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Item 2. Management’s Discussion and Analysis

2025-05-02 compared with 2025-02-04 · 131 added, 97 removed, 171 unchanged (57% of the section changed)

2 unchanged sentences

In this MD&A, there are statements concerning the future operating and future financial performance of Madison Square Garden Sports Corp.

and its direct and indirect subsidiaries (collectively, “we,” “us,” “our,” “MSG Sports,” or the “Company”), including increased expenses as a result of higher team personnel compensation and corresponding NBA luxury tax.

and its direct and indirect subsidiaries (collectively, “we,” “us,” “our,” “MSG Sports,” or the “Company”), including stated annual local media rights fees for the year ended June 30, 2026.

Words such as “expects,” “anticipates,” “believes,” “estimates,” “may,” “will,” “should,” “could,” “potential,” “continue,” “intends,” “plans,” and similar words and terms used in the discussion of future operating and future financial performance identify forward-looking statements.

5 unchanged sentences

• changes in professional sports teams’ compensation, including the impact of signing free agents and executing trades, subject to league salary caps and the impact of luxury tax;

• general economic conditions, especially in the New York City metropolitan area;

• general economic conditions, especially in the New York City metropolitan area, including the impact of a recession on our business;

• the demand for sponsorship arrangements and for advertising;

15 unchanged sentences

• the impact of any government plans to redesign New York City’s Pennsylvania Station;

• changes in international trade policies and practices, including tariffs, and the economic impacts, volatility and uncertainty resulting therefrom;

• business, economic, reputational and other risks associated with, and the outcome of, litigation and other proceedings;

11 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, 2024 compared to the three and six months ended December 31, 2023.

This section provides an analysis of our unaudited results of operations for the three and nine months ended March 31, 2025 compared to the three and nine months ended March 31, 2024.

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, 2024 compared to the six months ended December 31, 2023, 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, 2025 compared to the nine months ended March 31, 2024, and (iii) certain contractual obligations.

Seasonality of Our Business.

4 unchanged sentences

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recently Issued Accounting Pronouncements and Critical Accounting Policies — Critical Accounting Policies” and in the notes to the consolidated financial statements of the Company included therein.

Matters Affecting Comparability

Proposed Amendments to Media Rights Agreements

On April 24, 2025, New York Knicks, LLC and New York Rangers, LLC (collectively, the “Teams”), entered into a Transaction Support Agreement (the “Transaction Support Agreement”) with respect to amendments to the media rights agreements between subsidiaries of MSG Networks and the Teams and the restructuring of the debt of subsidiaries of MSG Networks (the “Transactions”).

The Transaction Support Agreement contemplates entering into amendments to the media rights agreements to which the Teams are a party, effective as of January 1, 2025, as follows:

• New York Knicks:

◦ a reduction of 28% in the annual rights fee;

◦ an elimination of the annual rights fee escalator;

◦ a change to the contract expiration date to the end of the 2028-29 season, subject to a right of first refusal in favor of MSG Networks;

• New York Rangers:

◦ a reduction of 18% in the annual rights fee;

◦ an elimination of the annual rights fee escalator;

◦ a change to the contract expiration date to the end of the 2028-29 season, subject to a right of first refusal in favor of MSG Networks;

• the issuance by MSG Networks of penny warrants to the Company exercisable for 19.9% of the equity interests in MSG Networks.

The Transactions will be consummated upon the execution of definitive documents containing terms consistent with those set forth in the Transaction Support Agreement.

As a result of the proposed amendments to the media rights agreements contemplated by the Transaction Support Agreement, media rights fees revenues for the three and nine months ended March 31, 2025 have been recorded at the applicable reduced rate described above.

The Company also expects to record media rights fees reflecting the reduced rates described above in future periods.

Knicks and Rangers Home Games at The Garden

The Company’s operating results are impacted by the number of home games the Knicks and the Rangers play at The Garden during each quarter of the fiscal year.

For the three months ended March 31, 2025 the Knicks and the Rangers played two fewer combined home games at The Garden during the current year period as compared to the prior year period.

