What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-05-03 compared with 2024-02-06 · 103 added, 76 removed, 181 unchanged (50% of the section changed)

42 unchanged sentences

Results of Operations.

This section provides an analysis of our unaudited results of operations for the three and six months ended December 31, 2023 compared to the three and six months ended December 31, 2022.

This section provides an analysis of our unaudited results of operations for the three and nine months ended March 31, 2024 compared to the three and nine months ended March 31, 2023.

Liquidity and Capital Resources.

This section focuses primarily on (i) the liquidity and capital resources of the Company, (ii) an analysis of the Company’s cash flows for the six months ended December 31, 2023 compared to the six months ended December 31, 2022, and (iii) certain contractual obligations.

This section focuses primarily on (i) the liquidity and capital resources of the Company, (ii) an analysis of the Company’s cash flows for the nine months ended March 31, 2024 compared to the nine months ended March 31, 2023, and (iii) certain contractual obligations.

Seasonality of Our Business.

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Results of Operations

Comparison of the three and six months ended December 31, 2023 versus the three and six months ended December 31, 2022

Comparison of the three and nine months ended March 31, 2024 versus the three and nine months ended March 31, 2023

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

Three Months Ended Six Months Ended

December 31, Change December 31, Change

Three Months Ended Nine Months Ended

March 31, Change March 31, Change

2024 2023 $ % 2024 2023 $ %

6 unchanged sentences

Interest expense, net (6,444) (6,300) (144) (2) % (19,720) (14,768) (4,952) (34) %

Miscellaneous income (expense), net 2,991 385 2,606 NM (9,674) 219 (9,893) NM

Income (loss) before income taxes 25,008 46,391 (21,383) (46) % (8,957) 7,371 (16,328) NM

Income tax (expense) benefit (10,784) (24,555) 13,771 56 % 4,360 (4,062) 8,422 NM

Net income (loss) 14,224 21,836 (7,612) (35) % (4,597) 3,309 (7,906) NM

Miscellaneous (expense) income, net (1,403) 19,324 (20,727) NM (11,077) 19,543 (30,620) NM

Income before income taxes 71,895 94,775 (22,880) (24) % 62,938 102,146 (39,208) (38) %

Income tax expense (34,018) (42,962) 8,944 21 % (29,658) (47,024) 17,366 37 %

Net income 37,877 51,813 (13,936) (27) % 33,280 55,122 (21,842) (40) %

Net loss attributable to nonredeemable noncontrolling interests — (566) 566 100 % — (1,928) 1,928 100 %

Net income (loss) attributable to Madison Square Garden Sports Corp.’s stockholders $ 14,224 $ 22,491 $ (8,267) (37) % $ (4,597) $ 4,671 $ (9,268) NM

Revenues decreased $26,796, or 8%, to $326,898 for the three months ended December 31, 2023 as compared to the prior year period.

Revenues decreased $7,839, or 2%, for the six months ended December 31, 2023 as compared to the prior year period.

The net decreases were attributable to the following:

Net income attributable to Madison Square Garden Sports Corp.’s stockholders $ 37,877 $ 52,379 $ (14,502) (28) % $ 33,280 $ 57,050 $ (23,770) (42) %

______________

NM - Percentage is not meaningful

Revenues increased $47,210, or 12%, to $429,954 for the three months ended March 31, 2024 as compared to the prior year period.

Revenues increased $39,371, or 5%, to $799,898 for the nine months ended March 31, 2024 as compared to the prior year period.

The net increases were attributable to the following:

Months Months

Decrease in pre/regular season ticket-related revenues $ (19,045) $ (18,709)

Decrease in suite revenues (5,895) (5,679)

Decrease in sponsorship and signage revenues (5,811) (5,527)

Increase in pre/regular season ticket-related revenues $ 29,874 $ 11,166

Increase in suite revenues 10,932 5,253

Increase in pre/regular season food, beverage, and merchandise sales 4,274 3,998

Increase in revenues from local media rights fees 1,348 3,532

Increase in revenues from league distributions 625 19,268

Increase (decrease) in sponsorship and signage revenues 130 (5,397)

Other net increases 27 1,551

$ 47,210 $ 39,371

The decreases in pre/regular season ticket-related revenues for the three and six months ended December 31, 2023 were primarily due to the Knicks and the Rangers playing fewer home games at The Garden during the current year periods as compared to the prior year periods, partially offset by higher average per-game revenue.

