10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

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: 1-34434

________________________

MSG Networks Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-0624498
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

_______________________ 

11 Pennsylvania Plaza

New York, NY 10001

(212) 465-6400

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

_______________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filero Non-accelerated filer o

Smaller reporting company o Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	MSGN	New York Stock Exchange

Number of shares of common stock outstanding as of April 30, 2019:

Class A Common Stock par value $0.01 per share	—	61,286,747
Class B Common Stock par value $0.01 per share	—	13,588,555

MSG NETWORKS INC.

INDEX TO FORM 10-Q

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2019 (unaudited) and June 30, 2018	1
Consolidated Statements of Operations for the three and nine months ended March 31, 2019 and 2018 (unaudited)	1
Consolidated Statements of Comprehensive Income for the three and nine months ended March 31, 2019 and 2018 (unaudited)	2
Consolidated Statements of Cash Flows for the nine months ended March 31, 2019 and 2018 (unaudited)	3
Consolidated Statements of Stockholders' Deficiency for the three and nine months ended March 31, 2019 and 2018 (unaudited)	4
Notes to Consolidated Financial Statements (unaudited)	6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosures About Market Risk	27
Item 4. Controls and Procedures	27
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	28
Item 6. Exhibits	28
Signature	29

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MSG NETWORKS INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

	March 31, 2019			June 30, 2018
ASSETS	(unaudited)
Current Assets:
Cash and cash equivalents	$	182,261		$	205,343
Accounts receivable, net	110,619			110,657
Related party receivables, net	30,880			12,100
Prepaid income taxes	2,411			1,134
Prepaid expenses	4,574			4,489
Other current assets	6,157			4,719
Total current assets	336,902			338,442
Property and equipment, net	8,653			10,029
Amortizable intangible assets, net	34,608			37,203
Goodwill	424,508			424,508
Other assets	39,978			39,430
Total assets	$	844,649		$	849,612
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Accounts payable	$	427		$	1,460
Related party payables	1,130			785
Current portion of long-term debt	98,664			72,414
Income taxes payable	5,593			8,460
Accrued liabilities:
Employee related costs	13,214			15,342
Other accrued liabilities	10,209			8,129
Deferred revenue	2,196			4,626
Total current liabilities	131,433			111,216
Long-term debt, net of current portion	937,457			1,118,017
Defined benefit and other postretirement obligations	26,026			28,170
Other employee related costs	4,602			4,560
Other liabilities	3,928			3,974
Deferred tax liability	244,544			241,417
Total liabilities	1,347,990			1,507,354
Commitments and contingencies (see Note 8)
Stockholders' Deficiency:
Class A Common stock, par value $0.01, 360,000 shares authorized; 61,287 and 61,017 shares outstanding as of March 31, 2019 and June 30, 2018, respectively	643			643
Class B Common stock, par value $0.01, 90,000 shares authorized; 13,589 shares outstanding as of March 31, 2019 and June 30, 2018	136			136
Preferred stock, par value $0.01, 45,000 shares authorized; none outstanding	—			—
Additional paid-in capital	5,487			4,067
Treasury stock, at cost 2,972 and 3,242 shares as of March 31, 2019 and June 30, 2018, respectively	(179,561		)	(195,881		)
Accumulated deficit	(323,593		)	(460,007		)
Accumulated other comprehensive loss	(6,453		)	(6,700		)
Total stockholders' deficiency	(503,341		)	(657,742		)
Total liabilities and stockholders' deficiency	$	844,649		$	849,612

See accompanying notes to consolidated financial statements.

MSG NETWORKS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited) (in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Revenues	$	195,105		$	186,568		$	552,483		$	525,246
Direct operating expenses (including related party expenses of $38,283 and $37,344 for the three months ended March 31, 2019 and 2018, respectively, and $114,586 and $111,357 for the nine months ended March 31, 2019 and 2018, respectively)	82,085			80,322			230,210			222,315
Selling, general and administrative expenses (including related party expenses of $9,739 and $8,719 for the three months ended March 31, 2019 and 2018, respectively, and $21,464 and $18,871 for the nine months ended March 31, 2019 and 2018, respectively)	28,734			23,383			76,931			63,255
Depreciation and amortization	1,805			2,279			5,650			7,153
Operating income	82,481			80,584			239,692			232,523
Other income (expense):
Interest income	1,557			1,195			4,571			3,072
Interest expense	(11,658		)	(10,932		)	(35,273		)	(31,817		)
Other components of net periodic benefit cost	(413		)	(407		)	(1,231		)	(1,221		)
	(10,514		)	(10,144		)	(31,933		)	(29,966		)
Income from operations before income taxes	71,967			70,440			207,759			202,557
Income tax benefit (expense)	(17,732		)	(23,505		)	(62,756		)	41,103
Net income	$	54,235		$	46,935		$	145,003		$	243,660
Earnings per share:
Basic
Net income	$	0.72		$	0.62		$	1.93		$	3.23
Diluted
Net income	$	0.72		$	0.62		$	1.92		$	3.21
Weighted-average number of common shares outstanding:
Basic	75,152			75,540			75,041			75,427
Diluted	75,739			76,017			75,712			75,844

See accompanying notes to consolidated financial statements.

1

MSG NETWORKS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited) (in thousands)

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Net income	$	54,235		$	46,935		$	145,003		$	243,660
Other comprehensive income (loss) before income taxes:
Pension plans and postretirement plan:
Amounts reclassified from accumulated other comprehensive loss:
Amortization of net actuarial loss included in net periodic benefit cost	119			149			357			447
Amortization of net prior service credit included in net periodic benefit cost	(2		)	(3		)	(6		)	(9		)
Settlement gain	—			—			(8		)	—
Other comprehensive income before income taxes	117			146			343			438
Income tax expense related to items of other comprehensive income	(32		)	(42		)	(96		)	(164		)
Other comprehensive income	85			104			247			274
Comprehensive income	$	54,320		$	47,039		$	145,250		$	243,934

See accompanying notes to consolidated financial statements.

2

MSG NETWORKS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (in thousands)

	Nine Months Ended
	March 31,
	2019			2018
Cash flows from operating activities:
Net income	$	145,003		$	243,660
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,650			7,153
Amortization of deferred financing costs	2,252			2,252
Share-based compensation expense	13,658			10,581
Provision for doubtful accounts	(756		)	183
Change in assets and liabilities:
Accounts receivable, net	932			(4,266		)
Related party receivables, net	(18,918		)	(9,016		)
Prepaid expenses and other assets	377			53
Accounts payable	(1,033		)	(587		)
Related party payables, including payable to MSG	466			(2,003		)
Prepaid/payable for income taxes	(4,144		)	22,568
Accrued and other liabilities	(1,856		)	1,194
Deferred revenue	(2,430		)	1,929
Deferred income taxes	2,879			(108,850		)
Net cash provided by operating activities	142,080			164,851
Cash flows from investing activities:
Capital expenditures	(1,912		)	(1,470		)
Investment in nonconsolidated entity	(2,000		)	—
Net cash used in investing activities	(3,912		)	(1,470		)
Cash flows from financing activities:
Principal repayments on Term Loan Facility (see Note 7)	(156,250		)	(106,250		)
Taxes paid in lieu of shares issued for share-based compensation	(5,000		)	(3,644		)
Net cash used in financing activities	(161,250		)	(109,894		)
Net increase (decrease) in cash and cash equivalents	(23,082		)	53,487
Cash and cash equivalents at beginning of period	205,343			141,087
Cash and cash equivalents at end of period	$	182,261		$	194,574

See accompanying notes to consolidated financial statements.

3

MSG NETWORKS INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited) (in thousands)

	Common Stock Issued		Additional Paid-In Capital		Treasury Stock			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
Balance as of December 31, 2018	$	779	$	1,116	$	(179,561	)	$	(377,828	)	$	(6,538	)	$	(562,032	)
Net income	—		—		—			54,235			—			54,235
Other comprehensive income	—		—		—			—			85			85
Comprehensive income														54,320
Share-based compensation expense	—		4,371		—			—			—			4,371
Balance as of March 31, 2019	$	779	$	5,487	$	(179,561	)	$	(323,593	)	$	(6,453	)	$	(503,341	)

	Common Stock Issued		Additional Paid-In Capital		Treasury Stock			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
Balance as of December 31, 2017	$	779	$	349	$	(184,449	)	$	(553,535	)	$	(6,386	)	$	(743,242	)
Net income	—		—		—			46,935			—			46,935
Other comprehensive income	—		—		—			—			104			104
Comprehensive income														47,039
Share-based compensation expense	—		2,862		—			—			—			2,862
Reclassification of stranded tax effects	—		—		—			1,391			(1,391		)	—
Balance as of March 31, 2018	$	779	$	3,211	$	(184,449	)	$	(505,209	)	$	(7,673	)	$	(693,341	)

4

MSG NETWORKS INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY (continued)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2019 AND 2018

(Unaudited) (in thousands)

	Common Stock Issued		Additional Paid-In Capital			Treasury Stock			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
Balance as of June 30, 2018	$	779	$	4,067		$	(195,881	)	$	(460,007	)	$	(6,700	)	$	(657,742	)
Net income	—		—			—			145,003			—			145,003
Other comprehensive income	—		—			—			—			247			247
Comprehensive income															145,250
Share-based compensation expense	—		13,658			—			—			—			13,658
Tax withholding associated with shares issued for share-based compensation	—		(4,879		)	—			—			—			(4,879		)
Shares issued upon distribution of Restricted Stock Units	—		(7,359		)	16,320			(8,961		)	—			—
Cumulative effect of adoption of ASC 606	—		—			—			372			—			372
Balance as of March 31, 2019	$	779	$	5,487		$	(179,561	)	$	(323,593	)	$	(6,453	)	$	(503,341	)

	Common Stock Issued		Additional Paid-In Capital			Treasury Stock			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
Balance as of June 30, 2017	$	779	$	6,909		$	(198,800	)	$	(746,539	)	$	(6,556	)	$	(944,207	)
Net income	—		—			—			243,660			—			243,660
Other comprehensive income	—		—			—			—			274			274
Comprehensive income															243,934
Share-based compensation expense	—		10,581			—			—			—			10,581
Tax withholding associated with shares issued for share-based compensation	—		(3,649		)	—			—			—			(3,649		)
Shares issued upon distribution of Restricted Stock Units	—		(10,630		)	14,351			(3,721		)	—			—
Reclassification of stranded tax effects	—		—			—			1,391			(1,391		)	—
Balance as of March 31, 2018	$	779	$	3,211		$	(184,449	)	$	(505,209	)	$	(7,673	)	$	(693,341	)

See accompanying notes to consolidated financial statements.

5

MSG NETWORKS INC.

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

MSG Networks Inc. (together with its subsidiaries, the “Company”), incorporated on July 29, 2009, owns and operates two regional sports and entertainment networks, MSG Network and MSG+.

On September 30, 2015, the Company distributed to its stockholders all of the outstanding common stock of The Madison Square Garden Company (“MSG”) (the “Distribution”). Following the Distribution, the Company no longer consolidates the financial results of MSG for purposes of its own financial reporting.

The Company operates and reports financial information in one segment. Substantially all revenues and assets of the Company are attributed to or located in the United States and are primarily concentrated in the New York City metropolitan area.

Unaudited Interim Financial Statements

The accompanying interim consolidated unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2018. The financial statements as of March 31, 2019 and for the three and nine months ended March 31, 2019 and 2018 presented in this Quarterly Report on Form 10-Q are unaudited; however, in the opinion of management such financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. The results of operations for the periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year.

Note 2. Accounting Policies

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of MSG Networks Inc. and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amount of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amount of revenues and expenses. Such estimates include the valuation of accounts receivable, investments, goodwill, other long-lived assets, pension and other postretirement benefit obligations and the related net periodic benefit cost, tax accruals, and other liabilities. In addition, estimates are used in revenue recognition, income tax benefit (expense), performance and share-based compensation, depreciation and amortization, litigation matters, and other matters. Management believes its use of estimates in the consolidated 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 material and would be reflected in the Company’s financial statements in future periods.

Investment in Nonconsolidated Entity

The Company’s investment in a nonconsolidated entity, which is included in other assets in the accompanying consolidated balance sheet, does not have a readily determinable fair value. As such, the Company has elected to account for it at cost, which would be adjusted for impairment and changes resulting from observable price fluctuations in orderly transactions for an identical or a similar investment of the same issuer (referred to as the measurement alternative method). Investments accounted for under the measurement alternative method are classified within Level III of the fair value hierarchy. As of March 31, 2019, the Company did not identify any potential adjustments to the cost of its investment.

6

MSG NETWORKS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

Accounts Receivable

Accounts receivable is recorded at net realizable value. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables. The allowance for doubtful accounts is estimated based on the Company’s analysis of receivables aging, specific identification of certain receivables that are at risk of not being paid, past collection experience and other factors. The Company’s allowance for doubtful accounts was $1,215 and $509 as of March 31, 2019 and June 30, 2018, respectively.

Recently Adopted Accounting Pronouncements

The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), and the subsequent ASUs that amended and/or clarified the application of ASU No. 2014-09 (collectively, “Topic 606”) on July 1, 2018 (“Adoption Date”). Topic 606 superseded the revenue recognition requirements in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition. The Company applied the modified retrospective approach for all contracts not completed as of the Adoption Date, and as a result, recorded a decrease to the opening accumulated deficit of $372, net of tax.

The reported results as of and for the three and nine months ended March 31, 2019 reflect the application of Topic 606, while the reported results for prior periods have not been adjusted to reflect Topic 606, and continue to be presented under the prior revenue recognition accounting guidance. The amount by which each financial statement line item has been affected in the current reporting period by the application of Topic 606 compared to historical policies is not material, therefore, comparative disclosures have been omitted. The adoption of Topic 606 did not result in significant changes in the way the Company records revenues. However, as a result of adopting Topic 606, there are certain components of the Company’s revenues where Topic 606 generally results in different recognition of revenue compared to the Company’s historical policies.

The following table provides changes to each applicable opening balance on the Company’s consolidated balance sheet resulting from the adoption of Topic 606:

	June 30, 2018		Impact of Adoption		July 1, 2018
Current assets	$	338,442	$	585	$	339,027
Total assets	849,612		760		850,372
Current liabilities	111,216		—		111,216
Total liabilities	1,507,354		388		1,507,742

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which amends ASC Topic 230, Statement of Cash Flows to eliminate the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on various cash flow issues. This standard was adopted by the Company in the first quarter of fiscal year 2019, and was applied retrospectively. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses, which will effect various areas of accounting including, but not limited to, goodwill and consolidation. This standard was adopted by the Company in the first quarter of fiscal year 2019, and was applied prospectively. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the measurement of goodwill impairment by eliminating the requirement of performing a hypothetical purchase price allocation. Instead, impairment will be measured using the difference between the carrying amount and fair value of the reporting unit, not to exceed the carrying amount of goodwill. The amended guidance also eliminates the requirement for any reporting unit with a zero or a negative carrying amount to perform a qualitative assessment, and will require disclosure of the amount of goodwill allocated to each reporting unit with a zero or a negative carrying amount of net assets. This standard was early adopted by the Company in the first quarter of fiscal year 2019, and was applied prospectively. Based on the Company’s most recent annual goodwill impairment test completed in the first quarter of fiscal year 2019, the adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

7

MSG NETWORKS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

In May 2017, the FASB issued ASU No. 2017-09, Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This standard does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification, and would not be required if the changes are considered non-substantive. This standard was adopted by the Company in the first quarter of fiscal year 2019, and will be applied prospectively to any changes to the terms and conditions of share-based payment awards made on or after the adoption date should they occur. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), and subsequent ASUs that amended and/or clarified the application of ASU No. 2016-02, which supersedes the current guidance in ASC Topic 840, Leases. This ASU generally requires the recognition of all lease assets and lease liabilities on the balance sheet, including those leases classified as operating leases under previous GAAP. The amended guidance also requires additional quantitative and qualitative disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases in order to provide additional information about the nature of an organization’s leasing activities. This standard will be effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted, and the modified retrospective approach required. The Company does not plan to early adopt this standard. The Company is compiling the necessary data and is in the process of determining which practical expedients to apply upon adoption. The adoption of this standard will result in the recognition of right of use assets and lease liabilities related to the Company’s identified leases.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses, which introduces a new impairment model for most financial assets and certain other instruments. For trade and other receivables, the Company will be required to use a forward-looking “expected loss” model that will replace the current “incurred loss” model and generally will result in earlier recognition of allowances for losses. This standard will be effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-14, Compensation — Retirement Benefits — Defined Benefit Plans — General (Topic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans, which removes, adds, or clarifies disclosure requirements relating to defined benefit plans to improve disclosure effectiveness. This standard will be effective for the Company beginning in the fourth quarter of fiscal year 2020, with early adoption permitted. The standard is to be applied retroactively to all periods presented. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2019, the FASB issued ASU No. 2019-02, Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and Entertainment-Broadcasters-Intangibles-Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials, which amends ASC Subtopic 920-350 to align the accounting for production costs of an episodic television series with that for the costs of producing films. This standard will be effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The standard is to be applied prospectively to all periods presented. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

Note 3. Revenue Recognition

The Company generates revenues principally from affiliation fees charged to cable, satellite, telephone and other platforms (“Distributors”) for the right to carry its networks, as well as from the sale of advertising. The Company’s advertising revenue is largely derived from the sale of inventory in its live professional sports programming, as such, a disproportionate share of this revenue has historically been earned in the Company’s second and third fiscal quarters. The Company’s revenue recognition policies that describe the nature, amount, timing and uncertainty associated with each major source of revenue from contracts with customers are summarized below.

Affiliation Fee Revenue

Affiliation fee revenue is earned from Distributors for the right to carry the Company’s networks under contracts, commonly referred to as “affiliation agreements.” The Company’s performance obligation under its affiliation agreements is satisfied as the Company provides its programming over the term of the affiliation agreement.

8

MSG NETWORKS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

Historically, affiliation fee revenue has constituted at least 90% of the Company’s consolidated revenues on a full fiscal year basis, however, given the timing of its advertising revenue as stated above, affiliation fee revenue constituted less than 90% of its consolidated revenues for the three and nine months ended March 31, 2019. Substantially all of the Company’s affiliation agreements are sales-based and usage-based royalty arrangements, which are recognized as the sale or usage occurs. The transaction price is represented by affiliation fees that are generally based upon contractual rates applied to the number of the Distributor’s subscribers who receive or can receive the Company’s programming. Such subscriber information is generally not received until after the close of the reporting period, and in these cases, the Company estimates the number of subscribers. Historical adjustments to recorded estimates have not been material.

The Company’s payment terms vary and are generally within 30-60 days after revenue is earned.

