What changed in this filing

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Item 1. Financial Statements

2025-02-04 compared with 2024-11-01 · 203 added, 134 removed, 566 unchanged (37% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

September 30,

2024 June 30,

2 unchanged sentences

Restricted cash 8,030 5,771

Accounts receivable, net of allowance for doubtful accounts of $ 0 as of September 30, 2024 and June 30, 2024

Accounts receivable, net of allowance for doubtful accounts of $ 0 as of December 31, 2024 and June 30, 2024

79,395 33,781

3 unchanged sentences

Total current assets 297,127 216,942

Property and equipment, net of accumulated depreciation and amortization of $ 51,199 and $ 52,281 as of September 30, 2024 and June 30, 2024, respectively

Property and equipment, net of accumulated depreciation and amortization of $ 51,990 and $ 52,281 as of December 31, 2024 and June 30, 2024, respectively

27,890 28,541

9 unchanged sentences

(in thousands, except per share data)

September 30,

2024 June 30,

22 unchanged sentences

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

19,465 and 19,423 shares outstanding as of September 30, 2024 and June 30, 2024, respectively

19,476 and 19,423 shares outstanding as of December 31, 2024 and June 30, 2024, respectively

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

4,530 shares outstanding as of September 30, 2024 and June 30, 2024

4,530 shares outstanding as of December 31, 2024 and June 30, 2024

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

none outstanding as of September 30, 2024 and June 30, 2024

none outstanding as of December 31, 2024 and June 30, 2024

Additional paid-in capital 9,776 19,079

Treasury stock, at cost, 983 and 1,025 shares as of September 30, 2024 and June 30, 2024, respectively

Treasury stock, at cost, 972 and 1,025 shares as of December 31, 2024 and June 30, 2024, respectively

( 160,647 ) ( 169,547 )

7 unchanged sentences

(in thousands, except per share data)

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2024 2023 2024 2023

$ 357,759 $ 326,898 $ 411,066 $ 369,944

Operating expenses:

Direct operating expenses (b)

275,753 232,225 283,964 235,745

Selling, general and administrative expenses (c)

1 unchanged sentence

Depreciation and amortization 791 790 1,573 1,584

Operating loss ( 8,273 ) ( 14,824 )

Operating income 13,315 28,817 5,042 13,993

Other income (expense):

1 unchanged sentence

Interest expense ( 5,587 ) ( 7,419 ) ( 11,642 ) ( 14,348 )

Miscellaneous expense, net ( 1,126 ) ( 12,665 )

Miscellaneous (expense) income, net ( 6,609 ) 2,991 ( 7,735 ) ( 9,674 )

( 11,506 ) ( 3,809 ) ( 17,823 ) ( 22,950 )

Loss before income taxes ( 14,590 ) ( 33,965 )

Income tax benefit 7,048 15,144

Net loss $ ( 7,542 ) $ ( 18,821 )

Basic loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.31 ) $ ( 0.79 )

Diluted loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.31 ) $ ( 0.79 )

Income (loss) before income taxes 1,809 25,008 ( 12,781 ) ( 8,957 )

Income tax (expense) benefit ( 698 ) ( 10,784 ) 6,350 4,360

Net income (loss) $ 1,111 $ 14,224 $ ( 6,431 ) $ ( 4,597 )

Basic earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 0.05 $ 0.59 $ ( 0.27 ) $ ( 0.19 )

Diluted earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 0.05 $ 0.59 $ ( 0.27 ) $ ( 0.19 )

Weighted-average number of common shares outstanding:

2 unchanged sentences

_________________

(a) Includes revenues from related parties of $ 8,904 and $ 8,817 for the three months ended September 30, 2024 and 2023, respectively.

(b) Includes net charges from related parties of $ 2,295 and $ 2,616 for the three months ended September 30, 2024 and 2023, respectively.

(c) Includes net charges from related parties of $ 11,862 and $ 12,125 for the three months ended September 30, 2024 and 2023, respectively.

(a) Includes revenues from related parties of $ 80,217 and $ 77,658 for the three months ended December 31, 2024 and 2023, respectively, and $ 89,121 and $ 86,475 for the six months ended December 31, 2024 and 2023, respectively.

