MSG Sports Files Q1 2025 10-Q

TL;DR

**MSG Sports Q1 2025 10-Q filed. Financials out.**

AI Summary

Madison Square Garden Sports Corp. filed its 10-Q for the period ending September 30, 2024. The filing details financial performance and operational updates for the first fiscal quarter of 2025. Key financial figures and segment performance are presented, reflecting the company's ongoing business activities in sports and entertainment.

Why It Matters

This filing provides investors with the latest financial snapshot of Madison Square Garden Sports Corp., crucial for understanding the company's performance and outlook in the sports and entertainment sector.

Risk Assessment

Risk Level: medium — 10-Q filings are standard for public companies, but the specific financial details and operational risks disclosed within can vary significantly, impacting investor decisions.

Key Numbers

• Q1 2025 — Fiscal Quarter (Reporting period for this 10-Q filing)
• 2024-07-01 to 2024-09-30 — Reporting Period (Specific dates covered by the financial statements)

Key Players & Entities

• Madison Square Garden Sports Corp. (company) — Filer of the 10-Q
• 20240930 (date) — End of the reporting period
• 20241101 (date) — Filing date
• Two Pennsylvania Plaza, New York, NY 10121 (location) — Company's business and mailing address

FAQ

Key Financial Figures

• $0.01 — 2024: Class A Common Stock par value $0.01 per share — 19,464,513 Class B Common

Filing Documents

• msgs-20240930.htm (10-Q) — 963KB
• msgsexhibit311930202410q.htm (EX-31.1) — 10KB
• msgsexhibit312930202410q.htm (EX-31.2) — 10KB
• msgsexhibit321930202410q.htm (EX-32.1) — 3KB
• msgsexhibit322930202410q.htm (EX-32.2) — 4KB
• msgs-20240930_g1.jpg (GRAPHIC) — 39KB
• 0001636519-24-000027.txt ( ) — 6427KB
• msgs-20240930.xsd (EX-101.SCH) — 51KB
• msgs-20240930_cal.xml (EX-101.CAL) — 68KB
• msgs-20240930_def.xml (EX-101.DEF) — 257KB
• msgs-20240930_lab.xml (EX-101.LAB) — 553KB
• msgs-20240930_pre.xml (EX-101.PRE) — 399KB
• msgs-20240930_htm.xml (XML) — 839KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets as of Septem ber 3 0 , 2024 (unaudited) and June 30, 202 4 1 Consolidated Statements of Operations for the three months ended September 3 0 , 2024 and 2023 (unaudited) 3 Consolidated Statements of Comprehensive Income (Los s) for the three months ended September 3 0 , 2024 and 2023 (unaudited) 4 Consolidated Statements of Cash Flows for the three months ended September 30 , 2024 and 2023 (unaudited) 5 Consolidated Statements of Equity for the three months ended September 30 , 2024 and 2023 (unaudited) 6

