Madison Square Garden Sports Corp. 10-Q

Item 1. Financial Statements MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) March 31, 2025 June 30, 2024 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 96,536 $ 89,136 Restricted cash 8,500 5,771 Accounts receivable, net of allowance for doubtful accounts of $ 0 as of March 31, 2025 and June 30, 2024 110,044 33,781 Net related party receivables 29,149 32,255 Prepaid expenses 35,297 30,956 Other current assets 39,761 25,043 Total current assets 319,287 216,942 Property and equipment, net of accumulated depreciation and amortization of $ 52,813 and $ 52,281 as of March 31, 2025 and June 30, 2024, respectively 29,407 28,541 Right-of-use lease assets 763,469 694,566 Indefinite-lived intangible assets 103,644 103,644 Goodwill 226,523 226,523 Investments 53,425 62,543 Other assets 8,743 13,533 Total assets $ 1,504,498 $ 1,346,292 See accompanying notes to consolidated financial statements. 1 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED BALANCE SHEETS (Continued) (in thousands, except per share data) March 31, 2025 June 30, 2024 (Unaudited) LIABILITIES AND EQUITY Current Liabilities: Accounts payable $ 6,948 $ 9,900 Net related party payables 6,530 6,718 Debt 24,000 30,000 Accrued liabilities: Employee related costs 138,962 133,930 League-related accruals 170,159 120,876 Other accrued liabilities 53,652 21,613 Operating lease liabilities, current 51,015 50,267 Deferred revenue 165,923 148,678 Total current liabilities 617,189 521,982 Long-term debt 267,000 275,000 Operating lease liabilities, noncurrent 848,534 749,952 Defined benefit obligations 944 4,103 Other employee related costs 47,257 43,493 Deferred tax liabilities, net 6,305 16,925 Deferred revenue, noncurrent 718 1,147 Total liabilities 1,787,947 1,612,602 Commitments and contingencies (see Note 11) Madison Square Garden Sports Corp. Stockholders’ Equity: Class A Common Stock, par value $ 0.01 , 120,000 shares authorized; 19,486 and 19,423 shares outstanding as of March 31, 2025 and June 30, 2024, respectively 204 204 Class B Common Stock, par value $ 0.01 , 30,000 shares authorized; 4,530 shares outstanding as of March 31, 2025 and June 30, 2024 45 45 Preferred stock, par value $ 0.01 , 15,000 shares authorized; none outstanding as of March 31, 2025 and June 30, 2024 — — Additional paid-in capital 11,855 19,079 Treasury stock, at cost, 961 and 1,025 shares as of March 31, 2025 and June 30, 2024, respectively ( 158,826 ) ( 169,547 ) Accumulated deficit ( 135,816 ) ( 115,139 ) Accumulated other comprehensive loss ( 911 ) ( 952 ) Total equity ( 283,449 ) ( 266,310 ) Total liabilities and equity $ 1,504,498 $ 1,346,292 See accompanying notes to consolidated financial statements. 2 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data) Three Months Ended Nine Months Ended March 31, March 31, 2025 2024 2025 2024 Revenues (a) $ 424,197 $ 429,954 $ 835,263 $ 799,898 Operating expenses: Direct operating expenses (b) 316,335 273,026 600,299 508,771 Selling, general and administrative expenses (c) 74,697 76,398 195,184 195,020 Depreciation and amortization 823 788 2,396 2,372 Operating income 32,342 79,742 37,384 93,735 Other income (expense): Interest income 1,051 477 2,605 1,549 Interest expense ( 5,020 ) ( 6,921 ) ( 16,662 ) ( 21,269 ) Miscellaneous expense, net ( 5,743 ) ( 1,403 ) ( 13,478 ) ( 11,077 ) ( 9,712 ) ( 7,847 ) ( 27,535 ) ( 30,797 ) Income before income taxes 22,630 71,895 9,849 62,938 Income tax expense ( 36,857 ) ( 34,018 ) ( 30,507 ) ( 29,658 ) Net (loss) income $ ( 14,227 ) $ 37,877 $ ( 20,658 ) $ 33,280 Basic (loss) earnings per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.59 ) $ 1.58 $ ( 0.86 ) $ 1.39 Diluted (loss) earnings per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.59 ) $ 1.57 $ ( 0.86 ) $ 1.38 Weighted-average number of common shares outstanding: Basic 24,103 24,028 24,084 24,005 Diluted 24,103 24,100 24,084 24,076 _________________ (a) Includes revenues from related parties of $ 67,704 and $ 86,944 for the three months ended March 31, 2025 and 2024, respectively, and $ 156,825 and $ 173,419 for the nine months ended March 31, 2025 and 2024, respectively. (b) Includes net charges from related parties of $ 47,476 and $ 49,907 for the three months ended March 31, 2025 and 2024, respectively, and $ 88,528 and $ 88,206 for the nine months ended March 31, 2025 and 2024, respectively. (c) Includes net charges from related parties of $ 22,439 and $ 18,707 for the three months ended March 31, 2025 and 2024, respectively, and $ 53,994 and $ 47,462 for the nine months ended March 31, 2025 and 2024, respectively. See accompanying notes to consolidated financial statements. 3 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) (in thousands) Three Months Ended Nine Months Ended March 31, March 31, 2025 2024 2025 2024 Net (loss) income $ ( 14,227 ) $ 37,877 $ ( 20,658 ) $ 33,280 Other comprehensive income, before income taxes: Pension plans: Amounts reclassified from accumulated other comprehensive loss: Amortization of actuarial loss included in net periodic benefit cost 21 10 61 28 Other comprehensive income, before income taxes 21 10 61 28 Income tax expense related to items of other comprehensive income ( 7 ) ( 3 ) ( 20 ) ( 9 ) Other comprehensive income, net of income taxes 14 7 41 19 Comprehensive (loss) income $ ( 14,213 ) $ 37,884 $ ( 20,617 ) $ 33,299 See accompanying notes to consolidated financial statements. 4 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended March 31, 2025 2024 Cash flows from operating activities: Net (loss) income $ ( 20,658 ) $ 33,280 Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: Depreciation and amortization 2,396 2,372 Benefit from deferred income taxes ( 10,640 ) ( 9,139 ) Share-based compensation expense 14,159 18,069 Unrealized loss on equity investments with readily determinable fair value and warrants 11,471 9,969 Other non-cash adjustments 3,652 3,136 Change in assets and liabilities: Accounts receivable, net ( 76,263 ) ( 36,704 ) Net related party receivables 3,106 ( 7,221 ) Prepaid expenses and other assets ( 15,270 ) ( 49,252 ) Investments ( 1,963 ) ( 2,067 ) Accounts payable ( 2,949 ) ( 3,190 ) Net related party payables ( 195 ) ( 563 ) Accrued and other liabilities 87,795 47,831 Deferred revenue 16,816 ( 51,625 ) Operating lease right-of-use assets and lease liabilities 30,427 28,884 Net cash provided by (used in) operating activities 41,884 ( 16,220 ) Cash flows from investing activities: Capital expenditures ( 3,248 ) ( 1,084 ) Purchases of investments ( 2,101 ) ( 4,605 ) Net cash used in investing activities ( 5,349 ) ( 5,689 ) Cash flows from financing activities: Dividends paid ( 633 ) ( 682 ) Taxes paid in lieu of shares issued for equity-based compensation ( 11,773 ) ( 8,084 ) Proceeds from revolving credit facilities — 75,000 Repayment of revolving credit facilities ( 8,000 ) ( 40,000 ) Repayment of NHL advance ( 6,000 ) — Net cash (used in) provided by financing activities ( 26,406 ) 26,234 Net increase in cash, cash equivalents and restricted cash 10,129 4,325 Cash, cash equivalents and restricted cash at beginning of period 94,907 40,459 Cash, cash equivalents and restricted cash at end of period $ 105,036 $ 44,784 Non-cash investing and financing activities: Capital expenditures incurred but not yet paid $ 22 $ 105 See accompanying notes to consolidated financial statements. 