Pension Plans and Other Postretirement Benefit Plans

12 Months Ended

Jun. 30, 2022

Retirement Benefits [Abstract]

Pension Plans And Other Postretirement Benefit Plans

Pension Plans and Other Postretirement Benefit Plans

Defined Benefit Pension Plans and Postretirement Benefit Plans

The Company sponsors a non-contributory, qualified cash balance retirement plan covering its non-union employees (the “Cash Balance Pension Plan”) and two unfunded non-contributory, non-qualified excess cash balance plans covering certain employees who participate in the underlying qualified plan (collectively, the “Cash Balance Plans”). Since March 1, 2011, the Cash Balance Pension Plan has also included the assets and liabilities of a frozen (as of December 31, 2007) non-contributory qualified defined benefit pension plan covering non-union employees hired prior to January 1, 2001. These plans are considered “Shared Plans”, as previously defined.

The Company also sponsors two unfunded non-contributory, non-qualified defined benefit pension plans for the benefit of certain employees who participated in underlying qualified plans, one of which merged into the Cash Balance Pension Plan on March 1, 2011 (collectively, the “Excess Plans”). As of December 31, 2007, the Excess Plans were amended to freeze all benefits earned through December 31, 2007 and to eliminate the ability of participants to earn benefits for future service under these plans. These plans are considered Shared Plans, as previously defined.

The Cash Balance Plans were amended to freeze participation and future benefit accruals effective December 31, 2015 for all employees. Therefore, after December 31, 2015, no employee of the Company or MSG Sports who was not already a participant may become a participant in the plans and no further annual pay credits will be made for any future year. Existing account balances under the plans will continue to be credited with monthly interest in accordance with the terms of the plans.

Lastly, the Company sponsors two non-contributory, qualified defined benefit pension plans covering certain of its union employees (the “UTT Plan” and the “Networks 1212 Plan”, collectively the ”Union Plans”). Benefits payable to retirees under the Union Plan are based upon years of Benefit Service (as defined in the Union Plan documents).

The Cash Balance Plans, Union Plans, and Excess Plans are collectively referred to as the “Pension Plans.”

The Company also sponsors two contributory welfare plans which provide certain postretirement healthcare benefits to certain employees hired prior to January 1, 2001, who are eligible to commence receipt of early or normal benefits under the Cash Balance Pension Plans, and their dependents, as well as certain union employees (“Postretirement Plans”).

For purposes of the consolidated and combined financial statements, it was determined that the Company was the obligor for these plans’ liabilities for the historical periods presented herein. Therefore, the consolidated and combined financial statements reflect the full impact of the Shared Plans and Direct Plan on both the consolidated and combined statements of operations and consolidated balance sheets. The pension expense related to employees of MSG Sports participating in any of these plans is reflected as a contributory charge from the Company to MSG Sports, resulting in a decrease to the expense recognized in the consolidated and combined statements of operations.

The following table summarizes the projected benefit obligations, assets, funded status and the amounts recorded on the Company’s consolidated balance sheets as of June 30, 2022 and 2021, associated with the Pension Plans and Postretirement Plans based upon actuarial valuations as of those measurement dates.

	Pension Plans				Postretirement Plans
	June 30,				June 30,
	2022		2021		2022		2021
Change in benefit obligation:
Benefit obligation at beginning of period	$	221,007	$	224,633	$	5,013	$	5,700
Service cost	491		500		59		81
Interest cost	4,756		4,412		73		78
Actuarial loss (gain) (a)	(42,115)		1,793		(745)		(381)
Benefits paid	(8,540)		(6,286)		(339)		(399)
Curtailments	—		(91)		—		—
Plan settlements paid	—		(3,777)		—		—
Other	—		(177)		—		(66)
Benefit obligation at end of period	175,599		221,007		4,061		5,013
Change in plan assets:
Fair value of plan assets at beginning of period	169,882		176,364		—		—
Actual return on plan assets	(35,259)		1,824		—		—
Employer contributions	400		1,703		—		—
Benefits paid	(7,289)		(6,285)		—		—
Plan settlements paid	—		(3,724)		—		—
Fair value of plan assets at end of period	127,734		169,882		—		—
Funded status at end of period	$	(47,865)	$	(51,125)	$	(4,061)	$	(5,013)

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(a)In Fiscal Year 2022, the actuarial gains on the benefit obligations were primarily due to a net increase in discount and interest crediting rates. In Fiscal Year 2021, the actuarial losses on the benefit obligations were primarily due to a net decrease in discount and interest crediting rates.

