PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Madison Square Garden Sports Corp.'s unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), cash flows, equity, and detailed notes, for periods ended December 31, 2021, and June 30, 2021 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show the company's financial position as of December 31, 2021, compared to June 30, 2021, with increased total assets and liabilities, and a slight decrease in total equity | Metric (in thousands) | Dec 31, 2021 | Jun 30, 2021 | Change | % Change | | :-------------------- | :----------- | :----------- | :----- | :------- | | Total Current Assets | $218,555 | $185,246 | $33,309 | 18.0% | | Total Assets | $1,349,421 | $1,309,939 | $39,482 | 3.0% | | Total Current Liabilities | $451,798 | $368,278 | $83,520 | 22.7% | | Total Liabilities | $1,559,031 | $1,511,805 | $47,226 | 3.1% | | Total Equity | $(209,610) | $(201,866) | $(7,744) | -3.8% | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a significant turnaround from net loss to net income for the three months and a substantial reduction in net loss for the six months ended December 31, 2021, driven by increased revenues | Metric (in thousands) | 3 Months Ended Dec 31, 2021 | 3 Months Ended Dec 31, 2020 | Change | % Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Revenues | $289,581 | $28,771 | $260,810 | 906.5% | | Operating Income (Loss) | $35,919 | $(38,406) | $74,325 | NM | | Net Income (Loss) | $15,198 | $(41,133) | $56,331 | NM | | EPS (Basic) | $0.65 | $(1.68) | $2.33 | NM | | Metric (in thousands) | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | Change | % Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Revenues | $308,375 | $85,809 | $222,566 | 259.4% | | Operating Income (Loss) | $981 | $(65,810) | $66,791 | NM | | Net Income (Loss) | $(1,687) | $(70,148) | $68,461 | 97.6% | | EPS (Basic) | $(0.02) | $(2.86) | $2.84 | 99.3% | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The consolidated statements of comprehensive income (loss) reflect a shift from comprehensive loss to income for the three months and a significant reduction in loss for the six months ended December 31, 2021, mirroring net income trends | Metric (in thousands) | 3 Months Ended Dec 31, 2021 | 3 Months Ended Dec 31, 2020 | Change | % Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Net income (loss) | $15,198 | $(41,133) | $56,331 | NM | | Other comprehensive income, net of income taxes | $22 | $10 | $12 | 120.0% | | Comprehensive income (loss) | $15,220 | $(41,123) | $56,343 | NM | | Metric (in thousands) | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | Change | % Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Net income (loss) | $(1,687) | $(70,148) | $68,461 | 97.6% | | Other comprehensive income, net of income taxes | $44 | $20 | $24 | 120.0% | | Comprehensive income (loss) | $(1,643) | $(70,128) | $68,485 | 97.7% | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows show significant improvement in operating cash flow, shifting from outflow to inflow for the six months ended December 31, 2021, while financing activities moved to a net outflow | Metric (in thousands) | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | Change | % Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Net cash provided by (used in) operating activities | $24,030 | $(21,633) | $45,663 | NM | | Net cash used in investing activities | $(627) | $(141) | $(486) | -344.7% | | Net cash (used in) provided by financing activities | $(39,879) | $11,363 | $(51,242) | NM | | Net decrease in cash, cash equivalents and restricted cash | $(16,476) | $(10,411) | $(6,065) | -58.3% | | Cash, cash equivalents and restricted cash at end of period | $55,560 | $80,262 | $(24,702) | -30.8% | [Consolidated Statements of Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Equity) The consolidated statements of equity detail changes in stockholders' equity, including net income/loss, other comprehensive income, share-based compensation, and noncontrolling interest adjustments for periods ended December 31, 2021 and 2020 | Metric (in thousands) | Dec 31, 2021 | Sep 30, 2021 | Change | | :-------------------- | :----------- | :----------- | :----- | | Total Madison Square Garden Sports Corp. Stockholders' Equity | $(212,090) | $(234,417) | $22,327 | | Total Equity | $(209,610) | $(232,184) | $22,574 | | Metric (in thousands) | Dec 31, 2021 | Jun 30, 2021 | Change | | :-------------------- | :----------- | :----------- | :----- | | Total Madison Square Garden Sports Corp. Stockholders' Equity | $(212,090) | $(204,308) | $(7,782) | | Total Equity | $(209,610) | $(201,866) | $(7,744) | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to the consolidated financial statements, covering business description, accounting policies, revenue recognition, leases, debt, and related party transactions, offering crucial context [Note 1. Description of Business and Basis of Presentation](index=12&type=section&id=Note%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) MSG Sports owns and operates professional sports teams, including the Knicks and Rangers, as a single segment, significantly impacted by COVID-19 disruptions, though capacity restrictions eased by May 2021 - MSG Sports owns and operates the New York Knicks (NBA), New York Rangers (NHL), two development league teams (Hartford Wolf Pack, Westchester Knicks), and esports franchises (Knicks Gaming, Counter Logic Gaming)[34](index=34&type=chunk) - The company operates and reports financial information in one segment, with the Executive Chairman acting as the Chief Operating Decision Maker (CODM)[34](index=34&type=chunk) - COVID-19 materially impacted revenues in fiscal year 2021 due to suspended/delayed seasons, fewer games, and initial fan prohibitions at The Garden, though full capacity was permitted from May 2021 (with restrictions) and August 2021 (with vaccine proof)[39](index=39&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk)[47](index=47&type=chunk) [Note 2. Accounting Policies](index=14&type=section&id=Note%202.