[Madison Square Garden Sports Corp. Fiscal 2024 Third Quarter Results](index=1&type=section&id=Madison%20Square%20Garden%20Sports%20Corp.%20Fiscal%202024%20Third%20Quarter%20Results) [Q3 FY2024 Financial Highlights](index=1&type=section&id=Q3%20FY2024%20Financial%20Highlights) Madison Square Garden Sports Corp. reported strong Q3 FY2024 results, with revenues up 12% to $430.0 million, driven by Knicks and Rangers performance Q3 & Nine-Month FY2024 Financial Performance ($ millions) | | Three Months Ended March 31, | Change | | Nine Months Ended March 31, | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Metric** | **2024** | **2023** | **%** | **2024** | **2023** | **%** | | Revenues | $430.0 | $382.7 | 12% | $799.9 | $760.5 | 5% | | Operating Income | $79.7 | $81.8 | (2)% | $93.7 | $97.4 | (4)% | | Adjusted Operating Income | $88.7 | $86.2 | 3% | $115.7 | $122.8 | (6)% | - Operational growth was driven by increased average per-game paid attendance, higher average ticket prices, and greater ancillary per-capita spending on food, beverage, and merchandise[3](index=3&type=chunk) - Results were positively impacted by the New York Knicks playing five additional home games at The Garden compared to the prior year's third quarter[3](index=3&type=chunk) - Following the quarter's end, both the Knicks and Rangers qualified for the playoffs, and the 2024-25 season ticket renewal initiative has shown strong demand[4](index=4&type=chunk) [Detailed Results of Operations](index=2&type=section&id=Summary%20of%20Reported%20Results%20from%20Operations) Revenue increased 12% to $430.0 million, driven by ticket and suite sales, while operating expenses rose significantly [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Revenue growth was broad-based, with significant increases in ticket, suite, and food/merchandise sales - Ticket-related revenues increased by **$29.9 million**, primarily due to the Knicks playing more home games and higher average per-game revenue for both the Knicks and Rangers[9](index=9&type=chunk) - Suite revenues grew by **$10.9 million**, driven by the additional Knicks games and higher sales of suite products, including new premium hospitality offerings[10](index=10&type=chunk) - Food, beverage, and merchandise sales were up **$4.3 million**, reflecting higher per-game revenue, more Knicks games, and increased online merchandise sales[11](index=11&type=chunk) - Local media rights fees increased by **$1.3 million** due to contractual rate hikes, while league distributions rose by **$0.6 million** from higher national media rights fees[12](index=12&type=chunk) [Expense Analysis](index=2&type=section&id=Expense%20Analysis) Operating expenses increased significantly, with direct operating expenses up 14% and SG&A expenses surging 25% - Direct operating expenses increased by **14% ($34.0 million)**, mainly due to higher team personnel compensation (+$11.8M), league revenue sharing/NBA luxury tax (+$8.4M), and other team operating expenses (+$5.1M)[13](index=13&type=chunk) - Selling, general and administrative expenses rose by **25% ($15.3 million)**, largely reflecting a **$12.2 million** increase in employee compensation and related benefits, primarily from executive management transition costs[14](index=14&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) Consolidated financial statements detail Q3 net income, balance sheet figures, and cash flow information for the period [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 FY2024 statements show revenues of $430.0 million and net income of $37.9 million, or $1.57 per diluted share Q3 FY2024 Statement of Operations (in thousands, except per share data) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | **2024** | **2023** | | **Revenues** | **$429,954** | **$382,744** | | Operating income | $79,742 | $81,751 | | Income before income taxes | $71,895 | $94,775 | | **Net income** | **$37,877** | **$51,813** | | Net income attributable to MSGS stockholders | $37,877 | $52,379 | | **Diluted EPS** | **$1.57** | **$2.18** | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, the balance sheet shows total assets of $1.39 billion, liabilities of $1.68 billion, and a stockholders' deficit Selected Balance Sheet Items (in thousands) | | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | | **Total current assets** | **$250,645** | **$149,233** | | Right-of-use lease assets | $697,464 | $715,283 | | **Total assets** | **$1,388,471** | **$1,315,017** | | **Total current liabilities** | **$526,555** | **$520,528** | | Long-term debt | $330,000 | $295,000 | | Operating lease liabilities, noncurrent | $756,871 | $746,437 | | **Total liabilities** | **$1,682,426** | **$1,652,251** | | **Total equity** | **($293,955)** | **($337,234)** | [Selected Cash Flow Information](index=8&type=section&id=Selected%20Cash%20Flow%20Information) Nine-month cash flow shows net cash used in operating activities of $16.2 million, a reversal from prior year's $114.8 million provided Nine-Month Cash Flow Summary (in thousands) | | Nine Months Ended March 31, | | | :--- | :--- | :--- | | | **2024** | **2023** | | Net cash (used in) provided by operating activities | $(16,220) | $114,801 | | Net cash used in investing activities | $(5,689) | $(10,366) | | Net cash provided by (used in) financing activities | $26,234 | $(129,618) | | **Net increase (decrease) in cash** | **$4,325** | **$(25,183)** | [Non-GAAP Financial Measures & Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) Adjusted Operating Income, a non-GAAP measure, is used to evaluate performance, with Q3 FY2024 operating income reconciling to $88.7 million - Adjusted operating income is defined as operating income excluding depreciation, amortization, share-based compensation, restructuring charges, and certain other non-cash or non-recurring items[19](index=19&type=chunk) - The company believes this measure is an appropriate tool for evaluating operating performance and is a key indicator used internally by management[20](index=20&type=chunk) Reconciliation of Operating Income to Adjusted Operating Income (in thousands) | | Three Months Ended March 31, | | Nine Months Ended March 31, | | | :--- | :--- | :--- | :--- | :--- | | | **2024** | **2023** | **2024** | **2023** | | **Operating income** | **$79,742** | **$81,751** | **$93,735** | **$97,371** | | Depreciation and amortization | 788 | 840 | 2,372 | 2,703 | | Share-based compensation | 7,350 | 3,220 | 18,069 | 22,059 | | Remeasurement of deferred compensation plan liabilities | 821 | 368 | 1,556 | 714 | | **Adjusted operating income** | **$88,701** | **$86,179** | **$115,732** | **$122,847** |

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.  TORONTO, May 01, 2024 (GLOBE NEWSWIRE) -- Xtract One Technologies Inc. (TSX:XTRA) (OTCQX:XTRAF) (FRA: 0PL) ("Xtract One" or the "Company") announces that, in connection with its previously announced public offering (the "Offering"), Eight Capital, as lead agent and sole bookrunner, and Echelon Wealth Partners Inc. (together with Eight C ...

NEW YORK, April 26, 2024 /PRNewswire/ -- Madison Square Garden Sports Corp. (NYSE: MSGS) will issue a press release on Thursday, May 2, 2024 before the market opens reporting results for its fiscal third quarter ended March 31, 2024.The Company generally hosts two earnings conference calls per year, one for its fiscal second quarter and one for its fiscal fourth quarter – which schedule allows for a mid-season update, followed by a full-season review. Accordingly, the Company will not hold an earnings confe ...

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES. TORONTO, April 24, 2024 (GLOBE NEWSWIRE) -- Xtract One Technologies Inc. (TSX:XTRA) (OTCQX:XTRAF) (FRA: 0PL) ("Xtract One" or the "Company") announces that it has closed its previously announced public offering (the "Offering") conducted by Eight Capital, as lead agent and sole bookrunner, and Echelon Wealth Partners Inc. (together with ...

