Madison Square Garden Sports Corp. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Madison Square Garden Sports Corp. filed its Q3 FY2024 10-Q report on May 3, 2024, detailing financial performance and corporate information.</b>

AI Summary

Madison Square Garden Sports Corp. (MSGS) filed a Quarterly Report (10-Q) with the SEC on May 3, 2024. The filing covers the third quarter of fiscal year 2024, ending March 31, 2024. Madison Square Garden Sports Corp. is incorporated in Delaware. The company's principal business address is Two Pennsylvania Plaza, New York, NY 10121. The filing is a 10-Q report, indicating a quarterly financial update. The Standard Industrial Classification code is 7990 (Services-Miscellaneous Amusement & Recreation).

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 the latest quarterly financial data, crucial for assessing the company's performance and making informed investment decisions. Understanding the company's operational segments and financial health as detailed in this report is key for evaluating its market position and future prospects.

Risk Assessment

Risk Level: low — Madison Square Garden Sports Corp. shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain unusual or high-risk disclosures, indicating routine business operations.

Analyst Insight

Review the detailed financial statements and segment performance within the 10-Q to understand revenue drivers and cost structures for Q3 FY2024.

Key Numbers

• 2024-03-31 — Reporting Period End Date (Conformed period of report)
• 2024-05-03 — Filing Date (Filed as of date)
• 0630 — Fiscal Year End (Fiscal year end)
• 7990 — SIC Code (Standard Industrial Classification)

Key Players & Entities

• Madison Square Garden Sports Corp. (company) — Filer name
• 2024-03-31 (date) — Conformed period of report
• 2024-05-03 (date) — Filed as of date
• Two Pennsylvania Plaza (address) — Business address
• New York (location) — Business address city
• DE (location) — State of incorporation
• 7990 (industry_code) — Standard Industrial Classification
• 212-465-4111 (phone) — Business phone

FAQ

Industry Context

Madison Square Garden Sports Corp. operates within the amusement and recreation services industry, focusing on sports and entertainment events.

Regulatory Implications

The company is subject to standard SEC regulations for public companies, including quarterly reporting requirements under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze the financial statements for revenue and expenses in the reported quarter.
2. Review any disclosures related to operational segments or significant business developments.
3. Compare current quarter performance to historical data if available in the full filing.

Year-Over-Year Comparison

This is a standard 10-Q filing for the period ending March 31, 2024, providing updated quarterly financial information.

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-20240331.htm (10-Q) — 1358KB
• msgsexhibit311331202410q.htm (EX-31.1) — 10KB
• msgsexhibit312331202410q.htm (EX-31.2) — 10KB
• msgsexhibit321331202410q.htm (EX-32.1) — 3KB
• msgsexhibit322331202410q.htm (EX-32.2) — 4KB
• msgs-20240331_g1.jpg (GRAPHIC) — 39KB
• 0001636519-24-000006.txt (&nbsp;) — 7369KB
• msgs-20240331.xsd (EX-101.SCH) — 56KB
• msgs-20240331_cal.xml (EX-101.CAL) — 70KB
• msgs-20240331_def.xml (EX-101.DEF) — 294KB
• msgs-20240331_lab.xml (EX-101.LAB) — 600KB
• msgs-20240331_pre.xml (EX-101.PRE) — 433KB
• msgs-20240331_htm.xml (XML) — 1034KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets as of March 31, 202 4 (unaudited) and June 30, 2023 1 Consolidated Statements of Operations for the three and nine months ended March 31, 202 4 and 202 3 (unaudited) 3 Consolidated Statements of Comprehensive Income for the three and nine months ended March 31, 202 4 and 202 3 (unaudited) 4 Consolidated Statements of Cash Flows for the nine months ended March 31, 202 4 and 202 3 (unaudited) 5 Consolidated Statements of Equity for the three and nine months ended March 31, 202 4 and 202 3 (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) March 31, 2024 June 30, 2023 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 40,033 $ 40,398 Restricted cash 4,751 61 Accounts receivable, net of allowance for doubtful accounts of $ 0 as of March 31, 2024 and June 30, 2023 76,843 40,139 Net related party receivables 23,190 15,969 Prepaid expenses 31,800 24,768 Other current assets 74,028 27,898 Total current assets 250,645 149,233 Property and equipment, net of accumulated depreciation and amortization of $ 51,490 and $ 49,117 as of March 31, 2024 and June 30, 2023, respectively 29,062 30,501 Right-of-use lease assets 697,464 715,283 Indefinite-lived intangible assets 103,644 103,644 Goodwill 226,523 226,523 Investments 61,443 67,374 Other assets 19,690 22,459 Total assets $ 1,388,471 $ 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) March 31, 2024 June 30, 2023 (Unaudited) LIABILITIES AND EQUITY Current Liabilities: Accounts payable $ 5,906 $ 9,093 Net related party payables 5,107 5,842 Debt 30,000 30,000 Accrued liabilities: Employee related costs 151,731 144,310 League-related accruals 117,472 106,926 Other accrued liabilities 49,075 17,561 Operating lease liabilities, current 50,376 49,745 Deferred revenue 116,888 157,051 Total current liabilities 526,555 520,528 Long-term debt 330,000 295,000 Operating lease liabilities, noncurrent 756,871 746,437 Defined benefit obligations 4,333 4,526 Other employee related costs 48,569 49,070 Deferred tax liabilities, net 14,894 24,024 Deferred revenue, noncurrent 1,204 12,666 Total liabilities 1,682,426 1,652,251 Commitments and contingencies (see Note 11) Madison Square Garden Sports Corp. Stockholders' Equity

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 nine months ended March 31, 2024 and 2023, 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 nine months ended March 31, 2024 and 2023: Three Months Ended Nine Months Ended March 31, March 31, 2024 2023 2024 2023 Event-related (a) $ 177,826 $ 144,650 $ 306,096 $ 292,304 Media rights (b) 139,579 135,200 269,345 260,344 Sponsorship, signage and suite licenses 101,402 90,340 176,032 176,175 League distributions and other 11,147 12,554 48,425 31,704 Total revenues from contracts with customers $ 429,954 $ 382,744 $ 799,898 $ 760,527 _________________ (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 March 31, 2024 and June 30, 2023. March 31, June 30, 2024 2023 Receivables from contracts with customers, net (a) $ 58,782 $ 20,134 Contract assets, current (b) 64,724 19,465 Deferred revenue, including non-current portion (c), (d) 118,092 169,717 _________________ (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 March 31, 2024 and June 30, 2023, the Company's receivables reported above incl uded $ 1,970 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 player compensation recoveries and luxury tax payments. As of March 31, 2024 and June 30, 2023, the Company had receivable balances related to escrow and player compensation recoveries of $ 7,058 and $ 1,544 , respectively, reco rded in Accounts receivable, net. (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 good