Financial Performance - Sphere Entertainment reported revenue of $282.68 million for the quarter ended June 2025, reflecting a 3.4% increase year-over-year [1] - The company's EPS was -$2.71, a decline from -$2.00 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $281.22 million by 0.52% [1] - The EPS fell short of the consensus estimate of -$1.57, resulting in a surprise of -72.61% [1] Key Metrics - Sphere's revenue of $175.6 million surpassed the average estimate of $172.6 million by three analysts, marking a 16.1% increase compared to the previous year [4] - Adjusted Operating Income for Sphere was reported at $24.9 million, exceeding the average estimate of $14.47 million by two analysts [4] - In contrast, MSG Networks reported revenue of $107.1 million, which was below the average estimate of $108.95 million, representing a year-over-year decline of 12.4% [4] Stock Performance - Sphere Entertainment's shares have returned -6.2% over the past month, while the Zacks S&P 500 composite has increased by 2.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company generated total revenues of $282.7 million for the quarter, with adjusted operating income of $61.5 million [10] - The Sphere segment's revenues increased to $175.6 million from $151.2 million in the prior year, driven by more corporate events and additional residency shows [10] - Adjusted operating income for the Sphere segment rose to $24.9 million, an increase of $30.4 million year over year, reflecting higher revenues and lower SG&A expenses [11] Business Line Data and Key Metrics Changes - The Sphere segment's revenue growth was primarily due to an increase in event-related revenues, offset by lower revenues from the Sphere experience [10] - MSG Networks generated $107.1 million in revenues, down from $122.2 million in the prior year, attributed to a 13% decrease in subscribers [12] Market Data and Key Metrics Changes - The company is seeing increased demand from artists across various genres, leading to an expectation of hosting over 100 concerts this year, up from 70 in 2024 [6] - The company is in discussions with multiple international markets for large-scale spheres and has completed the design and business model for smaller spheres [8] Company Strategy and Development Direction - The company aims to operate a venue that is busy year-round, with plans to expand Sphere venues globally, including Abu Dhabi [5] - The focus remains on developing original content experiences, with the upcoming "Wizard of Oz" expected to be a significant draw [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the Sphere segment, despite fluctuations in quarterly results [11] - The company is focused on building a recurring revenue base and diversifying its artist roster to mitigate impacts from market visitation trends [67] Other Important Information - MSG Networks completed a restructuring of its credit facilities, replacing a $840 million term loan with a new $210 million facility maturing in December 2029 [14] - The company has secured advertising commitments as part of a new multiyear sponsorship, indicating progress in building a recurring revenue base [7] Q&A Session Summary Question: Can you provide more details about the smaller spheres? - The smaller spheres will follow a franchise model, designed to keep venues busy year-round, and will be less expensive and quicker to build than the Las Vegas sphere [20][22] Question: How does ticket sales for "Wizard of Oz" compare to previous shows? - The company has sold approximately 127,000 tickets to date, with expectations for sales to ramp up significantly in the weeks leading to the opening [27][29] Question: What is the outlook for concert residencies in 2026? - The company expects to diversify genres and potentially increase the number of residencies, with the ability to run multiple shows in a day [38][40] Question: Will future sphere experiences be based on owned IP? - The company is exploring various IP options, including potential collaborations with IP holders, and is open to both owned and licensed content [43][45] Question: What is the trajectory for sponsorship and advertising? - The company is making progress in establishing a recurring business model for sponsorships and advertising, with new packages and multiyear agreements in place [64][66]

