Leases

9 Months Ended

Mar. 31, 2025

The Company’s leases primarily consist of the lease of the Company’s principal executive offices under the Sublease Agreement with MSG Entertainment (as defined below), and a lease agreement for an aircraft. In addition, the Company accounts for the rights of use of The Garden pursuant to the Arena License Agreements (as defined below) as leases under the ASC Topic 842, Leases. See Note 7 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 for more information regarding the Company’s accounting policies associated with its leases.

During the second quarter of fiscal 2025, the Company amended and restated its prior sublease agreement with MSG Entertainment (the “Prior Sublease Agreement”) to enter into a short term lease for new principal executive offices through December 31, 2024. The Company recorded the short term operating lease costs for this amendment within Selling, general and administrative expenses in the accompanying consolidated statements of operations for the nine months ended March 31, 2025.

In January 2025, the Company entered into a new sublease agreement with MSG Entertainment for new principal executive offices at Two Pennsylvania Plaza in New York with a lease term which ends January 31, 2046 (the “New Sublease Agreement” and together with the Prior Sublease Agreement, the “Sublease Agreement”) and fixed lease payment obligations of $167,444 over the lease term. The Company recorded a lease right-of-use asset and liability in the accompanying consolidated balance sheet as of March 31, 2025 based on the present value of minimum fixed lease payments over the lease term utilizing the Company’s incremental borrowing rate as of the lease commencement date. In addition, the Company entered into a commitment whereby if the MSG Entertainment’s lease for principal executive offices at Two Pennsylvania Plaza in New York were terminated under certain circumstances, the Company would be required to enter into a new lease for executive offices at Two Pennsylvania Plaza directly with the landlord, with a consistent lease term through January 31, 2046.

As of March 31, 2025, the Company’s existing operating leases, which are recorded in the accompanying financial statements, have remaining lease terms ranging from 7 to 30 years. In certain instances, leases include options to renew, with varying option terms. The exercise of lease renewals, if available under the lease options, is generally at the Company’s discretion and is considered in the Company’s assessment of the respective lease term. The Company’s lease agreements do not contain material residual value guarantees or material restrictive covenants.

The following table summarizes the right-of-use assets and lease liabilities recorded in the accompanying consolidated balance sheets as of March 31, 2025 and June 30, 2024:


	Line Item in the Company’s Consolidated Balance Sheet	March 31, 2025		June 30, 2024
Right-of-use assets:
Operating leases	Right-of-use lease assets	$	763,469	$	694,566
Lease liabilities:
Operating leases, current (a)	Operating lease liabilities, current	$	51,015	$	50,267
Operating leases, noncurrent (a)	Operating lease liabilities, noncurrent	848,534		749,952
Total lease liabilities		$	899,549	$	800,219

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(a)As of March 31, 2025, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $44,437 and $817,504, respectively, that are payable to MSG Entertainment. As of June 30, 2024, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $43,689 and $715,507, respectively, that are payable to MSG Entertainment.

The following table summarizes the activity recorded within the accompanying consolidated statements of operations for the three and nine months ended March 31, 2025 and 2024:


	Line Item in the Company’s Consolidated Statement of Operations	Three Months Ended March 31,				Nine Months Ended March 31,
		2025		2024		2025		2024
Operating lease costs	Direct operating expenses	$	33,380	$	35,370	$	61,472	$	61,043
Operating lease costs	Selling, general and administrative expenses	3,693		2,320		8,126		6,960

Short term lease costs	Selling, general and administrative expenses	—		—		3,971		—
Total lease cost		$	37,073	$	37,690	$	73,569	$	68,003

Supplemental Information

For the nine months ended March 31, 2025 and 2024, cash paid for amounts included in the measurement of lease liabilities was $39,172 and $39,119, respectively.

For the nine months ended March 31, 2025, non-cash additions to right-of-use assets and operating lease liabilities were $86,201.

The weighted average remaining lease term for operating leases recorded in the accompanying consolidated balance sheet as of March 31, 2025 was 28.4 years. The weighted average discount rate was 7.05% as of March 31, 2025 and represented the Company’s estimated incremental borrowing rate, assuming a secured borrowing, based on the remaining lease term at the period in which the lease term expectation commenced or was modified.

Maturities of operating lease liabilities as of March 31, 2025 were as follows:


Fiscal year ending June 30, 2025 (remainder)	$	12,708
Fiscal year ending June 30, 2026	54,369
Fiscal year ending June 30, 2027	59,716
Fiscal year ending June 30, 2028	62,388
Fiscal year ending June 30, 2029	63,874
Thereafter	2,129,295
Total lease payments	2,382,350
Less imputed interest	(1,482,801)
Total lease liabilities	$	899,549