5 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (in thousands) Three Months Ended March 31, 2025 Common Stock Issued Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Equity Balance as of December 31, 2024 $ 249 $ 9,776 $ ( 160,647 ) $ ( 121,589 ) $ ( 925 ) $ ( 273,136 ) Net loss — — — ( 14,227 ) — ( 14,227 ) Other comprehensive income — — — — 14 14 Comprehensive loss — — — — — ( 14,213 ) Share-based compensation — 3,900 — — — 3,900 Common stock issued under stock incentive plans — ( 1,821 ) 1,821 — — — Balance as of March 31, 2025 $ 249 $ 11,855 $ ( 158,826 ) $ ( 135,816 ) $ ( 911 ) $ ( 283,449 ) See accompanying notes to consolidated financial statements. 6 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (in thousands) Three Months Ended March 31, 2024 Common Stock Issued Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Equity Balance as of December 31, 2023 $ 249 $ 11,471 $ ( 171,400 ) $ ( 178,512 ) $ ( 997 ) $ ( 339,189 ) Net income — — — 37,877 — 37,877 Other comprehensive income — — — — 7 7 Comprehensive income — — — — — 37,884 Share-based compensation — 7,350 — — — 7,350 Common stock issued under stock incentive plans — ( 817 ) 817 — — — Balance as of March 31, 2024 $ 249 $ 18,004 $ ( 170,583 ) $ ( 140,635 ) $ ( 990 ) $ ( 293,955 ) See accompanying notes to consolidated financial statements. 7 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (in thousands) Nine Months Ended March 31, 2025 Common Stock Issued Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Equity Balance as of June 30, 2024 $ 249 $ 19,079 $ ( 169,547 ) $ ( 115,139 ) $ ( 952 ) $ ( 266,310 ) Net loss — — — ( 20,658 ) — ( 20,658 ) Other comprehensive income — — — — 41 41 Comprehensive loss — — — — — ( 20,617 ) Share-based compensation — 14,159 — — — 14,159 Tax withholding associated with shares issued for equity-based compensation — ( 10,662 ) — — — ( 10,662 ) Common stock issued under stock incentive plans — ( 10,721 ) 10,721 — — — Dividends declared ($ 7.00 per share) — — — ( 19 ) — ( 19 ) Balance as of March 31, 2025 $ 249 $ 11,855 $ ( 158,826 ) $ ( 135,816 ) $ ( 911 ) $ ( 283,449 ) See accompanying notes to consolidated financial statements. 8 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (in thousands) Nine Months Ended March 31, 2024 Common Stock Issued Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Equity Balance as of June 30, 2023 $ 249 $ 16,846 $ ( 179,410 ) $ ( 173,910 ) $ ( 1,009 ) $ ( 337,234 ) Net income — — — 33,280 — 33,280 Other comprehensive income — — — — 19 19 Comprehensive income — — — — — 33,299 Share-based compensation — 18,069 — — — 18,069 Tax withholding associated with shares issued for equity-based compensation — ( 8,084 ) — — — ( 8,084 ) Common stock issued under stock incentive plans — ( 8,827 ) 8,827 — — — Dividends declared ($ 7.00 per share) — — — ( 5 ) — ( 5 ) Balance as of March 31, 2024 $ 249 $ 18,004 $ ( 170,583 ) $ ( 140,635 ) $ ( 990 ) $ ( 293,955 ) See accompanying notes to consolidated financial statements. 9 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) All amounts included in the following Notes to Consolidated Financial Statements are presented in thousands, except per share data or as otherwise noted. Note 1. Description of Business and Basis of Presentation Description of Business Madison Square Garden Sports Corp. (together with its subsidiaries, collectively, “we,” “us,” “our,” “MSG Sports,” or the “Company”) owns and operates a portfolio of assets featuring some of the most recognized teams in all of sports, including the New York Knickerbockers (“Knicks”) of the National Basketball Association (“NBA”) and the New York Rangers (“Rangers”) of the National Hockey League (“NHL”). Both the Knicks and the Rangers play their home games in Madison Square Garden Arena (“The Garden”). The Company’s other professional sports franchises include two development league teams — the Hartford Wolf Pack of the American Hockey League and the Westchester Knicks of the NBA G League. These professional sports franchises are collectively referred to herein as the “sports teams” or the “teams.” The Company also owns and operates a professional sports team performance center — the Madison Square Garden Training Center in Greenburgh, NY. The Company operates and reports financial information in one segment. The Company’s decision to organize as one operating segment and report in one segment is based upon its internal organizational structure; the manner in which its operations are managed; and the criteria used by the Company’s Executive Chairman and Chief Executive Officer, its Chief Operating Decision Maker (“CODM”), to evaluate segment performance. The Company’s CODM reviews total company operating results to assess overall performance and allocate resources. The Company was incorporated on March 4, 2015 as an indirect, wholly-owned subsidiary of MSG Networks Inc. (“MSG Networks”). All the outstanding common stock of the Company was distributed to MSG Networks stockholders (the “MSGS Distribution”) on September 30, 2015. On April 17, 2020, the Company distributed all of the outstanding common stock of Sphere Entertainment Co. (“Sphere Entertainment”) to its stockholders (the “Sphere Distribution”). On July 9, 2021, MSG Networks merged with a subsidiary of Sphere Entertainment and became a wholly-owned subsidiary of Sphere Entertainment. Accordingly, agreements between the Company and MSG Networks are now effectively agreements with Sphere Entertainment on a consolidated basis. Unless the context otherwise requires, all references to Madison Square Garden Entertainment Corp. (“MSG Entertainment”), Sphere Entertainment and MSG Networks refer to such entity, together with its direct and indirect subsidiaries. Basis of Presentation 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 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; however, in the opinion of management, the Financial Statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. The results of operations for the periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full fiscal year. The dependence of MSG Sports on revenues from its NBA and NHL sports teams generally means it earns a disproportionate share of its revenues in the second and third quarters of the Company’s fiscal year, which is when the majority of the sports teams’ games are played. 10 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 2. Accounting Policies Principles of Consolidation The consolidated financial statements of the Company include the accounts of Madison Square Garden Sports Corp. and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the accompanying Financial Statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, other current assets, goodwill, intangible assets, other long-lived assets, fair value of investments, deferred tax valuation allowance, tax accruals, and other liabilities. In addition, estimates are used in revenue recognition, revenue sharing expense (net of escrow and excluding playoffs), luxury tax expense, income tax expense (benefit), performance and share-based compensation, depreciation and amortization, litigation matters and other matters. Management believes its use of estimates in the Financial Statements to be reasonable. Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and, as such, these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the Company’s financial statements in future periods. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-01, Leases (Topic 842): Common Control Arrangements. This ASU amends certain provisions of Accounting Standards Codification (“ASC”) 842, Leases that apply to arrangements between related parties under common control. The Company adopted this standard as of the beginning of the fiscal year ending June 30, 2025 (“fiscal year 2025”) and the adoption did not have an impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. The ASU is effective for the Company’s Annual Report on Form 10-K for fiscal year 2025 and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its segment disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU enhances annual disclosures related to the effective income tax rate reconciliation and income taxes paid. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ending June 30, 2026 and subsequent interim periods, with early adoption permitted. 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. 11 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 3. Revenue Recognition Contracts with Customers All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers. For the three months ended March 31, 2025, the Company did not have any impairment losses on contract assets arising from contracts with customers. For the nine months ended March 31, 2025, the Company recorded impairment losses of $ 109 on contract assets arising from contracts with customers. For the three and nine months ended March 31, 2025, the Company did not have any impairment losses on receivables arising from contracts with customers. For the three and nine months ended March 31, 2024, 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 and nine months ended March 31, 2025 and 2024: Three Months Ended Nine Months Ended March 31, March 31, 2025 2024 2025 2024 Event-related (a) $ 176,756 $ 177,826 $ 322,211 $ 306,096 Media rights (b) 123,544 139,579 257,799 269,345 Sponsorship, signage and suite licenses 113,701 101,402 198,302 176,032 League distributions and other 10,196 11,147 56,951 48,425 Total revenues from contracts with customers $ 424,197 $ 429,954 $ 835,263 $ 799,898 _________________ (a) Consists of (i) ticket sales and other ticket-related revenues, and (ii) food, beverage and merchandise sales at The Garden. (b) Consists of (i) local media rights fees, (ii) revenue from the distribution through league-wide national television contracts, and (iii) other local radio rights fees. Revenues from media rights for the three and nine months ended March 31, 2025 reflect a reduction in expected revenues from 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 defined below). 12 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Contract Balances 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 March 31, 2025 and June 30, 2024: March 31, June 30, 2025 2024 Receivables from contracts with customers, net (a) $ 91,448 $ 19,930 Contract assets, current (b) 28,059 14,054 Deferred revenue, including non-current portion (c), (d) 166,641 149,825 _________________ (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 March 31, 2025 and June 30, 2024, the Company’s receivables reported above incl uded $ 30,532 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 and NHL related to escrow and player compensation recoveries and luxury tax payments. As of March 31, 2025 and June 30, 2024, the Company had receivable balances related to escrow and player compensation recoveries of $ 14,667 and $ 0 , respectively, recorded in Accounts receivable, net. (b) Contract assets, current, which are reported as Other current assets in the accompanying consolidated balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to the customer, for which the Company does not have an unconditional right to bill as of the reporting date. Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional. The Company had contract assets related to local media rights of $ 6,507 and $ 0 as of March 31, 2025 and June 30, 2024, respectively. See Note 16 for further details on these related party arrangements. (c) Deferred revenue, including non-current portion, primarily relates to the Company’s receipt of consideration from customers, inclusive of sales tax collected, or billing customers in advance of the Company’s transfer of goods or services to those customers. Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to a customer. (d) Revenue recognized for the nine months ended March 31, 2025 relating to the deferred revenue balance as of June 30, 2024 was $ 115,264 . Transaction Price Allocated to the Remaining Performance Obligations The following table depicts the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2025. 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. Additionally, the Company has elected to exclude variable consideration from its disclosure related to the remaining performance obligations under its local media rights arrangements with MSG Networks, league-wide national and international television contracts, and certain other arrangements with variable consideration. Fiscal year ending June 30, 2025 (remainder) $ 23,903 Fiscal year ending June 30, 2026 153,698 Fiscal year ending June 30, 2027 96,694 Fiscal year ending June 30, 2028 58,905 Fiscal year ending June 30, 2029 46,842 Thereafter 34,870 $ 414,912 13 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 4. Computation of (Loss) Earnings per Common Share The following table presents a reconciliation of (loss) earnings allocated to common shares and a reconciliation of weighted-average shares used in the calculations of basic and diluted (loss) income per common share attributable to the Company’s stockholders (“EPS”) and the number of shares excluded from diluted (loss) income per common share, as they were anti-dilutive. Three Months Ended Nine Months Ended March 31, March 31, 2025 2024 2025 2024 Net (loss) earnings allocable to common shares, basic and diluted (numerator): Net (loss) income $ ( 14,227 ) $ 37,877 $ ( 20,658 ) $ 33,280 Less: Dividends to other-than-common stockholders (a) — — 19 5 Net (loss) earnings allocable to common shares, basic and diluted (numerator): $ ( 14,227 ) $ 37,877 $ ( 20,677 ) $ 33,275 Weighted-average shares (denominator): Weighted-average shares for basic EPS 24,103 24,028 24,084 24,005 Dilutive effect of shares issuable under share-based compensation plans — 72 — 71 Weighted-average shares for diluted EPS 24,103 24,100 24,084 24,076 Weighted-average shares excluded from diluted EPS 62 — 73 — Basic (loss) earnings per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.59 ) $ 1.58 $ ( 0.86 ) $ 1.39 Diluted (loss) earnings per common share attributable to Madison Square Garden Sports Corp.’s stockholders $ ( 0.59 ) $ 1.57 $ ( 0.86 ) $ 1.38 _________________ (a) Dividends to other-than-common stockholders consists of forfeitable rights to dividends declared and payable to holders of the Company’s unvested restricted stock units and performance restricted stock units. Note 5. Team Personnel Transactions 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 credit of $ 653 and a net provision of $ 2,170 for the three months ended March 31, 2025 and 2024, respectively, and a net provision of $ 7,766 and $ 2,170 for the nine months ended March 31, 2025 and 2024, respectively . 