%20Accounting%20Policies) This note outlines the company's accounting policies, including consolidation principles, use of estimates, and adoption of new pronouncements, with no material impact from recent changes - The consolidated financial statements include Madison Square Garden Sports Corp. and its subsidiaries, including CLG, where the Company holds a controlling voting interest[50](index=50&type=chunk) - Management uses estimates and assumptions for various financial statement items, including valuation of receivables, goodwill, intangible assets, and deferred taxes, which are evaluated on an ongoing basis[51](index=51&type=chunk)[52](index=52&type=chunk) - The company adopted ASU No. 2019-12, Income Taxes (Topic 740), at the beginning of fiscal year 2022, with no material impact on its consolidated financial statements[53](index=53&type=chunk) [Note 3. Revenue Recognition](index=15&type=section&id=Note%203.%20Revenue%20Recognition) Revenue recognition details are provided, disaggregating revenues by type and outlining contract balances, with significant increases in event-related, media rights, and sponsorship revenues due to COVID-19 recovery Disaggregation of Revenue (in thousands) | Revenue Type | 3 Months Ended Dec 31, 2021 | 3 Months Ended Dec 31, 2020 | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | | :------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Event-related | $109,074 | $— | $112,944 | $— | | Media rights | $112,308 | $22,306 | $118,894 | $72,495 | | Sponsorship, signage and suite licenses | $58,534 | $3,995 | $61,704 | $6,945 | | League distributions and other | $9,665 | $2,470 | $14,833 | $6,369 | | Total Revenues | $289,581 | $28,771 | $308,375 | $85,809 | Contract Balances (in thousands) | Contract Balance | Dec 31, 2021 | Jun 30, 2021 | | :----------------- | :----------- | :----------- | | Receivables from contracts with customers, net | $48,993 | $30,834 | | Contract assets, current | $12,053 | $9,604 | | Deferred revenue, including non-current portion | $208,129 | $162,628 | - Revenue recognized for the six months ended December 31, 2021, relating to the deferred revenue balance as of June 30, 2021, was **$62,758 thousand**[62](index=62&type=chunk) [Note 4. Computation of Earnings (Loss) per Common Share](index=17&type=section&id=Note%204.%20Computation%20of%20Earnings%20(Loss)%20per%20Common%20Share) This note reconciles weighted-average shares for basic and diluted EPS calculations, highlighting the dilutive effect of share-based compensation plans Weighted-Average Shares Outstanding (in thousands) | Metric | 3 Months Ended Dec 31, 2021 | 3 Months Ended Dec 31, 2020 | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic | 24,261 | 24,144 | 24,217 | 24,103 | | Diluted | 24,373 | 24,144 | 24,217 | 24,103 | | Dilutive effect of shares issuable under share-based compensation plans | 112 | — | — | — | [Note 5. Team Personnel Transactions](index=17&type=section&id=Note%205.%20Team%20Personnel%20Transactions) Team personnel transactions resulted in a net credit for the three months and reduced net provisions for the six months ended December 31, 2021, compared to the prior year Team Personnel Transactions (in thousands) | Period | 3 Months Ended Dec 31, 2021 | 3 Months Ended Dec 31, 2020 | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net provisions | $(302) | $2,839 | $425 | $13,712 | [Note 6. Cash, Cash Equivalents and Restricted Cash](index=18&type=section&id=Note%206.%20Cash,%20Cash%20Equivalents%20and%20Restricted%20Cash) This note summarizes cash, cash equivalents, and restricted cash balances, showing a decrease in total cash and equivalents at December 31, 2021, compared to June 30, 2021 Cash, Cash Equivalents and Restricted Cash (in thousands) | Metric | Dec 31, 2021 | Jun 30, 2021 | | :----- | :----------- | :----------- | | Cash and cash equivalents | $54,815 | $64,902 | | Restricted cash | $745 | $7,134 | | Total cash, cash equivalents and restricted cash | $55,560 | $72,036 | - Restricted cash as of December 31, 2021, primarily included cash deposited in an escrow account[72](index=72&type=chunk) [Note 7. Leases](index=18&type=section&id=Note%207.%20Leases) The company's lease obligations primarily cover executive offices and The Garden for its sports teams, with operating lease costs significantly increasing due to resumed full contractual payments for Arena License Agreements - The company's leases primarily consist of executive offices and the Arena License Agreements for The Garden, which allow the Knicks and Rangers to play home games until June 30, 2055[73](index=73&type=chunk)[76](index=76&type=chunk) - The Sublease Agreement for principal executive offices was extended to October 31, 2024, leading to a non-cash addition of **$1,244 thousand** to right-of-use assets and operating lease liabilities[74](index=74&type=chunk) Operating Lease Costs (in thousands) | Lease Cost Type | 3 Months Ended Dec 31, 2021 | 3 Months Ended Dec 31, 2020 | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | | :---------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Operating lease cost (Direct operating expenses) | $27,860 | $2,308 | $29,267 | $2,398 | | Operating lease cost (Selling, general and administrative expenses) | $613 | $611 | $1,224 | $1,222 | | Total lease cost | $28,514 | $2,946 | $30,568 | $3,671 | - Maturities of operating lease liabilities as of December 31, 2021, total **$2,316,392 thousand** in future lease payments, with a weighted average remaining lease term of **33.1 years** and a weighted average discount rate of **7.13%**[87](index=87&type=chunk)[84](index=84&type=chunk) [Note 8. Goodwill and Intangible Assets](index=20&type=section&id=Note%208.%20Goodwill%20and%20Intangible%20Assets) The company's annual impairment tests for goodwill and indefinite-lived intangible assets in Q1 FY2022 identified no impairment, with goodwill at **$226.955 million** and indefinite-lived assets at **$112.144 million** - Goodwill carrying amount as of December 31, 2021, and June 30, 2021, was **$226,955 thousand**, with no impairment identified in the annual test[88](index=88&type=chunk) Indefinite-Lived Intangible Assets (in thousands) | Asset Type | Dec 31, 2021 | | :---------------------- | :----------- | | Sports franchises | $111,064 | | Photographic related rights | $1,080 | | Total | $112,144 | Amortizable Intangible Assets, Net (in thousands) | Asset Type | Dec 31, 2021 | Jun 30, 2021 | | :------------------ | :----------- | :----------- | | Trade names | $268 | $498 | | Non-compete agreements | $280 | $520 | | Other intangibles | $617 | $677 | | Total | $1,165 | $1,695 | - Amortization expense for intangible assets was **$265 thousand** for both the three months ended December 31, 2021 and 2020, and **$530 thousand** for both the six months ended December 31, 2021 and 2020[89](index=89&type=chunk) [Note 9. Fair Value Measurements](index=21&type=section&id=Note%209.