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 June 30, 2025 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: 001-39245 SPHERE ENTERTAINMENT CO. (Exact name of registrant as specified in its charter) Nevada 84-3755666 ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Sphere Entertainment Co. reported a 3% revenue increase to $282.7 million, with operating loss narrowing by 30% and adjusted operating income surging 140% to $61.5 million, driven by strong Sphere segment performance Q2 2025 Key Financial Metrics (Consolidated) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $282.7M | $273.4M | +$9.3M | +3% | | **Operating Loss** | ($50.2M) | ($71.4M) | +$21.2M | +30% | | **Adjusted Operating Income** | $61.5M | $25.7M | +$35.8M | +140% | - Executive Chairman and CEO James L. Dolan stated the company is executing its strategic priorities for long-term growth and is making progress with global expansion plans[2](index=2&type=chunk) - Key operational highlights for the Sphere segment include surpassing **four million total tickets sold** for The Sphere Experience since its October 2023 opening and hosting multiple concert residencies and corporate events[5](index=5&type=chunk) [Segment Performance Analysis](index=2&type=section&id=Segment%20Performance%20Analysis) The Sphere segment achieved **16% revenue growth** and positive adjusted operating income, while MSG Networks saw a **12% revenue decline** due to subscriber loss, partially offset by cost-cutting measures Q2 2025 Revenue by Segment (in millions) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | Change (%) | | :--- | :--- | :--- | :--- | | Sphere | $175.6 | $151.2 | +16% | | MSG Networks | $107.1 | $122.2 | -12% | Q2 2025 Adjusted Operating Income by Segment (in millions) | Segment | Q2 2025 AOI | Q2 2024 AOI | Change ($) | | :--- | :--- | :--- | :--- | | Sphere | $24.9 | ($5.5) | +$30.4 | | MSG Networks | $36.5 | $31.1 | +$5.4 | [Sphere Segment](index=2&type=section&id=Sphere%20Segment) The Sphere segment's revenue grew **16%** to **$175.6 million**, driven by event-related revenues, with operating loss improving by **20%** and adjusted operating income turning positive at **$24.9 million** - Event-related revenues rose by **$26.7 million** due to more corporate events and nine additional concert residency shows compared to the prior year quarter[7](index=7&type=chunk) - Revenue from The Sphere Experience decreased by **$6.7 million**, as lower average per-show revenues offset an increase in the total number of performances[9](index=9&type=chunk) - Selling, general and administrative (SG&A) expenses decreased by **$5.7 million (6%)** due to lower employee compensation and professional fees[12](index=12&type=chunk) Sphere Segment Q2 2025 vs Q2 2024 (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $175.6 | $151.2 | +16% | | Operating Loss | ($83.4) | ($104.5) | +20% | | Adjusted Operating Income | $24.9 | ($5.5) | +$30.4M | [MSG Networks Segment](index=2&type=section&id=MSG%20Networks%20Segment) MSG Networks' revenue declined **12%** to **$107.1 million** due to subscriber loss, but direct operating expenses fell **33%** due to restructured media rights, leading to increased operating and adjusted operating income - Distribution revenue fell by **$11.4 million**, primarily driven by an approximate **13.0% decrease** in total subscribers[14](index=14&type=chunk) - Direct operating expenses decreased significantly by **$26.7 million (33%)**, mainly due to a **$25.6 million reduction** in rights fees expense following amendments to media rights agreements[16](index=16&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **$11.7 million**, largely due to higher marketing costs and the absence of prior-year litigation-related insurance recoveries[17](index=17&type=chunk) [Other Matters](index=3&type=section&id=Other%20Matters) MSG Networks restructured its credit facilities, resulting in a **$346.1 million gain** on debt extinguishment, amended media rights agreements, and issued warrants for **19.9%** equity to Madison Square Garden Sports Corp - MSG Networks restructured its credit facilities, replacing an **$804 million term loan** with a new **$210 million term loan**, leading to a recorded **gain on debt extinguishment of $346.1 million** for the quarter[19](index=19&type=chunk) - Media rights agreements with the Knicks and Rangers were amended to reduce annual rights fees by **28% and 18%** respectively, effective January 1, 2025, and eliminate annual fee escalators[20](index=20&type=chunk) - MSG Networks issued penny warrants to Madison Square Garden Sports Corp. exercisable for **19.9%** of the equity interests in MSG Networks[20](index=20&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) Consolidated statements show **net income of $151.8 million** for Q2 2025, driven by a **$346.1 million gain** on debt extinguishment, with total assets at **$4.2 billion** and liabilities at **$1.9 billion**, and negative operating cash flow [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenues were **$282.7 million** with an operating loss of **$50.2 million**, but a **$346.1 million gain** on debt extinguishment led to **net income of $151.8 million** or **$4.18 per basic share** Q2 2025 Statement of Operations Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $282,677 | $273,395 | | Operating loss | ($50,159) | ($71,377) | | Gain on extinguishment of debt | $346,092 | $— | | Net income (loss) | $151,816 | ($46,586) | | Basic income (loss) per share | $4.18 | ($1.31) | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$4.2 billion**, liabilities decreased to **$1.9 billion** due to debt restructuring, and total stockholders' equity increased to **$2.3 billion** Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, and restricted cash | $368,927 | $515,633 | | Total Assets | $4,199,061 | $4,515,300 | | Total Liabilities | $1,885,374 | $2,313,881 | | Total Stockholders' Equity | $2,313,687 | $2,201,419 | [Selected Cash Flow Information](index=10&type=section&id=Selected%20Cash%20Flow%20Information) For the first six months of 2025, operating activities resulted in a **$52.7 million net cash outflow**, financing activities used **$111.1 million**, leading to a **$146.7 million net decrease in cash** Six Months Ended June 30 Cash Flow (in thousands) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($52,711) | $28,570 | | Net cash provided by (used in) investing activities | $16,441 | ($46,156) | | Net cash used in financing activities | ($111,059) | ($36,242) | | **Net decrease in cash** | **($146,706)** | **($54,604)** | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted Operating Income (Loss) is a key non-GAAP metric, defined by excluding depreciation, amortization, share-based compensation, and restructuring charges, with Q2 2025 consolidated Adjusted Operating Income at **$61.5 million** - Adjusted operating income (loss) is defined as operating income (loss) excluding depreciation, amortization, share-based compensation, restructuring charges, and other specific non-recurring or non-cash items[23](index=23&type=chunk) Q2 2025 Reconciliation of Operating Loss to Adjusted Operating Income (in thousands) | Description | Amount | | :--- | :--- | | **Operating loss** | **($50,159)** | | Share-based compensation | $18,850 | | Depreciation and amortization | $83,907 | | Other adjustments | $8,868 | | **Adjusted operating income** | **$61,466** |

Group 1 - Sphere Entertainment (NYSE: SPHR) is a hybrid live-entertainment and media company that features the most advanced immersive venue [1] - The company continues to operate its legacy MSG Network business, which is experiencing declining subscribers and significant debt [1] Group 2 - The investment analysis emphasizes the importance of identifying high-quality and/or severely mispriced investment ideas [1] - A successful investment idea is characterized by the ability to intuitively recognize great companies at great prices [1]

Core Insights - Gabelli Funds will host its 17th Annual Media & Entertainment Symposium on June 5, 2025, at the Harvard Club in New York City, focusing on industry dynamics, current trends, and business fundamentals [1] - The symposium will include discussions on Sports Investing, Media & Telecom Regulatory issues, and Advertising Panels, providing a platform for attendees to engage with leading companies in the media ecosystem [1][3] - A webcast option will be available for those unable to attend in person, ensuring broader access to the discussions and insights shared during the event [1] Presenting Companies - Notable companies participating in one-on-one meetings include Atlanta Braves Holdings, AMC Networks, Lionsgate Studios, Churchill Downs, Nexstar Media Group, Genius Sports, Reservoir Media, Gray Television, Rogers Communications, Live Nation Entertainment, Sinclair Inc., Sportradar Group, TEGNA Inc., TKO Group, and The E.W. Scripps Company [2] Panel Discussions - The symposium will feature several panel discussions, including "Sports Investing: Ways to Play," a TV Bureau of Advertising (TVB) Panel, and a Media & Telecom Regulatory Expert Session led by former FCC Commissioner Rob McDowell [3]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Sphere Entertainment Co. as of March 31, 2025, and for the three months ended March 31, 2025 and 2024. It includes the balance sheets, statements of operations, comprehensive loss, cash flows, and stockholders' equity, along with detailed notes explaining the financial data. Key highlights include a net loss of **$82.0 million** for the quarter, a significant decrease in cash from operating activities, and a critical situation regarding the matured debt of