14 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 6. Cash, Cash Equivalents and Restricted Cash The following table provides a summary of the amounts recorded as cash, cash equivalents and restricted cash. As of March 31, 2025 June 30, 2024 March 31, 2024 Captions on the consolidated balance sheets: Cash and cash equivalents $ 96,536 $ 89,136 $ 40,033 Restricted cash (a) 8,500 5,771 4,751 Cash, cash equivalents and restricted cash on the consolidated statements of cash flows $ 105,036 $ 94,907 $ 44,784 _________________ (a) Restricted cash as of March 31, 2025, June 30, 2024 and March 31, 2024 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). Note 7. Leases The Company’s leases primarily consist of the lease of the Company’s principal executive offices under the Sublease Agreement with MSG Entertainment (as defined below), and a lease agreement for an aircraft. In addition, the Company accounts for the rights of use of The Garden pursuant to the Arena License Agreements (as defined below) as leases under the ASC Topic 842, Leases. See Note 7 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 for more information regarding the Company’s accounting policies associated with its leases. During the second quarter of fiscal 2025, the Company amended and restated its prior sublease agreement with MSG Entertainment (the “Prior Sublease Agreement”) to enter into a short term lease for new principal executive offices through December 31, 2024. The Company 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 nine months ended March 31, 2025. 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 which ends January 31, 2046 (the “New Sublease Agreement” and together with the Prior Sublease Agreement, the “Sublease Agreement”) and fixed lease payment obligations of $ 167,444 over the lease term. The Company recorded a lease right-of-use asset and liability in the accompanying consolidated balance sheet as of March 31, 2025 based on the present value of minimum fixed lease payments over the lease term utilizing the Company’s incremental borrowing rate as of the lease commencement date. In addition, the Company entered into a commitment whereby if the MSG Entertainment’s lease for principal executive offices at Two Pennsylvania Plaza in New York were terminated under certain circumstances, the Company would be required to enter into a new lease for executive offices at Two Pennsylvania Plaza directly with the landlord, with a consistent lease term through January 31, 2046. As of March 31, 2025, the Company’s exis ting operating leases, which are recorded in the accompanying financial statements, have remaining lease terms ranging from 7 to 30 years. In certain ins tances, leases include options to renew, with varying option terms. The exercise of lease renewals, if available under the lease options, is generally at the Company’s discretion and is considered in the Company’s assessment of the respective lease term. The Company’s lease agreements do not contain material residual value guarantees or material restrictive covenants. 15 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The following table summarizes the right-of-use assets and lease liabilities recorded in the accompanying consolidated balance sheets as of March 31, 2025 and June 30, 2024: Line Item in the Company’s Consolidated Balance Sheet March 31, 2025 June 30, 2024 Right-of-use assets: Operating leases Right-of-use lease assets $ 763,469 $ 694,566 Lease liabilities: Operating leases, current (a) Operating lease liabilities, current $ 51,015 $ 50,267 Operating leases, noncurrent (a) Operating lease liabilities, noncurrent 848,534 749,952 Total lease liabilities $ 899,549 $ 800,219 _________________ (a) As of March 31, 2025, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances o f $ 44,437 and $ 817,504 , 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 and nine months ended March 31, 2025 and 2024: Line Item in the Company’s Consolidated Statement of Operations Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Operating lease costs Direct operating expenses $ 33,380 $ 35,370 $ 61,472 $ 61,043 Operating lease costs Selling, general and administrative expenses 3,693 2,320 8,126 6,960 Short term lease costs Selling, general and administrative expenses — — 3,971 — Total lease cost $ 37,073 $ 37,690 $ 73,569 $ 68,003 Supplemental Information For the nine months ended March 31, 2025 and 2024, cash paid for amounts included in the measurement of lease liabilities was $ 39,172 and $ 39,119 , respectively. For the nine months ended March 31, 2025, non-cash additions to right-of-use assets and operating lease liabilities were $ 86,201 . The weighted average remaining lease term for operating leases recorded in the accompanying consolidated balance sheet as of March 31, 2025 was 28.4 years. The weighted average discount rate was 7.05 % as of March 31, 2025 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 March 31, 2025 were as follows: Fiscal year ending June 30, 2025 (remainder) $ 12,708 Fiscal year ending June 30, 2026 54,369 Fiscal year ending June 30, 2027 59,716 Fiscal year ending June 30, 2028 62,388 Fiscal year ending June 30, 2029 63,874 Thereafter 2,129,295 Total lease payments 2,382,350 Less imputed interest ( 1,482,801 ) Total lease liabilities $ 899,549 16 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 8. 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 March 31, 2025 and June 30, 2024 was $ 226,523 . The Company’s indefinite-lived intangible assets as of March 31, 2025 and June 30, 2024 were as follows: Sports franchises $ 102,564 Photographic related rights 1,080 $ 103,644 During the first quarter of fiscal year 2025, the Company performed its annual impairment test of identifiable indefinite-lived intangible assets and determined that there were no impairments identified as of the impairment test date. Note 9. Investments The Company’s Investments reported in the accompanying consolidated balance sheets, consisted of the following: March 31, 2025 June 30, 2024 Equity method investments: NRG $ 6,994 $ 7,536 Other equity method investments 4,513 5,038 Equity investments with readily determinable fair values: Xtract One Technologies Inc. (“Xtract One”) common stock 10,277 17,380 Other equity investments with readily determinable fair values held in trust under the Company’s Executive Deferred Compensation Plan 21,773 18,837 Equity investments without readily determinable fair values (a) 7,964 6,757 Derivative instruments: Xtract One warrants 1,904 6,995 Total investments $ 53,425 $ 62,543 _________________ (a) During the three and nine months ended March 31, 2025, the Company recorded impairment charges and reductions in carrying value resulting from observable price changes of $ 0 and $ 894 , respectively, related to its equity securities without readily determinable fair values in Miscellaneous expense, net within the accompanying consolidated statements of operations. During the three and nine months ended March 31, 2024, 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. 