For the nine months ended March 31, 2025 the Knicks and the Rangers playing a combined one additional home game at The Garden during the current year period as compared to the prior year period.

The Knicks played 23 games at The Garden during the three months ended March 31, 2025 and 40 games at The Garden during the nine months ended March 31, 2025 as compared to 26 and 41 games, respectively, during the prior year periods.

The Rangers played 20 games at The Garden during the three months ended March 31, 2025 and 40 games at The Garden during the nine months ended March 31, 2025 as compared to 19 and 38 games, respectively, during the prior year periods.

Results of Operations

Comparison of the three and six months ended December 31, 2024 versus the three and six months ended December 31, 2023

Comparison of the three and nine months ended March 31, 2025 versus the three and nine months ended March 31, 2024

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

2025 2024 $ % 2025 2024 $ %

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Selling, general and administrative expenses 74,697 76,398 (1,701) (2) % 195,184 195,020 164 — %

Depreciation and amortization 791 790 1 NM 1,573 1,584 (11) (1) %

Depreciation and amortization 823 788 35 4 % 2,396 2,372 24 1 %

Operating income 32,342 79,742 (47,400) (59) % 37,384 93,735 (56,351) (60) %

Other income (expense):

Interest income 690 619 71 11 % 1,554 1,072 482 45 %

Interest income 1,051 477 574 NM 2,605 1,549 1,056 68 %

Interest expense (5,020) (6,921) 1,901 (27) % (16,662) (21,269) 4,607 (22) %

Miscellaneous (expense) income, net (6,609) 2,991 (9,600) NM (7,735) (9,674) 1,939 20 %

Income (loss) before income taxes 1,809 25,008 (23,199) (93) % (12,781) (8,957) (3,824) (43) %

Income tax (expense) benefit (698) (10,784) 10,086 94 % 6,350 4,360 1,990 46 %

Net income (loss) $ 1,111 $ 14,224 $ (13,113) (92) % $ (6,431) $ (4,597) $ (1,834) (40) %

Miscellaneous expense, net (5,743) (1,403) (4,340) NM (13,478) (11,077) (2,401) 22 %

Income before income taxes 22,630 71,895 (49,265) (69) % 9,849 62,938 (53,089) (84) %

Income tax expense (36,857) (34,018) (2,839) 8 % (30,507) (29,658) (849) 3 %

Net (loss) income $ (14,227) $ 37,877 $ (52,104) NM $ (20,658) $ 33,280 $ (53,938) NM

______________

NM - Percentage is not meaningful

Revenues increased $30,861, or 9%, to $357,759 for the three months ended December 31, 2024 as compared to the prior year period.

Revenues increased $41,122, or 11%, to $411,066 for the six months ended December 31, 2024 as compared to the prior year period.

The net increases were attributable to the following:

Revenues decreased $5,757, or 1%, to $424,197 for the three months ended March 31, 2025 as compared to the prior year period.

Revenues increased $35,365, or 4%, to $835,263 for the nine months ended March 31, 2025 as compared to the prior year period.

The net (decrease) increase were attributable to the following:

Months Months

Increase in pre/regular season ticket-related revenues $ 14,339 $ 14,766

Increase in suite revenues 7,016 7,268

Decrease in revenues from local media rights fees $ (18,638) $ (16,837)

Decrease in pre/regular season food, beverage and merchandise sales (2,534) (96)

Increase in sponsorship and signage revenues 8,898 11,602

Increase in suite revenues 3,401 10,669

Increase in revenues from league distributions 2,446 14,822

Increase in pre/regular season food, beverage and merchandise sales 2,107 2,438

Increase in revenues from local media rights fees 1,666 1,800

Increase in pre/regular season ticket-related revenues 506 15,272

Other net increases (decreases) 164 (67)

$ (5,757) $ 35,365

The increases in pre/regular season ticket-related revenues for the three and six months ended December 31, 2024 were primarily due to the Knicks and the Rangers playing a combined 3 additional home games at The Garden during the current year periods as compared to the prior year periods and higher average per-game revenue.