(b) Includes net charges from related parties of $ 38,757 and $ 35,683 for the three months ended December 31, 2024 and 2023, respectively, and $ 41,052 and $ 38,299 for the six months ended December 31, 2024 and 2023, respectively.

(c) Includes net charges from related parties of $ 19,693 and $ 16,630 for the three months ended December 31, 2024 and 2023, respectively, and $ 31,555 and $ 28,755 for the six months ended December 31, 2024 and 2023, respectively.

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended

September 30,

Net loss $ ( 7,542 ) $ ( 18,821 )

Three Months Ended Six Months Ended

December 31, December 31,

2024 2023 2024 2023

Net income (loss) $ 1,111 $ 14,224 $ ( 6,431 ) $ ( 4,597 )

Other comprehensive income, before income taxes:

5 unchanged sentences

Other comprehensive income, net of income taxes 13 6 27 12

Comprehensive loss $ ( 7,528 ) $ ( 18,815 )

Comprehensive income (loss) $ 1,124 $ 14,230 $ ( 6,404 ) $ ( 4,585 )

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended

September 30,

Six Months Ended

Cash flows from operating activities:

Net loss $ ( 6,431 ) $ ( 4,597 )

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

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

Depreciation and amortization 1,573 1,584

1 unchanged sentence

Share-based compensation expense 10,259 10,719

Unrealized loss on equity investments with readily determinable fair value, warrants, and forward contract 612 12,101

Unrealized loss on equity investments with readily determinable fair value and warrants 5,831 8,397

Other non-cash adjustments 3,497 2,120

9 unchanged sentences

Operating lease right-of-use assets and lease liabilities 6,062 4,218

Net cash used in operating activities ( 26,158 ) ( 54,141 )

Net cash provided by (used in) operating activities 35,621 ( 20,257 )

Cash flows from investing activities:

6 unchanged sentences

Proceeds from revolving credit facilities — 75,000

Repayment of revolving credit facilities — ( 40,000 )

Net cash (used in) provided by financing activities ( 12,373 ) 26,268

Net (decrease) increase in cash, cash equivalents and restricted cash ( 36,823 ) 11,960

Net increase in cash, cash equivalents and restricted cash 20,946 773

Cash, cash equivalents and restricted cash at beginning of period 94,907 40,459

6 unchanged sentences

(in thousands)

Three Months Ended September 30, 2024

Three Months Ended December 31, 2024

Issued Additional

3 unchanged sentences

Loss Total Equity

Balance as of September 30, 2024 $ 249 $ 8,353 $ ( 162,504 ) $ ( 122,689 ) $ ( 938 ) $ ( 277,529 )

Net income — — — 1,111 — 1,111

Other comprehensive income — — — — 13 13

Comprehensive income — — — — — 1,124

Share-based compensation

— 5,991 — — — 5,991

Tax withholding associated with shares issued for equity-based compensation — ( 2,711 ) — — — ( 2,711 )

Common stock issued under stock incentive plans

— ( 1,857 ) 1,857 — — —

Dividends declared ($ 7.00 per share)

— — — ( 11 ) — ( 11 )

Balance as of December 31, 2024 $ 249 $ 9,776 $ ( 160,647 ) $ ( 121,589 ) $ ( 925 ) $ ( 273,136 )

See accompanying notes to consolidated financial statements.

MADISON SQUARE GARDEN SPORTS CORP.

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands)

Three Months Ended December 31, 2023

Issued Additional

Capital Treasury

Stock Accumulated Deficit Accumulated

Comprehensive

Loss Total Equity

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

Net income — — — 14,224 — 14,224

Other comprehensive income — — — — 6 6

Comprehensive income — — — — — 14,230

Share-based compensation

— 6,570 — — — 6,570

Tax withholding associated with shares issued for equity-based compensation — ( 1,447 ) — — — ( 1,447 )

Common stock issued under stock incentive plans

— ( 1,205 ) 1,205 — — —

Dividends declared ($ 7.00 per share)

Balance as of December 31, 2023 $ 249 $ 11,471 $ ( 171,400 ) $ ( 178,512 ) $ ( 997 ) $ ( 339,189 )

See accompanying notes to consolidated financial statements.

