EX-99.1

EX-99.1 4 d357108dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

TWO PENNSYLVANIA PLAZA

NEW YORK, NY 10121

[●], 2023

Dear Stockholder:

I am pleased to report that the previously announced spin-off by Madison Square Garden Entertainment Corp., which we refer to as “MSG Entertainment,” of approximately 67% of the common stock of its MSGE Spinco, Inc. subsidiary is expected to become effective on [●], 2023. MSGE Spinco, Inc., a Delaware corporation, which we refer to as “Spinco,” will become a public company on that date and will own the Entertainment business segment, excluding MSG Sphere, currently owned and operated by MSG Entertainment, as described in this information statement. We expect that on or prior to the Distribution, Madison Square Garden Entertainment Corp. will change its name to “MSG Sphere Corp.” and Spinco will change its name to “Madison Square Garden Entertainment Corp.” Spinco’s Class A Common Stock will be listed on the New York Stock Exchange, which we refer to as “NYSE”, under the symbol “MSGE” and we expect that Madison Square Garden Entertainment Corp. (renamed “MSG Sphere Corp.”) will change its symbol on the NYSE to “SPHR” in connection with the spin-off.

Holders of record of MSG Entertainment’s Class A Common Stock as of the close of business, New York City time, on [●], 2023, which will be the record date, will receive one share of Spinco Class A Common Stock for every one share of MSG Entertainment’s Class A Common Stock held. Holders of record of MSG Entertainment’s Class B Common Stock as of the close of business on the record date will receive one share of Spinco Class B Common Stock for every one share of MSG Entertainment Class B Common Stock held. No action is required on your part to receive your Spinco shares. You will not be required either to pay anything for the new shares or to surrender any shares of MSG Entertainment stock.

Immediately following such distribution, MSG Entertainment will retain approximately 33% of the outstanding shares of Spinco common stock in the form of Class A Common Stock. MSG Entertainment will not own any of our Class B Common Stock following the Distribution.

No fractional shares of Spinco stock will be issued. If you otherwise would be entitled to a fractional share, you will receive a check for the cash value thereof, which generally will be taxable to you. In due course you will be provided with information to enable you to compute your tax bases in both MSG Entertainment and Spinco stock. MSG Entertainment expects to obtain an opinion from Sullivan & Cromwell LLP substantially to the effect that, among other things, the distribution by MSG Entertainment of our Class A Common Stock and Class B Common Stock to the holders of MSG Entertainment Class A Common Stock and MSG Entertainment Class B Common Stock, respectively (i.e., the distribution), should qualify as a tax-free distribution for U.S. federal income tax purposes. MSG Entertainment will be required by applicable tax rules to dispose of the retained shares within a fixed period of time, which may occur through a series of steps including sales, exchange offers or pro rata distributions.

The enclosed information statement describes the distribution of shares of Spinco stock and contains important information about Spinco, including financial statements. I suggest that you read it carefully. If you have any questions regarding the Distribution, please contact MSG Entertainment’s transfer and distribution agent, EQ Shareowner Services, at 1-800-468-9716 (U.S. toll free) or 651-450-4064 (International).

Sincerely,

James L. Dolan

Executive Chairman and Chief Executive Officer

Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the U.S. Securities and Exchange Commission.

PRELIMINARY INFORMATION STATEMENT

SUBJECT TO COMPLETION, DATED MARCH 22, 2023

INFORMATION STATEMENT

MSGE Spinco, Inc.

Distribution of

Class A Common Stock

Par Value, $0.01 Per Share

Class B Common Stock

Par Value, $0.01 Per Share

This information statement is being furnished in connection with the distribution by Madison Square Garden Entertainment Corp. (“MSG Entertainment”) to holders of its common stock of approximately 67% of the outstanding shares of MSGE Spinco, Inc. (collectively, “we,” “us,” “our,” “Spinco,” or the “Company”) common stock. Immediately following such distribution, MSG Entertainment will retain approximately 33% of the outstanding shares of Spinco common stock in the form of Class A Common Stock. MSG Entertainment will not own any of our Class B Common Stock following the Distribution. Prior to such distribution, we will enter into a series of transactions with MSG Entertainment pursuant to which we will own the Entertainment business segment, excluding MSG Sphere, that was owned and operated by MSG Entertainment, as described in this information statement.

Shares of our Class A Common Stock will be distributed to holders of MSG Entertainment Class A Common Stock of record as of the close of business, New York City time, on [●], 2023, which will be the record date. Each such holder will receive one share of our Class A Common Stock for every one share of MSG Entertainment’s Class A Common Stock held on the record date. Shares of our Class B Common Stock will be distributed to holders of MSG Entertainment’s Class B Common Stock as of the close of business on the record date. Each holder of MSG Entertainment’s Class B Common Stock will receive one share of our Class B Common Stock for every one share of MSG Entertainment’s Class B Common Stock held on the record date. We refer to this distribution of securities as the “Distribution.” The Distribution will be effective at 11:59 p.m., New York City time, on [●], 2023 (the “Distribution Date”). For MSG Entertainment stockholders who own common stock in registered form, in most cases the transfer and distribution agent will credit their shares of Spinco common stock to book entry accounts established to hold their MSG Entertainment common stock. Our transfer and distribution agent will send these stockholders a statement reflecting their Spinco common stock ownership shortly after [●], 2023. For stockholders who own MSG Entertainment common stock through a broker or other nominee, their shares of Spinco common stock will be credited to their accounts by the broker or other nominee. Stockholders will receive a cash payment in lieu of fractional shares, which generally will be taxable. See “The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution.”