Advertising Revenue

The Company primarily earns advertising revenue through the sale of commercial time and other advertising inventory during its programming. In general, these advertising arrangements either do not exceed one year or are primarily multi-year media banks, the elements of which are agreed upon each year. Advertising revenue is recognized as advertising is aired. In certain advertising arrangements, the Company guarantees specified viewer ratings for its programming. In such cases, the promise to deliver the guaranteed viewer ratings by airing the advertising represents the Company’s performance obligation. A contract liability is recognized as deferred revenue to the extent any guaranteed viewer ratings are not met and the customer is expected to exercise any right for additional advertising time, and is subsequently recognized as revenue either when the Company provides the required additional advertising time, or additional performance requirements become remote, which may be at the time the guarantee obligation contractually expires.

The Company’s payment terms vary by the type of customer. Generally, payment terms are 30-60 days after revenue is earned.

Principal versus Agent Revenue Recognition

The Company has an advertising sales representation agreement with MSG that provides for MSG to act as its advertising sales representative and includes the exclusive right and obligation to sell certain advertising availabilities on the Company’s behalf for a commission. The Company reports advertising revenue on a gross basis as it is primarily responsible for the fulfillment of advertising orders.

Noncash Consideration

The Company enters into nonmonetary transactions, primarily with its Distributors, that involve the exchange of products or services, such as advertising and promotional benefits, for the Company’s services. For arrangements that are subject to sales-based and usage-based royalty guidance, the Company measures noncash consideration that it receives at fair value as the sale or usage occurs. For other arrangements, the Company measures the estimated fair value of the noncash consideration that it receives at contract inception. If the Company cannot reasonably estimate the fair value of the noncash consideration, the Company measures the fair value of the consideration indirectly by reference to the standalone selling price of the services promised to the customer in exchange for the consideration.

Transaction Price Allocated to Future Performance Obligations

Topic 606 requires disclosure of the aggregate amount of consideration the Company expects to receive in exchange for transferring services to a customer (transaction price) that is allocated to performance obligations that have not yet been satisfied as of March 31, 2019. However, the guidance provides certain practical expedients that allow companies to omit this disclosure requirement for (i) sales-based or usage-based royalty arrangements, (ii) contracts with an original expected length of one year or less, (iii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed, and (iv) variable consideration related to a wholly unsatisfied performance obligation.

Substantially all of the Company’s affiliation agreements are licenses of functional intellectual property where revenue is derived from sales-based and usage-based royalty arrangements, and generally the Company’s advertising arrangements either do not exceed one year or are primarily multi-year media banks, the elements of which are agreed upon each year. For these types of arrangements, the Company applies a practical expedient.

As of March 31, 2019, other than contracts for which the Company has applied the practical expedients, the aggregate amount of transaction price allocated to remaining performance obligations under these contracts was approximately $18,700 to be recognized over the next ten years.

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MSG NETWORKS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

Contract Balances from Contracts with Customers

An account receivable is recorded when there is an unconditional right to consideration based on a contract with a customer. When consideration is received from a customer prior to transferring services to the customer under the terms of a contract, a contract liability (deferred revenue) is recorded.

For certain types of contracts with customers, the Company may recognize revenue in advance of the contractual right to invoice the customer, resulting in an amount recorded to contract assets as required by Topic 606. Once the Company has an unconditional right to consideration under these contracts, the contract assets are reclassified to accounts receivable.

Deferred revenue is recognized as revenue when, or as, control of the services is transferred to the customer and all revenue recognition criteria have been met. As noted above, the primary source of the Company’s deferred revenue relates to the Company not meeting viewer rating guarantees on advertising sales arrangements.

The following table provides information about current contract balances from contracts with customers:

	March 31, 2019		June 30, 2018
Accounts receivable (including advertising receivable included in related party receivables, net)	$	151,456	$	125,982
Contract asset, short-term (included in other current assets)	1,779		—
Deferred revenue, short-term	2,196		4,626
Deferred revenue, long-term (included in other liabilities)	270		—

The amount of revenue recognized for the nine months endedMarch 31, 2019 related to deferred revenue (contract liability) recorded at the Adoption Date was approximately $4,588.

Note 4. Computation of Earnings per Common Share

Basic earnings per common share (“EPS”) is based upon net income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the effect of the assumed vesting of restricted stock units (“RSUs”) and exercise of stock options only in the periods in which such effect would have been dilutive.

The following table presents a reconciliation of the weighted-average number of shares used in the calculations of basic and diluted EPS:

	Three Months Ended		Nine Months Ended
	March 31,		March 31,
	2019	2018	2019	2018
Weighted-average number of shares for basic EPS	75,152	75,540	75,041	75,427
Dilutive effect of shares issuable under share-based compensation plans	587	477	671	417
Weighted-average number of shares for diluted EPS	75,739	76,017	75,712	75,844
Anti-dilutive shares	992	426	618	544

Note 5. Goodwill and Amortizable Intangible Assets

During the first quarter of fiscal year 2019, the Company performed its annual impairment test of goodwill. As the Company’s one reporting unit had a negative carrying value of net assets, there was no impairment of goodwill identified.

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(Continued)

The Company’s intangible assets subject to amortization are as follows:

	March 31, 2019			June 30, 2018
Affiliate relationships	$	83,044		$	83,044
Less accumulated amortization	(48,436		)	(45,841		)
	$	34,608		$	37,203

Affiliate relationships have an estimated useful life of 24 years. Amortization expense for intangible assets was $865 for the three months endedMarch 31, 2019 and 2018, and $2,595 for the nine months endedMarch 31, 2019 and 2018.

Note 6. Property and Equipment

As of March 31, 2019 and June 30, 2018, property and equipment consisted of the following assets:

	March 31, 2019			June 30, 2018
Equipment	$	37,887		$	36,027
Furniture and fixtures	1,757			1,728
Leasehold improvements	19,320			19,297
Construction in progress	494			727
	59,458			57,779
Less accumulated depreciation and amortization	(50,805		)	(47,750		)
	$	8,653		$	10,029

Depreciation and amortization expense on property and equipment was $940 and $1,414 for the three months endedMarch 31, 2019 and 2018, respectively, and $3,055 and $4,558 for the nine months endedMarch 31, 2019 and 2018, respectively.

Note 7. Debt

On September 28, 2015, MSGN Holdings L.P. (“MSGN L.P.”), an indirect wholly-owned subsidiary of the Company through which the Company conducts substantially all of its operations, MSGN Eden, LLC, an indirect subsidiary of the Company and the general partner of MSGN L.P., Regional MSGN Holdings LLC, a direct subsidiary of the Company and the limited partner of MSGN L.P. (collectively with MSGN Eden, LLC, the “Holdings Entities”), and certain subsidiaries of MSGN L.P. entered into a credit agreement (the “Credit Agreement”) with a syndicate of lenders.

The Credit Agreement provides MSGN L.P. with senior secured credit facilities (the “Senior Secured Credit Facilities”) consisting of: (a) an initial$1,550,000term loan facility (the “Term Loan Facility”) and (b) a$250,000revolving credit facility (the “Revolving Credit Facility”), each with a term of five years. In connection with the Distribution,$1,450,000of the proceeds from the Term Loan Facility was contributed to MSG immediately following the closing of the Senior Secured Credit Facilities. Up to $35,000of the Revolving Credit Facility is available for the issuance of letters of credit.Subject to the satisfaction of certain conditions and limitations, the Credit Agreement allows for the addition of incremental term and/or revolving loan commitments and incremental term and/or revolving loans.

Borrowings under the Credit Agreement bear interest at a floating rate, which at the option of MSGN L.P. may be either (a) base rate, representing the higher of: (i) the New York Fed Bank Rate plus 0.50%; (ii) the U.S. Prime Rate; or (iii) the one-month London Interbank Offered Rate, or LIBOR, plus 1.00% (the “Base Rate”), plus an additional rate ranging from 0.50% to 1.25% per annum (determined based on a total leverage ratio), or (b) a Eurodollar rate (the “Eurodollar Rate”) plus an additional rate ranging from 1.50% to 2.25% per annum (determined based on a total leverage ratio), provided that for the period until the delivery of the compliance certificate for the period ending March 31, 2016, the additional rate used in calculating both floating rates was (i) 1.00% per annum for borrowings bearing interest at the Base Rate, and (ii) 2.00% per annum for borrowings bearing interest at the Eurodollar Rate. Upon a payment default in respect of principal, interest or other amounts due and payable under the Credit Agreement or related loan documents, default interest will accrue on all overdue amounts at an additional rate of 2.00% per annum. The Credit Agreement requires that MSGN L.P. pay a commitment fee of 0.30%in respect of the average daily unused commitments, as well as fronting fees, to banks that issue letters of credit pursuant to the Revolving Credit Facility.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

The Credit Agreement generally requires the Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis to comply with a maximum total leverage ratio of 6.00:1.00 from the closing date until September 30, 2016 and a maximum total leverage ratio of 5.50:1.00 from October 1, 2016 until maturity, subject, in each case, to upward adjustment during the continuance of certain events. In addition, there is a minimum interest coverage ratio of 2.00:1.00 for the Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis. As of March 31, 2019, the Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis were in compliance with the financial covenants of the Credit Agreement. All borrowings under the Credit Agreement are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties. As ofMarch 31, 2019, there were noletters of credit issued and outstanding under the Revolving Credit Facility, which provides full borrowing capacity of$250,000. For the nine months ended March 31, 2019, the Company made principal repayments of$156,250, including voluntary payments of $100,000, of which $25,000 was made in the third quarter of fiscal year 2019. The Company has made principal payments aggregating$510,000 through March 31, 2019. The Term Loan Facility amortizes quarterly in accordance with its terms through June 30, 2020 with a final maturity date on September 28, 2020.

As of March 31, 2019, the principal repayments required under the Term Loan Facility are as follows:

Remainder of fiscal year ending June 30, 2019	$	18,750
Fiscal year ending June 30, 2020	114,375
Fiscal year ending June 30, 2021	906,875
	$	1,040,000

All obligations under the Credit Agreement are guaranteed by the Holdings Entities and MSGN L.P.’s existing and future direct and indirect domestic subsidiaries that are not designated as excluded subsidiaries or unrestricted subsidiaries (the “Subsidiary Guarantors,” and together with the Holdings Entities, the “Guarantors”). All obligations under the Credit Agreement, including the guarantees of those obligations, are secured by certain assets of MSGN L.P. and each Guarantor (collectively, “Collateral”), including, but not limited to, a pledge of the equity interests in MSGN L.P. held directly by the Holdings Entities and the equity interests in each Subsidiary Guarantor held directly or indirectly by MSGN L.P. Subject to customary notice and minimum amount conditions, MSGN L.P. may voluntarily prepay outstanding loans under the Credit Agreement at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to Eurodollar loans). MSGN L.P. is required to make mandatory prepayments in certain circumstances, including without limitation from the net cash proceeds of certain sales of assets (including Collateral) or casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights) and the incurrence of certain indebtedness, subject to certain exceptions.

In addition to the financial covenants discussed above, the Credit Agreement and the related security agreement contain certain customary representations and warranties, affirmative covenants, and events of default. The Credit Agreement contains certain restrictions on the ability of the Holdings Entities and MSGN L.P. and its restricted subsidiaries to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the Credit Agreement, including the following: (i) incurring additional indebtedness and contingent liabilities; (ii) creating liens on certain assets; (iii) making investments, loans or advances in or to other persons; (iv) paying dividends and distributions or repurchasing capital stock; (v) changing their lines of business; (vi) engaging in certain transactions with affiliates; (vii) amending specified material agreements; (viii) merging or consolidating; (ix) making certain dispositions; and (x) entering into agreements that restrict the granting of liens. The Holdings Entities are also subject to customary passive holding company covenants.

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MSG NETWORKS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

The Company is amortizing its deferred financing costs on a straight-line basis over the five-year term of the Senior Secured Credit Facilities which approximates the effective interest method. The following table summarizes the presentation of the Term Loan Facility and the related deferred financing costs in the accompanying consolidated balance sheets as of March 31, 2019 and June 30, 2018:

	Term Loan Facility		Deferred Financing Costs			Net
March 31, 2019
Current portion of long-term debt	$	101,250	$	(2,586	)	$	98,664
Long-term debt, net of current portion	938,750		(1,293		)	937,457
Total	$	1,040,000	$	(3,879	)	$	1,036,121
June 30, 2018
Current portion of long-term debt	$	75,000	$	(2,586	)	$	72,414
Long-term debt, net of current portion	1,121,250		(3,233		)	1,118,017
Total	$	1,196,250	$	(5,819	)	$	1,190,431

In addition, the Company has deferred financing costs related to the Revolving Credit Facility recorded in the accompanying consolidated balance sheets as summarized in the following table:

	March 31, 2019		June 30, 2018
Other current assets	$	417	$	417
Other assets	209		521

The Company made interest payments under the Credit Agreement of $32,879 and $29,303 during the nine months endedMarch 31, 2019 and 2018, respectively.

Note 8. Commitments and Contingencies

Commitments

As more fully described in Note 9 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018, the Company’s contractual obligations not reflected on the consolidated balance sheet consist primarily of its obligations under media rights agreements.

In addition, see Note 7 for the principal repayments required under the Company’s Term Loan Facility.

Legal Matters

The Company is a defendant in various lawsuits. Although the outcome of these matters cannot be predicted with certainty, management does not believe that resolution of these lawsuits will have a material adverse effect on the Company.

Note 9. Fair Value Measurements

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs are developed using market data, such as publicly available information about actual events or transactions, and reflect the assumptions that market participants would use when pricing the asset or liability. Unobservable inputs are inputs for which market data is not available and that are developed using the best information available about the assumptions that market participants would use when pricing the asset or liability. The fair value hierarchy consists of the following three levels:

• Level I — Quoted prices for identical instruments in active markets.

• Level II — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

• Level III — Instruments whose significant value drivers are unobservable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

The following table presents for each of these hierarchy levels, the Company’s assets that are measured at fair value on a recurring basis, which include cash equivalents:

	Level I		Level II		Level III		Total
March 31, 2019
Assets:
Money market accounts	$	18,488	$	—	$	—	$	18,488
Time deposits	162,376		—		—		162,376
Total assets measured at fair value	$	180,864	$	—	$	—	$	180,864
June 30, 2018
Assets:
Money market accounts	$	20,398	$	—	$	—	$	20,398
Time deposits	184,945		—		—		184,945
Total assets measured at fair value	$	205,343	$	—	$	—	$	205,343

Money market accounts and time deposits are classified within Level I of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets. The carrying amount of the Company’s money market accounts and time deposits approximates fair value due to their short-term maturities.

Other Financial Instruments

The fair value of the Company’s long-term debt (see Note 7) was approximately $1,019,000 as of March 31, 2019. The Company’s long-term debt is classified within Level II of the fair value hierarchy as it is valued using quoted prices of such securities for which fair value can be derived from inputs that are readily observable. 

Note 10. Pension Plans and Other Postretirement Benefit Plan

As more fully described in Note 12 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018, the Company sponsors (i) a non-contributory, qualified defined benefit pension plan covering certain of its union employees, (ii) an unfunded non-contributory, non-qualified frozen excess cash balance plan covering certain employees who participated in an underlying qualified plan, and (iii) an unfunded non-contributory, non-qualified frozen defined benefit pension plan for the benefit of certain employees who participated in an underlying qualified plan (collectively the “Pension Plans”). The Company also sponsors a contributory welfare plan which provides certain postretirement healthcare benefits to certain employees hired prior to January 1, 2001 (the “Postretirement Plan”).

Components of net periodic benefit cost for the three and nine months ended March 31, 2019 and 2018 are as follows:

	Pension Plans						Postretirement Plan
	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Service cost	$	111		$	128		$	18		$	17
Other components of net periodic benefit cost:
Interest cost	402			358			38			30
Expected return on plan assets	(144		)	(127		)	—			—
Recognized actuarial loss (a)	119			149			—			—
Amortization of unrecognized prior service credit (a)	—			—			(2		)	(3		)
Net periodic benefit cost	$	488		$	508		$	54		$	44

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MSG NETWORKS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

	Pension Plans						Postretirement Plan
	Nine Months Ended						Nine Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Service cost	$	333		$	384		$	54		$	51
Other components of net periodic benefit cost:
Interest cost	1,206			1,074			114			90
Expected return on plan assets	(432		)	(381		)	—			—
Recognized actuarial loss (a)	357			447			—			—
Amortization of unrecognized prior service credit (a)	—			—			(6		)	(9		)
Settlement gain (a)	(8		)	—			—			—
Net periodic benefit cost	$	1,456		$	1,524		$	162		$	132

(a) Reflects amounts reclassified from accumulated other comprehensive loss to other components of net periodic benefit cost in the accompanying consolidated statements of operations.

In addition, as more fully described in Note 12 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018, the Company sponsors the MSGN Holdings, L.P. Excess Savings Plan and participates in the Madison Square Garden 401(k) Savings Plan, formerly the MSG Holdings, L.P. 401(k) Savings Plan, a multiple employer plan (together, the “Savings Plans”). Expenses related to the Savings Plans included in the accompanying consolidated statements of operations were $254 and $232 for the three months endedMarch 31, 2019 and 2018, respectively, and $762 and $691 for the nine months endedMarch 31, 2019 and 2018, respectively.

Note 11. Share-based Compensation

See Note 13 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018 for more information regarding (i) the MSG Networks Inc. 2010 Employee Stock Plan, as amended (the “Employee Stock Plan”), and (ii) the MSG Networks Inc. 2010 Stock Plan For Non-Employee Directors, as amended (the “Non-Employee Director Plan”).

Share-based compensation expense, presented within selling, general and administrative expenses and direct operating expenses, was $4,371 and $2,862 for the three months endedMarch 31, 2019 and 2018, respectively, and $13,658 and $10,581 for the nine months endedMarch 31, 2019 and 2018, respectively.

Non-Qualified Stock Options (“NQSOs”) Award Activity

The following table summarizes activity relating to holders of the Company’s NQSOs for the nine months endedMarch 31, 2019:

	Number of		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
	Nonperformance Based Vesting NQSOs	Performance Based Vesting NQSOs
Balance as of June 30, 2018	961	961	$	19.49	6.14	$	8,567
Granted	316	316	25.05
Balance as of March 31, 2019	1,277	1,277	$	20.87	5.77	4,340
Exercisable as of March 31, 2019	498	—	$	18.89	5.24	$	1,425

In August 2018, the Company granted 632 NQSOs, of which 50% are subject to three-year ratable vesting and the remaining 50% are subject to three-year cliff vesting and the achievement of certain Company performance criteria. These NQSOs have an expiration period of 7.5 years. The Company calculated the fair value of these NQSOs on the date of grant using the Black-Scholes option pricing model, which resulted in a grant date fair value of $7.60 per NQSO.

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MSG NETWORKS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

The following were the key assumptions used to calculate the fair value of this award:

Risk-free interest rate	2.76	%
Expected term	5.25 years
Expected volatility	27.44	%

The Company’s computation of expected term was calculated using the simplified method (the average of the vesting period and option term) as prescribed in ASC Topic 718-10-S99. The Company’s computation of expected volatility was based on historical volatility of its common stock.