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES. TORONTO, April 22, 2024 (GLOBE NEWSWIRE) -- Xtract One Technologies Inc. (TSX:XTRA) (OTCQX:XTRAF) (FRA: 0PL) ("Xtract One" or the "Company") is pleased to announce that it has increased the size of its previously announced public offering (the "Offering"). The Offering is being conducted by Eight Capital, as lead agent and sole bookrunne ...

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES. TORONTO, April 18, 2024 (GLOBE NEWSWIRE) -- Xtract One Technologies Inc. (TSX:XTRA) (OTCQX:XTRAF) (FRA: 0PL) ("Xtract One" or the "Company") is pleased to announce that it has priced its previously announced public offering (the "Offering"). The Offering is being conducted by Eight Capital, as lead agent and sole bookrunner, and Echelon ...

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES. TORONTO, April 17, 2024 (GLOBE NEWSWIRE) -- Xtract One Technologies Inc. (TSX:XTRA) (OTCQX:XTRAF) (FRA: 0PL) ("Xtract One" or the "Company") is pleased to announce that it has entered into an engagement letter with Eight Capital (the "Agent") pursuant to which the Agent has agreed to conduct a public offering of units (the "Units") on a ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ________________________ ☐ 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: 1-36900 MADISON SQUARE GARDEN SPORTS CORP. (Exact name of registrant as specified in its charter) | Delaware | 47-3373056 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or organization) | Identifica ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements and accompanying notes for the period ended September 30, 2023 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The company's total liabilities exceeded total assets, resulting in negative total equity as of September 30, 2023 Key Balance Sheet Metrics | Metric | September 30, 2023 (in thousands) | June 30, 2023 (in thousands) | | :----------------------- | :-------------------------------- | :----------------------------- | | Total Assets | $1,366,085 | $1,315,017 | | Total Liabilities | $1,724,628 | $1,652,251 | | Total Equity | $(358,543) | $(337,234) | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a net loss for the quarter, although the operating loss narrowed significantly compared to the prior year Quarterly Operating Results | Metric | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenues | $43,046 | $24,089 | | Operating loss | $(14,824) | $(35,898) | | Net loss | $(18,821) | $(18,527) | | Net loss attributable to MSG Sports' stockholders | $(18,821) | $(17,820) | | Basic loss per common share | $(0.79) | $(0.73) | | Diluted loss per common share | $(0.79) | $(0.73) | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company's comprehensive loss remained relatively stable compared to the same period in the prior year Quarterly Comprehensive Loss | Metric | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net loss | $(18,821) | $(18,527) | | Other comprehensive income, net of income taxes | $6 | $3 | | Comprehensive loss | $(18,815) | $(18,524) | | Comprehensive loss attributable to MSG Sports' stockholders | $(18,815) | $(17,817) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash from financing activities offset cash used in operations, resulting in a net increase in cash for the quarter Quarterly Cash Flow Summary | Cash Flow Activity | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net cash (used in) operating activities | $(54,141) | $1,285 | | Net cash used in investing activities | $(1,729) | $(271) | | Net cash provided by (used in) financing activities | $67,830 | $(10,996) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $11,960 | $(9,982) | [Consolidated Statements of Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Equity) Total equity decreased during the quarter, continuing the trend from the prior year Change in Total Equity (Q1 FY2024) | Metric | Balance as of June 30, 2023 (in thousands) | Balance as of September 30, 2023 (in thousands) | | :-------------------------------- | :----------------------------------------- | :---------------------------------------------- | | Total Equity | $(337,234) | $(358,543) | Change in Total Equity (Q1 FY2023) | Metric | Balance as of June 30, 2022 (in thousands) | Balance as of September 30, 2022 (in thousands) | | :-------------------------------- | :----------------------------------------- | :---------------------------------------------- | | Total