Table of Contents 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, 2021 OR ☐ 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 registran ...

Table of Contents 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 December 31, 2020 OR ☐ 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 regist ...

Madison Square Garden Sports Corp. (NYSE:MSGS) Q2 2021 Earnings Conference Call February 3, 2021 10:00 AM ET Company Participants Ari Danes - CFA, Senior Vice President, Investor Relations Andy Lustgarten - President and Chief Executive Officer Victoria Mink - Executive Vice President, Chief Financial Officer and Treasurer Conference Call Participants John Janedis - Wolfe Research Brandon Ross - LightShed Partners David Karnovsky - JP Morgan Ben Swinburne - Morgan Stanley David Joyce - Barclays Operator ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the quarter ended September 30, 2020, including balance sheets, statements of operations, cash flows, and equity, along with notes detailing accounting policies, the MSGE spin-off, and subsequent debt refinancing [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2020, total assets were $1.22 billion, total liabilities $1.46 billion, and total equity a deficit of $239.9 million, with cash and equivalents decreasing significantly from June 30, 2020 Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2020 | June 30, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $23,527 | $77,852 | | Total current assets | $96,100 | $128,278 | | Total assets | $1,219,366 | $1,233,798 | | **Liabilities & Equity** | | | | Total current liabilities | $312,444 | $290,254 | | Long-term debt | $350,000 | $350,000 | | Total liabilities | $1,459,259 | $1,437,233 | | Total equity | ($239,893) | ($203,435) | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended September 30, 2020, revenues increased to $57.0 million, and the net loss attributable to stockholders improved to $28.4 million, or ($1.18) per share, compared to the prior year Quarterly Statement of Operations (in thousands, except per share data) | Metric | Q1 FY2021 (ended Sep 30, 2020) | Q1 FY2020 (ended Sep 30, 2019) | | :--- | :--- | :--- | | Revenues | $57,038 | $49,850 | | Direct operating expenses | $39,786 | $18,419 | | Selling, general and administrative expenses | $42,996 | $85,910 | | Operating loss | ($27,404) | ($59,324) | | Loss from continuing operations | ($29,015) | ($40,191) | | Loss from discontinued operations, net of taxes | $0 | ($40,475) | | Net loss attributable to stockholders | ($28,417) | ($79,981) | | Basic loss per common share | ($1.18) | ($3.36) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended September 30, 2020, net cash used in operating activities increased to $57.5 million, resulting in a net decrease in cash, cash equivalents, and restricted cash of $64.5 million Quarterly Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | ($57,485) | ($34,234) | | Net cash used in investing activities | ($80) | ($74,236) | | Net cash used in financing activities | ($6,902) | ($23,946) | | Net decrease in cash, cash equivalents and restricted cash | ($64,467) | ($134,366) | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the basis of presentation, the impact of COVID-19 and the MSGE spin-off, revenue recognition, leases, credit facilities, related party transactions, and subsequent significant debt refinancing in November 2020 - The company's primary business is the ownership and operation of sports teams, including the **New York Knicks (NBA)** and **New York Rangers (NHL)**[34](index=34&type=chunk) - The **COVID-19 pandemic** has materially impacted revenues from ticket sales, suite licenses, sponsorships, and food/beverage sales due to the suspension of events with fans at The Garden[41](index=41&type=chunk) - On April 17, 2020, the company completed the spin-off of **Madison Square Garden Entertainment Corp. (MSGE)**, with historical entertainment business results now reported as discontinued operations[36](index=36&type=chunk)[62](index=62&type=chunk) - Subsequent to the quarter end, on November 6, 2020, the company amended and restated its primary credit facilities, increasing total borrowing capacity and extending maturities to **November 2023**[176](index=176&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Q1 FY2021 financial results, highlighting a 14% revenue increase and narrowed operating loss, while emphasizing the ongoing COVID-19 impact and subsequent November 2020 credit facility refinancing to bolster liquidity [Results of Operations](index=35&type=section&id=Results%20of%20Operations) For Q1 FY2021, revenues increased by $7.2 million (14%) to $57.0 million, and operating loss decreased by $31.9 million (54%) to $27.4 million, primarily due to deferred media rights and reduced SG&A post-MSGE spin-off Quarterly Financial Performance Summary (in thousands) | Metric | Q1 FY2021 | Q1 FY2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $57,038 | $49,850 | $7,188 | 14% | | Direct operating expenses | $39,786 | $18,419 | $21,367 | 116% | | SG&A expenses | $42,996 | $85,910 | ($42,914) | (50)% | | Operating loss | ($27,404) | ($59,324) | $31,920 | 54% | - The primary driver of the revenue increase was a **$30.3 million** rise in league distributions, mainly from national media rights fees related to the completion of the delayed 2019-20 seasons[204](index=204&type=chunk)[206](index=206&type=chunk) - Adjusted operating loss, a non-GAAP measure, improved by **$22.9 million (56%)** to a loss of **$17.8 million**, compared to a loss of **$40.6 million** in the prior-year period[226](index=226&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2020, cash and cash equivalents were $23.5 million, with the company securing an additional $250 million in liquidity through debt refinancing in November 2020 to fund operations for the next 12 months - Cash and cash equivalents stood at approximately **$23.5 million** as of September 30, 2020[230](index=230&type=chunk)[234](index=234&type=chunk) - In November 2020, the company secured an additional **$250 million** of liquidity through new financing arrangements, which amended and extended existing credit facilities and established a new one[228](index=228&type=chunk)[234](index=234&type=chunk) - Current deferred revenue obligations were