The Knicks played 17 games at The Garden during the three and six months ended December 31, 2024 as compared to 15 games during the prior year periods.

The Rangers played 18 games at The Garden during the three months ended December 31, 2024 and 20 games at The Garden during the six months ended December 31, 2024 as compared to 17 and 19 games, respectively, during the prior year periods.

The increases in suite revenues for the three and six months ended December 31, 2024 were primarily due to the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods and higher net sales of suite products.

The increases in sponsorship and signage revenues for the three and six months ended December 31, 2024 were primarily due the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods and higher net sales of existing sponsorship and signage inventory.

The increase in revenues from league distributions for the three months ended December 31, 2024 was primarily due to increased national media rights fees in the current year period.

The increase in revenues from league distributions for the six months ended December 31, 2024 was primarily due to an increase in certain league distributions unrelated to national media rights fees and increased national media rights fees in the current year period.

The increases in pre/regular season food, beverage, and merchandise sales for the three and six months ended December 31, 2024 were primarily due to higher average per-game revenue and the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods, partially offset by lower online sales of merchandise.

The increases in revenues from local media rights fees for the three and six months ended December 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 games exclusively available to MSG Networks during the current fiscal year as compared to the prior fiscal year.

The decreases in revenues from local media rights fees for the three and nine months ended March 31, 2025 were primarily due to a reduction in expected local media rights fees for the 2024-25 season as a result of proposed amendments to the Knicks’ and Rangers’ local media rights agreements with MSG Networks contemplated in the Transaction Support Agreement.

As a result of the amendments contemplated by the Transaction Support Agreement, the Company expects revenues from local media rights fees will be $1,098 lower for the three months ended June 30, 2025, as compared to the prior year period.

Stated annual local media rights fees, subject to adjustments in certain circumstances, including if the Company does not make available a minimum number of games in the year, after consideration of the media rights amendments contemplated in the Transaction Support Agreement are anticipated to be $162,939 and $139,237 for the years ended June 30, 2025 and 2026, respectively.

The decrease in pre/regular season food, beverage, and merchandise sales for the three months ended March 31, 2025 was primarily due to lower average per-game revenue, lower online sales of merchandise, and the Knicks and the Rangers playing two fewer combined home games at The Garden during the current year period as compared to the prior year period.

decrease in pre/regular season food, beverage, and merchandise sales for the nine months ended March 31, 2025 was primarily due to lower online sales of merchandise, partially offset by the Knicks and the Rangers playing a combined one additional home game at The Garden during the current year period as compared to the prior year period and higher average per-game revenue.

Merchandise sales for the three and nine months ended March 31, 2024 included the positive impact of new Rangers’ jersey launches.

The increase in sponsorship and signage revenues for the three months ended March 31, 2025 was primarily due to higher net sales of existing sponsorship and signage inventory, partially offset by the Knicks and the Rangers playing two fewer combined home games at The Garden during the current year period as compared to the prior year period.

The increase in sponsorship and signage revenues for the nine months ended March 31, 2025 was primarily due to higher net sales of existing sponsorship and signage inventory.

The increase in suite revenues for the three months ended March 31, 2025 was primarily due higher net sales of suite products, partially offset by the Knicks and the Rangers playing two fewer combined home games at The Garden during the current year period as compared to the prior year period.

The increase in suite revenues for the nine months ended March 31, 2025 was primarily due higher net sales of suite products and the Knicks and the Rangers playing a combined one additional home game at The Garden during the current year period as compared to the prior year period.

The increase in revenues from league distributions for the three months ended March 31, 2025 was primarily due to increased national media rights fees in the current year period.

The increase in revenues from league distributions for the nine months ended March 31, 2025 was primarily due to an increase in certain league distributions unrelated to national media rights fees and 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, 2025 was primarily due to higher average per-game revenue, partially offset by the Knicks and the Rangers playing two fewer combined home games at The Garden during the current year period as compared to the prior year period.

The increase in pre/regular season ticket-related revenues for the nine months ended March 31, 2025 was primarily due to higher average per-game revenue and the Knicks and the Rangers playing a combined one additional home game at The Garden during the current year period as compared to the prior year period.

