Madison Square Garden Sports Corp. Files 10-Q for Period Ending December 31, 2023

AI Summary

Madison Square Garden Sports Corp. (MSGS) filed a Quarterly Report (10-Q) with the SEC on February 6, 2024. The filing covers the quarterly period ending December 31, 2023. Madison Square Garden Sports Corp. is incorporated in Delaware. The company's principal executive offices are located at Two Pennsylvania Plaza, New York, NY. The filing is a 10-Q, indicating a quarterly report. The report was filed on February 6, 2024.

Why It Matters

For investors and stakeholders tracking Madison Square Garden Sports Corp., this filing contains several important signals. This 10-Q filing provides investors with an update on the company's financial performance and operational status for the most recent quarter. Understanding the details within this report is crucial for assessing the company's current financial health and future prospects.

Risk Assessment

Risk Level: — Madison Square Garden Sports Corp. shows moderate risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain any immediate red flags or significant new disclosures that would suggest a high-risk profile based solely on the header information.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the full 10-Q filing to understand revenue, expenses, and any significant changes.

Key Numbers

• 2023-12-31 — Report Period End Date (Conformed period of report)
• 2024-02-06 — Filing Date (Filed as of date)
• 7990 — SIC Code (Standard Industrial Classification)

Key Players & Entities

• Madison Square Garden Sports Corp. (company) — Filer name
• Two Pennsylvania Plaza, New York, NY (location) — Business address
• 212-465-4111 (phone) — Business phone

Forward-Looking Statements

• The total outstanding share count will remain relatively stable in the near term, barring any significant share buybacks or new issuances. (Madison Square Garden Sports Corp.) — medium confidence, target: 2024-06-30

FAQ

Industry Context

Madison Square Garden Sports Corp. operates in the sports and entertainment industry, focusing on professional sports teams and related media and entertainment businesses.

Regulatory Implications

The company is subject to SEC regulations for public companies, requiring regular filings such as this 10-Q.

What Investors Should Do

1. Analyze the full 10-Q document for detailed financial statements.
2. Review the Management's Discussion and Analysis (MD&A) section for insights into performance drivers.
3. Check for any new risk factors or legal proceedings disclosed in the filing.

Key Dates

• 2024-02-06: 10-Q Filing — Submission of quarterly financial report
• 2023-12-31: Reporting Period End — End date for the financial data presented in the 10-Q

Year-Over-Year Comparison

This is a 10-Q filing, representing a quarterly update, and is distinct from a more comprehensive annual 10-K filing.

Key Financial Figures

• $0.01 — 2024: Class A Common Stock par value $0.01 per share — 19,416,405 Class B Common

Filing Documents

• msgs-20231231.htm (10-Q) — 1320KB
• msgsexhibit3111231202310q.htm (EX-31.1) — 10KB
• msgsexhibit3121231202310q.htm (EX-31.2) — 10KB
• msgsexhibit3211231202310q.htm (EX-32.1) — 3KB
• msgsexhibit3221231202310q.htm (EX-32.2) — 4KB
• msgs-20231231_g1.jpg (GRAPHIC) — 39KB
• 0001636519-24-000003.txt ( ) — 7304KB
• msgs-20231231.xsd (EX-101.SCH) — 56KB
• msgs-20231231_cal.xml (EX-101.CAL) — 69KB
• msgs-20231231_def.xml (EX-101.DEF) — 293KB
• msgs-20231231_lab.xml (EX-101.LAB) — 653KB
• msgs-20231231_pre.xml (EX-101.PRE) — 431KB
• msgs-20231231_htm.xml (XML) — 1008KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets as of December 31, 2023 (unaudited) and June 30, 2023 1 Consolidated Statements of Operations for the three and six months ended December 31, 2023 and 2022 (unaudited) 3 Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended December 31, 2023 and 2022 (unaudited) 4 Consolidated Statements of Cash Flows for the six months ended December 31, 2023 and 2022 (unaudited) 5 Consolidated Statements of Equity for the three and six months ended December 31, 2023 and 2022 (unaudited) 6