approximately **$138.0 million** as of September 30, 2020, primarily related to tickets, media rights, suites, and sponsorships for upcoming seasons[230](index=230&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure on its variable-rate debt, where a 100 basis point increase would raise annual interest expense by approximately $3.5 million on $350 million outstanding debt - The company has interest rate risk exposure from its credit facilities, which have floating rates based on **LIBOR, Federal Funds Rate, or Prime Rate**[275](index=275&type=chunk)[278](index=278&type=chunk) - As of September 30, 2020, a hypothetical **100 basis point** increase in interest rates would increase annual interest expense by approximately **$3.5 million** on the **$350 million** of outstanding debt[278](index=278&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal control over financial reporting during the quarter - The **CEO and CFO** concluded that the company's disclosure controls and procedures were **effective** as of the end of the quarter[279](index=279&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended September 30, 2020[280](index=280&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company settled a derivative lawsuit concerning Executive Chairman James L. Dolan's compensation, effective October 8, 2020, involving his relinquishment of a one-time equity award, with other ongoing lawsuits not expected to have a material adverse effect - A derivative lawsuit regarding **James L. Dolan's compensation** was settled, with the settlement becoming effective on **October 8, 2020**[283](index=283&type=chunk) - Under the settlement, Mr. Dolan relinquished a one-time equity award granted in **October 2018**[283](index=283&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) As of September 30, 2020, approximately $260 million remained available under the $525 million Class A Common Stock share repurchase program, with no shares repurchased during the quarter - The company did not repurchase any shares of its Class A Common Stock during the quarter ended September 30, 2020[285](index=285&type=chunk) - Approximately **$260 million** remained available for repurchases under the existing stock repurchase authorization as of September 30, 2020[285](index=285&type=chunk) [Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including amended and new credit agreements for the Knicks and Rangers subsidiaries, and certifications by the CEO and CFO - Key exhibits filed include the amended and restated credit agreements for the **Knicks and Rangers** dated **November 6, 2020**[287](index=287&type=chunk) - A new credit agreement for **Knicks Holdings, LLC**, also dated **November 6, 2020**, was filed as an exhibit[287](index=287&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Securities registered pursuant to Section 12(g) of the Act: None. For the transition period from ___________ to _____________ Commission File Number: 1-36900 MADISON SQUARE GARDEN SPORTS CORP. (Exact name of r ...

Financial Data and Key Metrics Changes - As of June 30, total cash and cash equivalents were approximately $78 million, with an additional $215 million in borrowing capacity [24] - For fiscal 2019, on a pro forma basis, MSG Sports generated $695 million in revenue and $96 million in adjusted operating income [27][28] - The company had over $290 million in liquidity at fiscal year-end [43] Business Line Data and Key Metrics Changes - The majority of revenue in fiscal 2019 came from media rights fees, sponsorship, and suite license fees, with nearly $240 million from media rights alone [28] - The company reported a significant portion of its revenue is contracted on a multi-year basis, providing strong visibility for future earnings [27] Market Data and Key Metrics Changes - The NBA and NHL have resumed play, with a significant public response indicating pent-up demand for live sports [9] - Over 80% of the Rangers' season ticket holders renewed for the upcoming season, reflecting strong fan engagement [9] Company Strategy and Development Direction - The company aims to create a pure-play sports entity to highlight premium assets and drive long-term value creation [6] - MSG Sports is focused on cost reduction and cash conservation due to the ongoing uncertainty from COVID-19 [31] - The company sees opportunities in improved team performance, playoff participation, and the continued legalization of sports gaming [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial flexibility to navigate through challenging times, emphasizing the value of its sports franchises [13] - The company is optimistic about the return of basketball and hockey next year, despite uncertainties related to COVID-19 [10] Other Important Information - The company has entered into 35-year arena license agreements with the Knicks and Rangers, with fees impacted by the pandemic [30] - The NHL's media rights agreement is set to expire after the 2020/21 season, presenting a potential opportunity for increased revenue [16] Q&A Session Summary Question: Impact of potential fanless games on revenue - Management indicated that if there are no fans, revenues from tickets, suites, food, beverage, and merchandise would decline significantly, but media rights revenue would still be recognized [36][37] Question: Cash burn rate and job cuts - The company is focused on cost reduction and cash conservation, with a workforce reduction of approximately 15% in business operations [42][44] Question: Plans around term loans and debt levels - The company plans to begin refinancing the Knicks' senior secured revolver in the near term and expects to successfully refinance credit facilities [50][52] Question: Bubble approach for the upcoming season and sports betting opportunities - Management is exploring various scenarios for the upcoming season, emphasizing the importance of fan safety, and sees significant opportunities in sports betting to drive engagement [55]

Table of Contents 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, 2020 OR ☐ 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 registran ...

Table of Contents 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 December 31, 2019 OR ☐ 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 (Exact name of registrant as specified in its charter) D ...