The Knicks played 15 games at The Garden during the three and six months ended December 31, 2023 as compared to 21 games during the prior year periods.

The Rangers played 17 games at The Garden during the three months ended December 31, 2023 and 19 games at The Garden during the six months ended December 31, 2023 as compared to 20 and 22 games, respectively, during the prior year periods.

The decreases in suite revenues for the three and six months ended December 31, 2023 were primarily due to the Knicks and the Rangers playing fewer games at The Garden during the current year periods as compared to the prior year periods, partially offset by higher net sales of suites products, including revenue related to new premium hospitality offerings which were made available at the start of the 2023-24 seasons.

The decreases in sponsorship and signage revenues for the three and six months ended December 31, 2023 were primarily due to the Knicks and the Rangers playing fewer games at The Garden during the current year periods as compared to the prior year periods.

The increases in revenues from local media rights fees for the three and six months ended December 31, 2023 were primarily due to contractual rate increases.

The increase in revenues from league distributions for the three months ended December 31, 2023 was primarily due to increased national media rights fees in the current year period, partially offset by lower other league distributions in the current year period.

The increase in revenues from league distributions for the six months ended December 31, 2023 was primarily due to an increase in and the timing of recognition of certain league distributions unrelated to national media rights fees and, to a lesser extent, increased national media rights fees in the current year period.

The increase in pre/regular season ticket-related revenues for the three months ended March 31, 2024 was primarily due to the Knicks playing additional home games at The Garden during the current year period as compared to the prior year period and higher average Knicks and Rangers per-game revenue.

The Knicks played 26 games at The Garden during the three months ended March 31, 2024 as compared to 21 games at The Garden during the prior year period.

The increase in pre/regular season ticket-related revenues for the nine months ended March 31, 2024 was primarily due to higher average Knicks and Rangers per-game revenue, partially offset by the Knicks and the Rangers playing fewer home games at The Garden during the current year period as compared to the prior year period.

The Knicks played 41 games at The Garden during the nine months ended

March 31, 2024 as compared to 42 games at The Garden during the prior year period.

The Rangers played 38 games at The Garden during the nine months ended March 31, 2024 as compared to 41 games at The Garden during the prior year period.

The increase in suite revenues for the three months ended March 31, 2024 was primarily due to the Knicks playing additional home games at The Garden during the current year period as compared to the prior year period and higher net sales of suites products, including revenue related to new premium hospitality offerings which were made available at the start of the 2023-24 seasons.

The increase in suite revenues for the nine months ended March 31, 2024 was primarily due to higher net sales of suites products, including revenue related to new premium hospitality offerings which were made available at the start of the 2023-24 seasons, partially offset by the Knicks and the Rangers playing fewer home games at The Garden during the current year period as compared to the prior year period.

The increase in pre/regular season food, beverage, and merchandise sales for the three months ended March 31, 2024 was primarily due to higher average per-game revenue, the Knicks playing additional home games at The Garden during the current year period as compared to the prior year period, and higher online sales of merchandise.

The increase in pre/regular season food, beverage, and merchandise sales for the nine months ended March 31, 2024 was primarily due to higher average per-game revenue and higher online sales of merchandise, partially offset by the Knicks and the Rangers playing fewer home games at The Garden during the current year period as compared to the prior year period.

The increases in revenues from local media rights fees for the three and nine months ended March 31, 2024 were primarily due to contractual rate increases, partially offset by a reduction in rights fees due to a decrease in the number of events exclusively available to MSG Networks during the current year as compared to the prior year.

The increase in revenues from league distributions for the three months ended March 31, 2024 was primarily due to increased national media rights fees in the current year period, partially offset by lower other league distributions in the current year period and the absence of league distributions related to Counter Logic Gaming (“CLG”) in the current year period following the Company’s sale of its controlling interest in CLG in April 2023.

The increase in revenues from league distributions for the nine months ended March 31, 2024 was primarily due to an increase in and the timing of recognition of certain league distributions unrelated to national media rights fees and, to a lesser extent, increased national media rights fees in the current year period, partially offset by lower other league distributions in the current year period and the absence of league distributions related to CLG in the current year period.