MADISON SQUARE GARDEN SPORTS CORP.

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands)

Six Months Ended December 31, 2024

Common Stock Issued Additional

Capital Treasury

Stock Accumulated Deficit Accumulated

Comprehensive Loss Total Equity

Balance as of June 30, 2024 $ 249 $ 19,079 $ ( 169,547 ) $ ( 115,139 ) $ ( 952 ) $ ( 266,310 )

5 unchanged sentences

Tax withholding associated with shares issued for equity-based compensation — ( 10,662 ) — — — ( 10,662 )

— ( 7,951 ) — — — ( 7,951 )

Common stock issued under stock incentive plans

2 unchanged sentences

— — — ( 19 ) — ( 19 )

Balance as of September 30, 2024 $ 249 $ 8,353 $ ( 162,504 ) $ ( 122,689 ) $ ( 938 ) $ ( 277,529 )

Balance as of December 31, 2024 $ 249 $ 9,776 $ ( 160,647 ) $ ( 121,589 ) $ ( 925 ) $ ( 273,136 )

See accompanying notes to consolidated financial statements.

MADISON SQUARE GARDEN SPORTS CORP.

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands)

Three Months Ended September 30, 2023

Six Months Ended December 31, 2023

Common Stock Issued Additional

9 unchanged sentences

Tax withholding associated with shares issued for equity-based compensation — ( 8,084 ) — — — ( 8,084 )

— ( 6,637 ) — — — ( 6,637 )

Common stock issued under stock incentive plans

2 unchanged sentences

— — — ( 5 ) — ( 5 )

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

Balance as of December 31, 2023 $ 249 $ 11,471 $ ( 171,400 ) $ ( 178,512 ) $ ( 997 ) $ ( 339,189 )

See accompanying notes to consolidated financial statements.

25 unchanged sentences

The accompanying unaudited consolidated interim financial statements (referred to as the “Financial Statements” herein) have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”) and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”) for interim financial information, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (“fiscal year 2024”).

generally accepted accounting principles (“GAAP”) and Article 10 of Regulation S-X of the Securities and Exchange Commission for interim financial information, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (“fiscal year 2024”).

The Financial Statements presented in this Quarterly Report on Form 10-Q are unaudited;

41 unchanged sentences

The Company is currently evaluating the impact this standard will have on its income tax disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The ASU requires the disclosure of additional information about specific expense categories in the notes to the financial statements.

The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ending June 30, 2028 and subsequent interim periods, with early adoption permitted.

The Company is currently evaluating the impact this standard will have on its disclosures.

MADISON SQUARE GARDEN SPORTS CORP.

3 unchanged sentences

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

For the three months ended September 30, 2024 and 2023, the Company did not have any impairment losses on receivables or contract assets arising from contracts with customers.

For the three and six months ended December 31, 2024, the Company recorded impairment losses of $ 109 on receivables or contract assets arising from contracts with customers.

For the three and six months ended December 31, 2023, the Company did not have any 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 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 months ended September 30, 2024 and 2023:

Three Months Ended

September 30,

Three Months Ended Six Months Ended

December 31, December 31,

2024 2023 2024 2023

Event-related (a)

1 unchanged sentence

Media rights (b)

126,902 122,547 134,255 129,766

Sponsorship, signage and suite licenses 79,413 69,316 84,601 74,630

8 unchanged sentences

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

The following table provides information about contract balances from the Company’s contracts with customers as of September 30, 2024 and June 30, 2024:

September 30, June 30,

The following table provides information about contract balances from the Company’s contracts with customers as of December 31, 2024 and June 30, 2024:

December 31, June 30,

Receivables from contracts with customers, net (a)

1 unchanged sentence

Contract assets, current (b)

10,595 14,054

Deferred revenue, including non-current portion (c), (d)

2 unchanged sentences

(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.

As of September 30, 2024 and June 30, 2024, the Company’s receivables reported above incl uded $ 235 and $ 0 , respectively, related to contracts with customers that are related parties.