The aggregate intrinsic value is calculated for in-the-money NQSOs as the difference between (i) the exercise price of the underlying award and (ii) the quoted price of the Company’s Class A common stock, par value $0.01 per share (“Class A Common Stock”) at March 31, 2019 and June 30, 2018, as applicable.

Restricted Share Units Award Activity

The following table summarizes activity relating to holders of the Company’s RSUs for the nine months endedMarch 31, 2019:

	Number of
	Nonperformance Based Vesting RSUs		Performance Based Vesting RSUs		Weighted-Average Fair Value Per Share At Date of Grant
Unvested award balance as of June 30, 2018	376		779		$	20.46
Granted	390		342		25.61
Vested	(225	)	(285	)	20.65
Unvested award balance as of March 31, 2019	541		836		23.08

Nonperformance based vesting RSUs granted during the nine months endedMarch 31, 2019 included 104 RSUs granted under the Employee Stock Plan that are subject to three-year ratable vesting, 240 RSUs granted under the Employee Stock Plan that are subject to four-year ratable vesting, and 46 RSUs granted under the Non-Employee Director Plan which vested upon date of grant. Performance based vesting RSUs granted under the Employee Stock Plan during the nine months endedMarch 31, 2019 included 118 RSUs that are subject to three-year ratable vesting, and 224 RSUs that are subject to three-year cliff vesting. RSUs granted under the Employee Stock Plan and Non-Employee Director Plan will settle in shares of the Company’s Class A Common Stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee of the Board of Directors, in cash. RSUs granted under the Non-Employee Director Plan will settle on the first business day after ninety days from the date the director’s service on the Board of Directors ceases or, if earlier, upon the director’s death.

The fair value of RSUs that vested during the nine months endedMarch 31, 2019 was $12,779. Upon delivery, RSUs granted under the Employee Stock Plan were net share-settled to cover the required statutory tax withholding obligations and the remaining number of shares were issued from the Company’s treasury shares. To fulfill the employees’ statutory tax withholding obligations for the applicable income and other employment taxes, 194 of these RSUs, with an aggregate value of $4,879 were retained by the Company and the taxes paid during the nine months endedMarch 31, 2019 are reflected as a financing activity in the accompanying consolidated statement of cash flows.

Note 12. Stock Repurchase Program

On December 7, 2017, the Company’s Board of Directors authorized the repurchase of up to$150,000of the Company’s Class A Common Stock. Under the authorization, shares of Class A Common Stock may be purchased from time to time in open market or private transactions, block trades or such other manner as the Company may determine, in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. As of March 31, 2019, the Company had$136,165of availability remaining under its stock repurchase authorization. The Company did not repurchase shares during thenine months endedMarch 31, 2019.

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MSG NETWORKS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

Note 13. Related Party Transactions

As of March 31, 2019, members of the Dolan family group, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, including trusts for the benefit of the Dolan family group (collectively, the “Dolan Family Group”), collectively beneficially own all of the Company’s outstanding Class B common stock, par value $0.01 per share (“Class B Common Stock”) and own approximately 3.2% of the Company’s outstanding Class A Common Stock (inclusive of options exercisable within 60 days of the date hereof). Such shares of the Company’s Class A Common Stock and Class B Common Stock, collectively, represent approximately 69.9% of the aggregate voting power of the Company’s outstanding common stock. The Dolan Family Group also controls MSG and AMC Networks Inc. (“AMC Networks”).

The Company has an arrangement with the Dolan Family Office, LLC (“DFO”), MSG, and AMC Networks providing for the sharing of certain expenses associated with executive office space which is available to Charles F. Dolan (a director of the Company and MSG, and the Executive Chairman and a director of AMC Networks), James L. Dolan (the Executive Chairman and a director of the Company, the Executive Chairman, Chief Executive Officer, and a director of MSG, and a director of AMC Networks), and the DFO, which is controlled by Charles F. Dolan.

The Company also agreed to share certain executive support costs, including office space, executive assistants, security and transportation costs for (i) the Company’s Executive Chairman with MSG and (ii) the Company’s Vice Chairman with MSG and AMC Networks.

The Company and MSG are also party to an aircraft time sharing agreement, pursuant to which MSG has agreed from time to time to make its aircraft available to the Company for lease on a “time sharing” basis. Additionally, the Company, MSG and AMC Networks have agreed on an allocation of the costs of certain other aircraft, including helicopter, use by shared executives.

The Company has various agreements with MSG, including media rights agreements covering the New York Knicks (the “Knicks”) and the New York Rangers (the “Rangers”) games, an advertising sales representation agreement, a trademark license agreement, a tax disaffiliation agreement, and certain other arrangements, including a services agreement (the “Services Agreement”) pursuant to which the Company outsources certain business functions to MSG. These services currently include information technology, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, investor relations, corporate communications, benefit plan administration and reporting and, internal audit, as well as certain executive support services described above. The Company provides certain services to MSG pursuant to the Services Agreement.

The Company has entered into various agreements with AMC Networks with respect to a number of ongoing commercial relationships.

Related party transactions

Rights fees

The Company’s media rights agreements with the Knicks and the Rangers, effective as of July 1, 2015, provide the Company with exclusive media rights to team games in their local markets. Rights fees included in the accompanying consolidated statements of operations for the three months endedMarch 31, 2019 and 2018 were $37,094 and $35,631, respectively, and $110,746 and $106,414 for the nine months endedMarch 31, 2019 and 2018, respectively.

Origination, master control and technical services

AMC Networks provides certain origination, master control, and technical services to the Company. Amounts incurred by the Company for the three months endedMarch 31, 2019 and 2018 were $1,161 and $1,581, respectively, and $3,471 and $4,574 for the nine months endedMarch 31, 2019 and 2018, respectively.

Commission

The Company’s advertising sales representation agreement with MSG, which has a term through June 30, 2022, provides for MSG to act as the Company’s advertising sales representative and includes the exclusive right and obligation to sell certain advertising availabilities on the Company’s behalf for a commission. The amounts incurred by the Company for the three months endedMarch 31, 2019 and 2018 were $6,880 and $6,273, respectively, and $13,325 and $11,840 for the nine months endedMarch 31, 2019 and 2018, respectively.

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MSG NETWORKS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

General and Administrative Expenses

Amounts incurred by the Company for expenses associated with the Services Agreement, net, amounted to $2,590 and $2,210 for the three months endedMarch 31, 2019 and 2018, respectively, and $7,735 and $6,631 for the nine months endedMarch 31, 2019 and 2018, respectively.

Other operating expenses

The Company and its related parties enter into other transactions with each other in the ordinary course of business. Net amounts incurred by the Company for other related party transactions amounted to $297 and $368 for the three months endedMarch 31, 2019 and 2018, respectively, and $773 and $769 for the nine months endedMarch 31, 2019 and 2018, respectively.

Note 14. Income Taxes

On December 22, 2017, the enactment of the Tax Cuts and Jobs Act significantly changed the U.S. tax laws and included a reduction in the corporate federal tax rate from 35% to 21%, effective January 1, 2018.

Income tax expense for the three months endedMarch 31, 2019 of $17,732 differs from the income tax expense derived from applying the statutory federal rate of 21% to pre-tax income due principally to the impact of state and local income taxes (net of federal benefit) of $6,131, partially offset by a tax benefit relating to a tax return to book provision adjustment in connection with the filing of the Company’s prior year income tax return of $3,939.

Income tax expense for the three months endedMarch 31, 2018 of $23,505 differs from the income tax expense derived from applying the blended statutory federal rate of 28% to pre-tax income due principally to the impact of state and local income taxes (net of federal benefit) of $5,135 and other items of $240. These increases were partially offset by the impact of the tax benefits related to the domestic production activities deduction of $1,635.

Income tax expense for the nine months endedMarch 31, 2019 of $62,756 differs from the income tax expense derived from applying the statutory federal rate of 21% to pre-tax income due principally to the impact of state and local income taxes (net of federal benefit) of $17,683, and changes in the applicable state rate used to measure deferred taxes of $2,062, partially offset by a net tax benefit relating to tax return to book provision adjustments in connection with the filing of the Company’s prior year income tax returns of $2,489.

Income tax benefit for the nine months endedMarch 31, 2018 of $41,103 differs from the income tax expense derived from applying the blended statutory federal rate of 28% to pre-tax income due principally to a deferred income tax benefit of $106,446 related to the reduction of the Company’s net deferred tax liabilities based upon the new federal rate. Other decreases included the impact of the tax benefits related to the domestic production activities deduction of $4,668, changes in the applicable state rate used to measure deferred taxes of $1,062, tax return to book provision adjustments in connection with the filing of the Company’s prior year income tax returns of $676, and other items of $253. These decreases were partially offset by the impact of state and local income taxes (net of federal benefit) of $15,165.

The Company made cash income tax payments (net) of $64,025 and $45,194 for the nine months endedMarch 31, 2019 and 2018, respectively.

During the fourth quarter of fiscal year 2017, the Company was notified that the City of New York was initiating a review of the Company’s 2014 and 2015 Unincorporated Business Tax Returns. In August 2018, the Company received a summary notice that the audit has been completed. The audit did not result in a material change to the tax returns.

The Company was also notified during the fourth quarter of fiscal year 2017 that the State of New York was commencing an examination of the Company’s New York State income tax returns as filed for the tax years ended December 31, 2013 and 2014. The Company does not expect the examination, when finalized, to result in material changes to the tax returns.

The Company was notified during the first quarter of fiscal year 2019 that the City of New York was commencing an examination of the Company’s New York City general corporate income tax returns as filed for the tax years ended December 31, 2015 and 2016. The Company does not expect the examination, when finalized, to result in material changes to the tax returns.

The federal and state statute of limitations are currently open with regard to the Company’s 2014 through 2018 and 2013 through 2018 calendar year tax returns, respectively.

18

MSG NETWORKS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Continued)

Note 15. Concentrations of Risk

Accounts receivable, net on the accompanying consolidated balance sheets as of March 31, 2019 and June 30, 2018 include amounts due from the following individual customers, which accounted for the noted percentages of the gross balance:

	March 31, 2019		June 30, 2018
Customer A	25	%	24	%
Customer B	24	%	24	%
Customer C	23	%	23	%
Customer D	15	%	15	%

Revenues in the accompanying consolidated statements of operations for the three and nine months ended March 31, 2019 and 2018 include amounts from the following individual customers, which accounted for the noted percentages of the total:

	Three Months Ended March 31,				Nine Months Ended March 31,
	2019		2018		2019		2018
Customer 1	23	%	23	%	23	%	24	%
Customer 2	21	%	22	%	22	%	23	%
Customer 3	19	%	21	%	21	%	21	%
Customer 4	10	%	10	%	11	%	10	%

The accompanying consolidated balance sheets as of March 31, 2019 and June 30, 2018 include the following approximate amounts that are recorded in connection with the Company’s license agreement with the New Jersey Devils:

Reported in	March 31, 2019		June 30, 2018
Prepaid expenses	$	1,000	$	3,000
Other current assets	4,000		3,000
Other assets	37,000		39,000
	$	42,000	$	45,000

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

This Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,”“anticipates,”“believes,”“estimates,”“may,”“will,”“should,”“could,”“potential,”“continue,”“intends,”“plans,” and similar words and terms used in the discussion of future operating and financial performance and plans identify forward-looking statements. Investors are cautioned that such forward-looking statements are not guarantees of future performance, results or events and involve risks and uncertainties, and that actual results or developments may differ materially from the forward-looking statements as a result of various factors. Factors that may cause such differences to occur include, but are not limited to:

• the demand for our programming among cable, satellite, telephone and other platforms (“Distributors”) and the subscribers thereto, and our ability to enter into and renew affiliation agreements with Distributors, as well as the impact of consolidation among Distributors;

• the level of our revenues, which depends in part on the popularity and competitiveness of the sports teams whose games are broadcast on our networks and the popularity of other content aired on our networks;

• the ability of our Distributors to maintain subscriber levels;

• the impact of subscribers selecting Distributors’ packages that do not include our networks or Distributors that do not carry our networks at all;

• the security of our program signal and electronic data;

• general economic conditions especially in the New York City metropolitan area where we conduct the majority of our operations;

• the demand for advertising and sponsorship arrangements and viewer ratings for our networks;

• competition, for example, from other regional sports networks;

• the relocation or insolvency of professional sports teams with which we have a media rights agreement;

• our ability to maintain, obtain or produce content, together with the cost of such content;

• our ability to renew or replace our media rights agreements with professional sports teams;

• the acquisition or disposition of assets and/or the impact of, and our ability to successfully pursue, acquisitions or other strategic transactions, and the operating and financial performance thereof (including those that we do not control);

• the costs associated with, and the outcome of, litigation and other proceedings to the extent uninsured;

• the impact of governmental regulations or laws and changes in such regulations or laws, including with respect to the legalization of sports gaming;

• the impact of sports league rules, regulations and/or agreements and changes thereto;

• our dependence on The Madison Square Garden Company, AMC Networks Inc., and other third-party providers for the provision of certain services;

• cybersecurity and similar risks which could result in the disclosure of confidential information, disruption of our business or damage to our brands and reputation;

• our substantial debt and high leverage;

• any reduction in our access to capital and credit markets or significant increases in costs to borrow;

• financial community perceptions of our business, operations, financial condition and the industry in which we operate;

• the tax-free treatment of the Distribution; and

• the factors described under “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018.

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The Company disclaims any obligation to update or revise the forward-looking statements contained herein, except as otherwise required by applicable federal securities laws.

All dollar amounts included in the following MD&A are presented in thousands, except as otherwise noted.

Introduction

MD&A is provided as a supplement to, and should be read in conjunction with, the unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the year ended June 30, 2018 to help provide an understanding of our financial condition, changes in financial condition and results of operations. Unless the context otherwise requires, all references to “we,” “us,” “our,” or the “Company” refer collectively to MSG Networks Inc., a holding company, and its direct and indirect subsidiaries through which substantially all of our operations are conducted. The Company owns and operates two regional sports and entertainment networks, MSG Network and MSG+. The Company operates and reports financial information in one segment.

This MD&A is organized as follows:

Results of Operations. This section provides an analysis of our unaudited consolidated results of operations for the three and nine months ended March 31, 2019 as compared with the three and nine months ended March 31, 2018.

Liquidity and Capital Resources. This section provides a discussion of our financial condition and liquidity, as well as an analysis of our cash flows for the nine months endedMarch 31, 2019 as compared with the nine months endedMarch 31, 2018.

Recently Issued Accounting Pronouncements Not Yet Adopted and Critical Accounting Policies. This section discusses recently issued accounting pronouncements not yet adopted, as well as the results of the Company’s annual impairment testing of goodwill performed during the first quarter of fiscal year 2019. This section should be read together with our critical accounting policies, which are discussed in our Annual Report on Form 10-K for the year ended June 30, 2018 under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recently Issued Accounting Pronouncements Not Yet Adopted and Critical Accounting Policies — Critical Accounting Policies” and in the notes to the consolidated financial statements included therein.

21

Results of Operations

Comparison of the Three Months EndedMarch 31, 2019 versus the Three Months EndedMarch 31, 2018

The table below sets forth, for the periods presented, certain historical financial information and the percentage that those items bear to revenues.

	Three Months Ended March 31,										Increase (Decrease) in Net Income
	2019					2018
	Amount			% of Revenues		Amount			% of Revenues
Revenues	$	195,105		100	%	$	186,568		100	%	$	8,537
Direct operating expenses	82,085			42	%	80,322			43	%	(1,763		)
Selling, general and administrative expenses	28,734			15	%	23,383			13	%	(5,351		)
Depreciation and amortization	1,805			1	%	2,279			1	%	474
Operating income	82,481			42	%	80,584			43	%	1,897
Other income (expense):
Interest income	1,557			1	%	1,195			1	%	362
Interest expense	(11,658		)	(6	)%	(10,932		)	(6	)%	(726		)
Other components of net periodic benefit cost	(413		)	NM		(407		)	NM		(6		)
	(10,514		)	(5	)%	(10,144		)	(5	)%	(370		)
Income from operations before income taxes	71,967			37	%	70,440			38	%	1,527
Income tax expense	(17,732		)	(9	)%	(23,505		)	(13	)%	5,773
Net income	$	54,235		28	%	$	46,935		25	%	$	7,300

_________________ 

NM – Percentage is not meaningful

In the first quarter of fiscal year 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), and the subsequent ASUs that amended and/or clarified the application of ASU No. 2014-09 (collectively, “Topic 606”). See Note 2 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for more information. The standard was applied using the modified retrospective approach. The amount by which each financial statement line item has been affected in the current reporting period by the application of Topic 606 compared to historical policies is not material, therefore, comparative disclosures have been omitted.

Revenues

Revenues for the three months endedMarch 31, 2019increased$8,537, or 5%, to $195,105 as compared with the prior year period. The net increase was attributable to the following:

Increase in affiliation fee revenue	$	3,162
Increase in advertising revenue	6,063
Other net decreases	(688		)
	$	8,537

The increase in affiliation fee revenue was primarily due to higher affiliation rates, partially offset by the impact of a decrease in subscribers of less than 4% as compared with the prior year period. The increase in advertising revenue was primarily due to a lower net increase in deferred revenue related to ratings guarantees, higher per-game sales from the telecast of live professional sports programming and higher sales from the Company’s branded content initiatives, partially offset by the impact of fewer live professional sports telecasts as compared with the prior year period.

Direct operating expenses

Direct operating expenses for the three months endedMarch 31, 2019increased$1,763, or 2%, to $82,085 as compared with the prior year period due to higher rights fees expense of $2,554, principally as a result of contractual rate increases, partially offset by a decrease in other programming-related costs of $791.

22

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months endedMarch 31, 2019increased$5,351, or 23%, to $28,734 as compared with the prior year period primarily due to higher employee compensation and related benefits (including share-based compensation expense), higher advertising and marketing costs, as well as a higher provision for doubtful accounts.

Operating income

Operating income for the three months endedMarch 31, 2019increased$1,897, or 2%, to $82,481 as compared with the prior year period primarily due to (as discussed above) higher revenues partially offset by higher selling, general and administrative expenses (including share-based compensation expense) and, to a lesser extent, higher direct operating expenses.

Interest expense

Interest expense for the three months endedMarch 31, 2019increased$726, or 7%, to $11,658 as compared with the prior year period primarily due to higher average interest rates in the third quarter of fiscal year 2019 (4.0% as compared with 3.1%), partially offset by a lower average principal balance under the Company’s term loan facility (see “Financing Agreements”).

Income taxes

See Note 14 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for more information on income taxes.