The increase in sponsorship and signage revenues for three months ended March 31, 2024 was primarily due the Knicks playing additional home games at The Garden during the current year period as compared to the prior year period, partially offset by the absence of sponsorship and signage revenues related to CLG in the current year period.

The decrease in sponsorship and signage revenues for nine months ended March 31, 2024 was primarily due to the Knicks and the Rangers playing fewer home games at The Garden during the current year period as compared to the prior year period and the absence of sponsorship and signage revenues related to CLG in the current year period.

Direct operating expenses

Direct operating expenses increased $6,523, or 3%, to $232,225 for the three months ended December 31, 2023 as compared to the prior year period.

Direct operating expenses increased $6,362, or 3%, to $235,745 for the six months ended December 31, 2023 as compared to the prior year period.

Direct operating expenses increased $33,975, or 14%, to $273,026 for the three months ended March 31, 2024 as compared to the prior year period.

Direct operating expenses increased $40,337, or 9%, to $508,771 for the nine months ended March 31, 2024 as compared to the prior year period.

The net increases were attributable to the following:

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Increase in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax 8,383 12,016

Decrease in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden (7,255) (7,255)

Other net decreases (1,040) (880)

Increase in other team operating expenses 5,106 3,388

Increase (decrease) in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden 4,408 (2,847)

Increase in pre/regular season expense associated with merchandise sales 2,237 2,775

Increase in net provisions for certain team personnel transactions 2,089 2,389

$ 33,975 $ 40,337

The increases in team personnel compensation for the three and six months ended December 31, 2023 were primarily due to roster changes for the Knicks and the Rangers, partially offset by the absence of expenses related to Counter Logic Gaming (“CLG”) in the current year periods, following the Company’s sale of its controlling interest in CLG in April 2023.

The increases in team personnel compensation for the three and nine months ended March 31, 2024 were primarily due to roster changes for the Knicks and the Rangers, partially offset by the absence of expenses related to CLG in the current year periods following the Company’s sale of its controlling interest in CLG in April 2023.

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

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2024 2023 Increase 2024 2023 Increase

Net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax $ 20,103 $ 11,720 $ 8,383 $ 42,521 $ 30,505 $ 12,016

The increases in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for the three and six months ended December 31, 2023 were primarily related to higher provisions for league revenue sharing expense (net of escrow and excluding playoffs) of $2,276 and $2,276, respectively.

In addition, the increase in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for the six months ended December 31, 2023 was partially due to the net impact of adjustments to prior seasons’ revenue sharing expense (net of escrow).

The increases in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for the three and nine months ended March 31, 2024 were primarily related to higher provisions for league revenue sharing expense (net of escrow and excluding playoffs) of $6,600 and $8,875, respectively, and, to a lesser extent, lower estimated recoveries of NBA luxury tax in the current year periods.

The Knicks were not a luxury tax payer for the 2022-23 season and, therefore, received an equal share of the portion of luxury tax receipts that were distributed to non-tax paying teams.

The Knicks’ roster as of December 31, 2023 would not result in the team being a luxury tax payer for the 2023-24 season.

The Knicks’ roster as of March 31, 2024 would not result in the team being a luxury tax payer for the 2023-24 season.

The actual amounts for the 2023-24 seasons may vary significantly from the recorded provisions based on actual operating results for each league and all teams within each league for the season and other factors.

The decreases in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden for the three and six months ended December 31, 2023 were a result of the Knicks and the Rangers playing fewer games at The Garden during the current year periods as compared to the prior year periods.

Other team operating expenses primarily consist of expenses associated with day-to-day operations, including variable day-of-event costs incurred at The Garden, team travel, player insurance, and league assessments.

The increase in other team operating expenses for the three months ended March 31, 2024 was primarily due to higher average per-game expenses and the Knicks playing additional home games at The Garden during the current year period as compared to the prior year period.

The increase in other team operating expenses for the nine months ended March 31, 2024 was primarily due to higher average per-game expenses, partially offset by the Knicks and the Rangers playing fewer home games at The Garden during the current year period as compared to the prior year period .