Direct operating expenses

Direct operating expenses increased $43,528, or 19%, to $275,753 for the three months ended December 31, 2024 as compared to the prior year period.

Direct operating expenses increased $48,219, or 20%, to $283,964 for the six months ended December 31, 2024 as compared to the prior year period.

Direct operating expenses increased $43,309, or 16%, to $316,335 for the three months ended March 31, 2025 as compared to the prior year period.

Direct operating expenses increased $91,528, or 18%, to $600,299 for the nine months ended March 31, 2025 as compared to the prior year period.

The net increases were attributable to the following:

Months Months

Increase in team personnel compensation $ 15,248 $ 15,247

Increase in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax $ 33,808 $ 52,808

Increase in net provisions for certain team personnel transactions 7,586 8,419

Increase in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden 2,418 2,418

Increase in team personnel compensation 14,692 29,939

Increase in other team operating expenses 1,091 2,972

Increase in pre/regular season expense associated with merchandise sales 1,104 1,254

(Decrease) increase in net (credits) provisions for certain team personnel transactions (2,823) 5,596

(Decrease) increase in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden (1,989) 429

Decrease in pre/regular season expense associated with merchandise sales (1,470) (216)

$ 43,309 $ 91,528

The increases in team personnel compensation for the three and six months ended December 31, 2024 were primarily due to changes in the Knicks roster.

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2025 2024 Increase 2025 2024 Increase

Net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax $ 53,911 $ 20,103 $ 33,808 $ 95,329 $ 42,521 $ 52,808

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, 2024 were primarily due to higher estimated NBA luxury tax expense, partially offset by lower provisions for league revenue sharing expense (net of escrow and excluding playoffs).

The increases in estimated NBA luxury tax expense were the result of the expectation that the Knicks will be a significant luxury tax payer for the 2024-25 season based on their roster as of December 31, 2024, whereas the Knicks were not a luxury tax payer for the 2023-24 season.

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, 2025 were primarily due to higher NBA luxury tax expense.

In addition, the increase in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for

the three months ended March 31, 2025 was partially due to higher provisions for league revenue sharing expense (net of escrow and excluding playoffs).

The increases in NBA luxury tax expense were the result of the Knicks being a significant luxury tax payer for the 2024-25 season based on their roster as of March 31, 2025, whereas the Knicks were not a luxury tax payer for the 2023-24 season.

The Knicks received an equal share of the portion of luxury tax receipts that were distributed to non-paying teams for the 2023-24 season.

The actual net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for the 2024-25 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.

Net provisions for certain team personnel transactions for the three and six months ended December 31, 2024 reflect provisions recorded for player trades of $7,586.

In addition, for the six months ended December 31, 2024, net provisions for certain team personnel transactions reflect provisions for waiver/contract terminations of $833.

The increases 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, 2024 were a result of the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods.

The actual net provisions for league revenue sharing expense (net of escrow and excluding playoffs) for the 2024-25 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 increases in team personnel compensation for the three and nine months ended March 31, 2025 were primarily due to changes in the Knicks roster.

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 increases in other team operating expenses for the three and six months ended December 31, 2024 were primarily due to the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods and higher average per-game expenses.

The increases in pre/regular season expense associated with merchandise sales for the three and six months ended December 31, 2024 were primarily related to higher merchandise sales as a result of higher average per-game revenue and the Knicks and the Rangers playing additional home games at The Garden during the current year periods as compared to the prior year periods, partially offset by lower online sales of merchandise.

Direct operating expenses for fiscal year 2025 are expected to reflect higher team personnel compensation and corresponding NBA luxury tax due to the Knicks 2024-25 season roster.

Based on the current roster, the Knicks would be a significant luxury tax payer for the 2024-25 season.

The increase in other team operating expenses for the three months ended March 31, 2025 was primarily due to higher average per-game expenses, partially offset by the Knicks and the Rangers playing two fewer combined 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, 2025 was primarily due to higher average per-game expenses and the Knicks and the Rangers playing a combined one additional home game at The Garden during the current year period as compared to the prior year period.