Adjusted operating income

The Company evaluates performance based on several factors, of which the key financial measure is adjusted operating income. Adjusted operating income is defined as operating income before (i) depreciation, amortization and impairments of property and equipment and intangible assets, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits and (iv) gains or losses on sales or dispositions of businesses. Because it is based upon operating income, adjusted operating income also excludes interest expense (including cash interest expense) and other non-operating income and expense items. We believe that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the Company without regard to the settlement of an obligation that is not expected to be made in cash. We believe adjusted operating income is an appropriate measure for evaluating the operating performance of our Company. Adjusted operating income and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and adjusted operating income measures as the most important indicators of our business performance, and evaluate management’s effectiveness with specific reference to these indicators. Adjusted operating income should be viewed as a supplement to and not a substitute for operating income, net income, cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Since adjusted operating income is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies.

The Company has presented the components that reconcile operating income, a GAAP measure, to adjusted operating income:

	Three Months Ended				Increase (Decrease) in Adjusted Operating Income
	March 31,
	2019		2018
Operating income	$	82,481	$	80,584	$	1,897
Share-based compensation	4,371		2,862		1,509
Depreciation and amortization	1,805		2,279		(474		)
Adjusted operating income	$	88,657	$	85,725	$	2,932

Adjusted operating income for the three months endedMarch 31, 2019increased$2,932, or 3%, to $88,657 as compared with the prior year period primarily due to (as discussed above) higher revenues, partially offset by higher selling, general and administrative expenses (excluding share-based compensation expense) and, to a lesser extent, higher direct operating expenses.

23

Results of Operations

Comparison of the Nine Months EndedMarch 31, 2019 versus the Nine Months EndedMarch 31, 2018

The table below sets forth, for the periods presented, certain historical financial information and the percentage that those items bear to revenues.

	Nine Months Ended March 31,										Increase (Decrease) in Net Income
	2019					2018
	Amount			% of Revenues		Amount			% of Revenues
Revenues	$	552,483		100	%	$	525,246		100	%	$	27,237
Direct operating expenses	230,210			42	%	222,315			42	%	(7,895		)
Selling, general and administrative expenses	76,931			14	%	63,255			12	%	(13,676		)
Depreciation and amortization	5,650			1	%	7,153			1	%	1,503
Operating income	239,692			43	%	232,523			44	%	7,169
Other income (expense):
Interest income	4,571			1	%	3,072			1	%	1,499
Interest expense	(35,273		)	(6	)%	(31,817		)	(6	)%	(3,456		)
Other components of net periodic benefit cost	(1,231		)	NM		(1,221		)	NM		(10		)
	(31,933		)	(6	)%	(29,966		)	(6	)%	(1,967		)
Income from operations before income taxes	207,759			38	%	202,557			39	%	5,202
Income tax benefit (expense)	(62,756		)	(11	)%	41,103			8	%	(103,859		)
Net income	$	145,003		26	%	$	243,660		46	%	$	(98,657	)

_________________ 

NM – Percentage is not meaningful

In the first quarter of fiscal year 2019, the Company adopted Topic 606. See Note 2 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for more information. The standard was applied using the modified retrospective approach. The amount by which each financial statement line item has been affected in the current reporting period by the application of Topic 606 compared to historical policies is not material, therefore, comparative disclosures have been omitted.

Revenues

Revenues for the nine months endedMarch 31, 2019increased$27,237, or 5%, to $552,483 as compared with the prior year period. The net increase was attributable to the following:

Increase in affiliation fee revenue	$	17,439
Increase in advertising revenue	9,376
Other net increases	422
	$	27,237

The increase in affiliation fee revenue was primarily due to higher affiliation rates, partially offset by the impact of a low single-digit percentage decrease in subscribers as compared with the prior year period.

The increase in advertising revenue was primarily due to the favorable impact of a net decrease in deferred revenue related to ratings guarantees in the current year as compared with a net increase in the prior year period. This increase also reflects higher per-game sales from the telecast of live professional sports programming and, to a lesser extent, higher sales from the Company’s branded content initiatives.

Direct operating expenses

Direct operating expenses for the nine months endedMarch 31, 2019increased$7,895, or 4%, to $230,210 as compared with the prior year period due to higher rights fees expense of $8,072, principally as a result of contractual rate increases, partially offset by a decrease in other programming-related costs of $177.

24

Selling, general and administrative expenses

Selling, general and administrative expenses for the nine months endedMarch 31, 2019increased$13,676, or 22%, to $76,931 as compared with the prior year period primarily due to higher advertising and marketing costs, higher employee compensation and related benefits (including share-based compensation expense) and, to a lesser extent, higher advertising sales commissions.

Operating income

Operating income for the nine months endedMarch 31, 2019increased$7,169, or 3%, to $239,692 as compared with the prior year period primarily due to (as discussed above) higher revenues partially offset by higher selling, general and administrative expenses (including share-based compensation expense) and, to a lesser extent, higher direct operating expenses.

Interest expense

Interest expense for the nine months endedMarch 31, 2019increased$3,456, or 11%, to $35,273 as compared with the prior year period primarily due to higher average interest rates in fiscal year 2019 (3.8% as compared with 2.9%), partially offset by a lower average principal balance under the Company’s term loan facility (see “Financing Agreements”).

Income taxes

See Note 14 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for more information on income taxes.

Adjusted operating income

The Company has presented the components that reconcile operating income, a GAAP measure, to adjusted operating income:

	Nine Months Ended				Increase (Decrease) in Adjusted Operating Income
	March 31,
	2019		2018
Operating income	$	239,692	$	232,523	$	7,169
Share-based compensation	13,658		10,581		3,077
Depreciation and amortization	5,650		7,153		(1,503		)
Adjusted operating income	$	259,000	$	250,257	$	8,743

Adjusted operating income for the nine months endedMarch 31, 2019increased$8,743, or 3%, to $259,000 as compared with the prior year period primarily due to (as discussed above) higher revenues, partially offset by higher selling, general and administrative expenses (excluding share-based compensation expense) and higher direct operating expenses.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash and cash equivalents, cash flows from the operations of our business and available borrowing capacity under our $250,000 revolving credit facility with a syndicate of lenders which was undrawn as of March 31, 2019 (see “Financing Agreements” below). Our principal uses of cash are expected to include working capital-related items, capital spending, taxes, debt service, and the repurchase of shares of the Company’s Class A common stock, par value $0.01 per share (“Class A Common Stock”). The Company’s use of its available liquidity will be based upon the ongoing review of the funding needs of the business, the optimal allocation of cash resources, and the timing of cash flow generation.

We believe we have sufficient liquidity, including $182,261 in cash and cash equivalents, as of March 31, 2019, as well as the available borrowing capacity under our revolving credit facility and our anticipated operating cash flows, to fund our business operations, repurchase shares of the Company’s Class A Common Stock and service our outstanding term loan facility (see “Financing Agreements” below) over the next twelve months. However, potential subscriber reductions of our Distributors, changes in the demand for our programming, advertising revenue declines, our ability to maintain or obtain content, and other factors could adversely impact our business and results of operations, which might require that we seek alternative sources of funding through the capital and credit markets that may or may not be available to us.

On December 7, 2017, the Company’s Board of Directors authorized the repurchase of up to $150,000 of the Company’s Class A Common Stock. Under the authorization, shares of Class A Common Stock may be purchased from time to time in open market

25

or private transactions, block trades or such other manner as the Company may determine, in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. As of March 31, 2019, the Company had $136,165 of availability remaining under its stock repurchase authorization. The Company did not repurchase shares during the nine months ended March 31, 2019.

Financing Agreements

On September 28, 2015, MSGN Holdings L.P. (“MSGN L.P.”), an indirect wholly-owned subsidiary of the Company through which the Company conducts substantially all of its operations, MSGN Eden, LLC, an indirect subsidiary of the Company and the general partner of MSGN L.P., Regional MSGN Holdings LLC, a direct subsidiary of the Company and the limited partner of MSGN L.P., and certain subsidiaries of MSGN L.P. entered into a credit agreement with a syndicate of lenders.

See Note 7 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for more information on the credit agreement.

Contractual Obligations

As more fully described in Note 9 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018, the Company’s contractual obligations not reflected on the consolidated balance sheet consist primarily of its obligations under media rights agreements.

In addition, see Note 7 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for the principal repayments required under the Company’s term loan facility.

Cash Flow Discussion

Operating Activities

Net cash provided by operating activities for the nine months endedMarch 31, 2019decreased by $22,771 to $142,080 as compared with the prior year period. This decrease was primarily driven by higher income taxes paid, and timing of certain working capital items, partially offset by higher income from operations before income taxes as compared with the prior year period.

Investing Activities

Net cash used in investing activities for the nine months endedMarch 31, 2019increased by $2,442 to $3,912 as compared with the prior year period due to an investment made in a nonconsolidated entity and, to a lesser extent, higher capital expenditures in the current year period.

Financing Activities

Net cash used in financing activities for the nine months endedMarch 31, 2019increased by $51,356 to $161,250 as compared with the prior year period primarily due to higher voluntary principal repayments on the Company’s term loan facility made in the current year period.

Recently Issued Accounting Pronouncements Not Yet Adopted and Critical Accounting Policies

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842), and subsequent ASUs that amended and/or clarified the application of ASU No. 2016-02, which supersedes the current guidance in Accounting Standards Codification (“ASC”) Topic 840, Leases. This ASU generally requires the recognition of all lease assets and lease liabilities on the balance sheet, including those leases classified as operating leases under previous GAAP. The amended guidance also requires additional quantitative and qualitative disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases in order to provide additional information about the nature of an organization’s leasing activities. This standard will be effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted, and the modified retrospective approach required. The Company does not plan to early adopt this standard. The Company is compiling the necessary data and is in the process of determining which practical expedients to apply upon adoption. The adoption of this standard will result in the recognition of right of use assets and lease liabilities related to the Company’s identified leases.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses, which introduces a new impairment model for most financial assets and certain other instruments. For trade and other receivables, the Company will be required to use a forward-looking “expected loss” model that will replace the current “incurred loss” model and generally will result in earlier recognition of allowances for losses. This standard will be effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

26

In August 2018, the FASB issued ASU No. 2018-14, Compensation — Retirement Benefits — Defined Benefit Plans — General (Topic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans, which removes, adds, or clarifies disclosure requirements relating to defined benefit plans to improve disclosure effectiveness. This standard will be effective for the Company beginning in the fourth quarter of fiscal year 2020, with early adoption permitted. The standard is to be applied retroactively to all periods presented. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2019, the FASB issued ASU No. 2019-02, Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and Entertainment-Broadcasters-Intangibles-Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials, which amends ASC Subtopic 920-350 to align the accounting for production costs of an episodic television series with that for the costs of producing films. This standard will be effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The standard is to be applied prospectively to all periods presented. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

Critical Accounting Policies

The following discussion has been included to provide the results of the Company’s annual impairment testing of goodwill performed during the first quarter of fiscal year 2019, and to provide a discussion of the Company’s adoption of ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. There have been no other material changes to the Company’s critical accounting policies from those set forth in our Annual Report on Form 10-K for the year ended June 30, 2018.

Goodwill

The goodwill balance reported on the Company’s consolidated balance sheet as of March 31, 2019 is $424,508. Goodwill is tested annually for impairment as of August 31st and at any time upon the occurrence of certain events or substantive changes in circumstances. The Company early adopted ASU No. 2017-04, which simplifies the measurement of goodwill impairment, for its August 31, 2018 test date. The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. If the Company can support the conclusion that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company does not need to perform the quantitative goodwill impairment test for that reporting unit. If the Company cannot support such a conclusion or the Company does not elect to perform the qualitative assessment then the Company would perform the quantitative goodwill impairment test. The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

The Company has one reporting unit for evaluating goodwill impairment. During the first quarter of fiscal year 2019, the Company performed its annual impairment test of goodwill by comparing the fair value of its reporting unit with its carrying value. As the Company’s reporting unit had a negative carrying value of net assets, there was no impairment of goodwill identified.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There were no material changes to the disclosures on this matter made in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018.

Item 4. Controls and Procedures

An evaluation was carried out under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2019 the Company’s disclosure controls and procedures were effective.

There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

27

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

The Company is a defendant in various lawsuits. Although the outcome of these matters cannot be predicted with certainty, management does not believe that resolution of these lawsuits will have a material adverse effect on the Company.

Item 6. Exhibits

(a) Index to Exhibits

EXHIBIT NO.	DESCRIPTION
31.1	Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Label Linkbase.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

28

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 2nd day of May, 2019.

MSG Networks Inc.
By:	/S/    BRET RICHTER
	Name:	Bret Richter
	Title:	Executive Vice President,
		Chief Financial Officer and Treasurer

29

EX-31.1

Exhibit 31.1

Certification

I, Andrea Greenberg, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of MSG Networks Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 2, 2019

/s/ Andrea Greenberg

Andrea Greenberg

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Bret Richter, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of MSG Networks Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 2, 2019

/s/ Bret Richter

Bret Richter

Executive Vice President, Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

Certification

Pursuant to 18 U.S.C. §1350, the undersigned officer of MSG Networks Inc. (the “Company”), hereby certifies, to such officer's knowledge, that the Company's Quarterly Report on Form 10-Q for the Quarter ended March 31, 2019 (the “Report”) fully complies with the requirements of §13(a) or §15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 2, 2019

/s/ Andrea Greenberg

Andrea Greenberg

President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

Certification

Pursuant to 18 U.S.C. §1350, the undersigned officer of MSG Networks Inc. (the “Company”), hereby certifies, to such officer's knowledge, that the Company's Quarterly Report on Form 10-Q for the Quarter ended March 31, 2019 (the “Report”) fully complies with the requirements of §13(a) or §15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 2, 2019

/s/ Bret Richter

Bret Richter

Executive Vice President, Chief Financial Officer and Treasurer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Document And Entity Information - shares	9 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Entity Registrant Name	MSG Networks Inc.
Trading Symbol	MSGN
Entity Central Index Key	0001469372
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Emerging Growth Company	false
Entity Small Business	false
Class A Common Stock [Member]
Entity Common Stock, Shares Outstanding		61,286,747
Class B Common Stock [Member]
Entity Common Stock, Shares Outstanding		13,588,555

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Jun. 30, 2018
Current Assets:
Cash and cash equivalents	$ 182,261	$ 205,343
Accounts receivable, net	110,619	110,657
Related party receivables, net	30,880	12,100
Prepaid income taxes	2,411	1,134
Prepaid expenses	4,574	4,489
Other current assets	6,157	4,719
Total current assets	336,902	338,442
Property and equipment, net	8,653	10,029
Amortizable intangible assets, net	34,608	37,203
Goodwill	424,508	424,508
Other assets	39,978	39,430
Total assets	844,649	849,612
Current Liabilities:
Accounts payable	427	1,460
Related party payables	1,130	785
Current portion of long-term debt	98,664	72,414
Income taxes payable	5,593	8,460
Accrued liabilities:
Employee related costs	13,214	15,342
Other accrued liabilities	10,209	8,129
Deferred revenue	2,196	4,626
Total current liabilities	131,433	111,216
Commitments and contingencies (see Note 8)
Long-term debt, net of current portion	937,457	1,118,017
Defined benefit and other postretirement obligations	26,026	28,170
Other employee related costs	4,602	4,560
Other liabilities	3,928	3,974
Deferred tax liability	244,544	241,417
Total liabilities	1,347,990	1,507,354
Stockholders' Equity (Deficiency):
Preferred stock, par value $0.01, 45,000 shares authorized; none outstanding	0	0
Additional paid-in capital	5,487	4,067
Treasury stock, at cost 2,972 and 3,242 shares as of March 31, 2019 and June 30, 2018, respectively	(179,561)	(195,881)
Accumulated deficit	(323,593)	(460,007)
Accumulated other comprehensive loss	(6,453)	(6,700)
Total stockholders' deficiency	(503,341)	(657,742)
Total liabilities and stockholders' deficiency	844,649	849,612
Class A Common Stock [Member]
Stockholders' Equity (Deficiency):
Common stock, value issued	643	643
Class B Common Stock [Member]
Stockholders' Equity (Deficiency):
Common stock, value issued	$ 136	$ 136

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands	Mar. 31, 2019	Jun. 30, 2018
Preferred stock, par value (dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	45,000	45,000
Preferred stock, shares outstanding	0	0
Treasury stock, shares	2,972	3,242
Commitments and contingencies (see Note 8)
Class A Common Stock [Member]
Common stock, par value (dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	360,000	360,000
Common stock, shares outstanding	61,287	61,017
Class B Common Stock [Member]
Common stock, par value (dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	90,000	90,000
Common stock, shares outstanding	13,589	13,589

XML

Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
Revenues	$ 195,105	$ 186,568	$ 552,483	$ 525,246
Direct operating expenses (including related party expenses of $38,283 and $37,344 for the three months ended March 31, 2019 and 2018, respectively, and $114,586 and $111,357 for the nine months ended March 31, 2019 and 2018, respectively)	82,085	80,322	230,210	222,315
Selling, general and administrative expenses (including related party expenses of $9,739 and $8,719 for the three months ended March 31, 2019 and 2018, respectively, and $21,464 and $18,871 for the nine months ended March 31, 2019 and 2018, respectively)	28,734	23,383	76,931	63,255
Depreciation and amortization	1,805	2,279	5,650	7,153
Operating income	82,481	80,584	239,692	232,523
Other income (expense):
Interest income	1,557	1,195	4,571	3,072
Interest expense	(11,658)	(10,932)	(35,273)	(31,817)
Other components of net periodic benefit cost	(413)	(407)	(1,231)	(1,221)
Nonoperating expense, Total	(10,514)	(10,144)	(31,933)	(29,966)
Income from operations before income taxes	71,967	70,440	207,759	202,557
Income tax benefit (expense)	(17,732)	(23,505)	(62,756)	41,103
Net income	$ 54,235	$ 46,935	$ 145,003	$ 243,660
Basic
Net income	$ 0.72	$ 0.62	$ 1.93	$ 3.23
Diluted
Net income	$ 0.72	$ 0.62	$ 1.92	$ 3.21
Weighted-average number of common shares outstanding:
Basic (in shares)	75,152	75,540	75,041	75,427
Diluted (in shares)	75,739	76,017	75,712	75,844

XML

Consolidated Statements Of Operations (Parenthetical) - Continuing Operations [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Direct operating expenses from related party	$ 38,283	$ 37,344	$ 114,586	$ 111,357
Selling, general and administrative expenses from related party	$ 9,739	$ 8,719	$ 21,464	$ 18,871

XML

Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Net income	$ 54,235	$ 46,935	$ 145,003	$ 243,660
Amounts reclassified from accumulated other comprehensive loss:
Amortization of net actuarial loss included in net periodic benefit cost	119	149	357	447
Amortization of net prior service credit included in net periodic benefit cost	(2)	(3)	(6)	(9)
Settlement gain	0	0	(8)	0
Other comprehensive income before income taxes	117	146	343	438
Income tax expense related to items of other comprehensive income	(32)	(42)	(96)	(164)
Other comprehensive income	85	104	247	274
Comprehensive income	$ 54,320	$ 47,039	$ 145,250	$ 243,934