%20Fair%20Value%20Measurements) This note details fair value measurements for the company's financial instruments, including cash equivalents and debt, with Level I for money market/time deposits and Level II for debt, all approximating fair values Assets Measured at Fair Value (in thousands) | Asset Type | Fair Value Hierarchy | Dec 31, 2021 | Jun 30, 2021 | | :---------------- | :------------------- | :----------- | :----------- | | Money market account | I | $12,419 | $33,820 | | Time deposits | I | $35,005 | $5,000 | | Total | | $47,424 | $38,820 | Carrying Value and Fair Value of Financial Instruments (in thousands) | Liability Type | Dec 31, 2021 Carrying Value | Dec 31, 2021 Fair Value | Jun 30, 2021 Carrying Value | Jun 30, 2021 Fair Value | | :------------- | :-------------------------- | :---------------------- | :-------------------------- | :---------------------- | | Debt, current | $30,000 | $30,000 | $30,000 | $30,000 | | Long-term debt | $330,000 | $330,000 | $355,000 | $355,000 | [Note 10. Commitments and Contingencies](index=21&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) The company's commitments primarily involve employment agreements and future lease payments, and while a defendant in lawsuits, management does not anticipate a material adverse effect from their resolution - Commitments primarily consist of obligations under employment agreements with professional sports teams' personnel and future lease payments (see Note 7)[94](index=94&type=chunk) - The company is a defendant in various lawsuits, but management does not believe their resolution will have a material adverse effect[95](index=95&type=chunk) [Note 11. Debt](index=21&type=section&id=Note%2011.%20Debt) This note details the company's debt structure, including amended Knicks and Rangers Revolving Credit Facilities extended to December 2026, the termination of Knicks Holdings facility, and an NHL advance agreement, with total outstanding debt of **$330 million** as of December 31, 2021 - The 2021 Knicks Revolving Credit Facility was amended and restated, providing up to **$275,000 thousand**, maturing December 14, 2026, with an outstanding balance of **$220,000 thousand** as of December 31, 2021[99](index=99&type=chunk)[100](index=100&type=chunk) - The 2021 Rangers Revolving Credit Facility was amended and restated, providing up to **$250,000 thousand**, maturing December 14, 2026, with an outstanding balance of **$110,000 thousand** as of December 31, 2021[109](index=109&type=chunk)[110](index=110&type=chunk) - The 2020 Knicks Holdings Revolving Credit Facility was terminated on December 14, 2021[105](index=105&type=chunk) - Rangers LLC received a **$30,000 thousand** advance from the NHL under the 2021 Rangers NHL Advance Agreement, bearing **3.00% interest**, with an outstanding balance of **$30,000 thousand** as of December 31, 2021[115](index=115&type=chunk)[116](index=116&type=chunk) [Note 12. Benefit Plans](index=24&type=section&id=Note%2012.%20Benefit%20Plans) This note outlines the company's defined benefit pension and defined contribution plans, detailing net periodic benefit costs and expenses for the three and six months ended December 31, 2021 Net Periodic Benefit Cost for MSGS Pension Plans (in thousands) | Component | 3 Months Ended Dec 31, 2021 | 3 Months Ended Dec 31, 2020 | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | | :---------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Interest cost | $31 | $60 | $62 | $120 | | Recognized actuarial loss | $33 | $10 | $66 | $20 | | Total Net periodic benefit cost | $64 | $70 | $128 | $140 | Expenses Related to Savings Plans (in thousands) | Period | 3 Months Ended Dec 31, 2021 | 3 Months Ended Dec 31, 2020 | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Expenses | $899 | $506 | $1,838 | $1,104 | [Note 13. Share-based Compensation](index=25&type=section&id=Note%2013.%20Share-based%20Compensation) Share-based compensation expense decreased for the three and six months ended December 31, 2021, partly due to a prior-year one-time equity award cancellation, with vested RSUs valued at **$38.828 million** Share-based Compensation Expense (in thousands) | Period | 3 Months Ended Dec 31, 2021 | 3 Months Ended Dec 31, 2020 | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Expense | $7,354 | $15,981 | $12,205 | $22,326 | - The decrease in share-based compensation expense in 2021 is partly due to a **$7,400 thousand** expense recognized in 2020 from the cancellation of a one-time equity award[126](index=126&type=chunk) - The fair value of RSUs that vested during the six months ended December 31, 2021, was **$38,828 thousand**[127](index=127&type=chunk) [Note 14. Stock Repurchase Program](index=26&type=section&id=Note%2014.%20Stock%20Repurchase%20Program) The company's board authorized a **$525 million** Class A Common Stock repurchase program in September 2015, with **$259.639 million** remaining available as of December 31, 2021, and no repurchases during the six months ended December 31, 2021 and 2020 - The company has a **$525,000 thousand** Class A Common Stock repurchase program authorized in September 2015[132](index=132&type=chunk) - As of December 31, 2021, **$259,639 thousand** of availability remained under the stock repurchase authorization[133](index=133&type=chunk) - No share repurchase activities occurred during the six months ended December 31, 2021, or 2020[133](index=133&type=chunk) [Note 15. Related Party Transactions](index=26&type=section&id=Note%2015.