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 25

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 33

Controls and Procedures

Item 4. Controls and Procedures 33

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 34

Risk Factors

Item 1A. Risk Factors 34

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 35

Exhibits

Item 6. Exhibits 36 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) September 30, 2024 June 30, 2024 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 52,252 $ 89,136 Restricted cash 5,832 5,771 Accounts receivable, net of allowance for doubtful accounts of $ 0 as of September 30, 2024 and June 30, 2024 45,302 33,781 Net related party receivables 26,018 32,255 Prepaid expenses 84,260 30,956 Other current assets 22,116 25,043 Total current assets 235,780 216,942 Property and equipment, net of accumulated depreciation and amortization of $ 51,199 and $ 52,281 as of September 30, 2024 and June 30, 2024, respectively 28,282 28,541 Right-of-use lease assets 692,412 694,566 Indefinite-lived intangible assets 103,644 103,644 Goodwill 226,523 226,523 Investments 64,450 62,543 Other assets 22,206 13,533 Total assets $ 1,373,297 $ 1,346,292 See accompanying notes to consolidated financial statements. 1 Table of Contents MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED BALANCE SHEETS (Continued) (in thousands, except per share data) September 30, 2024 June 30, 2024 (Unaudited) LIABILITIES AND EQUITY Current Liabilities: Accounts payable $ 5,334 $ 9,900 Net related party payables 4,658 6,718 Debt 30,000 30,000 Accrued liabilities: Employee related costs 68,766 133,930 League-related accruals 98,215 120,876 Other accrued liabilities 11,064 21,613 Operating lease liabilities, current 49,799 50,267 Deferred revenue 306,839 148,678 Total current liabilities 574,675 521,982 Long-term debt 275,000 275,000 Operating lease liabilities, noncurrent 738,555 749,952 Defined benefit obligations 4,104 4,103 Other employee related costs 47,580 43,493 Deferred tax liabilities, net 9,792 16,925 Deferred revenue, noncurrent 1,120 1,147 Total liabilities 1,650,826 1,612,602 Commitments and contingencies (see Note 11) Madison Square Garden Sports Corp. Stock

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) All amounts included in the following Notes to Consolidated Financial Statements are presented in thousands, except per share data or as otherwise noted. Note 1. Description of Business and Basis of Presentation Description of Business Madison Square Garden Sports Corp. (together with its subsidiaries, collectively, "we," "us," "our," "MSG Sports," or the "Company") owns and operates a portfolio of assets featuring some of the most recognized teams in all of sports, including the New York Knickerbockers ("Knicks") of the National Basketball Association ("NBA") and the New York Rangers ("Rangers") of the National Hockey League ("NHL"). Both the Knicks and the Rangers play their home games in Madison Square Garden Arena ("The Garden"). The Company's other professional sports franchises include two development league teams — the Hartford Wolf Pack of the American Hockey League and the Westchester Knicks of the NBA G League. These professional sports franchises are collectively referred to herein as the "sports teams" or the "teams." The Company also operates a professional sports team performance center — the Madison Square Garden Training Center in Greenburgh, NY. The Company operates and reports financial information in one segment. The Company's decision to organize as one operating segment and report in one segment is based upon its internal organizational structure; the manner in which its operations are managed; and the criteria used by the Company's Executive Chairman and Chief Executive Officer, its Chief Operating Decision Maker ("CODM"), to evaluate segment performance. The Company's CODM reviews total company operating results to assess overall performance and allocate resources. The Company was incorporated on March 4, 2015 as an indirect, wholly-owned subsidiary of MSG Networks Inc. ("MSG Networks"). All the outstanding common stock of the Company was distributed to MSG Networks stockholders (t

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 2. Accounting Policies Principles of Consolidation The consolidated financial statements of the Company include the accounts of Madison Square Garden Sports Corp. and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the accompanying Financial Statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, other current assets, goodwill, intangible assets, other long-lived assets, fair value of investments, deferred tax valuation allowance, tax accruals, and other liabilities. In addition, estimates are used in revenue recognition, revenue sharing expense (net of escrow and excluding playoffs), luxury tax expense, income tax expense (benefit), performance and share-based compensation, depreciation and amortization, litigation matters and other matters. Management believes its use of estimates in the Financial Statements to be reasonable. Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management's best judgment at a point in time and, as such, these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company's control could be