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net Income	$ 145,003	$ 243,660
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,650	7,153
Amortization of deferred financing costs	2,252	2,252
Share-based compensation expense	13,658	10,581
Provision for doubtful accounts	(756)	183
Change in assets and liabilities:
Accounts receivable, net	932	(4,266)
Related party receivables, net	(18,918)	(9,016)
Prepaid expenses and other assets	377	53
Accounts payable	(1,033)	(587)
Related party payables, including payable to MSG	466	(2,003)
Prepaid/payable for income taxes	(4,144)	22,568
Accrued and other liabilities	(1,856)	1,194
Deferred revenue	(2,430)	1,929
Deferred income taxes	2,879	(108,850)
Net cash provided by operating activities	142,080	164,851
Cash flows from investing activities:
Capital expenditures	(1,912)	(1,470)
Investment in nonconsolidated entity	(2,000)	0
Net cash used in investing activities	(3,912)	(1,470)
Cash flows from financing activities:
Principal repayments on Term Loan Facility (see Note 7)	(156,250)	(106,250)
Taxes paid in lieu of shares issued for share-based compensation	(5,000)	(3,644)
Net cash used in financing activities	(161,250)	(109,894)
Net increase (decrease) in cash and cash equivalents	(23,082)	53,487
Cash and cash equivalents at beginning of period	205,343	141,087
Cash and cash equivalents at end of period	$ 182,261	$ 194,574

XML

Consolidated Statements Of Stockholders' Equity (Deficiency) And Comprehensive Income (Loss) - USD ($) $ in Thousands	Total	Common Stock Issued [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]
Balance at Jun. 30, 2017	$ (944,207)	$ 779	$ 6,909	$ (198,800)	$ (746,539)	$ (6,556)
Increase (Decrease) in Stockholders' Equity (Deficiency) [Roll Forward]
Net income	243,660				243,660
Other comprehensive income	274					274
Comprehensive income	243,934
Share-based compensation expense	10,581		10,581
Tax withholding associated with shares issued for share-based compensation	(3,649)		(3,649)	0	0
Shares issued upon distribution of Restricted Stock Units	0		(10,630)	14,351	(3,721)
Balance at Mar. 31, 2018	(693,341)	779	3,211	(184,449)	(505,209)	(7,673)
Increase (Decrease) in Stockholders' Equity (Deficiency) [Roll Forward]
Reclassification of Stranded Tax Effects	0				1,391	(1,391)
Balance at Dec. 31, 2017	(743,242)	779	349	(184,449)	(553,535)	(6,386)
Increase (Decrease) in Stockholders' Equity (Deficiency) [Roll Forward]
Net income	46,935				46,935
Other comprehensive income	104					104
Comprehensive income	47,039
Share-based compensation expense	2,862		2,862
Balance at Mar. 31, 2018	(693,341)	779	3,211	(184,449)	(505,209)	(7,673)
Increase (Decrease) in Stockholders' Equity (Deficiency) [Roll Forward]
Reclassification of Stranded Tax Effects	0				1,391	(1,391)
Balance at Jun. 30, 2018	(657,742)	779	4,067	(195,881)	(460,007)	(6,700)
Increase (Decrease) in Stockholders' Equity (Deficiency) [Roll Forward]
Net income	145,003				145,003
Other comprehensive income	247					247
Comprehensive income	145,250
Share-based compensation expense	13,658		13,658
Tax withholding associated with shares issued for share-based compensation	(4,879)		(4,879)
Shares issued upon distribution of Restricted Stock Units	0		(7,359)	16,320	(8,961)
Balance at Mar. 31, 2019	(503,341)	779	5,487	(179,561)	(323,593)	(6,453)
Balance at Dec. 31, 2018	(562,032)	779	1,116	(179,561)	(377,828)	(6,538)
Increase (Decrease) in Stockholders' Equity (Deficiency) [Roll Forward]
Net income	54,235				54,235
Other comprehensive income	85					85
Comprehensive income	54,320
Share-based compensation expense	4,371		4,371
Balance at Mar. 31, 2019	$ (503,341)	$ 779	$ 5,487	$ (179,561)	$ (323,593)	$ (6,453)

XML

Description of Business and Basis of Presentation

9 Months Ended

Mar. 31, 2019

Description of Business And Basis of Presentation [Abstract]

Description of Business and Basis of Presentation

Description of Business and Basis of Presentation

Description of Business

MSG Networks Inc. (together with its subsidiaries, the “Company”), incorporated on July 29, 2009, owns and operates two regional sports and entertainment networks, MSG Network and MSG+.

On September 30, 2015, the Company distributed to its stockholders all of the outstanding common stock of The Madison Square Garden Company (“MSG”) (the “Distribution”). Following the Distribution, the Company no longer consolidates the financial results of MSG for purposes of its own financial reporting.

The Company operates and reports financial information in one segment. Substantially all revenues and assets of the Company are attributed to or located in the United States and are primarily concentrated in the New York City metropolitan area.

Unaudited Interim Financial Statements

The accompanying interim consolidated unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2018. The financial statements as of March 31, 2019 and for the three and nine months ended March 31, 2019 and 2018 presented in this Quarterly Report on Form 10-Q are unaudited; however, in the opinion of management such financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. The results of operations for the periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year.

XML

Accounting Policies

9 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Accounting Policies

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of MSG Networks Inc. and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amount of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amount of revenues and expenses. Such estimates include the valuation of accounts receivable, investments, goodwill, other long-lived assets, pension and other postretirement benefit obligations and the related net periodic benefit cost, tax accruals, and other liabilities. In addition, estimates are used in revenue recognition, income tax benefit (expense), performance and share-based compensation, depreciation and amortization, litigation matters, and other matters. Management believes its use of estimates in the consolidated 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 material and would be reflected in the Company’s financial statements in future periods.

Investment in Nonconsolidated Entity

The Company’s investment in a nonconsolidated entity, which is included in other assets in the accompanying consolidated balance sheet, does not have a readily determinable fair value. As such, the Company has elected to account for it at cost, which would be adjusted for impairment and changes resulting from observable price fluctuations in orderly transactions for an identical or a similar investment of the same issuer (referred to as the measurement alternative method). Investments accounted for under the measurement alternative method are classified within Level III of the fair value hierarchy. As of March 31, 2019, the Company did not identify any potential adjustments to the cost of its investment.

Accounts Receivable

Accounts receivable is recorded at net realizable value. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables. The allowance for doubtful accounts is estimated based on the Company’s analysis of receivables aging, specific identification of certain receivables that are at risk of not being paid, past collection experience and other factors. The Company’s allowance for doubtful accounts was $1,215 and $509 as of March 31, 2019 and June 30, 2018, respectively.

Recently Adopted Accounting Pronouncements

The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), and the subsequent ASUs that amended and/or clarified the application of ASU No. 2014-09 (collectively, “Topic 606”) on July 1, 2018 (“Adoption Date”). Topic 606 superseded the revenue recognition requirements in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition. The Company applied the modified retrospective approach for all contracts not completed as of the Adoption Date, and as a result, recorded a decrease to the opening accumulated deficit of $372, net of tax.

The reported results as of and for the three and nine months ended March 31, 2019 reflect the application of Topic 606, while the reported results for prior periods have not been adjusted to reflect Topic 606, and continue to be presented under the prior revenue recognition accounting guidance. The amount by which each financial statement line item has been affected in the current reporting period by the application of Topic 606 compared to historical policies is not material, therefore, comparative disclosures have been omitted. The adoption of Topic 606 did not result in significant changes in the way the Company records revenues. However, as a result of adopting Topic 606, there are certain components of the Company’s revenues where Topic 606 generally results in different recognition of revenue compared to the Company’s historical policies.

The following table provides changes to each applicable opening balance on the Company’s consolidated balance sheet resulting from the adoption of Topic 606:

	June 30, 2018		Impact of Adoption		July 1, 2018
Current assets	$	338,442	$	585	$	339,027
Total assets	849,612		760		850,372
Current liabilities	111,216		—		111,216
Total liabilities	1,507,354		388		1,507,742

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which amends ASC Topic 230, Statement of Cash Flows to eliminate the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on various cash flow issues. This standard was adopted by the Company in the first quarter of fiscal year 2019, and was applied retrospectively. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses, which will effect various areas of accounting including, but not limited to, goodwill and consolidation. This standard was adopted by the Company in the first quarter of fiscal year 2019, and was applied prospectively. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the measurement of goodwill impairment by eliminating the requirement of performing a hypothetical purchase price allocation. Instead, impairment will be measured using the difference between the carrying amount and fair value of the reporting unit, not to exceed the carrying amount of goodwill. The amended guidance also eliminates the requirement for any reporting unit with a zero or a negative carrying amount to perform a qualitative assessment, and will require disclosure of the amount of goodwill allocated to each reporting unit with a zero or a negative carrying amount of net assets. This standard was early adopted by the Company in the first quarter of fiscal year 2019, and was applied prospectively. Based on the Company’s most recent annual goodwill impairment test completed in the first quarter of fiscal year 2019, the adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In May 2017, the FASB issued ASU No. 2017-09, Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This standard does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification, and would not be required if the changes are considered non-substantive. This standard was adopted by the Company in the first quarter of fiscal year 2019, and will be applied prospectively to any changes to the terms and conditions of share-based payment awards made on or after the adoption date should they occur. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), and subsequent ASUs that amended and/or clarified the application of ASU No. 2016-02, which supersedes the current guidance in ASC Topic 840, Leases. This ASU generally requires the recognition of all lease assets and lease liabilities on the balance sheet, including those leases classified as operating leases under previous GAAP. The amended guidance also requires additional quantitative and qualitative disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases in order to provide additional information about the nature of an organization’s leasing activities. This standard will be effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted, and the modified retrospective approach required. The Company does not plan to early adopt this standard. The Company is compiling the necessary data and is in the process of determining which practical expedients to apply upon adoption. The adoption of this standard will result in the recognition of right of use assets and lease liabilities related to the Company’s identified leases.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses, which introduces a new impairment model for most financial assets and certain other instruments. For trade and other receivables, the Company will be required to use a forward-looking “expected loss” model that will replace the current “incurred loss” model and generally will result in earlier recognition of allowances for losses. This standard will be effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-14, Compensation — Retirement Benefits — Defined Benefit Plans — General (Topic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans, which removes, adds, or clarifies disclosure requirements relating to defined benefit plans to improve disclosure effectiveness. This standard will be effective for the Company beginning in the fourth quarter of fiscal year 2020, with early adoption permitted. The standard is to be applied retroactively to all periods presented. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2019, the FASB issued ASU No. 2019-02, Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and Entertainment-Broadcasters-Intangibles-Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials, which amends ASC Subtopic 920-350 to align the accounting for production costs of an episodic television series with that for the costs of producing films. This standard will be effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The standard is to be applied prospectively to all periods presented. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

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Revenue Recognition (Notes)

9 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Revenue Recognition

The Company generates revenues principally from affiliation fees charged to cable, satellite, telephone and other platforms (“Distributors”) for the right to carry its networks, as well as from the sale of advertising. The Company’s advertising revenue is largely derived from the sale of inventory in its live professional sports programming, as such, a disproportionate share of this revenue has historically been earned in the Company’s second and third fiscal quarters. The Company’s revenue recognition policies that describe the nature, amount, timing and uncertainty associated with each major source of revenue from contracts with customers are summarized below.

Affiliation Fee Revenue

Affiliation fee revenue is earned from Distributors for the right to carry the Company’s networks under contracts, commonly referred to as “affiliation agreements.” The Company’s performance obligation under its affiliation agreements is satisfied as the Company provides its programming over the term of the affiliation agreement.

Historically, affiliation fee revenue has constituted at least 90% of the Company’s consolidated revenues on a full fiscal year basis, however, given the timing of its advertising revenue as stated above, affiliation fee revenue constituted less than 90% of its consolidated revenues for the three and nine months ended March 31, 2019. Substantially all of the Company’s affiliation agreements are sales-based and usage-based royalty arrangements, which are recognized as the sale or usage occurs. The transaction price is represented by affiliation fees that are generally based upon contractual rates applied to the number of the Distributor’s subscribers who receive or can receive the Company’s programming. Such subscriber information is generally not received until after the close of the reporting period, and in these cases, the Company estimates the number of subscribers. Historical adjustments to recorded estimates have not been material.

The Company’s payment terms vary and are generally within 30-60 days after revenue is earned.

Advertising Revenue

The Company primarily earns advertising revenue through the sale of commercial time and other advertising inventory during its programming. In general, these advertising arrangements either do not exceed one year or are primarily multi-year media banks, the elements of which are agreed upon each year. Advertising revenue is recognized as advertising is aired. In certain advertising arrangements, the Company guarantees specified viewer ratings for its programming. In such cases, the promise to deliver the guaranteed viewer ratings by airing the advertising represents the Company’s performance obligation. A contract liability is recognized as deferred revenue to the extent any guaranteed viewer ratings are not met and the customer is expected to exercise any right for additional advertising time, and is subsequently recognized as revenue either when the Company provides the required additional advertising time, or additional performance requirements become remote, which may be at the time the guarantee obligation contractually expires.

The Company’s payment terms vary by the type of customer. Generally, payment terms are 30-60 days after revenue is earned.

Principal versus Agent Revenue Recognition

The Company has an advertising sales representation agreement with MSG that provides for MSG to act as its advertising sales representative and includes the exclusive right and obligation to sell certain advertising availabilities on the Company’s behalf for a commission. The Company reports advertising revenue on a gross basis as it is primarily responsible for the fulfillment of advertising orders.

Noncash Consideration

The Company enters into nonmonetary transactions, primarily with its Distributors, that involve the exchange of products or services, such as advertising and promotional benefits, for the Company’s services. For arrangements that are subject to sales-based and usage-based royalty guidance, the Company measures noncash consideration that it receives at fair value as the sale or usage occurs. For other arrangements, the Company measures the estimated fair value of the noncash consideration that it receives at contract inception. If the Company cannot reasonably estimate the fair value of the noncash consideration, the Company measures the fair value of the consideration indirectly by reference to the standalone selling price of the services promised to the customer in exchange for the consideration.

Transaction Price Allocated to Future Performance Obligations

Topic 606 requires disclosure of the aggregate amount of consideration the Company expects to receive in exchange for transferring services to a customer (transaction price) that is allocated to performance obligations that have not yet been satisfied as of March 31, 2019. However, the guidance provides certain practical expedients that allow companies to omit this disclosure requirement for (i) sales-based or usage-based royalty arrangements, (ii) contracts with an original expected length of one year or less, (iii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed, and (iv) variable consideration related to a wholly unsatisfied performance obligation.

Substantially all of the Company’s affiliation agreements are licenses of functional intellectual property where revenue is derived from sales-based and usage-based royalty arrangements, and generally the Company’s advertising arrangements either do not exceed one year or are primarily multi-year media banks, the elements of which are agreed upon each year. For these types of arrangements, the Company applies a practical expedient.

As of March 31, 2019, other than contracts for which the Company has applied the practical expedients, the aggregate amount of transaction price allocated to remaining performance obligations under these contracts was approximately $18,700 to be recognized over the next ten years.

Contract Balances from Contracts with Customers

An account receivable is recorded when there is an unconditional right to consideration based on a contract with a customer. When consideration is received from a customer prior to transferring services to the customer under the terms of a contract, a contract liability (deferred revenue) is recorded.

For certain types of contracts with customers, the Company may recognize revenue in advance of the contractual right to invoice the customer, resulting in an amount recorded to contract assets as required by Topic 606. Once the Company has an unconditional right to consideration under these contracts, the contract assets are reclassified to accounts receivable.

Deferred revenue is recognized as revenue when, or as, control of the services is transferred to the customer and all revenue recognition criteria have been met. As noted above, the primary source of the Company’s deferred revenue relates to the Company not meeting viewer rating guarantees on advertising sales arrangements.

The following table provides information about current contract balances from contracts with customers:

	March 31, 2019		June 30, 2018
Accounts receivable (including advertising receivable included in related party receivables, net)	$	151,456	$	125,982
Contract asset, short-term (included in other current assets)	1,779		—
Deferred revenue, short-term	2,196		4,626
Deferred revenue, long-term (included in other liabilities)	270		—

The amount of revenue recognized for the nine months endedMarch 31, 2019 related to deferred revenue (contract liability) recorded at the Adoption Date was approximately $4,588.

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Computation of Earnings Per Common Share

9 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Computation of Earnings per Common Share

Computation of Earnings per Common Share

Basic earnings per common share (“EPS”) is based upon net income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the effect of the assumed vesting of restricted stock units (“RSUs”) and exercise of stock options only in the periods in which such effect would have been dilutive.

The following table presents a reconciliation of the weighted-average number of shares used in the calculations of basic and diluted EPS:

	Three Months Ended		Nine Months Ended
	March 31,		March 31,
	2019	2018	2019	2018
Weighted-average number of shares for basic EPS	75,152	75,540	75,041	75,427
Dilutive effect of shares issuable under share-based compensation plans	587	477	671	417
Weighted-average number of shares for diluted EPS	75,739	76,017	75,712	75,844
Anti-dilutive shares	992	426	618	544

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Goodwill and Intangible Assets

9 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Intangible Assets

Goodwill and Amortizable Intangible Assets

During the first quarter of fiscal year 2019, the Company performed its annual impairment test of goodwill. As the Company’s one reporting unit had a negative carrying value of net assets, there was no impairment of goodwill identified.

The Company’s intangible assets subject to amortization are as follows:

	March 31, 2019			June 30, 2018
Affiliate relationships	$	83,044		$	83,044
Less accumulated amortization	(48,436		)	(45,841		)
	$	34,608		$	37,203

Affiliate relationships have an estimated useful life of 24 years. Amortization expense for intangible assets was $865 for the three months endedMarch 31, 2019 and 2018, and $2,595 for the nine months endedMarch 31, 2019 and 2018.

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Property and Equipment

9 Months Ended

Mar. 31, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

As of March 31, 2019 and June 30, 2018, property and equipment consisted of the following assets:

	March 31, 2019			June 30, 2018
Equipment	$	37,887		$	36,027
Furniture and fixtures	1,757			1,728
Leasehold improvements	19,320			19,297
Construction in progress	494			727
	59,458			57,779
Less accumulated depreciation and amortization	(50,805		)	(47,750		)
	$	8,653		$	10,029

Depreciation and amortization expense on property and equipment was $940 and $1,414 for the three months endedMarch 31, 2019 and 2018, respectively, and $3,055 and $4,558 for the nine months endedMarch 31, 2019 and 2018, respectively.