the MSG Networks segment [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2025, shows total assets of **$4.45 billion** and total liabilities of **$2.31 billion**. Compared to December 31, 2024, total assets decreased slightly. A significant portion of current liabilities is the **$804.1 million** current portion of long-term debt, primarily related to the matured MSG Networks term loan Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $735,105 | $760,993 | | **Total Assets** | **$4,447,618** | **$4,515,300** | | **Total Current Liabilities** | $1,381,092 | $1,371,667 | | Current portion of long-term debt, net | $804,125 | $829,125 | | **Total Liabilities** | **$2,305,554** | **$2,313,881** | | **Total Stockholders' Equity** | $2,142,064 | $2,201,419 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, the company reported revenues of **$280.6 million**, a decrease from **$321.3 million** in the prior-year period. The operating loss widened to **$78.6 million** from **$40.4 million**, and the net loss increased to **$82.0 million** from **$47.2 million** year-over-year Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $280,574 | $321,330 | | Operating Loss | $(78,609) | $(40,393) | | Net Loss | $(81,954) | $(47,240) | | Basic Loss Per Share | $(2.27) | $(1.33) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was **$6.3 million** for the quarter, a sharp decline from **$101.0 million** in the same period last year. Net cash used in investing activities was **$17.6 million**, while financing activities used **$26.3 million**. This resulted in a net decrease in cash of **$37.4 million** for the quarter Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,348 | $101,018 | | Net cash used in investing activities | $(17,570) | $(21,213) | | Net cash used in financing activities | $(26,307) | $(12,963) | | **Net (decrease) increase in cash** | **$(37,431)** | **$66,119** | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes provide critical details on accounting policies, segment information, debt, and contingencies. A key disclosure is the 'Liquidity and Going Concern' section (Note 2), which discusses the material uncertainty related to the MSG Networks' debt default and the subsequent Transaction Support Agreement aimed at restructuring it. Note 17 details this subsequent event, outlining the proposed debt restructuring, which is crucial for the company's financial stability. Other notes detail revenue sources, debt composition, and related-party transactions - The company's business is comprised of two reportable segments: Sphere, a next-generation entertainment medium, and MSG Networks, which operates regional sports networks[21](index=21&type=chunk) - A material uncertainty exists regarding the company's ability to continue as a going concern due to the MSG Networks' term loan maturing without repayment in October 2024. However, management believes its plans, including the Transaction Support Agreement, have alleviated substantial doubt[34](index=34&type=chunk)[39](index=39&type=chunk) - Subsequent to the quarter end, on April 24, 2025, the company entered into a Transaction Support Agreement to restructure the MSG Networks debt. Key terms include a new **$210 million** term loan, a **$15 million** capital contribution from Sphere Entertainment, and reduced media rights fees payable to the Knicks and Rangers[149](index=149&type=chunk)[153](index=153&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results, liquidity, and operational factors affecting the business. The analysis highlights a **13% decrease** in consolidated revenue, driven by a **19% drop** at MSG Networks. The Sphere segment's revenue also declined **8%**. A significant portion of the discussion is dedicated to the MSG Networks' debt situation, detailing the default, forbearance, and the subsequent Transaction Support Agreement. Management expresses confidence that Sphere's cash flow will support operations but acknowledges the uncertainty. Adjusted Operating Income (AOI), a key non-GAAP metric, decreased **42% to $36.0 million**, primarily due to a **53% decline** in MSG Networks' AOI Consolidated Results of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $280,574 | $321,330 | (13)% | | Operating Loss | $(78,609) | $(40,393) | 95% | | Net Loss | $(81,954) | $(47,240) | 73% | Adjusted Operating Income (AOI) Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Operating Loss | $(78,609) | $(40,393) | 95% | | **Adjusted Operating Income** | **$35,968** | **$61,521** | **(42)%** | - The primary source of liquidity is cash from operations, which is expected to be substantially used for working capital, capital spending (including