The increase in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden for the three months ended March 31, 2024 was a result of the Knicks playing additional home games at The Garden during the current year period as compared to the prior year period.

The decrease in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden for the nine months ended March 31, 2024 was a result of the Knicks and the Rangers playing fewer home games at The Garden during the current year period as compared to the prior year period .

The increases in pre/regular season expense associated with merchandise sales for the three and nine months ended March 31, 2024 were primarily related to higher merchandise sales.

Net provisions for certain team personnel transactions were as follows:

Three Months Ended Nine Months Ended

March 31, March 31,

2024 2023 Increase (Decrease) 2024 2023 Increase (Decrease)

Season-ending player injuries $ 2,170 $ — $ 2,170 $ 2,170 $ — $ 2,170

Player trades — 51 (51) — 1,143 (1,143)

Waivers/contract terminations — 30 (30) — (1,362) 1,362

Net provisions for certain team personnel transactions $ 2,170 $ 81 $ 2,089 $ 2,170 $ (219) $ 2,389

Selling, general and administrative expenses

Selling, general and administrative expenses primarily consist of (i) administrative costs, including compensation, costs under the Company’s Services Agreement, and professional fees, (ii) fees related to the Company’s sponsorship sales and service representation agreements, and (iii) sales and marketing costs.

Selling, general and administrative expenses primarily consist of (i) administrative costs, including compensation, costs under the Company’s Services Agreement, professional fees, and operating lease costs, (ii) fees related to the Company’s sponsorship sales and service representation agreements, and (iii) sales and marketing costs.

Selling, general and administrative expenses generally do not fluctuate in line with changes in the Company’s revenues and direct operating expenses.

Selling, general and administrative expenses for the three months ended December 31, 2023 decreased $10,570, or 14%, to $65,066 as compared to the prior year period driven by lower employee compensation and related benefits of $7,821, primarily due to executive management transition costs recognized in the prior year period, and lower other general and administrative expenses.

Selling, general and administrative expenses for the six months ended December 31, 2023 decreased $12,295, or 9%, to $118,622 as compared to the prior year period driven by lower employee compensation and related benefits of $10,527, primarily due to executive management transition costs recognized in the prior year period, and lower other general and administrative expenses.

Selling, general and administrative expenses for the three months ended March 31, 2024 increased $15,296, or 25%, to $76,398 as compared to the prior year period driven by higher employee compensation and related benefits of $12,187, primarily due to executive management transition costs in the current year period, and higher other general and administrative expenses.

Selling, general and administrative expenses for the nine months ended March 31, 2024 increased $3,001, or 2%, to $195,020 as compared to the prior year period primarily due to higher operating lease costs of $5,121 and higher employee compensation and related benefits of $1,417, partially offset by lower other general and administrative expenses.

Depreciation and amortization

Depreciation and amortization for the three months ended December 31, 2023 decreased $48, or 6%, to $790 as compared to the prior year period.

Depreciation and amortization for the six months ended December 31, 2023 decreased $279, or 15%, to $1,584 as compared to the prior year period.

Depreciation and amortization for the three months ended March 31, 2024 decreased $52, or 6%, to $788 as compared to the prior year period.

Depreciation and amortization for the nine months ended March 31, 2024 decreased $331, or 12%, to $2,372 as compared to the prior year period.

Operating income

Operating income for the three months ended December 31, 2023 decreased $22,701, or 44%, to $28,817 as compared to the prior year period primaril y due to lower revenues and, to a lesser extent, higher direct operating expenses, partially offset by lower selling, general and administrative expenses.

Operating income for the six months ended December 31, 2023 decreased $1,627, or 10%, to $13,993 as compared to the prior year period primaril y due to lower revenues and higher direct operating expenses, partially offset by lower selling, general and administrative expenses.

Operating income for the three months ended March 31, 2024 decreased $2,009, or 2%, to $79,742 as compared to the prior year period primaril y due to higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, partially offset by higher revenues.

Operating income for the nine months ended March 31, 2024 decreased $3,636, or 4%, to $93,735 as compared to the prior year period primaril y due to higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, partially offset by higher revenues.