The Company will have two classes of common stock. Our Class A Common Stock will be entitled to one vote per share and to collectively elect 25% of our Board of Directors, and our Class B Common Stock will be entitled to ten votes per share and to collectively elect the remaining 75% of our Board of Directors. See “Description of Capital Stock” for more information. As of the Distribution Date, the Dolan family, including trusts for the benefit of members of the Dolan family (the “Dolan Family Group”), will collectively own all of our Class B Common Stock, approximately [●]% of our outstanding Class A Common Stock and approximately [●]% of the total voting power of all our outstanding common stock. As a result, the Company will be a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange (“NYSE”) and the Dolan Family Group will have the ability to determine all matters requiring approval by stockholders (other than the election of the Class A Directors and any matters requiring a separate vote by the holders of the Class A common stock).

No stockholder approval of the Distribution is required or sought. We are not asking you for a proxy and you are requested not to send us a proxy. MSG Entertainment stockholders will not be required to pay for the shares of our common stock to be received by them in the Distribution, or to surrender or to exchange shares of MSG Entertainment common stock in order to receive our common stock, or to take any other action in connection with the Distribution. There is currently no trading market for our common stock.

We expect that on or prior to the Distribution, Madison Square Garden Entertainment Corp. will change its name to “MSG Sphere Corp.” and MSGE Spinco, Inc. will change its name to “Madison Square Garden Entertainment Corp.” We will apply to list our Class A Common Stock on the NYSE. Our Class A Common Stock will trade under the symbol “MSGE” and we expect that Madison Square Garden Entertainment Corp. (renamed “MSG Sphere Corp.”) will change its symbol on the NYSE to “SPHR” in connection with the Distribution. We will not list our Class B Common Stock on any securities exchange.

IN REVIEWING THIS INFORMATION STATEMENT, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DESCRIBED UNDER THE CAPTION “RISK FACTORS” BEGINNING ON PAGE 27.

WE ARE AN EMERGING GROWTH COMPANY AS DEFINED IN THE JUMPSTART OUR BUSINESS STARTUPS ACT OF 2012. REFER TO “RISK FACTORS — RISKS RELATED TO THE SPIN-OFF TRANSACTION — THE REDUCED DISCLOSURE REQUIREMENTS APPLICABLE TO US AS AN ‘EMERGING GROWTH COMPANY’ MAY MAKE OUR CLASS A COMMON STOCK LESS ATTRACTIVE TO INVESTORS” AND “BUSINESS — EMERGING GROWTH COMPANY STATUS.”

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS INFORMATION STATEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS INFORMATION STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.

Stockholders of MSG Entertainment with inquiries related to the Distribution should contact MSG Entertainment’s transfer and distribution agent, EQ Shareowner Services, at 1-800-468-9716 (U.S. toll free) or 651-450-4064 (International).

The date of this information statement is [●], 2023.

TABLE OF CONTENTS


	Page
Summary		1
The Distribution		10
Selected Historical and Unaudited Pro Forma Combined Financial Data		15
Questions and Answers about the Distribution		19
Risk Factors		27
The Distribution		48
Business		56
Dividend Policy		72
Unaudited Pro Forma Condensed Combined Financial Information		73
Management’s Discussion and Analysis of Financial Condition and Results of Operations		83
Corporate Governance and Management		117
Executive Compensation		128
Certain Relationships and Related Party Transactions		172
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		184
Shares Eligible for Future Sale		195
Description of Capital Stock		197
Indemnification of Directors and Officers		202
Available Information		203
Index to Combined Financial Statements		F-1

SUMMARY

The following is a summary of certain of the information contained in this information statement. This summary is included for convenience only and should not be considered complete. This summary is qualified in its entirety by more detailed information contained elsewhere in this information statement, which should be read in its entirety.

Unless the context otherwise requires, all references to “we,” “us,” “our,” “Spinco” or the “Company” refer to MSGE Spinco, Inc., together with its direct and indirect subsidiaries. Where we describe in this information statement our business activities, we do so as if the transfer of the Entertainment business segment, excluding MSG Sphere, owned and operated by MSG Entertainment, to Spinco has already occurred.

On or prior to the Distribution, Madison Square Garden Entertainment Corp. will change its name to “MSG Sphere Corp.” and MSGE Spinco, Inc. will change its name to “Madison Square Garden Entertainment Corp.”