Equity | $(145,377) | $(171,910) | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of accounting policies and financial statement components [Note 1. Description of Business and Basis of Presentation](index=10&type=section&id=Note%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) The company owns major sports franchises and operates as a single reporting segment - Madison Square Garden Sports Corp (MSG Sports) owns and operates the **New York Knicks (NBA)** and **New York Rangers (NHL)**, along with two development league teams[30](index=30&type=chunk) - MSG Sports operates and reports financial information in **one segment**, with the Executive Chairman serving as the Chief Operating Decision Maker (CODM)[31](index=31&type=chunk) [Note 2. Accounting Policies](index=11&type=section&id=Note%202.%20Accounting%20Policies) The company is currently assessing the impact of a new accounting standard for leases under common control arrangements - The Company is currently evaluating the impact of ASU No 2023-01, Leases (Topic 842): Common Control Arrangements, which is effective for the first quarter of fiscal year 2025[42](index=42&type=chunk) [Note 3. Revenue Recognition](index=12&type=section&id=Note%203.%20Revenue%20Recognition) League distributions drove a significant increase in total revenues for the quarter Revenue by Type | Revenue Type | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | | :------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Event-related | $5,821 | $5,346 | | Media rights | $7,219 | $6,986 | | Sponsorship, signage and suite licenses | $5,314 | $4,814 | | League distributions and other | $24,692 | $6,943 | | Total revenues | $43,046 | $24,089 | Contract Balances | Contract Balance | September 30, 2023 (in thousands) | June 30, 2023 (in thousands) | | :------------------------------------ | :-------------------------------- | :----------------------------- | | Receivables from contracts with customers, net | $31,842 | $20,134 | | Contract assets, current | $13,777 | $19,465 | | Deferred revenue, including non-current portion | $302,045 | $169,717 | Estimated Future Revenue from Existing Contracts | Fiscal Year | Estimated Revenue (in thousands) | | :-------------------------- | :------------------------------- | | Fiscal Year 2024 (remainder) | $162,928 | | Fiscal Year 2025 | $115,935 | | Fiscal Year 2026 | $72,727 | | Fiscal Year 2027 | $39,055 | | Fiscal Year 2028 | $20,213 | | Thereafter | $18,047 | | Total | $428,905 | [Note 4. Computation of Earnings (Loss) per Common Share](index=14&type=section&id=Note%204.%20Computation%20of%20Earnings%20(Loss)%20per%20Common%20Share) The company's basic and diluted loss per common share increased slightly compared to the prior-year period Loss Per Common Share | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :------------------------------------------------- | :------------------------------ | :------------------------------ | | Basic loss per common share | $(0.79) | $(0.73) | | Diluted loss per common share | $(0.79) | $(0.73) | [Note 5. Team Personnel Transactions](index=15&type=section&id=Note%205.%20Team%20Personnel%20Transactions) No team personnel transactions occurred during the quarter, unlike the prior-year period - There were **no Team personnel transactions** for the three months ended September 30, 2023, compared to a net credit of $329 thousand for the same period in 2022[57](index=57&type=chunk) [Note 6. Cash, Cash Equivalents and Restricted Cash](index=15&type=section&id=Note%206.%20Cash%2C%20Cash%20Equivalents%20and%20Restricted%20Cash) The company's total cash, cash equivalents, and restricted cash increased during the first fiscal quarter Cash Position | Metric | September 30, 2023 (in thousands) | June 30, 2023 (in thousands) | | :------------------------------------------------- | :-------------------------------- | :----------------------------- | | Cash and cash equivalents | $51,208 | $40,398 | | Restricted cash | $1,211 | $61 | | Cash, cash equivalents and restricted cash (statements of cash flows) | $52,419 | $40,459 | [Note 7. Leases](index=15&type=section&id=Note%207.