Net (credits) provisions for certain team personnel transactions were as follows:

Three Months Ended Nine Months Ended

March 31, March 31,

2025 2024 Decrease 2025 2024 Increase (Decrease)

Season-ending player injuries $ 133 $ 2,170 $ (2,037) $ 133 $ 2,170 $ (2,037)

Player trades (786) — (786) 6,800 — 6,800

Waivers/contract terminations — — — 833 — 833

Net (credits) provisions for certain team personnel transactions $ (653) $ 2,170 $ (2,823) $ 7,766 $ 2,170 $ 5,596

The decrease in operating lease costs associated with the Knicks and the Rangers playing home games at The Garden for the three months ended March 31, 2025 was a result of the Knicks and the Rangers playing two fewer combined 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 nine months ended March 31, 2025 was a result of the Knicks and the Rangers playing a combined one additional home game at The Garden during the current year period as compared to the prior year period.

Recognition of operating lease costs is recorded on a straight-line basis over the term of the applicable agreement based upon the value of total future payments under the arrangement.

Operating lease costs associated with the Knicks and the Rangers playing home games at The Garden includes operating lease costs of (i) $21,747 and $40,048 of expense paid in cash for the three and nine months ended March 31, 2025, respectively, and $22,372 and $38,610 of expense paid in cash for the three and nine months ended March 31, 2024, respectively, and (ii) a non-cash expense of $11,633 and $21,424 for the three and nine months ended March 31, 2025, respectively, and $12,998 and $22,433 for the three and nine months ended March 31, 2024, respectively.

The decrease in pre/regular season expense associated with merchandise sales for the three months ended March 31, 2025 was primarily related to lower average per-game revenue, lower online sales of merchandise, and the Knicks and the Rangers playing two fewer combined home games at The Garden during the current year period as compared to the prior year period.

The decrease in pre/regular season expense associated with merchandise sales for the nine months ended March 31, 2025 was primarily due to higher reserves for obsolete inventory recorded in the prior year period as compared to the current year period.

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, 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 primarily consist of (i) administrative costs, including compensation, costs under the Services Agreement, professional fees, and operating lease costs, (ii) fees related to the 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, 2024 increased $2,834, or 4%, to $67,900 as compared to the prior year period driven by higher operating lease costs of $3,613 and higher professional fees of $2,713, partially offset by lower employee compensation and related benefits of $2,648 and lower other general and administrative expenses.

Selling, general and administrative expenses for the six months ended December 31, 2024 increased $1,865, or 2%, to $120,487 as compared to the prior year period driven by higher professional fees of $3,901 and higher operating lease costs of $3,764, partially offset by (i) lower employee compensation and related benefits of $3,278, (ii) lower sales and marketing costs of $1,406, and (iii) lower other general and administrative expenses.

Selling, general and administrative expenses for the three months ended March 31, 2025 decreased $1,701, or 2%, to $74,697 as compared to the prior year period driven by lower employee compensation and related benefits of $12,423, primarily related to executive management transition costs recognized in the prior year period, and lower other general and administrative expenses, partially offset by (i) higher professional fees of $7,617, (ii) higher costs related to the Services Agreement of $1,844, (iii) higher operating lease costs of $1,373, and (iv) higher fees related to the Sponsorship Sales and Service Representation Agreements of $1,182.

Selling, general and administrative expenses for the nine months ended March 31, 2025 increased $164 to $195,184 as compared to the prior year period driven by (i) higher professional fees of $11,518, (ii) higher operating lease costs of $5,138, and (iii) higher fees related to the Sponsorship Sales and Service Representation Agreements of $1,686, offset by lower employee compensation and related benefits of $15,701, primarily related to executive management transition costs recognized in the prior year period, lower sales and marketing costs of $2,202, and lower other general and administrative expenses.

Operating income

Operating income for the three months ended December 31, 2024 decreased $15,502, or 54%, to $13,315 as compared to the prior year period primarily 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 six months ended December 31, 2024 decreased $8,951, or 64%, to $5,042 as compared to the prior year period primarily 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 three months ended March 31, 2025 decreased $47,400, or 59%, to $32,342 as compared to the prior year period primarily due to higher direct operating expenses and, to a lesser extent, lower revenues.