Amounts recognized in the consolidated balance sheets as of June 30, 2022 and 2021 consist of:

	Pension Plans				Postretirement Plans
	June 30,				June 30,
	2022		2021		2022		2021
Current liabilities (included in accrued employee related costs)	$	(1,534)	$	(1,502)	$	(497)	$	(468)
Non-current liabilities (included in defined benefit and other postretirement obligations)	(46,331)		(49,623)		(3,564)		(4,545)
	$	(47,865)	$	(51,125)	$	(4,061)	$	(5,013)

Accumulated other comprehensive loss, before income tax, as of June 30, 2022 and 2021 consists of the following amounts that have not yet been recognized in net periodic benefit cost:

	Pension Plans				Postretirement Plans
	June 30,				June 30,
	2022		2021		2022		2021
Actuarial gain (loss)	$	(49,793)	$	(51,747)	$	312	$	(439)

The following table presents components of net periodic benefit cost for the Pension Plans and Postretirement Plans included in the accompanying consolidated and combined statements of operations for Fiscal Years 2022, 2021 and 2020. Service cost is recognized in direct operating expenses and selling, general and administrative expenses. All other components of net periodic benefit cost are reported in Other income (expense), net.

	Pension Plans						Postretirement Plans
	Years Ended June 30,						Years Ended June 30,
	2022		2021		2020		2022		2021		2020
Service cost	$	491	$	500	$	579	$	59	$	81	$	96
Interest cost	4,756		4,412		6,674		73		78		168
Expected return on plan assets	(6,874)		(5,972)		(6,295)		—		—		—
Recognized actuarial loss	1,971		1,599		1,872		7		98		6
Amortization of unrecognized prior service cost (credit)	—		—		—		—		—		(3)
Settlement loss recognized (a)	—		870		67		—		—		—
Net periodic benefit cost	$	344	$	1,409	$	2,897	$	139	$	257	$	267
Contributory charge to Madison Square Garden Sports Corp. for participation in the Shared Plans and all allocation of costs related to the corporate employees	—		—		(173)		—		—		(26)
Net periodic benefit cost reported in the consolidated and combined statements of operations	$	344	$	1,409	$	2,724	$	139	$	257	$	241

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(a)For Fiscal Years 2022, 2021 and 2020, lump-sum payments totaling $0, $52 and $551, respectively, were distributed to vested participants of the non-qualified excess cash balance plans, triggering the recognition of settlement losses in accordance with ASC Topic 715. Due to these pension settlements, the Company was required to remeasure its pension plan liability as of June 30,2021 and 2020 and for Fiscal Years 2021 and 2020, respectively. The weighted average discount rates used for the projected benefit obligation and interest cost were 2.49% and 1.30% as of June 30, 2022, respectively, 1.66% and 1.26% as of June 30, 2021, respectively, and 2.94% and 2.81% as of June 30, 2020, respectively. Additionally, settlement charges of $0, $870 and $67 were recognized in Other income (expense), net for Fiscal Years 2022, 2021 and 2020, respectively.

