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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 10-Q
________________________
(Mark One)
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
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: 001-39245
msge-20220930_g1.jpg
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
(Exact name of registrant as specified in its charter) 
Delaware 84-3755666
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
Two Penn PlazaNew York,NY10121
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (212) 465-6000
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common StockMSGENew York Stock Exchange

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 ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☐ No
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 filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
Number of shares of common stock outstanding as of October 31, 2022:
Class A Common Stock par value $0.01 per share —27,683,119 
Class B Common Stock par value $0.01 per share —6,866,754 






MADISON SQUARE GARDEN ENTERTAINMENT CORP.
INDEX TO FORM 10-Q
 
 Page








PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except per share data)
September 30,
2022
June 30,
2022
ASSETS
Current Assets:
Cash, cash equivalents and restricted cash$458,893 $846,010 
Accounts receivable, net202,304 216,652 
Prepaid expenses and other current assets179,715 155,994 
Total current assets840,912 1,218,656 
Non-Current Assets:
Property and equipment, net3,226,436 2,939,052 
Right-of-use lease assets458,070 446,499 
Goodwill500,181 500,181 
Intangible assets, net222,005 227,885 
Other non-current assets178,449 189,887 
Total assets$5,426,053 $5,522,160 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current Liabilities:
Accounts payable, accrued and other current liabilities$517,265 $589,246 
Current portion of long-term debt, net of deferred financing costs86,168 73,843 
Operating lease liabilities, current62,887 65,310 
Deferred revenue253,781 228,032 
Total current liabilities920,101 956,431 
Non-Current Liabilities:
Long-term debt, net of deferred financing costs1,652,638 1,669,245 
Operating lease liabilities, non-current441,544 427,971 
Deferred tax liabilities, net161,509 163,441 
Other non-current liabilities145,824 145,496 
Total liabilities3,321,616 3,362,584 
Commitments and contingencies (see Note 7)
Redeemable noncontrolling interests185,711 184,192 
Equity:
Class A Common Stock(a)
273 273 
Class B Common Stock(b)
69 69 
Additional paid-in capital2,303,135 2,301,970 
Accumulated deficit(335,493)(290,736)
Accumulated other comprehensive loss(60,981)(48,355)
Total Madison Square Garden Entertainment Corp. stockholders’ equity1,907,003 1,963,221 
Nonredeemable noncontrolling interests11,723 12,163 
Total equity1,918,726 1,975,384 
Total liabilities, redeemable noncontrolling interests and equity$5,426,053 $5,522,160 
_________________
(a)Class A Common Stock, $0.01 par value per share, 120,000 shares authorized;27,683 and 27,368 shares outstanding as of September 30, 2022 and June 30, 2022, respectively.
(b)Class B Common Stock, $0.01 par value per share, 30,000 shares authorized;6,867 shares outstanding as of September 30, 2022 and June 30, 2022.

See accompanying notes to the unaudited condensed consolidated financial statements.
1







MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except per share data)
 Three Months Ended
September 30,
20222021
Revenues(a)
$401,218 $294,510 
Direct operating expenses(a)
(253,901)(165,761)
Selling, general and administrative expenses(a)
(164,410)(174,839)
Depreciation and amortization(29,755)(29,430)
Impairment and other gains (losses), net2,000 (7,818)
Operating loss(44,848)(83,338)
Interest income3,954 775 
Interest expense(2,167)(9,248)
Other income (expense), net1,525 (3,754)
Loss from operations before income taxes(41,536)(95,565)
Income tax (expense) benefit(2,507)18,910 
Net loss(44,043)(76,655)
Less: Net income attributable to redeemable noncontrolling interests1,124 2,212 
Less: Net (loss) income attributable to nonredeemable noncontrolling interests(410)365 
Net loss attributable to Madison Square Garden Entertainment Corp.’s stockholders$(44,757)$(79,232)
EARNINGS PER SHARE DATA
Weighted-average shares outstanding:
Basic and diluted34,403 34,095 
Net loss from operations attributable to Madison Square Garden Entertainment Corp.’s stockholders per share:
Basic and diluted$(1.30)$(2.32)
_________________
(a)See Note 12, Related Party Transactions, for further information on related party revenues and expenses