The Company reports on a fiscal year basis ending on June 30. The fiscal years ended June 30, 2022, 2021 and 2020 are referred to as “Fiscal Year 2022,” “Fiscal Year 2021,” and “Fiscal Year 2020,” respectively, and the fiscal year ending June 30, 2023 is referred to as “Fiscal Year 2023.”

Our Company

We are a leader in live entertainment experiences, comprised of iconic venues and marquee entertainment content. Utilizing our 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.

Our company includes (i) our portfolio of venues: Madison Square Garden (“The Garden”), The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre, (ii) the original production, the Christmas Spectacular Starring the Radio City Rockettes (“Christmas Spectacular”), and (iii) our entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually.

We manage our business through a single reportable segment.

Impact of the COVID-19 Pandemic on Our Business

The Company’s operations and operating results were materially impacted by the COVID-19 pandemic (including COVID-19 variants) and actions taken in response by governmental authorities and certain professional sports leagues during Fiscal Years 2020, 2021 and 2022. For the majority of Fiscal Year 2021, substantially all of our business operations were suspended. Fiscal Year 2022 was also impacted by the pandemic, with fewer ticketed events at our venues in the first half of the fiscal year as compared with Fiscal Year 2019 (the last full fiscal year not impacted by COVID-19) due to the lead-time required to book touring acts and artists, and an increase in COVID-19 cases due to a new variant, which resulted in a number of events at our venues being cancelled or postponed in the fiscal second and third quarters.

As a result of government-mandated assembly limitations and closures, all of our venues were closed beginning in March 2020. Use of The Garden resumed for home games of the New York Knicks (the “Knicks”) and the New York Rangers (the “Rangers”) without fans in December 2020 and January 2021, respectively, and was available at 10% seating capacity from February through May 2021 subject to certain safety protocols and social distancing. Beginning in May 2021, all of our New York venues were permitted to host guests at full capacity, subject to certain restrictions, and effective June 2021, The Chicago Theatre was permitted to host events without restrictions. Guests of our Chicago and New York venues were also subject to certain vaccination

requirements until February and March 2022, respectively. Our venues no longer require guests to provide proof of COVID-19 vaccination before entering (although specific performers may require enhanced protocols).

For Fiscal Year 2021, the majority of ticketed events at our venues were postponed or cancelled. For Fiscal Year 2022 and as of the date of this filing, live events have been permitted to be held at all of our venues and we are continuing to host and book new events. As a result of an increase in cases of a COVID-19 variant, select bookings were postponed or cancelled at our venues in the second and third quarters of Fiscal Year 2022. Variants of COVID-19 that arise in the future may result in additional postponements or cancellations of bookings at our venues.

The impact of the COVID-19 pandemic on our operations also included the partial cancellation of the 2021 production of the Christmas Spectacular and the cancellation of the 2020 production of the Christmas Spectacular.

The Company has long-term arena license agreements (the “Arena License Agreements”) with Madison Square Garden Sports Corp. (“MSG Sports”), formerly known as The Madison Square Garden Company, that require the Knicks and Rangers to play their home games at The Garden. As discussed above, capacity restrictions, use limitations and social distancing requirements were in place for the entirety of the Knicks and Rangers 2020-21 regular seasons, which materially impacted the payments we received under the Arena License Agreements for Fiscal Year 2021. On July 1, 2021, the Knicks and Rangers began paying the full amounts provided for under their respective Arena License Agreements. The Knicks and the Rangers each completed their 2021-2022 82-game regular seasons, with the Rangers advancing to the playoffs.

It is unclear to what extent COVID-19 concerns, including with respect to new variants, could result in new government- or league-mandated capacity restrictions or vaccination/mask requirements or impact the use of and/or demand for our venues, demand for our sponsorship and signage assets, deter our employees and vendors from working at our venues (which may lead to difficulties in staffing) or otherwise materially impact our operations.

Our Strengths

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Strong position in live entertainment through:

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A portfolio of world-renowned venues; and

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Marquee live entertainment brands and content;

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Significant presence in the New York market – the nation’s number one Designated Market Area (“DMA”);

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Deep industry relationships that drive top-tier performers and a wide variety of events to the Company’s venues;

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Proven track record of delivering significant value for partners through innovative sponsorships and premium hospitality;

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Reputation for world-class customer experience driven by decades of expertise in sales and marketing, and venue operations;

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Expertise in utilizing data to drive decisions to maximize revenue and the experience of our guests;

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Long-term agreements to host home games at The Garden for two of the most recognized franchises in professional sports — the Knicks and the Rangers; and a

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Strong and seasoned management team.

Our Strategy

Our strategy is to create world-class live experiences for our guests and partners by leveraging (i) our Company’s unique portfolio of live entertainment assets and brands; (ii) our expertise in venue management, bookings and productions, sponsorship, ticketing, marketing and premium hospitality, and content development; (iii) our deep relationships across the entertainment and sports industries; and (iv) our strong connection with diverse and passionate audiences. We believe this strategy will enable us to generate long-term value creation for our shareholders.