%20Related%20Party%20Transactions) The company engages in various related party transactions with MSG Entertainment and Dolan family entities, including Arena License Agreements, media rights, and sponsorship sales, with significant increases in both revenues and expenses for the three and six months ended December 31, 2021 - The Dolan family group beneficially owns **100%** of Class B Common Stock and approximately **3.1%** of Class A Common Stock, representing about **70.6%** of aggregate voting power[135](index=135&type=chunk) - Key related party agreements include Arena License Agreements, media rights agreements, sponsorship sales and service representation agreements, and a Transition Services Agreement (TSA) with MSG Entertainment[136](index=136&type=chunk) Related Party Revenues and Operating Expenses (in thousands) | Metric | 3 Months Ended Dec 31, 2021 | 3 Months Ended Dec 31, 2020 | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenues | $70,131 | $14,369 | $77,378 | $23,430 | | Corporate general and administrative expenses, net | $11,755 | $8,237 | $21,354 | $19,880 | | Costs associated with Sponsorship sales and service representation agreements | $5,735 | $2,322 | $8,468 | $4,680 | | Costs associated with Arena License Agreements | $39,056 | $2,494 | $41,016 | $2,854 | [Note 16. Income Taxes](index=28&type=section&id=Note%2016.%20Income%20Taxes) Income tax expense for the three months ended December 31, 2021, was **$17.115 million** with a **53%** effective rate, while the six months saw a **$4.054 million** benefit with a **71%** effective rate due to share-based awards - Income tax expense for the three months ended December 31, 2021, was **$17,115 thousand**, with an effective tax rate of **53%**[146](index=146&type=chunk) - Income tax benefit for the six months ended December 31, 2021, was **$4,054 thousand**, with an effective tax rate of **71%**, influenced by **$752 thousand** of excess tax benefit on share-based payment awards[147](index=147&type=chunk) - The City of New York commenced an audit of state income tax returns for fiscal years 2016 and 2017, but the company does not expect material changes[150](index=150&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting COVID-19's impact, substantial improvements in operating and net income, liquidity, capital resources, and critical accounting policies [Introduction](index=31&type=section&id=Introduction) This introduction sets the context for the MD&A, noting the company's structure after the MSG Entertainment distribution and its operation as a single segment - After the MSGE Distribution on April 17, 2020, the company operates and reports financial information in one segment[157](index=157&type=chunk)[158](index=158&type=chunk) [Factors Affecting Results of Operations](index=31&type=section&id=Factors%20Affecting%20Results%20of%20Operations) The COVID-19 pandemic significantly impacted operations, leading to suspended seasons and fan prohibitions, and while restrictions eased, management acknowledges potential long-term effects on fan attendance and discretionary spending - COVID-19 disruptions materially impacted revenues in fiscal year 2021 due to suspended/delayed NBA and NHL seasons, fewer games, and initial fan prohibitions at The Garden[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - Effective May 19, 2021, and August 17, 2021, The Garden was permitted to host guests at full capacity, subject to restrictions including vaccination proof[163](index=163&type=chunk)[168](index=168&type=chunk) - Management is unable to predict longer-term effects of COVID-19, with fan attendance potentially impacted by variants, reduced tourism, and public hesitancy, which could lead to declines in discretionary spending on sporting events[169](index=169&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) The company saw substantial improvement in operating results for the three and six months ended December 31, 2021, driven by significant revenue increases from COVID-19 recovery, shifting from operating loss to income despite higher expenses Key Financial Highlights (in thousands) | Metric | 3 Months Ended Dec 31, 2021 | 3 Months Ended Dec 31, 2020 | Change | % Change | | :----- | :-------------------------- | :-------------------------- | :----- | :------- | | Revenues | $289,581 | $28,771 | $260,810 | NM | | Direct operating expenses | $192,847 | $16,661 | $176,186 | NM | | Selling, general and administrative expenses | $59,600 | $48,909 | $10,691 | 22% | | Operating income (loss) | $35,919 | $(38,406) | $74,325 | NM | | Net income (loss) attributable to Madison Square Garden Sports Corp.'s stockholders | $15,845 | $(40,625) | $56,470 | NM | | Metric | 6 Months Ended Dec 31, 2021 | 6 Months Ended Dec 31, 2020 | Change | % Change | | :----- | :-------------------------- | :-------------------------- | :----- | :------- | | Revenues | $308,375 | $85,809 | $222,566 | NM | | Direct operating expenses | $201,425 | $56,447 | $144,978 | NM | | Selling, general and administrative expenses | $103,328 | $91,905 | $11,423 | 12% | | Operating income (loss) | $981 | $(65,810) | $66,791 | NM | | Net income (loss) attributable to Madison Square Garden Sports Corp.'s stockholders | $(560) | $(69,042) | $68,482 | 99% | - Revenue increases were driven by: pre/regular season ticket-related revenues (**+$100,802 thousand** for 3 months, **+$104,484 thousand** for 6 months), local media rights fees (**+$50,871 thousand** for 3 months, **+$49,107 thousand** for 6 months), league distributions (**+$44,790 thousand** for 3 months, **+$3,575 thousand** for 6 months), suite license fees (**+$34,349 thousand** for 3 months, **+$34,613 thousand** for 6 months), and sponsorship/signage revenues (**+$20,190 thousand** for 3 months, **+$20,146 thousand** for 6 months)[176](index=176&type=chunk) - Direct operating expenses increased primarily due to higher team personnel compensation (**+$91,147 thousand** for 3 months, **+$77,685 thousand** for 6 months), other team operating expenses (**+$36,423 thousand** for 3 months, **+$35,752 thousand** for 6 months), and operating lease costs for games at The Garden (**+$25,459 thousand** for 3 months, **+$26,770 thousand** for 6 months)[183](index=183&type=chunk) - Adjusted operating income improved by **$74,683 thousand** for the three months and **$64,306 thousand** for the six months ended December 31, 2021, reflecting the revenue recovery partially offset by increased operating