Financial Data and Key Metrics Changes - The company generated $214.8 million in revenues for Q1 2020, a decrease of 2% year-over-year [35] - Adjusted operating loss was $41.1 million compared to a loss of $9.9 million in the previous year [35] - Total unrestricted cash and cash equivalents were approximately $1.1 billion as of September 30 [41] Business Line Data and Key Metrics Changes - MSG Entertainment revenues were $159 million, a decrease of 2%, impacted by the absence of the MTV Video Music Awards [36] - MSG Sports revenues increased by 1% to $56 million, driven by higher revenues from other live sporting events [38] - TAO Group revenues increased by $2.4 million year-over-year, indicating solid growth despite some elevated costs [101] Market Data and Key Metrics Changes - The company hosted several sporting events, including WWE and Bellator MMA, contributing to the increase in revenues from other live sporting events [39] - The Garden was named Billboard's Arena of the Year for the second consecutive year, reflecting its strong market position [26] Company Strategy and Development Direction - The company announced a full spin-off of its entertainment business from its sports business, aiming for long-term success and tax efficiencies [11][14] - MSG Sphere in Las Vegas is expected to open in 2021, with a focus on immersive shared experiences [17][21] - The company is evaluating opportunities for the London Sphere, with no definitive opening date yet due to planning complexities [22][78] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the live entertainment sector and expects to recover ground lost in Q1 by the end of the fiscal year [25][94] - The potential legalization of gaming is viewed as a significant growth opportunity for the sports business [32][80] - Management is confident in the financial flexibility to fund growth plans, including the MSG Sphere projects [48][62] Other Important Information - The company is winding down Obscura Digital's third-party business to focus resources on MSG Sphere [36] - The Christmas Spectacular is anticipated to have another successful year despite fewer scheduled shows [28] Q&A Session Summary Question: Financing plans for MSG Sphere builds - Management indicated that the entertainment company will start with a strong cash position and may utilize revolvers for cash contributions prior to the spin-off [46][48] Question: Advantages of the new spin structure - The new structure allows for tax efficiencies and maintains 100% ownership for shareholders in both companies, which is seen as beneficial for long-term value [54] Question: Timeline for the London Sphere - The timeline for the London Sphere is uncertain, with ongoing planning processes that may extend into 2020 [60][78] Question: In-venue gaming opportunities - Management is optimistic about the potential for in-venue gaming and is exploring both venue-based and mobile options [80] Question: Updates on the booking pipeline - Management remains bullish on live entertainment and expects to recover from last year's record-breaking quarter [94][95] Question: TAO Group's future openings and costs - TAO Group is evaluating new venue opportunities on a case-by-case basis, with a focus on capital efficiency [102][105]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the period ended September 30, 2019 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The company's total assets and liabilities increased compared to the previous quarter Consolidated Balance Sheet Highlights (in thousands) | Metric | September 30, 2019 | June 30, 2019 | | :------------------------ | :------------------- | :------------ | | Total Assets | $3,961,634 | $3,763,551 | | Total Liabilities | $1,349,188 | $1,057,164 | | Total Equity | $2,544,982 | $2,638,760 | | Cash and cash equivalents | $952,186 | $1,086,372 | | Deferred revenue | $416,475 | $293,410 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a significant increase in operating and net losses for the quarter Consolidated Statements of Operations Highlights (Three Months Ended September 30, in thousands) | Metric | 2019 | 2018 | Change (Amount) | Change (%) | | :------------------------------------------------- | :------- | :------- | :-------------- | :--------- | | Revenues | $214,782 | $218,135 | $(3,353) | (2)% | | Operating loss | $(89,318) | $(50,785) | $(38,533) | (76)% | | Net loss | $(80,666) | $(34,048) | $(46,618) | (137)% | | Net loss attributable to The Madison Square Garden Company's stockholders | $(79,981) | $(32,212) | $(47,769) | (148)% | | Basic loss per common share | $(3.36) | $(1.36) | $(2.00) | (147)% | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive loss attributable to stockholders widened significantly compared to the prior year Consolidated Statements of Comprehensive Income (Loss) Highlights (Three Months Ended September 30, in thousands) | Metric | 2019 | 2018 | | :---------------------------------------------------- | :--------- | :--------- | | Net loss | $(80,666) | $(34,048) | | Other comprehensive loss | $(9,679) | $(624) | | Comprehensive loss attributable to The Madison Square Garden Company's stockholders | $(89,660) | $(32,836) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The company experienced a net decrease in cash, though cash used in operating and investing activities improved Consolidated Statements of Cash Flows Highlights (Three Months Ended September 30, in thousands) | Activity | 2019 | 2018 | | :------------------------------------------ | :--------- | :--------- | | Net cash used in operating activities | $(34,234) | $(44,672) | | Net cash used in investing activities | $(74,236) | $(94,503) | | Net cash used in financing activities | $(23,946) | $(16,632) | | Net decrease in cash, cash equivalents and restricted cash | $(134,366) | $(155,407) | [Consolidated Statements of Equity and Redeemable Noncontrolling Interests](index=9&type=section&id=Consolidated%20Statements%20of%20Equity%20and%20Redeemable%20Noncontrolling%20Interests) Total equity decreased during the quarter primarily due to net loss and tax withholding on share-based compensation Changes in Equity (Three Months Ended September 30, 2019, in thousands) | Item | Amount | | :---------------------------------------------------- | :------- | | Balance as of June 30, 2019 | $2,620,500 | | Net loss attributable to The Madison Square Garden Company's stockholders | $(79,981) | | Other comprehensive loss | $(9,679) | | Share-based compensation | $18,141 | | Tax withholding associated with shares issued for equity-based