Sphere content), and debt service. The ability to fund operations is dependent on Sphere generating significant positive cash flow[220](index=220&type=chunk)[221](index=221&type=chunk) - A Transaction Support Agreement was signed on April 24, 2025, to restructure MSG Networks' debt. This is expected to result in a non-cash gain but also the elimination of approximately half of the company's net operating losses[171](index=171&type=chunk)[177](index=177&type=chunk) [Business Segment Results - Sphere](index=50&type=section&id=Business%20Segment%20Results%20-%20Sphere) The Sphere segment reported revenues of **$157.5 million**, an **8% decrease** from the prior year. The decline was driven by lower revenues from The Sphere Experience and Exosphere advertising, partially offset by an increase in event-related revenues from more concerts. Direct operating expenses increased **13% to $70.5 million**. Despite the revenue drop, adjusted operating income improved slightly to **$13.1 million** from **$12.9 million**, primarily due to lower SG&A expenses Sphere Segment Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $157,545 | $170,364 | (8)% | | Direct Operating Expenses | $(70,536) | $(62,294) | 13% | | Operating Loss | $(93,762) | $(83,498) | 12% | | Adjusted Operating Income | $13,147 | $12,909 | 2% | - Revenue from The Sphere Experience decreased by **$26.2 million** due to fewer performances. Exosphere advertising and sponsorship revenue fell by **$15.8 million**, mainly due to the absence of Super Bowl-related campaigns that occurred in the prior-year period[194](index=194&type=chunk)[195](index=195&type=chunk) - Event-related revenues increased by **$25.6 million**, driven by **10 more concerts** held at the venue compared to the prior year[194](index=194&type=chunk)[196](index=196&type=chunk) [Business Segment Results - MSG Networks](index=52&type=section&id=Business%20Segment%20Results%20-%20MSG%20Networks) The MSG Networks segment saw a **significant 19% revenue decline to $123.0 million**, primarily due to a **$29.9 million drop** in distribution revenue. This was caused by the temporary non-carriage by Altice and an **11.5% decrease** in total subscribers. Direct operating expenses decreased **4% to $87.8 million**. Consequently, adjusted operating income fell **53% to $22.8 million** MSG Networks Segment Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $123,029 | $150,966 | (19)% | | Direct Operating Expenses | $(87,787) | $(91,746) | (4)% | | Operating Income | $15,153 | $43,105 | (65)% | | Adjusted Operating Income | $22,821 | $48,612 | (53)% | - Distribution revenue decreased by **$29.9 million**, driven by the absence of revenue from Altice during a non-carriage period (Jan 1 - Feb 21, 2025) and a decline in total subscribers of **approximately 11.5%** (excluding the Altice impact)[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) - Advertising revenue increased by **$1.9 million** due to a higher number of live professional sports telecasts[210](index=210&type=chunk)[212](index=212&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had **$465.0 million** in unrestricted cash. A major liquidity concern is the **$804.1 million** MSG Networks term loan that matured in October 2024 and is in default. The company entered a Transaction Support Agreement in April 2025 to restructure this debt. Management states that while this situation raises substantial doubt about the ability to continue as a going concern, their plans have effectively alleviated this doubt. Future liquidity is highly dependent on Sphere generating significant positive cash flow - The principal balance of total debt was **$1.34 billion** as of March 31, 2025, including **$804.1 million** of MSG Networks debt that matured in October 2024 and is in default[221](index=221&type=chunk) - If the MSG Networks debt work-out fails, it is probable that MSG Networks Inc. would seek bankruptcy protection or lenders would foreclose on its assets. The parent company and Sphere segment are not legally obligated for this debt[223](index=223&type=chunk)[224](index=224&type=chunk) Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,348 | $101,018 | | Net cash used in investing activities | $(17,570) | $(21,213) | | Net cash used in financing activities | $(26,307) | $(12,963) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, primarily from interest rates and foreign currency fluctuations. A hypothetical **200 basis point (2%)** increase in floating interest rates would increase annual interest payments by approximately **$21.6 million**. The company also has foreign currency exposure to the British pound sterling and the Euro, though the