%20Leases) The company holds significant long-term operating lease assets and liabilities with a weighted average term of over 30 years Lease Balances | Lease Metric | September 30, 2023 (in thousands) | June 30, 2023 (in thousands) | | :-------------------------------- | :-------------------------------- | :----------------------------- | | Right-of-use lease assets | $713,350 | $715,283 | | Operating lease liabilities, current | $50,530 | $49,745 | | Operating lease liabilities, noncurrent | $734,277 | $746,437 | | Total lease liabilities | $784,807 | $796,182 | Lease Costs | Lease Cost Type | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Operating lease cost (Direct operating expenses) | $1,311 | $1,403 | | Operating lease cost (Selling, general and administrative expenses) | $2,230 | $613 | | Short-term lease cost (Direct operating expenses) | $0 | $45 | | Total lease cost | $3,631 | $2,061 | - The weighted average remaining lease term for operating leases as of September 30, 2023, was **30.3 years**, with a weighted average discount rate of **7.1%**[66](index=66&type=chunk) [Note 8. Goodwill and Intangible Assets](index=17&type=section&id=Note%208.%20Goodwill%20and%20Intangible%20Assets) Annual impairment testing confirmed no impairment of goodwill or indefinite-lived intangible assets - The Company performed its annual impairment test for goodwill and identifiable indefinite-lived intangible assets in the first quarter of fiscal year 2024 and **identified no impairments**[69](index=69&type=chunk) - There was **no amortization expense** for intangible assets for the three months ended September 30, 2023, due to the disposal of CLG in April 2023, compared to $108 thousand in the prior year period[70](index=70&type=chunk) Goodwill and Intangible Asset Balances | Asset Type | September 30, 2023 (in thousands) | June 30, 2023 (in thousands) | | :-------------------------- | :-------------------------------- | :----------------------------- | | Goodwill | $226,523 | $226,523 | | Sports franchises | $102,564 | $102,564 | | Photographic related rights | $1,080 | $1,080 | | Total indefinite-lived intangible assets | $103,644 | $103,644 | [Note 9. Investments](index=17&type=section&id=Note%209.%20Investments) The company's investment portfolio includes various equity securities and derivative instruments, with notable unrealized losses on certain holdings Investment Portfolio Summary | Investment Type | September 30, 2023 (in thousands) | June 30, 2023 (in thousands) | | :------------------------------------------------- | :-------------------------------- | :----------------------------- | | Equity method investments: NRG | $11,533 | $11,948 | | Equity investments with readily determinable fair values: Xtract One common stock | $15,855 | $22,408 | | Other equity investments with readily determinable fair values | $15,783 | $14,406 | | Equity investments without readily determinable fair values | $6,852 | $5,514 | | Derivative instruments: Xtract One warrants | $7,680 | $13,098 | | Total investments | $57,703 | $67,374 | - The Company recognized a net share of losses of **$415 thousand** from its equity method investment in NRG during the three months ended September 30, 2023, and holds approximately **25% ownership**[73](index=73&type=chunk) Unrealized Losses on Equity Investments | Unrealized Losses on Equity Investments | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Unrealized loss - Xtract One common stock | $(6,553) | $0 | | Unrealized loss - other equity investments | $(130) | $(103) | [Note 10. Fair Value Measurements](index=18&type=section&id=Note%2010.%20Fair%20Value%20Measurements) The company's assets measured at fair value consist primarily of liquid investments and derivative warrants Assets Measured at Fair Value | Asset Type | Fair Value Hierarchy | September 30, 2023 (in thousands) | June 30, 2023 (in thousands) | | :-------------------------- | :------------------- | :-------------------------------- | :----------------------------- | | Money market accounts | I | $25,489 | $17,330 | | Time deposit | I | $23,144 | $1,457 | | Equity investments | I | $31,638 | $36,814 | | Warrants | III | $7,680 | $13,098 | | Total assets measured at fair value | | $87,951 | $68,699 | - The Company's Level III assets consist of Xtract One warrants, valued using the Black-Scholes option pricing model; unrealized losses on these warrants for the quarter were **$5,418 thousand**[80](index=80&type=chunk) [Note 11. Commitments and Contingencies](index=19&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) Commitments primarily relate to sports personnel employment agreements, while ongoing litigation is not expected to have a material impact - The Company's commitments primarily include obligations under employment agreements with professional sports teams' personnel and future lease payments[81](index=81&type=chunk) - Management does not believe that the resolution of various lawsuits in which the Company is a defendant will have a **material adverse effect** on the Company[83](index=83&type=chunk) [Note 12. Debt](index=20&type=section&id=Note%2012.