Key components of our strategy include:

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Maximizing the live entertainment experience for our customers. We use the strength of our venues, expertise and relationships to attract top talent and deliver unforgettable experiences for our guests. We have a track record of designing world-class facilities with top-quality amenities, including our renovations of The Garden, Radio City Music Hall, and the Beacon Theatre. We also continue to explore new ways to use technology to improve the guest experience. From the way our customers buy food, beverage and merchandise, to how we market and process their tickets, to utilizing next-generation audio technology in our venues, we strive to give our customers the best experience in the industry. We believe this approach will enable us to drive improvements in per-event revenue and profitability at our venues and help create a seamless and memorable guest experience that will help drive repeat visitation to our venues.

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Increasing the utilization of our venues. Part of what drives our success is our “artist first” approach. Through dedicated artist areas and top-tier service, our talent-friendly environment not only attracts artists to our venues, but also brings them back for repeat performances. Another part of this approach is how we use our diverse collection of venues. With seating capacities and configurations that range from 2,800 to 21,000, our venue portfolio enables us to shepherd artists through the growth in their careers, helping us develop deeper industry relationships. We will continue to use this “artist first” approach to attract the industry’s top talent with the goal of increasing utilization across all our venues through more multi-night concerts, as well as more marquee special events. We also plan to continue exploring opportunities for new events that would be unique to our venues, including high-profile residencies that would help build our base of events.

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Delivering unrivaled marketing exposure for our partners. Our assets are highly sought after by companies that value the popularity of our venues and entertainment brands. Our value proposition is further strengthened by our sponsorship sales representation agreement with MSG Sports which enables us to deliver broad-based marketing platforms that combine our assets with MSG Sports’ professional sports brands. We plan to continue utilizing this integrated approach to both renew and extend our relationships with existing partners, as well as to form partnerships with leading companies in emerging industries and in industry verticals where we are currently underpenetrated. We also offer our partners expanded reach through outdoor signage around the Madison Square Garden Complex and Pennsylvania Station (“Penn Station”), a major commuter hub in Manhattan. We plan to selectively explore additional opportunities to grow our external signage portfolio, which could increase our existing marketing partnerships packages as well as attract new partners.

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Offering best-in-class premium hospitality products. The Company offers a wide array of premium corporate hospitality offerings that cater to a variety of audiences. For example, The Garden has a range of suite and club products, including 21 Event Level suites, 58 Lexus Level suites, 18 Infosys Level suites, the Caesars Sportsbook Lounge, Suite Sixteen and the HUB Loft. These suites and clubs — which provide exclusive private spaces, first-class amenities and some of the best seats in The Garden — are primarily licensed to corporate customers with the majority being multi-year agreements with annual escalators. Through our Arena License Agreements with the Knicks and Rangers, we also offer suite holders access to MSG Sports’ premium live sporting events. We believe the strength of our product and content offerings, along with the continued importance of corporate hospitality to our partners, position us well with regard to

ongoing renewal and new sales activity. We also plan to explore enhancing and expanding our premium hospitality offerings, which would create new monetization opportunities for the Company.

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Understanding our customers. We continue to forge direct relationships with customers and fans, with a focus on understanding how consumers interact with every aspect of the Company. A key component of this strategy is our large and growing proprietary database of millions of customers. The data we collect from our venues and digital products provides the Company with significant insights into our customers, including who is utilizing our digital assets and attending events at our venues. In addition to providing value for our marketing partners, these insights are leveraged to help drive revenue and engagement across our assets, providing us with an opportunity to tailor offerings and cross-promote our products and services, introducing customers to our wide range of assets and brands. We also plan to increasingly use data to proactively identify potential bookings for our venues.

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Exploring opportunities to expand proprietary entertainment content. We plan to selectively explore opportunities to create new live entertainment content, including by leveraging owned intellectual property like the Radio City Rockettes (the “Rockettes”). This would enable us to benefit from the economics of being both content owner and venue operator. Additional owned content would also make us less reliant on third-party events to drive utilization of our venues.

Key Challenges

Following the Distribution, we may face a number of challenges, both pre-existing and as a result of the Distribution, including:

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Intense competition in the market and industry in which we operate, including with other leisure-time activities such as television, motion pictures and sporting events and other live performances, and concert venues;

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Dependence upon the continued popularity of the entertainment and sporting events presented in our venues and our existing brands (including the Christmas Spectacular and the National Basketball Association’s (“NBA”) New York Knicks and the National Hockey League’s (“NHL”) New York Rangers), which are sensitive to customer tastes, and our ability to attract popular artists, groups and events to our venues;

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Effectively managing any impacts of the COVID-19 pandemic (including COVID-19 variants) as well as renewed actions taken in response by governmental authorities or certain professional sports leagues, including ensuring compliance with rules and regulations imposed upon our venues, to the extent applicable;

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Significantly levered balance sheet and liquidity restraints imposed by interest and principal payments as well as a high cost of capital;

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Lack of an operating history as a stand-alone public company;

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Strength or weakness of, as well as volatility and less predictability in, our operating results and cash flow because the Company’s results will no longer include cash flows from MSG Networks Inc. (“MSG Networks”) and Tao Group Hospitality; and

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Volatility in the market price and trading volume of our common stock. The market price for our common stock could fluctuate significantly for many reasons following the Distribution, including the lack of an existing public market for our stock, the information set forth under “Risk Factors” and other reasons unrelated to our performance.