compensation | $(23,446) | | Common stock issued under stock incentive plans | $0 | | Contributions from noncontrolling interest holders | $1,709 | | Balance as of September 30, 2019 | $2,525,535 | [Notes to Consolidated Financial Statements](index=11&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=11&type=section&id=Note%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) The company operates in live sports and entertainment and is pursuing a spin-off of its entertainment assets - The Madison Square Garden Company operates as a live sports and entertainment business, classified into two reportable segments: **MSG Entertainment** and **MSG Sports**[28](index=28&type=chunk) - MSG Entertainment includes live events, venues (e.g., Madison Square Garden Arena, Radio City Music Hall), Tao Group Hospitality, and Boston Calling Events, as well as the **Christmas Spectacular** production[28](index=28&type=chunk)[29](index=29&type=chunk) - MSG Sports comprises professional sports franchises (**New York Knicks**, **New York Rangers**, Hartford Wolf Pack, Westchester Knicks), esports teams (Counter Logic Gaming, Knicks Gaming), and other live sporting events[29](index=29&type=chunk) - The Board authorized pursuing a **spin-off** of the Company's entertainment assets (Entertainment Distribution) as a pro-rata distribution of 100% of the stock of a new entity, with the Company's stockholders retaining 100% ownership of the sports business[31](index=31&type=chunk)[33](index=33&type=chunk) [Note 2. Accounting Policies](index=12&type=section&id=Note%202.%20Accounting%20Policies) The company adopted a new lease accounting standard and reports Tao Group Hospitality results on a lag basis - The Company adopted ASU No. 2016-02, Leases (Topic 842), on **July 1, 2019**, applying a modified-retrospective transition approach[41](index=41&type=chunk) Impact of ASU No. 2016-02 Adoption (July 1, 2019, in thousands) | Item | Amount | | :-------------------------------- | :------- | | Operating lease ROU assets | $261,110 | | Current operating lease liabilities | $51,389 | | Long-term operating lease liabilities | $207,425 | - Tao Group Hospitality's results are reported on a **three-month lag basis**, with the current period reflecting its operating results from April 1, 2019 to June 30, 2019[35](index=35&type=chunk) - The Company is evaluating the impact of several recently issued accounting pronouncements not yet adopted, including those related to **credit losses** and **goodwill impairment**, which are generally effective for fiscal year 2021[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) [Note 3. Revenue Recognition](index=15&type=section&id=Note%203.%20Revenue%20Recognition) This note details revenue disaggregation by segment, contract balances, and remaining performance obligations Disaggregation of Revenue by Segment (Three Months Ended September 30, 2019, in thousands) | Revenue Source | MSG Entertainment | MSG Sports | Eliminations | Total | | :-------------------------------- | :---------------- | :--------- | :----------- | :------ | | Event-related | $136,748 | $11,040 | $(13) | $147,775 | | Sponsorship, signage and suite licenses | $15,070 | $21,978 | $(170) | $36,878 | | League distributions | $0 | $14,425 | $0 | $14,425 | | Local media rights fees from MSG Networks | $0 | $6,211 | $0 | $6,211 | | Other | $7,189 | $2,380 | $(76) | $9,493 | | **Total Revenues** | **$159,007** | **$56,034** | **$(259)** | **$214,782** | Contract Balances (in thousands) | Metric | September 30, 2019 | June 30, 2019 | | :------------------------------------ | :------------------- | :------------ | | Receivables from contracts with customers, net | $120,980 | $96,982 | | Contract assets, current | $5,724 | $7,314 | | Deferred revenue, including non-current portion | $427,672 | $305,821 | Estimated Revenue from Remaining Performance Obligations (as of September 30, 2019, in thousands) | Fiscal Year | Amount | | :------------------- | :------- | | 2020 (remainder) | $191,781 | | 2021 | $192,510 | | 2022 | $146,513 | | 2023 | $83,814 | | 2024 | $58,116 | | Thereafter | $131,871 | | **Total** | **$804,605** | [Note 4. Team Personnel Transactions](index=17&type=section&id=Note%204.%20Team%20Personnel%20Transactions) The company recorded a significant expense for team personnel transactions compared to a net credit in the prior year Team Personnel Transactions Expense (Three Months Ended September 30, in thousands) | Year | Amount | | :--- | :------- | | 2019 | $10,243 | | 2018 | $(667) (net credit) | [Note 5. Cash, Cash Equivalents and Restricted Cash](index=17&type=section&id=Note%205.%20Cash%2C%20Cash%20Equivalents%20and%20Restricted%20Cash) Total cash, cash equivalents, and restricted cash decreased from the previous quarter Cash, Cash Equivalents and Restricted Cash (as of, in thousands) | Item | September 30, 2019 | June 30, 2019 | | :------------------------------------------ | :------------------- | :------------ | | Cash and cash equivalents | $952,186 | $1,086,372 | | Restricted cash | $31,349 | $31,529 | | **Total** | **$983,535** | **$1,117,901** | [Note 6. Investments and Loans to Nonconsolidated Affiliates](index=18&type=section&id=Note%206.%20Investments%20and%20Loans%20to%20Nonconsolidated%20Affiliates) The company's investments and loans decreased following the sale of its equity in Tribeca Enterprises Investments and Loans to Nonconsolidated Affiliates (in thousands) | Category | September 30, 2019 | June 30, 2019 | | :------------------------------------------ | :------------------- | :------------ | | Equity method investments | $50,918 | $52,693 | | Equity investments without readily determinable fair values | $13,334 | $13,867 | | Loans to nonconsolidated affiliates | $0 | $18,000 | | **Total** | **$64,252** | **$84,560** | - The Company recorded an impairment charge of **$533 thousand** for equity investments without readily determinable fair values for the three months ended September 30, 2019[75](index=75&type=chunk) - The Company sold its equity capital in Tribeca Enterprises for **$18,000 thousand** on August 5, 2019[73](index=73&type=chunk) [Note 7. Leases](index=19&type=section&id=Note%207.