17 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Equity Method Investments NRG The Company holds preferred shares of the capital stock of Hard Carry Gaming, Inc. (“NRG”), a professional gaming and entertainment company. During the three and nine months ended March 31, 2025, the Company recognized its net share of losses of $ 26 and $ 542 , respectively, in Miscellaneous expense, net within the Company’s consolidated statements of operations. During the three and nine months ended March 31, 2024, the Company recognized its net share of income of $ 140 and losses of $ 718 , respectively, in Miscellaneous expense, net within the Company’s consolidated statements of operations. As of March 31, 2025 and June 30, 2024, the Company’s ownership in NRG was approximately 25 %. Equity Investments with Readily Determinable Fair Values The Company holds investments in equity instruments with readily determinable fair value: • Xtract One, a technology-driven threat detection and security solution company that is listed on the Toronto Stock Exchange under the symbol “XTRA”. The Company holds common stock of Xtract One and holds warrants entitling the Company to acquire additional shares of common stock of Xtract One which are considered derivative instruments. Refer to Note 10 for further details regarding the Company’s warrants, including the inputs used in determining the fair value of the warrants. • Other equity investments held in trust under the Company’s Executive Deferred Compensation Plan. Refer to Note 13 for further details regarding the plan. The fair value of the Company’s investments in common stock of Xtract One and other investments held in trust are determined based on quoted market prices in active markets, which are classified within Level I of the fair value hierarchy. The cost basis and carrying value of equity investments with readily determinable fair values are as follows: March 31, 2025 June 30, 2024 Cost Basis Carrying Value/Fair Value Cost Basis Carrying Value/Fair Value Xtract One common stock $ 7,721 $ 10,277 $ 7,721 $ 17,380 Other equity investments with readily determinable fair values 18,723 21,773 16,510 18,837 $ 26,444 $ 32,050 $ 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 and nine months ended March 31, 2025 and 2024: Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Unrealized loss - Xtract One common stock $ ( 3,387 ) $ ( 853 ) $ ( 7,103 ) $ ( 5,645 ) Unrealized (loss) gain - other equity investments with readily determinable fair values ( 319 ) 809 723 1,501 Realized gain - other equity investments with readily determinable fair values 184 12 250 55 $ ( 3,522 ) $ ( 32 ) $ ( 6,130 ) $ ( 4,089 ) 18 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 10. Fair Value Measurements The following table presents the Company’s assets that are measured at fair value on a recurring basis, which include cash equivalents: Fair Value Hierarchy March 31, 2025 June 30, 2024 Assets: Money market accounts I $ 50,026 $ 37,594 Time deposits I 44,741 49,510 Equity investments I 32,050 36,217 Warrants III 1,904 6,995 Total assets measured at fair value $ 128,721 $ 130,316 Level I Inputs Assets that are classified within Level I of the fair value hierarchy are valued using observable inputs that reflect quoted prices for identical assets in active markets. The carrying amount of the Company’s money market accounts and time deposits approximates fair value due to their short-term maturities. Refer to Note 9 for further details regarding equity investments. Level III Inputs The Company’s Level III assets consist of warrants entitling the Company to acquire additional common stock of Xtract One. The Company’s warrants are included within Investments in the accompanying consolidated balance sheets. Changes in the fair value of derivative instruments are measured at each reporting date and are recorded within Miscellaneous expense, net in the accompanying consolidated statements of operations. The fair value of the Company’s warrants in Xtract One were determined using the Black-Scholes option pricing model. The following are key assumptions used to calculate the fair value of the warrants as of March 31, 2025 and June 30, 2024: March 31, 2025 June 30, 2024 Expected term 1.43 years 1.80 years Expected volatility 61.41 % 64.15 % Risk-free interest rate 3.97 % 4.73 % The following table presents additional information about our assets for which we utilize Level III inputs to determine fair value: Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Balance at beginning of period $ 3,838 $ 8,802 $ 6,995 $ 13,098 Unrealized losses on warrants ( 1,934 ) ( 1,529 ) ( 5,091 ) ( 5,825 ) Balance at end of period $ 1,904 $ 7,273 $ 1,904 $ 7,273 19 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The carrying value and fair value of the Company’s debt reported in the accompanying consolidated balance sheets are as follows: March 31, 2025 June 30, 2024 Carrying Value Fair Value Carrying Value Fair Value Liabilities Debt, current (a) $ 24,000 $ 24,000 $ 30,000 $ 30,000 Long-term debt (b) $ 267,000 $ 267,000 $ 275,000 $ 275,000 _________________ (a) The Company’s debt, current is classified within Level II of the fair value hierarchy as it is valued using quoted indices of similar securities for which the inputs are readily observable. The fair value of the Company’s debt, current is the same as its carrying amount based on valuation of similar securities. See Note 12 for further details. (b) The Company’s long-term debt is classified within Level II of the fair value hierarchy as it is valued using quoted indices of similar securities for which the inputs are readily observable. The fair value of the Company’s long-term debt is the same as its carrying amount as the debt bears interest at a variable rate indexed to current market conditions. See Note 12 for further details . Note 11. Commitments and Contingencies Commitments As more fully described in Note 12 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, the Company’s commitments consist primarily of the Company’s obligations under employment agreements that the Company has with its professional sports teams’ personnel that are generally guaranteed regardless of employee injury or termination. In addition, see Note 7 for more information on the contractual obligations related to future lease payments. The Company did not have any material changes in its contractual obligations, including off-balance sheet commitments, since the end of fiscal year 2024 other than the New Sublease Agreement described in Note 7 and activities in the ordinary course of business. Legal Matters The Company is a defendant in various lawsuits. Although the outcome of these lawsuits cannot be predicted with certainty (including the extent of available insurance, if any), management does not believe that resolution of these lawsuits will have a material adverse effect on the Company. Note 12. Debt Knicks Revolving Credit Facility On September 30, 2016, New York Knicks, LLC (“Knicks LLC”), a wholly owned subsidiary of the Company, entered into a credit agreement (the “2016 Knicks Credit Agreement”) with a syndicate of lenders providing for a senior secured revolving credit facility of up to $ 200,000 with a term of five years to fund working capital needs and for general corporate purposes. On November 6, 2020, the Company amended and restated the 2016 Knicks Credit Agreement in its entirety (the “2020 Knicks Credit Agreement”). On December 14, 2021, Knicks LLC entered into Amendment No. 2 to the 2020 Knicks Credit Agreement, which amended and restated the 2020 Knicks Credit Agreement (as amended and restated, the “Knicks Credit Agreement”). The Knicks Credit Agreement provides for a senior secured revolving credit facility of up to $ 275,000 (the “Knicks Revolving Credit Facility”) to fund working capital needs and for general corporate purposes. The maturity date of the Knicks Credit Agreement is December 14, 2026. Amounts borrowed may be distributed to the Company except during an event of default. All borrowings under the Knicks Revolving Credit Facility are subject to the satisfaction of certain customary conditions, including a representation as to the absence of a bankruptcy or insolvency event (as set forth in the Knicks Credit