Operating income for the nine months ended March 31, 2025 decreased $56,351, or 60%, to $37,384 as compared to the prior year period primarily due to higher direct operating expenses, partially offset by higher revenues.

Interest income

Interest income for the three months ended December 31, 2024 increased $71, or 11%, to $690 as compared to the prior year period primarily due to higher average cash balances in the current year period, partially offset by lower average interest rates.

Interest income for the six months ended December 31, 2024 increased $482, or 45%, to $1,554 as compared to the prior year period primarily due to higher average cash balances in the current year period.

Interest income for the three months ended March 31, 2025 increased $574 to $1,051 as compared to the prior year period primarily due to higher average cash balances in the current year period, partially offset by lower average interest rates.

Interest income for the nine months ended March 31, 2025 increased $1,056, or 68%, to $2,605 as compared to the prior year period primarily due to higher average cash balances in the current year period, partially offset by lower average interest rates.

Interest expense

Interest expense for the three months ended December 31, 2024 decreased $1,832, or 25%, to $5,587 as compared to the prior year period primarily due to lower average borrowings under the Rangers Revolving Credit Facility in the current year period and lower average interest rates under the Knicks Revolving Credit Facility in the current year period.

Interest expense for the six months ended December 31, 2024 decreased $2,706, or 19%, to $11,642 as compared to the prior year period primarily due to lower average borrowings under the Rangers Revolving Credit Facility in the current year period and lower average interest rates under the Knicks Revolving Credit Facility in the current year period, partially offset by higher average borrowings under the Knicks Revolving Credit Facility in the current year period.

Miscellaneous (expense) income, net

Miscellaneous (expense) income, net for the three months ended December 31, 2024 reflected net expense of $6,609 and Miscellaneous (expense) income, net for the three months ended December 31, 2023 reflected net income of $2,991.

The decrease in Miscellaneous (expense) income, net as compared to the prior year period was primarily due to the recognition of unrealized losses in the current year period as compared to unrealized gains in the prior year period related to the Company’s investments in Xtract One common stock and warrants.

Miscellaneous (expense) income, net for the six months ended December 31, 2024 reflected net expense of $7,735 and Miscellaneous (expense) income, net for the six months ended December 31, 2023 reflected net expense of $9,674.

The decrease in Miscellaneous (expense) income, net as compared to the prior year period was primarily due to lower unrealized losses in the current year period related to the Company’s investments in Xtract One common stock and warrants.

Interest expense for the three months ended March 31, 2025 decreased $1,901, or 27%, to $5,020 as compared to the prior year period primarily due to lower average borrowings under the Rangers Revolving Credit Facility in the current year period and lower average interest rates under the Knicks Revolving Credit Facility in the current year period.

Interest expense for the nine months ended March 31, 2025 decreased $4,607, or 22%, to $16,662 as compared to the prior year period primarily due to lower average borrowings under the Rangers Revolving Credit Facility in the current year period and lower average interest rates under the Knicks Revolving Credit Facility in the current year period.

Miscellaneous expense, net

Miscellaneous expense, net for the three months ended March 31, 2025 increased $4,340 to $5,743 as compared to the prior year period primarily due to higher unrealized losses in the current year period as compared to the prior year period related to the Company’s investments in Xtract One common stock and warrants and the net impact of the remeasurement of the fair value of assets under the Deferred Compensation Plan.

Miscellaneous expense, net for the nine months ended March 31, 2025 increased $2,401, or 22%, to $13,478 as compared to the prior year period primarily due to higher unrealized losses in the current year period related to the Company’s investments in equity investments without readily determinable fair values and Xtract One common stock and warrants, and lower unrealized gains in the current year period related to the remeasurement of the fair value of assets under the Deferred Compensation Plan.

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

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The Company evaluates performance based on several factors, of which the key financial measure is operating income (loss) excluding (i) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits, (iv) gains or losses on sales or dispositions of businesses, (v) the impact of purchase accounting adjustments related to business acquisitions, and (vi) gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan, which is referred to as adjusted operating income (loss), a non-GAAP measure.