As of December 31, 2024 and June 30, 2024, the Company’s receivables reported above incl uded $ 2,666 and $ 0 , respectively, related to contracts with customers that are related parties.

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

Receivables from contracts with customers, net, excludes amounts recorded in Accounts receivable, net, associated with amounts due from the NBA related to luxury tax payments.

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.

(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.

2 unchanged sentences

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

The Company’s deferred revenue related to local media rights was $ 34,241 and $ 0 as of September 30, 2024 and June 30, 2024, respectively.

The Company’s deferred revenue related to local media rights was $ 8,492 and $ 0 as of December 31, 2024 and June 30, 2024, respectively.

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

(d) Revenue recognized for the three months ended September 30, 2024 relating to the deferred revenue balance as of June 30, 2024 was $ 16,713 .

(d) Revenue recognized for the six months ended December 31, 2024 relating to the deferred revenue balance as of June 30, 2024 was $ 74,514 .

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 September 30, 2024.

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 December 31, 2024.

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.

10 unchanged sentences

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

Three Months Ended

September 30,

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

Net loss $ ( 7,542 ) $ ( 18,821 )

Three Months Ended Six Months Ended

December 31, December 31,

2024 2023 2024 2023

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

Net income (loss) $ 1,111 $ 14,224 $ ( 6,431 ) $ ( 4,597 )

Dividends to other-than-common stockholders (a)

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

11 ( 1 ) 19 5

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

$ 1,100 $ 14,225 $ ( 6,450 ) $ ( 4,602 )

Weighted-average shares (denominator):

3 unchanged sentences

Weighted-average shares excluded from diluted EPS — — 79 71

Basic loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.31 ) $ ( 0.79 )

Diluted loss per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.31 ) $ ( 0.79 )

Basic earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 0.05 $ 0.59 $ ( 0.27 ) $ ( 0.19 )

Diluted earnings (loss) per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ 0.05 $ 0.59 $ ( 0.27 ) $ ( 0.19 )

_________________

2 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 sports teams for waiver/contract termination costs, player trades and season-ending injuries (“Team personnel transactions”).

Team personnel transactions were a net provision of $ 833 for the three months ended September 30, 2024.

There were no Team personnel transactions for the three months ended September 30, 2023.

Team personnel transactions were a net provision of $ 7,586 and $ 8,419 for the three and six months ended December 31, 2024, respectively.

There were no Team personnel transactions for the three and six months ended December 31, 2023.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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,

2024 June 30,

2024 September 30,

2024 December 31,

Captions on the consolidated balance sheets:

5 unchanged sentences

_________________

(a) Restricted cash as of September 30, 2024, June 30, 2024 and September 30, 2023 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 fiscal year ended June 30, 2024 for more information).

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(a) Restricted cash as of December 31, 2024, June 30, 2024 and December 31, 2023 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 fiscal year ended June 30, 2024 for more information).

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.

1 unchanged sentence

See Note 7 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 for more information regarding the Company’s accounting policies associated with its leases.

As of September 30, 2024, the Company’s exis ting operating leases, which are recorded in the accompanying financial statements, have remaining lease terms ranging from 1 month to 31 years.

During the second quarter of fiscal 2025, the Company amended and restated the Sublease Agreement to enter into a short term lease for new principal executive offices through December 31, 2024.

The Company has recorded the short term operating lease costs for this amendment within Selling, general and administrative expenses in the accompanying consolidated statements of operations for the three and six months ended December 31, 2024.

In November 2021, Sphere Entertainment entered into a new lease for principal executive offices at Two Pennsylvania Plaza in New York, which was assigned to MSG Entertainment in connection with the MSGE Distribution (the “New MSGE Lease Agreement”).

In January 2025, the Company entered into a new sublease agreement with MSG Entertainment for new principal executive offices at Two Pennsylvania Plaza in New York with a lease term equivalent to the New MSGE Lease Agreement term, which ends January 31, 2046 (the “New Sublease Agreement”) and fixed lease payment obligations of $ 167,444 over the lease term.

The Company will record a lease right-of-use asset and liability based on the present value of minimum lease fixed payments over the lease term utilizing the Company’s incremental borrowing rate in the third quarter of fiscal 2025.