Agreement) with respect to the obligor (including MSG Networks) under any local media rights agreement. Borrowings under the Knicks Credit Agreement bear interest at a floating rate, which at the option of Knicks LLC may be either (i) a base rate plus a margin ranging from 0.250 % to 0.500 % per annum or (ii) term Secured Overnight Financing Rate (“SOFR”) plus a credit spread adjustment of 0.100 % per annum plus a margin ranging from 1.250 % to 1.500 % per annum depending on the credit rating applicable to the NBA’s league-wide credit facility. Knicks LLC is required to pay a commitment fee ranging from 0.250 % to 20 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) 0.300 % per annum in respect of the average daily unused commitments under the Knicks Revolving Credit Facility. During the nine months ended March 31, 2025 , the Company made principal repayments of $ 8,000 under the Knicks Revolving Credit Facility. The outstanding balance under the Knicks Revolving Credit Facility was $ 267,000 as of March 31, 2025, which was recorded as Long-term debt in the accompanying consolidated balance sheet. The interest rate on the Knicks Revolving Credit Facility as of March 31, 2025 was 5.67 % . During the nine months ended March 31, 2025, the Company made interest payments of $ 12,897 in respect of the Knicks Revolving Credit Facility. All obligations under the Knicks Revolving Credit Facility are secured by a first lien security interest in certain of Knicks LLC’s assets, including, but not limited to, (i) the Knicks LLC’s membership rights in the NBA, (ii) revenues to be paid to Knicks LLC by the NBA pursuant to certain U.S. national broadcast agreements, and (iii) revenues to be paid to Knicks LLC pursuant to local media contracts. Subject to customary notice and minimum amount conditions, Knicks LLC may voluntarily prepay outstanding loans under the Knicks Revolving Credit Facility at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to SOFR-based loans). Knicks LLC is required to make mandatory prepayments in certain circumstances, including without limitation if the maximum available amount under the Knicks Revolving Credit Facility is greater than 350 % of qualified revenues. In addition to the financial covenant described above, the Knicks Credit Agreement and related security agreement contain certain customary representations and warranties, affirmative covenants and events of default. The Knicks Revolving Credit Facility contains certain restrictions on the ability of Knicks LLC to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the Knicks Revolving Credit Facility, including the following: (i) incurring additional indebtedness and contingent liabilities; (ii) creating liens on certain assets; (iii) making restricted payments during the continuance of an event of default under the Knicks Revolving Credit Facility; (iv) engaging in sale and leaseback transactions; (v) merging or consolidating; and (vi) taking certain actions that would invalidate the secured lenders’ liens on any Knicks LLC’s collateral. The Knicks Revolving Credit Facility requires Knicks LLC to comply with a debt service ratio of at least 1.5 :1.0 over a trailing four quarter period. As of March 31, 2025, Knicks LLC was in compliance with this financial covenant. Rangers Revolving Credit Facility On January 25, 2017, New York Rangers, LLC (“Rangers LLC”), a wholly owned subsidiary of the Company, entered into a credit agreement (the “2017 Rangers Credit Agreement”) with a syndicate of lenders providing for a senior secured revolving credit facility of up to $ 150,000 with a term of five years to fund working capital needs and for general corporate purposes. On November 6, 2020, the Company amended and restated the 2017 Rangers Credit Agreement in its entirety (the “2020 Rangers Credit Agreement”). On December 14, 2021, Rangers LLC entered into Amendment No. 3 to the 2020 Rangers Credit Agreement, which amended and restated the 2020 Rangers Credit Agreement (as amended and restated, the “Rangers Credit Agreement”). The Rangers Credit Agreement provides for a senior secured revolving credit facility of up to $ 250,000 (the “Rangers Revolving Credit Facility”) to fund working capital needs and for general corporate purposes. The maturity date of the Rangers Credit Agreement is December 14, 2026. Amounts borrowed may be distributed to the Company except during an event of default. All borrowings under the Rangers Revolving Credit Facility are subject to the satisfaction of certain customary conditions, including a representation as to the absence of a bankruptcy or insolvency event (as set forth in the Rangers Credit Agreement) with respect to the obligor (including MSG Networks) under any local media rights agreement. Borrowings under the Rangers Revolving Credit Facility bear interest at a floating rate, which at the option of Rangers LLC may be either (i) a base rate plus a margin ranging from 0.500 % to 1.000 % per annum or (ii) term SOFR plus a credit spread adjustment of 0.100 % per annum plus a margin ranging from 1.500 % to 2.000 % per annum depending on the credit rating applicable to the NHL’s league-wide credit facility. 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 outstanding under the Rangers Revolving Credit Facility as of March 31, 2025 and the Company did not make any interest payments during the nine months ended March 31, 2025 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. and Canadian national broadcast agreements, and (iii) revenues to be paid to Rangers LLC pursuant to local media contracts. 21 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Subject to customary notice and minimum amount conditions, Rangers LLC may voluntarily prepay outstanding loans under the Rangers Revolving Credit Facility at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to SOFR-based loans). Rangers LLC is required to make mandatory prepayments in certain circumstances, including without limitation if qualified revenues are less than 17 % of the maximum available amount under the Rangers Credit Agreement. In addition to the financial covenant described above, the Rangers Credit Agreement and related security agreement contain certain customary representations and warranties, affirmative covenants and events of default. The Rangers Revolving Credit Facility contains certain restrictions on the ability of Rangers LLC to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the Rangers Revolving Credit Facility, including the following: (i) incurring additional indebtedness and contingent liabilities; (ii) creating liens on certain assets; (iii) making restricted payments during the continuance of an event of default under the Rangers Revolving Credit Facility; (iv) engaging in sale and leaseback transactions; (v) merging or consolidating; 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 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 March 31, 2025, Rangers LLC was in compliance with this financial covenant . Rangers NHL Advance Agreement On March 19, 2021, Rangers LLC, Rangers Holdings, LLC and MSG NYR Holdings LLC entered into an advance agreement with the NHL (the “Rangers NHL Advance Agreement”) pursuant to which the NHL advanced $ 30,000 to Rangers LLC. The advance is required to be utilized solely and exclusively to pay for Rangers LLC operating expenses. All obligations under the Rangers NHL Advance Agreement are senior to and shall have priority over all secured and other indebtedness