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Debt

9 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Debt

Debt

On September 28, 2015, MSGN Holdings L.P. (“MSGN L.P.”), an indirect wholly-owned subsidiary of the Company through which the Company conducts substantially all of its operations, MSGN Eden, LLC, an indirect subsidiary of the Company and the general partner of MSGN L.P., Regional MSGN Holdings LLC, a direct subsidiary of the Company and the limited partner of MSGN L.P. (collectively with MSGN Eden, LLC, the “Holdings Entities”), and certain subsidiaries of MSGN L.P. entered into a credit agreement (the “Credit Agreement”) with a syndicate of lenders.

The Credit Agreement provides MSGN L.P. with senior secured credit facilities (the “Senior Secured Credit Facilities”) consisting of: (a) an initial$1,550,000term loan facility (the “Term Loan Facility”) and (b) a$250,000revolving credit facility (the “Revolving Credit Facility”), each with a term of five years. In connection with the Distribution,$1,450,000of the proceeds from the Term Loan Facility was contributed to MSG immediately following the closing of the Senior Secured Credit Facilities. Up to $35,000of the Revolving Credit Facility is available for the issuance of letters of credit.Subject to the satisfaction of certain conditions and limitations, the Credit Agreement allows for the addition of incremental term and/or revolving loan commitments and incremental term and/or revolving loans.

Borrowings under the Credit Agreement bear interest at a floating rate, which at the option of MSGN L.P. may be either (a) base rate, representing the higher of: (i) the New York Fed Bank Rate plus 0.50%; (ii) the U.S. Prime Rate; or (iii) the one-month London Interbank Offered Rate, or LIBOR, plus 1.00% (the “Base Rate”), plus an additional rate ranging from 0.50% to 1.25% per annum (determined based on a total leverage ratio), or (b) a Eurodollar rate (the “Eurodollar Rate”) plus an additional rate ranging from 1.50% to 2.25% per annum (determined based on a total leverage ratio), provided that for the period until the delivery of the compliance certificate for the period ending March 31, 2016, the additional rate used in calculating both floating rates was (i) 1.00% per annum for borrowings bearing interest at the Base Rate, and (ii) 2.00% per annum for borrowings bearing interest at the Eurodollar Rate. Upon a payment default in respect of principal, interest or other amounts due and payable under the Credit Agreement or related loan documents, default interest will accrue on all overdue amounts at an additional rate of 2.00% per annum. The Credit Agreement requires that MSGN L.P. pay a commitment fee of 0.30%in respect of the average daily unused commitments, as well as fronting fees, to banks that issue letters of credit pursuant to the Revolving Credit Facility.

The Credit Agreement generally requires the Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis to comply with a maximum total leverage ratio of 6.00:1.00 from the closing date until September 30, 2016 and a maximum total leverage ratio of 5.50:1.00 from October 1, 2016 until maturity, subject, in each case, to upward adjustment during the continuance of certain events. In addition, there is a minimum interest coverage ratio of 2.00:1.00 for the Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis. As of March 31, 2019, the Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis were in compliance with the financial covenants of the Credit Agreement. All borrowings under the Credit Agreement are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties. As ofMarch 31, 2019, there were noletters of credit issued and outstanding under the Revolving Credit Facility, which provides full borrowing capacity of$250,000. For the nine months ended March 31, 2019, the Company made principal repayments of$156,250, including voluntary payments of $100,000, of which $25,000 was made in the third quarter of fiscal year 2019. The Company has made principal payments aggregating$510,000 through March 31, 2019. The Term Loan Facility amortizes quarterly in accordance with its terms through June 30, 2020 with a final maturity date on September 28, 2020.

As of March 31, 2019, the principal repayments required under the Term Loan Facility are as follows:

Remainder of fiscal year ending June 30, 2019	$	18,750
Fiscal year ending June 30, 2020	114,375
Fiscal year ending June 30, 2021	906,875
	$	1,040,000

All obligations under the Credit Agreement are guaranteed by the Holdings Entities and MSGN L.P.’s existing and future direct and indirect domestic subsidiaries that are not designated as excluded subsidiaries or unrestricted subsidiaries (the “Subsidiary Guarantors,” and together with the Holdings Entities, the “Guarantors”). All obligations under the Credit Agreement, including the guarantees of those obligations, are secured by certain assets of MSGN L.P. and each Guarantor (collectively, “Collateral”), including, but not limited to, a pledge of the equity interests in MSGN L.P. held directly by the Holdings Entities and the equity interests in each Subsidiary Guarantor held directly or indirectly by MSGN L.P. Subject to customary notice and minimum amount conditions, MSGN L.P. may voluntarily prepay outstanding loans under the Credit Agreement at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to Eurodollar loans). MSGN L.P. is required to make mandatory prepayments in certain circumstances, including without limitation from the net cash proceeds of certain sales of assets (including Collateral) or casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights) and the incurrence of certain indebtedness, subject to certain exceptions.

In addition to the financial covenants discussed above, the Credit Agreement and the related security agreement contain certain customary representations and warranties, affirmative covenants, and events of default. The Credit Agreement contains certain restrictions on the ability of the Holdings Entities and MSGN L.P. and its restricted subsidiaries to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the Credit Agreement, including the following: (i) incurring additional indebtedness and contingent liabilities; (ii) creating liens on certain assets; (iii) making investments, loans or advances in or to other persons; (iv) paying dividends and distributions or repurchasing capital stock; (v) changing their lines of business; (vi) engaging in certain transactions with affiliates; (vii) amending specified material agreements; (viii) merging or consolidating; (ix) making certain dispositions; and (x) entering into agreements that restrict the granting of liens. The Holdings Entities are also subject to customary passive holding company covenants.

The Company is amortizing its deferred financing costs on a straight-line basis over the five-year term of the Senior Secured Credit Facilities which approximates the effective interest method. The following table summarizes the presentation of the Term Loan Facility and the related deferred financing costs in the accompanying consolidated balance sheets as of March 31, 2019 and June 30, 2018:

	Term Loan Facility		Deferred Financing Costs			Net
March 31, 2019
Current portion of long-term debt	$	101,250	$	(2,586	)	$	98,664
Long-term debt, net of current portion	938,750		(1,293		)	937,457
Total	$	1,040,000	$	(3,879	)	$	1,036,121
June 30, 2018
Current portion of long-term debt	$	75,000	$	(2,586	)	$	72,414
Long-term debt, net of current portion	1,121,250		(3,233		)	1,118,017
Total	$	1,196,250	$	(5,819	)	$	1,190,431

In addition, the Company has deferred financing costs related to the Revolving Credit Facility recorded in the accompanying consolidated balance sheets as summarized in the following table:

	March 31, 2019		June 30, 2018
Other current assets	$	417	$	417
Other assets	209		521

The Company made interest payments under the Credit Agreement of $32,879 and $29,303 during the nine months endedMarch 31, 2019 and 2018, respectively.

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Commitments and Contingencies

9 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

Commitments

As more fully described in Note 9 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018, the Company’s contractual obligations not reflected on the consolidated balance sheet consist primarily of its obligations under media rights agreements.

In addition, see Note 7 for the principal repayments required under the Company’s Term Loan Facility.

Legal Matters

The Company is a defendant in various lawsuits. Although the outcome of these matters cannot be predicted with certainty, management does not believe that resolution of these lawsuits will have a material adverse effect on the Company.

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Fair Value Measurements

9 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs are developed using market data, such as publicly available information about actual events or transactions, and reflect the assumptions that market participants would use when pricing the asset or liability. Unobservable inputs are inputs for which market data is not available and that are developed using the best information available about the assumptions that market participants would use when pricing the asset or liability. The fair value hierarchy consists of the following three levels:

• Level I — Quoted prices for identical instruments in active markets.

• Level II — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

• Level III — Instruments whose significant value drivers are unobservable.

The following table presents for each of these hierarchy levels, the Company’s assets that are measured at fair value on a recurring basis, which include cash equivalents:

	Level I		Level II		Level III		Total
March 31, 2019
Assets:
Money market accounts	$	18,488	$	—	$	—	$	18,488
Time deposits	162,376		—		—		162,376
Total assets measured at fair value	$	180,864	$	—	$	—	$	180,864
June 30, 2018
Assets:
Money market accounts	$	20,398	$	—	$	—	$	20,398
Time deposits	184,945		—		—		184,945
Total assets measured at fair value	$	205,343	$	—	$	—	$	205,343

Money market accounts and time deposits are classified within Level I of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets. The carrying amount of the Company’s money market accounts and time deposits approximates fair value due to their short-term maturities.

Other Financial Instruments

The fair value of the Company’s long-term debt (see Note 7) was approximately $1,019,000 as of March 31, 2019. The Company’s long-term debt is classified within Level II of the fair value hierarchy as it is valued using quoted prices of such securities for which fair value can be derived from inputs that are readily observable.

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Pension Plans and Other Postretirement Benefit Plan

9 Months Ended

Mar. 31, 2019

Retirement Benefits [Abstract]

Pension Plans And Other Postretirement Benefit Plan

Pension Plans and Other Postretirement Benefit Plan

As more fully described in Note 12 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018, the Company sponsors (i) a non-contributory, qualified defined benefit pension plan covering certain of its union employees, (ii) an unfunded non-contributory, non-qualified frozen excess cash balance plan covering certain employees who participated in an underlying qualified plan, and (iii) an unfunded non-contributory, non-qualified frozen defined benefit pension plan for the benefit of certain employees who participated in an underlying qualified plan (collectively the “Pension Plans”). The Company also sponsors a contributory welfare plan which provides certain postretirement healthcare benefits to certain employees hired prior to January 1, 2001 (the “Postretirement Plan”).

Components of net periodic benefit cost for the three and nine months ended March 31, 2019 and 2018 are as follows:

	Pension Plans						Postretirement Plan
	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Service cost	$	111		$	128		$	18		$	17
Other components of net periodic benefit cost:
Interest cost	402			358			38			30
Expected return on plan assets	(144		)	(127		)	—			—
Recognized actuarial loss (a)	119			149			—			—
Amortization of unrecognized prior service credit (a)	—			—			(2		)	(3		)
Net periodic benefit cost	$	488		$	508		$	54		$	44

	Pension Plans						Postretirement Plan
	Nine Months Ended						Nine Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Service cost	$	333		$	384		$	54		$	51
Other components of net periodic benefit cost:
Interest cost	1,206			1,074			114			90
Expected return on plan assets	(432		)	(381		)	—			—
Recognized actuarial loss (a)	357			447			—			—
Amortization of unrecognized prior service credit (a)	—			—			(6		)	(9		)
Settlement gain (a)	(8		)	—			—			—
Net periodic benefit cost	$	1,456		$	1,524		$	162		$	132

(a) Reflects amounts reclassified from accumulated other comprehensive loss to other components of net periodic benefit cost in the accompanying consolidated statements of operations.

In addition, as more fully described in Note 12 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018, the Company sponsors the MSGN Holdings, L.P. Excess Savings Plan and participates in the Madison Square Garden 401(k) Savings Plan, formerly the MSG Holdings, L.P. 401(k) Savings Plan, a multiple employer plan (together, the “Savings Plans”). Expenses related to the Savings Plans included in the accompanying consolidated statements of operations were $254 and $232 for the three months endedMarch 31, 2019 and 2018, respectively, and $762 and $691 for the nine months endedMarch 31, 2019 and 2018, respectively.

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Share-Based Compensation

9 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation

Share-based Compensation

See Note 13 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2018 for more information regarding (i) the MSG Networks Inc. 2010 Employee Stock Plan, as amended (the “Employee Stock Plan”), and (ii) the MSG Networks Inc. 2010 Stock Plan For Non-Employee Directors, as amended (the “Non-Employee Director Plan”).

Share-based compensation expense, presented within selling, general and administrative expenses and direct operating expenses, was $4,371 and $2,862 for the three months endedMarch 31, 2019 and 2018, respectively, and $13,658 and $10,581 for the nine months endedMarch 31, 2019 and 2018, respectively.

Non-Qualified Stock Options (“NQSOs”) Award Activity

The following table summarizes activity relating to holders of the Company’s NQSOs for the nine months endedMarch 31, 2019:

	Number of		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
	Nonperformance Based Vesting NQSOs	Performance Based Vesting NQSOs
Balance as of June 30, 2018	961	961	$	19.49	6.14	$	8,567
Granted	316	316	25.05
Balance as of March 31, 2019	1,277	1,277	$	20.87	5.77	4,340
Exercisable as of March 31, 2019	498	—	$	18.89	5.24	$	1,425

In August 2018, the Company granted 632 NQSOs, of which 50% are subject to three-year ratable vesting and the remaining 50% are subject to three-year cliff vesting and the achievement of certain Company performance criteria. These NQSOs have an expiration period of 7.5 years. The Company calculated the fair value of these NQSOs on the date of grant using the Black-Scholes option pricing model, which resulted in a grant date fair value of $7.60 per NQSO.

The following were the key assumptions used to calculate the fair value of this award:

Risk-free interest rate	2.76	%
Expected term	5.25 years
Expected volatility	27.44	%

The Company’s computation of expected term was calculated using the simplified method (the average of the vesting period and option term) as prescribed in ASC Topic 718-10-S99. The Company’s computation of expected volatility was based on historical volatility of its common stock.

The aggregate intrinsic value is calculated for in-the-money NQSOs as the difference between (i) the exercise price of the underlying award and (ii) the quoted price of the Company’s Class A common stock, par value $0.01 per share (“Class A Common Stock”) at March 31, 2019 and June 30, 2018, as applicable.

Restricted Share Units Award Activity

The following table summarizes activity relating to holders of the Company’s RSUs for the nine months endedMarch 31, 2019:

	Number of
	Nonperformance Based Vesting RSUs		Performance Based Vesting RSUs		Weighted-Average Fair Value Per Share At Date of Grant
Unvested award balance as of June 30, 2018	376		779		$	20.46
Granted	390		342		25.61
Vested	(225	)	(285	)	20.65
Unvested award balance as of March 31, 2019	541		836		23.08

Nonperformance based vesting RSUs granted during the nine months endedMarch 31, 2019 included 104 RSUs granted under the Employee Stock Plan that are subject to three-year ratable vesting, 240 RSUs granted under the Employee Stock Plan that are subject to four-year ratable vesting, and 46 RSUs granted under the Non-Employee Director Plan which vested upon date of grant. Performance based vesting RSUs granted under the Employee Stock Plan during the nine months endedMarch 31, 2019 included 118 RSUs that are subject to three-year ratable vesting, and 224 RSUs that are subject to three-year cliff vesting. RSUs granted under the Employee Stock Plan and Non-Employee Director Plan will settle in shares of the Company’s Class A Common Stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee of the Board of Directors, in cash. RSUs granted under the Non-Employee Director Plan will settle on the first business day after ninety days from the date the director’s service on the Board of Directors ceases or, if earlier, upon the director’s death.

The fair value of RSUs that vested during the nine months endedMarch 31, 2019 was $12,779. Upon delivery, RSUs granted under the Employee Stock Plan were net share-settled to cover the required statutory tax withholding obligations and the remaining number of shares were issued from the Company’s treasury shares. To fulfill the employees’ statutory tax withholding obligations for the applicable income and other employment taxes, 194 of these RSUs, with an aggregate value of $4,879 were retained by the Company and the taxes paid during the nine months endedMarch 31, 2019 are reflected as a financing activity in the accompanying consolidated statement of cash flows.

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Stock Repurchase Program (Notes)

9 Months Ended

Mar. 31, 2019

Equity [Abstract]

Treasury Stock [Text Block]

Stock Repurchase Program

On December 7, 2017, the Company’s Board of Directors authorized the repurchase of up to$150,000of the Company’s Class A Common Stock. Under the authorization, shares of Class A Common Stock may be purchased from time to time in open market or private transactions, block trades or such other manner as the Company may determine, in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. As of March 31, 2019, the Company had$136,165of availability remaining under its stock repurchase authorization. The Company did not repurchase shares during thenine months endedMarch 31, 2019.

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Related Party Transactions

9 Months Ended

Mar. 31, 2019

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

As of March 31, 2019, members of the Dolan family group, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, including trusts for the benefit of the Dolan family group (collectively, the “Dolan Family Group”), collectively beneficially own all of the Company’s outstanding Class B common stock, par value $0.01 per share (“Class B Common Stock”) and own approximately 3.2% of the Company’s outstanding Class A Common Stock (inclusive of options exercisable within 60 days of the date hereof). Such shares of the Company’s Class A Common Stock and Class B Common Stock, collectively, represent approximately 69.9% of the aggregate voting power of the Company’s outstanding common stock. The Dolan Family Group also controls MSG and AMC Networks Inc. (“AMC Networks”).

The Company has an arrangement with the Dolan Family Office, LLC (“DFO”), MSG, and AMC Networks providing for the sharing of certain expenses associated with executive office space which is available to Charles F. Dolan (a director of the Company and MSG, and the Executive Chairman and a director of AMC Networks), James L. Dolan (the Executive Chairman and a director of the Company, the Executive Chairman, Chief Executive Officer, and a director of MSG, and a director of AMC Networks), and the DFO, which is controlled by Charles F. Dolan.

The Company also agreed to share certain executive support costs, including office space, executive assistants, security and transportation costs for (i) the Company’s Executive Chairman with MSG and (ii) the Company’s Vice Chairman with MSG and AMC Networks.

The Company and MSG are also party to an aircraft time sharing agreement, pursuant to which MSG has agreed from time to time to make its aircraft available to the Company for lease on a “time sharing” basis. Additionally, the Company, MSG and AMC Networks have agreed on an allocation of the costs of certain other aircraft, including helicopter, use by shared executives.

The Company has various agreements with MSG, including media rights agreements covering the New York Knicks (the “Knicks”) and the New York Rangers (the “Rangers”) games, an advertising sales representation agreement, a trademark license agreement, a tax disaffiliation agreement, and certain other arrangements, including a services agreement (the “Services Agreement”) pursuant to which the Company outsources certain business functions to MSG. These services currently include information technology, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, investor relations, corporate communications, benefit plan administration and reporting and, internal audit, as well as certain executive support services described above. The Company provides certain services to MSG pursuant to the Services Agreement.

The Company has entered into various agreements with AMC Networks with respect to a number of ongoing commercial relationships.

Related party transactions

Rights fees

The Company’s media rights agreements with the Knicks and the Rangers, effective as of July 1, 2015, provide the Company with exclusive media rights to team games in their local markets. Rights fees included in the accompanying consolidated statements of operations for the three months endedMarch 31, 2019 and 2018 were $37,094 and $35,631, respectively, and $110,746 and $106,414 for the nine months endedMarch 31, 2019 and 2018, respectively.

Origination, master control and technical services

AMC Networks provides certain origination, master control, and technical services to the Company. Amounts incurred by the Company for the three months endedMarch 31, 2019 and 2018 were $1,161 and $1,581, respectively, and $3,471 and $4,574 for the nine months endedMarch 31, 2019 and 2018, respectively.

