10q10k10q10k.net

What changed in Madison Square Garden Sports Corp.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Madison Square Garden Sports Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+323 added−306 removedSource: 10-K (2024-08-13) vs 10-K (2023-08-17)

Top changes in Madison Square Garden Sports Corp.'s 2024 10-K

323 paragraphs added · 306 removed · 259 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

43 edited+7 added−8 removed58 unchanged
Biggest changeTogether with the PRIDE ERG, marched in the 2022 and 2023 NYC Pride Parades. Hosted a community conversations series focused on “Finding Your Voice as an LGBTQ+ Professional” with a prominent LGBTQ+ elected official and employees of the Company, MSG Entertainment and Sphere Entertainment.
Biggest changeTogether with the PRIDE ERG, we marched in the NYC Pride Parades in 2022, 2023 and 2024. • Expanded our community conversations series with a theme this year of “Finding Your Voice.” Panels were held during Hispanic Heritage Month, Veterans Day, Black History Month, Women’s Empowerment Month, Asian American and Pacific Islander Heritage Month and Pride Month with elected officials and employees across the Company, MSG Entertainment and Sphere Entertainment. 6 Table of Contents Community: Bridging the Divide through Expansion to Diverse Stakeholders • Focused on increasing opportunities to connect with diverse vendors and suppliers by leveraging ERGs and our community.
We believe the unique combination of our live sporting events and MSG Entertainment’s live entertainment offerings, along with the continued importance of corporate hospitality to our guests, 2 Table of Contents positions us well to continue to grow this area of the business. • Continue to invest in the fan experience.
We believe the unique combination of our live sporting events and MSG Entertainment’s live entertainment offerings, along with the continued importance of corporate hospitality to our guests, positions us well to continue to grow this area of the business. 2 Table of Contents • Continue to invest in the fan experience.
Our benefit offerings are designed to meet the range of needs of our diverse workforce and include: domestic partner coverage; medical, dental and vision plan options; life insurance benefits for the employee and their dependents; a 401k plan with 100% employer match; an employee assistance program which also provides assistance with child and elder care resources; legal support; wellness programs and financial planning seminars.
Our benefit offerings are designed to meet the range of needs of our diverse workforce and include: domestic partner coverage; medical, dental and vision plan options; life insurance benefits for the employee and their dependents; a 401k plan with employer match; an employee assistance program which also provides assistance with child and elder care resources; legal support; wellness programs and financial planning seminars.
In October 2015, the Knicks and the Rangers entered into 20-year local media rights agreements with MSG Networks, creating a significant recurring and growing revenue stream for the Company. These agreements provide MSG Networks with exclusive local linear and digital rights to home and away games of the Knicks and the Rangers, as well as other team-related programming.
In October 2015, the Knicks and the Rangers entered into 20-year local media rights agreements with MSG Networks, creating a significant recurring revenue stream for the Company. These agreements provide MSG Networks with exclusive local linear and digital rights to home and away games of the Knicks and the Rangers, as well as other team-related programming.
In particular, when our sports teams have strong on-court and on-ice performance, we benefit from increased demand for tickets and premium hospitality, potentially greater food and merchandise sales from increased attendance and increased sponsorship opportunities. When our sports teams qualify for the playoffs, we also benefit from the attendance and in-game spending at the playoff games.
In particular, when our sports teams have strong on-court and on-ice performance, we benefit from increased demand for tickets and premium hospitality, potentially greater food, beverage and merchandise sales from increased attendance and increased sponsorship opportunities. When our sports teams qualify for the playoffs, we also benefit from the attendance and in-game spending at the playoff games.
All agreements between the Company and MSG Entertainment described herein were between the Company and Sphere Entertainment prior to the MSGE Distribution (except agreements entered into after the MSGE Distribution). Unless the context otherwise requires, all references to MSG Entertainment, Sphere Entertainment and MSG Networks refer to such entity, together with its direct and indirect subsidiaries.
All agreements between the Company and MSG Entertainment described herein were between the Company and Sphere Entertainment prior to the MSGE Distribution (except agreements entered into after the MSGE Distribution Date). Unless the context otherwise requires, all references to MSG Entertainment, Sphere Entertainment and MSG Networks refer to such entity, together with its direct and indirect subsidiaries.
While the precise rights and obligations of member teams vary from league to league, the leagues have varying degrees of control exercisable under certain circumstances over the length and format of the playing season, including, for example, preseason and playoff schedules; the number of games in a playing season; the operating territories of the member teams; local, national and international media and other licensing rights; admission of new members and changes in ownership; franchise relocations; indebtedness affecting the franchises and their affiliates; and labor relations with the players’ associations, including collective bargaining, free agency, and rules applicable to player transactions, luxury taxes and revenue sharing.
While the precise rights and obligations of member teams vary from league to league, the leagues have varying degrees of control exercisable under certain circumstances over the length and format of the playing season, including, for example, 3 Table of Contents preseason and playoff schedules; the number of games in a playing season; the operating territories of the member teams; local, national and international media and other licensing rights; admission of new members and changes in ownership; franchise relocations; indebtedness affecting the franchises and their affiliates; and labor relations with the players’ associations, including collective bargaining, free agency, and rules applicable to player transactions, luxury taxes and revenue sharing.
This integrated approach to marketing partnerships — which delivers unrivaled sports, entertainment and media exposure in the New York market — has already attracted world-class partners such as JPMorgan Chase, Anheuser-Busch, BetMGM, Caesars Sportsbook, Delta Air Lines, HUB International, Infosys, Kia, Benjamin Moore, Lexus, PepsiCo, Spectrum, Ticketmaster, MSC Cruises and Verizon, among others. ◦ Our Arena License Agreements with MSG Entertainment enable MSG Entertainment to offer corporate hospitality solutions that bring together our live sporting events with MSG Entertainment’s live entertainment offerings and provide for the sharing of revenues from such offerings.
This integrated approach to marketing partnerships — which delivers unrivaled sports, entertainment and media exposure in the New York market — has already attracted world-class partners such as JPMorgan Chase, Anheuser-Busch, BetMGM, Caesars Sportsbook, Delta Air Lines, HUB International, Dunkin Donuts, Benjamin Moore, Lexus, PepsiCo, Spectrum, Ticketmaster, MSC Cruises and Verizon, among others. ◦ Our Arena License Agreements with MSG Entertainment enable MSG Entertainment to offer corporate hospitality solutions that bring together our live sporting events with MSG Entertainment’s live entertainment offerings and provide for the sharing of revenues from such offerings.
Media Rights We generally license the local media rights for our sports teams’ home and away games. The Knicks and the Rangers are party to media rights agreements with MSG Networks covering the local telecast and radio rights for the Knicks and the Rangers. Each agreement has a remaining term of approximately 12 years.
Media Rights We generally license the local media rights for our sports teams’ home and away games. The Knicks and the Rangers are party to media rights agreements with MSG Networks covering the local telecast and radio rights for the Knicks and the Rangers. Each agreement has a remaining term of approximately 11 years.
In addition, under the respective league constitutions of our sports teams, the commissioner of each league, either acting alone or with the consent of a majority (or, in some cases, a 3 Table of Contents supermajority) of the other sports teams in the league, may be empowered in certain circumstances to take certain actions believed to be in the best interests of the league, whether or not such actions would benefit our sports teams and whether or not we consent or object to those actions.
In addition, under the respective league constitutions of our sports teams, the commissioner of each league, either acting alone or with the consent of a majority (or, in some cases, a supermajority) of the other sports teams in the league, may be empowered in certain circumstances to take certain actions believed to be in the best interests of the league, whether or not such actions would benefit our sports teams and whether or not we consent or object to those actions.
Together with MSG Entertainment and Sphere Entertainment, we have furthered these objectives under our expanded Talent Management, Diversity and Inclusion function, including: Workforce: Embedding Diversity and Inclusion through Talent Actions • Created a common definition of “potential” and an objective potential assessment to de-bias talent review conversations so employees have an opportunity to learn, grow, and thrive.
Together with MSG Entertainment and Sphere Entertainment, we have furthered these objectives under our expanded People Development, Diversity and Inclusion function, including: Workforce: Embedding Diversity and Inclusion through Talent Actions • Created a common definition of “potential” and an objective potential assessment to de-bias talent review conversations so employees have an opportunity to learn, grow and thrive.
The ownership and operation of NBA and NHL development teams — the Westchester Knicks and the Hartford Wolf Pack — as well as the operation of our state-of-the-art professional sports teams performance center, are part of our strategy to develop championship-caliber teams. • Employ a ticketing policy that gives the Company a direct relationship with our fanbases .
The ownership and operation of NBA and NHL development teams — the Westchester Knicks and the Hartford Wolf Pack — as well as the operation of our state-of-the-art professional sports teams performance center, are part of our strategy to develop championship-caliber teams. • Employ a ticketing policy that gives the Company a direct relationship with our fan bases .
There are no union employees subject to CBAs that expired as of June 30, 2023 and no union employees subject to CBAs that will expire by June 30, 2024. Labor relations in general and in the sports industry in particular can be volatile, though our current relationships with our unions taken as a whole are positive.
There are no union employees subject to CBAs that expired as of June 30, 2024 and 37 union employees subject to CBAs that will expire by June 30, 2025. Labor relations in general and in the sports industry in particular can be volatile, though our current relationships with our unions taken as a whole are positive.
Knicks and Jr. Rangers — focused on eliminating barriers and creating more inclusive opportunities for all kids to enjoy basketball and hockey. Over 428,000 tri-state area youth participated in these programs in fiscal year 2023. The Company is also dedicated to affecting positive change through other social impact and cause-related initiatives including philanthropic food and other in-kind donations.
Knicks and Jr. Rangers — focused on eliminating barriers and creating more inclusive opportunities for all kids to enjoy basketball and hockey. Over 480,000 tri-state area youth participated in these programs in fiscal year 2024. The Company is also dedicated to affecting positive change through other social impact and cause-related initiatives including philanthropic food and other in-kind donations.
New York Rangers The Rangers hockey club is one of the NHL’s “Original Six” franchises. Heading into its 97th season, the Rangers are a storied franchise and one of the league’s marquee teams, with four Stanley Cup Championships and one of the most passionate, loyal and enthusiastic fan bases.
New York Rangers The Rangers hockey club is one of the NHL’s “Original Six” franchises. Heading into its 98 th season, the Rangers are a storied franchise and one of the league’s marquee teams, with four Stanley Cup Championships and one of the most passionate, loyal and enthusiastic fan bases.
As the Knicks head into the 2023-24 season, the team is coming off of a first round playoff series win and trip to the Eastern Conference Semifinals and has a number of draft picks over the next several years, which may be used to add new players or as trade assets.
As the Knicks head into the 2024-25 season, the team is coming off of a first round playoff series win and trip to the Eastern Conference Semifinals and has a number of draft picks over the next several years, which may be used to add new players or as trade assets.
Garden of Dreams Foundation The centerpiece of the Company’s philanthropy is the Garden of Dreams Foundation (“GDF”), a non-profit organization that assists young people in need. Since it was established in 2006, the Garden of Dreams Foundation has donated nearly $75 million in grants and other donations, impacting more than 425,000 young people and their families.
Garden of Dreams Foundation The centerpiece of the Company’s philanthropy is the Garden of Dreams Foundation (“GDF”), a non-profit organization that assists young people in need. Since it was established in 2006, the Garden of Dreams Foundation has donated nearly $81 million in grants and other donations, impacting more than 440,000 young people and their families.
See “Human Capital Resources — Diversity and Inclusion.” 4 Table of Contents Regulation Our sports and entertainment businesses are subject to legislation governing the sale and resale of tickets and consumer protection statutes generally. In addition, The Garden, like all public spaces, is subject to building and health codes and fire regulations imposed by the state and local governments.
See “Human Capital Resources — Diversity and Inclusion.” 4 Table of Contents Regulation Our business is subject to legislation governing the sale and resale of tickets and consumer protection statutes generally. In addition, The Garden, like all public spaces, is subject to building and health codes and fire regulations imposed by the state and local governments.
On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment distributed approximately 67% of the issued and outstanding shares of common stock of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc. and referred to herein as “MSG Entertainment”) to its stockholders (the “MSGE Distribution”).
On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment distributed approximately 67% of the issued and outstanding shares of common stock of Madison Square Garden Entertainment Corp. (referred to herein as “MSG Entertainment”) to its stockholders (the “MSGE Distribution”).
The Company reports on a fiscal year basis ending on June 30th. In this Annual Report on Form 10-K, the years ended on June 30, 2023 and 2022 are referred to as “fiscal year 2023” and “fiscal year 2022,” respectively.
The Company reports on a fiscal year basis ending on June 30th. In this Annual Report on Form 10-K, the years ended on June 30, 2024 and 2023 are referred to as “fiscal year 2024” and “fiscal year 2023,” respectively.
These resources are intended to support the physical, emotional and financial well-being of our employees. In addition, approximately 11.3% of our employees were represented by unions as of June 30, 2023, most of whom are our players.
These resources are intended to support the physical, emotional and financial well-being of our employees. In addition, approximately 11.2% of our employees were represented by unions as of June 30, 2024, most of whom are our players.
In addition to the NBA, NHL, AHL and NBAGL teams that we own and operate, the New York City metropolitan area is home to two Major League Baseball teams (the New York Yankees (the “Yankees”) and the New York Mets (the “Mets”)), two National Football League teams (the New York Giants (the “Giants”) and the New York Jets (the “Jets”)), two additional NHL teams (the New York Islanders (the “Islanders”) and the New Jersey Devils (the “Devils”)), a second NBA team (the Brooklyn Nets (the “Nets”)) and two Major League Soccer franchises (the New York Red Bulls and the New York City Football Club).
In addition to the NBA, NHL, AHL and NBAGL teams that we own and operate, the New York City metropolitan area is home to two Major League Baseball teams (the New York Yankees (the “Yankees”) and the New York Mets (the “Mets”)), two National Football League teams (the New York Giants (the “Giants”) and the New York Jets (the “Jets”)), two additional NHL teams (the New York Islanders (the “Islanders”) and the New Jersey Devils (the “Devils”)), a second NBA team (the Brooklyn Nets (the “Nets”)), two Major League Soccer franchises (the New York Red Bulls and the New York City Football Club), a Women’s National Basketball Association team (the New York Liberty), and a National Women’s Soccer League team (the NJ/NY Gotham FC).
Our Strengths • Iconic sports franchises with renowned brands; • Enduring and meaningful presence in the New York metropolitan area, the nation’s largest media market; • Deep connections with large and passionate fan bases that span a wide demographic mix; • Multi-year sponsorship and suite agreements through a strategic partnership with MSG Entertainment; • Long-term local media rights agreements with MSG Networks; • National media rights agreements through the NBA and NHL; • Long-term arena license agreements with MSG Entertainment under which the Knicks and the Rangers play their home games at The Garden; 1 Table of Contents • World-class organization with expertise in team operations, event presentation and ticketing; and • Seasoned management team and committed ownership.
Our Strengths • Iconic sports franchises with renowned brands; • Enduring and meaningful presence in the New York metropolitan area, the nation’s largest media market; • Deep connections with large and passionate fan bases that span a wide demographic mix; • Multi-year sponsorship and suite agreements through a strategic partnership with MSG Entertainment; • Long-term local media rights agreements with MSG Networks; • National media rights agreements through the NBA and NHL; • Long-term arena license agreements with MSG Entertainment under which the Knicks and the Rangers play their home games at The Garden; • World-class organization with expertise in team operations, event presentation, ticketing, and premium hospitality; and • Seasoned management team and committed ownership. 1 Table of Contents Our Strategy Our strategy is to leverage the strength and popularity of our professional sports franchises and our unique position in the nation’s largest media market to grow our business and increase the long-term value of our sports assets.
Workplace: Building an Inclusive and Accessible Community • Redoubled our efforts with the MSG Diversity & Inclusion Heritage Month enterprise calendar to acknowledge and celebrate culturally relevant days and months of recognition, anchored by our six employee resource groups (“ERGs”): Asian Americans and Pacific Islanders (AAPI), Black, LatinX, PRIDE, Veterans, and Women.
Workplace: Building an Inclusive and Accessible Community • Expanded our efforts with the MSG D&I enterprise calendar to acknowledge and celebrate culturally relevant days and months of recognition, anchored by our six employee resource groups (“ERGs”): Asian Americans and Pacific Islanders (AAPI), Black, LatinX, PRIDE, Veterans, and Women.
Our core goal is to develop and maintain teams that consistently compete for championships. Competitive teams help support and drive revenue streams across the Company during the regular season and, when our teams qualify for the postseason, the Company benefits from incremental home playoff games.
Key components of our strategy include: • Developing championship-caliber teams. Our core goal is to develop and maintain teams that consistently compete for championships. Competitive teams help support and drive revenue streams across the Company during the regular season and, when our teams qualify for the postseason, the Company benefits from incremental home playoff games.
Risk Factors “— Operational Risks — We Are Subject to Governmental Regulation, Which Can Change, and Any Failure to Comply With These Regulations May Have a Material Negative Effect on Our Business and Results of Operations .” Competition Our business operates in a market in which numerous sports and entertainment opportunities are available.
Risk Factors — Operational Risks — We Are Subject to Data Privacy, Data Protection and Data Security Regulations and Laws and Could Face Substantial Penalties if We Fail to Comply With Such Regulations and Laws” and “— We Are Subject to Governmental Regulation, Which Can Change, and Any Failure to Comply With These Regulations May Have a Material Negative Effect on Our Business and Results of Operations .” Competition Our business operates in a market in which numerous sports and entertainment opportunities are available.
Hartford Wolf Pack The Hartford Wolf Pack, a minor-league hockey team in the AHL, is the top affiliate team for the Rangers. The Rangers send draft picks, prospects and other players to the Hartford Wolf Pack to compete, gain valuable ice time and develop.
The Westchester Knicks support the development and injury rehabilitation of Knicks players through varied assignments. Hartford Wolf Pack The Hartford Wolf Pack, a minor-league hockey team in the AHL, is the top affiliate team for the Rangers. The Rangers send draft picks, prospects and other players to the Hartford Wolf Pack to compete, gain valuable ice time and develop.
The year-to-year impact of team performance is somewhat moderated by the fact that a significant portion of our revenue derives from media rights fees, suite rental fees and sponsorship and signage revenue, all of which are generally contracted on a multi-year basis. Nevertheless, the long-term performance of our business is tied to the success and popularity of our sports teams.
The year-to-year impact of team performance is somewhat moderated by the fact that a significant portion of our revenue derives from media 5 Table of Contents rights fees, suite rental fees and sponsorship and signage revenue, all of which are generally contracted on a multi-year basis.
Implemented quarterly performance and career conversations to facilitate regular conversations between managers and employees about goals, career growth and productivity. • Integrated D&I best practices into our performance management and learning and development strategies with the goal of driving more equitable outcomes. • Developed an Emerging Talent List to expand our talent pool to better identify and develop high performing diverse talent for expanded roles and promotion opportunities.
Through our performance management process, we encourage regular conversations between managers and employees regarding goals, career growth and productivity. • Integrated D&I best practices into our performance management and learning and development strategies with the goal of driving more equitable outcomes. • Developed an emerging talent list to expand our talent pool to better identify and provide specific development opportunities for high performing employees, including diverse talent.
In addition, there are a number of other amateur and professional teams that compete in other sports, including at the collegiate and minor league levels. New York is also home to many other non-sports related entertainment options. As a result of the large number of options available, we face strong competition for the New York area sports fan base.
In addition, there are a number of other men’s and women’s amateur and professional teams that compete in other sports, including at the collegiate and minor league levels. New York is also home to many other non-sports related entertainment options.
In addition, due to the NBA and NHL playing seasons, revenues from our business are typically concentrated in the second and third quarters of each fiscal year. 5 Table of Contents See “Item 1A.
Nevertheless, the long-term performance of our business is tied to the success and popularity of our sports teams. In addition, due to the NBA and NHL playing seasons, revenues from our business are typically concentrated in the second and third quarters of each fiscal year. See “Item 1A.
In partnership with the Knicks and our social impact team, we hosted the 2nd Annual Historically Black Colleges and Universities (“HBCU”) Night highlighting the important contributions of these institutions and awarded a $60,000 scholarship to a New York City high school student.
In partnership with the Knicks and our social impact team, we hosted the 3rd Annual Historically Black Colleges and Universities Night highlighting the important contributions of these institutions and awarded a $60,000 scholarship to a New York City high school student. • Partnered with MSG Entertainment to host various theme nights during Knicks and Rangers games throughout the season and invited our ERGs to participate.
For example, The Garden offers a variety of suite and club products, including 21 Event Level suites, 58 Lexus Level suites, 18 Infosys Level suites, the Caesars Sportsbook Lounge, Suite Sixteen and the Loft Club.
For example, The Garden offers a variety of suite and club products, including 23 Event Level spaces consisting of 22 suites and a new event level club, 58 Lexus Level suites, 18 Infosys Level suites, the Madison Club and the HUB Loft.
All of the outstanding common stock of the Company was distributed to MSG Networks shareholders (the “MSGS Distribution”) on September 30, 2015. On April 17, 2020 (the “Sphere Distribution Date”), the Company distributed all of the outstanding common stock of Sphere Entertainment Co.
All of 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. (formerly Madison Square Garden Entertainment Corp. and referred to herein as “Sphere Entertainment”) to its stockholders (the “Sphere Distribution”).
The NHL’s U.S. national media rights agreements with The Walt Disney Company and WarnerMedia, LLC will expire following the 2027-28 season. The NHL’s agreement with Rogers Communications (Canada) expires following the 2025-26 season.
The NHL’s agreement with Rogers Communications (Canada) expires following the 2025-26 season. The NBA’s current agreements with The Walt Disney Company and WarnerMedia, LLC expire after the 2024-25 regular season.
In fiscal year 2023, the Company and Sphere Entertainment hosted a multi-city holiday market event featuring twenty underrepresented businesses in New York City and Burbank. • Invested in an external facing supplier diversity portal on our website, which launched in fiscal year 2023.
This effort creates revenue generating opportunities for diverse suppliers to promote their businesses and products. In fiscal year 2024, we, MSG Entertainment and Sphere Entertainment expanded our multi-city holiday market event featuring thirty underrepresented businesses in New York City and Burbank. • Invested in an external facing supplier diversity portal on our website, which launched in fiscal year 2023.
On April 26, 2023, the NBA and the NBPA announced that a new seven-year CBA had been ratified by the NBA Board of Governors and the NBA players. This current NBA CBA expires after the 2029-30 season, but each of the NBA and the NBPA has the right to terminate the CBA effective following the 2028-29 season.
The current NBA CBA expires after the 2029-30 season, but each of the NBA and the NBPA has the right to terminate the CBA effective following the 2028-29 season.
MSG Networks makes this content available to our fans on its regional sports networks, MSG Network and MSG Sportsnet, and through its direct to consumer and authenticated streaming product, MSG+. In addition, the Company also receives a pro-rata share of fees related to the NBA’s and NHL’s national media rights agreements.
MSG Networks makes this content available to our fans on its regional sports networks, MSG Network and MSG Sportsnet, and through its direct to consumer and authenticated streaming product, MSG+.
Our performance management practice includes ongoing feedback and conversations between managers and team members, and talent reviews designed to identify potential future leaders and inform succession plans. We value continuous learning and development opportunities for our employees, which include: a career development tool; leadership development programs; a learning platform; and tuition assistance.
We aim to retain our talent by emphasizing our competitive rewards; offering opportunities that support employees both personally and professionally; and our commitment to fostering career development in a positive corporate culture. Our performance management practice includes ongoing feedback and conversations between managers and team members, and talent reviews designed to identify potential future leaders and inform succession plans.
The NBA’s agreements with The Walt Disney Company and WarnerMedia, LLC expire after the 2024-25 regular season. • Utilize our unique assets and an integrated approach to drive sponsorship and suite sales.
In July 2024, the NBA entered into new 11-year media rights agreements with The Walt Disney Company, NBCUniversal and Amazon, which will take effect starting with 2025-26 season and will expire following the 2035-36 season. • Utilize our unique assets and an integrated approach to drive sponsorship and suite sales.
Increased combined ERG involvement from 622 members in fiscal year 2022 to 1120 members in fiscal year 2023 (an increase of 80.1%), which includes employees from the Company, MSG Entertainment and Sphere Entertainment. • Revamped our Conscious Inclusion Awareness Experience, a training program, and created two required educational modules focused on unconscious bias and conscious inclusion within our learning management system.
Membership in our ERGs is open to all employees, and we increased combined ERG involvement from approximately 1,100 members in fiscal year 2023 to approximately 1,700 members in fiscal year 2024 (an increase of 54.8%), which includes employees from the Company, MSG Entertainment and Sphere Entertainment. • Continued to embed our “Conscious Inclusion Awareness Experience” into an on-boarding experience.
As of June 30, 2023, over 90% of employees across the Company, MSG Entertainment and Sphere Entertainment have completed both required trainings either through the e-modules or through live training sessions. • Broadened our LGBTQ+ inclusivity strategy by launching new gender pronoun feature within the employee intranet platform, hosted live allyship and inclusivity trainings, and launched toolkit resources for employees to learn and develop.
Trainings were completed by approximately 500 employees across the Company, MSG Entertainment and Sphere Entertainment from January 2024 to June 2024. • Continued our LGBTQ+ inclusivity strategy by hosting live allyship and inclusivity trainings and launching toolkit resources for employees to learn and develop.
In August 2018, Knicks Gaming won the first-ever NBA 2K League Championship title after securing a playoff bid through its Ticket Tournament Championship victory. Arena License Agreements Madison Square Garden, the World’s Most Famous Arena, is the home for the Knicks and the Rangers pursuant to Arena License Agreements with MSG Entertainment.
The Rangers can call up players from Hartford to their own roster during the regular season when needed. Arena License Agreements Madison Square Garden, the World’s Most Famous Arena, is the home for the Knicks and the Rangers pursuant to Arena License Agreements with MSG Entertainment.
Removed
(formerly Madison Square Garden Entertainment Corp. and referred to herein as “Sphere Entertainment”) to its stockholders (the “Sphere Distribution”).
Added
In addition, the Company also receives a pro-rata share of fees related to the NBA’s and NHL’s national and international media rights agreements, which provides a significant recurring revenue stream for the Company. The NHL’s U.S. national media rights agreements with The Walt Disney Company and WarnerMedia, LLC will expire following the 2027-28 season.
Removed
Prior to the MSGE Distribution (as defined below), Sphere Entertainment owned, directly or indirectly, the entertainment business previously owned and operated by the Company through its MSG Entertainment business segment and the sports booking business previously owned and operated by the Company through its MSG Sports business segment.
Added
For the 2023-24 season, the Rangers captured the Presidents’ Trophy for the league’s best regular season record, while winning a franchise record 55 games in the regular season, and earned a trip to the Eastern Conference Finals. Westchester Knicks The Westchester Knicks serve as the exclusive NBA G League affiliate of the Knicks.
Removed
Our Strategy Our strategy is to leverage the strength and popularity of our professional sports franchises and our unique position in the nation’s largest media market to grow our business and increase the long-term value of our sports assets. Key components of our strategy include: • Developing championship-caliber teams.
Added
As a result of the large number of options available, we face strong competition for the New York area sports fan base.
Removed
The Rangers qualified for the Stanley Cup Playoffs for the second consecutive season in 2022-23 after winning 47 games in the regular season. Westchester Knicks The Westchester Knicks serve as the exclusive NBA G League affiliate of the Knicks. The Westchester Knicks support the development and injury rehabilitation of Knicks players through varied assignments.
Added
This is a required educational module, delivered in two parts, focused on unconscious bias and conscious inclusion within our learning management system. • Broadened our D&I educational strategy by launching “D&I Learning Moments” to highlight e-learning courses in our learning management system connected to D&I themes, including microaggressions and stereotypes.
Removed
The Rangers can call up players from Hartford to their own roster during the regular season when needed. Knicks Gaming Knicks Gaming, our esports franchise that competes in the NBA 2K League, was one of the inaugural teams when the league debuted in 2018.
Added
Additionally, our D&I team offers live trainings that are open to the entire company on topics such as Inclusive Leadership, LGBTQ+ Allyship and Generational Differences.
Removed
Community: Bridging the Divide through Expansion to Diverse Stakeholders • Focused on connecting with minority-owned businesses to increase the diversity of our vendors and suppliers by leveraging ERGs and our community, which creates revenue generating opportunities for diverse suppliers to promote their businesses and products.
Added
Talent As of June 30, 2024, we had approximately 533 full-time union and non-union employees and 450 part-time union and non-union employees. We aim to attract top talent through our brands, as well as through the many benefits we offer.
Removed
Additionally, we welcomed two NBA HBCU Fellows in the Company’s Business 6 Table of Contents Operations Department covering marketing strategy, ticketing revenue strategy, and basketball operations through the NBA’s HBCU Fellows Program. Talent As of June 30, 2023, we had approximately 558 full-time union and non-union employees and 404 part-time union and non-union employees.
Added
We value continuous learning and development opportunities for our employees, which include: a career development tool; leadership development programs; a learning platform; and tuition assistance.
Removed
We aim to attract top talent through our brands, as well as through the many benefits we offer. We aim to retain our talent by emphasizing our competitive rewards; offering opportunities that support employees both personally and professionally; and our commitment to fostering career development in a positive corporate culture.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

104 edited+38 added−16 removed123 unchanged
Biggest changeSee “Certain Relationships and Potential Conflicts of Interest” in our Current Report on Form 8-K filed with the SEC on April 15, 2023 for a discussion of certain procedures we instituted to help ameliorate such potential conflicts with MSG Entertainment, Sphere Entertainment and/or AMC Networks that may arise.
Biggest changeSee “Certain Relationships and Potential Conflicts of Interest” in our Current Report on Form 8-K filed with the SEC on April 25, 2023 for a discussion of certain procedures we instituted to help ameliorate such potential conflicts with MSG Entertainment, Sphere Entertainment and/or AMC Networks that may arise. 22 Table of Contents Our Overlapping Directors and Executive Officers with MSG Entertainment, Sphere Entertainment and/or AMC Networks May Result in the Diversion of Corporate Opportunities to MSG Entertainment, Sphere Entertainment and/or AMC Networks and Other Conflicts, and Provisions in Our Amended and Restated Certificate of Incorporation May Provide Us No Remedy in That Circumstance.
These expenses add to the volatility of our results. The Actions of the NBA and NHL May Have a Material Negative Effect on Our Business and Results of Operations.
These expenses add to the volatility of our results of operations. The Actions of the NBA and NHL May Have a Material Negative Effect on Our Business and Results of Operations.
The current NHL CBA expires on September 15, 2026 (with the possibility of a one-year extension in certain circumstances). The NBA has also experienced lockouts in the past that resulted in regular seasons being shortened, with a most recent lockout during the 2011-12 season, which resulted in a regular season that was shortened from 82 games to 66 games.
The current NHL CBA expires on September 15, 2026 (with the possibility of a one-year extension in certain circumstances). The NBA has also experienced lockouts in the past that resulted in regular seasons being shortened, with the most recent lockout during the 2011-12 season, which resulted in a regular season that was shortened from 82 games to 66 games.
These agreements provide for a number of ongoing commercial relationships, including our use of The Garden and the allocation of certain revenues and expenses from games played by our sports teams at The Garden. In addition, we also have a services agreement and sublease agreement.
These agreements provide for a number of ongoing commercial relationships, including our use of The Garden and the allocation of certain revenues and expenses from games played by our sports teams at The Garden. In addition, we also have a services agreement and a sublease agreement.
If, due to a resurgence in COVID-19 or another pandemic or public health emergency, the NBA and the NHL do not play a minimum number of games required under the league-wide media rights agreements or the Knicks or the Rangers do not make available to MSG Networks the number of games during the season required under the local media rights agreements, the amounts of revenues we earn could be substantially reduced depending upon the number of games not played or not made available to MSG Networks and an event of default may occur under the Knicks and the Rangers credit agreements.
If, due to a resurgence of COVID-19 or another pandemic or public health emergency, the NBA and the NHL do not play a minimum number of games required under the league-wide media rights agreements or the Knicks or the Rangers do not make available to MSG Networks the number of games during the season required under the local media rights agreements, the amounts of revenues we earn could be substantially reduced depending upon the number of games not played or not made available to MSG Networks and an event of default may occur under the Knicks and the Rangers credit agreements.
Our financial results have historically been dependent on, and are expected to continue to depend in large part on, the Knicks and the Rangers remaining popular with our fan bases and, in varying degrees, on the teams achieving on-court and on-ice success, which can generate fan enthusiasm, resulting in sustained ticket, premium seating, suite, sponsorship, food and beverage and merchandise sales during the season.
Our financial results have historically been substantially dependent on, and are expected to continue to substantially depend in large part on, the Knicks and the Rangers remaining popular with our fan bases and, in varying degrees, on the teams achieving on-court and on-ice success, which can generate fan enthusiasm, resulting in sustained ticket, premium seating, suite, sponsorship, food and beverage and merchandise sales during the season.
Any labor disputes, such as players’ strikes, protests or lockouts, with the unions with which we have CBAs have in the past had and could in the future have a material negative effect on our business and results of operations. MSG Entertainment provides certain services to us through various commercial agreements, including day-of-game services.
Labor disputes, such as players’ strikes, protests or lockouts, with the unions with which we have CBAs have in the past had and could in the future have a material negative effect on our business and results of operations. MSG Entertainment provides certain services to us through various commercial agreements, including day-of-game services.
Our business is, and may in the future be, subject to a variety of other laws and regulations, including working conditions, labor, immigration and employment laws; and health, safety and sanitation requirements. We are unable to predict the outcome or effects of any potential legislative or regulatory proposals on our businesses.
Our business is, and may in the future be, subject to a variety of laws and regulations, including working conditions, labor, immigration and employment laws and health, safety and sanitation requirements. We are unable to predict the outcome or effects of any potential legislative or regulatory proposals on our businesses.
Decisions by the NBA or the NHL could have a material negative effect on our business and results of operations. For example, failure to follow rules and regulations of the NBA or NHL has in the past and may in the future result in loss of draft picks, fines or other actions by the leagues.
Decisions by the NBA or the NHL could have a material negative effect on our business and results of operations. For example, failure to follow rules and regulations of the NBA or NHL has in the past resulted and may in the future result in loss of draft picks, fines and other actions by the leagues.
To the degree that our financial results are dependent on our sports teams’ popularity and/or on-court and on-ice success, the likelihood of achieving such popularity or competitive success may be substantially impacted by serious and/or untimely injuries to or illness of key players.
To the degree that our financial results are dependent on our sports teams’ popularity and/or on-court and on-ice success, the likelihood of achieving such popularity or competitive success may be substantially impacted by serious and/or untimely injuries to, or illness of, our players.
For example, the NHL has experienced lockouts in the past that resulted in a regular season being shortened and the cancellation of the entire season, with a more recent lockout during the 2012-13 NHL season, which resulted in a regular season that was shortened from 82 to 48 games.
For example, the NHL has experienced lockouts in the past that resulted in a regular season being shortened and the cancellation of the entire season, with a recent lockout during the 2012-13 NHL season, which resulted in a regular season that was shortened from 82 to 48 games.
From time to time, the Company, its subsidiaries and/or our affiliates are involved in various legal proceedings, including proceedings or lawsuits brought by governmental agencies, stockholders, customers, employees, other private parties and other stakeholders.
From time to time, the Company, its subsidiaries and/or its affiliates are involved in various legal proceedings, including proceedings or lawsuits brought by governmental agencies, stockholders, customers, employees, other private parties and other stakeholders.
The Company’s Board of Directors has adopted resolutions putting in place policies and arrangements whereby the Company has renounced its rights to certain business opportunities and no director or officer of the Company who is also serving as a director, officer, employee, consultant or agent of MSG Entertainment, Sphere Entertainment and/or AMC Networks and their subsidiaries will be liable to the 21 Table of Contents Company or its stockholders for breach of any fiduciary duty that would otherwise occur by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of opportunities set forth in such policies) to MSG Entertainment, Sphere Entertainment and/or AMC Networks or any of their subsidiaries instead of the Company, or does not refer or communicate information regarding such corporate opportunities to the Company.
The Company’s Board of Directors has adopted resolutions putting in place policies and arrangements whereby the Company has renounced its rights to certain business opportunities and no director or officer of the Company who is also serving as a director, officer, employee, consultant or agent of MSG Entertainment, Sphere Entertainment and/or AMC Networks and their subsidiaries will be liable to the Company or its stockholders for breach of any fiduciary duty that would otherwise occur by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of opportunities set forth in such policies) to MSG Entertainment, Sphere Entertainment and/or AMC Networks or any of their subsidiaries instead of the Company, or does not refer or communicate information regarding such corporate opportunities to the Company.
A pandemic such as COVID-19, or the fear of a new pandemic or public health emergency, has in the past and could in the future impede economic activity in impacted regions or globally over the long-term, leading to a decline in discretionary spending on sporting events and other leisure activities, including declines in domestic and international tourism, which could result in long-term effects on our business.
A pandemic such as COVID-19, or the fear of a new pandemic or public health emergency, has in the past impeded and could in the future impede economic activity in impacted regions or globally over the long term, leading to a decline in discretionary spending on sporting events and other leisure activities, including declines in domestic and international tourism, which has in the past resulted and could in the future result in long-term effects on our business.
Any transactions that we are able to identify and complete may involve risks, including the commitment of significant capital, the incurrence of indebtedness, the payment of advances, the diversion of management’s attention and resources, litigation or other claims in connection with acquisitions or against companies we invest in or acquire, our lack of control over certain joint venture companies and other minority investments, the inability to successfully integrate such business into our operations or even if successfully integrated, the risk of not achieving the intended results and the exposure to losses if the underlying transactions or ventures are not successful.
Any transactions that we are able to identify and complete may involve risks, including the commitment of significant capital, the incurrence of indebtedness, the 16 Table of Contents payment of advances, the diversion of management’s attention and resources, litigation or other claims in connection with acquisitions or against companies we invest in or acquire, our lack of control over certain joint venture companies and other minority investments, the inability to successfully integrate such business into our operations or even if successfully integrated, the risk of not achieving the intended results and the exposure to losses if the underlying transactions or ventures are not successful.
We take these matters seriously and take significant steps to protect our stored information, including the implementation of systems and processes to thwart malicious activity. These protections are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated.
We take significant steps to protect our stored information, including the implementation of systems and processes to thwart malicious activity. These protections are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated.
We Share Certain Directors, Officers and Employees with MSG Entertainment, Sphere Entertainment and/or AMC Networks, Which Means Those Officers and Directors Do Not Devote Their Full Time and Attention to Our Affairs and the Overlap May Give Rise to Conflicts. Our Executive Chairman, James L.
We Share Certain Directors, Officers and Employees with MSG Entertainment, Sphere Entertainment and/or AMC Networks, Which Means Those Officers and Directors Do Not Devote Their Full Time and Attention to Our Affairs and the Overlap May Give Rise to Conflicts. Our Executive Chairman and Chief Executive Officer, James L.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Expenses — Player Salaries, Escrow System/Revenue Sharing and NBA Luxury Tax.” We have incurred, and may incur in the future, significant charges for costs associated with transactions relating to players on our sports teams for season-ending and career-ending injuries and for trades, waivers and contract terminations of players and other team personnel, including team executives.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Overview — Expenses — Player Salaries, Escrow System/Revenue Sharing and NBA Luxury Tax.” We have incurred, and may incur in the future, significant charges for costs associated with transactions relating to players on our sports teams for season-ending and career-ending injuries and for trades, waivers and contract terminations of players and other team personnel, including coaches and team executives.
We have various agreements with Sphere Entertainment, which include local media rights agreements with MSG Networks (a wholly owned subsidiary of Sphere Entertainment) which provide MSG Networks with exclusive local linear and digital rights to home and away games of the Knicks and the Rangers, as well as other team-related programming.
We have various agreements with Sphere Entertainment, including local media rights agreements with MSG Networks (a wholly-owned subsidiary of Sphere Entertainment) which provide MSG Networks with exclusive local linear and digital rights to home and away games of the Knicks and the Rangers, as well as other team-related programming.
Any such claims, regardless of their merit, could cause us to incur significant costs that could harm our results of operations. These claims may not be covered by insurance or could involve exposures that exceed the limits of any 18 Table of Contents applicable insurance policy.
Any such claims, regardless of their merit, could cause us to incur significant costs that could harm our results 19 Table of Contents of operations. These claims may not be covered by insurance or could involve exposures that exceed the limits of any applicable insurance policy.
For example, California has passed a comprehensive data privacy law, the CCPA, and a number of other states including Virginia, Colorado, Utah and Connecticut have also passed similar laws, and various additional states may do so in the near future.
For example, California has passed a comprehensive data privacy law, the CCPA, and a number of other states including New Jersey, Virginia, Colorado, Utah and Connecticut have also passed similar laws, and various additional states may do so in the near future.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors Affecting Operating Results.” 13 Table of Contents We Do Not Own The Garden and Our Failure to Renew the Arena License Agreements or MSG Entertainment’s Failure to Operate The Garden in Compliance with the Arena License Agreements or Extensive Governmental Regulations May Have a Material Negative Effect on Our Business and Results of Operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors Affecting Operating Results.” We Do Not Own The Garden and Our Failure to Renew the Arena License Agreements or MSG Entertainment’s Failure to Operate The Garden in Compliance with the Arena License Agreements or Extensive Governmental Regulations May Have a Material Negative Effect on Our Business and Results of Operations.
The sports leagues have also asserted control 10 Table of Contents over other important decisions, such as the length and format of, and the number of games in, the playing season, preseason and playoff schedules, admission of new members, franchise relocations, labor relations with the players associations, collective bargaining, free agency, luxury taxes and revenue sharing.
The sports leagues have also asserted control over other important decisions, such as the length and format of, and the number of games in, the playing season, preseason and playoff schedules, admission of new members, franchise relocations, labor relations with the players associations, collective bargaining, free agency, luxury taxes and revenue sharing.
We must compete with these other sports teams and sporting events, in varying respects and degrees, including on the basis of the quality of the teams we field, their success in the leagues in which they compete, our ability to provide an entertaining environment at our games, prices we charge for tickets and the viewing availability of our teams on multiple media alternatives.
We must compete with these other sports teams and sporting events including on the basis of the quality of the teams we field, their success in the leagues in which they compete, our ability to provide an entertaining environment at our games, prices we charge for tickets and the viewing availability of our teams on multiple media alternatives.
In the event of injuries sustained resulting in lost services (as defined in the applicable insurance policies), generally the insurance policies provide for payment to us of a portion of the player’s salary for the remaining term of the contract or until the player can resume play, in each case following a deductible number of missed games.
In the event of injuries sustained resulting in lost 11 Table of Contents services (as defined in the applicable insurance policies), generally the insurance policies provide for payment to us of a portion of the player’s salary for the remaining term of the contract or until the player can resume play, in each case following a deductible number of missed games.
Our Business is Subject to Seasonal Fluctuations and our Operating Results and Cash Flow Can Vary Substantially from Period to Period. Our revenues and expenses have been seasonal and we expect they will continue to be seasonal.
Our Business is Subject to Seasonal Fluctuations and our Operating Results and Cash Flows Can Vary Substantially from Period to Period. Our revenues and expenses have been seasonal and we expect they will continue to be seasonal.
Such compromise could affect the security of information on our network, or that of a third-party service provider, including MSG Entertainment to which we outsource information technology services, including technology relating to season ticket holders and purchases of individual game tickets, and certain payment processing.
A compromise could affect the security of information on our network, or that of a third-party service provider, including MSG Entertainment or our vendors’ systems to which we outsource information technology services, including technology relating to season ticket holders and purchases of individual game tickets, and certain payment processing.
We have two classes of common stock: • Class A Common Stock, par value $0.01 per share (“Class A Common Stock”), which is entitled to one vote per share and is entitled collectively to elect 25% of our Board of Directors; and 19 Table of Contents • Class B Common Stock, par value $0.01 per share (“Class B Common Stock”), which is entitled to ten votes per share and is entitled collectively to elect the remaining 75% of our Board of Directors.
We have two classes of common stock: • Class A Common Stock, par value $0.01 per share (“Class A Common Stock”), which is entitled to one vote per share and is entitled collectively to elect 25% of our Board of Directors; and • Class B Common Stock, par value $0.01 per share (“Class B Common Stock”), which is entitled to ten votes per share and is entitled collectively to elect the remaining 75% of our Board of Directors.
Our Board of Directors has elected for the Company to be treated as a “controlled company” under NYSE corporate governance rules and not to comply with the NYSE requirement for a majority independent board of directors and for an independent corporate governance and nominating committee because of our status as a controlled company.
Our Board of Directors has elected for the Company to be treated as a “controlled company” under NYSE corporate governance rules and not to comply with the NYSE requirement for a majority independent board of directors and for an independent corporate governance and nominating committee because of our 21 Table of Contents status as a controlled company.
Similarly, for those fans attracted to the equally unique experience of NBA basketball, we must compete with another NBA team located in the New York City metropolitan area (the Nets) as well as, in varying respects and degrees, with other NBA teams and the NBA itself.
Similarly, for those fans attracted to the equally unique experience of NBA basketball, we must compete with another NBA team located in the New York City metropolitan area (the Nets) as well as with other NBA teams and the NBA itself.
See “Part II — Management’s Discussion and Analysis of Financial Condition and Results of Operation — Liquidity and Capital Resources — Financing Agreements and Stock Repurchases” and Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Management’s Discussion and Analysis of Financial Condition and Results of Operation — Liquidity and Capital Resources — Financing Agreements and Stock Repurchases” and Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
For example, the global economy, including credit and financial markets, has recently experienced extreme volatility and disruptions, including diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
For example, the global economy, including credit and financial markets, has in recent years experienced extreme volatility and disruptions, including diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
For example, in June 2023 the New York Metropolitan Transportation Authority, New Jersey Transit and Amtrak, which operate commuter rail services from Penn Station, issued a compatibility report asserting that The Garden imposes severe constraints on Penn Station that restrict efforts to make its desired improvements.
For example, in June 2023 the New York Metropolitan Transportation Authority, New Jersey Transit and Amtrak, which operate commuter rail services from Penn Station, issued a compatibility report asserting that The Garden imposes severe constraints on Penn Station 14 Table of Contents that restrict efforts to make its desired improvements.
For fans who prefer the unique experience of NHL hockey, we must compete with two other NHL hockey teams located in the New York City metropolitan area (the Islanders and the Devils) as well as, in varying respects and degrees, with other NHL hockey teams and the NHL itself.
For fans who prefer the unique experience of NHL hockey, we must compete with two other NHL hockey teams located in the New York City metropolitan area (the Islanders and the Devils) as well as with other NHL hockey teams and the NHL itself.
Such mandatory disclosures are costly, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to or alleviate problems caused by an actual or perceived security breach.
Such mandatory disclosures are costly, could provide information to bad actors, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our security measures and may require us to expend significant capital and other resources to respond to or alleviate problems caused by an actual or perceived security breach.
For example, governmental regulations adopted in the wake of the COVID-19 pandemic impacted the permitted occupancy of The Garden for games of the Knicks and the Rangers and the manner in which we use or maintain The Garden on game days during the 2019-20 and 2020-21 seasons, which impacted the revenue we derive from games and the expenses that we incur on game days.
For example, governmental regulations adopted in the wake of the COVID-19 pandemic impacted the permitted occupancy of The Garden for games of the Knicks and the Rangers and the manner in which we use or maintain The Garden on game days during the 2019-20 and 2020-21 seasons, which impacted the revenue we derived from games and the expenses that we incurred on game days.
Any of these actions could increase expenses for a particular period, subject to any salary cap restrictions contained in the respective leagues’ CBAs. There can be no assurance that any actions taken by management to generate and increase our long-term growth and asset value creation will be successful.
Any of these actions could increase expenses (including incurring NBA luxury tax) for a particular period, subject to any salary cap restrictions contained in the respective leagues’ CBAs. There can be no assurance that any actions taken by management to generate and increase our long-term growth and asset value creation will be successful.
Certain government officials and special interest groups have used and may continue to use the renewal process for the zoning special permit to pressure MSG Entertainment to contribute to the redevelopment of Penn Station, relocate The Garden or sell all or portions of The Garden complex.
Certain government officials and special interest groups have in the past used, and may in the future use, the renewal process for the zoning special permit to pressure MSG Entertainment to contribute to the redevelopment of Penn Station, relocate The Garden or sell all or portions of The Garden complex.
If we are required to indemnify Sphere Entertainment under the circumstances set forth in the Tax Disaffiliation Agreement, we may be subject to substantial liabilities, which could adversely affect our financial position. We are Controlled by the Dolan Family.
If we are required to indemnify Sphere Entertainment under the circumstances set forth in the Tax Disaffiliation Agreement, we may be subject to substantial liabilities, which could adversely affect our financial position. 20 Table of Contents We are Controlled by the Dolan Family.
Our teams qualified for the post-seasons during their respective 2022-23 seasons. In addition, league, team and/or player actions or inactions, including protests, may impact the popularity of the Knicks, the Rangers or the leagues in which they play.
Our teams qualified for the post-seasons during their respective 2023-24 seasons. In addition, league, team and/or player actions or inactions, including protests, may impact the popularity of the Knicks, the Rangers or the leagues in which they play.
In addition, the popularity of our sports teams can impact television ratings, which could affect the long-term value of the media rights for the Knicks and/or the Rangers.
In addition, the popularity of our sports teams impacts television ratings, which could affect the long-term value of the media rights for the Knicks and/or the Rangers.
If, the NBA and/or NHL 2023-24 seasons are delayed, shortened, suspended or cancelled, the Knicks or the Rangers may be required, absent a cure or waiver, to repay certain amounts borrowed under the revolving credit facilities.
If the NBA and/or NHL 2024-25 seasons are delayed, shortened, suspended or cancelled, the Knicks or the Rangers may be required, absent a cure or waiver, to repay certain amounts borrowed under the revolving credit facilities.
The current NBA CBA expires after the 2029-30 season, but each of the NBA and NBPA has the right to terminate the CBA effective following the 2028-29 season.
The current NBA CBA expires after the 2029-30 season, but each of the NBA and NBPA has the right to terminate the CBA 15 Table of Contents effective following the 2028-29 season.
As a result, instability and weakness of the U.S. and global economies, disruptions to financial markets, inflation, recession, high unemployment, reduced tourism and other geopolitical events, including any prolonged effects caused by the COVID-19 or other similar outbreak, and the resulting negative effects on consumers’ and businesses’ discretionary spending have in the past materially negatively affected, and may in the future materially negatively affect our business and results of operations.
As a result, instability and weakness of the U.S. and global economies, disruptions to financial markets, inflation, recession, high unemployment, reduced tourism and other geopolitical events, including another outbreak similar to the COVID-19 pandemic, and the resulting negative effects on consumers’ and businesses’ discretionary spending have in the past materially negatively affected, and may in the future materially negatively affect, our business and results of operations.
Such insurance may not be available in every circumstance or on terms that are commercially feasible and such insurance may contain significant dollar limits and/or exclusions from coverage for pre-existing 11 Table of Contents medical conditions.
Such insurance may not be available in every circumstance, may not be available on terms that are commercially feasible, or may contain significant dollar limits and/or exclusions from coverage for pre-existing medical conditions.
In addition, we have paid the NBA a luxury tax in the past and we may also be obligated to pay the NBA a luxury tax in future years, the calculation of which is determined by a formula based on the aggregate salaries paid to our Knicks players. See “Part II — Item 7.
In addition, we have paid the NBA a luxury tax in the past and we may also be obligated to pay the NBA a luxury tax in future years, the calculation of which is determined by a formula based on the aggregate salaries paid to our Knicks players.
A significant factor in our ability to attract and retain talented players is player compensation. NBA and NHL player salaries have generally increased significantly and may continue to increase in the future.
A significant factor in our ability to attract and retain talented players is player compensation. NBA and NHL player salaries have increased significantly and are expected to continue to increase significantly in the future.
The Madison Square Garden Complex benefits from a more limited real estate tax exemption pursuant to an agreement with the City of New York, subject to certain conditions, and legislation enacted by the State of New York in 1982. For fiscal year 2023, the tax exemption was $42.4 million.
The Garden Complex benefits from a more limited real estate tax exemption pursuant to an agreement with the City of New York, subject to certain conditions, and legislation enacted by the State of New York in 1982. For fiscal year 2024, the tax exemption was $42.2 million.
The 2021 Rangers Revolving Credit Facility includes covenants and events of default that may be implicated by a shortfall in the amount of national and local media rights revenue received by the Rangers.
The Rangers Credit Agreement includes covenants and events of default that may be implicated by a shortfall in the amount of national and local media rights revenue received by the Rangers.
Even if we take health and safety precautions and comply with government protocols, our players may nevertheless contract serious illness, such as COVID-19 and, as a result, our ability to participate in games may be substantially impacted.
Even if we take health and safety precautions and comply with government protocols, our players may nevertheless contract serious illnesses, and, as a result, our ability to participate in games may be substantially impacted.
The Company also continues to review and enhance our security measures in light of the constantly evolving techniques used to gain unauthorized access to networks, data, software and systems.
We also continue to review and enhance our security measures in light of the constantly evolving techniques used to gain unauthorized access to networks, data, software and systems.
The NBA and NHL have each entered into agreements regarding the national and international telecasts of NBA and NHL games. We receive a share of the income the NBA and the NHL generate from these contracts, which expire from time to time.
The NBA and NHL have each entered into agreements regarding the national and international telecasts of NBA and NHL games. We receive a share of the income the NBA and the NHL generate from these contracts, which expire at various times.
We May Require Financing to Fund Our Ongoing Operations, the Availability of Which is Highly Uncertain. We may require financing to fund our ongoing operations or otherwise engage in transactions that depend on our ability to obtain financing. The public and private capital and credit markets can experience volatility and disruption.
We may require financing to fund our ongoing operations or otherwise engage in transactions that depend on our ability to obtain financing. The public and private capital and credit markets can experience volatility and disruption.
Due to the NBA and NHL playing seasons, revenues from our business are typically concentrated in the second and third quarters of each fiscal year. Disruptions due to COVID-19 have also impacted the seasonality of our business.
Due to the NBA and NHL playing seasons, revenues from our business are typically concentrated in the second and third quarters of each fiscal year. Disruptions due to COVID-19 impacted the seasonality of our business and other disruptions could impact the seasonality of our business in the future.
For fiscal year 2023, the Knicks and the Rangers recorded approximately $62.5 million in estimated revenue sharing expenses, net of escrow. The actual amounts for the 2022-23 season may vary significantly from the estimate based on actual operating results for the respective leagues and all teams for the season and other factors.
For fiscal year 2024, the Knicks and the Rangers recorded approximately $76.1 million in estimated revenue sharing expenses, net of escrow. The actual amounts for the 2023-24 season may vary significantly from the estimate based on actual operating results for the respective leagues and all teams for the season and other factors.
During some or all of the basketball and hockey seasons, our sports teams face competition, in varying respects and degrees, from professional baseball (including the Yankees and the Mets), professional football (including the Giants and the Jets), professional soccer (including the New York Red Bulls and the New York City Football Club), collegiate sporting events, such as the Big East basketball tournament, other sporting events, including those held by MSG Entertainment, and each other.
During some or all of the basketball and hockey seasons, our sports teams face competition from professional baseball (including the Yankees and the Mets), professional football (including the Giants and the Jets), professional soccer (including the New York Red Bulls, the New York City Football Club and the NJ/NY Gotham FC), professional women’s basketball (including the New York Liberty), collegiate sporting events, such as the Big East basketball tournament, other sporting events, including those held by MSG Entertainment, and each other.
As of July 31, 2023, the Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”), collectively own all of our Class B Common Stock, approximately 3.3% of our outstanding Class A Common Stock and approximately 71.0% of the total voting power of all our outstanding common stock (in each case, inclusive of options exercisable and RSUs vesting within 60 days of July 31, 2023).
As of June 30, 2024, the Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”), collectively own all of our Class B Common Stock, approximately 3.0% of our outstanding Class A Common Stock and approximately 70.9% of the total voting power of all our outstanding common stock (in each case, inclusive of options exercisable and RSUs vesting within 60 days of June 30, 2024).
The NBA and NHL have also imposed significant restrictions on amounts of financing and/or certain types of financings and the rights of those financing providers.
The NBA and NHL have also imposed significant restrictions on amounts of financing and/or certain types of financings and the rights of those financing providers. See “Part II — Item 7.
For example, Diamond Sports Group, an unconsolidated subsidiary of Sinclair Broadcasting Group Inc., which licenses and distributes sports content in a number of regional markets, filed for protection under Chapter 11 of the bankruptcy code in March 2023.
In recent years, certain regional sports networks have experienced financial difficulties. For example, in March 2023, Diamond Sports Group, an unconsolidated subsidiary of Sinclair Broadcasting Group Inc., which licenses and distributes sports content in a number of regional markets, filed for protection under Chapter 11 of the bankruptcy code.
It is unclear to what extent COVID-19, including variants thereof, or another pandemic or public health emergency, could result in renewed governmental and/or league restrictions on attendance or otherwise impact attendance of games at The Garden, demand for our sponsorship, tickets and other premium inventory or otherwise impact the Company’s operations and operating results.
Although the Company saw a return to normal business operations and schedules for the Knicks and the Rangers following the COVID-19 pandemic, it is unclear to what extent a resurgence of COVID-19, including variants thereof, or another pandemic or public health emergency, could result in renewed governmental and/or league restrictions on attendance or otherwise impact attendance of games at The Garden, demand for our sponsorship, tickets and other premium inventory or otherwise impact the Company’s operations and operating results.
Dolan, also serves as the Executive Chairman and Chief Executive Officer of MSG Entertainment and Sphere Entertainment and as Non-Executive Chairman of AMC Networks and our Executive Vice President, David Granville-Smith, also serves as the Executive Vice President of Sphere Entertainment and AMC Networks.
Dolan, also serves as the Executive Chairman and Chief Executive Officer of MSG Entertainment and Sphere Entertainment and as Non-Executive Chairman of AMC Networks, and our Executive Vice President, David Granville-Smith, also serves as the Executive Vice President of Sphere Entertainment and AMC Networks. In addition, one of our directors, Charles F.
As a result, personal injuries, accidents and other incidents have occurred and may occur from time to time, which could subject us to claims and liabilities. These risks may not be covered by insurance or could involve exposures that exceed the limits of any applicable insurance policy.
There are inherent risks associated with having customers attend our teams’ games. As a result, personal injuries, accidents and other incidents have occurred and may occur from time to time, which could subject us to claims and liabilities. These risks may not be covered by insurance or could involve exposures that exceed the limits of any applicable insurance policy.
We are subject to substantial governmental regulations affecting our business. These include, but are not limited to, data privacy and protection laws, regulations, policies and contractual obligations that apply to the collection, transmission, storage, processing and use of personal information or personal data, which among other things, impose certain requirements relating to the privacy and security of personal information.
We are subject to data privacy and protection laws, regulations, policies and contractual obligations that apply to the collection, transmission, storage, processing and use of personal information or personal data, which among other things, impose certain requirements relating to the privacy and security of personal information.
We May Pursue Acquisitions and Other Strategic Transactions to Complement or Expand Our Business that May Not Be Successful . We may continue to explore opportunities to purchase or invest in other businesses or assets that we believe will complement, enhance or expand our current business or that might otherwise offer us growth opportunities.
We may continue to explore opportunities to purchase or invest in other businesses or assets that we believe will complement, enhance or expand our current business or that might otherwise offer us growth opportunities.
We Have Incurred Substantial Operating Losses, Adjusted Operating Losses and Negative Cash Flow and There is No Assurance We Will Have Operating Income, Adjusted Operating Income or Positive Cash Flow in the Future. We incurred an operating loss of approximately $78 million in fiscal year 2021.
We Have in the Past Incurred Substantial Operating Losses, Adjusted Operating Losses and Negative Cash Flow and There Can Be No Assurance We Will Not Incur Operating Losses, Adjusted Operating Losses or Negative Cash Flow Again in the Future. We incurred an operating loss of approximately $78 million in fiscal year 2021.
For example, in November 2016, a payment card issue that affected cards used at merchandise and food and beverage locations at several of the Company’s pre-Sphere Distribution venues, including its New York venues and The Chicago Theatre, was identified and addressed with the assistance of security firms. The issue was promptly fixed and enhanced security measures were implemented.
For example, in November 2016, a payment card issue that affected cards used at merchandise and food and beverage locations at several MSG Entertainment’s venues, including The Garden, was identified and addressed with the assistance of security firms. The issue was promptly fixed and enhanced security measures were implemented.
In addition, we have, in prior periods, incurred adjusted operating losses and negative cash flow and there is no assurance that we will have operating income, adjusted operating income or positive cash flow in the future.
In addition, we have, in prior periods, incurred adjusted operating losses and negative cash flow and there can be no assurance that we will not incur operating losses, adjusted operating losses or negative cash flow again in the future.
Dolan, members of his family, certain Dolan family interests, and the Dolan Family Foundation that provide 20 Table of Contents them with “demand” and “piggyback” registration rights with respect to approximately 5.2 million shares of Class A Common Stock, including shares issuable upon conversion of shares of Class B Common Stock.
We have entered into registration rights agreements with Charles F. Dolan, members of his family, certain Dolan family interests, and the Dolan Family Foundation that provide them with “demand” and “piggyback” registration rights with respect to approximately 5.1 million shares of Class A Common Stock, including shares issuable upon conversion of shares of Class B Common Stock.
See “— Economic and Business Relationship Risks — Certain of Our Subsidiaries Have Incurred Substantial Indebtedness, and the Occurrence of an Event of Default Under Our Subsidiaries’ Credit Facilities or Our Inability to Repay Such Indebtedness When Due Could Substantially Impair the Assets of Those Subsidiaries and Have a Negative Effect on Our Business ” and “— Economic and Business Relationship Risks — We Do Not Own The Garden and Our Failure to Renew the Arena License Agreements or MSG Entertainment’s Failure to Operate The Garden in Compliance with the Arena License Agreements or Extensive Governmental Regulations May Have a Material Negative Effect on Our Business and Results of Operations .” 12 Table of Contents Economic and Business Relationship Risks Our Business Has Been Adversely Impacted and May, in the Future, Be Materially Adversely Impacted by an Economic Downturn, Recession, Financial Instability or Inflation.
See “— Economic and Business Relationship Risks — Certain of Our Subsidiaries Have Incurred Substantial Indebtedness, and the Occurrence of an Event of Default Under Our Subsidiaries’ Credit Facilities or Our Inability to Repay Such Indebtedness When Due Could Substantially Impair the Assets of Those Subsidiaries and Have a Negative Effect on Our Business ” and “— Economic and Business Relationship Risks — We Do Not Own The Garden and Our Failure to Renew the Arena License Agreements or MSG Entertainment’s Failure to Operate The Garden in Compliance with the Arena License Agreements or Extensive Governmental Regulations May Have a Material Negative Effect on Our Business and Results of Operations .” Economic and Business Relationship Risks Local Media Rights Are a Significant Revenue Stream for Our Business and Decreases in Local Media Rights Revenue Could Have a Material Negative Effect on our Business and Results of Operations.
Any repeal of the tax exemption status would require legislative action by the New York State legislature. Under the Arena License Agreements with subsidiaries of MSG Entertainment, pursuant to which the Knicks and the Rangers play their home games at The Garden, the teams are responsible for 100% of any real estate or similar taxes applicable to The Garden.
Any repeal of the tax exemption status would require legislative action by the New York State legislature. Under the Arena License Agreements, the teams are responsible for 100% of any real estate or similar taxes applicable to The Garden.
We collect and store, including by electronic means, certain personal, proprietary and other sensitive information, including payment card information, that is provided to us through purchases, registration on our websites or mobile applications, or otherwise in communication or interaction with us. These activities require the use of online services and centralized data storage, including through third-party service providers.
Through our operations, we collect and store, including by electronic means, certain personal, proprietary and other sensitive information, including payment card information, that is provided to us through purchases, registration on our websites or mobile applications, or otherwise in communication or interaction with us.
Changes to league rules, regulations and/or agreements, including changes to league schedules and national and international media rights, have in the past and could in the future impact the availability of games covered by our local media rights and negatively affect the rights fees we receive from MSG Networks and our business and results of operations. • The NBA and NHL impose certain rules that define, under certain circumstances, the territories in which our sports teams operate, including the markets in which our games may be telecast.
Changes to league rules, regulations and/or agreements, including changes to league schedules and national and international media rights, have in the past impacted and could in the future impact the availability of games covered by our local media rights and negatively affect the rights fees we receive from MSG Networks and our business and results of operations.
Our business also competes, in certain respects and to varying degrees, with other leisure-time activities and entertainment options in the New York City metropolitan area, such as television, motion pictures, concerts, music festivals and other live performances, restaurants and nightlife venues, the Internet, social media and social networking platforms and online and mobile services, including sites for online content distribution, video on demand and other alternative sources of entertainment.
Our Knicks and Rangers and other sports franchises compete for attendance, viewership and/or advertising, in varying respects and degrees, with other live sporting events, and with sporting events delivered over television networks, radio, the Internet and online services, streaming devices and applications, and other alternative sources, as well as with other leisure-time activities and entertainment options in the New York City metropolitan area, such as television, motion pictures, concerts, music festivals and other live performances, restaurants and nightlife venues, the Internet, social media and social networking platforms and online and mobile services, including sites for online content distribution, video on demand and other alternative sources of entertainment.
Dolan and Charles F. Dolan) are also directors of MSG Entertainment, ten members of our Board of Directors (including James L. Dolan and Charles F. Dolan) are also directors of Sphere Entertainment and six members of our Board of Directors (including James L. Dolan and Charles F. Dolan) are also directors of AMC Networks. Our Vice Chairman, Gregg G.
Dolan, is the Chairman Emeritus of AMC Networks and a director of MSG Entertainment and Sphere Entertainment. Furthermore, nine members of our Board of Directors (including James L. Dolan and Charles F. Dolan) are also directors of MSG Entertainment, ten members of our Board of Directors (including James L. Dolan and Charles F.
See “— Sports Business Risks — Our Operations and Operating Results Were Materially Impacted by the COVID-19 Pandemic and Government and League Actions Taken in Response, and a Resurgence of the Pandemic or Another Pandemic or Other Public Health Emergency Could Adversely Affect Our Business and Results of Operations. ” Moreover, the costs of protecting against such incidents could reduce the profitability of our operations.
See “— Sports Business Risks — Our Operations and Operating Results Have Been, and May in the Future Be, Materially Impacted by a Pandemic or Other Public Health Emergency, such as the COVID-19 Pandemic. ” Moreover, the costs of protecting against such incidents have in the past reduced and could in the future reduce the profitability of our operations.
The Unavailability of Systems Upon Which We Rely May Have a Material Negative Effect on Our Business and Results of Operations. We rely upon various internal and third-party software or systems in the operation of our business, including, with respect to ticket sales, credit card processing, email marketing, point of sale transactions, database, inventory, human resource management and financial systems.
We rely upon various internal and third-party software and systems in the operation of our business, including, with respect to ticket sales, credit card processing, email marketing, point of sale transactions, database, inventory, human resource management and financial systems. With respect to third-party software or systems, certain of these arrangements are not covered by long-term agreements.
We may choose not to obtain (or may not be able to obtain) such insurance in some cases and we may change coverage levels (or be unable to change coverage levels) in the future. In the absence of disability insurance, we have in the past and may in the future be obligated to pay all of an injured player’s salary.
We may choose not to obtain (or may not be able to obtain) such insurance in some cases and we may change coverage levels (or be unable to change coverage levels) in the future.
Our sports teams also compete with other teams in their leagues to attract players. For example, players who are free agents are generally permitted to sign with the team of their choice.
The success of our business is also largely dependent on our ability to attract strong attendance to our professional sports franchises’ home games at The Garden. Our sports teams also compete with other teams in their leagues to attract players. For example, players who are free agents are generally permitted to sign with the team of their choice.
In addition, player disability insurance policies do not cover any NBA luxury tax that we may be required to pay under the NBA CBA. For purposes of determining NBA luxury tax under the NBA CBA, salary payable to an injured player is included in team salary for at least one year and until other conditions are satisfied.
For purposes of determining NBA luxury tax under the NBA CBA, salary payable to an injured player is included in team salary for at least one year and until other conditions are satisfied. Replacement of an injured player may result in an increase in our salary and NBA luxury tax expenses.
In addition, if we are unable to continue use of certain intellectual property rights, our business and results of operations could be materially negatively impacted.
In addition, if we are unable to continue use of certain intellectual property rights, our business and results of operations could be materially negatively impacted. Weather or Other Conditions May Impact Our Games, Which May Have a Material Negative Effect on Our Business and Results of Operations.

… 78 more changes not shown on this page.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeMine Safety Disclosures Not applicable. 22 Table of Contents PART II
Biggest changeMine Safety Disclosures Not applicable. 24 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 22 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 23 Item 6. (Reserved) 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 43 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 24 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. (Reserved) 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 44 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed2 unchanged
Biggest changeAs of June 30, 2023, there were 16 holders of record of our Class B Common Stock. 23 Table of Contents On October 6, 2022, the Company announced that its Board of Directors declared a special cash dividend of $7.00 per share, which was paid on October 31, 2022 to stockholders to record as of October 17, 2022.
Biggest changeOn October 6, 2022, the Company announced that its Board of Directors declared a special cash dividend of $7.00 per share, which was paid on October 31, 2022 to stockholders to record as of October 17, 2022.
The Company has been funding and expects to continue to fund stock repurchases through a combination of cash on hand, cash generated by operations and available borrowing capacity under its existing credit facilities. During the three months ended June 30, 2023, the Company did not engage in any share repurchase activity under its share repurchase program.
The Company has been funding and expects to continue to fund stock repurchases through a combination of cash on hand, cash generated by operations and available borrowing capacity under its existing credit facilities. During the three months ended June 30, 2024, the Company did not engage in any share repurchase activity under its share repurchase program.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 201(d) is incorporated by reference to the definitive proxy statement for our 2023 Annual Meeting of Stockholders, which is expected to be filed with the SEC within 120 days of our fiscal year end.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 201(d) is incorporated by reference to the definitive proxy statement for our 2024 Annual Meeting of Stockholders, which is expected to be filed with the SEC within 120 days of our fiscal year end.
Issuer Purchases of Equity Securities As of June 30, 2023, the Company had approximately $185 million remaining under the $525 million Class A Common Stock share repurchase program authorized by the Company’s Board of Directors on September 11, 2015.
Issuer Purchases of Equity Securities As of June 30, 2024, the Company had approximately $185 million remaining under the $525 million Class A Common Stock share repurchase program authorized by the Company’s Board of Directors on September 11, 2015.
Any decisions regarding the payment of future dividends on our common stock will be made by our Board of Directors from time to time in accordance with applicable law, and there can be no assurance that dividends will be paid in the future.
Any decisions regarding the payment of 25 Table of Contents future dividends on our common stock will be made by our Board of Directors from time to time in accordance with applicable law, and there can be no assurance that dividends will be paid in the future.
This graph covers the period from June 30, 2018 through June 30, 2023. The comparison assumes an investment of $100 on June 30, 2018 and reinvestment of dividends. The Sphere Distribution is treated as a reinvestment of a special dividend pursuant to SEC rules.
This graph covers the period from June 30, 2019 through June 30, 2024. The comparison assumes an investment of $100 on June 30, 2019 and reinvestment of dividends. The Sphere Distribution is treated as a reinvestment of a special dividend pursuant to SEC rules.
As of June 30, 2023, there were 569 holders of record of our Class A Common Stock. There is no public trading market for our Class B Common Stock, par value $.01 per share (“Class B Common Stock”).
As of June 30, 2024, there were 559 holders of record of our Class A Common Stock. There is no public trading market for our Class B Common Stock, par value $.01 per share (“Class B Common Stock”). As of June 30, 2024, there were 15 holders of record of our Class B Common Stock.
The stock price performance included in this graph is not necessarily indicative of future stock performance. 6/30/18 6/30/19 6/30/20 6/30/21 6/30/22 6/30/23 Madison Square Garden Company Sports Corp. $ 100.00 $ 90.25 $ 66.41 $ 78.02 $ 68.27 $ 89.00 Russell 3000 Index 100.00 108.98 116.10 167.37 114.17 171.49 Bloomberg Americas Entertainment Index 100.00 110.35 89.68 206.40 109.09 129.16 This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
The stock price performance included in this graph is not necessarily indicative of future stock performance. 6/30/19 6/30/20 6/30/21 6/30/22 6/30/23 6/30/24 Madison Square Garden Company Sports Corp. $ 100.00 $ 73.58 $ 86.45 $ 75.64 $ 98.62 $ 98.66 Russell 3000 Index 100.00 106.53 153.58 132.28 157.36 193.74 Bloomberg Americas Entertainment Index 100.00 81.27 187.04 98.86 117.05 118.07 This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

100 edited+19 added−23 removed101 unchanged
Biggest change(“MSG Networks”); • a resurgence of the COVID-19 pandemic or another pandemic or public health emergency, and our ability to effectively manage the impacts, including labor market disruptions; • any NBA, NHL or other work stoppage; • any economic, political or other actions, such as boycotts, protests, work stoppages or campaigns by labor organizations; • seasonal fluctuations and other variation in our operating results and cash flow from period to period; • the level of our expenses, including our corporate expenses; • business, reputational and litigation risk if there is a security incident resulting in loss, disclosure or misappropriation of stored personal information or other breaches of our information security; • activities or other developments that discourage or may discourage congregation at prominent places of public assembly, including The Garden where the home games of the New York Knickerbockers (the “Knicks”) and the New York Rangers (the “Rangers”) are played; • a default by our subsidiaries under their respective credit facilities; • the acquisition or disposition of assets or businesses and/or the impact of, and our ability to successfully pursue, acquisitions or other strategic transactions; • our ability to successfully integrate acquisitions or new businesses into our operations; • the operating and financial performance of our strategic acquisitions and investments, including those we may not control; • the impact of governmental regulations or laws, including changes in how those regulations and laws are interpreted and the continued benefit of certain tax exemptions (including for The Garden) and the ability for us and Madison Square Garden Entertainment Corp.
Biggest changeFactors that may cause such differences to occur include, but are not limited to: • the level of our revenues, which depends in part on the popularity and competitiveness of our sports teams; • costs associated with player injuries, waivers or contract terminations of players and other team personnel; • 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; • the demand for sponsorship arrangements and for advertising; • competition, for example, from other teams, and other sports and entertainment options; • changes in laws, National Basketball Association (“NBA”) or National Hockey League (“NHL”) rules, regulations, guidelines, bulletins, directives, policies and agreements, including the leagues’ respective collective bargaining agreements (each, a “CBA”) with their players’ associations, salary caps, escrow requirements, revenue sharing, NBA luxury tax thresholds and media rights, or other regulations under which we operate; • the performance by our affiliates of their obligations under various agreements with the Company; • a pandemic or another pandemic or public health emergency, including a resurgence of the COVID-19 pandemic, and our ability to effectively manage the impacts, including labor market disruptions; • developments affecting the regional sports network industry, including the effects of such developments on MSG Networks Inc.’s (“MSG Networks”) ability to generate revenue and perform its obligations under its local media rights agreements with us; • any NBA, NHL or other work stoppage; • any economic, political or other actions, such as boycotts, protests, work stoppages or campaigns by labor organizations; • seasonal fluctuations and other variation in our operating results and cash flow from period to period; • the level of our expenses, including our corporate expenses; • operational, business, reputational, litigation and other risk if there is a security incident resulting in loss, disclosure or misappropriation of stored personal information or other breaches of our information security or if third party facilities, systems and/or software upon which we rely are interrupted or unavailable; • activities or other developments that discourage or may discourage congregation at prominent places of public assembly, including Madison Square Garden Arena (“The Garden”) where the home games of the New York Knickerbockers (the “Knicks”) and the New York Rangers (the “Rangers”) are played; • a default by our subsidiaries under their respective credit facilities; • the acquisition or disposition of assets or businesses and/or the impact of, and our ability to successfully pursue acquisitions or other strategic transactions; • our ability to successfully integrate acquisitions or new businesses into our operations and the operating and financial performance of strategic acquisitions and investments, including those we may not control; • the impact of governmental regulations or laws, including changes in how those regulations and laws are interpreted and the continued benefit of certain tax exemptions (including for The Garden) and the ability for us and Madison Square Garden Entertainment Corp.
Income taxes Income tax expense for the year ended June 30, 2023 of $44,293 differs from the income tax expense derived from applying the statutory federal rate of 21% to pretax income primarily due to state and local tax expense of $15,066, nondeductible officers’ compensation of $5,238, a change in the estimated tax rate used to determine deferred taxes of $1,788, and nondeductible disability insurance premiums expense of $1,227.
Income tax expense for the year ended June 30, 2023 of $44,293 differs from the income tax expense derived from applying the statutory federal rate of 21% to pretax income primarily due to state and local tax expense of $15,066, nondeductible officers’ compensation of $5,238, a change in the estimated tax rate used to determine deferred taxes of $1,788, and nondeductible disability insurance premiums expense of $1,227.
The contracted license fee for the first full contract year ending June 30, 2021 was approximately $22,500 for the Knicks and approximately $16,700 for the Rangers, and then for each subsequent year, the license fees are 103% of the license fees for the immediately preceding contract year. 28 Table of Contents Player Salaries, Escrow System/Revenue Sharing and NBA Luxury Tax The amount we pay an individual player is typically determined by negotiation between the player (typically represented by an agent) and us, and is generally influenced by the player’s past performance, the amounts paid to players with comparable past performance by other sports teams, the NBA luxury tax and restrictions in the CBAs, including the salary floors and caps.
The contracted license fee for the first full contract year ending June 30, 2021 was approximately $22,500 for the Knicks and approximately $16,700 for the Rangers, and then for each subsequent year, the license fees are 103% of the license fees for the immediately preceding contract year. 30 Table of Contents Player Salaries, Escrow System/Revenue Sharing and NBA Luxury Tax The amount we pay an individual player is typically determined by negotiation between the player (typically represented by an agent) and us, and is generally influenced by the player’s past performance, the amounts paid to players with comparable past performance by other sports teams, the NBA luxury tax and restrictions in the CBAs, including the salary floors and caps.
The percentage of league-wide revenues paid as compensation and retained by the teams does not apply evenly across all teams and, accordingly, the Company may pay its players a higher or lower percentage of the Knicks’ revenues than other NBA teams. During the 2020-21 season a new “Ten-and-Spread” escrow system was put in place.
The percentage of league-wide revenues paid as compensation and retained by the teams does not apply evenly across all teams and, accordingly, the Company may pay its players a higher or lower percentage of the Knicks’ revenues than other NBA teams. During the 2020-21 season a “Ten-and-Spread” escrow system was put in place.
In particular, when our sports teams have strong on-court and on-ice performance, we benefit from increased demand for tickets and premium hospitality, potentially greater food and merchandise sales from increased attendance and increased sponsorship opportunities. When our sports teams qualify for the playoffs, we also benefit from the attendance and in-game spending at the playoff games.
In particular, when our sports teams have strong on-court and on-ice performance, we benefit from increased demand for tickets and premium hospitality, potentially greater food, beverage and merchandise sales from increased attendance and increased sponsorship opportunities. When our sports teams qualify for the playoffs, we also benefit from the attendance and in-game spending at the playoff games.
(“MSG Entertainment”) to maintain necessary permits or licenses; • the impact of any government plans to redesign New York City’s Pennsylvania Station; • business, economic, reputational and other risks associated with, and the outcome of, litigation and other proceedings; 25 Table of Contents • financial community and rating agency perceptions of our business, operations, financial condition and the industry in which we operate; • certain restrictions on transfer and ownership of our common stock related to our ownership of professional sports franchises in the NBA and NHL; • the tax-free treatment of the Sphere Distribution (as defined below) and; • the factors described under “Part I — Item 1A.
(“MSG Entertainment”) to maintain necessary permits or licenses; 27 Table of Contents • the impact of any government plans to redesign New York City’s Pennsylvania Station; • business, economic, reputational and other risks associated with, and the outcome of, litigation and other proceedings; • financial community and rating agency perceptions of our business, operations, financial condition and the industry in which we operate; • certain restrictions on transfer and ownership of our common stock related to our ownership of professional sports franchises in the NBA and NHL; • the tax-free treatment of the Sphere Distribution (as defined below); and • the factors described under “Part I — Item 1A.
To the extent the Company desires to access alternative sources of funding through the capital and credit markets, restrictions imposed by the NBA and NHL and challenging U.S. and global economic and market conditions could adversely impact its ability to do so at that time.
To the extent the Company desires to access alternative sources of funding through the capital and credit markets, restrictions imposed by the NBA and NHL and potentially challenging U.S. and global economic and market conditions could adversely impact its ability to do so at that time.
Direct operating expenses Direct operating expenses generally include: • compensation expense for our sports teams’ players and certain other team personnel; • arena license fees recognized as operating lease costs associated with the Knicks and the Rangers playing home games at The Garden; • cost of team personnel transactions for waivers/contract termination costs, trades, and season-ending player injuries (net of anticipated insurance recoveries) of players and other team personnel; • NBA and NHL revenue sharing (net of escrow and excluding playoffs) and NBA luxury tax receipts; • Other team operating expenses including variable day-of-event costs, operating costs of the Company’s training center, and league assessments; and • the cost of merchandise sales.
Direct operating expenses Direct operating expenses generally include: • compensation expense for our sports teams’ players and certain other team personnel; • arena license fees recognized as operating lease costs associated with the Knicks and the Rangers playing home games at The Garden; • cost of team personnel transactions for waivers/contract termination costs, trades, and season-ending player injuries (net of anticipated insurance recoveries) of players and other team personnel; • NBA and NHL revenue sharing (net of escrow and excluding playoffs) and NBA luxury tax; • Other team operating expenses including variable day-of-event costs, team travel, player insurance, operating costs of the Company’s training center, and league assessments; and • the cost of merchandise sales.
The lease ROU asset and liability were recorded in the Company’s accompanying consolidated balance sheet as of June 30, 2023 based on the present value of minimum lease fixed payments over the lease term utilizing the Company’s incremental borrowing rate as of the lease commencement date.
The lease ROU asset and operating lease liability were recorded in the Company’s accompanying consolidated balance sheet as of June 30, 2023 based on the present value of minimum lease fixed payments over the lease term utilizing the Company’s incremental borrowing rate as of the lease commencement date.
(b) Consists of amounts under the 2021 Rangers NHL Advance Agreement. See Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further details.
(b) Consists of amounts under the Rangers NHL Advance Agreement. See Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further details.
The following table sets forth the amount of identifiable indefinite-lived intangible assets reported in the Company’s consolidated balance sheet as of June 30, 2023: Sports franchises $ 102,564 Photographic related rights 1,080 $ 103,644 The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred.
The following table sets forth the amount of identifiable indefinite-lived intangible assets reported in the Company’s consolidated balance sheet as of June 30, 2024: Sports franchises $ 102,564 Photographic related rights 1,080 $ 103,644 The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred.
The decrease was primarily due to the decrease in net income adjusted for non-cash items, partially offset by the impact of changes in working capital assets and liabilities.
The decrease was primarily due to the impact of changes in working capital assets and liabilities, partially offset by the increase in net income adjusted for non-cash items.
In addition, all of our significant accounting policies, including our critical accounting policies, are discussed in the notes to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. 26 Table of Contents Business Overview The Company owns and operates a portfolio of assets featuring some of the most recognized teams in all of sports, including the Knicks of the NBA and the Rangers of the NHL.
In addition, all of our significant accounting policies, including our critical accounting policies, are discussed in the notes to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. 28 Table of Contents Business Overview The Company owns and operates a portfolio of assets featuring some of the most recognized teams in all of sports, including the Knicks of the NBA and the Rangers of the NHL.
The Company performed its most recent annual impairment test of identifiable indefinite-lived intangible assets during the first quarter of fiscal year 2023, and there were no impairments identified. Based on this impairment test, the Company concluded it was not more likely than not that the fair value of the indefinite-lived intangible assets was less than their carrying amount.
The Company performed its most recent annual impairment test of identifiable indefinite-lived intangible assets during the first quarter of fiscal year 2024, and there were no impairments identified. Based on this impairment test, the Company concluded it was not more likely than not that the fair value of the indefinite-lived intangible assets was less than their carrying amount.
The reduction of players’ salary for any one season is capped at 20% and carried over to the subsequent season as additional compensation reductions. Each team is entitled to receive an equal one-thirtieth share of the compensation reductions up to 10% and the excess above 10% is allocated in proportion to each team’s player payroll.
The reduction of players’ salary for any one season was capped at 20% and carried over to the subsequent season as additional compensation reductions. Each team was entitled to receive an equal one-thirtieth share of the compensation reductions up to 10% and the excess above 10% was allocated in proportion to each team’s player payroll.
This section provides a general description of our business, as well as other matters that we believe are important in understanding our results of operations and financial condition and in anticipating future trends. Results of Operations. This section provides an analysis of our results of operations for the years ended June 30, 2023 and 2022.
This section provides a general description of our business, as well as other matters that we believe are important in understanding our results of operations and financial condition and in anticipating future trends. Results of Operations. This section provides an analysis of our results of operations for the years ended June 30, 2024 and 2023.
The Company performed its most recent annual impairment test of goodwill during the first quarter of fiscal year 2023, and there was no impairment of goodwill. Based on this impairment test, the Company concluded it was not more likely than not that the fair value of the reporting unit was less than its carrying amount.
The Company performed its most recent annual impairment test of goodwill during the first quarter of fiscal year 2024, and there was no impairment of goodwill. Based on this impairment test, the Company concluded it was not more likely than not that the fair value of the reporting unit was less than its carrying amount.
The Company has one operating and reportable segment, and for the year ended June 30, 2023, the Company had one reporting unit for goodwill impairment testing purposes. The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred.
The Company has one operating and reportable segment, and for the year ended June 30, 2024, the Company had one reporting unit for goodwill impairment testing purposes. The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred.
Risk Factors — Economic and Business Relationship Risks — Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations .” 30 Table of Contents In addition to our future performance being dependent upon the continued popularity and/or on-court or on-ice competitiveness of our Knicks and Rangers teams, it is also dependent on general economic conditions, in particular those in the New York City metropolitan area, and the effect of these conditions on our customers.
Risk Factors — Economic and Business Relationship Risks — Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations .” In addition to our future performance being dependent upon the continued popularity and/or on-court or on-ice competitiveness of our Knicks and Rangers teams, it is also dependent on general economic conditions, in particular those in the New York City metropolitan area, and the effect of these conditions on our customers.
Examples of such events and circumstances include: • cost factors; • financial performance; • legal, regulatory, contractual, business or other factors; • other relevant company-specific factors such as changes in management, strategy or customers; • industry and market considerations; and 41 Table of Contents • macroeconomic conditions.
Examples of such events and circumstances include: 42 Table of Contents • cost factors; • financial performance; • legal, regulatory, contractual, business or other factors; • other relevant company-specific factors such as changes in management, strategy or customers; • industry and market considerations; and • macroeconomic conditions.
Sphere Distribution On April 17, 2020 (the “Sphere Distribution Date”), the Company distributed all of the outstanding common stock of Sphere Entertainment Co. (formerly Madison Square Garden Entertainment Corp. and referred to herein as “Sphere Entertainment”) to its stockholders (the “Sphere Distribution”).
Sphere Distribution and MSGE Distribution On April 17, 2020, the Company distributed all of the outstanding common stock of Sphere Entertainment Co. (formerly Madison Square Garden Entertainment Corp. and referred to herein as “Sphere Entertainment”) to its stockholders (the “Sphere Distribution”).
Lease Accounting The Company’s leases primarily consist of the lease of the Company’s corporate offices under the Sublease Agreement with MSG Entertainment (the “Sublease Agreement”) for our principal executive offices at Two Pennsylvania Plaza in New York, the lease of the CLG Performance Center until April 2023, and an aircraft lease entered into in June 2023.
Lease Accounting The Company’s leases primarily consist of the lease of the Company’s corporate offices under the Sublease Agreement with MSG Entertainment (the “Sublease Agreement”) for our principal executive offices at Two Pennsylvania Plaza in New York, an aircraft lease, and the lease of the CLG Performance Center until April 2023.
In accordance with the terms of the Sublease Agreement and the New MSGE Lease Agreement, the lease term of the Sublease Agreement was extended until October 31, 2024. The Company has accounted for this extension as a lease remeasurement and remeasured the right-of-use asset and operating lease liability utilizing the Company’s incremental borrowing rate as of the date of remeasurement.
In accordance with the terms of the Sublease Agreement and the New MSGE Lease Agreement, the lease term of the Sublease Agreement was extended until October 31, 2024. The Company has accounted for this extension as a lease remeasurement and remeasured the ROU asset and operating lease liability utilizing the Company’s incremental borrowing rate as of the date of remeasurement.
Any such excess funds are distributed to all teams. In addition, the NHL CBA limits the amount of deductions to be withheld from player salaries each year.
Any such excess funds are distributed to all teams in equal shares. In addition, the NHL CBA limits the amount of deductions to be withheld from player salaries each year.
This section provides a discussion of our financial condition, as well as an analysis of our cash flows for the years ended June 30, 2023 and 2022 .
This section provides a discussion of our financial condition, as well as an analysis of our cash flows for the years ended June 30, 2024 and 2023 .
Fees paid by telecasters under these arrangements are pooled by each league and then generally shared equally among all teams. 27 Table of Contents Suites and Clubs We earn revenue through the sale of suite and premium club licenses at The Garden, which are generally sold by MSG Entertainment to corporate customers pursuant to multi-year licenses.
Fees paid by telecasters under these arrangements are pooled by each league and then generally shared equally among all teams. 29 Table of Contents Suites and Clubs We earn revenue through the sale of suite and premium club licenses at The Garden, which are generally sold by MSG Entertainment to corporate customers via multi-year licenses.
The contracted license fee for the first full contract year ending June 30, 2021 was approximately $22,500 for the Knicks and approximately $16,700 for the Rangers, and then for each subsequent year, the license fees are 103% of the license fees for the immediately preceding contract year.
The contracted license fee for 43 Table of Contents the first full contract year ending June 30, 2021 was approximately $22,500 for the Knicks and approximately $16,700 for the Rangers, and then for each subsequent year, the license fees are 103% of the license fees for the immediately preceding contract year.
For the comparison of our results of operations for the years ended June 30, 2022 and 2021, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our 2022 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on August 18, 2022. Liquidity and Capital Resources.
For the comparison of our results of operations for the years ended June 30, 2023 and 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our 2023 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on August 17, 2023. Liquidity and Capital Resources.
The actual amounts for the 2022-23 season may vary significantly from the recorded provision based on actual operating results for the league and all NBA teams for the season and other factors. NHL CBA. The current NHL CBA expires after the 2025-26 season (with the possibility of a one-year extension in certain circumstances).
The actual amounts for the 2023-24 season may vary significantly from the recorded provision based on actual operating results for the league and all NBA teams for the season and other factors. NHL CBA. The current NHL CBA expires after the 2025-26 season (with the possibility of a one-year extension in certain circumstances).
The discussion of our financial condition and liquidity includes summaries of (i) our primary sources of liquidity and (ii) our contractual obligations and off balance sheet arrangements that existed at June 30, 2023. Seasonality of Our Business. This section discusses the seasonal performance of the Company . Recently Issued Accounting Pronouncements and Critical Accounting Policies.
The discussion of our financial condition and liquidity includes summaries of (i) our primary sources of liquidity and (ii) our contractual obligations and off-balance sheet arrangements that existed as of June 30, 2024. Seasonality of Our Business. This section discusses the seasonal performance of the Company . Recently Issued Accounting Pronouncements and Critical Accounting Policies.
The NHL CBA provides for a salary floor (i.e., a floor on each team’s aggregate player salaries) and a “hard” salary cap (i.e., teams may not exceed a stated maximum, which is adjusted each season based upon league-wide revenues). 29 Table of Contents NHL Escrow System/Revenue Sharing.
The NHL CBA provides for a salary floor (i.e., a floor on each team’s aggregate player salaries) and a “hard” salary cap (i.e., teams may not exceed a stated maximum, which is adjusted each season based upon league-wide revenues). NHL Escrow System/Revenue Sharing.
These transactions can result in significant charges as the Company recognizes the estimated ultimate costs of these events in the period in which they occur, although amounts due to these individuals are generally paid over their remaining contract terms . For example, the expense for these items was $4,412, and $737 for fiscal years 2023 and 2022, respectively .
These transactions can result in significant charges as the Company recognizes the estimated ultimate costs of these events in the period in which they occur, although amounts due to these individuals are generally paid over their remaining contract terms . For example, the expense for these transactions was $781, and $4,412 for fiscal years 2024 and 2023, respectively .
Under the Ten-and-Spread system, based upon league-wide revenues, aggregate player compensation will be reduced by up to 10% of each player’s salary. If, for a particular season, compensation reductions in excess of 10% are needed, the excess will be divided by three and recouped via reductions to players’ compensation over the same season, and the subsequent two seasons.
Under the Ten-and-Spread system, based upon league-wide revenues, aggregate player compensation was reduced by up to 10% of each player’s salary. If, for a particular season, compensation reductions in excess of 10% were needed, the excess would be divided by three and recouped via reductions to players’ compensation over the same season, and the subsequent two seasons.
On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment distributed approximately 67% of the issued and outstanding shares of common stock of Madison Square Garden Entertainment Corp. (formerly MSGE Spinco, Inc. and referred to herein as “MSG Entertainment”) to its stockholders (the “MSGE Distribution”).
On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment distributed approximately 67% of the issued and outstanding shares of common stock of Madison Square Garden Entertainment Corp. (referred to herein as “MSG Entertainment”) to its stockholders (the “MSGE Distribution”).
As the Company has not yet entered into a new sublease for or taken possession of the new executive office space at Two Pennsylvania Plaza, no additional right-of-use assets or operating lease liabilities have been recorded as of June 30, 2023 related to the commitments discussed above.
As the Company has not yet entered into a new sublease for or taken possession of the new executive office space at Two Pennsylvania Plaza, no additional ROU assets or operating lease liabilities have been recorded as of June 30, 2024 related to the commitments discussed above.
Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows provided by (used in) operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP.
Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP.
Changes in assumptions could significantly affect the estimates. If these estimates or material related assumptions change in the future, the Company may be required to record impairment charges related to its long-lived and/or indefinite-lived assets.
Changes in 41 Table of Contents assumptions could significantly affect the estimates. If these estimates or material related assumptions change in the future, the Company may be required to record impairment charges related to its long-lived and/or indefinite-lived assets.
The Knicks were not a luxury tax payer for the 2021-22 or 2022-23 seasons and, therefore, received an equal share of the portion of luxury tax receipts that were distributed to non-tax paying teams.
The Knicks were not a luxury tax payer for the 2022-23 or 2023-24 seasons and, therefore, received an equal share of the portion of luxury tax receipts that were distributed to non-tax paying teams.
The increase in adjusted operating income was primarily due to higher revenues, offset by higher direct operating expenses and selling, general and administrative expenses. 36 Table of Contents Liquidity and Capital Resources Overview Our primary sources of liquidity are cash and cash equivalents, cash flow from operations and available borrowing capacity under our credit facilities.
The increase in adjusted operating income was primarily due to higher revenues, partially offset by higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses. 38 Table of Contents Liquidity and Capital Resources Overview Our primary sources of liquidity are cash and cash equivalents, cash flow from operations and available borrowing capacity under our credit facilities.
Additional amounts may also be distributed on a discretionary basis, funded by assessments on playoff ticket revenues and through collective league sources and are recorded as revenues from league distributions. Our net provisions for revenue sharing, net of escrow, for the year ended June 30, 2023 was approximately $21,458.
Additional amounts may also be distributed on a discretionary basis, funded by assessments on playoff ticket revenues and through collective league sources and are recorded as revenues from league distributions. Our net provisions for revenue sharing, net of escrow, for the year ended June 30, 2024 was approximately $23,787.
The plan generally requires the distribution of a pool of funds approximating 6.055% of league-wide revenues to certain qualifying lower-revenue teams and is funded as follows: (a) 50% from contributions by the top ten revenue earning teams (based on preseason and regular season revenues, net of arena costs) in accordance with a formula; (b) then from payments by teams participating in the playoffs, with each team contributing 35% of its gate receipts for each home playoff game (although this provision was waived for the 2020-21 season); and (c) the remainder from centrally-generated NHL sources .
The plan generally requires the distribution of a pool of funds not more than 6.055% of league-wide revenues to certain qualifying lower-revenue teams and is funded as follows: (a) 50% from contributions by the top ten revenue earning teams (based on preseason and regular season revenues, net of arena costs) in accordance with a formula; (b) then from payments by teams participating in the playoffs, with each team contributing 35% of its gate receipts for each home playoff game; and (c) the remainder from centrally-generated NHL sources .
The actual amounts for the 2022-23 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 actual amounts for the 2023-24 seasons may vary significantly from the recorded provisions based on actual operating results for each league and all teams within each league for the season and other factors.
See Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for a discussion of the 2021 Knicks Credit Agreement, 2021 Rangers Credit Agreement, and 2021 Rangers NHL Advance Agreement (each as defined therein).
See Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for a discussion of the Knicks Credit Agreement, Rangers Credit Agreement, and Rangers NHL Advance Agreement.
The Company recognizes the estimated amount associated with luxury tax expense or the amount it expects to receive as a non-tax paying team, if applicable, on a straight-line basis over the NBA regular season as a component of direct operating expenses. The revised luxury tax rates will become effective with the 2025-26 season. NBA Escrow System/Revenue Sharing .
The Company recognizes the estimated amount associated with luxury tax expense or the amount it expects to receive as a non-tax paying team, if applicable, on a straight-line basis over the NBA regular season as a component of direct operating expenses. NBA Escrow System/Revenue Sharing .
Impairment of Long-Lived and Indefinite-Lived Assets The Company’s long-lived and indefinite-lived assets accounted for approximately 27% of the Company’s consolidated total assets as of June 30, 2023 and consisted of the following: Goodwill $ 226,523 Indefinite-lived intangible assets 103,644 Property and equipment, net 30,501 $ 360,668 In assessing the recoverability of the Company’s long-lived and indefinite-lived assets, the Company must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets.
Impairment of Long-Lived and Indefinite-Lived Assets The Company’s long-lived and indefinite-lived assets accounted for approximately 27% of the Company’s consolidated total assets as of June 30, 2024 and consisted of the following: Goodwill $ 226,523 Indefinite-lived intangible assets 103,644 Property and equipment, net 28,541 $ 358,708 In assessing the recoverability of the Company’s long-lived and indefinite-lived assets, the Company must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets.
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 generally accepted accounting principles (“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).
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 generally accepted accounting principles (“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 (expense) income, net , which is not reflected in Operating income (loss). 37 Table of Contents The Company believes adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of the Company.
For the 2022-23 and 2021-22 seasons, the Knicks were not a luxury tax payer and we recorded approximately $15,074 and $10,457, respectively, of luxury tax proceeds from tax-paying teams. Tax obligations for years beyond the 2022-23 season will be subject to contractual player payroll obligations and corresponding NBA luxury tax thresholds.
For the 2023-24 and 2022-23 seasons, the Knicks were not a luxury tax payer and we recorded approximately $11,968 and $15,074, respectively, of luxury tax proceeds from tax-paying teams. Tax obligations for years beyond the 2023-24 season will be subject to contractual player payroll obligations and corresponding NBA luxury tax thresholds.
We believe we have sufficient liquidity, including approximately $40,398 in Cash and cash equivalents as of June 30, 2023, along with $230,000 of additional available borrowing capacity under existing credit facilities, to fund our operations and satisfy any obligations, for the foreseeable future.
We believe we have sufficient liquidity, including approximately $89,136 in Cash and cash equivalents as of June 30, 2024, along with $250,000 of additional available borrowing capacity under existing credit facilities, to fund our operations and satisfy any obligations, for the foreseeable future.
Our net provisions for revenue sharing, net of escrow, for the year ended June 30, 2023 was approximately $41,075. The actual amounts for the 2022-23 season may vary significantly from the recorded provision based on actual operating results for the league and all NHL teams for the season and other factors.
Our net provisions for revenue sharing, net of escrow, for the year ended June 30, 2024 was approximately $52,337. The actual amounts for the 2023-24 season may vary significantly from the recorded provision based on actual operating results for the league and all NHL teams for the season and other factors.
The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following: Arrangements with Multiple Performance Obligations The Company has contracts with customers, including multi-year sponsorship agreements, that contain multiple performance obligations.
Management believes its use of estimates in the consolidated financial statements to be reasonable. The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following: Arrangements with Multiple Performance Obligations The Company has contracts with customers, including multi-year sponsorship agreements, that contain multiple performance obligations.
Adjusted operating income The Company has amended the definition of adjusted operating income so that the impact of the non-cash portion of operating lease costs related to the Company’s Arena License Agreements with MSG Entertainment is no longer excluded in all periods presented.
Adjusted operating income During the fourth quarter of fiscal year 2023, the Company amended the definition of adjusted operating income (loss) so that the impact of the non-cash portion of operating lease costs related to the Company’s Arena License Agreements with MSG Entertainment is no longer excluded in the calculation of adjusted operating income (loss) in all periods presented.
See Note 7 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for information on the contractual obligations related to future lease payments, which are reflected on the consolidated balance sheet as lease liabilities as of June 30, 2023.
See Note 7 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for information on the contractual obligations related to future lease payments, which are reflected on the consolidated balance sheet as lease liabilities as of June 30, 2024. (d) Consists of amounts drawn under the Knicks Revolving Credit Facility.
In addition, as of June 30, 2023, the Company’s deferred revenue obligations were $147,561, net of billed, but not yet collected deferred revenue. The current portion of this balance is primarily comprised of obligations in connection with tickets and suites. In addition, the Company’s deferred revenue obligations included $24,833 from the NBA which the league provided to each team.
In addition, as of June 30, 2024, the Company’s deferred revenue obligations were $118,018, net of billed, but not yet collected deferred revenue. This balance is primarily comprised of obligations in connection with tickets and suites. In addition, the Company’s deferred revenue obligations included $11,033 from the NBA which the league provided to each team.