See accompanying notes to the unaudited condensed consolidated financial statements.
2





MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
(in thousands)
Three Months Ended
September 30,
20222021
Net loss$(44,043)$(76,655)
Other comprehensive loss, before income taxes:
Amortization of prior service credit included in net periodic benefit cost510 510 
Cumulative translation adjustments(16,080)(6,418)
Other comprehensive loss, before income taxes(15,570)(5,908)
Income tax benefit related to items of other comprehensive loss2,944 1,120 
Other comprehensive loss, net of income taxes(12,626)(4,788)
Comprehensive loss(56,669)(81,443)
Less: Net income attributable to redeemable noncontrolling interests1,124 2,212 
Less: Net (loss) income attributable to nonredeemable noncontrolling interests(410)365 
Comprehensive loss attributable to Madison Square Garden Entertainment Corp.’s stockholders$(57,383)$(84,020)

See accompanying notes to the unaudited condensed consolidated financial statements.

3



MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)


Three Months Ended
September 30,
20222021
OPERATING ACTIVITIES:
Net loss$(44,043)$(76,655)
Adjustment to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization29,755 29,430 
Impairment and other (gains) losses, net(2,000)7,818 
Amortization of deferred financing costs1,304 2,184 
Benefit (expense) from deferred income taxes1,012 (20,036)
Share-based compensation expense15,188 19,528 
Amortization of right-of-use assets7,780 6,494 
Net unrealized (gain) loss on equity investments with and without readily determinable fair value(1,310)2,460 
Other non-cash adjustments2,370 1,555 
Change in assets and liabilities:
Accounts receivable, net14,293 5,546 
Prepaid expenses and other current assets(30,212)3,022 
Accounts payable, accrued and other current liabilities(92,590)(29,891)
Deferred revenue25,468 56,299 
Right-of-use lease assets and operating lease liabilities(8,198)(766)
Net cash (used in) provided by operating activities$(81,183)$6,988 
INVESTING ACTIVITIES:
Capital expenditures, net$(270,088)$(137,271)
Capitalized interest
(20,466)(9,326)
Proceeds from sale of equity securities3,819  
Other investing activities1,517 295 
Net cash used in investing activities$(285,218)$(146,302)
FINANCING ACTIVITIES:
Proceeds from revolving credit facility7,860  
Taxes paid in lieu of shares issued for equity-based compensation(13,967)(14,903)
Noncontrolling interest holders’ capital contributions 500 872 
Distributions to noncontrolling interest holders(530) 
Distributions to related parties associated with the settlement of certain share-based awards(571)(516)
Repayments of revolving credit facility (15,000)
Principal repayments on long-term debt(13,312)(15,250)
Payments for financing costs(3) 
Net cash used in financing activities$(20,023)$(44,797)
Effect of exchange rates on cash, cash equivalents and restricted cash(693)(386)
Net decrease in cash, cash equivalents and restricted cash(387,117)(184,497)
Cash, cash equivalents and restricted cash at beginning of period
846,010 1,539,976 
Cash, cash equivalents and restricted cash at end of period$458,893 $1,355,479 
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Investments and loans to nonconsolidated affiliates$1,969 $547 
Capital expenditures incurred but not yet paid$35,986 $16,052 
Share-based compensation capitalized in property and equipment$910 $751 
See accompanying notes to the unaudited condensed consolidated financial statements.
4







MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
AND REDEEMABLE NONCONTROLLING INTERESTS
(Unaudited)
(in thousands)
Common
Stock
Issued
Additional
Paid-In
Capital
Accumulated DeficitAccumulated
Other
Comprehensive
Loss
Total Madison Square Garden Entertainment Corp. Stockholders’ EquityNon -
redeemable
Noncontrolling
Interests
Total EquityRedeemable
Noncontrolling
 Interests
Balance as of June 30, 2022$342 $2,301,970 $(290,736)$(48,355)$1,963,221 $12,163 $1,975,384 $184,192 
Net (loss) income— — (44,757)— (44,757)(410)(45,167)1,124 
Other comprehensive loss— — — (12,626)(12,626)— (12,626)— 
Share-based compensation— 15,511 — — 15,511 — 15,511 — 
Tax withholding associated with shares issued for equity-based compensation— (13,967)— — (13,967)— (13,967)— 
Accretion of put options— — — — — — — 587 
Contributions— — — — — 500 500 — 
Distributions— (379)— — (379)(530)(909)(192)
Balance as of September 30, 2022$342 $2,303,135 $(335,493)$(60,981)$1,907,003 $11,723 $1,918,726 $185,711 
Balance as of June 30, 2021$340 $2,294,775 $(96,341)$(30,272)$2,168,502 $11,904 $2,180,406 $137,834 
Net (loss) income— — (79,232)— (79,232)365 (78,867)2,212 
Other comprehensive loss— — — (4,788)(4,788)— (4,788)— 
Share-based compensation— 19,692 — — 19,692 — 19,692 — 
Tax withholding associated with shares issued for equity-based compensation2 (14,905)— — (14,903)— (14,903)— 
Accretion of put options— — — — — — — 587 
Adjustments of redeemable noncontrolling interest(6,178)(6,178)(6,178)66 
Contributions— — — — — 872 872 — 
Distributions— (227)— — (227) (227)(289)
Balance as of September 30, 2021$342 $2,293,157 $(175,573)$(35,060)$2,082,866 $13,141 $2,096,007 $140,410 
See accompanying notes to the unaudited condensed consolidated financial statements.


5



MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
All amounts included in the following notes to condensed consolidated financial statements (unaudited) are presented in thousands, except per share data or as otherwise noted.

Note 1. Description of Business and Basis of Presentation
Description of Business
Madison Square Garden Entertainment Corp. (together with its subsidiaries, the “Company” or “MSG Entertainment”), is a leader in live entertainment comprised of iconic venues, marquee entertainment brands, regional sports and entertainment networks, popular dining and nightlife offerings, and a premier music festival. Utilizing the Company’s powerful brands and live entertainment expertise, the Company delivers unique experiences that set the standard for excellence and innovation while forging deep connections with diverse and passionate audiences. The Company is comprised of three reportable segments: Entertainment, MSG Networks and Tao Group Hospitality. As of September 30, 2022, there have been no changes to the reportable segments of the Company. See Note 1, Description of Business and Basis of Presentation, to the consolidated and combined financial statements included in the Form 10-K for the fiscal year ended June 30, 2022 as filed with the SEC on August 19, 2022 (the “2022 Form 10-K”) for more information regarding the details of the Company’s business.
Basis of Presentation
The Company reports on a fiscal year basis ending on June 30th (“Fiscal Year”). In these unaudited condensed consolidated interim financial statements (“financial statements”), the years ended on June 30, 2023 and 2022 are referred to as “Fiscal Year 2023” and “Fiscal Year 2022,” respectively. Certain Fiscal Year 2022 amounts have been reclassified to conform to the Fiscal Year 2023 presentation.
The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions of Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for Fiscal Year 2022 included in the 2022 Form 10-K.
In the opinion of the Company, the accompanying financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2022, and its results of operations for the three months ended September 30, 2022, and 2021, and cash flows for the three months ended September 30, 2022, and 2021. The condensed consolidated balance sheet as of Fiscal Year 2022, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.
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. As a result of the production of the Christmas Spectacular Starring the Radio City Rockettes (the “Christmas Spectacular”), arena license fees in connection with the use of Madison Square Garden (“The Garden”) by the New York Knicks (the “Knicks”) of the National Basketball Association (the “NBA”) and the New York Rangers (the “Rangers”) of the National Hockey League (the “NHL”), and MSG Networks’ advertising revenue being largely derived from the sale of inventory in its live NBA and NHL professional sports programming, the Company generally earns a disproportionate share of its annual revenues in the second and third quarters of its fiscal year.
Impact of the COVID-19 Pandemic
The Company’s operations and operating results were not materially impacted by the COVID-19 pandemic during the three months ended September 30, 2022, as compared to the prior year period, which was impacted by (i) fewer ticketed events at our performance venues due to the lead-time required to book touring acts and artists, (ii) a residual impact of reductions in MSG Networks media rights fees related to the shortened 2020-21 NHL season and (iii) certain regulatory requirements, including vaccination/mask requirements for our performance, entertainment dining and nightlife venues, which contributed to certain Tao Group Hospitality branded locations remaining closed during the period. See Note 1, Impact of the COVID-19 Pandemic, to the consolidated and combined financial statements included in the 2022 Form 10-K for more information regarding the impact of the COVID-19 pandemic on our business.
It is unclear to what extent COVID-19 concerns, including with respect to new variants, could result in new government or league-mandated capacity or other restrictions or vaccination/mask requirements or impact the use of and/or demand for our performance, entertainment dining and nightlife venues, demand for our sponsorship and advertising assets, deter our employees and vendors from working at our venues (which may lead to difficulties in staffing) or otherwise materially impact our operations.
6




MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 2. Accounting Policies
Principles of Consolidation
The financial statements of the Company include the accounts of Madison Square Garden Entertainment Corp. and its subsidiaries, which include Tao Group Holdings, LLC and its subsidiaries (“Tao Group Hospitality”) and Boston Calling Events, LLC (“BCE”). All significant intercompany transactions and balances have been eliminated in consolidation.
The financial statements of the Company include accounts of Tao Group Hospitality and BCE, in which the Company has controlling voting interests. The Company’s consolidation criteria are based on authoritative accounting guidance for identifying a controlling financial interest. Tao Group Hospitality and BCE are consolidated with the equity owned by other stockholders shown as redeemable or nonredeemable noncontrolling interests in the accompanying condensed consolidated balance sheets, and the other stockholders’ portion of net earnings (loss) and other comprehensive income (loss) shown as net income (loss) or comprehensive income (loss) attributable to redeemable or nonredeemable noncontrolling interests in the accompanying condensed consolidated statements of operations and condensed consolidated statements of comprehensive income (loss), respectively. See Note 2, Summary of Significant Accounting Policies, to the consolidated and combined financial statements included in the 2022 Form 10-K regarding the classification of redeemable noncontrolling interests of Tao Group Hospitality.
Use of Estimates
The preparation of the accompanying financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the provision for credit losses, valuation of investments, goodwill, intangible assets, other long-lived assets, deferred tax assets, pension and other postretirement benefit obligations and the related net periodic benefit cost, and other liabilities. In addition, estimates are used in revenue recognition, rights fees, performance and share-based compensation, depreciation and amortization, litigation matters and other matters, as well as in the valuation of noncontrolling interests resulting from business combination transactions. Management believes its use of estimates in the financial statements to be reasonable.
Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic 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.
Recently Issued and Adopted Accounting Pronouncements
Recently Issued Accounting Pronouncements
No recently issued accounting guidance materially impacted or is expected to impact the Company's financial statements.
Recently Adopted Accounting Pronouncements
In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, Accounting for Contract Assets and Contract Liabilities From Contracts With Customers. This ASU requires that the acquiring entity in a business combination recognize and measure contract assets and contract liabilities acquired in accordance with ASC Topic 606. This standard was adopted by the Company in the first quarter of Fiscal Year 2023. The adoption of this standard had no impact on the Company’s financial statements.
7




MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 3. Revenue Recognition
Contracts with Customers
See Note 2, Summary of Significant Accounting Policies and Note 4, Revenue Recognition, to the consolidated and combined financial statements included in the 2022 Form 10-K for more information regarding the details of the Company’s revenue recognition policies. All revenue recognized in the condensed consolidated statements of operations is considered to be revenue from contracts with customers in accordance with ASC Topic 606, except for revenues from the arena license agreements that require the Knicks and the Rangers to play their home games at The Garden (the “Arena License Agreements”), leases and subleases that are accounted for in accordance with ASC Topic 842 of $2,786 and $2,316 for the three months ended September 30, 2022 and 2021, respectively.
Disaggregation of Revenue
The following tables disaggregate the Company’s revenue by major source and reportable segment based upon the timing of transfer of goods or services to the customer for the three months ended September 30, 2022 and 2021:
Three Months Ended
September 30, 2022
Entertainment
MSG Networks
Tao Group
Hospitality
EliminationsTotal
Event-related and entertainment dining and nightlife offerings (a)
$102,790 $ $115,518 $(48)$218,260 
Sponsorship, signage and suite licenses (b)
38,393 244 803 (414)39,026 
Media related, primarily from affiliation agreements (b)
 121,812   121,812 
Other (c)
3,133 423 16,330 (552)19,334 
Total revenues from contracts with customers$144,316 $122,479 $132,651 $(1,014)$398,432 
Three Months Ended
September 30, 2021
Entertainment
MSG Networks
Tao Group
Hospitality
EliminationsTotal
Event-related and entertainment dining and nightlife offerings (a)
$22,580 $ $108,690 $(181)$131,089 
Sponsorship, signage and suite licenses (b)
7,776 636 135  8,547 
Media related, primarily from affiliation agreements (b)
 140,471   140,471 
Other (c)
1,567 366 10,639 (485)12,087 
Total revenues from contracts with customers$31,923 $141,473 $119,464 $(666)$292,194 
_________________
(a)Consists of (i) ticket sales and other ticket-related revenues, (ii) Tao Group Hospitality’s entertainment dining and nightlife offerings, (iii) venue license fees from third-party promoters, and (iv) food, beverage and merchandise sales. Event-related revenues and entertainment dining and nightlife offerings are recognized at a point in time. As such, these revenues have been included in the same category in the table above.
(b)See Note 2, Summary of Significant Accounting Policies, Revenue Recognition, and Note 4, Revenue Recognition, to the consolidated and combined financial statements included in the 2022 Form 10-K for further details on the pattern of recognition of sponsorship, signage and suite license revenues and media related revenue.
(c)Primarily consists of (i) revenues from sponsorship sales and representation agreements with Madison Square Garden Sports Corp. (“MSG Sports”), (ii) Tao Group Hospitality’s managed venue revenues, and (iii) advertising commission revenues recognized by the Entertainment segment from the MSG Networks segment of $376 and $410 for the three months ended September 30, 2022 and 2021, respectively, that are eliminated in consolidation.
8




MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
In addition to the disaggregation of the Company’s revenue by major source based upon the timing of transfer of goods or services to the customer disclosed above, the following tables disaggregate the Company’s consolidated revenues by type of goods or services in accordance with the required entity-wide disclosure requirements of ASC Subtopic 280-10-50-38 to 40 and the disaggregation of revenue required disclosures in accordance with ASC Subtopic 606-10-50-5 for the three months ended September 30, 2022 and 2021:
Three Months Ended
September 30, 2022
Entertainment
MSG Networks
Tao Group
Hospitality
EliminationsTotal
Ticketing and venue license fee revenues (a)
$72,132 $ $ $ $72,132 
Sponsorship and signage, suite, and advertising commission revenues (b)
45,134   (791)44,343 
Revenues from entertainment dining and nightlife offerings (c)
  132,651 (223)132,428 
Food, beverage and merchandise revenues26,303    26,303 
Media networks revenues (d)
 122,479   122,479 
Other747    747 
Total revenues from contracts with customers$144,316 $122,479 $132,651 $(1,014)$398,432 
Three Months Ended
September 30, 2021
Entertainment
MSG Networks
Tao Group
Hospitality
EliminationsTotal
Ticketing and venue license fee revenues (a)
$16,836 $ $ $ $16,836 
Sponsorship and signage, suite, and advertising commission revenues (b)
10,813   (410)10,403 
Revenues from entertainment dining and nightlife offerings (c)
  119,464 (256)119,208 
Food, beverage and merchandise revenues3,923    3,923 
Media networks revenues (d)
 141,473   141,473 
Other351    351 
Total revenues from contracts with customers$31,923 $141,473 $119,464 $(666)$292,194 
_________________
(a)Amounts include ticket sales, including other ticket-related revenue, and venue license fees from the Company’s events such as (i) concerts and (ii) other live entertainment and sporting events.
(b)Amounts include (i) revenues from sponsorship sales and representation agreements with MSG Sports and (ii) advertising commission revenues recognized by the Entertainment segment from the MSG Networks segment of $376 and $410 for the three months ended September 30, 2022 and 2021, respectively, that are eliminated in consolidation.
(c)Primarily consist of revenues from (i) entertainment dining and nightlife offerings and (ii) venue management agreements.
(d)Primarily consist of affiliation fees from Distributors and, to a lesser extent, advertising revenues through the sale of commercial time and other advertising inventory during MSG Networks programming.
9




MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Contract Balances
The following table provides information about contract balances from the Company’s contracts with customers as of September 30, 2022 and June 30, 2022:
September 30,June 30,
20222022
Receivables from contracts with customers, net (a)
$200,394 $215,261 
Contract assets, current (b)
7,196 5,503 
Contract assets, non-current (b)
869 756 
Deferred revenue, including non-current portion (c)
254,162 228,703 
_________________
(a)Receivables from contracts with customers, which are reported in Accounts receivable and Prepaid expenses and other current assets in the Company’s condensed consolidated balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers. As of September 30, 2022 and June 30, 2022, the Company’s receivables from contracts with customers above included $3,719 and $4,618, respectively, related to various related parties. See Note 12, Related Party Transactions for further details on related party arrangements.
(b)Contract assets, which are reported as Prepaid expenses and other current assets or Other non-current assets in the Company’s condensed consolidated balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to customers, for which the Company does not have an unconditional right to bill as of the reporting date. Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional.
(c)Deferred revenue primarily relates to the Company’s receipt of consideration from customers in advance of the Company’s transfer of goods or services to the customers. Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to a customer. Revenue recognized for the three months ended September 30, 2022 relating to the deferred revenue balance as of June 30, 2022 was $105,586.
Transaction Price Allocated to the Remaining Performance Obligations
As of September 30, 2022, the Company’s remaining performance obligations were approximately $680,000 of which 52% is expected to be recognized over the next two years and an additional 33% of the balance to be recognized in the following two years. This primarily relates to performance obligations under sponsorship and suite license arrangements that have original expected durations longer than one year and for which the consideration is not variable. In developing the estimated revenue, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
Note 4. Restructuring Charges
During Fiscal Year 2022, the Company underwent organizational changes to further streamline operations. These measures included termination of certain employees and executives in the Entertainment reportable segment.
The Company’s restructuring activity through September 30, 2022 is as follows:
June 30, 2022$8,081 
Restructuring charges 
Payments(148)
September 30, 2022$7,933 
10




MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 5. Investments in Nonconsolidated Affiliates
The Company’s investments in nonconsolidated affiliates, which are accounted for under the equity method of accounting or as equity investments without readily determinable fair value, are included within Other non-current assets on the accompanying condensed consolidated balance sheets and consisted of the following:
Investment As of
Ownership PercentageSeptember 30,
2022
June 30,
2022
Equity method investments:
SACO Technologies Inc. (“SACO”)30 %$27,786 $31,448 
Others4,749 5,248 
Equity securities without readily determinable fair values9,076 7,108 
Total investments in nonconsolidated affiliates$41,611 $43,804 
Equity Investments with Readily Determinable Fair Value
In addition to the investments discussed above, the Company holds investments of (i) Townsquare Media, Inc. (“Townsquare”), and (ii) DraftKings Inc. (“DraftKings”).
Townsquare is a media, entertainment and digital marketing solutions company that is listed on the New York Stock Exchange (“NYSE”) under the symbol “TSQ.”
DraftKings is a fantasy sports contest and sports gambling provider that is listed on the NASDAQ Stock Market (“NASDAQ”) under the symbol “DKNG” for its common stock.
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.
The carrying fair value of these investments, which are reported under Other non-current assets in the accompanying condensed balance sheets as of September 30, 2022 and June 30, 2022, are as follows:
Equity Investments with Readily Determinable Fair ValueSeptember 30,
2022
June 30,
2022
Townsquare Class A common stock$4,234 $4,776 
Townsquare Class C common stock19,057 21,499 
DraftKings common stock10,142 10,146 
Total Equity Investment with Readily Determinable Fair Values$33,433 $36,421 

11




MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
The following table summarizes the realized and unrealized gain (loss) on equity investments with and without readily determinable fair value, which is reported in Other income (expenses), net, for the three months ended September 30, 2022 and 2021:
Three Months Ended
September 30,
20222021
Unrealized (loss) gain— Townsquare$(2,983)$1,027 
Unrealized gain (loss) — DraftKings2,324 (3,487)
Unrealized gain — Other1,969  
Gains from shares sold — DraftKings1,489  
     Total Realized and Unrealized gain (loss)$2,799 $(2,460)
Supplemental information on realized gain:
Shares of common stock sold — DraftKings200 
Cash proceeds from common stock sold — DraftKings$3,819 $ 
Note 6. Property and Equipment
As of September 30, 2022 and June 30, 2022, property and equipment consisted of the following: 
September 30,
2022
June 30,
2022
Land$133,893 $140,239 
Buildings1,035,072 997,345 
Equipment, furniture and fixtures499,382 477,040 
Aircraft38,090 38,090 
Leasehold improvements229,692 232,819 
Construction in progress (a)
2,286,737 2,031,972 
Total Property and equipment4,222,866 3,917,505 
Less accumulated depreciation and amortization(996,430)(978,453)
Property and equipment, net$3,226,436 $2,939,052 
_________________
(a)Construction in progress includes labor and interest that are capitalized during the construction period for significant long term construction projects. These costs primarily relate to the construction of MSG Sphere in Las Vegas. For the three months ended September 30, 2022, the Company capitalized $20,466 of interest.
The increase in Construction in progress is primarily associated with the development and construction of MSG Sphere in Las Vegas, which includes capitalized labor and interest. The property and equipment balances above include $235,847 and $206,462 of capital expenditure accruals (primarily related to MSG Sphere construction) as of September 30, 2022 and June 30, 2022, respectively, which are reflected in Accounts payable, accrued and other current liabilities in the accompanying condensed consolidated balance sheets.
Depreciation and amortization expense on property and equipment was $25,307 and $25,120 for the three months ended September 30, 2022 and 2021, respectively.
12




MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 7. Commitments and Contingencies
Commitments
See Note 14, Commitments and Contingencies, to the consolidated and combined financial statements included in the 2022 Form 10-K for details on the Company’s off-balance sheet commitments. The Company’s off-balance sheet commitments as of June 30, 2022 included a total of $3,898,281 of contract obligations (primarily related to media rights agreements from the MSG Networks segment).
During the three months ended September 30, 2022, the Company did not have any material changes in its non-cancelable contractual obligations other than activities in the ordinary course of business. See Note 8, Credit Facilities for details of the principal repayments required under the Company’s various credit facilities.
Legal Matters
Fifteen complaints were filed in connection with the Company’s acquisition of MSG Networks Inc. (the “Merger”) by purported stockholders of the Company and MSG Networks Inc.
Nine of these complaints involved allegations of materially incomplete and misleading information set forth in the joint proxy statement/prospectus filed by the Company and MSG Networks Inc. in connection with the Merger. As a result of supplemental disclosures made by the Company and MSG Networks Inc. on July 1, 2021, all of the disclosure actions were voluntarily dismissed with prejudice prior to or shortly following the consummation of the Merger.
Six complaints involved allegations of fiduciary breaches in connection with the negotiation and approval of the Merger and have since been consolidated into two remaining litigations.
On September 10, 2021, the Court of Chancery entered an order consolidating two derivative complaints filed by purported Company stockholders. The consolidated action is captioned: In re Madison Square Garden Entertainment Corp. Stockholders Litigation, C.A. No. 2021-0468-KSJM. The consolidated plaintiffs filed their Verified Consolidated Derivative Complaint on October 11, 2021. The complaint, which names the Company as only a nominal defendant, retains all of the derivative claims and alleges that the members of the board of directors and controlling stockholders violated their fiduciary duties in the course of negotiating and approving the Merger. Plaintiffs seek, among other relief, an award of damages to the Company including interest, and plaintiffs’ attorneys’ fees. The Company and other defendants filed answers to the complaint on December 30, 2021. The Company substantially completed its production of documents responsive to plaintiffs’ requests on June 24, 2022, and continues to be engaged in responding to plaintiffs’ additional discovery requests. Pursuant to the indemnity rights in its bylaws and Delaware law, the Company is advancing the costs incurred by defendants in this action, and defendants may assert indemnification rights in respect of any adverse judgment or settlement of the action.
On September 27, 2021, the Court of Chancery entered an order consolidating four complaints filed by purported stockholders of MSG Networks Inc. The consolidated action is captioned: In re MSG Networks Inc. Stockholder Class Action Litigation, C.A. No. 2021-0575-KSJM. The consolidated plaintiffs filed their Verified Consolidated Stockholder Class Action Complaint on October 29, 2021. The complaint asserts claims on behalf of a putative class of former MSG Networks Inc. stockholders against each member of the board of directors of MSG Networks Inc. and the controlling stockholders prior to the Merger. Plaintiffs allege that the MSG Networks Inc. board of directors and controlling stockholders breached their fiduciary duties in negotiating and approving the Merger. The Company is not named as a defendant but has been subpoenaed to produce documents and testimony related to the Merger. Plaintiffs seek, among other relief, monetary damages for the putative class and plaintiffs’ attorneys’ fees. Defendants to the MSG Networks Inc. consolidated action filed answers to the complaint on December 30, 2021. The Company substantially completed its production of documents responsive to plaintiffs’ requests on June 24, 2022, and continues to be engaged in responding to plaintiffs’ additional discovery requests. Pursuant to the indemnity rights in its bylaws and Delaware law, the Company is advancing the costs incurred by defendants in this action, and defendants may assert indemnification rights in respect of any adverse judgment or settlement of the action.
On September 19, 2022, the Court of Chancery approved a case schedule, governing the two consolidated actions, which set tentative trial dates for April 2023.
We are currently unable to determine a range of potential liability, if any, with respect to these Merger-related claims. Accordingly, no accrual for these matters has been made in our financial statements.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
The Company is a defendant in various other lawsuits. Although the outcome of these other lawsuits cannot be predicted with certainty (including the extent of available insurance, if any), management does not believe that resolution of these other lawsuits will have a material adverse effect on the Company.
Note 8. Credit Facilities
See Note 15, Credit Facilities, to the consolidated and combined financial statements included in the 2022 Form 10-K for more information regarding the Company’s credit facilities. The following table summarizes the presentation of the outstanding balances under the Company’s credit agreements as of September 30, 2022 and June 30, 2022:
September 30, 2022June 30, 2022
PrincipalUnamortized Deferred Financing Costs
Net
PrincipalUnamortized Deferred Financing Costs
Net
Current portion
MSG Networks Term Loan$74,250 $(1,219)$73,031 $66,000 $(1,231)$64,769 
National Properties Term Loan Facility