expenses[197](index=197&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by cash, credit facilities, and operating cash flow, with **$54.8 million** in cash and **$195 million** available borrowing capacity as of December 31, 2021, deemed sufficient for foreseeable operations - Primary liquidity sources are cash and cash equivalents, available borrowing capacity under credit facilities, and cash flow from operations[199](index=199&type=chunk) - As of December 31, 2021, the company had **$54,800 thousand** in Cash and cash equivalents and **$195,000 thousand** of additional available borrowing capacity under existing credit facilities[204](index=204&type=chunk) - Net cash provided by operating activities for the six months ended December 31, 2021, was **$24,030 thousand**, a significant improvement from a net cash outflow of **$21,633 thousand** in the prior year[208](index=208&type=chunk) - Net cash used in financing activities for the six months ended December 31, 2021, was **$39,879 thousand**, compared to net cash provided of **$11,363 thousand** in the prior year, due to additional borrowings in the prior year and a partial repayment on the 2021 Rangers Credit Agreement in the current year[210](index=210&type=chunk) [Seasonality of Our Business](index=38&type=section&id=Seasonality%20of%20Our%20Business) The company typically earns disproportionate revenues in the second and third fiscal quarters due to its NBA and NHL teams, though COVID-19 disruptions in 2020 shifted some FY2020 revenues to Q1 FY2021 - The company typically earns a disproportionate share of revenues in the second and third fiscal quarters due to its NBA and NHL sports teams[211](index=211&type=chunk) - COVID-19 disruptions in 2020 caused certain revenues that would have been recognized in Q3/Q4 FY2020 to be recognized in Q1 FY2021[211](index=211&type=chunk) [Recently Issued Accounting Pronouncements and Critical Accounting Policies](index=38&type=section&id=Recently%20Issued%20Accounting%20Pronouncements%20and%20Critical%20Accounting%20Policies) This section refers to Note 2 for accounting pronouncements and discusses annual impairment testing for goodwill and indefinite-lived intangible assets, confirming no impairment in Q1 FY2022 - The company performed its annual impairment test of goodwill and identifiable indefinite-lived intangible assets during the first quarter of fiscal year 2022, with no impairments identified[213](index=213&type=chunk)[216](index=216&type=chunk)[218](index=218&type=chunk) - Goodwill impairment testing is performed at the reporting unit level, which is the same as or one level below the operating segment, and involves a qualitative assessment or quantitative analysis[214](index=214&type=chunk) - Identifiable indefinite-lived intangible assets, such as sports franchises and photographic related rights, are tested annually for impairment using a qualitative assessment or quantitative analysis[217](index=217&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on floating-rate credit facility borrowings, where a **100 basis point** increase would raise annual interest expense by approximately **$3.3 million** on **$330 million** outstanding debt - The company has potential interest rate risk exposure related to outstanding borrowings under its credit facilities, which bear interest at a floating rate[222](index=222&type=chunk) - As of December 31, 2021, total borrowings outstanding under credit facilities were **$330 million**[223](index=223&type=chunk) - A hypothetical **100 basis point** increase in floating interest rates would increase annual interest expense by approximately **$3.3 million**[223](index=223&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's management concluded that disclosure controls and procedures were effective as of December 31, 2021, with no material changes to internal control over financial reporting during the quarter - The company's disclosure controls and procedures were effective as of December 31, 2021[224](index=224&type=chunk) - No material changes occurred in the company's internal control over financial reporting during the quarter ended December 31, 2021[225](index=225&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various lawsuits, but management believes their resolution will not have a material adverse effect - The company is a defendant in various lawsuits[228](index=228&type=chunk) - Management does not believe the resolution of these lawsuits will have a material adverse effect on the company[228](index=228&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a **$525 million** Class A Common Stock repurchase program, with approximately **$260 million** remaining as of December 31, 2021, and no repurchase activity during the three months ended December 31, 2021 - The company has a **$525 million** Class A Common Stock share repurchase program authorized in September 2015[229](index=229&type=chunk) - Approximately **$260 million** remained available under the authorization as of December 31, 2021[229](index=229&type=chunk) - No share repurchase activity occurred during the three months ended December 31, 2021[229](index=229&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including employment agreements, credit agreement amendments, certifications, and financial statements in iXBRL format - Exhibits include employment agreements for key executives (Victoria Mink, Andrew Lustgarten, James L. Dolan)[231](index=231&type=chunk) - Amendments to the credit agreements for New York Knicks, LLC and New York Rangers, LLC are filed as exhibits[231](index=231&type=chunk) - Certifications by the Chief Executive Officer and Chief Financial Officer pursuant to the Sarbanes-Oxley Act of 2002 are included[231](index=231&type=chunk)

Madison Square Garden Sports Corp. (NYSE:MSGS) Q2 2021 Earnings Conference Call February 3, 2022 10:00 AM ET Company Participants Ari Danes - Investor Relations Andy Lustgarten - President & Chief Executive Officer Victoria Mink - Executive Vice President, Chief Financial Officer & Treasurer Conference Call Participants David Karnovsky - JPMorgan Brandon Ross - LightShed Partners Curry Baker - Guggenheim Securities Paul Golding - Macquarie Capital David Joyce - Barclays David Katz - Jefferies LLC Operator G ...