potential impact from a **10% fluctuation** is relatively small (**$3.2 million** and **$0.18 million**, respectively) - The company is subject to interest rate risk on its floating-rate debt. A hypothetical **200 basis point** increase in rates would increase annual interest payments by **$21.6 million**[266](index=266&type=chunk) - The company has foreign currency exchange rate exposure to the British pound sterling (GBP) and the Euro (EUR). A hypothetical **10% fluctuation** in the GBP/USD rate would change net asset value by approximately **$3.2 million**, and a similar fluctuation in EUR/USD would change it by **$0.18 million**[267](index=267&type=chunk)[268](index=268&type=chunk) [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025. There were no material changes in internal control over financial reporting during the quarter - Management concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025[270](index=270&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control[271](index=271&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) This section details litigation related to the 2021 merger with MSG Networks Inc. The MSG Entertainment Litigation was settled with an **$85 million** payment to the company, funded by insurers. The MSG Networks Litigation was settled for **approximately $48.5 million**, with **about $28 million** paid by the company. An insurance dispute over coverage for this settlement is ongoing - The MSG Entertainment Litigation related to the Networks Merger was settled, resulting in a payment of **approximately $85 million** to the Company, funded by defendants' insurers[278](index=278&type=chunk) - The MSG Networks Litigation was settled for **approximately $48.5 million**. The Company paid **about $28 million** of the settlement, with the remainder covered by insurers, although a dispute over the full insurance coverage remains[280](index=280&type=chunk) [Item 1A. Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks to the company's business. The most critical risks relate to the MSG Networks segment's debt situation, including the potential for bankruptcy or foreclosure if the refinancing efforts fail. Other major risks include the company's high overall leverage, its dependence on the financial success of the Sphere venue to generate sufficient cash flow for operations and debt service, and its reliance on media rights agreements for the MSG Networks business [Risks Related to Our MSG Networks Business](index=66&type=section&id=Risks%20Related%20to%20Our%20MSG%20Networks%20Business) The primary risk is the failure to refinance the MSG Networks term loan, which is currently in default. The company believes a failure to complete the workout contemplated by the Transaction Support Agreement would probably lead to MSG Networks Inc. seeking bankruptcy protection or lenders foreclosing on the business. This could lead to the deconsolidation of the segment and potential claims against the parent company. The business also depends on renewing media rights agreements with sports teams, which is not guaranteed - If MSG Networks cannot refinance its term loan, the company believes it is probable that MSG Networks Inc. and/or its subsidiaries would seek bankruptcy protection or lenders would foreclose on the collateral[283](index=283&type=chunk)[289](index=289&type=chunk) - Events of default exist under the MSG Networks Credit Agreement. While a Transaction Support Agreement is in place, there is no assurance it will be successfully consummated. Any successful refinancing is expected to be on terms materially less favorable than the current ones[293](index=293&type=chunk)[296](index=296&type=chunk) - The MSG Networks business is dependent on media rights agreements with professional sports teams. The Transaction Support Agreement proposes reducing the term of the Knicks and Rangers agreements to expire after the 2028-29 season[299](index=299&type=chunk) [Risks Related to Our Indebtedness, Financial Condition, and Internal Control](index=69&type=section&id=Risks%20Related%20to%20Our%20Indebtedness,%20Financial%20Condition%20and%20Internal%20Control) The company is highly leveraged with a consolidated debt balance of **approximately $1.3 billion** as of March 31, 2025. Its ability to fund operations and service this debt is dependent on Sphere generating significant positive cash flow, which is not assured. The uncertainty surrounding the MSG Networks debt raises substantial doubt about the company's ability to continue as a going concern, although management believes its plans have alleviated this doubt for the next year - The company is highly leveraged with a consolidated debt balance