Other pre-tax changes in plan assets and benefit obligations recognized in other comprehensive income (loss) for Fiscal Years 2022, 2021 and 2020 are as follows:

	Pension Plans						Postretirement Plans
	Years Ended June 30,						Years Ended June 30,
	2022		2021		2020		2022		2021		2020
Actuarial gain (loss), net	$	12	$	(5,953)	$	(1,712)	$	744	$	381	$	123
Recognized actuarial loss	1,971		1,599		1,872		7		98		6
Recognized prior service credit	—		—		—		—		—		(3)
Curtailments	—		91		—		—		65		—
Settlement loss recognized	—		870		67		—		—		—
Total recognized in other comprehensive income (loss)	$	1,983	$	(3,393)	$	227	$	751	$	544	$	126

Funded Status

The accumulated benefit obligation for the Pension Plans aggregated to $175,599 and $220,532 at June 30, 2022 and 2021, respectively. As of June 30, 2022 and 2021, each of the Pension Plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets, except for the Networks 1212 Plan, which had plan assets in excess of projected benefit obligations.

Pension Plans and Postretirement Plan Assumptions

Weighted-average assumptions used to determine benefit obligations (made at the end of the period) as of June 30, 2022 and 2021 are as follows:

	Pension Plans				Postretirement Plans
	June 30,				June 30,
	2022		2021		2022		2021
Discount rate	4.85	%	2.84	%	4.64	%	2.21	%
Rate of compensation increase	3.00	%	3.00	%	n/a		n/a
Interest crediting rate	2.76	%	2.32	%	n/a		n/a
Healthcare cost trend rate assumed for next year	n/a		n/a		6.00	%	6.25	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	n/a		n/a		5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	n/a		n/a		2027		2027

Weighted-average assumptions used to determine net periodic benefit cost (made at the beginning of the period) for Fiscal Years 2022, 2021 and 2020 are as follows:

	Pension Plans						Postretirement Plans
	Years Ended June 30,						Years Ended June 30,
	2022		2021		2020		2022		2021		2020
Discount rate - projected benefit obligation	2.60	%	2.80	%	3.57	%	2.20	%	2.12	%	3.20	%
Discount rate - service cost	3.13	%	3.08	%	3.70	%	2.64	%	2.48	%	3.44	%
Discount rate - interest cost	1.98	%	2.16	%	3.20	%	1.61	%	1.63	%	2.88	%
Expected long-term return on plan assets	4.79	%	4.03	%	5.38	%	n/a		n/a		n/a
Rate of compensation increase	3.00	%	3.00	%	2.00	%	n/a		n/a		n/a
Interest crediting rate	2.32	%	1.37	%	3.28	%	n/a		n/a		n/a
Healthcare cost trend rate assumed for next year	n/a		n/a		n/a		6.25	%	6.50	%	6.75	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	n/a		n/a		n/a		5.00	%	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	n/a		n/a		n/a		2027		2027		2027

The discount rates were determined (based on the expected duration of the benefit payments for the plans) from the Willis Towers Watson U.S. Rate Link: 40-90 Discount Rate Model as of June 30, 2022 and 2021 to select a rate at which the Company believed the plans’ benefits could be effectively settled. This model was developed by examining the yields on selected highly rated corporate bonds. The expected long-term return on plan assets is based on a periodic review and modeling of the plans’ asset allocation structures over a long-term horizon. Expectations of returns for each asset class are the most important of the assumptions used in the review and modeling and are based on comprehensive reviews of historical data, forward-looking economic outlook, and economic/financial market theory. The expected long-term rate of return was selected from within the reasonable range of rates determined by (i) historical returns for the asset classes covered by the investment policy and (ii) projections of returns over the long-term period during which benefits are payable to plan participants.

Plan Assets and Investment Policy

The weighted-average asset allocation of the Pension Plans’ assets at June 30, 2022 and 2021 was as follows:

	June 30,
Asset Classes (a):	2022		2021
Fixed income securities	81	%	98	%
Equity securities	12	%	—	%
Cash equivalents	7	%	2	%
	100	%	100	%

_____________________

(a)The Company’s target allocation for pension plan assets is 85% fixed income securities and 15% equity as of June 30, 2022.