Interest expense, net

Net interest expense for the three months ended December 31, 2023 increased $1,288, or 23%, to $6,800 as compared to the prior year period primarily due to increased interest expense caused by higher average interest rates in the current year period and higher average borrowings under the Knicks Revolving Credit Facility in the current year period.

Net interest expense for the three months ended March 31, 2024 increased $144, or 2%, to $6,444 as compared to the prior year period primarily due to lower interest income caused by lower cash balances, partially offset by decreased interest expense in the current year period.

This decrease in interest expense was primarily due to lower average borrowings under the Rangers Revolving Credit Facility in the current year period, partially offset by higher average interest rates and higher average borrowings under the Knicks Revolving Credit Facility in the current year period.

Net interest expense for the nine months ended March 31, 2024 increased $4,952, or 34%, to $19,720 as compared to the prior year period primarily due to increased interest expense caused by higher average interest rates in the current year period and higher average borrowings under the Knicks Revolving Credit Facility in the current year period.

The increase was partially offset by lower average borrowings under the Rangers Revolving Credit Facility in the current year period.

Net interest expense for the six months ended December 31, 2023 increased $4,808, or 57%, to $13,276 as compared to the prior year period primarily due to increased interest expense caused by higher average interest rates in the current year period and higher average borrowings under the Rangers Revolving Credit Facility and the Knicks Revolving Credit Facility in the current year period.

Miscellaneous income (expense), net

Miscellaneous income, net for the three months ended December 31, 2023 increased $2,606 to $2,991 as compared to the prior year period primarily due to the recognition of unrealized gains in the current year period related to the Company’s investments in Xtract One common stock and warrants which were made in the third and fourth quarters of fiscal year 2023.

Miscellaneous income (expense), net for the six months ended December 31, 2023 decreased $9,893 to a net expense of $9,674 as compared to the prior year period primarily due to the recognition of unrealized losses in the current year period related to the Company’s investments in Xtract One common stock and warrants.

Miscellaneous (expense) income, net

Miscellaneous (expense) income, net for the three months ended March 31, 2024 decreased $20,727 to a net expense of $1,403 as compared to the prior year period primarily due to the recognition of unrealized losses in the current year period related to the Company’s investments in Xtract One common stock and warrants as compared to unrecognized gains in the prior year period related to the Company’s investments in Xtract One common stock, warrants and forward contracts.

Miscellaneous (expense) income, net for the nine months ended March 31, 2024 decreased $30,620 to a net expense of $11,077 as compared to the prior year period primarily due to the recognition of unrealized losses in the current year period related to the Company’s investments in Xtract One common stock and warrants as compared to unrecognized gains in the prior year period related to the Company’s investments in Xtract One common stock and warrants.

See Note 17 to the consolidated financial statements included in “Part I — Item 1.

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Management believes that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the Company’s business without regard to the settlement of an obligation that is not expected to be made in cash.

In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan provides investors with a clearer picture of the Company’s operating performance given that, in accordance with GAAP, gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan are recognized in Operating income (loss) whereas gains and losses related to the remeasurement of the assets under the Company’s Executive Deferred Compensation Plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recognized in Miscellaneous income (expense), net, which is not reflected in Operating income (loss).

(expense), net, which is not reflected in Operating income (loss).

The Company believes adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of the Company.

4 unchanged sentences

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

The following are the reconciliations of operating income to adjusted operating income for the three and six months ended December 31, 2023 and 2022:

Three Months Ended Six Months Ended

December 31, Change December 31, Change

The following are the reconciliations of operating income to adjusted operating income for the three and nine months ended March 31, 2024 and 2023:

Three Months Ended Nine Months Ended

March 31, Change March 31, Change

2024 2023 $ % 2024 2023 $ %

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(a) During the fourth quarter of fiscal year 2023, the Company amended the definition of adjusted operating income (loss) so that the impact of the non-cash portion of operating lease costs related to the Company’s Arena License Agreements with MSG Entertainment is no longer excluded.

(a) During the fourth quarter of fiscal year 2023, the Company amended the definition of adjusted operating income so that the impact of the non-cash portion of operating lease costs related to the Company’s Arena License Agreements with MSG Entertainment is no longer excluded.

Pursuant to GAAP, recognition of operating lease costs is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement.

