the three months ended September 30, 2023 and 2022:

Three Months Ended September 30,

$ 8,817 $ 8,174

Operating expenses:

Corporate expenses pursuant to Services Agreement with Sphere Entertainment $ 8,702 $ 9,473 $ 28,032 $ 29,347

Rent expense (sublease) due to Sphere Entertainment 741 752 2,162 2,232

Expense pursuant to the Services Agreement $ 9,887 $ 9,513

Rent expense pursuant to Sublease agreement with MSG Entertainment 750 698

Costs associated with the Sponsorship sales and service representation agreements 2,601 2,933

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Other costs associated with the Arena License Agreements 804 970

Other operating expenses, net 64 479 69 800

Other operating (credits) expenses, net ( 612 ) 67

___________________

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

Income tax expense for the three and nine months ended March 31, 2023 of $ 42,962 and $ 47,024 , respe ctively, reflect an effective tax rate of 45 % and 46 %.

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

Income tax benefit for the three months ended September 30, 2023 of $ 15,144 reflects an effective tax rate of 45 % .

Income tax benefit for the three months ended September 30, 2022 of $ 20,493 reflects an effective tax rate of 53 %.

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

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

During the nine months ended March 31, 2023, the Company made income tax payments of $ 1,084 .

Subsequent Events

CLG & NRG Combination

On April 6, 2023, the Company completed the sale of its controlling interest in CLG to NRG, a professional gaming and entertainment company, in exchange for a noncontrolling equity interest in the combined NRG/CLG company, which will be accounted for as an equity method investment.

The Company will deconsolidate the CLG business in the fourth quarter of fiscal year 2023 and the transaction is not expected to have a material impact on the Company’s ongoing operations, financial position, or cash flows.

During the three months ended September 30, 2023, the Company made income tax payments, net of refunds, of $ 8,029 .

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

What changed 10-Q

Item 1. Financial Statements