of Rangers LLC, Rangers Holdings, LLC and MSG NYR Holdings LLC. All borrowings under the Rangers NHL Advance Agreement were made on a non-revolving basis and bear interest at 3.00 % per annum, ending on the date any such advances are fully repaid. Advances received under the Rangers NHL Advance Agreement are payable upon demand by the NHL. The advanced amount may be set off against funds that would otherwise be paid, distributed or transferred by the NHL to Rangers LLC. During the nine months ended March 31, 2025, the Company made principal repayments of $ 6,000 under the Rangers NHL Advance Agreement . The outstanding balance under the Rangers NHL Advance Agreement was $ 24,000 as of March 31, 2025 and was recorded as Debt in the accompanying consolidated balance sheet. During the nine months ended March 31, 2025, the Company made interest p ayments of $ 688 in respect of 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: March 31, 2025 June 30, 2024 Other current assets $ 1,145 $ 1,145 Other assets 806 1,665 22 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 13. Benefit Plans Defined Benefit Pension Plans The Company sponsors the MSG Sports, LLC Excess Cash Balance Plan (the “Excess Cash Balance Plan”), an unfunded non-contributory, non-qualified excess cash balance plan and the MSG Sports, LLC Excess Retirement Plan, an unfunded non-contributory, non-qualified defined benefit pension plan for the benefit of certain employees (collectively referred to as the “Pension Plans”). All benefits in the Company’s Pension Plans are frozen and participants are not able to earn benefits for future service under these plans, and no employee of the Company who was not already a participant as of the date the respective plan was frozen may become a participant in the Pension Plans. Existing account balances under the Excess Cash Balance Plan are credited with monthly interest in accordance with the terms of the plan. The following table presents components of net periodic benefit cost for the Pension Plans included in the accompanying consolidated statements of operations for the three and nine months ended March 31, 2025 and 2024. Components of net periodic benefit cost are reported in Miscellaneous expense, net: Three Months Ended Nine Months Ended March 31, March 31, 2025 2024 2025 2024 Interest cost $ 63 $ 68 $ 189 $ 204 Recognized actuarial loss 21 10 61 28 Net periodic benefit cost $ 84 $ 78 $ 250 $ 232 Defined Contribution Plans MSG Sports employees participate in The Madison Square Garden 401(k) Savings Plan (the “401(k) Plan”), which is a multiple employer plan sponsored by MSG Entertainment Holdings, LLC, a wholly owned subsidiary of MSG Entertainment. In addition, the Company sponsors the MSG Sports LLC, Excess Savings Plan (the “Excess Savings Plan”), which provides non-qualified retirement benefits to eligible MSG Sports employees. Expense related to the 401(k) Plan and Excess Savings Plan for the three and nine months ended March 31, 2025 was $ 1,500 and $ 4,027 , respectively, and $ 1,261 and $ 3,869 for the three and nine months ended March 31, 2024, 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 cost credits)/compensation expense of $( 134 ) and $ 973 for the three and nine months ended March 31, 2025, respectively, and $ 821 and $ 1,556 for the three and nine months ended March 31, 2024, respectively, within Selling, general and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability. In addition, the Company recorded (losses)/gains of $( 134 ) and $ 973 for the three and nine months ended March 31, 2025, respectively, and $ 821 and $ 1,556 for the three and nine months ended March 31, 2024, respectively, within Miscellaneous expense, net to reflect t he remeasurement of the fair value of assets under the Deferred Compensation Plan. The following table summarizes amounts recognized related to the Deferred Compensation Plan in the consolidated balance sheets: March 31, 2025 June 30, 2024 Non-current assets (included in investments) $ 21,773 $ 18,837 Current liabilities (included in accrued employee related costs) ( 1,226 ) ( 1,233 ) Non-current liabilities (included in other employee related costs) ( 20,547 ) ( 17,604 ) 23 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 14. Share-based Compensation See Note 15 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 2015 Employee Stock Plan (the “Employee Stock Plan”) and its 2015 Stock Plan for Non-Employee Directors. 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 $ 3,900 and $ 14,159 for the three and nine months ended March 31, 2025, respectively, and $ 7,350 and $ 18,069 for the three and nine months ended March 31, 2024, respectively. There were no costs related to share-based compensation that were capitalized for the three and nine months ended March 31, 2025 and 2024. 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 nine months ended March 31, 2025: Number of Weighted-Average Fair Value Per Share at Date of Grant (a) Nonperformance Based Vesting RSUs Performance Based Vesting RSUs Unvested award balance, June 30, 2024 105 153 $ 170.61 Granted 54 46 $ 207.94 Vested ( 64 ) ( 59 ) $ 174.98 Forfeited / Cancelled ( 2 ) ( 3 ) $ 173.51 Unvested award balance, March 31, 2025 93 137 $ 184.48 _____________________ (a) Weighted-average fair value per share at date of grant does not reflect any adjustments to awards granted prior to the Sphere Distribution. The fair value of RSUs that vested during the nine months ended March 31, 2025 was $ 25,713 . 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, 55 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 nine months ended March 31, 2025. The fair value of RSUs that vested during the nine months ended March 31, 2024 was $ 21,192 . The weighted-average fair value per share at grant date of RSUs granted during the nine months ended March 31, 2024 was $ 177.62 . Stock Options Award Activity The following table summarizes activity related to the Company’s stock options for the nine months ended March 31, 2025: Number of Time Vesting Options Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Balance as of June 30, 2024 94 $ 138.78 Granted — $ — Cancelled — $ — Balance as of March 31, 2025 94 $ 138.78 2.71 $ 5,249 Exercisable as of March 31, 2025 94 $ 138.78 2.71 $ 5,249 24 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 15. Stock Repurchase Program Effective as of October 1, 2015, the Company’s board of directors authorized the repurchase of up to $ 525,000 of the Company’s Class A Common Stock, par value $ 0.01 per share (“Class A Common Stock”). Under the authorization, shares of Class A Common Stock may be purchased from time to time in open market or private transactions, block trades or such other manner as the Company may determine, in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. During the nine months ended March 31, 2025 and 2024, the Company did not repurchase any shares under its share repurchase program. As of March 31, 2025, the Company had $ 184,639 of availability remaining under its stock repurchase authorization . Note 16. Related Party Transactions As of March 31, 2025, 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, par value $ 0.01 per share (“Class B Common Stock”) and approximately 2.6 % 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 70.7 % of the aggregate voting power of the Company’s outstanding common stock as of March 31, 2025. 