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

As of December 31, 2024, the Company’s exis ting operating leases, which are recorded in the accompanying financial statements, have remaining lease terms ranging from 7 to 31 years.

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

1 unchanged sentence

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

The following table summarizes the right-of-use assets and lease liabilities recorded in the accompanying consolidated balance sheets as of September 30, 2024 and June 30, 2024:

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

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the right-of-use assets and lease liabilities recorded in the accompanying consolidated balance sheets as of December 31, 2024 and June 30, 2024:

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

2024 June 30,

9 unchanged sentences

_________________

(a) As of September 30, 2024, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances o f $ 43,220 and $ 705,233 , r espectively, that are payable to MSG Entertainment.

(a) As of December 31, 2024, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances o f $ 43,276 and $ 715,368 , r espectively, that are payable to MSG Entertainment.

As of June 30, 2024, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $ 43,689 and $ 715,507 , 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, 2024 and 2023:

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

The following table summarizes the activity recorded within the accompanying consolidated statements of operations for the three and six months ended December 31, 2024 and 2023:

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

2024 2023 2024 2023

Operating lease cost Direct operating expenses $ 26,781 $ 24,362 $ 28,092 $ 25,673

Operating lease cost Selling, general and administrative expenses

1,962 2,320 4,433 4,640

Short term lease costs Selling, general and administrative expenses 3,971 — 3,971 —

Total lease cost $ 32,714 $ 26,682 $ 36,496 $ 30,313

Supplemental Information

For the three months ended September 30, 2024 and 2023, cash paid for amounts included in the measurement of lease liabilities was $ 13,493 and $ 13,072 , respectively.

The weighted average remaining lease term for operating leases recorded in the accompanying consolidated balance sheet as of September 30, 2024 was 29.6 years.

The weighted average discount rate was 7.1 % as of September 30, 2024 and represented the Company’s estimated incremental borrowing rate, assuming a secured borrowing, based on the remaining lease term at the time of either (i) adoption of the standard or (ii) the period in which the lease term expectation commenced or was modified.

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Maturities of operating lease liabilities as of September 30, 2024 were as follows:

For the six months ended December 31, 2024 and 2023, cash paid for amounts included in the measurement of lease liabilities was $ 26,463 and $ 26,095 , respectively.

The weighted average remaining lease term for operating leases recorded in the accompanying consolidated balance sheet as of December 31, 2024 was 29.4 years.

The weighted average discount rate was 7.11 % as of December 31, 2024 and represented the Company’s estimated incremental borrowing rate, assuming a secured borrowing, based on the remaining lease term at the period in which the lease term expectation commenced or was modified.

Maturities of operating lease liabilities as of December 31, 2024 were as follows:

Fiscal year ending June 30, 2025 (remainder) $ 25,417

7 unchanged sentences

Total lease liabilities $ 797,407

MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Goodwill and Intangible Assets

During the first quarter of fiscal year 2025, 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 September 30, 2024 and June 30, 2024 was $ 226,523 .

The Company’s indefinite-lived intangible assets as of September 30, 2024 and June 30, 2024 were as follows:

The carrying amount of goodwill as of December 31, 2024 and June 30, 2024 was $ 226,523 .

The Company’s indefinite-lived intangible assets as of December 31, 2024 and June 30, 2024 were as follows:

Sports franchises $ 102,564

2 unchanged sentences

The Company’s Investments reported in the accompanying consolidated balance sheets, consisted of the following:

September 30,

2024 June 30,

11 unchanged sentences

_________________

(a) For the three months ended September 30, 2024 and 2023, 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.

(a) During the three and six months ended December 31, 2024, the Company recorded impairment charges and reductions in carrying value resulting from observable price changes of $ 894 related to its equity securities without readily determinable fair values in Miscellaneous (expense) income, net within the accompanying consolidated statements of operations.

During the three and six months ended December 31, 2023, 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.

MADISON SQUARE GARDEN SPORTS CORP.

5 unchanged sentences

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, 2024 and 2023, the Company recognized its net share of losses of $ 230 and $ 415 , respectively, in Miscellaneous expense, net within the Company’s consolidated statements of operations.