%20Leases) This note details the company's right-of-use assets, lease liabilities, and total lease costs for the quarter Right-of-Use Assets and Lease Liabilities (as of September 30, 2019, in thousands) | Item | Amount | | :-------------------------- | :------- | | Operating lease ROU assets | $251,346 | | Current operating lease liabilities | $51,426 | | Noncurrent operating lease liabilities | $198,709 | | **Total lease liabilities** | **$250,135** | Total Lease Cost (Three Months Ended September 30, 2019, in thousands) | Item | Amount | | :------------------------------------------ | :------- | | Operating lease cost (Direct operating expenses) | $8,325 | | Operating lease cost (Selling, general and administrative expenses) | $4,815 | | Short-term lease cost (Direct operating expenses) | $378 | | Variable lease cost (Direct operating expenses) | $1,534 | | Variable lease cost (Selling, general and administrative expenses) | $13 | | **Total lease cost** | **$15,065** | - The weighted average remaining lease term for operating leases was **6.7 years**, and the weighted average discount rate was **9.35%** as of September 30, 2019[89](index=89&type=chunk) [Note 8. Goodwill and Intangible Assets](index=21&type=section&id=Note%208.%20Goodwill%20and%20Intangible%20Assets) The company's goodwill and intangible assets remained stable with no impairments identified during the quarter Goodwill by Reportable Segment (as of September 30, 2019, in thousands) | Segment | Amount | | :---------------- | :------- | | MSG Entertainment | $165,558 | | MSG Sports | $226,955 | | **Total** | **$392,513** | Indefinite-Lived Intangible Assets (as of September 30, 2019, in thousands) | Asset Type | Amount | | :-------------------------- | :------- | | Sports franchises (MSG Sports) | $111,064 | | Trademarks (MSG Entertainment) | $62,421 | | Photographic related rights (MSG Sports) | $3,000 | | **Total** | **$176,485** | - **No impairments** of goodwill or identifiable indefinite-lived intangible assets were identified during the annual impairment test in the first quarter of fiscal year 2020[93](index=93&type=chunk)[94](index=94&type=chunk) Amortization Expense for Intangible Assets (Three Months Ended September 30, in thousands) | Year | Amount | | :--- | :------- | | 2019 | $4,228 | | 2018 | $4,612 | [Note 9. Commitments and Contingencies](index=22&type=section&id=Note%209.%20Commitments%20and%20Contingencies) Future lease payments are now reflected as liabilities, and current lawsuits are not expected to have a material impact - Contractual obligations related to future lease payments are now reflected on the consolidated balance sheet as **lease liabilities** due to the adoption of ASU No. 2016-02[99](index=99&type=chunk) - The Company has accrued deferred and contingent consideration as part of the purchase price allocation for the **Tao Group Hospitality** and **CLG** acquisitions[100](index=100&type=chunk) - Management does not believe that the resolution of current lawsuits will have a **material adverse effect** on the Company[101](index=101&type=chunk) [Note 10. Fair Value Measurements](index=23&type=section&id=Note%2010.%20Fair%20Value%20Measurements) This note outlines assets measured at fair value and related gains and liabilities Assets Measured at Fair Value on a Recurring Basis (as of September 30, 2019, in thousands) | Asset Type | Fair Value | | :------------------------------------------ | :--------- | | Commercial Paper | $144,623 | | Money market accounts | $107,720 | | Time deposits | $672,910 | | Equity investment with readily determinable fair value | $22,553 | | **Total** | **$947,806** | - The Company recorded an unrealized gain of **$5,293 thousand** for its investment in Townsquare Media, Inc. for the three months ended September 30, 2019, reported in Miscellaneous income, net[106](index=106&type=chunk) - The fair value of deferred and contingent consideration liabilities related to the Tao Group Hospitality and CLG acquisitions was **$3,349 thousand** as of September 30, 2019[109](index=109&type=chunk) [Note 11. Credit Facilities](index=24&type=section&id=Note%2011.%20Credit%20Facilities) The company's primary credit facilities had no outstanding borrowings, while a subsidiary facility had a temporary balance - The Knicks Revolving Credit Facility (**$200,000 thousand**) and Rangers Revolving Credit Facility (**$150,000 thousand**) had no outstanding borrowings as of September 30, 2019[112](index=112&type=chunk)[121](index=121&type=chunk) - TAO Group Operating LLC entered into a **$40,000 thousand** term loan facility and a **$25,000 thousand** revolving credit facility in May 2019. The outstanding amount drawn on the TAO Revolving Credit Facility was **$15,000 thousand** as of September 30, 2019, which was subsequently repaid in October 2019[128](index=128&type=chunk)[131](index=131&type=chunk) - The TAO Senior Credit Agreement requires compliance with maximum total leverage ratio, maximum senior leverage ratio, and minimum fixed charge coverage ratio, which **TAOIH was in compliance with** as of September 30, 2019[129](index=129&type=chunk) [Note 12. Pension Plans and Other Postretirement Benefit Plan](index=28&type=section&id=Note%2012.%20Pension%20Plans%20and%20Other%20Postretirement%20Benefit%20Plan) Net periodic benefit costs for pension plans decreased significantly from the prior year Net Periodic Benefit Cost (Three Months Ended September 30, in thousands) | Item | Pension Plans (2019) | Pension Plans (2018) | Postretirement Plan (2019) | Postretirement Plan (2018) | | :------------------------------------------ | :------------------- | :------------------- | :------------------------- | :------------------------- | | Service cost | $28 | $20 | $18 | $28 | | Interest cost | $1,328 | $1,473 | $28 | $58 | | Expected return on plan assets | $(1,331) | $(781) | $0 | $0 | | Recognized actuarial loss | $336 | $318 | $3 | $10 | | Amortization of unrecognized prior service credit | $0 | $0 | $0 | $(1) | | **Net periodic benefit cost** | **$361** | **$1,030** | **$49** | **$95** | Defined Contribution Pension Plan Expenses (Three Months Ended September 30, in thousands) | Plan | 2019 | 2018 | | :----------------- | :------- | :------- | | Savings Plans | $2,858 | $2,300 | | Union Savings Plan | $22 | $22 | [Note 13. Share-based Compensation](index=28&type=section&id=Note%2013.