of **approximately $1.3 billion** as of March 31, 2025[302](index=302&type=chunk) - The company's ability to have sufficient liquidity to fund operations and refinance its debt is dependent on the ability of the Sphere venue to generate significant positive cash flow[306](index=306&type=chunk) - While conditions at MSG Networks raise substantial doubt about the company's ability to continue as a going concern, management has concluded that its plans have effectively alleviated this doubt as of the report's issuance date[311](index=311&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a share repurchase program authorizing **up to $350 million** of its Class A Common Stock. The program was re-authorized in March 2023. To date, no shares have been repurchased under this program - The company has a board-authorized share repurchase program for **up to $350 million** of Class A Common Stock. No shares have been repurchased under this program to date[313](index=313&type=chunk) [Item 6. Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various amendments to the MSG Networks Forbearance Agreement, the Transaction Support Agreement, and certifications by the CEO and CFO

Financial Data and Key Metrics Changes - The company reported total revenues of $280.6 million and adjusted operating income of $36 million for the quarter [12] - The Sphere segment generated revenues of $157.5 million, a decrease from $170.4 million in the prior year period, primarily due to lower revenues from the Sphere experience and advertising campaigns [12] - Adjusted operating income for the Sphere segment was $13.1 million, slightly up from $12.9 million in the prior year period, reflecting a decrease in revenues offset by lower SG&A expenses [13] Business Line Data and Key Metrics Changes - The Sphere experience welcomed over half a million guests, contributing to total revenues of over $500 million since its debut in October 2023 [7] - MSG Networks generated $123 million in revenues and $22.8 million in adjusted operating income, down from $151 million and $48.6 million respectively in the prior year period, due to a non-carriage period and a decrease in subscribers [14] Market Data and Key Metrics Changes - The Las Vegas market continues to attract over 40 million visitors annually, with international guests accounting for over 20% of Sphere attendees [22] - The company has seen strong consumer demand, with acts like Dead and Company and the Eagles scheduled for over 40 performances at the Sphere [9] Company Strategy and Development Direction - The company aims to drive growth by hosting concerts and events, optimizing the go-to-market strategy for the Exosphere, and enhancing operational efficiencies [6] - Plans are underway to develop a smaller Sphere model for faster and cheaper deployment in various markets [39] - The company is focused on creating a diverse slate of original content and has multiple projects in development [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth despite macroeconomic concerns, noting that demand for concerts exceeds capacity [23] - The company is optimistic about the potential of new productions and the expansion of concert residencies, indicating a strong pipeline of artist demand [34] Other Important Information - The company has entered into new marketing partnerships with major brands like Pepsi and Google, enhancing its sponsorship opportunities [10][61] - As of the end of the quarter, the company had approximately $465 million in unrestricted cash and cash equivalents, with a debt balance of approximately $1.34 billion [14][15] Q&A Session Summary Question: Can you elaborate on the relationship with Google and the new product? - Management acknowledged the question but noted connectivity issues, indicating they would circle back later [18][19] Question: What is the current state of the tourism market in Vegas? - Management reported no significant changes in visitation or spending, with international guests making up over 20% of Sphere attendees [22][23] Question: What are the revenue expectations for new Sphere experience shows? - Management expects higher revenues from new productions, indicating they will be more experiential and impactful [31] Question: What is the strategy for MSG Networks moving forward? - Management discussed pursuing a hybrid model between traditional linear and streaming distribution, exploring strategic partnerships [44] Question: How is the company managing costs moving forward? - Management emphasized a focus on driving profitable growth and optimizing infrastructure to identify cost efficiencies [47] Question: Can you provide an update on the Exosphere and sponsorship strategy? - Management highlighted progress in pricing and packaging, establishing relationships with media agencies, and building a recurring sponsorship business [60][61]