%20Debt) The company utilizes revolving credit facilities for its Knicks and Rangers teams and was in compliance with all debt covenants - The Knicks Revolving Credit Facility has a maximum capacity of **$275,000 thousand**, with an outstanding balance of **$275,000 thousand** as of September 30, 2023, at an interest rate of **6.67%**[86](index=86&type=chunk)[87](index=87&type=chunk) - The Rangers Revolving Credit Facility has a maximum capacity of **$250,000 thousand**, with an outstanding balance of **$95,000 thousand** as of September 30, 2023, at an interest rate of **7.17%**[95](index=95&type=chunk)[96](index=96&type=chunk) - The Rangers NHL Advance Agreement has an outstanding balance of **$30,000 thousand** as of September 30, 2023, bearing interest at **3.00%** per annum[101](index=101&type=chunk)[104](index=104&type=chunk) - Both Knicks LLC and Rangers LLC were in compliance with their respective debt service ratio covenants of at least **1.5:1.0** as of September 30, 2023[91](index=91&type=chunk)[100](index=100&type=chunk) [Note 13. Benefit Plans](index=22&type=section&id=Note%2013.%20Benefit%20Plans) The company incurred costs related to its pension, 401(k), and deferred compensation plans for employees and executives Benefit Plan Costs | Benefit Plan Cost | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net periodic benefit cost (Pension Plans) | $77 | $64 | | Expense (401(k) Plan and Excess Savings Plan) | $1,294 | $1,065 | - The Company recorded offsetting compensation cost credits and losses of **$104 thousand** related to the Executive Deferred Compensation Plan for the quarter[113](index=113&type=chunk) [Note 14. Share-based Compensation](index=23&type=section&id=Note%2014.%20Share-based%20Compensation) Share-based compensation expense decreased significantly from the prior year, with new RSU grants awarded during the quarter Share-based Compensation Expense | Metric | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Share-based compensation expense | $4,149 | $7,220 | RSU Activity | RSU Activity (in thousands) | Nonperformance Based Vesting RSUs | Performance Based Vesting RSUs | Weighted-Average Fair Value Per Share at Date of Grant | | :-------------------------------- | :-------------------------------- | :----------------------------- | :----------------------------------------------------- | | Unvested award balance, June 30, 2023 | 124 | 160 | $167.08 | | Granted | 48 | 48 | $178.45 | | Vested | (42) | (52) | $161.41 | | Forfeited / Cancelled | (1) | (1) | $163.39 | | Unvested award balance, September 30, 2023 | 129 | 155 | $172.76 | - The fair value of RSUs that vested during the quarter was **$16,637 thousand**, with **$6,637 thousand** retained by the Company for tax withholding[117](index=117&type=chunk) [Note 15. Stock Repurchase Program](index=24&type=section&id=Note%2015.%20Stock%20Repurchase%20Program) The company did not repurchase any shares during the quarter, leaving significant capacity under its current authorization - As of September 30, 2023, the Company had **$184,639 thousand remaining** under its $525,000 thousand Class A Common Stock repurchase authorization, with no repurchases made during the quarter[121](index=121&type=chunk)[122](index=122&type=chunk) [Note 16. Related Party Transactions](index=24&type=section&id=Note%2016.%20Related%20Party%20Transactions) The company engages in numerous transactions with entities controlled by the Dolan Family, who hold majority voting power - The Dolan Family Group beneficially owns **100% of the Company's Class B Common Stock** and approximately 3.3% of Class A Common Stock, representing about **71.0% of aggregate voting power**[123](index=123&type=chunk) - Key related party agreements include Arena License Agreements, Sponsorship sales and service representation agreements, a Services Agreement with MSG Entertainment, and Media rights agreements with MSG Networks[124](index=124&type=chunk)[128](index=128&type=chunk) Summary of Related Party Transactions | Related Party Transaction | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenues | $8,817 | $8,174 | | Expense pursuant to the Services Agreement | $9,887 | $9,513 | | Rent expense (Sublease agreement) | $750 | $698 | | Costs (Sponsorship sales and service) | $2,601 | $2,933 | | Operating lease expense (Arena License) | $1,311 | $1,311 | [Note 17. Income Taxes](index=26&type=section&id=Note%2017.