As of September 30, 2024 and June 30, 2024, the Company’s ownership in NRG was approximately 25 %.

During the three and six months ended December 31, 2024, the Company recognized its net share of losses of $ 286 and $ 516 , respectively, in Miscellaneous (expense) income, net within the Company’s consolidated statements of operations.

During the three and six months ended December 31, 2023, the Company recognized its net share of losses of $ 442 and $ 857 , respectively, in Miscellaneous (expense) income, net within the Company’s consolidated statements of operations.

As of December 31, 2024 and June 30, 2024, the Company’s ownership in NRG was approximately 25 %.

Equity Investments with Readily Determinable Fair Values

7 unchanged sentences

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

September 30, 2024 June 30, 2024

December 31, 2024 June 30, 2024

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

2 unchanged sentences

$ 26,619 $ 35,931 $ 24,231 $ 36,217

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 statements of operations, for the three months ended September 30, 2024 and 2023:

Three Months Ended September 30,

Unrealized loss - Xtract One common stock $ ( 533 ) $ ( 6,553 )

Unrealized gain (loss) - other equity investments with readily determinable fair values 965 ( 130 )

The following table summarizes the realized and unrealized gains (losses) on equity investments with readily determinable fair values, recorded within Miscellaneous (expense) income, net within the Company’s consolidated statements of operations, for the three and six months ended December 31, 2024 and 2023:

Three Months Ended December 31, Six Months Ended December 31,

2024 2023 2024 2023

Unrealized (loss) gain - Xtract One common stock $ ( 3,183 ) $ 1,761 $ ( 3,716 ) $ ( 4,792 )

Unrealized gain - other equity investments with readily determinable fair values 77 821 1,042 691

Realized gain - other equity investments with readily determinable fair values 66 18 66 44

4 unchanged sentences

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

Fair Value Hierarchy September 30,

Fair Value Hierarchy December 31,

2024 June 30,

11 unchanged sentences

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.

Changes in the fair value of derivative instruments are measured at each reporting date and are recorded within Miscellaneous (expense) income, 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 following are key assumptions used to calculate the fair value of the warrants as of September 30, 2024 and June 30, 2024:

September 30,

The following are key assumptions used to calculate the fair value of the warrants as of December 31, 2024 and June 30, 2024:

2024 June 30,

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

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2024 2023 2024 2023

Balance at beginning of period $ 5,951 $ 7,680 $ 6,995 $ 13,098

Unrealized losses on warrants ( 1,044 ) ( 5,418 )

Unrealized (losses) gains on warrants ( 2,113 ) 1,122 ( 3,157 ) ( 4,296 )

Balance at end of period $ 3,838 $ 8,802 $ 3,838 $ 8,802

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

September 30, 2024 June 30, 2024

December 31, 2024 June 30, 2024

Value Carrying

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

outstanding balance under the Knicks Revolving Credit Facility was $ 275,000 as of September 30, 2024, 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, 2024 was 6.22 % .

During the three months ended September 30, 2024 the Company made interest payments of $ 4,793 in respect of the Knicks Revolving Credit Facility.

outstanding balance under the Knicks Revolving Credit Facility was $ 275,000 as of December 31, 2024, which was recorded as Long-term debt in the accompanying consolidated balance sheet.

The interest rate on the Knicks Revolving Credit Facility as of December 31, 2024 was 5.70 % .

During the six months ended December 31, 2024, the Company made interest payments of $ 9,029 in respect of the Knicks Revolving Credit Facility.

In addition, on January 23, 2025, the Company made a principal repayment of $ 8,000 under 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.

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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 September 30, 2024, Knicks LLC was in compliance with this financial covenant.

As of December 31, 2024, Knicks LLC was in compliance with this financial covenant.

Rangers Revolving Credit Facility

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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.

There were no borrowings under the Rangers Revolving Credit Facility as of September 30, 2024 and accordingly the Company did not make any interest payments during the three months ended September 30, 2024 in respect of the Rangers Revolving Credit Facility.

There were no borrowings outstanding under the Rangers Revolving Credit Facility as of December 31, 2024 and the Company did not make any interest payments during the six months ended December 31, 2024 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.