Commission

The Company’s advertising sales representation agreement with MSG, which has a term through June 30, 2022, provides for MSG to act as the Company’s advertising sales representative and includes the exclusive right and obligation to sell certain advertising availabilities on the Company’s behalf for a commission. The amounts incurred by the Company for the three months endedMarch 31, 2019 and 2018 were $6,880 and $6,273, respectively, and $13,325 and $11,840 for the nine months endedMarch 31, 2019 and 2018, respectively.

General and Administrative Expenses

Amounts incurred by the Company for expenses associated with the Services Agreement, net, amounted to $2,590 and $2,210 for the three months endedMarch 31, 2019 and 2018, respectively, and $7,735 and $6,631 for the nine months endedMarch 31, 2019 and 2018, respectively.

Other operating expenses

The Company and its related parties enter into other transactions with each other in the ordinary course of business. Net amounts incurred by the Company for other related party transactions amounted to $297 and $368 for the three months endedMarch 31, 2019 and 2018, respectively, and $773 and $769 for the nine months endedMarch 31, 2019 and 2018, respectively.

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Income Taxes

9 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

On December 22, 2017, the enactment of the Tax Cuts and Jobs Act significantly changed the U.S. tax laws and included a reduction in the corporate federal tax rate from 35% to 21%, effective January 1, 2018.

Income tax expense for the three months endedMarch 31, 2019 of $17,732 differs from the income tax expense derived from applying the statutory federal rate of 21% to pre-tax income due principally to the impact of state and local income taxes (net of federal benefit) of $6,131, partially offset by a tax benefit relating to a tax return to book provision adjustment in connection with the filing of the Company’s prior year income tax return of $3,939.

Income tax expense for the three months endedMarch 31, 2018 of $23,505 differs from the income tax expense derived from applying the blended statutory federal rate of 28% to pre-tax income due principally to the impact of state and local income taxes (net of federal benefit) of $5,135 and other items of $240. These increases were partially offset by the impact of the tax benefits related to the domestic production activities deduction of $1,635.

Income tax expense for the nine months endedMarch 31, 2019 of $62,756 differs from the income tax expense derived from applying the statutory federal rate of 21% to pre-tax income due principally to the impact of state and local income taxes (net of federal benefit) of $17,683, and changes in the applicable state rate used to measure deferred taxes of $2,062, partially offset by a net tax benefit relating to tax return to book provision adjustments in connection with the filing of the Company’s prior year income tax returns of $2,489.

Income tax benefit for the nine months endedMarch 31, 2018 of $41,103 differs from the income tax expense derived from applying the blended statutory federal rate of 28% to pre-tax income due principally to a deferred income tax benefit of $106,446 related to the reduction of the Company’s net deferred tax liabilities based upon the new federal rate. Other decreases included the impact of the tax benefits related to the domestic production activities deduction of $4,668, changes in the applicable state rate used to measure deferred taxes of $1,062, tax return to book provision adjustments in connection with the filing of the Company’s prior year income tax returns of $676, and other items of $253. These decreases were partially offset by the impact of state and local income taxes (net of federal benefit) of $15,165.

The Company made cash income tax payments (net) of $64,025 and $45,194 for the nine months endedMarch 31, 2019 and 2018, respectively.

During the fourth quarter of fiscal year 2017, the Company was notified that the City of New York was initiating a review of the Company’s 2014 and 2015 Unincorporated Business Tax Returns. In August 2018, the Company received a summary notice that the audit has been completed. The audit did not result in a material change to the tax returns.

The Company was also notified during the fourth quarter of fiscal year 2017 that the State of New York was commencing an examination of the Company’s New York State income tax returns as filed for the tax years ended December 31, 2013 and 2014. The Company does not expect the examination, when finalized, to result in material changes to the tax returns.

The Company was notified during the first quarter of fiscal year 2019 that the City of New York was commencing an examination of the Company’s New York City general corporate income tax returns as filed for the tax years ended December 31, 2015 and 2016. The Company does not expect the examination, when finalized, to result in material changes to the tax returns.

The federal and state statute of limitations are currently open with regard to the Company’s 2014 through 2018 and 2013 through 2018 calendar year tax returns, respectively.

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Concentration of Risk

9 Months Ended

Mar. 31, 2019

Concentration of Risk [Abstract]

Concentration Risk Disclosure [Text Block]

Concentrations of Risk

Accounts receivable, net on the accompanying consolidated balance sheets as of March 31, 2019 and June 30, 2018 include amounts due from the following individual customers, which accounted for the noted percentages of the gross balance:

	March 31, 2019		June 30, 2018
Customer A	25	%	24	%
Customer B	24	%	24	%
Customer C	23	%	23	%
Customer D	15	%	15	%

Revenues in the accompanying consolidated statements of operations for the three and nine months ended March 31, 2019 and 2018 include amounts from the following individual customers, which accounted for the noted percentages of the total:

	Three Months Ended March 31,				Nine Months Ended March 31,
	2019		2018		2019		2018
Customer 1	23	%	23	%	23	%	24	%
Customer 2	21	%	22	%	22	%	23	%
Customer 3	19	%	21	%	21	%	21	%
Customer 4	10	%	10	%	11	%	10	%

The accompanying consolidated balance sheets as of March 31, 2019 and June 30, 2018 include the following approximate amounts that are recorded in connection with the Company’s license agreement with the New Jersey Devils:

Reported in	March 31, 2019		June 30, 2018
Prepaid expenses	$	1,000	$	3,000
Other current assets	4,000		3,000
Other assets	37,000		39,000
	$	42,000	$	45,000

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Accounting Policies (Policies)

9 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of MSG Networks Inc. and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amount of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amount of revenues and expenses. Such estimates include the valuation of accounts receivable, investments, goodwill, other long-lived assets, pension and other postretirement benefit obligations and the related net periodic benefit cost, tax accruals, and other liabilities. In addition, estimates are used in revenue recognition, income tax benefit (expense), performance and share-based compensation, depreciation and amortization, litigation matters, and other matters. Management believes its use of estimates in the consolidated 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 material and would be reflected in the Company’s financial statements in future periods.

Investment, Policy [Policy Text Block]

Investment in Nonconsolidated Entity

The Company’s investment in a nonconsolidated entity, which is included in other assets in the accompanying consolidated balance sheet, does not have a readily determinable fair value. As such, the Company has elected to account for it at cost, which would be adjusted for impairment and changes resulting from observable price fluctuations in orderly transactions for an identical or a similar investment of the same issuer (referred to as the measurement alternative method). Investments accounted for under the measurement alternative method are classified within Level III of the fair value hierarchy. As of March 31, 2019, the Company did not identify any potential adjustments to the cost of its investment.

Accounts Receivable, Policy [Policy Text Block]

Accounts Receivable

Accounts receivable is recorded at net realizable value. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables. The allowance for doubtful accounts is estimated based on the Company’s analysis of receivables aging, specific identification of certain receivables that are at risk of not being paid, past collection experience and other factors. The Company’s allowance for doubtful accounts was $1,215 and $509 as of March 31, 2019 and June 30, 2018, respectively.

New Accounting Pronouncements

In May 2017, the FASB issued ASU No. 2017-09, Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This standard does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification, and would not be required if the changes are considered non-substantive. This standard was adopted by the Company in the first quarter of fiscal year 2019, and will be applied prospectively to any changes to the terms and conditions of share-based payment awards made on or after the adoption date should they occur. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Recently Adopted Accounting Pronouncements

The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), and the subsequent ASUs that amended and/or clarified the application of ASU No. 2014-09 (collectively, “Topic 606”) on July 1, 2018 (“Adoption Date”). Topic 606 superseded the revenue recognition requirements in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition. The Company applied the modified retrospective approach for all contracts not completed as of the Adoption Date, and as a result, recorded a decrease to the opening accumulated deficit of $372, net of tax.

The reported results as of and for the three and nine months ended March 31, 2019 reflect the application of Topic 606, while the reported results for prior periods have not been adjusted to reflect Topic 606, and continue to be presented under the prior revenue recognition accounting guidance. The amount by which each financial statement line item has been affected in the current reporting period by the application of Topic 606 compared to historical policies is not material, therefore, comparative disclosures have been omitted. The adoption of Topic 606 did not result in significant changes in the way the Company records revenues. However, as a result of adopting Topic 606, there are certain components of the Company’s revenues where Topic 606 generally results in different recognition of revenue compared to the Company’s historical policies.

The following table provides changes to each applicable opening balance on the Company’s consolidated balance sheet resulting from the adoption of Topic 606:

	June 30, 2018		Impact of Adoption		July 1, 2018
Current assets	$	338,442	$	585	$	339,027
Total assets	849,612		760		850,372
Current liabilities	111,216		—		111,216
Total liabilities	1,507,354		388		1,507,742

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which amends ASC Topic 230, Statement of Cash Flows to eliminate the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on various cash flow issues. This standard was adopted by the Company in the first quarter of fiscal year 2019, and was applied retrospectively. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses, which will effect various areas of accounting including, but not limited to, goodwill and consolidation. This standard was adopted by the Company in the first quarter of fiscal year 2019, and was applied prospectively. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

New Accounting Pronouncement, Early Adoption

In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the measurement of goodwill impairment by eliminating the requirement of performing a hypothetical purchase price allocation. Instead, impairment will be measured using the difference between the carrying amount and fair value of the reporting unit, not to exceed the carrying amount of goodwill. The amended guidance also eliminates the requirement for any reporting unit with a zero or a negative carrying amount to perform a qualitative assessment, and will require disclosure of the amount of goodwill allocated to each reporting unit with a zero or a negative carrying amount of net assets. This standard was early adopted by the Company in the first quarter of fiscal year 2019, and was applied prospectively. Based on the Company’s most recent annual goodwill impairment test completed in the first quarter of fiscal year 2019, the adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Recently Issued Acounting Pronouncements Not Yet Adopted [Policy Text Block]

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), and subsequent ASUs that amended and/or clarified the application of ASU No. 2016-02, which supersedes the current guidance in ASC Topic 840, Leases. This ASU generally requires the recognition of all lease assets and lease liabilities on the balance sheet, including those leases classified as operating leases under previous GAAP. The amended guidance also requires additional quantitative and qualitative disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases in order to provide additional information about the nature of an organization’s leasing activities. This standard will be effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted, and the modified retrospective approach required. The Company does not plan to early adopt this standard. The Company is compiling the necessary data and is in the process of determining which practical expedients to apply upon adoption. The adoption of this standard will result in the recognition of right of use assets and lease liabilities related to the Company’s identified leases.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses, which introduces a new impairment model for most financial assets and certain other instruments. For trade and other receivables, the Company will be required to use a forward-looking “expected loss” model that will replace the current “incurred loss” model and generally will result in earlier recognition of allowances for losses. This standard will be effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-14, Compensation — Retirement Benefits — Defined Benefit Plans — General (Topic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans, which removes, adds, or clarifies disclosure requirements relating to defined benefit plans to improve disclosure effectiveness. This standard will be effective for the Company beginning in the fourth quarter of fiscal year 2020, with early adoption permitted. The standard is to be applied retroactively to all periods presented. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2019, the FASB issued ASU No. 2019-02, Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and Entertainment-Broadcasters-Intangibles-Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials, which amends ASC Subtopic 920-350 to align the accounting for production costs of an episodic television series with that for the costs of producing films. This standard will be effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The standard is to be applied prospectively to all periods presented. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

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Accounting Policies Revenue Recognition (Tables)

9 Months Ended

Mar. 31, 2019

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

The following table provides changes to each applicable opening balance on the Company’s consolidated balance sheet resulting from the adoption of Topic 606:

	June 30, 2018		Impact of Adoption		July 1, 2018
Current assets	$	338,442	$	585	$	339,027
Total assets	849,612		760		850,372
Current liabilities	111,216		—		111,216
Total liabilities	1,507,354		388		1,507,742

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Revenue Recognition (Tables)

9 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Contract with Customer, Asset and Liability [Table Text Block]

The following table provides information about current contract balances from contracts with customers:

	March 31, 2019		June 30, 2018
Accounts receivable (including advertising receivable included in related party receivables, net)	$	151,456	$	125,982
Contract asset, short-term (included in other current assets)	1,779		—
Deferred revenue, short-term	2,196		4,626
Deferred revenue, long-term (included in other liabilities)	270		—

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Computation of Earnings Per Common Share (Tables)

9 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Reconciliation of Weighted-Average Shares Used in Calculation of Basic and Diluted EPS

The following table presents a reconciliation of the weighted-average number of shares used in the calculations of basic and diluted EPS:

	Three Months Ended		Nine Months Ended
	March 31,		March 31,
	2019	2018	2019	2018
Weighted-average number of shares for basic EPS	75,152	75,540	75,041	75,427
Dilutive effect of shares issuable under share-based compensation plans	587	477	671	417
Weighted-average number of shares for diluted EPS	75,739	76,017	75,712	75,844
Anti-dilutive shares	992	426	618	544

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets Subject to Amortization

The Company’s intangible assets subject to amortization are as follows:

	March 31, 2019			June 30, 2018
Affiliate relationships	$	83,044		$	83,044
Less accumulated amortization	(48,436		)	(45,841		)
	$	34,608		$	37,203

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Property and Equipment (Tables)

9 Months Ended

Mar. 31, 2019

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

As of March 31, 2019 and June 30, 2018, property and equipment consisted of the following assets:

	March 31, 2019			June 30, 2018
Equipment	$	37,887		$	36,027
Furniture and fixtures	1,757			1,728
Leasehold improvements	19,320			19,297
Construction in progress	494			727
	59,458			57,779
Less accumulated depreciation and amortization	(50,805		)	(47,750		)
	$	8,653		$	10,029

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Debt (Tables)

9 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of Maturities of Long-term Debt [Table Text Block]

As of March 31, 2019, the principal repayments required under the Term Loan Facility are as follows:

Remainder of fiscal year ending June 30, 2019	$	18,750
Fiscal year ending June 30, 2020	114,375
Fiscal year ending June 30, 2021	906,875
	$	1,040,000

Schedule of Debt [Table Text Block]

The Company is amortizing its deferred financing costs on a straight-line basis over the five-year term of the Senior Secured Credit Facilities which approximates the effective interest method. The following table summarizes the presentation of the Term Loan Facility and the related deferred financing costs in the accompanying consolidated balance sheets as of March 31, 2019 and June 30, 2018:

	Term Loan Facility		Deferred Financing Costs			Net
March 31, 2019
Current portion of long-term debt	$	101,250	$	(2,586	)	$	98,664
Long-term debt, net of current portion	938,750		(1,293		)	937,457
Total	$	1,040,000	$	(3,879	)	$	1,036,121
June 30, 2018
Current portion of long-term debt	$	75,000	$	(2,586	)	$	72,414
Long-term debt, net of current portion	1,121,250		(3,233		)	1,118,017
Total	$	1,196,250	$	(5,819	)	$	1,190,431

Debt Financing Cost [Table Text Block]

In addition, the Company has deferred financing costs related to the Revolving Credit Facility recorded in the accompanying consolidated balance sheets as summarized in the following table:

	March 31, 2019		June 30, 2018
Other current assets	$	417	$	417
Other assets	209		521

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Fair Value Measurements (Tables)

9 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets Measured on Recurring Basis

The following table presents for each of these hierarchy levels, the Company’s assets that are measured at fair value on a recurring basis, which include cash equivalents:

	Level I		Level II		Level III		Total
March 31, 2019
Assets:
Money market accounts	$	18,488	$	—	$	—	$	18,488
Time deposits	162,376		—		—		162,376
Total assets measured at fair value	$	180,864	$	—	$	—	$	180,864
June 30, 2018
Assets:
Money market accounts	$	20,398	$	—	$	—	$	20,398
Time deposits	184,945		—		—		184,945
Total assets measured at fair value	$	205,343	$	—	$	—	$	205,343

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Pension Plans and Other Postretirement Benefit Plan (Tables)

9 Months Ended

Mar. 31, 2019

Retirement Benefits [Abstract]

Schedule of Net Periodic Benefit Cost

Components of net periodic benefit cost for the three and nine months ended March 31, 2019 and 2018 are as follows:

	Pension Plans						Postretirement Plan
	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Service cost	$	111		$	128		$	18		$	17
Other components of net periodic benefit cost:
Interest cost	402			358			38			30
Expected return on plan assets	(144		)	(127		)	—			—
Recognized actuarial loss (a)	119			149			—			—
Amortization of unrecognized prior service credit (a)	—			—			(2		)	(3		)
Net periodic benefit cost	$	488		$	508		$	54		$	44

	Pension Plans						Postretirement Plan
	Nine Months Ended						Nine Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Service cost	$	333		$	384		$	54		$	51
Other components of net periodic benefit cost:
Interest cost	1,206			1,074			114			90
Expected return on plan assets	(432		)	(381		)	—			—
Recognized actuarial loss (a)	357			447			—			—
Amortization of unrecognized prior service credit (a)	—			—			(6		)	(9		)
Settlement gain (a)	(8		)	—			—			—
Net periodic benefit cost	$	1,456		$	1,524		$	162		$	132

(a) Reflects amounts reclassified from accumulated other comprehensive loss to other components of net periodic benefit cost in the accompanying consolidated statements of operations.