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 3. Revenue Recognition Contracts with Customers All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers. For the three months ended September 30, 2024 and 2023, the Company did not have any impairment losses on receivables or contract assets arising from contracts with customers. Disaggregation of Revenue The following table disaggregates the Company's revenues by type of goods or services in accordance with the disclosure requirements set forth in ASC Subtopic 280-10-50-38 to 40 and the disaggregation of revenue required disclosures in accordance with ASC Subtopic 606-10-50-5 for the three months ended September 30, 2024 and 2023: Three Months Ended September 30, 2024 2023 Event-related (a) $ 6,085 $ 5,821 Media rights (b) 7,353 7,219 Sponsorship, signage and suite licenses 5,188 5,314 League distributions and other 34,681 24,692 Total revenues from contracts with customers $ 53,307 $ 43,046 _________________ (a) Consists of (i) ticket sales and other ticket-related revenues, and (ii) food, beverage and merchandise sales at The Garden. (b) Consists of (i) local media rights fees, (ii) revenue from the distribution through league-wide national television contracts, and (iii) other local radio rights fees. 10 Table of Contents MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Contract Balances The timing of revenue recognition, billings and cash collections results in billed receivables, contract assets and contract liabilities on the consolidated balance sheets. The following table provides information about contract balances from the Company's contracts with customers as of September 30, 2024 and June 30, 2024: September 30, June 30, 2024 2024 Receivables from contracts with customers, net (a) $ 45,210 $ 19,930 Contract assets, current (b) 9,333 14,054 Deferred revenue, including non-current portion (c), (d) 307,959 149,825 _________________ (a) Receivables from contracts with customers, net, which are reported in Accounts receivable, net and Net related party receivables in the accompanying consolidated balance sheets, represent the Company's unconditional rights to consideration under its contracts with customers. As of September 30, 2024 and June 30, 2024, the Company's receivables reported above incl uded $ 235 and $ 0 , respectively, related to contracts with customers that are related parties. See Note 16 for further details on these related party arrangements. Receivables from contracts with customers, net, excludes amounts recorded in Accounts receivable, net, associated with amounts due from the NBA related to luxury tax payments. (b) Contract assets, current, which are reported as Other current assets in the accompanying consolidated balance sheets, primarily relate to the Company's rights to consideration for goods or services transferred to the customer, for which the Company does not have an unconditional right to bill as of the reporting date. Contract assets are transferred to accounts receivable once the Company's right to consideration becomes unconditional. (c) Deferred revenue, including non-current portion, primarily relates to the Company's receipt of consideration from customers, inclusive of sales tax collected, or billing custom

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 4. Computation of Earnings (Loss) per Common Share The following table presents a reconciliation of loss allocated to common shares and a reconciliation of weighted-average shares used in the calculations of basic and diluted loss per common share attributable to the Company's stockholders ("EPS") and the number of shares excluded from diluted loss per common share, as they were anti-dilutive. Three Months Ended September 30, 2024 2023 Net loss allocable to common shares, basic and diluted (numerator): Net loss $ ( 7,542 ) $ ( 18,821 ) Less: Dividends to other-than-common stockholders (a) 8 6 Net earnings allocable to common shares, basic and diluted (numerator): $ ( 7,550 ) $ ( 18,827 ) Weighted-average shares (denominator): Weighted-average shares for basic EPS 24,049 23,971 Dilutive effect of shares issuable under share-based compensation plans — — Weighted-average shares for diluted EPS 24,049 23,971 Weighted-average shares excluded from diluted EPS 92 94 Basic loss per common share attributable to Madison Square Garden Sports Corp.'s stockholders $ ( 0.31 ) $ ( 0.79 ) Diluted loss per common share attributable to Madison Square Garden Sports Corp.'s stockholders $ ( 0.31 ) $ ( 0.79 ) _________________ (a) Dividends to other-than-common stockholders consists of forfeitable rights to dividends declared and payable to holders of the Company's unvested restricted stock units and performance restricted stock units. Note 5. Team Personnel Transactions Direct operating and selling, general and administrative expenses in the accompanying consolidated statements of operations include a net provision or credit for transactions relating to the Company's sports teams for waiver/contract termination costs, player trades and season-ending injuries ("Team personnel transactions"). Team personnel transactions were a net provision of $ 833 for the three months ended September 30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) Note 7. Leases The Company's leases primarily consist of the lease of the Company's principal executive offices under the Sublease Agreement with MSG Entertainment (the "Sublease Agreement") and a lease agreement for an aircraft. In addition, the Company accounts for the rights of use of The Garden pursuant to the Arena License Agreements (as defined below) as l

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