As a result, operating lease costs is comprised of a contractual cash component plus or minus a non-cash component for each period presented.

Adjusted operating income includes operating lease costs of (i) $15,409 and $16,238 of expense paid in cash for the three and six months ended December 31, 2023, respectively, and $19,416 and $20,221 of expense paid in cash for the three and six months ended December 31, 2022, respectively, and (ii) a non-cash expense of $8,953 and $9,435, for the three and six months ended December 31, 2023, respectively, and $12,202 and $12,708 for the three and six months ended December 31, 2022, respectively.

For the three months ended December 31, 2023, adjusted operating income decreased $27,408, or 43%, to $37,016 as compared to the prior year period.

The decrease in adjusted operating income was primarily due to lower revenues and, to a lesser extent, higher direct operating expenses, partially offset by lower selling, general and administrative expenses.

For the six months ended December 31, 2023, adjusted operating income decreased $9,637, or 26%, to $27,031 as compared to the prior year period.

The decrease in adjusted operating income was primarily due to lower revenues and higher direct operating expenses, partially offset by lower selling, general and administrative expenses.

Adjusted operating income includes operating lease costs of (i) $22,372 and $38,610 of expense paid in cash for the three and nine months ended March 31, 2024, respectively, and $19,013 and $39,234 of expense paid in cash for the three and nine months ended March 31, 2023, respectively, and (ii) a non-cash expense of $12,998 and $22,433, for the three and nine months ended March 31, 2024, respectively, and $11,949 and $24,657 for the three and nine months ended March 31, 2023, respectively.

For the three months ended March 31, 2024, adjusted operating income increased $2,522, or 3%, to $88,701 as compared to the prior year period.

The increase in adjusted operating income was primarily due to higher revenues, partially offset by higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses.

For the nine months ended March 31, 2024, adjusted operating income decreased $7,115, or 6%, to $115,732 as compared to the prior year period.

The decrease in adjusted operating income was primarily due to higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, partially offset by higher revenues.

Liquidity and Capital Resources

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

As of December 31, 2023, we had $37,880 in C ash and cash equivale nts.

In addition, as of December 31, 2023, the Company’s deferred revenue obligations were $218,450, net of billed, but not yet collected deferred revenue.

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

As of March 31, 2024, we had $40,033 in C ash and cash equivale nts.

In addition, as of March 31, 2024, the Company’s deferred revenue obligations were $88,452, net of billed, but not yet collected deferred revenue.

This balance is primarily comprised of obligations in connection with tickets and suites.

In addition, the Company’s deferred revenue obligations included $11,033 from the NBA, which the league provided to each team.

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

We believe we have sufficient liquidity, including approximately $37,880 in Cash and cash equivalents as of December 31, 2023, along with $195,000 of additional available borrowing capacity under existing credit facilities, to fund our operations and satisfy any obligations for the foreseeable future.

We believe we have sufficient liquidity, including approximately $40,033 in Cash and cash equivalents as of March 31, 2024, along with $195,000 of additional available borrowing capacity under existing credit facilities, to fund our operations and satisfy any obligations for the foreseeable future.

In addition, on April 22, 2024, the Company made an additional principal repayment of $40,000 under the Rangers Revolving Credit Facility.

Financing Agreements and Stock Repurchases

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Cash Flow Discussion

The following table summarizes the Company’s cash flow activities for the six months ended December 31, 2023 and 2022:

Six Months Ended December 31,

Net (loss) income $ (4,597) $ 3,309

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

The following table summarizes the Company’s cash flow activities for the nine months ended March 31, 2024 and 2023:

Nine Months Ended March 31,

Net income $ 33,280 $ 55,122

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

24,407 33,477

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Operating Activities

Net cash used in operating activities for the six months ended December 31, 2023 was $20,257 as compared to net cash provided by operating activities in the prior period of $31,577.

This was primarily due to the decrease in net (loss) income adjusted for non-cash items in addition to changes in working capital assets and liabilities.