%20Share-based%20Compensation) Share-based compensation expense increased substantially compared to the prior-year period Share-based Compensation Expense (Three Months Ended September 30, in thousands) | Item | 2019 | 2018 | | :------------------------------------------ | :------- | :------- | | Share-based compensation expense | $16,891 | $10,189 | | Capitalized share-based compensation expense | $1,250 | $0 | Restricted Stock Units (RSUs) Activity (Three Months Ended September 30, 2019) | Item | Nonperformance Based Vesting RSUs | Performance Based Vesting RSUs | Weighted-Average Fair Value Per Share at Date of Grant | | :-------------------------------- | :-------------------------------- | :----------------------------- | :--------------------------------------------------- | | Unvested award balance, June 30, 2019 | 229 | 359 | $252.02 | | Granted | 117 | 114 | $246.54 | | Vested | (87) | (121) | $214.27 | | Forfeited | (2) | (2) | $259.49 | | Unvested award balance, September 30, 2019 | 257 | 350 | $262.85 | - The fair value of RSUs that vested during the three months ended September 30, 2019, was **$53,522 thousand**, with **$23,446 thousand** retained by the Company for tax withholding[151](index=151&type=chunk) [Note 14. Stock Repurchase Program](index=29&type=section&id=Note%2014.%20Stock%20Repurchase%20Program) The company did not repurchase any shares during the quarter, leaving significant availability under its program - As of September 30, 2019, the Company had **$259,639 thousand** of availability remaining under its **$525,000 thousand** stock repurchase authorization[155](index=155&type=chunk) - The Company **did not engage in any share repurchase activities** during the three months ended September 30, 2019[155](index=155&type=chunk) [Note 15. Accumulated Other Comprehensive Loss](index=30&type=section&id=Note%2015.%20Accumulated%20Other%20Comprehensive%20Loss) Accumulated other comprehensive loss increased due to cumulative translation adjustments Components of Accumulated Other Comprehensive Loss (Three Months Ended September 30, 2019, in thousands) | Item | Pension Plans and Postretirement Plan | Cumulative Translation Adjustments | Accumulated Other Comprehensive Loss | | :------------------------------------------ | :---------------------------------- | :--------------------------------- | :----------------------------------- | | Balance as of June 30, 2019 | $(42,080) | $(4,843) | $(46,923) | | Other comprehensive loss before reclassifications | $0 | $(10,018) | $(10,018) | | Amounts reclassified from accumulated other comprehensive loss | $339 | $0 | $339 | | **Balance as of September 30, 2019** | **$(41,741)** | **$(14,861)** | **$(56,602)** | [Note 16. Income Taxes](index=31&type=section&id=Note%2016.%20Income%20Taxes) Income tax expense was primarily driven by an increase in the valuation allowance Income Tax Expense (Three Months Ended September 30, in thousands) | Year | Amount | | :--- | :------- | | 2019 | $428 | | 2018 | $696 | - Income tax expense for Q1 FY2020 differed from the statutory federal rate primarily due to an increase in valuation allowance (**$26,710 thousand**), tax expense from nondeductible officers' compensation (**$1,461 thousand**), partially offset by state income tax benefits (**$7,735 thousand**) and excess tax benefit from share-based compensation (**$3,510 thousand**)[161](index=161&type=chunk) [Note 17. Related Party Transactions](index=31&type=section&id=Note%2017.%20Related%20Party%20Transactions) The company engages in various transactions with entities controlled by the Dolan Family Group - The **Dolan Family Group** collectively beneficially owns all Class B Common Stock and approximately 3.5% of Class A Common Stock, representing about **71.1% of aggregate voting power**[164](index=164&type=chunk) Related Party Transactions (Three Months Ended September 30, in thousands) | Item | 2019 | 2018 | | :------------------------------------------ | :------- | :------- | | Revenues | $7,064 | $6,734 | | Corporate general and administrative expenses, net - MSG Networks | $(2,602) | $(2,504) | | Consulting fees | $0 | $950 | | Advertising expenses | $43 | $68 | | Other operating expenses, net | $89 | $(19) | | Capital expenditures (MSG Sphere related) | $3,199 | $0 | - Revenues from related parties primarily consist of local media rights from **MSG Sports licensing team-related programming to MSG Networks**[181](index=181&type=chunk) - The Company provides aircraft support services and enters into reciprocal time sharing/dry lease agreements with entities controlled by members of the **Dolan family**[168](index=168&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) [Note 18. Segment Information](index=34&type=section&id=Note%2018.%20Segment%20Information) This note details the operating results and capital expenditures for the company's business segments - The Company evaluates segment performance based on **adjusted operating income (loss)**, a non-GAAP measure that excludes depreciation, amortization, impairments, share-based compensation, restructuring charges, and gains/losses on business dispositions[189](index=189&type=chunk) Segment Operating Results (Three Months Ended September 30, 2019, in thousands) | Metric | MSG Entertainment | MSG Sports | Corporate and Other | Purchase accounting adjustments | Inter-segment eliminations | Total | | :-------------------------- | :---------------- | :--------- | :------------------ | :------------------------------ | :------------------------- | :--------- | | Revenues | $159,007 | $56,034 | $0 | $0 | $(259) | $214,782 | | Operating loss | $(2,552) | $(20,230) | $(60,650) | $(5,674) | $(212) | $(89,318) | | Adjusted operating income (loss) | $6,238 | $(13,660) | $(33,470) | $0 | $(212) | $(41,104) | | Capital expenditures | $2,592 | $6,596 | $83,798 | $0 | $0 | $92,986 | - Substantially all of Corporate and Other's capital expenditures for the three months ended September 30, 2019, are related to the Company's planned **MSG Spheres** in Las Vegas and London[200](index=200&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial condition and operational results, covering segment performance and liquidity [Introduction](index=39&type=section&id=Introduction) The company's operations are managed through its MSG Entertainment and MSG Sports segments - The Madison Square Garden Company operates through two reportable segments: **MSG Entertainment** and **MSG Sports**[204](index=204&type=chunk) - MSG Entertainment encompasses live events, venues, Tao Group Hospitality, Boston Calling Events, and the **Christmas Spectacular**[205](index=205&type=chunk) - MSG Sports includes professional sports franchises (**Knicks**, **Rangers**), esports teams (CLG, Knicks Gaming), and other live sporting events[207](index=207&type=chunk) [Factors Affecting Results of Operations](index=38&type=section&id=Factors%20Affecting%20Results%20of%20Operations) Operational results are influenced by venue construction, sports-related costs, economic conditions, and competition - Key factors affecting results include the ability to design, construct, finance, and