See the section entitled “Risk Factors” for more information on each of these key challenges.

Organizational Structure

The following charts depict a simplified graphical representation of the Company’s corporate structure before and after the Distribution. The shares issued in the Distribution will represent approximately 67% of our common stock and MSG Entertainment (to be renamed “MSG Sphere Corp.”) will retain approximately 33% of our common stock immediately following the Distribution in the form of Class A Common Stock. MSG Entertainment will not own any of our Class B Common Stock following the Distribution. The shares issued in the Distribution will include approximately 62% of the outstanding shares of Class A Common Stock (the holders of which will have the right to collectively elect 25% of our Board of Directors, rounded up to the nearest whole number of directors) and 100% of the outstanding shares of Class B Common Stock (the holders of which will have the right to collectively elect the remaining 75% of our Board of Directors). As a result, the shares issued in the Distribution will represent at least 90% of the combined voting power of the outstanding common stock with respect to the election of directors. The Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”) will collectively own all of our Class B Common Stock, approximately [●]% of our outstanding Class A Common Stock and approximately [●]% of the total voting power of all our outstanding common stock.

Before the Distribution:

LOGO

After the Distribution:

LOGO

Company Information

We are a Delaware corporation with our principal executive offices at Two Pennsylvania Plaza, New York, NY 10121. Our telephone number is +1 (212) 465-6000, our website is www.msgentertainment.com. Spinco is a holding company and conducts substantially all of its operations through its subsidiaries.

Spinco was incorporated on September 15, 2022 and is a direct, wholly-owned subsidiary of MSG Entertainment. MSG Entertainment’s board of directors approved the Distribution on [●], 2023. Prior to the Distribution, the Company will acquire the subsidiary of MSG Entertainment that owns, directly and indirectly, the subsidiaries, businesses and other assets described in this information statement. Where we describe in this information statement our business activities, we do so as if these transfers have already occurred.

Entertainment Corp.” We will apply for our Class A Common Stock to be listed on the NYSE under the symbol “MSGE” and we expect that Madison Square Garden Entertainment Corp. (renamed “MSG Sphere Corp.”) will change its symbol on the NYSE to “SPHR” in connection with the Distribution. We will not list our Class B Common Stock on any securities exchange.

SUMMARY OF RISK FACTORS

Ownership of our common stock is subject to numerous risks, including the Distribution, that could adversely affect our business, operations and financial results. The following list of risk factors is not exhaustive. Please read the information in the section entitled “Risk Factors” for a more thorough description of these and other risks.

Risks Related to Our Business

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Our business faces intense and wide-ranging competition that may have a material negative effect on our business and results of operations.

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The success of our business depends on the continued popularity of the Christmas Spectacular production, and the entertainment and sporting events we host at our venues.

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Our operations and operating results were, and may in the future be, materially impacted by the COVID-19 pandemic and actions taken in response by governmental authorities and certain professional sports leagues.

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We depend on licenses from third parties for the performance of musical works at our venues.

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Our properties are subject to, and benefit from, certain easements, the availability of which may not continue on terms favorable to us or at all.

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A change to or withdrawal of a New York City real estate tax exemption for the Madison Square Garden Complex may have a material negative effect on our business and results of operations.

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We have extended credit to MSG Entertainment, which is a highly leveraged business, on an unsecured basis, and a default on the loan could impact our results of operations and cash flows.

Economic and Operational Risks

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Our business has been adversely impacted and may, in the future, be materially adversely impacted by an economic downturn, recession, financial instability, inflation or changes in consumer tastes and preferences.

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We do not own all of our venues and our failure to renew our leases on economically attractive terms may have a material negative effect on our business and results of operations.

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The geographic concentration of our business could subject us to greater risk than our competitors and have a material negative effect on our business and results of operations.

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Our business could be adversely affected by terrorist activity or the threat of terrorist activity, weather and other conditions that discourage congregation at prominent places of public assembly.

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We are subject to extensive governmental regulation and our failure to comply with these regulations may have a material negative effect on our business and results of operations.

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Labor matters may have a material negative effect on our business and results of operations.

Risks Related to Indebtedness; Financial Condition; Internal Control; Cybersecurity and Intellectual Property

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We have substantial indebtedness and are highly leveraged, which could adversely affect our business.

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We have and could in the future incur substantial operating losses, adjusted operating losses and negative cash flow.