%20Income%20Taxes) The company's effective tax rate was significantly higher than the federal statutory rate due to various state and non-deductible items Income Tax Summary | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :-------------------------------- | :------------------------------ | :------------------------------ | | Income tax benefit | $15,144 | $20,493 | | Effective tax rate | 45% | 53% | - The effective tax rate exceeds the statutory federal tax rate of 21% primarily due to state taxes and nondeductible expenses for officers' compensation and players' disability insurance[131](index=131&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial condition and operational results for the quarter, highlighting key changes and business factors [Introduction](index=28&type=section&id=Introduction) The company's financial information is operated and reported as a single business segment - The Company operates and reports financial information in **one segment**[141](index=141&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Quarterly revenues increased significantly, driven by league distributions, which led to a substantially lower operating loss Comparison of Operations | Metric | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | Change ($) | Change (%) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------- | :--------- | | Revenues | $43,046 | $24,089 | $18,957 | 79% | | Direct operating expenses | $3,520 | $3,681 | $(161) | (4)% | | Selling, general and administrative expenses | $53,556 | $55,281 | $(1,725) | (3)% | | Depreciation and amortization | $794 | $1,025 | $(231) | (23)% | | Operating loss | $(14,824) | $(35,898) | $21,074 | 59% | | Interest expense, net | $(6,476) | $(2,956) | $(3,520) | NM | | Miscellaneous expense, net | $(12,665) | $(166) | $(12,499) | NM | | Loss before income taxes | $(33,965) | $(39,020) | $5,055 | 13% | | Income tax benefit | $15,144 | $20,493 | $(5,349) | (26)% | | Net loss | $(18,821) | $(18,527) | $(294) | (2)% | | Net loss attributable to MSG Sports' stockholders | $(18,821) | $(17,820) | $(1,001) | (6)% | - Revenues increased by **$18,957 thousand (79%)** primarily due to a **$16,991 thousand** increase in league distributions[147](index=147&type=chunk) - Direct operating expenses decreased by **$161 thousand (4%)**, mainly due to lower team personnel compensation following the sale of CLG[148](index=148&type=chunk)[149](index=149&type=chunk) - Selling, general and administrative expenses decreased by **$1,725 thousand (3%)**, driven by lower employee compensation and related benefits[151](index=151&type=chunk) - Operating loss decreased by **$21,074 thousand (59%)** to $14,824 thousand, primarily due to higher revenues and lower SG&A expenses[153](index=153&type=chunk) - Net interest expense increased by **$3,520 thousand** due to higher average interest rates and increased average borrowings[154](index=154&type=chunk) - Miscellaneous expense, net, increased by **$12,499 thousand**, primarily due to unrealized losses on investments in Xtract One common stock and warrants[155](index=155&type=chunk) Reconciliation of Operating Loss to Adjusted Operating Loss | Adjusted Operating Loss Reconciliation | Three Months Ended Sep 30, 2023 (in thousands) | Three Months Ended Sep 30, 2022 (in thousands) | Change ($) | Change (%) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------- | :--------- | | Operating loss | $(14,824) | $(35,898) | $21,074 | 59% | | Depreciation and amortization | $794 | $1,025 | | | | Share-based compensation | $4,149 | $7,220 | | | | Remeasurement of deferred compensation plan liabilities | $(104) | $(103) | | | | Adjusted operating loss | $(9,985) | $(27,756) | $17,771 | 64% | - Adjusted operating loss decreased by **$17,771 thousand (64%)** to $9,985 thousand, primarily due to higher revenues[164](index=164&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through cash reserves and available credit, while managing significant deferred revenue