operate new venues (**MSG Spheres**), costs associated with player injuries/contracts, changes in professional sports compensation, capital expenditures, general economic conditions, and competition[202](index=202&type=chunk)[206](index=206&type=chunk) - Other factors include demand for sponsorships, changes in laws/league rules, potential **NBA/NHL work stoppages**, seasonality, security incidents, and the success of Tao Group Hospitality and Boston Calling Events[202](index=202&type=chunk)[206](index=206&type=chunk) [Consolidated Results of Operations](index=41&type=section&id=Consolidated%20Results%20of%20Operations) The company's consolidated operating loss widened significantly due to higher administrative and development expenses Consolidated Operating Results (Three Months Ended September 30, in thousands) | Metric | 2019 | 2018 | Change (Amount) | Change (%) | | :------------------------------------------ | :------- | :------- | :-------------- | :--------- | | Revenues | $214,782 | $218,135 | $(3,353) | (2)% | | Direct operating expenses | $132,464 | $123,909 | $8,555 | 7% | | Selling, general and administrative expenses | $142,645 | $115,321 | $27,324 | 24% | | Operating loss | $(89,318) | $(50,785) | $(38,533) | (76)% | | Net loss attributable to stockholders | $(79,981) | $(32,212) | $(47,769) | (148)% | | Adjusted operating loss | $(41,104) | $(9,893) | $(31,211) | NM | - The increase in operating loss was primarily driven by higher selling, general and administrative expenses in Corporate and Other, mainly due to increased employee compensation and **MSG Sphere-related content development** and technology expenses[218](index=218&type=chunk)[220](index=220&type=chunk) - Loss in equity method investments increased significantly due to the absence of equity earnings from **AMSGE** and **Tribeca Enterprises**, which were sold in December 2018 and August 2019, respectively[221](index=221&type=chunk) - Net interest income increased by **74%** primarily due to lower interest expense associated with Tao Group Hospitality's credit facility refinancing[222](index=222&type=chunk) [Business Segment Results](index=44&type=section&id=Business%20Segment%20Results) This section provides a detailed breakdown of the financial performance of each business segment [MSG Entertainment](index=44&type=section&id=MSG%20Entertainment) The entertainment segment's revenue and operating income declined due to the absence of a large special event MSG Entertainment Operating Results (Three Months Ended September 30, in thousands) | Metric | 2019 | 2018 | Change (Amount) | Change (%) | | :------------------------------------------ | :------- | :------- | :-------------- | :--------- | | Revenues | $159,007 | $162,953 | $(3,946) | (2)% | | Direct operating expenses | $105,927 | $107,785 | $(1,858) | (2)% | | Selling, general and administrative expenses | $50,658 | $48,969 | $1,689 | 3% | | Operating income (loss) | $(2,552) | $1,717 | $(4,269) | NM | | Adjusted operating income | $6,238 | $9,040 | $(2,802) | (31)% | - Revenue decrease was primarily due to the absence of a large-scale special event at **Radio City Music Hall** in the current period and the winding down of Obscura's third-party production business, partially offset by increased concert events and new entertainment dining/nightlife venues[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - Direct operating expenses decreased due to the same factors affecting revenue, with lower costs from the absence of the special event and **Obscura's wind-down**, partially offset by increased concert-related expenses and new venue costs for Tao Group Hospitality[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk) [MSG Sports](index=46&type=section&id=MSG%20Sports) The sports segment's operating loss increased substantially, driven by higher team personnel and event expenses MSG Sports Operating Results (Three Months Ended September 30, in thousands) | Metric | 2019 | 2018 | Change (Amount) | Change (%) | | :------------------------------------------ | :------- | :------- | :-------------- | :--------- | | Revenues | $56,034 | $55,352 | $682 | 1% | | Direct operating expenses | $24,311 | $15,319 | $8,992 | 59% | | Selling, general and administrative expenses | $50,152 | $42,217 | $7,935 | 19% | | Operating loss | $(20,230) | $(4,126) | $(16,104) | NM | | Adjusted operating income (loss) | $(13,660) | $588 | $(14,248) | NM | - Revenue increased primarily due to higher per-event revenue from other live sporting events and increased suite license fees, partially offset by lower professional sports teams' ticket-related revenues (due to **Liberty sale** and lower Rangers per-game revenue) and sponsorship/signage revenues[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) - Direct operating expenses increased significantly due to higher net provisions for team personnel transactions (**$10,910 thousand increase**) and event-related expenses for other live sporting events, partially offset by a decrease in league revenue sharing expense and other team operating expenses (due to Liberty sale)[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through cash reserves and credit facilities, with significant capital allocated to MSG Sphere projects [Overview](index=48&type=section&id=Overview) The company's primary liquidity sources are cash, operating cash flows, and available credit facilities - Primary liquidity sources include cash and cash equivalents, operating cash flows, and **$390,000 thousand** in revolving credit facilities[257](index=257&type=chunk) - As of September 30, 2019, the Company had approximately **$952,000 thousand** in unrestricted cash and cash equivalents and **$105,000 thousand** of short-term investments[258](index=258&type=chunk) - Principal uses of cash include working capital, capital spending (**MSG Spheres**), investments, stock repurchases, debt repayment, and earn-out obligations[257](index=257&type=chunk) [MSG Spheres](index=48&type=section&id=MSG%20Spheres) The company is advancing its MSG Sphere projects in Las Vegas and London, requiring significant future capital - The preliminary cost estimate for MSG Sphere at The Venetian in Las Vegas is approximately **$1,700,000 thousand**, including core technology and estimated soft costs, which the Company is actively working to reduce[263](index=263&type=chunk) - Actual construction costs for MSG Sphere in Las Vegas incurred through September 30, 2019, were approximately **$187,000 thousand**, excluding **$37,500 thousand** received from Las Vegas Sands Corp. for