The changes in working capital assets and liabilities were primarily driven by (i) lower accrued and other liabilities of $60,478 primarily due to higher payments related to employee compensation, league revenue sharing, and income taxes in the current year period, (ii) higher prepaid expenses and other assets of $10,236 primarily due to higher payments for income taxes in the current year period and lower receipts related to escrow and player compensation recoveries in the current year period, (iii) $7,586 related to operating lease right-of-use assets and lease liabilities due to the timing of recognition of operating lease costs and higher lease payments, (iv) higher net related party

receivables of $6,114 due to the timing of collections related to the Company’s sponsorship sales and service representation agreements and Arena License Agreements, (v) higher accounts receivable, net of $4,793 due to the timing of collections related to sponsorship and ticket sales.

These changes are partially offset by (i) higher deferred revenue of $33,592 primarily due to the higher collections of ticket sales in advance of recognition of pre/regular season ticket-related revenues, (ii) lower net related party payables of $11,592 primarily due to the timing of payments related to the Services Agreement, and (iii) lower investments of $7,344 primarily related to the Company’s Executive Deferred Compensation Plan.

Net cash used in operating activities for the nine months ended March 31, 2024 was $16,220 as compared to net cash provided by operating activities in the prior period of $114,801.

This was primarily due to the decrease in net income adjusted for non-cash items in addition to changes in working capital assets and liabilities.

The changes in working capital assets and liabilities were primarily driven by (i) a decrease in deferred revenue of $52,369 primarily due to the timing of collections related to pre/regular season ticket sales and the recognition of certain league distributions unrelated to national media rights fees, (ii) a lower decrease in accrued and other liabilities of $37,191 primarily due to higher payments related to employee compensation and league revenue sharing in the current year period, (iii) a higher increase in prepaid expenses and other assets of $14,114 primarily due to higher contract assets as

a result of timing of revenue recognition and lower receipts related to escrow and player compensation recoveries in the current year period, and (iv) an increase in net related party receivables of $8,671 primarily due to the timing of collections related to the Company’s sponsorship sales and service representation agreements.

These changes were partially offset by (i) a lower decrease in net related party payables of $11,157 primarily due to the timing of payments related to the Services Agreement, and (ii) a lower increase in investments of $7,669 primarily related to the Company’s Executive Deferred Compensation Plan.

Investing Activities

Net cash used in investing activities for the six months ended December 31, 2023 increased by $3,924 to $5,238 as compared to the prior year period primarily due to higher purchases of investments in the current year period.

Net cash used in investing activities for the nine months ended March 31, 2024 decreased by $4,677 to $5,689 as compared to the prior year period primarily due to lower purchases of investments in the current year period.

Financing Activities

Net cash provided by financing activities for the six months ended December 31, 2023 was $26,268 as compared to net cash used in financing activities for the six months ended December 31, 2022 of $76,123.

This was primarily due to the impact of dividends paid and the accelerated share repurchase in the prior year period and, to a lesser extent, lower taxes paid in lieu of shares issued for equity-based compensation in the current year period.

These impacts were partially offset by additional borrowings under the Knicks Revolving Credit Facility and the Rangers Revolving Credit Facility in the prior year period and higher principal repayments under the Company’s credit facilities in the current year period.

Net cash provided by financing activities for the nine months ended March 31, 2024 was $26,234 as compared to net cash used in financing activities for the nine months ended March 31, 2023 of $129,618.

This was primarily due to the impact of dividends paid and the accelerated share repurchase in the prior year period, lower principal repayments under the Knicks Revolving Credit Facility and the Rangers Revolving Credit Facility in the current year period and, to a lesser extent, lower taxes paid in lieu of shares issued for equity-based compensation in the current year period.

These impacts were partially offset by additional borrowings under the Company’s credit facilities in the prior year period.

Seasonality of Our Business

7 unchanged sentences

There have been no material changes to the Company’s critical accounting policies from those set forth in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

The carrying amount of goodwill as of December 31, 2023 was $226,523.

The carrying amount of goodwill as of March 31, 2024 was $226,523.

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

22 unchanged sentences

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

The following table sets forth the amount of identifiable indefinite-lived intangible assets reported in the Company’s consolidated balance sheet as of December 31, 2023:

The following table sets forth the amount of identifiable indefinite-lived intangible assets reported in the Company’s consolidated balance sheet as of March 31, 2024:

Sports franchises $ 102,564

17 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis