SEC Form 10-Q filed by Madison Square Garden Entertainment Corp.

5/9/24 4:02:36 PM ET

$MSGE

Services-Misc. Amusement & Recreation

Consumer Discretionary

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msge-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________

FORM 10-Q

________________________

(Mark One)


			☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


			☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-41627

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

(Exact name of registrant as specified in its charter)


Delaware						92-0318813
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Two Penn Plaza

New York

10121

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (212) 465-6000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	MSGE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☑

Smaller reporting company

☐

Emerging growth company

☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

Number of shares of common stock outstanding as of April 30, 2024:


Class A Common Stock par value $0.01 per share	—	41,158,016
Class B Common Stock par value $0.01 per share	—	6,866,754

INDEX TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS


			Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Condensed Consolidated Balance Sheets as of March 31, 202 4 and June 30, 2023 (unaudited)			2

Condensed Consolidated and Combined Statements of Operations for the three and nine months ended March 31, 202 4 and 202 3 (unaudited)			3

Condensed Consolidated and Combined Statements of Comprehensive Income for the three and nine months ended March 31, 202 4 and 202 3 (unaudited)			4

Condensed Consolidated and Combined Statements of Cash Flows for the nine months ended March 31, 202 4 and 202 3 (unaudited)			5

Condensed Consolidated and Combined Statements of (Deficit) Equity for the three and nine months ended March 31, 202 4 and 202 3 (unaudited)			6

Notes to the Condensed Consolidated and Combined Financial Statements (unaudited)			8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			26

Item 3. Quantitative and Qualitative Disclosures About Market Risk			39

Item 4. Controls and Procedures			39

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			40

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			40

Item 6. Exhibits			40

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data)





	As of
	March 31,		June 30,
	2024		2023

ASSETS
Current Assets:
Cash, cash equivalents, and restricted cash	$	28,308	$	84,355
Accounts receivable, net	108,560		63,898
Related party receivables, current	29,690		69,466
Prepaid expenses and other current assets	89,240		77,562
Total current assets	255,798		295,281
Non-Current Assets:
Property and equipment, net	636,014		628,888
Right-of-use lease assets	307,435		235,790
Goodwill	69,041		69,041
Indefinite-lived intangible assets	63,801		63,801
Other non-current assets	126,482		108,356
Total assets	$	1,458,571	$	1,401,157
LIABILITIES AND DEFICIT
Current Liabilities:
Accounts payable, accrued and other current liabilities	$	205,076	$	214,725
Related party payables, current	46,596		47,281
Long-term debt, current	16,250		16,250
Operating lease liabilities, current	31,570		36,529
Deferred revenue	251,270		225,855
Total current liabilities	550,762		540,640
Non-Current Liabilities:
Long-term debt, net of deferred financing costs	602,468		630,184
Operating lease liabilities, non-current	330,902		219,955
Deferred tax liabilities, net	24,151		23,518
Other non-current liabilities	44,851		56,332
Total liabilities	1,553,134		1,470,629
Commitments and contingencies (see Note 9)
Deficit:
Class A Common Stock (a)	455		450
Class B Common Stock (b)	69		69
Additional paid-in-capital	29,656		17,727
Treasury stock at cost (4,365 and 840 shares outstanding as of March 31, 2024 and June 30, 2023, respectively)	(140,512)		(25,000)
Retained earnings (deficit)	48,676		(28,697)
Accumulated other comprehensive loss	(32,907)		(34,021)
Total deficit	(94,563)		(69,472)


Total liabilities and deficit	$	1,458,571	$	1,401,157

_________________

(a) Class A Common Stock, $0.01 par value per share, 120,000 shares authorized; 45,523 and 45,024 shares issued as of March 31, 2024 and June 30, 2023, respectively.

(b) Class B Common Stock, $0.01 par value per share, 30,000 shares authorized; 6,867 shares issued as of March 31, 2024 and June 30, 2023.

See accompanying notes to the unaudited condensed consolidated and combined financial statements.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands, except per share data)


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Revenues (a)
Revenues from entertainment offerings	$	146,221	$	129,260	$	581,025	$	524,331
Food, beverage, and merchandise revenues	45,380		39,954		127,379		112,412
Arena license fees and other leasing revenue	36,712		32,015		64,787		66,818
Total revenues	228,313		201,229		773,191		703,561
Direct operating expenses (a)

Entertainment offerings, arena license fees, and other leasing direct operating expenses	(112,997)		(90,296)		(375,786)		(332,290)
Food, beverage, and merchandise direct operating expenses	(29,024)		(24,837)		(70,673)		(65,108)
Total direct operating expenses	(142,021)		(115,133)		(446,459)		(397,398)
Selling, general, and administrative expenses (a)	(53,945)		(44,122)		(151,156)		(127,537)
Depreciation and amortization	(13,182)		(14,798)		(39,972)		(46,369)
(Loss) gains, net on dispositions	—		(51)		—		4,361
Restructuring charges	(2,362)		(2,461)		(14,803)		(9,820)
Operating income	16,803		24,664		120,801		126,798

Interest income (a)	341		2,482		2,275		5,804
Interest expense	(14,425)		(13,423)		(43,761)		(38,055)
Other income (expense), net	78		8,070		(1,545)		6,784

Income from operations before income taxes	2,797		21,793		77,770		101,331
Income tax expense	(2)		(73)		(397)		(804)
Net income	2,795		21,720		77,373		100,527
Less: Net loss attributable to nonredeemable noncontrolling interest	—		—		—		(553)
Net income attributable to MSG Entertainment’s stockholders	$	2,795	$	21,720	$	77,373	$	101,080

Income per share attributable to MSG Entertainment’s stockholders:
Basic	$	0.06	$	0.42	$	1.59	$	1.95
Diluted	$	0.06	$	0.42	$	1.58	$	1.95

Weighted-average number of shares of common stock:
Basic (b)	48,109		51,768		48,675		51,768
Diluted (b)	48,447		51,768		48,883		51,768

_________________

(a) See Note 14. Related Party Transactions for further information on related party arrangements.

(b) On April 20, 2023, 51,768 common shares were distributed to Sphere Entertainment Co. stockholders in the MSGE Distribution (as defined in Note 1. Description of Business and Basis of Presentation). This share amount is being utilized for the calculation of basic and diluted loss per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders for the three and nine months ended March 31, 2023 because the Company was not a standalone public company prior to the MSGE Distribution.

See accompanying notes to the unaudited condensed consolidated and combined financial statements.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Net income	$	2,795	$	21,720	$	77,373	$	100,527
Other comprehensive income, before income taxes:

Amortization of net actuarial loss included in net periodic benefit cost	450		323		1,350		1,063
Other comprehensive income, before income taxes	450		323		1,350		1,063
Income tax expense	(78)		(56)		(236)		(185)
Other comprehensive income, net of income taxes	372		267		1,114		878
Comprehensive income	3,167		21,987		78,487		101,405
Less: Comprehensive loss attributable to nonredeemable noncontrolling interest	—		—		—		(553)
Comprehensive income attributable to MSG Entertainment	$	3,167	$	21,987	$	78,487	$	101,958

See accompanying notes to the unaudited condensed consolidated and combined financial statements.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)





	Nine Months Ended
	March 31,
	2024		2023
OPERATING ACTIVITIES:
Net income	$	77,373	$	100,527
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	39,972		46,369
Share-based compensation expense	26,186		24,273
Deferred income tax expense	397		—
Provision for doubtful accounts	158		—
Amortization of deferred financing costs	2,508		2,409
Related party paid in kind interest	(512)		(2,939)
Net unrealized and realized gains on equity investments with readily determinable fair value	(391)		(4,307)

Gains, net on dispositions	—		(4,361)

Change in assets and liabilities:
Accounts receivable, net	(44,820)		(27,890)
Related party receivables and payables, net	39,091		(5,292)
Prepaid expenses and other current and non-current assets	(41,434)		(29,855)
Accounts payable, accrued and other current, and non-current liabilities	(18,687)		(20,812)
Deferred revenue	25,415		56,531
Operating lease right-of-use assets and lease liabilities	5,798		(2,312)
Net cash provided by operating activities	$	111,054	$	132,341
INVESTING ACTIVITIES:
Capital expenditures	(19,646)		(12,187)
Proceeds from dispositions, net	—		27,904
Proceeds from sale of investments	13,484		4,244
Loans to related parties	(65,000)		(6,700)
Other investing activities	(1,463)		—
Net cash (used in) provided by investing activities	$	(72,625)	$	13,261


















FINANCING ACTIVITIES:
Proceeds from revolving credit facility	73,000		168
Principal repayments on term loan and revolving credit facilities	(102,288)		(6,063)
Repayments on related party loan, net	(304)		—
Payments for debt financing costs	(632)		—
Taxes paid in lieu of shares issued for equity-based compensation	(13,378)		—
Stock repurchases	(50,874)		—
Net transfers to Sphere Entertainment and Sphere Entertainment’s subsidiaries	—		(79,299)
Net cash used in financing activities	$	(94,476)	$	(85,194)
Net (decrease) increase in cash, cash equivalents, and restricted cash	(56,047)		60,408
Cash, cash equivalents, and restricted cash, beginning of period	84,355		62,573
Cash, cash equivalents, and restricted cash, end of period	$	28,308	$	122,981
Non-cash investing and financing activities:
Capital expenditures incurred but not yet paid or paid by landlord	$	29,389	$	504
Non-cash stock repurchases in lieu of payment of loan due from related party	$	65,512	$	5,350

See accompanying notes to the unaudited condensed consolidated and combined financial statements.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF (DEFICIT) EQUITY (Unaudited)

(in thousands)






	Common Stock		Sphere Entertainment Co. Investment		Additional Paid- Capital		Treasury Stock		Retained Earnings (Deficit)		Accumulated Other Comprehensive Loss		Total Madison Square Garden Entertainment Corp. Stockholders’ (Deficit) Equity		Nonredeemable Noncontrolling Interest		Total (Deficit) Equity
Balance as of December 31, 2023	$	524	$	—	$	25,339	$	(140,512)	$	45,881	$	(33,279)	$	(102,047)	$	—	$	(102,047)
Net income	—		—		—		—		2,795		—		2,795		—		2,795
Other comprehensive income	—		—		—		—		—		372		372		—		372
Comprehensive income	—		—		—		—		—		—		3,167		—		3,167
Share-based compensation	—		—		5,448		—		—		—		5,448		—		5,448
Tax withholding associated with shares issued for share-based compensation	—		—		(1,131)		—		—		—		(1,131)		—		(1,131)
Balance as of March 31, 2024	$	524	$	—	$	29,656	$	(140,512)	$	48,676	$	(32,907)	$	(94,563)	$	—	$	(94,563)

Balance as of December 31, 2022	$	—	$	133,018	$	—	$	—	$	—	$	(34,129)	$	98,889	$	—	$	98,889
Net income	—		21,720		—		—		—		—		21,720		—		21,720
Other comprehensive income	—		—		—		—		—		267		267		—		267
BCE Disposition	—		—		—		—		—		—		—		—		—
Comprehensive income	—		—		—		—		—		—		21,987		—		21,987
Net decrease in Sphere Entertainment Co. Investment	—		(77,373)		—		—		—		—		(77,373)		—		(77,373)
Balance as of March 31, 2023	$	—	$	77,365	$	—	$	—	$	—	$	(33,862)	$	43,503	$	—	$	43,503

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF (DEFICIT) EQUITY (Unaudited)

(in thousands)






	Common Stock		Sphere Entertainment Co. Investment		Additional Paid- Capital		Treasury Stock		Retained Earnings (Deficit)		Accumulated Other Comprehensive Loss		Total Madison Square Garden Entertainment Corp. Stockholders’ (Deficit) Equity		Nonredeemable Noncontrolling Interest		Total (Deficit) Equity
Balance as of June 30, 2023	$	519	$	—	$	17,727	$	(25,000)	$	(28,697)	$	(34,021)	$	(69,472)	$	—	$	(69,472)
Net income	—		—		—		—		77,373		—		77,373		—		77,373
Other comprehensive income	—		—		—		—		—		1,114		1,114		—		1,114
Comprehensive income	—		—		—		—		—		—		78,487		—		78,487
Share-based compensation	—		—		26,186		—		—		—		26,186		—		26,186
Tax withholding associated with shares issued for share-based compensation	5		—		(13,383)		—		—		—		(13,378)		—		(13,378)
Stock repurchases, inclusive of tax	—		—		(874)		(115,512)		—		—		(116,386)		—		(116,386)
Balance as of March 31, 2024	$	524	$	—	$	29,656	$	(140,512)	$	48,676	$	(32,907)	$	(94,563)	$	—	$	(94,563)

Balance as of June 30, 2022	$	—	$	33,265	$	—	$	—	$	—	$	(34,740)	$	(1,475)	$	(114)	$	(1,589)
Net income	—		101,080		—		—		—		—		101,080		(553)		100,527
Other comprehensive income	—		—		—		—		—		878		878		—		878
BCE disposition	—		—		—		—		—		—		—		667		667
Comprehensive income	—		—		—		—		—		—		101,958		114		102,072
Net increase in Sphere Entertainment Co. Investment	—		(56,980)		—		—		—		—		(56,980)		—		(56,980)
Balance as of March 31, 2023	$	—	$	77,365	$	—	$	—	$	—	$	(33,862)	$	43,503	$	—	$	43,503

See accompanying notes to the unaudited condensed consolidated and combined financial statements.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

All amounts included in the following Notes to Condensed Consolidated and Combined Financial Statements (unaudited) are presented in thousands, except per share data or as otherwise noted.

Note 1. Description of Business and Basis of Presentation

Description of Business

Madison Square Garden Entertainment Corp. (together with its subsidiaries, as applicable, the “Company” or “MSG Entertainment”), is a live entertainment company comprised of iconic venues and marquee entertainment content. Utilizing the Company’s powerful brands and live entertainment expertise, the Company delivers unique experiences that set the standard for excellence and innovation while forging deep connections with diverse and passionate audiences. The Company operates and reports financial information in one reportable segment.

The Company’s portfolio of venues includes: Madison Square Garden (“The Garden”), The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. The Company also owns and produces the original production, the Christmas Spectacular Starring the Radio City Rockettes (the “Christmas Spectacular”). The Company also has an entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually.

MSG Entertainment Distribution

On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment Co. (together with its subsidiaries, as applicable, “Sphere Entertainment”), distributed approximately 67% of the outstanding common stock of the Company to its stockholders (the “MSGE Distribution”), with Sphere Entertainment retaining approximately 33% of the outstanding common stock of the Company in the form of Class A common stock, $0.01 par value per share (“Class A Common Stock”) immediately following the MSGE Distribution. As a result, the Company became an independent publicly traded company on April 21, 2023 through the MSGE Distribution. Following the completion of the secondary offering by Sphere Entertainment of the Company’s Class A Common Stock on September 22, 2023, Sphere Entertainment no longer owns any of the Company’s outstanding common stock. See Note 1. Description of Business and Basis of Presentation to the Company’s audited consolidated and combined financial statements and notes thereto as of June 30, 2023 and 2022 and for the three years ended June 30, 2023, 2022 and 2021 (the “Audited Consolidated and Combined Annual Financial Statements”) included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023 filed with the Securities and Exchange Commission (the “SEC”) on August 18, 2023 (the “2023 Form 10-K”) for more information regarding the MSGE Distribution.

Basis of Presentation

The Company reports on a fiscal year basis ending on June 30th (“Fiscal Year”). In these unaudited condensed consolidated and combined financial statements, the years ending and ended on June 30, 2024 and 2023, respectively, are referred to as “Fiscal Year 2024” and “Fiscal Year 2023,” respectively.

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and Article 10 of Regulation S-X of the SEC, and should be read in conjunction with the Company’s Audited Consolidated and Combined Annual Financial Statements.

Subsequent to the MSGE Distribution, the Company’s balance sheets as of March 31, 2024 and June 30, 2023 and the statements of operations for the three and nine months ended March 31, 2024 are presented on a consolidated basis, as the Company became a standalone public company on April 21, 2023. The Company’s financial statements prior to April 21, 2023 that are included in the results of operations for the three and nine months ended March 31, 2023 were prepared on a stand-alone basis derived from the consolidated financial statements and accounting records of Sphere Entertainment. These financial statements reflect the combined historical results of operations, financial position and cash flows of the Company in accordance with GAAP and SEC Staff Accounting Bulletin Topic 1-B, Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity, and Article 10 of Regulation S-X of the SEC for interim financial information. References to GAAP issued by the Financial Accounting Standards Board (“FASB”) in these footnotes are to the FASB Accounting Standards Codification, also referred to as “ASC.”

Management believes the assumptions underlying the combined financial statements, including the assumptions regarding allocating general corporate expenses, are reasonable. Nevertheless, the combined financial statements may not include all of the actual expenses that would have been incurred by the Company and may not reflect its combined results of operations, financial position and cash flows had it been a stand-alone company during the periods presented on a combined basis. Actual costs that would have been incurred if the Company had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. The Company is unable to quantify the amounts that it would have recorded during the historical periods on a stand-alone basis. See Note 17. Related Party Transactions in

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

the Audited Consolidated and Combined Annual Financial Statements for further details regarding allocations of certain costs from the Company to Sphere Entertainment.

In the opinion of the Company, the accompanying financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2024 and its results of operations for the three and nine months ended March 31, 2024 and 2023 and cash flows for the nine months ended March 31, 2024, and 2023. The condensed consolidated balance sheets were derived from the Audited Consolidated and Combined Annual Financial Statements but do not contain all of the footnote disclosures from the Audited Consolidated and Combined Annual Financial Statements.

The results of operations for the periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year. As a result of the production of the Christmas Spectacular, arena license fees in connection with the use of The Garden by the New York Knicks (the “Knicks”) of the National Basketball Association (the “NBA”) and the New York Rangers (the “Rangers”) of the National Hockey League (the “NHL”), the Company generally earns a disproportionate share of its annual revenues in the second and third quarters of its fiscal year.

Reclassifications

For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation in accordance with GAAP. The accompanying unaudited condensed consolidated and combined financial information for the three and nine-month periods ended March 31, 2024, and 2023 have been revised to change the presentation of our revenue and direct operating expenses from an aggregated to a disaggregated basis.

Note 2. Summary of Significant Accounting Policies

A. Principles of Consolidation and Combination

All significant intracompany accounts and balances within the Company’s consolidated businesses have been eliminated.

For the periods prior to the MSGE Distribution Date, the combined financial statements include certain assets and liabilities that were historically held at Sphere Entertainment’s corporate level but were specifically identifiable or otherwise attributable to the Company. Certain historical intercompany transactions between Sphere Entertainment and the Company have been included as components of Sphere Entertainment’s investment in the condensed consolidated and combined financial statements, as they are considered to be effectively settled upon effectiveness of the MSGE Distribution and were not historically settled in cash. Certain other historical intercompany transactions between Sphere Entertainment and the Company have been classified as related party, rather than intercompany, in the condensed consolidated and combined financial statements as they were historically settled in cash. Expenses related to corporate allocations from the Company to Sphere Entertainment prior to the MSGE Distribution are considered to be effectively settled in the condensed consolidated and combined financial statements at the time the transaction is recorded, with the offset recorded against Sphere Entertainment’s investment. See Note 14. Related Party Transactions, for further information on related party arrangements.

The Company disposed of its controlling interest in Boston Calling Events, LLC on December 2, 2022 (the “BCE Disposition”) and these condensed consolidated and combined financial statements reflect the results of operations of BCE until the BCE Disposition. See Note 3. Dispositions for further information on the BCE disposition.

B. Use of Estimates

The preparation of the accompanying condensed consolidated and combined financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the provision for credit losses, goodwill, intangible assets, other long-lived assets, deferred tax assets, pension and other postretirement benefit obligations and the related net periodic benefit cost, and other liabilities. In addition, estimates are used in revenue recognition, depreciation and amortization, litigation matters and other matters. Management believes its use of estimates in the financial statements to be reasonable.

Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and, as such, these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the Company’s condensed consolidated financial statements in future periods.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

C. Revenue Recognition and Direct Operating Expenses

The following reflects an update to the Company’s comprehensive revenue recognition and direct operating expense accounting policies to align with the disaggregation of revenue and direct operating expenses as presented on the condensed consolidated and combined statements of operations.

The Company generates revenue from the provision of services and sale of tangible products, as well as leasing transactions. Revenues are presented under these three categories in the condensed consolidated and combined statements of operations, as described below.

Service revenue, presented as “Revenues from entertainment offerings” primarily includes:

•Ticket sales and other ticket-related revenue

•Venue license fees for events held at the Company’s venues that the Company does not produce or promote/co-promote

•Sponsorship and signage

•Suite licenses and single night suite rentals

•Advertising commissions and related service fees

•Commissions related to the sale of merchandise for which the Company is not the principal in the underlying transaction

Direct operating expenses related to the provision of services and leasing, presented as “Entertainment offerings, arena license fees, and other leasing direct operating expenses”, primarily include:(a)

•Event production costs including direct personnel expenses

•Venue operations and infrastructure costs (a)

•Venue rental costs for venues not owned by the Company

•Sponsorship and signage fulfillment costs

•Contractual revenue sharing expenses related to suite licenses and certain internal signage

•Event-related marketing and advertising costs

Product revenue, presented as “Food, beverage, and merchandise revenues”, includes:

•Sales of food and beverage during events held at the Company’s venues

•Sales of the Company’s merchandise at the Company’s venues and via traditional retail channels

Direct operating expenses related to the sale of products, presented as “Food, beverage, and merchandise direct operating expenses” include:

•Costs of goods sold including direct personnel expenses

•Contractual revenue sharing expenses related to food and beverage sold at events held by Madison Square Garden Sports Corp. (together with its subsidiaries, as applicable, “MSG Sports”) at The Garden

Lease revenue, presented as “Arena license fees and other leasing revenue”, includes:

•Rental fees related to the arena license agreements that require the Knicks and the Rangers to play their home games at The Garden (the “Arena License Agreements”) with MSG Sports

•Sublease income

_________________

(a) Venue operations and infrastructure costs are not specifically allocated to each revenue category, but are instead attributed in their entirety to service revenue, which is the Company’s principal revenue category. Leasing direct operating expenses materially consist of venue operations and infrastructure costs. As a result, the Company combines service and leasing direct operating expenses within “Entertainment offerings, arena license fees, and other leasing direct operating expenses” for presentation purposes.

The Company recognizes revenue when, or as, performance obligations under the terms of a contract are satisfied, which generally occurs when, or as, control of promised goods or services is transferred to customers. Revenue is measured as the amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services (“transaction price”). To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and the determination of whether to include such estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available. The Company accounts for taxes collected from customers and remitted to governmental authorities on a net basis and excludes these amounts from revenues.

In addition, the Company defers certain costs to fulfill the Company’s contracts with customers to the extent such costs relate directly to the contracts, are expected to generate resources that will be used to satisfy the Company’s performance obligations under the

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

contracts, and are expected to be recovered through revenue generated under the contracts. Contract fulfillment costs are expensed as the Company satisfies the related performance obligations.

Arrangements with Multiple Performance Obligations

The Company enters into arrangements with multiple performance obligations, such as multi-year sponsorship agreements, which may derive revenues for the Company, as well as Sphere Entertainment and MSG Sports within a single arrangement. The Company also derives revenue from similar types of arrangements which are entered into by MSG Sports. Payment terms for such arrangements can vary by contract, but payments are generally due in installments throughout the contractual term. The performance obligations included in each sponsorship agreement vary and may include advertising and other benefits such as, but not limited to, signage at The Garden and the Company’s other venues, digital advertising, event or property-specific advertising, as well as non-advertising benefits such as suite licenses and event tickets. To the extent the Company’s multi-year arrangements provide for performance obligations that are consistent over the multi-year contractual term, such performance obligations generally meet the definition of a series as provided for under the accounting guidance. If performance obligations are concluded to meet the definition of a series, the contractual fees for all years during the contract term are aggregated and the related revenue is recognized proportionately as the underlying performance obligations are satisfied.

The timing of revenue recognition for each performance obligation is dependent upon the facts and circumstances surrounding the Company’s satisfaction of its respective performance obligation. The Company allocates the transaction price for such arrangements to each performance obligation within the arrangement based on the estimated relative standalone selling price of the performance obligation. The Company’s process for determining its estimated standalone selling prices involves management’s judgment and considers multiple factors including company specific and market specific factors that may vary depending upon the unique facts and circumstances related to each performance obligation. Key factors considered by the Company in developing an estimated standalone selling price for its performance obligations include, but are not limited to, prices charged for similar performance obligations, the Company’s ongoing pricing strategy and policies, and consideration of pricing of similar performance obligations sold in other arrangements with multiple performance obligations.

The Company may incur costs such as commissions to obtain its multi-year sponsorship agreements. The Company assesses such costs for capitalization on a contract by contract basis. To the extent costs are capitalized, the Company estimates the useful life of the related contract asset, which may be the underlying contract term or the estimated customer life depending on the facts and circumstances surrounding the contract. The contract asset is amortized over the estimated useful life.

Principal versus Agent Revenue Recognition

The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service before transfer to the customer. When the Company concludes that it controls the good or service before transfer to the customer, the Company is considered a principal in the transaction and records revenue on a gross basis. When the Company concludes that it does not control the good or service before transfer to the customer but arranges for another entity to provide the good or service, the Company acts as an agent and records revenue on a net basis in the amount it earns for its agency service.

Contract Balances

Amounts collected in advance of the Company’s satisfaction of its contractual performance obligations are recorded as a contract liability within deferred revenue, and are recognized as the Company satisfies the related performance obligations. Amounts collected in advance of events for which the Company is not the promoter or co-promoter do not represent contract liabilities and are recorded within accrued and other current liabilities on the accompanying consolidated and combined balance sheets. Amounts recognized as revenue for which the Company has a right to consideration for goods or services transferred to customers and for which the Company does not have an unconditional right to bill as of the reporting date are recorded as contract assets. Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional.

Production Costs for the Company’s Original Productions

The Company defers certain costs of productions such as creative design, scenery, wardrobes, rehearsal and other related costs for the Company’s proprietary shows. Deferred production costs are amortized on a straight-line basis over the course of a production’s performance period using the expected life of a show’s assets and are recorded as a component of Entertainment offerings, arena license fees, and other leasing direct operating expenses on the Company’s condensed consolidated and combined statement of

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

operations. Deferred production costs are subject to recoverability assessments whenever there is an indication of potential impairment.

Revenue Sharing Expenses

Revenue sharing expenses are determined based on contractual agreements between the Company and MSG Sports, primarily related to suite licenses, certain internal signage and in-venue food and beverage sales and are recorded as a component of Entertainment offerings, arena license fees, and other leasing direct operating expenses on the Company’s condensed consolidated and combined statement of operations.

D. Recently Issued and Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, Improvement to Reportable Segment Disclosures. This ASU aims to improve segment disclosures through enhanced disclosures about significant segment expenses. The standard requires disclosure of significant expense categories and amounts for such expenses, including those segment expenses that are regularly provided to the chief operating decision maker, easily computable from information that is regularly provided, or significant expenses that are expressed in a form other than actual amounts. This standard will be effective for the Company in Fiscal Year 2025 and is required to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s condensed consolidated and combined financial statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures which applies to all entities subject to income taxes. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be helpful to understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, assess income tax information that affects cash flow forecasts and capital allocation decisions, and identify potential opportunities to increase future cash flows. This standard will be effective for the Company in Fiscal Year 2026 and should be applied prospectively. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s condensed consolidated and combined financial statements.

Note 3. Dispositions

The Company has not had any dispositions during Fiscal Year 2024.

Disposition of Our Interest in Boston Calling Events

The Company entered into an agreement on December 1, 2022 to sell its controlling interest in BCE. The transaction closed on December 2, 2022, resulting in a total gain on sale of $8,744, net of transaction costs. BCE meets the definition of a business under SEC Regulation S-X Rule 11-01(d)-1 and ASC Topic 805 — Business Combinations. The BCE Disposition did not represent a strategic shift with a major effect on the Company’s operations, and as such, has not been reflected as a discontinued operation under ASC Subtopic 205-20 — Discontinued Operations. The gain on the BCE Disposition was recorded in (Loss) gains, net on dispositions in the condensed consolidated and combined statements of operations.

Disposition of Corporate Aircraft

On December 30, 2022, the Company sold its owned aircraft for $20,375. In connection with the sale, the Company recognized a loss of $4,383, net of transaction costs. The loss on the aircraft disposition was recorded in (Loss) gains, net on dispositions in the condensed combined statements of operations.

Note 4. Revenue Recognition

Contracts with Customers

All revenue recognized in the condensed consolidated and combined statements of operations is considered to be revenue from contracts with customers in accordance with ASC Topic 606, Revenue From Contracts with Customers, except for revenues from the Arena License Agreements, leases and subleases that are accounted for in accordance with ASC Topic 842, Leases.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by major source based upon the timing of satisfaction of the Company’s performance obligations to the customer for the three and nine months ended March 31, 2024 and 2023:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Event-related offerings (a)	$	113,165	$	95,634	$	501,211	$	432,729
Sponsorship, signage, and suite licenses (b)	68,695		64,079		182,339		172,708
Other (c)	9,741		9,501		24,854		31,306
Total revenues from contracts with customers	191,601		169,214		708,404		636,743
Arena license fees and other leasing revenue	36,712		32,015		64,787		66,818
Total revenues	$	228,313	$	201,229	$	773,191	$	703,561

_________________

(a) Event-related and entertainment offerings revenues are recognized at a point in time.

(b) See Note 2. Summary of Significant Accounting Policies and Note 4. Revenue Recognition, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for further details on the pattern of recognition of sponsorship, signage, and suite license revenues.

(c) Primarily consists of (i) revenues from sponsorship sales and representation agreements with MSG Sports and (ii) advertising commission revenues recognized under the advertising sales representation agreement (the “Networks Advertising Sales Representation Agreement”) between the Company and Sphere Entertainment’s subsidiary, MSGN Holdings, L.P. (“MSG Networks”). The Networks Advertising Sales Representation Agreement was terminated as of December 31, 2022.

In addition to the disaggregation of the Company’s revenue by major source as disclosed above, the following table disaggregates the Company’s revenues by revenue category in accordance with the required entity-wide disclosure requirements of ASC Subtopic 280-10-50-38 to 40, Segment Reporting, and the disaggregation of revenue required disclosures in accordance with ASC Subtopic 606-10-50-5, Revenue From Contracts with Customers-Overall-Disclosures, for the three and nine months ended March 31, 2024 and 2023.


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Ticketing and venue license fee revenues (a)	$	64,859	$	48,179	$	361,458	$	304,637
Sponsorship and signage, suite, and advertising commission revenues (b)	80,269		79,493		214,873		216,788
Food, beverage, and merchandise revenues	45,380		39,954		127,379		112,412
Other	1,093		1,588		4,694		2,906
Total revenues from contracts with customers	191,601		169,214		708,404		636,743
Arena license fees and other leasing revenue	36,712		32,015		64,787		66,818
Total revenues	$	228,313	$	201,229	$	773,191	$	703,561

_________________

(a) Amounts include ticket sales, including other ticket-related revenue, and venue license fees from the Company’s events such as (i) concerts, (ii) the presentation of the Christmas Spectacular and (iii) other live entertainment and sporting events.

(b) Amounts include (i) revenues from sponsorship sales and representation agreements with MSG Sports and (ii) advertising commission revenues from MSG Networks until the termination of the Networks Advertising Sales Representation Agreement as of December 31, 2022.

Contract Balances

The following table provides information about the opening and closing contract balances from the Company’s contracts with customers as of March 31, 2024 and June 30, 2023:


	As of
	March 31, 2024		June 30, 2023
Receivables from contracts with customers, net (a)	$	110,480	$	69,295
Contract assets, current (b)	$	8,584	$	11,254
Deferred revenue, including non-current portion (c)	$	251,270	$	226,029

________________

(a) Receivables from contracts with customers, net, which are reported in Accounts receivable, net and Related party receivables, current in the Company’s

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

condensed consolidated balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers. As of March 31, 2024 and June 30, 2023, the Company’s receivables from contracts with customers above included $4,309 and $5,397, respectively, related to various related parties. See Note 14. Related Party Transactions for further details on related party arrangements.

(b) Contract assets, current, which are reported as Prepaid expenses and other current assets in the Company’s condensed consolidated balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to customers, for which the Company does not have an unconditional right to bill as of the reporting date. Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional.

(c) Deferred revenue primarily relates to the Company’s receipt of consideration from customers in advance of the Company’s transfer of goods or services to the customers. Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to a customer. Revenue recognized for the three and nine months ended March 31, 2024 relating to the deferred revenue balance as of June 30, 2023 was $23,006 and $158,715, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2024, the Company’s remaining performance obligations under contracts were approximately $493,000, of which 43% is expected to be recognized over the next two years and an additional 57% of the balance is expected to be recognized thereafter. This primarily relates to performance obligations under sponsorship and suite license agreements that have original expected durations longer than one year and for which the consideration is not variable. In developing the estimated revenue, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

Note 5. Restructuring Charges

During the nine months ended March 31, 2024, the Company recorded restructuring charges related to termination benefits for certain corporate executives and employees. The Company recorded restructuring charges of $2,362 and $14,803 for the three and nine months ended March 31, 2024, respectively, inclusive of $0 and $6,788, respectively, of share-based compensation expenses, which are accrued in accounts payable, accrued and other current liabilities and additional paid-in capital on the condensed consolidated balance sheet. The Company recorded restructuring charges of $2,461 and $9,820, net of contributory credits from the Company to Sphere Entertainment for the Company’s corporate employees, during the three and nine months ended March 31, 2023, respectively. Restructuring charges are inclusive of $0 and $2,293 of share-based compensation expenses for the three and nine months ended March 31, 2023, respectively. Changes to the Company’s restructuring liability through March 31, 2024 were as follows:


	Restructuring Liability
June 30, 2023	$	2,530
Restructuring charges (excluding share-based compensation expense)	11,378
Payments	(3,130)

March 31, 2024	$	10,778

Note 6. Investments

As of March 31, 2024, the Company held an investment in Townsquare Media, Inc. (“Townsquare”) and as of June 30, 2023, also held an investment in DraftKings Inc. (“DraftKings”), which was subsequently sold during the first quarter of Fiscal Year 2024.

• Townsquare is a media, entertainment and digital marketing solutions company that is listed on the New York Stock Exchange (“NYSE”) under the symbol “TSQ.”

• DraftKings is a fantasy sports contest and sports gambling provider that is listed on the NASDAQ Stock Market (“NASDAQ”) under the symbol “DKNG.”

• Other equity investments held in trust under the Company’s Executive Deferred Compensation Plan. Refer to Note 11. Pension Plans and Other Postretirement Benefit Plans for further details regarding the plan

On March 1, 2024, the Company converted all shares of Class C common stock of Townsquare into an equal number of shares of Class A common stock of Townsquare, subject to restrictions set forth in Townsquare’s certificate of incorporation. The fair value of the Company’s investments in Class A common stock of Townsquare and Class A common stock of DraftKings is determined based on quoted market prices in active markets on the NYSE and NASDAQ, respectively, which are classified within Level I of the fair value hierarchy.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

The carrying fair value of these investments, which is reported under Other non-current assets in the accompanying condensed consolidated balance sheets as of March 31, 2024 and June 30, 2023, is as follows:


			As of
	Ownership Percentage as of March 31, 2024		March 31, 2024		June 30, 2023
Equity investments with readily determinable fair values:
Townsquare Class A common stock			$	18,755	$	6,945
Townsquare Class C common stock			—		13,399
DraftKings Class A common stock			—		11,297
Other equity investments with readily determinable fair values held in trust under the Company’s Executive Deferred Compensation Plan			4,566		2,954
Equity method investments:
Crown Properties Collection(a)	8	%	51		—
Equity investments without readily determinable fair values			596		475
Total investments			$	23,968	$	35,070

_______________

(a) In March 2024, the Company paid $51 for an 8.3% investment in Oak View Group’s Crown Properties Collection, LLC ("CPC"). The investment in CPC is accounted for as an equity method investment, with MSGE's share of CPC results recorded on a three‐month lag. The impact of recording results on a three-month lag is not material.

The following table summarizes the realized and unrealized gain (loss) on equity investments with readily determinable fair value, which is reported in Other income (expense), net for the three and nine months ended March 31, 2024 and 2023:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Unrealized gain (loss) — Townsquare	$	717	$	2,406	$	(1,589)	$	(609)
Unrealized gain — DraftKings	—		5,104		—		4,916
Unrealized gain — Executive Deferred Compensation Plan	233		129		432		135
Realized gain from shares sold — DraftKings	—		214		1,548		1,703
Total realized and unrealized gain	$	950	$	7,853	$	391	$	6,145
Supplemental information on realized gain:
Shares of common stock sold — DraftKings	—		29		425		229
Cash proceeds from common stock sold — DraftKings	$	—	$	550	$	12,844	$	4,369

Note 7. Property and Equipment, Net

As of March 31, 2024 and June 30, 2023, property and equipment, net consisted of the following:


	As of
	March 31, 2024		June 30, 2023
Land	$	62,768	$	62,768
Buildings	1,010,034		999,205
Equipment, furniture, and fixtures	358,693		351,596
Leasehold improvements	105,885		105,877
Construction in progress (a)	31,971		2,828
Total Property and equipment	$	1,569,351	$	1,522,274
Less: accumulated depreciation and amortization	(933,337)		(893,386)
Property and equipment, net	$	636,014	$	628,888

_________________

(a) In October 2023, the Company took possession of certain floors in the New York corporate office space and will be relocating from the space that the Company currently occupies to newly renovated office space within the same building. The Company was not involved in the design or construction of the new space for purposes of the Company’s build out prior to obtaining possession. The increase in construction in progress primarily relates to build out costs incurred after

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

possession. Upon obtaining possession of the space, the Company recognized an additional lease obligation of $96,334 and a right-of-use (“ROU”) lease asset of $88,602, net of tenant improvement incentives received on the possession date. While lease payments under the new lease agreement will be recognized as a lease expense on a straight-line basis over the lease term, the Company will begin paying full rent starting in the second half of Fiscal Year 2026 due to certain tenant incentives included in the arrangement. Base rent payments will increase every five years beginning in Fiscal Year 2031 in accordance with the terms of the lease. In January 2024, the Company recognized an additional lease obligation and ROU lease asset of $5,408 as the Company took possession of additional space in the New York corporate office.

The Company recorded depreciation expense on property and equipment of $13,182 and $39,972 for the three and nine months ended March 31, 2024, respectively, and $14,798 and $45,615 for the three and nine months ended March 31, 2023, respectively, which is recognized in Depreciation and amortization in the condensed consolidated and combined statements of operations.

Note 8. Goodwill and Intangible Assets

As of March 31, 2024 and June 30, 2023, the carrying amount of goodwill was $69,041.

The Company’s indefinite-lived intangible assets as of March 31, 2024 and June 30, 2023 were as follows:


	As of
	March 31, 2024		June 30, 2023
Trademarks	$	61,881	$	61,881
Photographic related rights	1,920		1,920
Total indefinite-lived intangible assets	$	63,801	$	63,801

During the first quarter of Fiscal Year 2024, the Company performed its annual impairment test of goodwill and indefinite-lived intangible assets and determined that there were no impairments of goodwill and indefinite-lived intangibles identified as of the impairment test date.

No amortization expense was recognized in the three and nine months ended March 31, 2024 for definite lived intangible assets as a result of the disposition of the related assets in connection with the BCE Disposition on December 2, 2022. The Company recorded amortization expense on definite lived intangible assets of $0 and $754 for the three and nine months ended March 31, 2023, respectively, which is recognized in Depreciation and amortization in the condensed consolidated and combined statements of operations.

Note 9. Commitments and Contingencies

Commitments

See Note 11. Commitments and Contingencies, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for details on the Company’s commitments. The Company’s commitments as of June 30, 2023 included a total of $926,466 (primarily related to contractual obligations).

During the nine months ended March 31, 2024, the Company did not have any material changes in its non-cancelable contractual obligations (other than activities in the ordinary course of business). See Note 10. Credit Facilities for details of the principal repayments required under the Company’s credit facilities.

Delayed Draw Term Loan Facility

On April 20, 2023, a subsidiary of the Company, MSG Entertainment Holdings, LLC (“MSG Entertainment Holdings”), entered into a delayed draw term loan facility (the “DDTL Facility”) with Sphere Entertainment. Pursuant to the DDTL Facility, MSG Entertainment Holdings committed to lend up to $65,000 in delayed draw term loans to Sphere Entertainment on an unsecured basis until October 20, 2024. See Note 11. Commitments and Contingencies to the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the DDTL Facility. On July 14, 2023, Sphere Entertainment drew down the full amount of $65,000 under the DDTL Facility. On August 9, 2023, Sphere Entertainment repaid the full principal amount of the DDTL Facility and accrued interest and commitment fees by delivering 1,923 shares of the Company’s Class A Common Stock held by Sphere Entertainment, as permitted as payment under the DDTL Facility. Such shares have been classified by the Company pursuant to the Stock Repurchase Program (as defined and further explained in Note 13. Stockholders’ Equity) as treasury shares and are no longer outstanding on the date of repayment.

Legal Matters

The Company is a defendant in various lawsuits. Although the outcome of these lawsuits cannot be predicted with certainty (including

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

the extent of available insurance, if any), management does not believe that resolution of these lawsuits will have a material adverse effect on the Company.

Note 10. Credit Facilities

See Note 12. Credit Facilities, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the Company’s credit facilities. The following table summarizes the presentation of the outstanding balances under the Company’s credit and other debt agreements as of March 31, 2024 and June 30, 2023:


	As of
	March 31, 2024		June 30, 2023
Current Portion
National Properties Term Loan Facility	$	16,250	$	16,250

Current portion of long-term debt	$	16,250	$	16,250


	As of
	March 31, 2024						June 30, 2023
	Principal		Unamortized Deferred Financing Costs		Net		Principal		Unamortized Deferred Financing Costs		Net
Non-current Portion
National Properties Term Loan Facility	$	613,437	$	(10,424)	$	603,013	$	625,625	$	(12,845)	$	612,780
National Properties Revolving Credit Facility	—		(545)		(545)		17,100		—		17,100
Other debt	—		—		—		304		—		304
Long-term debt, net of deferred financing costs	$	613,437	$	(10,969)	$	602,468	$	643,029	$	(12,845)	$	630,184

National Properties Facilities

General. MSG National Properties, LLC (“MSG National Properties”), MSG Entertainment Holdings and certain subsidiaries of MSG National Properties are party to a credit agreement dated June 30, 2022 (as amended, the “National Properties Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent and the lenders and L/C issuers party thereto, providing for a five-year, $650,000 senior secured term loan facility (the “National Properties Term Loan Facility”) and a five-year, $100,000 revolving credit facility (the “National Properties Revolving Credit Facility” and, together with the National Properties Term Loan Facility, the “National Properties Facilities”). On September 15, 2023, the National Properties Credit Agreement was amended to, among other things, increase the National Properties Revolving Credit Facility by $50,000 to $150,000. Up to $25,000 of the National Properties Revolving Credit Facility is available for the issuance of letters of credit. As of March 31, 2024, outstanding letters of credit were $17,726 and the remaining balance available under the National Properties Revolving Credit Facility was $132,274.

Interest Rates. Borrowings under the current National Properties Facilities bear interest at a floating rate, which at the option of MSG National Properties may be either (a) a base rate plus an applicable margin ranging from 1.50% to 2.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries (the “National Properties Base Rate”), or (b) adjusted Term SOFR (i.e., Term SOFR plus 0.10%) plus an applicable margin ranging from 2.50% to 3.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries (the “National Properties SOFR Rate”). The National Properties Credit Agreement requires MSG National Properties to pay a commitment fee ranging from 0.30% to 0.50% in respect of the daily unused commitments under the National Properties Revolving Credit Facility. MSG National Properties is also required to pay customary letter of credit fees, as well as fronting fees, to banks that issue letters of credit pursuant to the National Properties Credit Agreement. The interest rate on the National Properties Facilities as of March 31, 2024 was 7.93%.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

are due at the maturity of the facility. Under certain circumstances, MSG National Properties is required to make mandatory prepayments on loans outstanding, including prepayments in an amount equal to the net cash proceeds of certain sales of assets or casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights), subject to certain exceptions.

Covenants. The National Properties Credit Agreement includes financial covenants requiring MSG National Properties and its restricted subsidiaries to maintain a specified minimum liquidity level, a specified minimum debt service coverage ratio and specified maximum total leverage ratio. The minimum liquidity level is set at $50,000, and is tested based on the level of average daily liquidity, consisting of cash and cash equivalents and available revolving commitments, over the last month of each quarter over the life of the National Properties Facilities. The debt service coverage ratio covenant began testing in the fiscal quarter ended December 31, 2022, and is set at a ratio of 2:1 before stepping up to 2.5:1 in the fiscal quarter ending September 30, 2024. The leverage ratio covenant began testing in the fiscal quarter ended June 30, 2023. It is tested based on the ratio of MSG National Properties and its restricted subsidiaries’ consolidated total indebtedness to adjusted operating income, with an initial maximum ratio of 6:1, stepping down to 5.5:1 in the fiscal quarter ending June 30, 2024 and 4.5:1 in the fiscal quarter ending June 30, 2026. As of March 31, 2024, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Credit Agreement.

In addition to the financial covenants discussed above, the National Properties Credit Agreement and the related security agreement contain certain customary representations and warranties, affirmative and negative covenants and events of default. The National Properties Credit Agreement contains certain restrictions on the ability of MSG National Properties and its restricted subsidiaries to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the National Properties Credit Agreement, including the following: (i) incur additional indebtedness; (ii) create liens on certain assets; (iii) make investments, loans or advances in or to other persons; (iv) pay dividends and distributions or repurchase capital stock (which will restrict the ability of MSG National Properties to make cash distributions to the Company); (v) repay, redeem or repurchase certain indebtedness; (vi) change its lines of business; (vii) engage in certain transactions with affiliates; (viii) amend their respective organizational documents; (ix) merge or consolidate; and (x) make certain dispositions.

All obligations under the National Properties Facilities, including the guarantees of those obligations, are secured by certain of the assets of MSG National Properties and the Subsidiary Guarantors (collectively, “Collateral”) including, but not limited to, a pledge of some or all of the equity interests held directly or indirectly by MSG National Properties in each Subsidiary Guarantor. The Collateral does not include, among other things, any interests in The Garden or the leasehold interests in Radio City Music Hall and the Beacon Theatre.

Interest payments and loan principal repayments made by the Company under the National Properties Credit Agreement were as follows:


	Interest Payments				Principal Repayments
	Nine Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
National Properties Facilities	$	40,742	$	35,283	$	102,288	$	6,063

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


	As of
	March 31, 2024				June 30, 2023
	Carrying Value (a)		Fair Value		Carrying Value (a)		Fair Value
Liabilities:
National Properties Facilities	$	629,687	$	620,242	$	658,975	$	655,509
Other debt	—		—		304		304
Total Long-term debt	$	629,687	$	620,242	$	659,279	$	655,813

________________

(a) The total carrying value of the Company’s debt as of March 31, 2024 and June 30, 2023 is equal to the current and non-current principal payments for the

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Company’s credit agreements excluding unamortized deferred financing costs of $10,969 and $12,845, respectively.

The Company’s long-term debt is classified within Level II of the fair value hierarchy as it is valued using quoted indices of similar instruments for which the inputs are readily observable.

Note 11. Pension Plans and Other Postretirement Benefit Plans

Prior to the MSGE Distribution, Sphere Entertainment sponsored both funded and unfunded and qualified and non-qualified defined benefit plans (the “Pension Plans”), as well as a postretirement benefit plan (the “Postretirement Plan”), covering certain full-time employees and retirees of the Company. In connection with the MSGE Distribution, the sponsorship of the Pension Plans and Postretirement Plan was transferred to the Company. See Note 13. Pension Plans and Other Postretirement Benefit Plans, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the Pension Plans, Postretirement Plan, the Madison Square Garden 401(k) Savings Plans, together with the associated excess savings plan, and the Madison Square Garden 401(k) Union Plan.

Defined Benefit Pension Plans and Other Postretirement Benefit Plans

The following table presents components of net periodic benefit cost (benefit) for the Pension Plans and Postretirement Plan included in the accompanying condensed consolidated and combined statements of operations for the three and nine months ended March 31, 2024 and 2023. Service cost is recognized in direct operating expenses and selling, general and administrative expenses. All other components of net periodic benefit cost (benefit) are reported in Other income (expense), net.


	Pension Plans				Postretirement Plan
	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Service cost	$	17	$	30	$	6	$	8
Interest cost	1,469		927		24		11
Expected return on plan assets	(1,090)		(1,504)		—		—
Recognized actuarial loss	450		314		—		9
Net periodic cost (benefit)	$	846	$	(233)	$	30	$	28


	Pension Plans				Postretirement Plan
	Nine Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Service cost	$	51	$	90	$	18	$	24
Interest cost	4,407		2,781		72		33
Expected return on plan assets	(3,273)		(4,512)		—		—
Recognized actuarial loss	1,350		1,036		—		27
Net periodic cost (benefit)	$	2,535	$	(605)	$	90	$	84

Contributions for Qualified Defined Benefit Pension Plans

During the three and nine months ended March 31, 2024, the Company contributed $0 and $12,250 to the Cash Balance Pension Plan.

Defined Contribution Plans

For the three and nine months ended March 31, 2024 and 2023, expenses related to the Savings Plans and Union Savings Plan included in the accompanying condensed consolidated and combined statements of operations are as follows:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Savings Plans	$	1,526	$	1,367	$	5,825	$	3,553
Union Savings Plan	$	490	$	371	$	621	$	409

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Executive Deferred Compensation

See Note 13. Pension Plans and Other Postretirement Benefit Plans, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the Company’s Executive Deferred Compensation Plan (the “Deferred Compensation Plan”). The Company recorded compensation expense of $233 and $432 for the three and nine months ended March 31, 2024, respectively, and $129 and $135 for the three and nine months ended March 31, 2023, respectively, within Selling, general, and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability. In addition, the Company recorded gains of $233 and $432 for the three and nine months ended March 31, 2024 and $129 and $135 for the three and nine months ended March 31, 2023, respectively, within Other income (expense), net to reflect remeasurement of the fair value of assets under the Deferred Compensation Plan.

The following table summarizes amounts recognized related to the Deferred Compensation Plan in the condensed consolidated and combined balance sheets:


	As of
	March 31, 2024		June 30, 2023
Non-current assets (included in Other non-current assets)	$	4,566	$	2,954
Non-current liabilities (included in Other non-current liabilities)	$	(4,593)	$	(2,976)

Note 12. Share-based Compensation

The Company has two share-based compensation plans: the 2023 Employee Stock Plan and the 2023 Stock Plan for Non-Employee Directors. See Note 14. Share Based Compensation, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for more information on these plans.

Share-based compensation expense for the Company’s restricted stock units (“RSUs”) and performance stock units (“PSUs”) are recognized in the condensed consolidated and combined statements of operations as a component of direct operating expenses or selling, general, and administrative expenses. The share-based compensation expense recorded by the Company in Fiscal Year 2023 includes the expenses associated with the employees attributable to the Company, net of contributory credits from the Company to Sphere Entertainment for the Company’s corporate employees. The following table summarizes the Company’s share-based compensation expense:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Share-based compensation expense (a)	$	5,611	$	8,014	$	19,561	$	21,979
Fair value of awards vested (b)	$	2,004	$	—	$	31,155	$	2,867

________________

(a) The expense shown excludes $0 and $6,788 for the three and nine months ended March 31, 2024, respectively, and $0 and $2,293 for the three and nine months ended March 31, 2023, respectively, that was reclassified to Restructuring charges in the condensed consolidated and combined statements of operations as detailed in Note 5. Restructuring Charges.

(b) To fulfill required statutory tax withholding obligations for the applicable income and other employment taxes, RSUs and PSUs with an aggregate value of $993 and $13,222, and $0 and $1,147 were retained by the Company during the three and nine months ended March 31, 2024 and 2023, respectively.

For the three and nine months ended March 31, 2024, weighted-average shares used in the calculation for diluted earnings per share (“EPS”) consisted of 48,447 and 48,883 shares of Class A Common Stock for basic EPS, respectively, and the dilutive effect of 338 and 208 shares of Class A Common Stock issuable, respectively, under share-based compensation plans. For the three and nine months ended March 31, 2024, weighted-average anti-dilutive shares primarily consisted of approximately 540 RSUs and stock options, and were excluded in the calculation of diluted EPS because their effect would have been anti-dilutive.

On April 20, 2023, 51,768 shares of Class A Common Stock were distributed to Sphere Entertainment stockholders in the MSGE Distribution. This share amount is being utilized for the calculation of basic and diluted loss per share of Class A Common Stock attributable to the Company’s stockholders for the three and nine months ended March 31, 2023 because the Company was not a standalone public company prior to the MSGE Distribution.

As of March 31, 2024, there was $33,914 of unrecognized compensation cost related to unvested RSUs and PSUs held by the Company’s direct employees. The cost is expected to be recognized over a weighted-average period of approximately 2.0 years.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Award Activity

RSUs

During the nine months ended March 31, 2024 and March 31, 2023, 624 and 66 RSUs were granted and 688 and 40 RSUs vested, respectively.

PSUs

During the nine months ended March 31, 2024 and March 31, 2023, 506 and 60 PSUs were granted and 273 and 11 PSUs vested, respectively.

Note 13. Stockholders’ Equity

Stock Repurchase Program

On March 29, 2023, the Company’s Board of Directors authorized a share repurchase program to repurchase up to $250,000 of the Company’s Class A Common Stock (the “Stock Repurchase Program”). Pursuant to the Stock Repurchase Program, shares of Class A Common Stock may be purchased from time to time in open market or private transactions, block trades or such other manner as the Company may determine in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. For the nine months ended March 31, 2024, the Company repurchased 3,525 shares of Class A Common Stock for $115,512. As of March 31, 2024, the Company had approximately $110,000 remaining available for repurchases.

Accumulated Other Comprehensive Loss

The following table details the components of accumulated other comprehensive loss:


	Pension Plans and Postretirement Plan
	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Balance at beginning of period	$	(33,279)	$	(34,129)	$	(34,021)	$	(34,740)
Other comprehensive income:
Amounts reclassified from accumulated other comprehensive loss (a)	450		323		1,350		1,063
Income tax expense	(78)		(56)		(236)		(185)
Other comprehensive income, net of income taxes	372		267		1,114		878
Balance at end of period	$	(32,907)	$	(33,862)	$	(32,907)	$	(33,862)

________________

(a) Amounts reclassified from accumulated other comprehensive loss represent the amortization of net actuarial loss included in net periodic benefit cost, which is reflected under Other income (expense), net in the accompanying condensed consolidated and combined statements of operations (see Note 11. Pension Plans and Other Postretirement Benefit Plans).

Note 14. Related Party Transactions

As of March 31, 2024, members of the Dolan family, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, and members of the Dolan family including trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”) collectively beneficially owned 100% of the Company’s outstanding Class B Common Stock, $0.01 par value per share (“Class B Common Stock”) and approximately 3.9% of the Company’s outstanding Class A Common Stock (inclusive of options exercisable within 60 days of March 31, 2024). Such shares of Class A Common Stock and Class B Common Stock, collectively, represent approximately 63.7% of the aggregate voting power of the Company’s outstanding common stock. Members of the Dolan Family Group are also the controlling stockholders of Sphere Entertainment, MSG Sports, and AMC Networks Inc.

See Note 17. Related Party Transactions, included in the Company’s Audited Consolidated and Combined Annual Financial Statements for a description of the Company’s current related party arrangements. There have been no material changes in such related party arrangements except as described below.

The Company has also entered into a commercial agreement with CPC, under which CPC provides sponsorship sales services. The Company recorded commission expense of $854 and $1,013 for the three and nine months ended March 31, 2024, respectively. and did not record any commission expense for three and nine months ended March 31, 2023 as the arrangement was not yet in place

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

during those periods. As of March 31, 2024 and June 30, 2023, prepaid expenses associated with this arrangement were $4,237 and $0, respectively, and are reported under Prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets.

From time to time the Company enters into arrangements with 605, LLC (“605”). James L. Dolan, the Company’s Executive Chairman, Chief Executive Officer and a director, and his spouse, Kristin A. Dolan, owned 605 until September 13, 2023. Kristin A. Dolan is also the founder and was the Chief Executive Officer of 605. 605 provides audience measurement and data analytics services to the Company and its subsidiaries in the ordinary course of business. In August 2022, a subsidiary of Sphere Entertainment entered into a three-year agreement with 605, valued at $750, covering several customer analysis projects per year in connection with events held at our venues, which was assigned to the Company in connection with the MSGE Distribution. Pursuant to this arrangement, the Company recognized $0 and $34 of expense for the three and nine months ended March 31, 2024, respectively, and $68 and $204 of expense for the three and nine months ended March 31, 2023, respectively. On September 13, 2023, 605 was sold to iSpot.tv, and James L. Dolan and Kristin A. Dolan now hold a minority interest in iSpot.tv. As a result, as of September 13, 2023, 605 is no longer considered to be a related party.

During Fiscal Year 2023 and the first quarter of Fiscal Year 2024, MSG Sports made market rate interest-bearing advances to the Company in connection with the construction of new premium hospitality suites at The Garden. The advances were fully repaid (including interest) in the second quarter of Fiscal Year 2024. As of March 31, 2024 and June 30, 2023, the other debt balance was $0 and $304, respectively.

Subsequent to June 30, 2023, the Company entered into arrangements with (i) MSG Sports, pursuant to which MSG Sports provides certain sponsorship, premium hospitality and other business operations services to the Company in exchange for service fees, (ii) Sphere Entertainment, pursuant to which the Company provides certain sponsorship account management services to Sphere Entertainment in exchange for service fees, and (iii) MSG Sports and Sphere Entertainment, pursuant to which the three companies have agreed to allocate expenses in connection with the use by each company of aircraft owned or leased by the Company and MSG Sports.

Revenues and Operating Expenses

The following table summarizes the composition and amounts of the transactions with the Company’s affiliates. The significant components of these amounts are discussed below. These amounts are reflected in revenues and operating expenses in the accompanying condensed consolidated and combined statements of operations for the three and nine months ended March 31, 2024 and 2023:


	Three Months				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Revenues	$	46,396	$	41,594	$	85,185	$	96,805
Operating expenses (credits):
Revenue sharing expenses	$	8,521	$	7,353	$	15,988	$	15,639
Reimbursement under Arena License Arrangements	(10,959)		(8,911)		(19,266)		(18,761)
Cost reimbursement from MSG Sports	(9,483)		(9,789)		(28,871)		(28,781)
Cost reimbursement from Sphere Entertainment (after April 20, 2023) and Corporate allocations to Sphere Entertainment (before April 20, 2023)	(27,494)		(40,794)		(84,171)		(114,761)
Other operating expenses, net	1,266		327		4,120		3,682
Total operating expenses (credits), net (a)	$	(38,149)	$	(51,814)	$	(112,200)	$	(142,982)

_________________

(a) Of the total operating expenses (credits), net, $(1,661) and $895 for the three and nine months ended March 31, 2024, respectively, and $(804) and $(1,329) for the three and nine months ended March 31, 2023, respectively, are included in direct operating expenses in the accompanying condensed consolidated and combined statements of operations, and $(36,488) and $(113,095) for the three and nine months ended March 31, 2024, respectively, and $(51,010) and $(141,653) for the three and nine months ended March 31, 2023, respectively, are included in selling, general, and administrative expenses.

(b) Other operating expenses, net, includes CPC professional expenses.

Revenues

The Company recorded $35,588 and $61,441 of revenues under the Arena License Agreements for the three and nine months ended March 31, 2024, respectively. In addition to the Arena License Agreements, during the three and nine months ended March 31, 2024, the Company’s revenues from related parties primarily reflected sponsorship sales and service representation agreements of $7,234

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

and $15,503, respectively, and merchandise sharing revenues of $2,789 and $5,087, respectively, with MSG Sports. The Company also earned sublease revenue from related parties of $761 and $2,258 during the three and nine months ended March 31, 2024, respectively.

The Company recorded $31,163 and $64,312 of revenues under the Arena License Agreements for the three and nine months ended March 31, 2023, respectively. In addition, during the three and nine months ended March 31, 2023, the Company recorded revenues under sponsorship sales and service representation agreements of $7,079 and $15,643, respectively, and merchandise sharing revenues of $2,160 and $4,451, respectively, with MSG Sports. The Company recorded revenues under the Networks Advertising Sales Representation Agreement of $0 and $8,802 for the three and nine months ended March 31, 2023, respectively. The Networks Advertising Sales Representation Agreement was terminated effective as of December 31, 2022. As a result, after December 31, 2022, the Company no longer recognizes advertising sales commission revenue or the employee costs related to the Networks Advertising Sales Representation Agreement. The Company also earned sublease revenue from related parties of $716 and $2,100 during the three and nine months ended March 31, 2023, respectively.

Other Related Party Matters

Loans Receivable from Sphere Entertainment

Prior to the MSGE Distribution, the Company’s captive insurance entity, Eden Insurance Company, Inc. (“Eden”), entered into a loan agreement with Sphere Entertainment (the “Eden Loan Agreement”), under which Eden granted Sphere Entertainment an unsecured loan bearing interest at a rate of SOFR plus 350 basis points with a principal amount not exceeding $60,000. This loan was in the form of a demand promissory note, payable immediately upon order from Eden. The loan payable to the Company held by Sphere Entertainment under the Eden Loan Agreement was assigned by Sphere Entertainment to the Company in connection with the MSGE Distribution, and has been eliminated in consolidation by the Company for periods subsequent to the MSGE Distribution.

During Fiscal Year 2023, Eden declared and paid dividends to Sphere Entertainment through a reduction of the loan receivable from Sphere Entertainment. During Fiscal Year 2023, no interest or principal payments were received by Eden. Instead, the accrued but unpaid interest was added to the outstanding principal amount of the loan. The cash flows related to this loan receivable for periods prior to the MSGE Distribution are reflected as investing activities, as these balances represent amounts loaned by the Company to Sphere Entertainment. The Company recorded related party interest income of $0 and $0 related to the Eden Loan Agreement in the three and nine months ended March 31, 2024, respectively, and $1,121 and $2,925 in the three and nine months ended March 31, 2023, respectively.

Note 15. Additional Financial Information

The following table provides a summary of the amounts recorded as cash, cash equivalents, and restricted cash:


	As of
	March 31, 2024		June 30, 2023
Cash and cash equivalents	$	28,008	$	76,089
Restricted cash	300		8,266
Total cash, cash equivalents, and restricted cash	$	28,308	$	84,355

The Company’s cash, cash equivalents, and restricted cash are classified within Level I of the fair value hierarchy as it is valued using observable inputs that reflect quoted prices for identical assets in active markets. The Company’s restricted cash includes cash deposited in escrow accounts. The Company has deposited cash in an interest-bearing escrow account related to credit support, debt facilities, and collateral to workers compensation and general liability insurance obligations.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Prepaid expenses and other current assets consisted of the following:


	As of
	March 31, 2024		June 30, 2023
Prepaid revenue sharing expense	$	42,530	$	42,774
Other prepaid expenses	29,383		15,814
Current contract assets	8,584		11,254
Inventory (a)	4,314		2,557

Other	4,429		5,163
Total prepaid expenses and other current assets	$	89,240	$	77,562

_________________

(a) Inventory is mostly comprised of food and liquor for venues.

Other non-current assets consisted of the following:


	As of
	March 31, 2024		June 30, 2023
Unbilled lease receivable (a)	$	96,689	$	67,325
Investments (b)	23,968		35,070
Deferred costs	3,984		4,120
Other	1,841		1,841
Total other non-current assets	$	126,482	$	108,356

_________________

(a) Unbilled lease receivable relates to the amounts recorded under the Arena License Agreement.

(b) See Note 6. Investments for more information on long-term investments.

Accounts payable, accrued and other current liabilities consisted of the following:


	As of
	March 31, 2024		June 30, 2023
Accounts payable	$	23,498	$	15,628
Accrued payroll and employee related liabilities	61,810		64,532
Cash due to promoters	69,658		90,538
Accrued expenses	50,110		44,027
Total accounts payable, accrued and other current liabilities	$	205,076	$	214,725

Other income (expense), net includes the following:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Gains from shares sold — DraftKings	$	—	$	214	$	1,548	$	1,703
Net unrealized gains (loss) on equity investments with readily determinable fair value	950		7,639		(1,157)		4,442
Other	(872)		217		(1,936)		639
Total other income (expense), net	$	78	$	8,070	$	(1,545)	$	6,784

Income Taxes

During the nine months ended March 31, 2024, the Company made income tax payments of $58. During the nine months ended March 31, 2023, the Company received income tax refunds, net of payments, of $2,031.

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)

Note 16. Subsequent Events

In April and May 2024, the Company sold approximately 1,577 of its shares of Townsquare’s Class A common stock and received aggregate net cash proceeds of approximately $15,620.

In April 2024, the Company recognized an additional lease obligation of $104,668 and ROU lease asset of $104,284 as the Company took possession of additional space in the New York corporate office.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this MD&A, there are statements concerning the future operating and future financial performance of Madison Square Garden Entertainment Corp. (“MSG Entertainment”) and its direct and indirect subsidiaries (collectively, “we,” “us,” “our,” “MSG Entertainment,” or the “Company”). Words such as “expects,” “anticipates,” “believes,” “estimates,” “may,” “will,” “should,” “could,” “potential,” “continue,” “intends,” “plans,” and similar words and terms used in the discussion of future operating and future financial performance identify forward-looking statements. Investors are cautioned that such forward-looking statements are not guarantees of future performance, results or events and involve risks and uncertainties and that actual results or developments may differ materially from the forward-looking statements as a result of various factors. Factors that may cause such differences to occur include, but are not limited to:

•the level of our expenses, including our corporate expenses;

•the level of our revenues, which depends in part on the popularity of the Christmas Spectacular Starring the Radio City Rockettes (the “Christmas Spectacular”), the sports teams whose games are played at Madison Square Garden (“The Garden”), and other events which are presented in our venues, and our ability to attract such events;

•the on-ice and on-court performance of the professional sports teams whose games we host in our venues;

•the level of our capital expenditures and other investments;

•general economic conditions, especially in the New York City and Chicago metropolitan areas where we have business activities;

•the demand for sponsorship and suite arrangements;

•competition, for example, from other venues and sports and entertainment options, including of new competing venues;

•our ability to effectively manage any impacts of a pandemic or other public health emergency (including COVID-19 variants) as well as renewed actions taken in response by governmental authorities or certain professional sports leagues, including ensuring compliance with rules and regulations imposed upon our venues, to the extent applicable;

•the effect of any postponements or cancellations by third-parties or the Company as a result of a pandemic or other public health emergency due to operational challenges and other health and safety concerns (such as the partial cancellation of the 2021 production of the Christmas Spectacular);

•the extent to which attendance at our venues may be impacted by government actions, renewed health concerns by potential attendees and reduced tourism;

•the impact on the payments we receive under the arena license agreements (the “Arena License Agreements”) that require the New York Knicks (the “Knicks”) of the National Basketball Association (the “NBA”) and the New York Rangers (the “Rangers”) of the National Hockey League (the “NHL”) to play their home games at The Garden as a result of government-mandated capacity restrictions, league restrictions and/or social-distancing or vaccination requirements, if any, at Knicks and Rangers games;

•changes in laws, guidelines, bulletins, directives, policies and agreements, and regulations under which we operate;

•any economic, social or political actions, such as boycotts, protests, work stoppages or campaigns by labor organizations, including the unions representing players and officials of the NBA and NHL, or other work stoppage;

•seasonal fluctuations and other variations in our operating results and cash flow from period to period;

•enhancements or changes to existing productions and the investments associated with such enhancements or changes;

•business, reputational and litigation risk if there is a cyber or other security incident resulting in loss, disclosure or misappropriation of stored personal information, or disclosure of confidential information or other breaches of our information security;

•activities or other developments (such as pandemics, including the COVID-19 pandemic) that discourage or may discourage congregation at prominent places of public assembly, including our venues;

•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, new venues or new businesses into our operations;

•our internal control environment and our ability to identify and remedy any future material weaknesses;

•the costs associated with, and the outcome of, litigation, including any negative publicity, and other proceedings to the extent uninsured, including litigation or other claims against companies we invest in or acquire;

•the impact of governmental regulations or laws, changes in how those regulations and laws are interpreted, as well as the continued benefit of certain tax exemptions and the ability to maintain necessary permits or licenses;

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

•the impact of sports league rules, regulations and/or agreements and changes thereto;

•the substantial amount of debt incurred, the ability of our subsidiaries to make payments on, or repay or refinance, such debt under the National Properties Credit Agreement and our ability to obtain additional financing, to the extent required;

•financial community perceptions of our business, operations, financial condition and the industries in which we operate;

•the performance by Madison Square Garden Sports Corp. (together with its subsidiaries, as applicable, “MSG Sports”) of its obligations under various agreements with the Company and ongoing commercial arrangements, including the Arena License Agreements;

•the tax-free treatment of the MSGE Distribution (as defined below);

•our ability to achieve the intended benefits of the MSGE Distribution;

•failure of the Company or Sphere Entertainment Co. (together with its subsidiaries, as applicable, “Sphere Entertainment”) to satisfy its obligations under transition services agreements, or other agreements entered into in connection with the MSGE Distribution;

•lack of operating history as a stand-alone public company and costs associated with being an independent public company;

•our status as an emerging growth company; and

•the additional factors described under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023 filed with the Securities and Exchange Commission (the “SEC”) on August 18, 2023 (the “2023 Form 10-K”).

We disclaim any obligation to update or revise the forward-looking statements contained herein, except as otherwise required by applicable federal securities laws. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

All dollar amounts included in the following MD&A are presented in thousands, except as otherwise noted.

Introduction

This MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s unaudited financial statements and accompanying notes thereto included in this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated and combined financial statements and notes thereto as of June 30, 2023 and 2022 and for the three years ended June 30, 2023, 2022 and 2021 (“Audited Consolidated and Combined Annual Financial Statements”) included in the 2023 Form 10-K, to help provide an understanding of our financial condition, changes in financial condition and results of operations.

Business Overview

We are a live entertainment company comprised of iconic venues and marquee entertainment content. Utilizing the Company’s powerful brands and live entertainment expertise, the Company delivers unique experiences that set the standard for excellence and innovation while forging deep connections with diverse and passionate audiences.

We manage our business through one reportable segment. The Company’s portfolio of venues includes: The Garden, The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. The Company’s business also includes the original production, the Christmas Spectacular. The Company also has an entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually.

The Company conducts a significant portion of its operations at venues that it either owns or operates under long-term leases. The Company owns The Garden, The Theater at Madison Square Garden, and The Chicago Theatre, and leases Radio City Music Hall and the Beacon Theatre.

All of the Company’s revenues and assets are attributed to or located in the United States and are primarily concentrated in the New York City metropolitan area.

MSG Entertainment Distribution

On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment distributed approximately 67% of the outstanding common stock of the Company to its stockholders (the “MSGE Distribution”), with Sphere Entertainment retaining approximately 33% of the outstanding common stock of MSG Entertainment in the form of Class A common stock, $0.01 par value per share (“Class A Common Stock”) immediately following the MSGE Distribution (the “Retained Interest”). As a result, the Company became an independent publicly traded company on April 21, 2023 through the MSGE Distribution. Following the completion of the secondary offering by Sphere Entertainment of the Company’s Class A Common Stock on September 22, 2023, Sphere Entertainment no longer owns any of the Company’s outstanding common stock. See Note 1. Description of Business and Basis of Presentation to the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the MSGE Distribution.

Our MD&A is organized as follows:

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

Liquidity and Capital Resources. This section provides a discussion of our financial condition and liquidity, an analysis of our cash flows for the nine months ended March 31, 2024 and 2023, as well as certain contractual obligations.

Seasonality of Our Business. This section discusses the seasonal performance of our business.

Recently Issued Accounting Pronouncements and Critical Accounting Estimates. This section discusses accounting pronouncements that have been adopted by the Company and recently issued accounting pronouncements not yet adopted by the Company. This section should be read together with our critical accounting estimates, which are discussed in the 2023 Form 10-K under “Management's Discussion and Analysis of Financial Condition and Results of Operations — Recently Issued Accounting Pronouncements and Critical Accounting Estimates — Critical Accounting Estimates” and in the notes to the Audited Consolidated and Combined Annual Financial Statements of the Company included therein.

Factors Affecting Results of Operations

The consolidated statement of operations for the three and nine months ended March 31, 2024 is presented on a consolidated basis, as the Company became a standalone public company on April 21, 2023. The Company’s combined statement of operations for the three and nine months ended March 31, 2023 was prepared on a stand-alone basis derived from the consolidated financial statements and accounting records of Sphere Entertainment, and is presented as a carve-out financial statement, because the Company was not a standalone public company prior to the MSGE Distribution. See Note 1. Description of Business and Basis of Presentation to the consolidated and combined financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for additional information.

Our operating results are largely dependent on our ability to attract concerts and other events to our venues, revenues under various agreements entered into with MSG Sports, and the continuing popularity of the Christmas Spectacular. Certain of these factors in turn depend on the popularity and/or performance of the professional sports teams whose games we host at The Garden.

In addition, Fiscal Year 2024 has been and will continue to be impacted by increased rent expense relative to Fiscal Year 2023 due to our new corporate office lease, which runs through 2046. Our Company’s future performance is dependent in part on general economic conditions and the effect of these conditions on our customers. Weak economic conditions may lead to lower demand for suite licenses and tickets to our live productions, concerts, family shows and other events, which would also negatively affect concession and merchandise sales, and lower levels of sponsorship and venue signage. These conditions may also affect the number of concerts, family shows and other events that take place in the future. An economic downturn could adversely affect our business and results of operations.

Factors Affecting Comparability

MSGE Distribution

The condensed combined statements of operations for the three and nine months ended March 31, 2023 includes allocations for certain support functions that were provided on a centralized basis and not historically recorded at the business unit level by Sphere Entertainment, such as expenses related to executive management, finance, legal, human resources, government affairs, information technology, and venue operations among others. As part of the MSGE Distribution, certain corporate and operational support functions were transferred to the Company and therefore, charges were reflected in order to burden all business units comprising Sphere Entertainment’s historical operations. These expenses were allocated on the basis of direct usage when identifiable, with the remainder allocated on a pro-rata basis of combined assets, headcount or other measures of the Company and Sphere Entertainment, which are recorded as a reduction of either direct operating expenses or selling, general, and administrative expenses.

Management believes the assumptions underlying the combined financial statements, including the assumptions regarding allocating general corporate expenses, are reasonable. Nevertheless, the combined financial statements do not include all of the actual expenses that would have been incurred by the Company and may not reflect its combined results of operations, financial position and cash flows had it been a separate, standalone company during the periods presented. Actual costs that would have been incurred if the Company had been a separate, standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. See Note 1. Description of Business and Basis of Presentation to the condensed consolidated and combined financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

The costs to operate our business as an independent, publicly-traded company, including pursuant to terms of the transition services agreement, are expected to vary from those historical allocations. Such costs principally relate to areas that include, but are not limited to:

•corporate personnel overhead expenses as a result of the Company operating on a stand-alone basis;

•professional fees associated with internal and external audits including compliance with Sarbanes-Oxley Act, tax, legal and other services;

•anticipated executive compensation costs related to existing and new executive management and excluding future share-based compensation expense; and

•fees for preparing and distributing periodic filings with the Securities and Exchange Commission.

These costs will not be fully reflected in a complete year of the Company’s financial statements until the year ending June 30, 2024, because, for periods prior to April 20, 2023, the Company’s financial statements were presented on a carve-out basis.

Advertising Sales Representation Agreement Termination

Prior to December 31, 2022, the Company was a party to an advertising sales representation agreement (the “Networks Advertising Sales Representation Agreement”) with Sphere Entertainment’s subsidiary, MSGN Holdings, L.P. (“MSG Networks”), pursuant to which the Company had the exclusive right and obligation to sell MSG Networks advertising availabilities for a commission. The Networks Advertising Sales Representation Agreement was terminated effective as of December 31, 2022. As a result, after December 31, 2022, the Company no longer recognizes advertising sales commission revenue or the employee costs related to the Networks Advertising Sales Representation Agreement. For the three and nine months ended March 31, 2023, the Company recognized $0 and $8,802, respectively, of revenues under the Networks Advertising Sales Representation Agreement.

The termination of the Networks Advertising Sales Representation Agreement impacted the operating results of the Company for Fiscal Year 2023 and will impact the operating results of the Company on a go forward basis.

Results of Operations

Effective for the third quarter of Fiscal 2024, the Company modified its presentation of revenues and direct operating expenses. Total revenue is now presented in three categories consisting of i) Revenues from entertainment offerings, ii) Food, beverage, and merchandise revenues, and iii) Arena license fees and other leasing revenues. In addition, total direct operating expenses is now presented in two categories consisting of i) Entertainment offerings and leasing direct operating expenses and ii) food, beverage, and merchandise direct operating expenses. Prior period financial information has been revised to conform with the current period presentation.

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


	Three Months Ended
	March 31,				Change
	2024		2023		Amount		Percentage
Revenues
Revenues from entertainment offerings	$	146,221	$	129,260	$	16,961	13	%
Food, beverage, and merchandise revenues	45,380		39,954		5,426		14	%
Arena license fees and other leasing revenue	36,712		32,015		4,697		15	%
Total revenues	228,313		201,229		27,084		13	%
Direct operating expenses
Entertainment offerings, arena license fees, and other leasing direct operating expenses	(112,997)		(90,296)		(22,701)		(25)	%
Food, beverage, and merchandise direct operating expenses	(29,024)		(24,837)		(4,187)		(17)	%
Total Direct operating expenses	(142,021)		(115,133)		(26,888)		(23)	%
Selling, general, and administrative expenses	(53,945)		(44,122)		(9,823)		(22)	%
Depreciation and amortization	(13,182)		(14,798)		1,616		11	%
Loss, net on dispositions	—		(51)		51		NM
Restructuring charges	(2,362)		(2,461)		99		4	%
Operating income	16,803		24,664		(7,861)		(32)	%
Interest income	341		2,482		(2,141)		(86)	%
Interest expense	(14,425)		(13,423)		(1,002)		(7)	%
Other income, net	78		8,070		(7,992)		(99)	%
Income from operations before income taxes	2,797		21,793		(18,996)		(87)	%
Income tax expense	(2)		(73)		71		97	%
Net income attributable to MSG Entertainment’s stockholders	$	2,795	$	21,720	$	(18,925)	(87)	%


	Nine Months Ended
	March 31,				Change
	2024		2023		Amount		Percentage
Revenues
Revenues from entertainment offerings	$	581,025	$	524,331	$	56,694	11	%
Food, beverage, and merchandise revenues	127,379		112,412		14,967		13	%
Arena license fees and other leasing revenue	64,787		66,818		(2,031)		(3)	%
Total revenues	773,191		703,561		69,630		10	%
Direct operating expenses
Entertainment offerings, arena license fees, and other leasing direct operating expenses	(375,786)		(332,290)		(43,496)		(13)	%
Food, beverage, and merchandise direct operating expenses	(70,673)		(65,108)		(5,565)		(9)	%
Total direct operating expenses	(446,459)		(397,398)		(49,061)		(12)	%
Selling, general, and administrative expenses	(151,156)		(127,537)		(23,619)		(19)	%
Depreciation and amortization	(39,972)		(46,369)		6,397		14	%
Gains, net on dispositions	—		4,361		(4,361)		NM
Restructuring charges	(14,803)		(9,820)		(4,983)		(51)	%
Operating income	120,801		126,798		(5,997)		(5)	%
Interest income	2,275		5,804		(3,529)		(61)	%
Interest expense	(43,761)		(38,055)		(5,706)		(15)	%
Other (expense) income, net	(1,545)		6,784		(8,329)		NM
Income from operations before income taxes	77,770		101,331		(23,561)		(23)	%
Income tax expense	(397)		(804)		407		51	%
Net income	77,373		100,527		(23,154)		(23)	%
Less: Net loss attributable to nonredeemable noncontrolling interest	—		(553)		553		NM
Net income attributable to MSG Entertainment’s stockholders	$	77,373	$	101,080	$	(23,707)	(23)	%

_________________

NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.