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

The Rangers Credit Agreement includes an event of default that is implicated by a bankruptcy or insolvency event with respect to a material media rights counterparty, including MSG Networks.

The Rangers Credit Agreement includes an event of default upon a bankruptcy or insolvency event with respect to a material media rights counterparty, including MSG Networks.

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 September 30, 2024, Rangers LLC was in compliance with this financial covenant .

As of December 31, 2024, Rangers LLC was in compliance with this financial covenant .

Rangers NHL Advance Agreement

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

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

The outstanding balance under the Rangers NHL Advance Agreement was $ 30,000 as of September 30, 2024 and was recorded as Debt in the accompanying consolidated balance sheet.

During the three months ended September 30, 2024 the Company made interest p ayments of $ 225 .

The advanced amount may be set off against funds that would otherwise be paid, distributed or transferred by the NHL to Rangers LLC.

The outstanding balance under the Rangers NHL Advance Agreement was $ 30,000 as of December 31, 2024 and was recorded as Debt in the accompanying consolidated balance sheet.

During the six months ended December 31, 2024, the Company made interest p ayments of $ 450 .

In addition, on January 3, 2025, the Company made a principal repayment of $ 6,000 under the Rangers NHL Advance Agreement .

Deferred Financing Costs

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,

2024 June 30,

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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, 2024 and 2023.

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

Three Months Ended

September 30,

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 and six months ended December 31, 2024 and 2023.

Components of net periodic benefit cost are reported in Miscellaneous (expense) income, net:

Three Months Ended Six Months Ended

December 31, December 31,

2024 2023 2024 2023

Interest cost $ 63 $ 68 $ 126 $ 136

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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, 2024 and 2023 was $ 1,283 and $ 1,294 , respectively.

Expense related to the 401(k) Plan and Excess Savings Plan for the three and six months ended December 31, 2024 was $ 1,244 and $ 2,527 , respectively, and $ 1,314 and $ 2,608 for the three and six months ended December 31, 2023, respectively.

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 fiscal year ended June 30, 2024 for more information regarding the Company’s E xecutive Deferred Compensation Plan (the “Deferred Compensation Plan”).

The Company recorded compensation expense/(compensation cost credits) of $ 965 and $( 104 ) for the three months ended September 30, 2024 and 2023, respectively , within Selling, general and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability.

In addition, the Company recorded gains/(losses) of $ 965 and $( 104 ) for the three months ended September 30, 2024 and 2023, respectively , within Miscellaneous expense, net to reflect t he remeasurement of the fair value of assets under the Deferred Compensation Plan.

The Company recorded compensation expense of $ 142 and $ 1,107 for the three and six months ended December 31, 2024, respectively, and $ 839 and $ 735 for the three and six months ended December 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 $ 142 and $ 1,107 for the three and six months ended December 31, 2024, respectively, and $ 839 and $ 735 for the three and six months ended December 31, 2023, respectively, within Miscellaneous (expense) income, 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,

2024 June 30,

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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 $ 4,268 and $ 4,149 for the three months ended September 30, 2024 and 2023, respectively.

There were no costs related to share-based compensation that were capitalized for the three months ended September 30, 2024 and 2023.

Share-based compensation expense was $ 5,991 and $ 10,259 for the three and six months ended December 31, 2024, respectively, and $ 6,570 and $ 10,719 for the three and six months ended December 31, 2023, respectively.

There were no costs related to share-based compensation that were capitalized for the three and six months ended December 31, 2024 and 2023.

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 current and former employees of the Company and non-employee directors, for the three months ended September 30, 2024:

Number of Weighted-Average

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Forfeited / Cancelled ( 2 ) ( 3 ) $ 173.51

Unvested award balance, September 30, 2024 103 138 $ 186.26

Unvested award balance, December 31, 2024 102 137 $ 186.27

_____________________

(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 three months ended September 30, 2024 was $ 21,227 .

The fair value of RSUs that vested during the six months ended December 31, 2024 was $ 23,527 .

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 current and former employees’ required statutory tax withholding obligations for the applicable income and other employment taxes, 39 of these RSUs, with an aggregate value of $ 7,951 , inclusive of $ 24 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, 2024.