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We face continually evolving cybersecurity and similar risk, which could result in loss, disclosure, theft, destruction or misappropriation of, or access to, our confidential information and cause disruption of our business, damage to our brands and reputation, legal exposure and financial losses.

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Theft of our intellectual property may have a material negative effect on our business and results of operations.

Risks Related to the Spin-off Transaction

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Because there has not been any public market for our common stock, the market price and trading volume of our common stock may be volatile and you may not be able to resell your shares at or above the initial market price of our stock following the distribution. In addition, future stock sales, including as a result of the exercise of registration rights by certain of our stockholders, could adversely affect the trading price of our Class A Common Stock.

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The combined post-distribution value of MSG Entertainment and Spinco shares may not equal or exceed the pre-distribution value of MSG Entertainment shares, and we may incur material costs and expenses as a result of our separation from MSG Entertainment.

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The distribution could result in significant tax liability, and we may have a significant indemnity obligation to MSG Entertainment if the distribution is treated as a taxable transaction.

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The tax rules applicable to the distribution may restrict us from engaging in certain corporate transactions or from raising equity capital beyond certain thresholds for a period of time after the distribution.

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Certain adverse U.S. federal income tax consequences might apply to non-U.S. holders that hold our Class A Common Stock and Class B Common Stock after the distribution if we are treated as a “United States real property holding corporation” (“USRPHC”).

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We do not have an operating history as a stand-alone public company and our historical financial results and our unaudited pro forma condensed combined financial statements may not be representative of our results as a separate, stand-alone company.

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If applicable, following the Distribution, if we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), or our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned and our stock price may suffer.

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We will share certain key directors and officers with MSG Entertainment, MSG Sports and/or AMC Networks, which means those officers will not devote their full time and attention to our affairs and the overlap may give rise to conflicts. These overlaps may result in the diversion of corporate opportunities and other conflicts, and provisions in our amended and restated certificate of incorporation may provide us no remedy in that circumstance.

THE DISTRIBUTION

Please see “The Distribution” for a more detailed description of the matters described below.

Distributing Company

MSG Entertainment, a live entertainment and media company, which is comprised of iconic venues, marquee entertainment content, award-winning regional sports and entertainment networks. In addition to the Entertainment business that is being transferred to Spinco, MSG Entertainment also owns and operates the MSG Sphere business under its Entertainment business segment, the MSG Networks business segment and the Tao Group Hospitality business segment.

Distributed Company

Spinco, a wholly-owned subsidiary of MSG Entertainment, which will own and operate the Entertainment business segment, excluding MSG Sphere, currently owned and operated by MSG Entertainment, as described in this information statement. Please see “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for information concerning this business.

Distribution Ratio

Each holder of MSG Entertainment Class A Common Stock will receive a distribution of one share of our Class A Common Stock for every one share of MSG Entertainment Class A Common Stock held on the record date and each holder of MSG Entertainment Class B Common Stock will receive a distribution of one share of our Class B Common Stock for every one share of MSG Entertainment Class B Common Stock held on the record date.

Securities to be Distributed

Based on [●] shares of MSG Entertainment Class A Common Stock and [●] shares of MSG Entertainment Class B Common Stock outstanding on [●], 2023, approximately [●] shares of our Class A Common Stock and [●] shares of our Class B Common Stock will be distributed. The shares issued in the Distribution will represent approximately 67% of our common stock and MSG Entertainment will retain approximately 33% of our common stock immediately following the Distribution in the form of Class A Common Stock. MSG Entertainment will not own any of our Class B Common Stock following the Distribution. The shares issued in the Distribution will include approximately 62% of the outstanding shares of Class A Common Stock (the holders of which will have the right to collectively elect 25% of our Board of Directors, rounded up to the nearest whole number of directors) and 100% of the outstanding shares of Class B Common Stock (the holders of which will have the right to collectively elect the remaining 75% of our Board of Directors). As a result, the shares issued in the Distribution will represent at least 90% of the combined voting power of the outstanding common stock with respect to the election of directors. MSG Entertainment stockholders will not be required to pay for the shares of our common stock to be received by them in the Distribution, or to surrender or exchange shares of MSG Entertainment common stock in order to receive our common stock, or to take any other action in connection with the Distribution.

Fractional Shares

Fractional shares of our common stock will not be distributed. Fractional shares of our Class A Common Stock will be aggregated and sold in the public market by the transfer and distribution agent and stockholders will receive a cash payment in lieu of a fractional share. Similarly, fractional shares of our Class B Common Stock will be aggregated, converted to Class A Common Stock, and sold in the public market by the transfer and distribution agent. The aggregate net cash proceeds of these sales will be distributed ratably to the stockholders who would otherwise have received fractional interests. These proceeds generally will be taxable to those stockholders.

Distribution Agent, Transfer Agent and Registrar for the Shares

EQ Shareowner Services will be the distribution agent, transfer agent and registrar for the shares of our common stock.

Record Date

The record date is the close of business, New York City time, on [●], 2023.

Distribution Date

11:59 p.m., New York City time, on [●], 2023.