Revenues

Revenues for the three and nine months ended March 31, 2024 increased $27,084 and $69,630, respectively, as compared to the prior year period. The changes in revenues were attributable to the following:


	Three Months Ended				Change
	March 31, 2024		March 31, 2023
Revenues from entertainment offerings	$	146,221	$	129,260	$	16,961
Food, beverage, and merchandise revenues	45,380		39,954		5,426
Arena license fees and other leasing revenue	36,712		32,015		4,697





	$	228,313	$	201,229	$	27,084


	Nine Months Ended				Change
	March 31, 2024		March 31, 2023
Revenues from entertainment offerings	$	581,025	$	524,331	$	56,694
Food, beverage, and merchandise revenues	127,379		112,412		14,967
Arena license fees and other leasing revenue	64,787		66,818		(2,031)





	$	773,191	$	703,561	$	69,630

Revenues from entertainment offerings

For the three months ended March 31, 2024 the increase in revenues from entertainment offerings was primarily due to (i) higher event-related revenues of $10,667 and (ii) an increase in revenues subject to the sharing economics with MSG Sports pursuant to the Arena License Agreements of $6,796.

For the three months ended March 31, 2024, the increase in event-related revenues reflects higher revenues from concerts of $16,855, primarily due to an increase in the number of concerts at the Company’s venues, partially offset by lower revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) of $6,188, primarily due to the absence of a marquee sporting event that took place in the prior year period.

For the three months ended March 31, 2024, the increase in revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements primarily reflects higher suite license fee revenue and, to a lesser extent, higher commissions on merchandise sales in the current year period.

For the nine months ended March 31, 2024, the increase in revenues from entertainment offerings was primarily due to (i) higher event-related revenues of $36,784, (ii) ticket related revenues from the presentation of the Christmas Spectacular production of $15,786, (iii) an increase in revenues subject to the sharing economics with MSG Sports pursuant to the Arena License Agreements of $9,520, partially offset by (iv) lower revenues of $8,802 due to the termination of the Networks Advertising Sales Representation Agreement.

For the nine months ended March 31, 2024, the increase in event-related revenues primarily reflects higher revenues from concerts of $30,191, due to an increase in the number of concerts at the Company’s venues, and to a lesser extent, higher average per-concert revenue in the current year period.

For the nine months ended March 31, 2024, the increase in revenues from the presentation of the Christmas Spectacular production, as compared to the prior year period, was primarily due to higher ticket-related revenues. This reflected higher per-show revenue and, to a lesser extent, an increase in the number of performances as compared to the prior year periods. The increase in per-show ticket-related revenues was due to higher average ticket yield and higher average per-show attendance as compared to the prior year periods.

For the nine months ended March 31, 2024, the increase in revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements primarily reflects higher suite license fee revenue and, to a lesser extent, higher commissions on merchandise sales, both as compared to the prior year period.

Food, beverage, and merchandise revenues

For the three months ended March 31, 2024, the increase in food, beverage and merchandise revenues was primarily due to higher food and beverage sales at Knicks and Rangers games, and to a lesser extent, higher food and beverage sales at concerts at the Company’s venues.

For the three months ended March 31, 2024, the increase in food and beverage sales at Knicks and Rangers games was primarily due to the impact of five more Knicks games played at The Garden, as compared to the prior year quarter, and to a lesser extent, higher average per-game revenues in the current year quarter.

For the three months ended March 31, 2024, the increase in food and beverage sales at concerts, was primarily due to the increase in the number of concerts held at the Company’s venues, as compared to the prior year period, partially offset by lower per-concert food and beverage revenues, which reflects a mix shift to more concerts at the Company’s theaters during the quarter.

For the nine months ended March 31, 2024, the increase in food, beverage and merchandise revenues was primarily due to higher food and beverage sales at concerts held at the Company’s venues, and to a lesser extent, higher food, beverage, and merchandise sales from the presentation of the Christmas Spectacular production.

For the nine months ended March 31, 2024 the increase in food and beverage sales at concerts was due to an increase in the number of concerts held at the Company’s venues and to a lesser extent, higher average per-concert revenues in the current year period.

Arena license fees and other leasing revenue

For the three months ended March 31, 2024, the increase in revenues was primarily due to higher arena license fees from MSG Sports pursuant to the Arena License Agreements due to five more Knicks games played at The Garden in the current year period.

For the nine months ended March 31, 2024, the decrease in revenues was due to lower arena license fees from MSG Sports pursuant to

the Arena License Agreements due to four fewer Knicks and Rangers games played at The Garden in the current year period, partially offset by an increase in other leasing revenue.

In the three and nine months ended March 31, 2024, the Knicks and Rangers played a combined 45 and 79 pre/regular season games at The Garden, respectively, as compared to 40 and 83 combined pre/regular season games, respectively, in the prior year periods.

Direct operating expenses

Direct operating expenses for the three and nine months ended March 31, 2024 increased $26,888 and $49,061 as compared to the prior year period. The changes in direct operating expenses were attributable to the following:


	Three Months Ended				Change
	March 31, 2024		March 31, 2023
Entertainment offerings, arena license fees, and other leasing direct operating expenses (a)	$	112,997	$	90,296	$	22,701
Food, beverage, and merchandise direct operating expenses (a)	29,024		24,837		4,187





	$	142,021	$	115,133	$	26,888


	Nine Months Ended				Change
	March 31, 2024		March 31, 2023
Entertainment offerings, arena license fees, and other leasing direct operating expenses (a)	$	375,786	$	332,290	$	43,496
Food, beverage, and merchandise direct operating expenses (a)	70,673		65,108		5,565





	$	446,459	$	397,398	$	49,061

________________

(a) Venue operations and infrastructure costs are not specifically allocated to each revenue stream, but are instead attributed in their entirety to service revenue which is the Company’s principal revenue stream. Leasing direct operating expenses materially consist of venue operations and infrastructure costs. As a result, the Company combines service and leasing direct operating expenses as “Entertainment offerings, arena license fees, and other leasing direct operating expenses” for presentation purposes.

Direct Operating Expenses Associated with Entertainment Offerings, Arena License Fees and Other Leasing

For the three and nine months ended March 31, 2024, the increase in direct operating expenses associated with entertainment offerings, arena license fees, and other leasing reflects (i) higher event-related expenses of $12,038, and $24,978, respectively, (ii) higher expenses associated with the sharing economics with MSG Sports pursuant to the Arena License Agreements of $6,041, and $8,974, respectively, and (iii) higher venue operating costs of $2,584, and $1,094, respectively. For the nine months ended March 31, 2024, the increase in direct operating expenses also reflects higher expenses related to the presentation of the Christmas Spectacular production of $4,337.

For the three and nine months ended March 31, 2024, the increase in event-related expenses was primarily due to higher direct operating expenses from concerts of $11,665, and $18,905, respectively, which was primarily due to the increase in the number of concerts at the Company’s venues and, to a lesser extent, higher per-concert expenses.

For the three and nine months ended March 31, 2024, the increase in expenses associated with the sharing of economics with MSG Sports pursuant to the Arena License Agreements primarily reflects direct operating expenses incurred as a result of the increase in suite license fee revenues.

Direct Operating Expenses Associated with Food, Beverage, and Merchandise

For the three months ended March 31, 2024, the increase in food, beverage and merchandise direct operating expenses was primarily driven by the related increase in food and beverage sales at Knicks and Rangers games and, to a lesser extent, the increase in food and beverage sales at concerts held at the Company’s venues.

For the nine months ended March 31, 2024,the increase in food, beverage and merchandise direct operating expenses was primarily driven by the related increase in food and beverage sales at concerts held at the Company’s venues and, to a lesser extent, the increase in food, beverage, and merchandise sales related to the presentation of the Christmas Spectacular production.

Selling, general, and administrative expenses

For the three and nine months ended March 31, 2024, selling, general, and administrative expenses increased $9,823 and $23,619, respectively, as compared to the prior year periods. Results for Fiscal Year 2024 reflect MSG Entertainment on a fully standalone basis. Results for the first nine months of Fiscal Year 2023 reflect the allocation of corporate and administrative costs based on the accounting requirements for the preparation of carve-out financial statements. These results do not include all of the expenses that would have been incurred by MSG Entertainment had it been a standalone public company for the prior year periods. This was the primary driver of the overall increase in selling, general and administrative expenses, partially offset by the impact of the Company’s transition services agreement with Sphere Entertainment.

Depreciation and amortization

For the three and nine months ended March 31, 2024, depreciation and amortization decreased $1,616 and $6,397, respectively, as compared to the prior year period primarily due to certain intangible assets being fully amortized in the current year as well as the disposal of a corporate aircraft during Fiscal Year 2023.

(Loss) gains, net on dispositions

(Loss) gains, net on dispositions for the three and nine months ended March 31, 2024 were $0 as compared to a net loss of $51 and a net gain of $4,361 in the three and nine months ended March 31, 2023. The net gains in the prior year nine month period were due to the gain on sale of the Company’s controlling interest in Boston Calling Events, LLC, partially offset by the loss on the disposal of a corporate aircraft during Fiscal Year 2023.

Restructuring charges

For the three and nine months ended March 31, 2024, the Company recorded restructuring charges of $2,362 and $14,803, respectively, which related to termination benefits for certain corporate executives and employees. For the three and nine months ended March 31, 2023, the Company recorded restructuring charges of $2,461 and $9,820, respectively which related to the termination benefits provided due to a workforce reduction of certain executives and employees as part of Sphere Entertainment’s cost reduction program implemented in Fiscal Year 2023.

Operating income

For the three and nine months ended March 31, 2024, operating income decreased by $7,861 and $5,997, respectively. The decrease in operating income for the three months and nine months ended March 31, 2024 was primarily due to an increase in direct operating expenses and higher selling, general and administrative expenses, partially offset by an increase in revenues and decrease in depreciation and amortization, as compared to the prior year period.

Interest income

For the three and nine months ended March 31, 2024, interest income decreased $2,141 and $3,529, respectively, as compared to the prior year period primarily due to (i) the impact of the MSGE Distribution, which impacted the year-over-year comparability of results since the prior year period included carve-out allocation costs and (ii) lower average balances in the Company’s cash, cash equivalents and restricted cash, partially offset by higher interest rates.

Interest expense

For the three and nine months ended March 31, 2024, interest expense increased $1,002 and $5,706, respectively, as compared to the prior year period primarily due to higher interest rates on borrowings and higher revolver borrowings under the National Properties Facilities.

Other income (expense), net

For the three months ended March 31, 2024, other income, net was $78 as compared to $8,070 for the three months ended March 31, 2023, a decrease of $7,992. The change was primarily due to (i) a decrease in unrealized gains of $1,689 associated with the investment in Townsquare Media, Inc., (ii) the absence of a $5,104 unrealized gain associated with the investment in DraftKings Inc. recognized in the prior period, and (iii) higher net periodic benefit costs of $1,079 associated with the Company’s funded and unfunded and qualified and non-qualified defined benefit plans (the “Pension Plans”).

For the nine months ended March 31, 2024, other income (expense), net decreased $8,329 as compared to the prior year period. The change was primarily due to (i) an increase in unrealized loss of $980 associated with the investment in Townsquare Media, Inc., (ii)

the absence of a gain of $4,916 associated with the investment in DraftKings Inc. recognized in the prior period, and (iii) higher net periodic benefit costs of $3,140 associated with the Pension Plans.

Income tax expense

In general, the Company is required to use an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in an interim period. Income tax expense for the three and nine months ended March 31, 2024 of $2 and $397, respectively, reflects effective tax rates of 0% and 1%, respectively.

Income tax expense for the three and nine months ended March 31, 2023 of $73 and $804, respectively, reflects effective tax rates of 0% and 1%, respectively.

The estimated annual effective tax rate is lower than the statutory federal tax rate of 21% primarily due to the offset of the valuation allowance. The estimated annual effective tax rate is revised on a quarterly basis.

Adjusted operating income (“AOI”)

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 Sports is no longer excluded in all periods presented.

The Company evaluates its performance based on several factors, of which the key financial measure is adjusted operating income (loss), a non-GAAP financial measure. We define adjusted operating income (loss) as operating income (loss) excluding:

(i) depreciation, amortization and impairments of property and equipment, goodwill and intangible assets,

(ii) share-based compensation expense,

(iii) restructuring charges or credits,

(iv) merger, spin-off, and acquisition-related costs, including merger-related litigation expenses,

(v) gains or losses on sales or dispositions of businesses and associated settlements,

(vi) the impact of purchase accounting adjustments related to business acquisitions,

(vii) gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan, and

(viii) amortization for capitalized cloud computing arrangement costs.

The Company believes that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the Company’s business without regard to the settlement of an obligation that is not expected to be made in cash. The Company eliminates merger, spin-off, and acquisition-related costs, when applicable, because the Company does not consider such costs to be indicative of the ongoing operating performance of the Company as they result from an event that is of a non-recurring nature, thereby enhancing comparability. In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan, provides investors with a clearer picture of the Company’s operating performance given that, in accordance with GAAP, gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan are recognized in Operating (income) loss whereas gains and losses related to the remeasurement of the assets under the 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 Other income (expense), net, which is not reflected in Operating income (loss).