Financial Data and Key Metrics Changes - The company reported total revenues of $280.6 million and adjusted operating income of $36 million for the quarter [10] - The Sphere segment generated revenues of $157.5 million, a decrease from $170.4 million in the prior year period, primarily due to lower revenues from the Sphere experience and advertising campaigns [10][11] - Adjusted operating income for the Sphere segment was $13.1 million, slightly up from $12.9 million in the prior year period, reflecting a decrease in revenues offset by lower SG&A expenses [11] Business Line Data and Key Metrics Changes - The Sphere experience welcomed over half a million guests, contributing to total revenues exceeding $500 million since its debut in October 2023 [6] - MSG Networks generated $123 million in revenues and $22.8 million in adjusted operating income, down from $151 million and $48.6 million respectively in the prior year period, mainly due to a non-carriage period and a decrease in subscribers [13] Market Data and Key Metrics Changes - The Las Vegas market continues to attract over 40 million visitors annually, with international guests accounting for over 20% of Sphere attendees and 10% for concerts [22] - The company has seen strong consumer demand, with acts like Dead and Company and the Eagles scheduled for over 40 performances at the Sphere [7] Company Strategy and Development Direction - The company aims to drive growth by hosting a variety of concerts and events, optimizing the go-to-market strategy for the Exosphere, and enhancing operational efficiencies [5] - Plans are underway to develop a smaller Sphere model for faster and cheaper deployment in various markets, alongside the ongoing project in Abu Dhabi [37] Management's Comments on Operating Environment and Future Outlook - Management noted that despite macroeconomic concerns, there has not been a significant change in visitation or spending in Las Vegas [23] - The company remains optimistic about the demand for concerts, stating that demand exceeds capacity [23] Other Important Information - The company has entered into new marketing partnerships with major brands like Pepsi and Google, enhancing exposure on the Exosphere [8] - The company is focused on creating a diverse slate of original content and has multiple projects in development [6] Q&A Session Summary Question: Inquiry about the partnership with Google - Management acknowledged the question but noted connectivity issues and promised to circle back later [18] Question: Observations on the tourism market in Vegas - Management reported that international guests account for over 20% of Sphere attendees and noted no significant changes in visitation or spending [22][23] Question: Opportunities for new Sphere experience shows - Management expressed optimism about new shows driving higher revenues, expecting better performance compared to previous productions [30] Question: Update on concert residencies - Management confirmed ongoing discussions with multiple artists and noted that demand exceeds available slots [31][33] Question: Sphere expansion and geopolitical tensions - Management confirmed global discussions for Sphere expansion and mentioned designing a smaller Sphere for various markets [37] Question: Long-term plan for MSG Networks - Management discussed pursuing a hybrid model between traditional and streaming distribution, with potential strategic partnerships [42] Question: Cost management moving forward - Management emphasized a focus on driving profitable growth and optimizing infrastructure to identify cost efficiencies [44]

分组1 - Sphere Entertainment reported a quarterly loss of $2.27 per share, better than the Zacks Consensus Estimate of a loss of $2.48, but worse than a loss of $1.33 per share a year ago, indicating an earnings surprise of 8.47% [1] - The company posted revenues of $280.57 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.26%, but down from $321.33 million year-over-year [2] - Sphere Entertainment shares have declined approximately 26.1% since the beginning of the year, compared to a decline of 4.3% for the S&P 500 [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is -$1.99 on revenues of $282.18 million, and for the current fiscal year, it is -$5.40 on revenues of $1.19 billion [7] - The Zacks Industry Rank indicates that the Media Conglomerates sector is in the bottom 37% of over 250 Zacks industries, suggesting potential underperformance compared to higher-ranked industries [8]