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 10

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 27

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 36

Controls and Procedures

Item 4. Controls and Procedures 37

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 38

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38

Exhibits

Item 6. Exhibits 39 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) December 31, 2023 June 30, 2023 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 37,880 $ 40,398 Restricted cash 3,352 61 Accounts receivable, net of allowance for doubtful accounts of $ 0 and $ 0 as of December 31, 2023 and June 30, 2023, respectively 72,668 40,139 Net related party receivables 17,334 15,969 Prepaid expenses 55,661 24,768 Other current assets 28,738 27,898 Total current assets 215,633 149,233 Property and equipment, net of accumulated depreciation and amortization of $ 50,701 and $ 49,117 as of December 31, 2023 and June 30, 2023, respectively 29,697 30,501 Right-of-use lease assets 706,569 715,283 Indefinite-lived intangible assets 103,644 103,644 Goodwill 226,523 226,523 Investments 62,112 67,374 Other assets 24,271 22,459 Total assets $ 1,368,449 $ 1,315,017 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) December 31, 2023 June 30, 2023 (Unaudited) LIABILITIES AND EQUITY Current Liabilities: Accounts payable $ 4,969 $ 9,093 Net related party payables 5,615 5,842 Debt 30,000 30,000 Accrued liabilities: Employee related costs 90,987 144,310 League-related accruals 110,904 106,926 Other accrued liabilities 9,653 17,561 Operating lease liabilities, current 50,683 49,745 Deferred revenue 257,626 157,051 Total current liabilities 560,437 520,528 Long-term debt 330,000 295,000 Operating lease liabilities, noncurrent 741,003 746,437 Defined benefit obligations 4,539 4,526 Other employee related costs 50,719 49,070 Deferred tax liabilities, net 19,535 24,024 Deferred revenue, noncurrent 1,405 12,666 Total liabilities 1,707,638 1,652,251 Commitments and contingencies (see Note 11) Madison Square Garden S

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." In addition, the Company previously owned a controlling interest in Counter Logic Gaming ("CLG"), a North American esports organization. In April 2023, the Company sold its controlling interest in CLG to Hard Carry Gaming Inc. ("NRG"), a professional gaming and entertainment company in exchange for a noncontrolling equity interest in the combined NRG/CLG company. CLG and the sports teams are collectively referred to herein as 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, its Chief Op

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. For consolidated subsidiaries where the Company's ownership is less than 100%, the relevant amounts attributable to investors other than the Company are reflected under "Nonredeemable noncontrolling interests," "Net income (loss) attributable to nonredeemable noncontrolling interests" and "Comprehensive income (loss) attributable to nonredeemable noncontrolling interests" in the accompanying consolidated balance sheets, the accompanying consolidated statements of operations and consolidated statements of comprehensive income (loss), respectively. 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, 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, 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 environme

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 and six months ended December 31, 2023 and 2022, the Company did not have any material 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 required entity-wide 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 and six months ended December 31, 2023 and 2022: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Event-related (a) $ 122,449 $ 142,308 $ 128,270 $ 147,654 Media rights (b) 122,547 118,158 129,766 125,144 Sponsorship, signage and suite licenses 69,316 81,021 74,630 85,835 League distributions and other 12,586 12,207 37,278 19,150 Total revenues from contracts with customers $ 326,898 $ 353,694 $ 369,944 $ 377,783 _________________ (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. 12 Table of Contents MADISON SQUARE GARDEN SPORTS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued) The timing of revenue recognition, billings and cash collections results in billed receivables, contract assets and contract liabilities on the consolidated balance sheet. The following table provides information about contract balances from the Company's contracts with customers as of December 31, 2023 and June 30, 2023. December 31, June 30, 2023 2023 Receivables from contracts with customers, net (a) $ 65,963 $ 20,134 Contract assets, current (b) 19,134 19,465 Deferred revenue, including non-current portion (c), (d) 259,031 169,717 _________________ (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 December 31, 2023 and June 30, 2023, the Company's receivables reported above incl uded $ 2,012 and $ 0 , respectively, related to contracts with customers who are related parties. See Note 16 for further details on related party arrangements. Receivables from contracts with customers, net, excludes amounts recorded in Accounts receivable, net, associated with amounts due from the NBA and NHL related to escrow and p