The Company believes AOI is an appropriate measure for evaluating the operating performance of the Company on a consolidated and combined basis. AOI 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 AOI measures as the most important indicators of its business performance and evaluates management’s effectiveness with specific reference to these indicators.

AOI 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. Since AOI 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 AOI.

The following is a reconciliation of operating income to adjusted operating income for the three and nine months ended March 31, 2024 as compared to the prior year periods:



	Three Months Ended
	March 31,				Change
	2024		2023		Amount		Percentage
Operating income	$	16,803	$	24,664	$	(7,861)	(32)	%

Depreciation and amortization	13,182		14,798		(1,616)		(11)	%
Share-based compensation (excluding share-based compensation in restructuring charges)	5,611		8,014		(2,403)		(30)	%
Loss, net on dispositions	—		51		(51)		NM
Restructuring charges	2,362		2,461		(99)		(4)	%

Amortization for capitalized cloud computing arrangement costs	388		65		323		NM
Remeasurement of deferred compensation plan liabilities	191		126		65		52	%
Adjusted operating income (a)	$	38,537	$	50,179	$	(11,642)	(23)	%



	Nine Months Ended
	March 31,				Change
	2024		2023		Amount		Percentage
Operating income	$	120,801	$	126,798	$	(5,997)	(5)	%

Depreciation and amortization	39,972		46,369		(6,397)		(14)	%
Share-based compensation (excluding share-based compensation in restructuring charges)	19,561		21,979		(2,418)		(11)	%
Gains, net on dispositions	—		(4,361)		4,361		NM
Restructuring charges	14,803		9,820		4,983		51	%
Merger, spin-off, and acquisition-related costs (b)	2,035		—		2,035		NM
Amortization for capitalized cloud computing arrangement costs	836		169		667		NM
Remeasurement of deferred compensation plan liabilities	389		132		257		195	%
Adjusted operating income (a)	$	198,397	$	200,906	$	(2,509)	(1)	%

_________________

(a) The Company has amended the definition of adjusted operating income so that the impact of the non-cash portion of operating lease revenue related to the Company’s Arena License Agreements with MSG Sports is no longer excluded in all periods presented. Pursuant to GAAP, recognition of operating lease revenue is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement. As a result, operating lease revenue is comprised of a contractual cash component plus or minus a non-cash component for each period presented. Adjusted operating income includes operating lease revenue of (i) $22,372 and $38,610 of revenue collected in cash for the three and nine months ended March 31, 2024, respectively, and $19,014 and $39,234 of revenue collected in cash for the three and nine months ended March 31, 2023, respectively, and (ii) a non-cash portion of $13,216 and $22,831 for the three and nine months ended March 31, 2024, respectively, and $12,149 and $25,078 for the three and nine months ended March 31, 2023, respectively.

(b) This adjustment represents non-recurring costs incurred and paid by the Company for the sale of the Retained Interest by Sphere Entertainment.

NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.

Net loss attributable to nonredeemable noncontrolling interests

For the three and nine months ended March 31, 2024, the Company recorded $0 of net loss attributable to nonredeemable noncontrolling interests as compared to $0 and $553 of net loss attributable to nonredeemable noncontrolling interests for the three and nine months ended March 31, 2023. These amounts represent the share of net loss of BCE that were not attributable to the Company. The Company disposed of its controlling interest in BCE on December 2, 2022.

Liquidity and Capital Resources

Sources and Uses of Liquidity

Our primary sources of liquidity are cash and cash equivalents, cash flows from our business operations and available borrowing capacity under the National Properties Revolving Credit Facility (as defined below). Our principal uses of cash include working capital-related items (including funding our operations), capital spending, debt service, investments and related loans and advances that we may fund from time to time. We may also use cash to continue to repurchase shares of our Class Common A Stock pursuant to the share repurchase program authorized by our Board of Directors on March 29, 2023, of which there was approximately $110,000 remaining as of March 31, 2024. Our decisions as to the use of our available liquidity will be based upon the ongoing review of the funding needs of the business, the optimal allocation of cash resources, and the timing of cash flow generation. To the extent that we desire to access alternative sources of funding through the capital and credit markets, challenging U.S. and global economic and market conditions could adversely impact our ability to do so at that time.

We regularly monitor and assess our ability to meet our net funding and investing requirements. As of March 31, 2024, the Company’s unrestricted cash and cash equivalents balance was $28,008. The principal balance of the Company’s total debt outstanding as of March 31, 2024 was $629,687 and the Company had $132,274 of available borrowing capacity under the National Properties Revolving Credit Facility. We believe we have sufficient liquidity from cash and cash equivalents, available borrowing capacity under our credit facilities and cash flows from operations to fund our operations and satisfy any obligations for the foreseeable future.

Financing Agreements

See Note 10. Credit Facilities, to the financial statements included in “— Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for discussions of the Company’s debt obligations and various financing agreements.

National Properties Facilities

General. MSG National Properties, LLC (“MSG National Properties”), MSG Entertainment Holdings, LLC (“MSG Entertainment Holdings”) and certain subsidiaries of MSG National Properties are party to a credit agreement dated June 30, 2022 with JP Morgan Chase Bank, N.A., as administrative agent and the lenders and L/C issuers party thereto (as amended, the “National Properties Credit Agreement”), providing for a five-year, $650,000 senior secured term loan facility (the “National Properties Term Loan Facility”) and a five-year, $100,000 revolving credit facility (the “National Properties Revolving Credit Facility” and, together with the National Properties Term Loan Facility, the “National Properties Facilities”). On September 15, 2023, the National Properties Credit Agreement was amended to, among other things, increase the National Properties Revolving Credit Facility by $50,000 to $150,000. Up to $25,000 of the National Properties Revolving Credit Facility is available for the issuance of letters of credit. As of March 31, 2024 outstanding letters of credit were $17,726 and the remaining balance available under the National Properties Revolving Credit Facility was $132,274.

Principal Repayments. Subject to customary notice and minimum amount conditions, the Company may voluntarily repay outstanding loans under the National Properties Facilities or terminate commitments under the National Properties Revolving Credit Facility, at any time, in whole or in part, subject only to customary breakage costs in the case of prepayment of Term SOFR loans. The National Properties Facilities will mature on June 30, 2027. The principal obligations under the National Properties Term Loan Facility are to be repaid in quarterly installments beginning with the fiscal quarter ended March 31, 2023, in an aggregate amount equal to 2.50% per annum (0.625% per quarter), stepping up to 5.0% per annum (1.25% per quarter) in the fiscal quarter ending September 30, 2025, with the balance due at the maturity of the facility. The principal obligations under the National Properties Revolving Credit Facility are due at the maturity of the facility. Under certain circumstances, MSG National Properties is required to make mandatory prepayments on loans outstanding, including prepayments in an amount equal to the net cash proceeds of certain sales of assets or casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights), subject to certain exceptions.

Guarantors and Collateral. All obligations under the National Properties Facilities are guaranteed by MSG Entertainment Holdings and MSG National Properties’ existing and future direct and indirect domestic subsidiaries, other than the subsidiaries that own The Garden and certain other excluded subsidiaries (the “Subsidiary Guarantors”). All obligations under the National Properties Facilities, including the guarantees of those obligations, are secured by certain of the assets of MSG National Properties and the Subsidiary Guarantors (collectively, “Collateral”) including, but not limited to, a pledge of some or all of the equity interests held directly or indirectly by MSG National Properties in each Subsidiary Guarantor. The Collateral does not include, among other things, any interests in The Garden or the leasehold interests in Radio City Music Hall and the Beacon Theatre.

Contractual Obligations

During the nine months ended March 31, 2024, the Company did not have any material changes in its non-cancelable contractual obligations other than the recognition of an additional lease obligation and right-of-use lease asset and activities in the ordinary course of business. See Note 7. Property and Equipment, Net and Note 9. Commitments and Contingencies, to the financial statements included in “— Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for further details on the Company’s contractual obligations.

Cash Flow Discussion

As of March 31, 2024, cash, cash equivalents and restricted cash totaled $28,308, as compared to $84,355 as of June 30, 2023. The following table summarizes the Company’s cash flow activities for the nine months ended March 31, 2024 and 2023:


	Nine Months Ended
	March 31,
	2024		2023




Net cash provided by operating activities	$	111,054	$	132,341
Net cash (used in) provided by investing activities	(72,625)		13,261
Net cash used in financing activities	(94,476)		(85,194)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(56,047)	$	60,408

Operating Activities

Net cash provided by operating activities for the nine months ended March 31, 2024 decreased by $21,287 to $111,054 as compared to the prior year period, primarily due to lower net income in the current year period and changes in working capital which included (i) decrease in deferred revenue, (ii) increase in accounts receivable, net, and (iii) an increase in prepaid expenses and other current and non-current assets, partially offset by an increase in related party receivables and payables, net.

Investing Activities

Net cash used in investing activities for the nine months ended March 31, 2024 increased by $85,886 to $72,625 as compared to the prior year period primarily due (i) to a loan to a related party under the DDTL facility, and (ii) the absence of proceeds received from the dispositions of BCE and the corporate aircraft recognized in the prior year period, partially offset by additional proceeds received from the sale of investments in the current year period as compared to the prior year period.

Financing Activities

Net cash used in financing activities for the nine months ended March 31, 2024 increased by $9,282 to $94,476 as compared to the prior year period primarily due to (i) an increase in principal repayments on term loan and revolving credit facilities, (ii) increase in stock repurchases, and (iii) increase in taxes paid in lieu of shares for equity based compensation in the current period, partially offset by a decrease in net transfers to Sphere Entertainment and Sphere Entertainment’s subsidiaries under carve-out accounting principles in the current period and proceeds received from the National Properties Revolving Credit Facility.

Seasonality of Our Business

The revenues the Company earns from the Christmas Spectacular and arena license fees from MSG Sports in connection with the Knicks’ and Rangers’ use of The Garden generally means the Company earns a disproportionate share of its revenues and operating income in the second and third quarters of the Company’s fiscal year, with the first and fourth fiscal quarters being disproportionately lower.

Recently Issued Accounting Pronouncements and Critical Accounting Estimates

Recently Issued and Adopted Accounting Pronouncements

See Note 2. Accounting Policies, to the financial statements included in “— Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for discussion of recently issued accounting pronouncements.

Critical Accounting Estimates

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There were no material changes to the disclosures regarding market risks in connection with our pension and postretirement plans. See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of the 2023 Form 10-K.

Potential Interest Rate Risk Exposure

The Company, through its subsidiary, MSG National Properties, is subject to potential interest rate risk exposure related to borrowings incurred under its credit facilities. Changes in interest rates may increase interest expense payments with respect to any borrowings incurred under these credit facilities. The effect of a hypothetical 200 basis point increase in floating interest rate prevailing as of March 31, 2024 and continuing for a full year would increase the Company’s interest expense on the outstanding amounts under the credit facilities by $12,594.

Item 4. Controls and Procedures

Our management, with the participation of our Executive Chairman and Chief Executive Officer and our Executive Vice President and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act. Based on that evaluation, our Executive Chairman and Chief Executive Officer and our Executive Vice President and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March 31, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is a defendant in various lawsuits. Although the outcome of these lawsuits cannot be predicted with certainty (including the extent of available insurance, if any), management does not believe that resolution of these lawsuits will have a material adverse effect on the Company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On March 29, 2023, the Company’s Board of Directors authorized a share repurchase program to repurchase up to $250 million of the Company’s Class A Common Stock (the “Stock Repurchase Program”). Pursuant to the Stock Repurchase Program, shares of Class A Common Stock may be purchased from time to time in open market or private transactions, block trades or such other manner as the Company may determine in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. For the nine months ended March 31, 2024, the Company repurchased 3,525,314 shares of Class A Common Stock for approximately $115 million. As of March 31, 2024, the Company had approximately $110 million remaining available for repurchases. For the three months ended March 31, 2024, the Company did not repurchase any shares of Class A Common Stock.

Item 6. Exhibits

(a) Index to Exhibits


EXHIBIT NO.						DESCRIPTION
















10 .1						Employment Agreement, dated as of February 1, 2024, between Madison Square Garden Entertainment Corp. and Michael Grau (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 5, 2024). †
31.1						Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1						Certification by the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2						Certification by the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101						The following materials from the Madison Square Garden Entertainment Corp. Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) condensed consolidated balance sheets, (ii) condensed consolidated and combined statements of operations, (iii) condensed consolidated and combined statements of comprehensive income, (iv) condensed consolidated and combined statements of cash flows, (v) condensed consolidated and combined statements of (deficit) equity, and (vi) notes to condensed consolidated and combined financial statements.
104						The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 formatted in Inline XBRL and contained in Exhibit 101.

_________________

† This exhibit is a management contract or a compensatory plan or arrangement.

* Furnished herewith. These exhibits shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibits shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 9th day of May 2024.


Madison Square Garden Entertainment Corp.

By:	/S/ MICHAEL J. GRAU
	Name:	Michael J. Grau
	Title:	Executive Vice President and Chief Financial Officer

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Date	Price Target	Rating	Analyst
7/24/2024	$41.00 → $45.00	Neutral → Buy	Goldman
8/22/2023	$41.00	Buy	BofA Securities
8/11/2023	$38.00	Neutral	JP Morgan
6/1/2023	$43.00	Outperform	Macquarie
5/26/2023	$40.00	Equal-Weight	Morgan Stanley
5/26/2023	$40.00	Neutral	Goldman
5/17/2023	$37.00	Buy	Guggenheim
4/24/2023	$36.00	Buy	Seaport Research Partners

SEC Form 10-Q filed by Madison Square Garden Entertainment Corp.

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