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 March 31, 2025: • 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; • Sponsorship sales and service representation agreements (the “Sponsorship Sales and Service Representation Agreements”) pursuant to which MSG Entertainment has the exclusive right and obligation to sell the Company’s sponsorships for an initial stated term of 10 years for a commission. In addition, under these agreements, the Company is charged by MSG Entertainment for sales and service staff and overhead associated with the sales of sponsorship assets; • Team sponsorship allocation agreement with MSG Entertainment, pursuant to which the sports teams receive an allocation of sponsorship and signage revenues associated with sponsorship agreements that include the assets of both the Company and MSG Entertainment; • Services agreement (the “Services Agreement”) pursuant to which the Company (i) receives certain services from MSG Entertainment, such as information technology, executive support, accounts payable, payroll, human resources, and other corporate functions, and communications, marketing and facilities-related services, in exchange for service fees and (ii) provides certain services to MSG Entertainment, such as certain communications services, in exchange for service fees; • Arrangements pursuant to which the Company provides MSG Entertainment certain services associated with the management of ticketing, premium hospitality sales, sponsorship sales, and other business operations services; • The Sublease Agreement, pursuant to which the Company leases office space from MSG Entertainment; • Group ticket sales representation agreement, pursuant to which MSG Entertainment appointed the Company as its sales and service representative to sell group ticket packages related to MSG Entertainment events in exchange for a commission and reimbursement for sales and service staff and overhead associated with ticket sales on behalf of MSG Entertainment; • Single night rental commission agreement, pursuant to which the Company may, from time to time, sell (or make referrals for sales of) licenses for the use of suites at The Garden for individual MSG Entertainment events in exchange for a commission; and 25 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) • Other agreements with MSG Entertainment entered into in connection with the Sphere Distribution, including a trademark license agreement and certain other arrangements. The Company was also party to the following agreements and/or arrangements with Sphere Entertainment (including through its subsidiary MSG Networks) as of March 31, 2025 : • 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; • Arrangements with MSG Networks pursuant to which the Knicks and the Rangers have allocated revenues with MSG Networks related to virtual advertising inventory; • Arrangements pursuant to which the Company provides Sphere Entertainment with certain business operations services; • Other agreements with Sphere Entertainment in connection with the Sphere Distribution, including a distribution agreement, a tax disaffiliation agreement and an employee matters agreement and certain other arrangements; and • Other agreements with MSG Networks entered into in connection with the MSGS Distribution, including an employee matters agreement, agreements related to audio-only distribution rights for Knicks and Rangers games, and certain other arrangements. On April 24, 2025, Knicks LLC and 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; and ◦ 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; and ◦ 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; and • 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. Prior to April 1, 2024, the Company was also party to arrangements with MSG Entertainment and Sphere Entertainment pursuant to which the Company provided certain sponsorship services to MSG Entertainment and Sphere Entertainment in exchange for services fees. The Company is also party to dry lease arrangements and time-sharing with MSG Entertainment in connection with aircraft leased by the Company and MSG Entertainment, respectively, as well as arrangements with MSG Entertainment and Sphere Entertainment pursuant to which the three companies have agreed to allocate expenses in connection with the use by each company of such aircraft. In addition, the Company shares certain executive support costs, including office space, executive assistants, security and transportation costs for: (i) the Company’s Executive Chairman and Chief Executive Officer with MSG Entertainment and Sphere Entertainment, (ii) the Company’s Vice Chairman with MSG Entertainment, Sphere Entertainment, and AMC Networks, and (iii) the Company’s Executive Vice President with Sphere Entertainment and AMC Networks. Additionally, the 26 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Company, MSG Entertainment, Sphere Entertainment, and AMC Networks allocate the costs of certain personal aircraft and helicopter usage by their shared executives. Revenues and Operating Expenses (Credits) The following table summarizes the composition and amounts of the transactions with the Company’s affiliates. These amounts are reflected in revenues and operating expenses in the accompanying consolidated statements of operations for the three and nine months ended March 31, 2025 and 2024: Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Revenues (a) $ 67,704 $ 86,944 $ 156,825 $ 173,419 Operating expenses: Expense pursuant to the Services Agreement $ 10,383 $ 9,131 $ 26,836 $ 28,557 Rent expense pursuant to Sublease Agreement 1,973 731 7,151 2,233 Costs associated with the Sponsorship Sales and Service Representation Agreements 8,568 7,260 17,209 15,411 Operating lease expense associated with the Arena License Agreements 33,380 35,370 61,472 61,043 Other costs associated with the Arena License Agreements 16,746 16,788 31,565 30,409 Other operating credits, net ( 1,135 ) ( 666 ) ( 1,711 ) ( 1,985 ) ___________________ (a) Primarily consist of local media rights recognized from the licensing of team-related programming under the media rights agreements covering the Knicks and the Rangers. Note 17. Income Taxes In general, the Company is required to use an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in an interim period. The estimated annual effective tax rate exceeds the statutory federal tax rate of 21 % primarily due to state taxes, nondeductible officers’ compensation, and players’ disability insurance premiums expense. The estimated annual effective tax rate is revised on a quarterly basis. Income tax expense for the three and nine months ended March 31, 2025 of $ 36,857 and $ 30,507 , respectively, reflects an effective tax rate of 163 % and 310 %, respectively. Income tax expense for the three and nine months ended March 31, 2024 of $ 34,018 and $ 29,658 , respectively, reflects an effective tax rate of 47 %. During the nine months ended March 31, 2025, the Company made income tax payments, net of refunds, of $ 20,958 . The Company was notified in March of 2025 that the State of New York was commencing an audit of the state income tax returns for the fiscal years ended June 30, 2022 and 2023. The Company does not expect the examinations, when finalized, to result in material changes. The Company had $ 35,963 and $ 15,775 of accrued federal and state income tax, recorded within other accrued liabilities in the accompanying consolidated balance sheets as of March 31, 2025 and June 30, 2024, respectively. 27 Table of Contents