Madison Square Garden Sports Corp. (NYSE:MSGS) Q1 2022 Earnings Conference Call November 10, 2021 10:00 AM ET Company Participants Ari Danes - Investor Relations Andy Lustgarten - President & Chief Executive Officer Victoria Mink - Executive Vice President, Chief Financial Officer & Treasurer Conference Call Participants David Karnovsky - JPMorgan Ben Swinburne - Morgan Stanley Brandon Ross - LightShed Partners John Janedis - Wolfe Research Operator Good morning. Thank you for standing by, and welcome to th ...

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 September 30, 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 registrant as specified in ...

PART I [Business](index=3&type=section&id=Item%201.%20Business) MSG Sports is a professional sports company owning iconic franchises whose revenue from tickets, media, and sponsorships was impacted by COVID-19 - The company owns a portfolio of professional sports teams, including the **New York Knicks (NBA)**, **New York Rangers (NHL)**, Hartford Wolf Pack (AHL), Westchester Knicks (NBAGL), and two esports franchises, Knicks Gaming and Counter Logic Gaming (CLG)[11](index=11&type=chunk) - A key strategy is to maximize the value of live sports content through long-term local and national media rights agreements[15](index=15&type=chunk) - The company has long-term (35-year) Arena License Agreements with MSG Entertainment for the Knicks and Rangers to play their home games at Madison Square Garden, which includes revenue sharing[14](index=14&type=chunk)[23](index=23&type=chunk) - The **COVID-19 pandemic materially impacted revenues in FY2021** due to shortened seasons, government-mandated limits on fan attendance, and reduced ticket sales, suite licenses, sponsorships, and merchandise sales[27](index=27&type=chunk)[60](index=60&type=chunk) - As of June 30, 2021, the company had approximately **415 full-time and 242 part-time employees**, with approximately 16% of the workforce represented by unions[50](index=50&type=chunk)[54](index=54&type=chunk) [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from the COVID-19 pandemic, market competition, team performance, labor disputes, and substantial indebtedness [Sports Business Risks](index=10&type=section&id=Sports%20Business%20Risks) - The **COVID-19 pandemic has materially impacted operations** and operating results, leading to shortened seasons, limited fan attendance, and reduced revenues, with a resurgence posing future risks[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) - The business faces **intense competition** for attendance, viewership, and advertising from numerous other professional and collegiate sports teams in the New York City metropolitan area[67](index=67&type=chunk)[68](index=68&type=chunk) - Financial results are substantially dependent on the **continued popularity and competitive success of the Knicks and Rangers**, which drives ticket sales, sponsorships, and media rights value[72](index=72&type=chunk) - Actions by the NBA and NHL, such as changes to media rights, revenue sharing, and league expansion, can have a **material negative effect** on the company's business[75](index=75&type=chunk)[78](index=78&type=chunk)[81](index=81&type=chunk) [Economic and Business Relationship Risks](index=14&type=section&id=Economic%20and%20Business%20Relationship%20Risks) - Subsidiaries have incurred **substantial indebtedness**, with **$220 million** outstanding under the Knicks facility and **$135 million** under the Rangers facility as of June 30, 2021[86](index=86&type=chunk) - The company has a history of operating losses, reporting losses of approximately **$78 million in FY2021**, **$94 million in FY2020**, and **$58 million in FY2019**[93](index=93&type=chunk) - The company does not own Madison Square Garden and relies on Arena License Agreements with MSG Entertainment, which expire in 2055[97](index=97&type=chunk) - The business is dependent on unionized labor, particularly NBA and NHL players, and **future labor disputes could have a material negative effect**[108](index=108&type=chunk) - The company relies on MSG Entertainment for various services under a transition services agreement, and a breach or termination could cause operational difficulties[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk) [Operational Risks](index=18&type=section&id=Operational%20Risks) - The business is exposed to risks from terrorist activity, pandemics, or other events that discourage public assembly at The Garden, which could reduce attendance and revenue[114](index=114&type=chunk) - The company faces continually evolving **cybersecurity risks**, including data breaches and ransomware attacks, which could lead to business disruption and financial losses[121](index=121&type=chunk)[123](index=123&type=chunk) [Corporate Governance Risks](index=20&type=section&id=Corporate%20Governance%20Risks) - The company is controlled by the **Dolan Family Group**, which held approximately **70.7% of the total voting power** as of July 30, 2021, giving them control over stockholder decisions[138](index=138&type=chunk)[140](index=140&type=chunk) - The company has elected to be a **"controlled company"** under NYSE rules, allowing it to opt out of certain corporate governance requirements[142](index=142&type=chunk) - Overlapping key officers and directors with MSG Entertainment and/or AMC Networks may lead to **conflicts of interest**[147](index=147&type=chunk)[148](index=148&type=chunk) [Properties](index=23&type=section&id=Item%202.