The increase was primarily due to higher average interest rates in the current year causing increased interest expense under the Knicks and the Rangers revolving credit facilities.
The increase was primarily due to increased interest expense caused by higher average interest rates in the current year and higher average borrowings under the Knicks Revolving Credit Facility in the current year.
Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies.
Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. The Company has presented the components that reconcile operating income (loss), the most directly comparable GAAP financial measure, to adjusted operating income (loss).
Adjusted operating income includes operating lease costs of (i) $41,524 and $40,314 of expense paid in cash for the years ended June 30, 2023 and 2022, respectively, and (ii) a non-cash expense of $26,096 and $27,305, for the years ended June 30, 2023 and 2022, respectively.
Adjusted operating income includes operating lease costs of (i) $42,769 and $41,524 of expense paid in cash for the years ended June 30, 2024 and 2023, respectively, and (ii) a non-cash expense of $24,850 and $26,096, for the years ended June 30, 2024 and 2023, respectively.
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, including $75,000 under the ASR (as defined below), dividends, if declared, and investments. As of June 30, 2023, we had $40,398 in Cash and cash equivalents.
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 June 30, 2024, we had $89,136 in Cash and cash equivalents.
The Company uses revenues and adjusted operating income (loss) measures as the most important indicators of its business performance and evaluates management’s effectiveness with specific reference to these indicators.
Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze the Company’s performance. The Company uses revenues and adjusted operating income (loss) measures as the most important indicators of its business performance and evaluates management’s effectiveness with specific reference to these indicators.
If the 40 Table of Contents Company cannot support such a conclusion or the Company does not elect to perform the qualitative assessment, the first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill.
If the Company cannot support such a conclusion or the Company does not elect to perform the qualitative assessment, a quantitative assessment is performed by comparing the fair value of a reporting unit with its carrying amount, including goodwill.
NBA Luxury Tax. Amounts in this paragraph are in thousands, except for luxury tax rates. The NBA CBA generally provides for a luxury tax that is applicable to all teams with aggregate player salaries exceeding a threshold that is set prior to each season based upon projected league-wide revenues (as defined under the NBA CBA).
The NBA CBA generally provides for a luxury tax that is applicable to all teams with aggregate player salaries exceeding a threshold that is set prior to each season based upon projected league-wide revenues (as defined under the NBA CBA), with the amount of luxury tax owed determined based on that season’s luxury tax bracket and tax rates.
Investing Activities Net cash used in investing activities for the year ended June 30, 2023 increased by $14,827 to $17,759 as compared to the prior year primarily due to higher purchases of investments in the current year and to a lesser extent, cash balances disposed of as part of the sale of CLG in the current year.
Investing Activities Net cash used in investing activities for the year ended June 30, 2024 decreased by $8,861 to $8,898 as compared to the prior year primarily due to lower purchases of investments in the current year and, to a lesser extent, the impact of cash balances disposed of as part of the sale of CLG in the prior year.
The decrease in operating income was primarily due to higher direct operating expenses and selling, general and administrative expenses, partially offset by higher revenues and to a lesser extent, lower depreciation and amortization. Interest expense, net Net interest expense increased $9,070, or 79%, to $20,492 as compared to the prior year.
The increase in operating income was primarily due to higher revenues, partially offset by higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses. Interest expense, net Interest expense, net increased $4,310, or 21%, to $24,802 as compared to the prior year.
(d) Consists of amounts drawn under the 2021 Knicks Revolving Credit Facility and 2021 Rangers Revolving Credit Facility. See Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further details.
See Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further details.
The Rangers played ten home playoff games at The Garden in the prior year as the team advanced to the Eastern Conference Finals, resulting in higher per-game revenue in the prior year, as compared to three home playoff games during the current year.
The Rangers played eight home playoff games in the current year as the team advanced to the Eastern Conference Finals, as compared to three home playoff games in the prior year. The Knicks played seven home playoff games at The Garden in the current year as compared to five home playoff games in the prior year.
Recently Issued Accounting Pronouncements and Critical Accounting Policies Recently Issued Accounting Pronouncements See Note 2 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for discussion of recently issued accounting pronouncements. 39 Table of Contents Critical Accounting Policies The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events.
Recently Issued Accounting Pronouncements and Critical Accounting Policies Recently Issued Accounting Pronouncements See Note 2 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for discussion of recently issued accounting pronouncements.
In addition, for teams that are taxpayers in at least three of four previous seasons, the above tax rates are increased by $1.00 for each increment. Fifty percent of the aggregate luxury tax payments is a funding source for the revenue sharing plan (described below) and the remaining 50% of such payments is distributed in equal shares to non-taxpaying teams.
Fifty percent of the aggregate luxury tax payments is a funding source for the revenue sharing plan (described below) and the remaining 50% of such payments is distributed in equal shares to non-taxpaying teams.
We also incur costs for travel, player insurance, league operating assessments (including a 6% NBA assessment on regular season ticket sales), NBA and NHL revenue sharing and, when applicable, NBA luxury tax.
We also incur costs for travel, player insurance, league operating assessments (including a 6% NBA assessment on regular season ticket sales), NBA and NHL revenue sharing, NBA luxury tax, when applicable, and charges for transactions relating to players for career-ending and season-ending injuries, trades, and waivers and contract termination costs of players and other team personnel, including coaches and team executives.
Seasonality of Our Business The Company’s dependence on revenues from its NBA and NHL sports teams generally means that it earns a disproportionate share of its revenues in the second and third quarters of the Company’s fiscal year, which is when the majority of the teams’ games are played.
See Note 14 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for more information on the Company’s pension obligations. 40 Table of Contents Seasonality of Our Business The Company’s dependence on revenues from its NBA and NHL sports teams generally means that it earns a disproportionate share of its revenues in the second and third quarters of the Company’s fiscal year, which is when the majority of the teams’ games are played.
The changes in working capital assets and liabilities were primarily driven by (i) lower Net related party receivables of $32,618, due to the timing of collections related to the Company’s Arena License Agreements, (ii) increased accrued and other liabilities of $28,806, primarily due to the timing of payments and recognition for compensation and (iii) an increase in deferred revenue of $6,818 primarily due to higher collections of ticket sales.
The changes in working capital assets and liabilities were primarily driven by (i) a decrease in accrued and other liabilities of $69,417 primarily due to higher payments related to employee compensation and league revenue sharing in the current year, (ii) an increase in net related party receivables of $27,820 primarily due to the timing of collections related to the Company’s arena license agreements and sponsorship sales and service representation agreements, and (iii) a decrease in deferred revenue of $27,482 primarily due to the timing of collections related to pre/regular season ticket sales.
Other Amounts collected for ticket sales, suite licenses and clubs, sponsorships and venue signage in advance of an event are recorded as deferred revenue and are recognized as revenues when earned.
Other Amounts collected for ticket sales, media rights, suite licenses and clubs, sponsorships and venue signage in advance the Company’s satisfaction of its contractual performance obligations are recorded as deferred revenue and are recognized as revenues when earned. Expenses The most significant expenses are player and other team personnel salaries.
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. Management believes its use of estimates in the consolidated financial statements to be reasonable.
Critical Accounting Policies The preparation of the Company’s consolidated 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.
The Company has presented the components that reconcile operating income (loss), the most directly comparable GAAP financial measure, to adjusted operating income (loss). 35 Table of Contents The following is a reconciliation of operating income to adjusted operating income: Years Ended June 30, 2023 2022 Change Percentage Operating income $ 85,174 $ 86,080 $ (906) (1) % Depreciation and amortization 3,577 5,042 Share-based compensation 25,203 24,245 Remeasurement of deferred compensation plan liabilities 1,091 (461) Adjusted operating income (a) $ 115,045 $ 114,906 $ 139 NM _________________ (a) The Company has amended the definition of adjusted operating income so that the impact of the non-cash portion of operating lease costs related to the Company’s Arena License Agreements with MSG Entertainment is no longer excluded.
The following is a reconciliation of operating income to adjusted operating income: Years Ended June 30, 2024 2023 Change Percentage Operating income $ 146,038 $ 85,174 $ 60,864 71 % Depreciation and amortization 3,164 3,577 Share-based compensation 21,291 25,203 Remeasurement of deferred compensation plan liabilities 1,749 1,091 Adjusted operating income (a) $ 172,242 $ 115,045 $ 57,197 50 % _________________ (a) During the fourth quarter of fiscal year 2023, the Company amended the definition of adjusted operating income so that the impact of the non-cash portion of operating lease costs related to the Company’s Arena License Agreements with MSG Entertainment is no longer excluded.
For the year ended June 30, 2023, adjusted operating income increased $139 to $115,045 as compared to the prior year.
For the year ended June 30, 2024, adjusted operating income increased $57,197, or 50%, to $172,242 as compared to the prior year.
All agreements between the Company and MSG Entertainment described herein were between the Company and Sphere Entertainment prior to the MSGE Distribution (except agreements entered into after the MSGE Distribution). Unless the context otherwise requires, all references to MSG Entertainment, Sphere Entertainment and MSG Networks refer to such entity, together with its direct and indirect subsidiaries.
All agreements between the Company and MSG Entertainment described herein were between the Company and Sphere Entertainment prior to the MSGE Distribution (except agreements entered into after the MSGE Distribution Date).
Direct operating expenses for the year ended June 30, 2023 increased $48,247, or 10%, to $548,811 as compared to the prior year.
Direct operating expenses for the year ended June 30, 2024 increased $67,703, or 12%, to $616,514 as compared to the prior year.
The amount of an impairment loss is measured as the amount by which a reporting unit’s carrying value exceeds its fair value determined in step one, not to exceed the carrying amount of goodwill. The second step of the goodwill impairment test compared the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill.
The amount of an impairment loss is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company elected to perform the qualitative assessment of impairment for the Company’s reporting unit for the fiscal year 2024 impairment test.
Factors Affecting Operating Results General Our operating results are largely dependent on the continued popularity and/or on-court or on-ice competitiveness of our Knicks and Rangers teams, which have a direct effect on ticket sales for the teams’ home games and are each team’s largest single source of revenue.
Other Expenses Other expenses primarily include Selling, general and administrative (“SG&A”) expenses that consist of (i) administrative costs, including compensation, costs under the Company’s services agreement with MSG Entertainment, operating lease costs and professional fees, (ii) fees related to the Company’s sponsorship sales and service representation agreements, and (iii) sales and marketing costs. 32 Table of Contents Factors Affecting Operating Results Our operating results are largely dependent on the continued popularity and/or on-court or on-ice competitiveness of our Knicks and Rangers teams, which have a direct effect on ticket sales for the teams’ home games and are each team’s largest single source of revenue.
Years Ended June 30, Change 2023 2022 Amount Percentage Revenues $ 887,447 $ 821,354 $ 66,093 8 % Direct operating expenses 548,811 500,564 48,247 10 % Selling, general and administrative expenses 249,885 229,668 20,217 9 % Depreciation and amortization 3,577 5,042 (1,465) (29) % Operating income 85,174 86,080 (906) (1) % Other income (expense): Interest expense, net (20,492) (11,422) (9,070) (79) % Miscellaneous income (expense), net 25,239 (726) 25,965 NM Income before income taxes 89,921 73,932 15,989 22 % Income tax expense (44,293) (25,052) (19,241) (77) % Net income 45,628 48,880 (3,252) (7) % Less: Net loss attributable to nonredeemable noncontrolling interests (2,165) (2,251) 86 4 % Net income attributable to Madison Square Garden Sports Corp.’s stockholders $ 47,793 $ 51,131 $ (3,338) (7) % NM — Percentage is not meaningful Revenues Revenues for the year ended June 30, 2023 increased $66,093, or 8%, to $887,447 as compared to the prior year.
Years Ended June 30, Change 2024 2023 Amount Percentage Revenues $ 1,027,149 $ 887,447 $ 139,702 16 % Direct operating expenses 616,514 548,811 67,703 12 % Selling, general and administrative expenses 261,433 249,885 11,548 5 % Depreciation and amortization 3,164 3,577 (413) (12) % Operating income 146,038 85,174 60,864 71 % Other income (expense): Interest expense, net (24,802) (20,492) (4,310) 21 % Miscellaneous (expense) income, net (15,568) 25,239 (40,807) NM Income before income taxes 105,668 89,921 15,747 18 % Income tax expense (46,897) (44,293) (2,604) 6 % Net income 58,771 45,628 13,143 29 % Less: Net loss attributable to nonredeemable noncontrolling interests — (2,165) 2,165 100 % Net income attributable to Madison Square Garden Sports Corp.’s stockholders $ 58,771 $ 47,793 $ 10,978 23 % NM — Percentage is not meaningful Revenues Revenues for the year ended June 30, 2024 increased $139,702, or 16%, to $1,027,149 as compared to the prior year.
The luxury tax rates for teams with aggregate player salaries above such threshold start at $1.50 for each $1.00 of team salary above the threshold up to $5,000 and scale up to $3.25 for each $1.00 of team salary that is from $15,000 to $20,000 over the threshold, and an additional tax rate increment of $0.50 applies for each additional $5,000 (or part thereof) of team salary in excess of $20,000 over the threshold.
Through the 2024-25 season, luxury tax rates for teams with aggregate player salaries above such threshold start at $1.50 for each $1.00 of team salary exceeding the threshold by 0% - 100% of the luxury tax bracket and scale up to $3.25 for each $1.00 of team salary exceeding the threshold by 300% - 400% of the luxury tax bracket.
This system was in place until the new CBA took effect on July 1, 2023. The NBA also has a revenue sharing plan that generally requires the distribution of a pool of funds to teams with below-average net revenues (as defined in the plan), subject to reduction or elimination based on individual team market size and profitability.
Each team is entitled to receive an equal one-thirtieth share of the compensation reductions up to 10% and the excess above 10% is allocated in proportion to each team’s player payroll. 31 Table of Contents The NBA also has a revenue sharing plan that generally requires the distribution of a pool of funds to teams with below-average net revenues (as defined in the plan), subject to reduction or elimination based on individual team market size and profitability.

… 62 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed2 unchanged
Biggest changeThe effect of a hypothetical 100 basis point increase in floating interest rates prevailing as of June 30, 2023 and continuing for a full year would increase interest expense approximately $3.0 million. 43 Table of Contents
Biggest changeThe effect of a hypothetical 100 basis point increase in floating interest rates prevailing as of June 30, 2024 and continuing for a full year would increase interest expense approximately $2.8 million.
See Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for more information on our credit facilities. As of June 30, 2023, we had a total of $295 million of borrowings outstanding under our credit facilities.
See Note 13 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for more information on our credit facilities. As of June 30, 2024, we had a total of $275 million of borrowings outstanding under our credit facilities.

Other MSGS 10-K year-over-year comparisons