Investment allocation decisions have been made by the Company’s Investment and Benefits Committee, which considers investment advice provided by the Company’s external investment consultant. The investment consultant takes into account expected long-term risks, returns, correlation, and other prudent investment assumptions when recommending asset classes and investment managers to the Company’s Investment and Benefits Committee. The investment consultant also considers the pension plans’ liabilities when making investment allocation recommendations. The Company’s Investment and Benefits Committee’s decisions are influenced by asset/liability studies conducted by the external investment consultant who combines actuarial considerations and strategic investment advice. The major investment categories of the pension plan assets are in cash equivalents and long duration fixed income securities that are marked-to-market on a daily basis. As a result, the pension plan assets are subjected to interest-rate risk, specifically to a rising interest rate environment, as the majority of the pension plan assets are invested in long duration fixed income securities. However, the pension plan assets are structured in an asset/liability framework, and consequently, an increase in interest rates would cause a corresponding decrease to the overall liability of the pension plans, thus creating a hedge against rising interest rates. Additional risks involving the asset/liability framework include earning insufficient investment returns to cover future pension plan liabilities and imperfect hedging of such liabilities. In addition, a portion of the long duration fixed income securities portfolio is invested in non-government securities that are subject to credit risk of the issuers who might default on interest and/or principal payments.

Investments at Estimated Fair Value

The cumulative fair values of the individual plan assets at June 30, 2022 and 2021 by asset class are as follows:

	Fair Value Hierarchy	June 30,
		2022		2021
Fixed income securities:
U.S. Treasury securities (a)	I	$	672	$	—
Money market fund (a)	I	8,529		2,948
U.S. corporate bonds (b)	II	—		100,230
Foreign issues (c)	II	—		20,119
Municipal bonds (c)	II	—		3,880
Mutual fund - equity (d)	II	15,661		—
Common collective trust (d)	II	102,872		42,705
Total investments measured at fair value		$	127,734	$	169,882

_____________________

(a)U.S. Treasury Securities and the money market fund 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.

(b)U.S. corporate bonds are classified within Level II of the fair value hierarchy as they are valued using quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active and evaluations based on various market and industry inputs.

(c)Foreign issued corporate bonds and municipal bonds are classified within Level II of the fair value hierarchy as they are valued at a price that is based on a compilation of primarily observable market information or a broker quote in a non-active over-the-counter market.

(d)Common collective trust (CCT) and the mutual fund, that are non-exchange traded funds, are classified within Level II of the fair value hierarchy at its net asset value (NAV) as reported by the Trustee and investment manager, respectively. The NAV is based on the fair value of the underlying investments held by the fund which are based on quoted market prices less its liabilities. Both CCT and the mutual fund publish its daily NAV and uses such value as the basis for current transactions.

Contributions for Qualified Defined Benefit Pension Plans

During Fiscal Year 2022, the Company contributed $400 to the UTT Plan. The Company expects to contribute $250 and $500 to the UTT and Networks 1212 Plans, respectively in Fiscal Year 2023.

Estimated Future Benefit Payments

The following table presents estimated future fiscal year benefit payments for the Pension Plans and Postretirement Plan:

	Pension Plans		Postretirement Plans
Fiscal year ending June 30, 2023	$	13,760	$	504
Fiscal year ending June 30, 2024	$	10,916	$	471
Fiscal year ending June 30, 2025	$	10,742	$	474
Fiscal year ending June 30, 2026	$	11,525	$	433
Fiscal year ending June 30, 2027	$	11,764	$	399
Fiscal years ending June 30, 2028 – 2032	$	59,027	$	1,763

Defined Contribution Pension Plans

The Company sponsors The Madison Square Garden 401(k) Savings Plan (the “401(k) Plan”) and the MSG S&E, LLC Excess Savings Plan (collectively referred to as the “Savings Plans”). The 401(k) Plan is a multiple employer plan. For Fiscal Years 2022, 2021 and 2020, expenses related to the Savings Plans, excluding expenses related to MSG Sports employees, that are included in the accompanying consolidated and combined statements of operations were $9,217, $5,389 and $6,549, respectively. These amounts include $1,240 of expenses related to the Company’s corporate employees which were allocated to MSG Sports during Fiscal Year 2020.