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).

5 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, 2024 and 2023:

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, 2025 and 2024:

Three Months Ended Nine Months Ended

March 31, Change March 31, Change

2025 2024 $ % 2025 2024 $ %

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Remeasurement of deferred compensation plan liabilities (134) 821 973 1,556

Adjusted operating income (a)

$ 20,239 $ 37,016 $ (16,777) (45) % $ 17,981 $ 27,031 $ (9,050) (33) %

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(a) Adjusted operating income includes operating lease costs which is comprised of a contractual cash component plus or minus a non-cash component for each period presented.

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.

Adjusted operating income includes operating lease costs of (i) $17,447 and $18,301 of expense paid in cash for the three and six months ended December 31, 2024, respectively, and $15,409 and $16,238 of expense paid in cash for the three and six months ended December 31, 2023, respectively, and (ii) a non-cash expense of $9,334 and $9,791 for the three and six months ended December 31, 2024, respectively, and $8,953 and $9,435 for the three and six months ended December 31, 2023, respectively.

For the three months ended December 31, 2024, adjusted operating income decreased $16,777, or 45%, to $20,239 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.

For the six months ended December 31, 2024, adjusted operating income decreased $9,050, or 33%, to $17,981 as compared to the prior year period.

Adjusted operating income for fiscal year 2025 is expected to reflect higher team personnel compensation and corresponding NBA luxury tax due to Knicks 2024-25 season roster.

Adjusted operating income $ 36,931 $ 88,701 $ (51,770) (58) % $ 54,912 $ 115,732 $ (60,820) (53) %

For the three months ended March 31, 2025, adjusted operating income decreased $51,770, or 58%, to $36,931 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, lower revenues.

For the nine months ended March 31, 2025, adjusted operating income decreased $60,820, or 53%, to $54,912 as compared to the prior year period.

The decrease in adjusted operating income was primarily due to higher direct operating 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, 2024, we had $107,823 in C ash and cash equivale nts.

In addition, as of December 31, 2024, the Company’s deferred revenue obligations were $222,146, net of billed, but not yet collected deferred revenue.

As of March 31, 2025, we had $96,536 in C ash and cash equivale nts.

In addition, as of March 31, 2025, the Company’s deferred revenue obligations were $124,958, net of billed, but not yet collected deferred revenue.

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

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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 $107,823 in Cash and cash equivalents as of December 31, 2024, along with $250,000 of additional available borrowing capacity under existing credit facilities (as of December 31, 2024), to fund our operations and satisfy any obligations for the foreseeable future.

We believe we have sufficient liquidity, including approximately $96,536 in Cash and cash equivalents as of March 31, 2025, along with $258,000 of additional available borrowing capacity under existing credit facilities (as of March 31, 2025), to fund our operations and satisfy any obligations for the foreseeable future.

If MSG Networks were to experience a bankruptcy or insolvency event (as set forth in each of the credit facilities), we would be prevented, absent a cure or waiver, from making borrowings under our revolving credit facilities.

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

There were no borrowings outstanding under the Rangers Revolving Credit Facility as of December 31, 2024.

On January 3, 2025, the Company made a principal repayment of $6,000 under the Rangers NHL Advance Agreement and on January 23, 2025, the Company made a principal repayment of $8,000 under the Knicks Revolving Credit Facility.

There were no borrowings outstanding under the Rangers Revolving Credit Facility as of March 31, 2025.

In addition, we had an outstanding receivable balance of $30,101 as of March 31, 2025 from MSG Networks related to unpaid amounts under the media rights agreements.

If MSG Networks were to experience a bankruptcy or insolvency event, some or all of this accounts receivable balance could be impaired.

Financing Agreements and Stock Repurchases

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Contractual Obligations

The Company did not have any material changes in its contractual obligations since the end of fiscal year 2024 other than activities in the ordinary course of business.