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

The weighted-average fair value per share at grant date of RSUs granted during the three months ended September 30, 2023 was $ 178.45 .

To fulfill the Company’s current and former employees’ required statutory tax withholding obligations for the applicable income and other employment taxes, 51 of these RSUs, with an aggregate value of $ 10,662 , inclusive of $ 24 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 six months ended December 31, 2024.

The fair value of RSUs that vested during the six months ended December 31, 2023 was $ 19,195 .

The weighted-average fair value per share at grant date of RSUs granted during the six months ended December 31, 2023 was $ 177.39 .

Stock Options Award Activity

The following table summarizes activity related to the Company’s stock options for the three months ended September 30, 2024:

The following table summarizes activity related to the Company’s stock options for the six months ended December 31, 2024:

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 September 30, 2024 94 $ 138.78 3.21 $ 6,519

Exercisable as of September 30, 2024 94 $ 138.78 3.21 $ 6,519

Balance as of December 31, 2024 94 $ 138.78 2.96 $ 8,153

Exercisable as of December 31, 2024 94 $ 138.78 2.96 $ 8,153

MADISON SQUARE GARDEN SPORTS CORP.

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

During the three months ended September 30, 2024 and 2023, the Company did not repurchase any shares under its share repurchase program.

As of September 30, 2024, the Company had $ 184,639 of availability remaining under its stock repurchase authorization .

During the six months ended December 31, 2024 and 2023, the Company did not repurchase any shares under its share repurchase program.

As of December 31, 2024, the Company had $ 184,639 of availability remaining under its stock repurchase authorization .

Related Party Transactions

As of September 30, 2024, certain members of the Dolan family, including certain 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 owned 100 % of the Company’s outstanding Class B Common Stock and approximately 3.0 % 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, represented approximately 70.9 % of the aggregate voting power of the Company’s outstanding common stock as of September 30, 2024.

As of December 31, 2024, certain members of the Dolan family, including certain 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 owned 100 % of the Company’s outstanding Class B Common Stock and approximately 2.9 % 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, represented approximately 70.8 % of the aggregate voting power of the Company’s outstanding common stock as of December 31, 2024.

Members of the Dolan family 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 MSG Entertainment as of September 30, 2024:

The Company was party to the following agreements and/or arrangements with MSG Entertainment as of December 31, 2024:

• Arena license agreements, entered into in April 2020 (the “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 and club 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) shares revenues collected for the sale of venue indoor signage space and sponsorship rights at The Garden that are not specific to our sports teams, (vi) provides day of game services, and (vii) provides other general services within The Garden;

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company was also party to the following agreements and/or arrangements with Sphere Entertainment (including through its subsidiary MSG Networks) as of September 30, 2024 :

The Company was also party to the following agreements and/or arrangements with Sphere Entertainment (including through its subsidiary MSG Networks) as of December 31, 2024 :

• 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 rights for Knicks and Rangers games in exchange for media rights fees;

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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 months ended September 30, 2024 and 2023:

Three Months Ended September 30,

These amounts are reflected in revenues and operating expenses in the accompanying consolidated statements of operations for the three and six months ended December 31, 2024 and 2023:

Three Months Ended December 31, Six Months Ended December 31,

2024 2023 2024 2023

$ 80,217 $ 77,658 $ 89,121 $ 86,475

Operating expenses:

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

Income tax benefit for the three months ended September 30, 2024 of $ 7,048 reflects an effective tax rate of 48 %.

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

During the three months ended September 30, 2024, the Company made income tax payments, net of refunds, of $ 10,280 .

Income tax expense for the three months ended December 31, 2024 of $ 698 reflects an effective tax rate of 39 %.

Income tax benefit for the six months ended December 31, 2024 of $ 6,350 reflects an effective tax rate of 50 %.

Income tax expense for the three months ended December 31, 2023 of $ 10,784 reflects an effective tax rate of 43 %.

Income tax benefit for the six months ended December 31, 2023 of $ 4,360 reflects an effective tax rate of 49 %.

During the six months ended December 31, 2024, the Company made income tax payments, net of refunds, of $ 17,831 .

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