Material U.S. Federal Income Tax Consequences of the Distribution

MSG Entertainment expects to obtain an opinion from Sullivan & Cromwell LLP substantially to the effect that, among other things, the distribution by MSG Entertainment of our Class A Common Stock and Class B Common Stock to the holders of MSG Entertainment Class A Common Stock and MSG Entertainment Class B Common Stock, respectively (i.e., the Distribution), should qualify as a tax-free distribution under the Internal Revenue Code of 1986, as amended (the “Code”). For U.S. federal income tax purposes, the Distribution is not expected to result in the recognition of gain to MSG Entertainment with respect to the distribution of our Class A Common Stock or our Class B Common Stock to the MSG Entertainment stockholders and, except to the extent a stockholder receives cash in lieu of fractional shares of our common stock, no income, gain or loss should be recognized by, and no amount should be included in the income of, such holder upon the receipt of shares of our common stock pursuant to the Distribution. The opinion will not be binding on the Internal Revenue Service (“IRS”) or the courts. See “The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution” below. Certain transactions related to the Distribution that are not addressed (or expected to be addressed) by the opinion could result in the recognition of income or gain by MSG Entertainment. The opinion will rely on factual representations and reasonable assumptions, which, if incorrect or inaccurate, may jeopardize the ability to rely on such opinion. MSG Entertainment will be required by applicable tax rules to dispose of the retained shares within a fixed period of time, which may occur through a series of steps including sales, exchange offers or pro rata distributions.

Stock Exchange Listing

There is not currently a public market for our common stock. We will apply for our Class A Common Stock to be listed on the NYSE under the symbol “MSGE” and we expect that Madison Square Garden Entertainment Corp. (renamed “MSG Sphere Corp.”) will change its symbol on the NYSE to “SPHR” in connection with the Distribution. It is anticipated that trading will commence on a when-issued basis prior to the Distribution. On the first trading day following the date of the Distribution, when-issued trading in respect of our Class A Common Stock will end and regular way trading will begin. Our Class B Common Stock will not be listed on any securities exchange.

Relationship Between MSG Entertainment and Us After the Distribution

Following the Distribution, we will be a separate public company. MSG Entertainment will initially own approximately 38% of the outstanding Class A Common Stock, representing an approximately 33% economic interest in us. MSG Entertainment will not own any of our Class B Common Stock following the Distribution. Prior to the Distribution, we and MSG Entertainment will enter into a distribution agreement (the “Distribution Agreement”) and several ancillary agreements for the purpose of accomplishing the distribution of our common stock to MSG Entertainment’s common stockholders. These agreements also will govern our relationship with MSG Entertainment subsequent to the Distribution and provide for the allocation of employee benefit, tax and some other liabilities and obligations attributable to periods prior to, at and after the Distribution. These agreements also will include arrangements with respect to transition services (the “Transition Services Agreement”) and a number of on-going commercial relationships. The Distribution Agreement includes an agreement that we and MSG Entertainment will provide each other with appropriate indemnities with respect to liabilities arising out of the business being transferred to us by MSG Entertainment. We will also be party to other arrangements with MSG Sports, MSG Entertainment and each entity’s subsidiaries. See “Certain Relationships and Related Party Transactions — Relationship Between MSG Entertainment and Us After the Distribution.”

Overlapping Directors and Officers and Potential Conflicts of Interest

Following the Distribution, there will be an overlap between an officer of the Company, MSG Sports and MSG Entertainment. James L. Dolan will serve as the Executive Chairman and Chief Executive Officer of both the Company and MSG Entertainment and as the Executive Chairman of MSG Sports. James L. Dolan also currently serves as Non-Executive Chairman of AMC Networks Inc. (“AMC Networks”), a company controlled by the Dolan family. In addition, Gregg G. Seibert will serve as a Vice Chairman of the Company, MSG Sports, MSG Entertainment and AMC Networks and Charles F. Dolan will serve as Chairman Emeritus of AMC Networks concurrently with his service on our Board of Directors (the “Board

of Directors” or the “Board”). Furthermore, immediately following the Distribution, we expect nine of the members of the Board of Directors will also serve as directors of MSG Entertainment, nine will serve as directors of MSG Sports and five will serve as directors of AMC Networks (each of MSG Entertainment, MSG Sports and AMC Networks is referred to as an “Other Entity”), including our Executive Chairman and Chief Executive Officer, who serves as the Non-Executive Chairman of AMC Networks.

There will be no overlap of Class A Directors as between MSG Entertainment and the Company.

The overlapping directors and officers may have actual or apparent conflicts of interest with respect to matters involving or affecting each company. In addition, after the Distribution, certain of our directors and officers will continue to own stock and/or stock options or other equity awards of an Other Entity. These ownership interests could create actual, apparent or potential conflicts of interest when these individuals are faced with decisions that could have different implications for our Company and an Other Entity.