a pedestrian bridge[265](index=265&type=chunk) - The target opening date for MSG Sphere in Las Vegas is **calendar year 2021**[265](index=265&type=chunk) - The MSG Sphere in London project timeline has evolved, and there is **no target opening date** at this time, as the Company refines its design and applies learnings from Las Vegas[267](index=267&type=chunk) - The Company anticipates needing **additional capital** beyond current liquidity to fund the MSG Sphere projects[269](index=269&type=chunk) [Financing Agreements and Stock Repurchases](index=49&type=section&id=Financing%20Agreements%20and%20Stock%20Repurchases) This section covers the company's financing arrangements and stock repurchase program status [Bilateral Letters of Credit Lines](index=49&type=section&id=Bilateral%20Letters%20of%20Credit%20Lines) The company had a minor amount of letters of credit outstanding at the end of the quarter - As of September 30, 2019, the Company had **$12,512 thousand** of letters of credit outstanding[271](index=271&type=chunk) [Contractual Obligations](index=49&type=section&id=Contractual%20Obligations) Future lease payment obligations are now recorded as liabilities on the consolidated balance sheet - Due to the adoption of ASU No. 2016-02 (Leases), contractual obligations related to future lease payments are now reflected on the consolidated balance sheet as **lease liabilities**[272](index=272&type=chunk) [Cash Flow Discussion](index=50&type=section&id=Cash%20Flow%20Discussion) Cash used in operations and investing decreased, while cash used in financing increased Cash Flow Activities (Three Months Ended September 30, in thousands) | Activity | 2019 | 2018 | | :------------------------------------------ | :--------- | :--------- | | Net cash used in operating activities | $(34,234) | $(44,672) | | Net cash used in investing activities | $(74,236) | $(94,503) | | Net cash used in financing activities | $(23,946) | $(16,632) | | Net decrease in cash, cash equivalents and restricted cash | $(134,366) | $(155,407) | - Net cash used in operating activities decreased by **$10,438 thousand**, primarily due to changes in assets and liabilities, including a **$37,500 thousand** receipt from Las Vegas Sands Corp., partially offset by an increase in net loss adjusted for non-cash items[275](index=275&type=chunk) - Net cash used in investing activities decreased by **$20,267 thousand**, mainly due to the absence of investments in SACO and notes receivable acquisitions in the current period, and proceeds from the sale of Tribeca, partially offset by higher capital expenditures for MSG Spheres[276](index=276&type=chunk) - Net cash used in financing activities increased by **$7,314 thousand**, primarily due to an increase in taxes paid in lieu of shares issued for equity-based compensation[277](index=277&type=chunk) [Seasonality of Our Business](index=50&type=section&id=Seasonality%20of%20Our%20Business) The company's revenues and operating income are subject to significant seasonal fluctuations across its segments - MSG Entertainment's revenues and operating income are disproportionately earned in the **second fiscal quarter** due to the Christmas Spectacular[278](index=278&type=chunk) - MSG Sports' revenues are disproportionately earned in the **second and third fiscal quarters** due to its NBA and NHL sports teams' seasons[278](index=278&type=chunk) - Tao Group Hospitality's seasonally lighter quarters (first and third calendar quarters) are reflected in the Company's **second and fourth fiscal quarters** due to a three-month reporting lag[279](index=279&type=chunk) [Recently Issued Accounting Pronouncements and Critical Accounting Policies](index=51&type=section&id=Recently%20Issued%20Accounting%20Pronouncements%20and%20Critical%20Accounting%20Policies) The company's annual impairment tests for goodwill and intangible assets identified no impairments - The Company performed its annual impairment tests for goodwill and identifiable indefinite-lived intangible assets during the first quarter of fiscal year 2020 and determined that **no impairments were identified** for any reporting units or assets[286](index=286&type=chunk)[291](index=291&type=chunk) Goodwill by Reporting Unit (as of September 30, 2019, in thousands) | Reporting Unit | Amount | | :-------------------- | :------- | | MSG Sports | $226,955 | | MSG Entertainment | $76,975 | | Tao Group Hospitality | $88,583 | | **Total** | **$392,513** | Identifiable Indefinite-Lived Intangible Assets (as of September 30, 2019, in thousands) | Asset Type | Amount | | :-------------------------- | :------- | | Sports franchises (MSG Sports) | $111,064 | | Trademarks (MSG Entertainment) | $62,421 | | Photographic related rights (MSG Sports) | $3,000 | | **Total** | **$176,485** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There were no material changes to the company's market risk disclosures since the last annual report - A hypothetical **5% fluctuation** in the GBP/USD exchange rate would result in an approximate **$14.6 million** change in the Company's net asset value as of September 30, 2019[294](index=294&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective - The Company's disclosure controls and procedures were **effective** as of September 30, 2019[295](index=295&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter ended September 30, 2019[296](index=296&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal matters, including a stockholder complaint regarding executive compensation - A stockholder complaint was filed on March 29, 2019, alleging breach of fiduciary duties by certain directors regarding **James L. Dolan's compensation**, with litigation stayed until December 19, 2019[299](index=299&type=chunk) - Management believes that the resolution of various other lawsuits will **not have a material adverse effect** on the Company[300](index=300&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any shares during the quarter, with significant availability remaining under its program - As of September 30, 2019, approximately **$260 million** remained available under the **$525 million** Class A Common Stock share repurchase program[301](index=301&type=chunk) - The Company **did not engage in any share repurchase activity** during the three months ended September 30, 2019[301](index=301&type=chunk) [Item 6. Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q - The exhibits include certifications by the CEO and CFO (**Sarbanes-Oxley Act Sections 302 and 906**) and XBRL-related documents[303](index=303&type=chunk)