Investments in Nonconsolidated Affiliates

12 Months Ended

Jun. 30, 2022

Investments in and Advances to Affiliates [Abstract]

Investments in Nonconsolidated Affiliates

Investments in Nonconsolidated Affiliates

The Company’s investments in nonconsolidated affiliates which are accounted for under the equity method of accounting and equity investments without readily determinable fair values consisted of the following:

	Ownership Percentage	Investment
June 30, 2022
Equity method investments:
SACO Technologies Inc. (“SACO”)	30%	$	31,448
Others		5,248
Equity investments without readily determinable fair values (a)		7,108
Total investments in nonconsolidated affiliates		$	43,804
June 30, 2021
Equity method investments:
SACO	30%	$	36,265
Others		6,204
Equity investments without readily determinable fair values (a)		6,752
Total investments in nonconsolidated affiliates		$	49,221

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(a)For Fiscal Years 2022 and 2021, the Company did not have any impairment charges or changes in carrying value recorded to its equity securities without readily determinable fair values. For Fiscal Year 2020, the Company recorded an impairment charge of $533.

Equity Method Investments

The Company determined that it has the ability to exert significant influence over the investee and therefore accounts for these investments under the equity method of accounting. For investments in limited partnerships in which the Company has an ownership interest that exceeds 3% to 5%, the Company also accounts for such investments under the equity method of accounting.

SACO

In Fiscal Year 2019, the Company acquired a 30% interest in SACO, a global provider of high-performance LED video lighting and media solutions, for a total consideration of $47,244. The Company is utilizing SACO as a preferred display technology provider for MSG Sphere based upon commercial terms. The total consideration consisted of a $42,444 payment at closing and a $4,800 deferred payment, which was made in October 2018. As of the acquisition date, the carrying amount of the investment was greater than the Company’s equity interest in the underlying net assets of SACO. As such, the Company allocated the difference to amortizable intangible assets of $25,350 and is amortizing these intangible assets on a straight-line basis over the expected useful lives ranging from 6 years to 12 years as a basis adjustment to the carrying amount of the investment.

Equity Investments with Readily Determinable Fair Value

As of June 30, 2022, the Company holds investments of (i) 583 shares of the Class A common stock of Townsquare Media, Inc. (“Townsquare”), (ii) 2,625 shares of the Class C common stock of Townsquare, and (iii) 869 shares of Class A common stock of DraftKings Inc. (“DraftKings”):

•Townsquare is a community-focused digital media, digital marketing solutions and radio company that has its Class A common stock listed on the New York Stock Exchange (“NYSE”) under the symbol “TSQ”.

•DraftKings is a digital sports entertainment and gaming company that is listed on the NASDAQ Stock Market (“NASDAQ”) under the symbol “DKNG”.

The fair value of the Company’s investments in Class A common stock of Townsquare and Class A common stock of DraftKings are determined based on quoted market prices in active markets on the NYSE and NASDAQ, respectively, which are classified within Level I of the fair value hierarchy. As a holder of Class C common stock of Townsquare, the Company is entitled to convert at any time all or any part of the Company’s shares into an equal number of shares of Class A common stock of Townsquare, subject to restrictions set forth in Townsquare’s certificate of incorporation. Therefore, the fair value of the Company’s investment in Class C common stock of Townsquare is also determined based on the quoted market price in an active market on the NYSE, which is classified within Level I of the fair value hierarchy.

The cost basis and the carrying fair value of these investments, which are reported under Other assets in the accompanying consolidated balance sheets as of June 30, 2022 and 2021, are as follows:

	Balance as of June 30, 2022
Equity Investment with Readily Determinable Fair Values	Shares Held	Cost Basis		Carrying Value / Fair Value
Townsquare Class A common stock	583	$	4,221	$	4,776
Townsquare Class C common stock	2,625	19,001		21,499
DraftKings Class A common stock	869	6,036		10,146
Total		$	29,258	$	36,421

	Balance as of June 30, 2021
Equity Investment with Readily Determinable Fair Value	Shares Held	Cost Basis		Carrying Value / Fair Value
Townsquare Class A common stock	583	$	4,221	$	7,435
Townsquare Class C common stock	2,625	19,001		33,469
DraftKings Class A common stock	869	6,036		45,360
Total		$	29,258	$	86,264

The following table summarizes the realized and unrealized gains (loss) on equity investments with readily determinable fair value for Fiscal Years 2022, 2021 and 2020:

	June 30,
	2022		2021		2020
Unrealized gain (loss) — Townsquare	$	(14,629)	$	26,563	$	(2,920)
Unrealized gain (loss)— DraftKings	(35,213)		26,942		34,197
Realized gain (loss) — DraftKings	—		(2,327)		6,351
	$	(49,842)	$	51,178	$	37,628
Supplemental information on realized gain (loss):
Shares of common stock sold — DraftKings	—		420		197
Cash proceeds from common stock sold — DraftKings	$	—	$	22,079	$	7,659

The realized and unrealized gains and losses on investments discussed above are reported under Other income (expense), net in the accompanying consolidated and combined statements of operations.