%20Properties) The company licenses Madison Square Garden, owns a training center in NY, leases a performance center in CA, and subleases its main offices - The company licenses Madison Square Garden from MSG Entertainment for its Knicks and Rangers home games[150](index=150&type=chunk) - Owns the Madison Square Garden Training Center in Greenburgh, NY (approx 114,000 sq ft) and leases the CLG Performance Center in Los Angeles, CA (approx 8,000 sq ft)[150](index=150&type=chunk) - Subleases approximately 47,000 sq ft of office space for its administrative and executive offices from MSG Entertainment at Two Pennsylvania Plaza, New York City[151](index=151&type=chunk) [Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) The company is a defendant in various lawsuits but management does not believe their resolution will have a material adverse effect - The company is a defendant in various lawsuits, but management does not expect the outcomes to have a material adverse effect[153](index=153&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20for%20the%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A stock trades on the NYSE, no dividends were paid in FY2021, and $260 million remains under its share repurchase program - Class A Common Stock trades on the NYSE under the symbol **"MSGS"**; there is no public market for the Class B Common Stock[157](index=157&type=chunk)[160](index=160&type=chunk) - The company **did not pay any cash dividends** during fiscal year 2021 and does not have current plans to pay dividends in the foreseeable future[162](index=162&type=chunk) - As of June 30, 2021, approximately **$260 million remained available** under the company's $525 million stock repurchase authorization, though no shares were repurchased during FY2021[163](index=163&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) COVID-19 heavily impacted FY2021 performance, causing a 31% revenue decrease to $415.7 million and an operating loss of $78.4 million [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Consolidated Results of Operations (FY2021 vs. FY2020) | | Years Ended June 30, | | Change | | | :--- | :--- | :--- | :--- | :--- | | | **2021** | **2020** | **Amount** | **Percentage** | | **Revenues** | $415,721 | $603,319 | $(187,598) | (31)% | | **Direct operating expenses** | 281,890 | 359,970 | (78,080) | (22)% | | **Selling, general and administrative expenses** | 206,700 | 319,675 | (112,975) | (35)% | | **Operating loss** | (78,443) | (93,866) | 15,423 | 16% | | **Loss from continuing operations** | (15,897) | (118,641) | 102,744 | 87% | | **Net loss attributable to stockholders** | (13,954) | (182,388) | 168,434 | 92% | - **Revenues decreased by 31%** primarily due to lower pre/regular season ticket-related revenues (-$192.4M), suite license fee revenues (-$67.4M), and food, beverage, and merchandise sales (-$35.6M), all driven by COVID-19 restrictions[235](index=235&type=chunk) - The revenue decline was partially offset by a **$98.3 million increase in league distributions**, mainly from higher national media rights fees and a $21.0 million NHL expansion fee[235](index=235&type=chunk)[239](index=239&type=chunk) - **Direct operating expenses decreased by 22%** due to lower net provisions for league revenue sharing (-$44.2M), reduced team operating expenses, and lower food/beverage costs[242](index=242&type=chunk) - **Selling, general and administrative (SG&A) expenses decreased by 35%**, primarily due to lower corporate overhead costs following the MSGE Distribution[251](index=251&type=chunk) Reconciliation of Operating Loss to Adjusted Operating Loss | | Years Ended June 30, | | Change | | | :--- | :--- | :--- | :--- | :--- | | | **2021** | **2020** | **Amount** | **Percentage** | | **Operating loss** | $(78,443) | $(93,866) | $15,423 | 16% | | Deferred rent | 28,305 | — | | | | Depreciation and amortization | 5,574 | 17,540 | | | | Share-based compensation | 30,437 | 48,693 | | | | Restructuring charges | 1,597 | — | | | | **Adjusted operating loss** | **$(12,530)** | **$(27,466)** | **$14,936** | **54%** | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary sources of liquidity are cash on hand (**$64.9M** as of June 30, 2021), cash flow from operations, and available borrowing capacity[266](index=266&type=chunk)[268](index=268&type=chunk) - As of June 30, 2021, the company had **$245 million of additional available borrowing capacity** and believes it has sufficient liquidity to fund operations for the next 12 months[270](index=270&type=chunk) Outstanding Debt as of June 30, 2021 | Facility | Outstanding Balance (in millions) | | :--- | :--- | | 2020 Knicks Revolving Credit Facility | $220 | | 2020 Rangers Revolving Credit Facility | $135 | | 2021 Rangers NHL Advance | $30 | | 2020 Knicks Holdings Revolving Credit Facility | $0 | Cash Flow Summary (FY2021 vs. FY2020) | | Years Ended June 30, (in thousands) | | | :--- | :--- | :--- | | | **2021** | **2020** | | Net cash provided by (used in) operating activities | $(35,326) | $3,568 | | Net cash used in investing activities | (466) | (514,863) | | Net cash provided by (used in) financing activities | 17,155 | (520,588) | | Net decrease in cash, cash equivalents and restricted cash | $(18,637) | $(1,027,228) | [Critical Accounting Policies](index=45&type=section&id=Critical%20Accounting%20Policies) - For contracts with multiple performance obligations, the transaction price is allocated based on the **estimated relative standalone selling price** of each obligation, which involves significant management judgment[304](index=304&type=chunk)[305](index=305&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment annually as of August 31; the FY2021 assessment concluded **no impairment was likely**[308](index=308&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk) - The company accounts for its use of Madison Square Garden under the Arena License Agreements as operating leases, with liabilities measured at the present value of future lease payments[317](index=317&type=chunk)[328](index=328&type=chunk)[330](index=330&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate fluctuation on its variable-rate debt, with a 1% rate increase adding $3.6 million in annual expense - The company has potential **interest rate risk** from outstanding borrowings under its credit facilities, which bear interest at floating rates[331](index=331&type=chunk)[332](index=332&type=chunk) - As of June 30, 2021, with $355 million in borrowings outstanding, a hypothetical **100 basis point increase** in interest rates would increase annual interest expense by approximately **$3.6 million**[332](index=332&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective as of June 30, 2021 - Management, including the CEO and CFO, concluded that as of June 30, 2021, the company's **disclosure controls and procedures were effective**[337](index=337&type=chunk) - Management concluded that the company's **internal control over financial reporting was effective** as of June 30, 2021, a conclusion audited and confirmed by Deloitte & Touche LLP[340](index=340&type=chunk)[341](index=341&type=chunk) PART III [Directors, Executive Compensation, Security Ownership, and Principal Accountant Fees](index=50&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) Required information on directors, compensation, ownership, and accountant fees is incorporated by reference from the 2021 proxy statement - Information regarding Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, and Principal Accountant Fees is **incorporated by reference** from the proxy statement for the 2021 annual meeting of shareholders[346](index=346&type=chunk)[347](index=347&type=chunk)[348](index=348&type=chunk)[349](index=349&type=chunk)[350](index=350&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=51&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K report - This section lists all documents filed as part of the report, including financial statements, schedules, and exhibits such as credit agreements, employment contracts, and related-party agreements[353](index=353&type=chunk) Financial Statements and Notes [Consolidated Financial Statements](index=63&type=section&id=Consolidated%20Financial%20Statements) For FY2021, the company reported total assets of $1.31 billion, a net loss of $14.0 million, and a stockholders' deficit of $204.3 million Key Balance Sheet Data (as of June 30, 2021) | | Amount (in thousands) | | :--- | :--- | | **Total Assets** | **$1,309,939** | | Cash and cash equivalents | $64,902 | | Right-of-use lease assets | $703,521 | | Goodwill | $226,955 | | **Total Liabilities** | **$1,511,805** | | Long-term debt | $355,000 | | Operating lease liabilities, noncurrent | $691,152 | | **Total Madison Square Garden Sports Corp. stockholders' equity** | **$(204,308)** | Key Income Statement Data (for the year ended June 30, 2021) | | Amount (in thousands) | | :--- | :--- | | **Revenues** | **$415,721** | | Operating loss | $(78,443) | | Loss from continuing operations | $(15,897) | | **Net loss attributable to stockholders** | **$(13,954)** | | **Basic and Diluted EPS** | **$(0.58)** | [Notes to Consolidated Financial Statements](index=72&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the impact of COVID-19, the MSG Entertainment spin-off, accounting policies, and extensive related-party transactions [Note 3. Discontinued Operations](index=81&type=section&id=Note%203.%20Discontinued%20Operations) - Following the April 17, 2020 distribution, the historical results of the MSG Entertainment business have been classified as **discontinued operations** for all periods presented[513](index=513&type=chunk) [Note 8. Leases](index=87&type=section&id=Note%208.%20Leases) - The company accounts for its use of Madison Square Garden under 35-year Arena License Agreements as operating leases, resulting in a Right-of-Use asset of **$703.5 million** and a total lease liability of **$733.1 million** as of June 30, 2021[557](index=557&type=chunk)[571](index=571&type=chunk) - The weighted average remaining lease term for operating leases was **33.7 years** with a weighted average discount rate of **7.13%** as of June 30, 2021[573](index=573&type=chunk) [Note 13. Debt](index=93&type=section&id=Note%2013.%20Debt) Debt Facilities Summary (as of June 30, 2021) | Facility | Capacity (in thousands) | Outstanding (in thousands) | Maturity | | :--- | :--- | :--- | :--- | | 2020 Knicks Revolving Credit Facility | $275,000 | $220,000 | Nov 2023 | | 2020 Knicks Holdings Revolving Credit Facility | $75,000 | $0 | Nov 2023 | | 2020 Rangers Revolving Credit Facility | $250,000 | $135,000 | Nov 2023 | | 2021 Rangers NHL Advance | $30,000 | $30,000 | On Demand | [Note 17. Related Party Transactions](index=104&type=section&id=Note%2017.%20Related%20Party%20Transactions) - The company has extensive related party transactions with MSG Entertainment, MSG Networks, and AMC Networks, all controlled by the **Dolan Family Group**[678](index=678&type=chunk) - Key agreements include Arena License Agreements, media rights agreements, sponsorship sales agreements, and a Transition Services Agreement with MSG Entertainment[679](index=679&type=chunk) - For FY2021, revenues from related parties (primarily MSG Networks) were **$147.0 million**, representing **35% of total consolidated revenues**[694](index=694&type=chunk)[719](index=719&type=chunk)

Madison Square Garden Sports Corp. (NYSE:MSGS) Q4 2021 Results Earnings Conference Call August 19, 2021 10:00 AM ET Company Participants Ari Danes - Senior Vice President of Investor Relations Andy Lustgarten - President, Chief Executive Officer Victoria Mink - Executive Vice President, Chief Financial Officer, Treasurer Conference Call Participants Ben Swinburne - Morgan Stanley John Janedis - Wolfe Research Brandon Ross - LightShed Partners David Karnovsky - JPMorgan Operator Good morning. My name is Chri ...

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)