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Share Based Compensation (Tables)

9 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation, Stock Options, Activity

The following table summarizes activity relating to holders of the Company’s NQSOs for the nine months endedMarch 31, 2019:

	Number of		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
	Nonperformance Based Vesting NQSOs	Performance Based Vesting NQSOs
Balance as of June 30, 2018	961	961	$	19.49	6.14	$	8,567
Granted	316	316	25.05
Balance as of March 31, 2019	1,277	1,277	$	20.87	5.77	4,340
Exercisable as of March 31, 2019	498	—	$	18.89	5.24	$	1,425

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The following were the key assumptions used to calculate the fair value of this award:

Risk-free interest rate	2.76	%
Expected term	5.25 years
Expected volatility	27.44	%

Schedule of Share-based Compensation, Restricted Stock Units Award Activity

The following table summarizes activity relating to holders of the Company’s RSUs for the nine months endedMarch 31, 2019:

	Number of
	Nonperformance Based Vesting RSUs		Performance Based Vesting RSUs		Weighted-Average Fair Value Per Share At Date of Grant
Unvested award balance as of June 30, 2018	376		779		$	20.46
Granted	390		342		25.61
Vested	(225	)	(285	)	20.65
Unvested award balance as of March 31, 2019	541		836		23.08

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Concentration of Risk (Tables)

9 Months Ended

Mar. 31, 2019

Concentration of Risk [Abstract]

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

Accounts receivable, net on the accompanying consolidated balance sheets as of March 31, 2019 and June 30, 2018 include amounts due from the following individual customers, which accounted for the noted percentages of the gross balance:

	March 31, 2019		June 30, 2018
Customer A	25	%	24	%
Customer B	24	%	24	%
Customer C	23	%	23	%
Customer D	15	%	15	%

Revenues in the accompanying consolidated statements of operations for the three and nine months ended March 31, 2019 and 2018 include amounts from the following individual customers, which accounted for the noted percentages of the total:

	Three Months Ended March 31,				Nine Months Ended March 31,
	2019		2018		2019		2018
Customer 1	23	%	23	%	23	%	24	%
Customer 2	21	%	22	%	22	%	23	%
Customer 3	19	%	21	%	21	%	21	%
Customer 4	10	%	10	%	11	%	10	%

The accompanying consolidated balance sheets as of March 31, 2019 and June 30, 2018 include the following approximate amounts that are recorded in connection with the Company’s license agreement with the New Jersey Devils:

Reported in	March 31, 2019		June 30, 2018
Prepaid expenses	$	1,000	$	3,000
Other current assets	4,000		3,000
Other assets	37,000		39,000
	$	42,000	$	45,000

XML

Description of Business and Basis of Presentation (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Mar. 31, 2019
Description of Business And Basis of Presentation [Abstract]
Regional Sports and Entertainment Networks		2
Percentage of ownership of MSG business distributed to stockholders		100.00%
Number of Reportable Segments	1	1

XML

Accounting Policies Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jul. 01, 2018	Jun. 30, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect of adoption of ASC 606		$ 372
Assets, Current	$ 336,902	339,027	$ 338,442
Total assets	844,649	850,372	849,612
Liabilities, Current	131,433	111,216	111,216
Total Liabilities	$ 1,347,990	1,507,742	1,507,354
Accounting Standards Update 2014-09 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Cumulative effect of adoption of ASC 606		372
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Assets, Current			338,442
Total assets			849,612
Liabilities, Current			111,216
Total Liabilities			$ 1,507,354
Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Assets, Current		585
Total assets		760
Liabilities, Current		0
Total Liabilities		$ 388

XML

Accounting Policies Accounts Receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jun. 30, 2018
Accounting Policies [Abstract]
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount	$ 1,215	$ 509

XML

Revenue Recognition (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jun. 30, 2018
Revenue from Contract with Customer [Abstract]
Accounts receivable (including advertising receivable included in related party receivables, net)	$ 151,456	$ 125,982
Contract asset, short-term (included in other current assets)	1,779	0
Deferred revenue, short-term	2,196	4,626
Deferred revenue, long-term (included in other liabilities	$ 270	$ 0

XML

Revenue Recognition Revenue Recognition (Narrative) (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2019 USD ($)	Mar. 31, 2019 USD ($)
Related Party Transaction [Line Items]
PaymentTermsAffiliationFeeRevenue		within 30-60 days after revenue is earned.
PaymentTermsAdvertisingRevenue		payment terms are 30-60 days after revenue is earned.
Revenue, Remaining Performance Obligation, Amount	$ 18,700	$ 18,700
RecognitionPeriodofTransactionPriceAllocatedtoPerformanceObligations		10 years
Contract with Customer, Liability, Revenue Recognized		$ 4,588
Maximum [Member]
Related Party Transaction [Line Items]
Affiliation Revenue Percentage Concentration Revenue		90.00%
Minimum [Member]
Related Party Transaction [Line Items]
Affiliation Revenue Percentage Concentration Revenue	90.00%

XML

Computation of Earnings Per Common Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Weighted-average shares for basic EPS (in shares)	75,152	75,540	75,041	75,427
Dilutive effect of shares issuable under share-based compensation plans (in shares)	587	477	671	417
Weighted-average shares for diluted EPS (in shares)	75,739	76,017	75,712	75,844
Anti-dilutive shares (in shares)	992	426	618	544

XML

Goodwill and Intangible Assets (Carrying Amount of Goodwill By Reportable Segment) (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018 USD ($)	Mar. 31, 2019
Goodwill [Line Items]
Number of Reportable Segments	1	1
Impairment of goodwill	$ 0

XML

Goodwill and Intangible Assets (Schedule of Intangible Assets Subject To Amortization) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Net	$ 34,608		$ 34,608		$ 37,203
Finite-Lived Intangible Asset, Useful Life			24 years
Finite-Lived Intangible Assets, Amortization Expense	865	$ 865	$ 2,595	$ 2,595
Affiliate Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Affiliate Relationships	83,044		83,044		83,044
Less accumulated amortization	(48,436)		(48,436)		(45,841)
Net	$ 34,608		$ 34,608		$ 37,203

XML

Property and Equipment (Schedule of Property, Plant and Equipment) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jun. 30, 2018
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 59,458	$ 57,779
Less accumulated depreciation and amortization	(50,805)	(47,750)
Property and equipment, net	8,653	10,029
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	37,887	36,027
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,757	1,728
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	19,320	19,297
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 494	$ 727

XML

Property and Equipment (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 940	$ 1,414	$ 3,055	$ 4,558

XML

Debt (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended		30 Months Ended
	Mar. 31, 2019	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Sep. 28, 2015
Debt Instrument [Line Items]
Additional interest Rate when Default		2.00%
Line of Credit Facility, Commitment Fee Percentage		0.30%
Debt instrument, restrictive covenants		The Credit Agreement generally requires the Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis to comply with a maximum total leverage ratio of 6.00:1.00 from the closing date until September 30, 2016 and a maximum total leverage ratio of 5.50:1.00 from October 1, 2016 until maturity, subject, in each case, to upward adjustment during the continuance of certain events. In addition, there is a minimum interest coverage ratio of 2.00:1.00 for the Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis.
Amortization of Deferred Financing Costs		5 years
Aggregate Repayments of Debt		$ 156,250		$ 510,000
Debt Instrument, Maturity Date, Description		The Term Loan Facility amortizes quarterly in accordance with its terms through June 30, 2020 with a final maturity date on September 28, 2020
Interest Paid, Including Capitalized Interest, Operating and Investing Activities		$ 32,879	$ 29,303
Federal Funds Effective Swap Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		0.50%
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Increase (Decrease)		1.00%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Senior secured revolving credit facility					$ 250,000
Revolving credit term in years		5 years
Letters of Credit, maximum capacity					35,000
Letters of credit issued and outstanding under the Revolving Credit Facility	$ 0	$ 0		0
Borrowing capacity	250,000	250,000		$ 250,000
Voluntary Debt Repayments	$ 25,000	$ 100,000
Term Loan Facility [Member]
Debt Instrument [Line Items]
Senior secured revolving credit facility					1,550,000
Revolving credit term in years		5 years
Cash distributed to stockholder from cash borrowed in connection with spin off					$ 1,450,000
Minimum [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		1.50%
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		0.50%
Maximum [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		2.25%
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		1.25%
After delivery of Compliance Certificate [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Increase (Decrease)		2.00%
After delivery of Compliance Certificate [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Increase (Decrease)		1.00%

XML

Debt Schedule of Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jun. 30, 2018
Debt Instrument [Line Items]
Long-term Debt, Gross	$ 1,040,000	$ 1,196,250
Term Loan Facility [Member]
Debt Instrument [Line Items]
Remainder of fiscal year ending June 30, 2019	18,750
Fiscal year ending June 30, 2020	114,375
Fiscal year ending June 30, 2021	906,875
Long-term Debt, Gross	$ 1,040,000

XML

Debt Schedule of Debt (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2019	Jun. 30, 2018
Debt Instrument [Line Items]
Amortization of Deferred Financing Costs	5 years
Long-term Debt, Gross	$ 1,040,000	$ 1,196,250
Debt Issuance Costs, Gross	(3,879)	(5,819)
Debt outstanding, net of deferred financing costs	1,036,121	1,190,431
Current portion of long-term debt [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross	101,250	75,000
Debt Issuance Costs, Gross	(2,586)	(2,586)
Debt outstanding, net of deferred financing costs	98,664	72,414
Long-term debt, net of current portion [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross	938,750	1,121,250
Debt Issuance Costs, Gross	(1,293)	(3,233)
Debt outstanding, net of deferred financing costs	$ 937,457	$ 1,118,017

XML

Debt Financing Costs (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jun. 30, 2018
Debt Financing Cost [Line Items]
Debt Issuance Costs, Gross	$ 3,879	$ 5,819
Other Current Assets [Member]
Debt Financing Cost [Line Items]
Debt Issuance Costs, Gross	417	417
Other Noncurrent Assets [Member]
Debt Financing Cost [Line Items]
Debt Issuance Costs, Gross	$ 209	$ 521

XML

Fair Value Measurements (Schedule of Fair Value, Assets Measured on Recurring Basis) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jun. 30, 2018
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	$ 180,864	$ 205,343
Level I [Member]
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	180,864	205,343
Level II [Member]
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Long-term Debt, Fair Value	1,019,000
Level III [Member]
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Money market accounts [Member]
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	18,488	20,398
Money market accounts [Member] | Level I [Member]
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	18,488	20,398
Money market accounts [Member] | Level II [Member]
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Money market accounts [Member] | Level III [Member]
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Time deposits [Member]
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	162,376	184,945
Time deposits [Member] | Level I [Member]
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	162,376	184,945
Time deposits [Member] | Level II [Member]
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	0	0
Time deposits [Member] | Level III [Member]
Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets measured at fair value	$ 0	$ 0

XML

Pension Plans and Other Postretirement Benefit Plan (Schedule of Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Pension Plans [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost	$ 111	$ 128	$ 333	$ 384
Interest cost	402	358	1,206	1,074
Expected return on plan assets	(144)	(127)	(432)	(381)
Recognized actuarial loss	119	149	357	447
Amortization of unrecognized prior service credit	0	0	0	0
Settlement gain			(8)	0
Net periodic benefit cost	488	508	1,456	1,524
Postretirement Plan [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost	18	17	54	51
Interest cost	38	30	114	90
Expected return on plan assets	0	0	0	0
Recognized actuarial loss	0	0	0	0
Amortization of unrecognized prior service credit	(2)	(3)	(6)	(9)
Settlement gain			0	0
Net periodic benefit cost	54	44	162	132
Msg Savings Plans [Member] | Continuing Operations [Member]
Defined Contribution Plan [Abstract]
Defined Contribution Plan, Cost	$ 254	$ 232	$ 762	$ 691

XML

Share-Based Compensation (Share-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	$ 4,371	$ 2,862	$ 13,658	$ 10,581

XML

Share-Based Compensation (Stock Options, Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Mar. 31, 2019	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, Grants in Period	632
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, Outstanding, Weighted Average Remaining Contractual Term		5 years 9 months 7 days	6 years 1 month 20 days
Options, Outstanding, Intrinsic Value		$ 4,340	$ 8,567
Options, Exercisable, Weighted Average Remaining Contractual Term		5 years 2 months 26 days
Options, Exercisable, Intrinsic Value		$ 1,425
Options, Outstanding, Weighted Average Exercise Price [Abstract]
Options, Outstanding, Weighted Average Exercise Price, Beginning Balance	$ 19.49	$ 19.49
Options, Grants in Period, Weighted Average Exercise Price		25.05
Options, Outstanding, Weighted Average Exercise Price, Ending Balance		20.87	$ 19.49
Options, Exercisable, Weighted Average Exercise Price		$ 18.89
Non-Performance Vesting | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, Outstanding, Beginning Balance	961	961
Options, Grants in Period		316
Options, Outstanding, Number, Ending Balance		1,277	961
Options, Exercisable, Number		498
Performance Vesting | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, Outstanding, Beginning Balance	961	961
Options, Grants in Period		316
Options, Outstanding, Number, Ending Balance		1,277	961
Options, Exercisable, Number		0

XML

Share-Based Compensation Share-Based Compensation - Stock Options - Narrative (Details) - $ / shares shares in Thousands	3 Months Ended
	Sep. 30, 2018	Mar. 31, 2019	Jun. 30, 2018
Share-Based Compensation - Stock Options (Narrative) [Line Items]
Options, Grants in Period, Gross	632
Share-based Payment Award, Expiration Period	7 years 6 months
Stock Options Weighted Average Grant Date Fair Value	$ 7.60
Stock Options | Ratable Vesting [Member]
Share-Based Compensation - Stock Options (Narrative) [Line Items]
Percent of Awards Type	50.00%
Award Vesting Period	3 years
Stock Options | Cliff Vesting [Member]
Share-Based Compensation - Stock Options (Narrative) [Line Items]
Percent of Awards Type	50.00%
Award Vesting Period	3 years
Class A Common Stock [Member]
Share-Based Compensation - Stock Options (Narrative) [Line Items]
Common stock, par value (dollars per share)		$ 0.01	$ 0.01

XML

Share-Based Compensation Share-Based Compensation (Assumptions) (Details)	3 Months Ended
	Sep. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Risk Free Interest Rate	2.76%
Expected Term	5 years 3 months
Expected Volatility Rate	27.44%

XML

Share-Based Compensation (Restricted Stock Units Activity) (Details) - Restricted Stock Units (RSUs) shares in Thousands	9 Months Ended
	Mar. 31, 2019 $ / shares shares
Weighted-Average Fair Value Per Share at Date of Grant - RSUs (in dollars per share):
Unvested award balance (beginning balance) | $ / shares	$ 20.46
Granted | $ / shares	25.61
Vested | $ / shares	20.65
Unvested award balance (ending balance) | $ / shares	$ 23.08
Non-Performance Vesting
Unvested award (in shares):
Unvested award balance (beginning balance)	376
Granted	390
Vested	(225)
Unvested award balance (ending balance)	541
Performance Vesting
Unvested award (in shares):
Unvested award balance (beginning balance)	779
Granted	342
Vested	(285)
Unvested award balance (ending balance)	836

XML

Share-Based Compensation Share-Based Compensation - Restricted Stock Units (Narrative) (Details) shares in Thousands, $ in Thousands	9 Months Ended
	Mar. 31, 2019 USD ($) shares
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Awards, Settlement Description	RSUs granted under the Non-Employee Director Plan will settle on the first business day after ninety days from the date the director’s service on the Board of Directors ceases or, if earlier, upon the director’s death.
Restricted Stock Units (RSUs)
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
RSUs vested in period, fair value | $	$ 12,779
RSUs shares witheld for tax withholding for share-based compensation	194
Value Of Equity Instruments Surrendered By Employees | $	$ 4,879
Restricted Stock Units (RSUs) | Non-Performance Vesting
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
Granted	390
Restricted Stock Units (RSUs) | Performance Vesting
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
Granted	342
Cliff Vesting [Member] | Restricted Stock Units (RSUs)
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
Award Vesting Period	3 years
Employee Stock Plan [Member] | Ratable Vesting [Member] | Restricted Stock Units (RSUs) | Performance Vesting
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
Granted	118
Employee Stock Plan [Member] | Cliff Vesting [Member] | Restricted Stock Units (RSUs) | Performance Vesting
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
Granted	224
Non Employee Director Plan [Member] | Restricted Stock Units (RSUs) | Non-Performance Vesting
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
Granted	46
4 year vesting [Member] | Ratable Vesting [Member] | Restricted Stock Units (RSUs)
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
Award Vesting Period	4 years
4 year vesting [Member] | Employee Stock Plan [Member] | Ratable Vesting [Member] | Restricted Stock Units (RSUs) | Non-Performance Vesting
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
Granted	240
3 year vesting [Member] | Ratable Vesting [Member] | Restricted Stock Units (RSUs)
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
Award Vesting Period	3 years
3 year vesting [Member] | Employee Stock Plan [Member] | Ratable Vesting [Member] | Restricted Stock Units (RSUs) | Non-Performance Vesting
Share-Based Compensation - Restricted Stock Units (Narrative) [Line Items]
Granted	104

XML

Stock Repurchase Program Stock Repurchase Program (Details) - Class A Common Stock [Member] - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 07, 2017
Equity, Class of Treasury Stock [Line Items]
Stock Repurchase Program, Authorized Amount		$ 150,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 136,165

XML

Related Party Transactions (Ownership Percentage) (Details) - $ / shares	Mar. 31, 2019	Jun. 30, 2018
Related Party Ownership Percentage [Line Items]
Aggregate Voting Power Held By Related Party	69.90%
Class A Common Stock [Member]
Related Party Ownership Percentage [Line Items]
Common stock, par value (dollars per share)	$ 0.01	$ 0.01
Percentage of Common Stock Owned by Related Party	3.20%
Common Class B [Member]
Related Party Ownership Percentage [Line Items]
Common stock, par value (dollars per share)	$ 0.01	$ 0.01
Percentage of Common Stock Owned by Related Party	100.00%

XML

Related Party Transactions (Transactions by Type) (Details) - Continuing Operations [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Operating Expenses [Abstract]
Rights fees	$ 37,094	$ 35,631	$ 110,746	$ 106,414
Origination, master control and technical services	1,161	1,581	3,471	4,574
Commission	6,880	6,273	13,325	11,840
General and administrative expenses	2,590	2,210	7,735	6,631
Other operating expenses	$ 297	$ 368	$ 773	$ 769

XML

Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Income tax benefit (expense)	$ (17,732)	$ (23,505)	$ (62,756)	$ 41,103
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount	(6,131)	$ (5,135)	(17,683)	(15,165)
Deferred State and Local Income Tax Benefit (Expense)			(2,062)	1,062
Effective Income Tax Rate Reconciliation, Book Provision Adjustment	$ 3,939		2,489	$ 676
EffectiveIncomeTaxRateReconciliationBookingRate		28.00%		28.00%
Deferred Federal Income Tax Benefit (Expense)				$ 106,446
Effective Income Tax Rate Reconciliation, Deduction, Qualified Production Activity, Amount		$ 1,635		4,668
Effective Income Tax Rate Reconciliation, Misc Adjustments		$ (240)		253
Income Taxes Paid			$ 64,025	$ 45,194

XML

Concentration of Risk (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2018
Concentration Risk [Line Items]
Customer Concentration In Prepaid Expenses	$ 1,000		$ 1,000		$ 3,000
Customer Concentration In Other Current Assets	4,000		4,000		3,000
Customer Concentration In Other Assets	37,000		37,000		39,000
Customer Concentration	$ 42,000		$ 42,000		$ 45,000
Customer A [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration at period end, AR	25.00%		25.00%		24.00%
Customer B [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration at period end, AR	24.00%		24.00%		24.00%
Customer C [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration at period end, AR	23.00%		23.00%		23.00%
Customer D [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration at period end, AR	15.00%		15.00%		15.00%
Customer 1 [Member] | Sales Revenue, Services, Net [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage Revenues	23.00%	23.00%	23.00%	24.00%
Customer 2 [Member] | Sales Revenue, Services, Net [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage Revenues	21.00%	22.00%	22.00%	23.00%
Customer 3 [Member] | Sales Revenue, Services, Net [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage Revenues	19.00%	21.00%	21.00%	21.00%
Customer 4 [Member] | Sales Revenue, Services, Net [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage Revenues	10.00%	10.00%	11.00%	10.00%

XML

Label	Element	Value
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 372,000