In addition, the Company sponsors The Madison Square Garden 401(k) Union Plan (the “Union Savings Plan”). The Union Savings Plan is a multiple employer plan. For Fiscal Years 2022, 2021 and 2020, expenses related to the Union Savings Plan included in the accompanying consolidated and combined statements of operations were $394, $215 and $539, respectively.

Multiemployer Plans

The Company contributes to a number of multiemployer defined benefit pension plans, multiemployer defined contribution pension plans, and multiemployer health and welfare plans that provide benefits to retired union-represented employees under the terms of collective bargaining agreements (“CBAs”).

Multiemployer Defined Benefit Pension Plans

The multiemployer defined benefit pension plans to which the Company contributes generally provide for retirement and death benefits for eligible union-represented employees based on specific eligibility/participant requirements, vesting periods and benefit formulas. The risks to the Company of participating in these multiemployer defined benefit pension plans are different from single-employer defined benefit pension plans in the following aspects:

•Assets contributed to a multiemployer defined benefit pension plan by one employer may be used to provide benefits to employees of other participating employers.

•If a participating employer stops contributing to a multiemployer defined benefit pension plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

•If the Company chooses to stop participating in some of these multiemployer defined benefit pension plans, the Company may be required to pay those plans an amount based on the Company’s proportion of the underfunded status of the plan, referred to as a withdrawal liability. However, cessation of participation in a multiemployer defined benefit pension plan and subsequent payment of any withdrawal liability is subject to the collective bargaining process.

The following table outlines the Company’s participation in multiemployer defined benefit pension plans for Fiscal Years 2022, 2021 and 2020, and summarizes the contributions that the Company has made during each period. The “EIN” and “Pension Plan Number” columns provide the Employer Identification Number and the three-digit plan number for each applicable plan. The most recent Pension Protection Act zone status available as of June 30, 2022 and 2021 relates to the plan’s two most recent years ended which are indicated. Among other factors, plans in the red zone are generally less than 65% funded, plans in the orange zone are both less than 80% funded and have an accumulated funding deficiency or are expected to have a deficiency in any of the next six plan years, plans in the yellow zone are less than 80% funded, and plans in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates whether a funding improvement plan (“FIP”) for yellow/orange zone plans or a rehabilitation plan (“RP”) for red zone plans is either pending or has been implemented by the trustees of such plan. The zone status and any FIP or RP information is based on information that the Company received from the plan, and the zone status is as certified by the plan’s actuary. The last column lists the expiration date(s) or a range of expiration dates of the CBA to which the plans are subject. There are no other significant changes that affect such comparability.

			PPA Zone Status		FIP/RP Status Pending / Implemented	Company Contributions
			As of June 30,			Years Ended June 30,
Plan Name	EIN	Pension Plan Number	2022	2021		2022		2021		2020		Surcharge Imposed	Expiration Date of CBA
Pension Fund of Local No. 1 of I.A.T.S.E.	136414973	001	Green as of 2021-12-31	Green as of 2020-12-31	No	$	2,032	$	194	$	1,831	No	6/30/2021 - 5/1/2023
All Other Multiemployer Defined Benefit Pension Plans						2,263		584		3,137
						$	4,295	$	778	$	4,968

The Company was listed in the following plans’ Form 5500’s as providing more than 5% of the total contributions for the following plans and plan years:

Fund Name	Exceeded 5 Percent of Total Contributions	Year Contributions to Plan Exceeded 5 Percent of Total Contributions (As of Plan’s Year-End)
Pension Fund of Local No. 1 of I.A.T.S.E	True	December 31, 2020, 2019 and 2018
32BJ/Broadway League Pension Fund	True	December 31, 2020, 2019 and 2018
Treasurers and Ticket Sellers Local 751 Pension Fund	True	August 31, 2021, 2020 and 2019

Multiemployer Defined Contribution Pension Plans

The Company contributed $5,793, $1,706 and $6,398 for Fiscal Years 2022, 2021 and 2020, respectively, to multiemployer defined contribution pension plans.