obligations - As of September 30, 2023, the Company had **$51,208 thousand in cash** and **$155,000 thousand of available borrowing capacity**[168](index=168&type=chunk)[170](index=170&type=chunk) - Deferred revenue obligations were **$270,876 thousand**, primarily from tickets, suites, and local media rights[168](index=168&type=chunk) - Net cash used in operating activities was **$54,141 thousand**, a significant shift from net cash provided in the prior year, primarily due to changes in working capital[173](index=173&type=chunk)[174](index=174&type=chunk) - Net cash provided by financing activities was **$67,830 thousand**, primarily due to additional borrowings of **$75,000 thousand**[173](index=173&type=chunk)[177](index=177&type=chunk) [Seasonality of Our Business](index=33&type=section&id=Seasonality%20of%20Our%20Business) The company's revenue generation is concentrated in the second and third fiscal quarters, aligned with sports seasons - The Company's revenues are disproportionately earned in the **second and third quarters** of its fiscal year, coinciding with the majority of its NBA and NHL sports teams' games[178](index=178&type=chunk) [Critical Accounting Policies](index=33&type=section&id=Critical%20Accounting%20Policies) Annual impairment tests for goodwill and indefinite-lived intangible assets found no impairment - The Company performed its annual impairment tests for goodwill and identifiable indefinite-lived intangible assets during the first quarter of fiscal year 2024 and concluded there was **no impairment**[180](index=180&type=chunk)[183](index=183&type=chunk)[185](index=185&type=chunk) Indefinite-Lived Intangible Assets | Indefinite-Lived Intangible Assets | September 30, 2023 (in thousands) | | :--------------------------------- | :-------------------------------- | | Sports franchises | $102,564 | | Photographic related rights | $1,080 | | Total | $103,644 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is to interest rate fluctuations on its floating-rate debt - The Company has potential interest rate risk exposure from **$370 million** in outstanding floating-rate borrowings; a hypothetical **100 basis point increase** in interest rates would increase annual interest expense by approximately **$3.7 million**[187](index=187&type=chunk)[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal financial reporting controls were effective as of the quarter's end - As of September 30, 2023, the Company's Executive Chairman and Chief Financial Officer concluded that **disclosure controls and procedures were effective**[190](index=190&type=chunk) - There were **no material changes** in the Company's internal control over financial reporting during the quarter ended September 30, 2023[191](index=191&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing lawsuits are not expected to have a material adverse effect on the company's financial condition - Management does not believe that the resolution of various lawsuits in which the Company is a defendant will have a **material adverse effect** on the Company[194](index=194&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No shares were repurchased during the quarter, with approximately $185 million remaining under the buyback program - As of September 30, 2023, the Company had approximately **$185 million remaining** under its $525 million Class A Common Stock share repurchase program, with no repurchases made during the quarter[195](index=195&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists the certifications and financial data exhibits filed with the quarterly report - Exhibits include certifications by the Executive Chairman and Chief Financial Officer (Sections 302 and 906 of Sarbanes-Oxley Act) and Inline Extensible Business Reporting Language (iXBRL) formatted financial statements[197](index=197&type=chunk) [SIGNATURE](index=38&type=section&id=SIGNATURE) This section contains the official signature confirming the filing of the report - The report was duly signed on November 2, 2023, by Victoria M Mink, Executive Vice President, Chief Financial Officer and Treasurer of Madison Square Garden Sports Corp[199](index=199&type=chunk)[200](index=200&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2023 or Securities registered pursuant to Section 12(b) of the Act: ☐ 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: 1-36900 MADISON SQUARE GARDEN SPORTS CORP. (Exact name ...