The Company did not have any material changes in its contractual obligations since the end of fiscal year 2024 other than the New Sublease Agreement described in Note 7 to the consolidated financial statements included in “Part I — Item 1.

Financial Statements” of this Quarterly Report on Form 10-Q and activities in the ordinary course of business.

Cash Flow Discussion

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

Six Months Ended December 31,

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

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

The following table summarizes the Company’s cash flow activities for the nine months ended March 31, 2025 and 2024:

Nine Months Ended March 31,

Net (loss) income $ (20,658) $ 33,280

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

21,038 24,407

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Operating Activities

Net cash provided by (used in) operating activities for the six months ended December 31, 2024 improved by $55,878 to $35,621 as compared to the prior year period.

The improvement was primarily due to changes in working capital assets and liabilities, partially offset by the decrease in net income (loss) adjusted for non-cash items.

The changes in working capital assets and liabilities were primarily driven by (i) a higher increase in deferred revenue of $29,563 primarily due to higher collections of ticket, sponsorship,

and suite sales in advance of recognition, (ii) a lower decrease in accrued and other liabilities of $26,020 primarily due to increased accruals for NBA luxury tax in the current year period and lower payments related to employee compensation in the current year period, (iii) a decrease in net related party receivables of $13,626 primarily due to primarily due to the timing of collections related to the Company’s arena license agreements and sponsorship sales and service representation agreements, and (iv) a lower increase in prepaid expenses and other assets of $6,213 primarily due to lower contract assets, current in the current year period and higher collections of other receivables in the current year period.

These changes were partially offset by a higher increase in accounts receivable, net of $13,085 primarily due to higher receivables related to league distributions in the current year period.

Net cash provided by (used in) operating activities for the nine months ended March 31, 2025 improved by $58,104 to $41,884 as compared to the prior year period.

The improvement was primarily due to changes in working capital assets and liabilities, partially

offset by the decrease in net (loss) income adjusted for non-cash items.

The changes in working capital assets and liabilities were primarily driven by (i) an increase in deferred revenue of $68,441 primarily due to higher collections of ticket, suites, and sponsorship sales in advance of recognition, (ii) a higher increase in accrued and other liabilities of $39,964 primarily due to increased accruals for NBA luxury tax in the current year period, (iii) a lower increase in prepaid expenses and other assets of $33,982 primarily due to a lower increase in contract assets in the current year period primarily due to lower revenue recognized under the Company’s local media rights agreements, and (iv) a decrease in net related party receivables of $10,327 primarily due to the timing of collections related to the Company’s Sponsorship Sales and Service Representation Agreements.

These changes were partially offset by a higher increase in accounts receivable, net of $39,559 primarily due to higher accounts receivable from MSG Networks related to unpaid amounts under the local media rights agreements.

Investing Activities

Net cash used in investing activities for the six months ended December 31, 2024 decreased by $2,936 to $2,302 as compared to the prior year period primarily due to lower purchases of investments in the current year period.

Net cash used in investing activities for the nine months ended March 31, 2025 decreased by $340 to $5,349 as compared to the prior year period primarily due to lower purchases of investments in the current year period, partially offset by higher capital expenditures.

Financing Activities

Net cash used in financing activities for the six months ended December 31, 2024 was $12,373 as compared to net cash provided by financing activities for the six months ended December 31, 2023 of $26,268.

This was primarily due to additional borrowings under the Company’s credit facilities in the prior year period partially offset by higher principal repayments in the prior year period.

Net cash used in financing activities for the nine months ended March 31, 2025 was $26,406 as compared to net cash provided by financing activities for the nine months ended March 31, 2024 of $26,234.

This was primarily due to additional borrowings under the Company’s credit facilities in the prior year period and, to a lesser extent, the impact of principal repayments under the Rangers NHL Advance Agreement in the current year period and higher taxes paid in lieu of shares issued for equity-based compensation in the current year period.

These were partially offset by lower repayments under the Company’s credit facilities in the current year period.

Seasonality of Our Business

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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, 2024.

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

The carrying amount of goodwill as of March 31, 2025 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.

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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, 2024:

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, 2025:

Sports franchises $ 102,564

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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