The Company’s amended and restated certificate of incorporation will acknowledge that directors and officers of the Company may also be serving as directors, officers, employees or agents of an Other Entity (the “Overlap Persons”), and that the Company may engage in material business transactions with such Other Entities. The Company will renounce its rights to certain business opportunities and the Company’s amended and restated certificate of incorporation will provide that no Overlap Person will be liable to the Company or its stockholders for breach of any fiduciary duty that would otherwise occur by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of opportunities set forth in our amended and restated certificate of incorporation) to one or more of the Other Entities instead of the Company, or does not refer or communicate information regarding such corporate opportunities to the Company. These provisions in our amended and restated certificate of incorporation will also expressly validate certain contracts, agreements, arrangements and transactions (and amendments, modifications or terminations thereof) between the Company and the Other Entities and, to the fullest extent permitted by law, will provide that the actions of the Overlap Persons in connection therewith are not breaches of fiduciary duties owed to the Company, any of its subsidiaries or their respective stockholders.

See “Certain Relationships and Related Party Transactions — Certain Relationships and Potential Conflicts of Interest” and “Description of Capital Stock — Certain Corporate Opportunities and Conflicts.”

Control by Dolan Family

Following the Distribution, we will be controlled by the Dolan Family Group. We have been informed that the Dolan Family Group will

enter into a stockholders agreement (the “Stockholders Agreement”) relating, among other things, to the voting of its shares of our Class B Common Stock. As a result, following the Distribution, we will be a “controlled company” under the corporate governance rules of the NYSE. Our Board of Directors has elected not to comply with the NYSE requirements for a majority-independent board of directors and an independent corporate governance and nominating committee because of our status as a controlled company. The Dolan Family Group also controls MSG Entertainment, MSG Sports and AMC Networks. See “Risk Factors — Risks Related to the Spin-off Transaction — We Are Controlled by the Dolan Family. As a Result of Their Control, the Dolan Family Has the Ability to Prevent or Cause a Change in Control or Approve, Prevent or Influence Certain Actions by the Company.” Immediately following the Distribution, nine of the members of our Board of Directors will be members of the Dolan family.

Post-Distribution Dividend Policy

We do not expect to pay any cash dividends on our common stock in the foreseeable future. All decisions regarding the payment of dividends will be made by our Board of Directors from time to time in accordance with applicable law.

Risk Factors

Stockholders should carefully consider the matters discussed under “Risk Factors.”

SELECTED HISTORICAL AND UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The historical operating and balance sheet data included in the following selected financial data table have been derived from the unaudited combined financial statements as of December 31, 2022 and June 30, 2022 and for the six months ended December 31, 2022 and 2021 and the audited combined financial statements as of June 30, 2022 and 2021 and for the three years ended June 30, 2022, 2021 and 2020 included elsewhere in this information statement. The historical financial information presented below does not necessarily reflect what our results of operations and financial position would have been if we had operated as a separate publicly-traded entity during those periods. The selected historical financial data presented below should be read in conjunction with the combined financial statements included elsewhere in this information statement and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Also set forth below are summary unaudited pro forma combined balance sheet data as of December 31, 2022 and summary unaudited pro forma combined statements of operations data for the six months ended December 31, 2022 and the year ended June 30, 2022. The unaudited pro forma condensed combined balance sheet information has been prepared giving effect to the distribution as if this transaction had occurred as of December 31, 2022. The unaudited pro forma condensed combined statements of operations have been prepared giving effect to the distribution as if this transaction had occurred on July 1, 2021. The unaudited pro forma condensed combined financial information also reflects certain assumptions that we believe are reasonable given the information currently available. The unaudited pro forma financial information does not purport to represent what the Company’s financial position and results of operations actually would have been had the Distribution occurred on the dates indicated, or to project the Company’s financial performance for any future period. See “Unaudited Pro Forma Condensed Combined Financial Information” for more information.


	Pro Forma Combined						Historical
	Six Months Ended December 31, 2022			Year Ended June 30, 2022			Six Months Ended December 31,						Years Ended June 30,
	Six Months Ended December 31, 2022			Year Ended June 30, 2022			2022			2021			2022			2021			2020
	(in thousands, except per share information)
Operating Data:
Revenues	$	502,332		$	653,490		$	502,332		$	281,162		$	653,490		$	81,812		$	584,601

Operating income (loss)		76,846			(70,162	)		102,134			(15,931	)		(5,648	)		(237,288	)		225,332

Net income (loss)		52,466			(202,831	)		78,807			(58,369	)		(136,200	)		(219,308	)		170,659
Less: Net loss attributable to nonredeemable noncontrolling interests		(553	)		(2,864	)		(553	)		(367	)		(2,864	)		(694	)		(1,071	)

Net income (loss) attributable to Spinco’s stockholders		53,019			(199,967	)		79,360			(58,002	)		(133,336	)		(218,614	)		171,730

Balance Sheet Data:
Total assets		1,398,847						1,548,961						1,526,701			1,697,289
Total debt, net of deferred financing costs		664,647						664,647						663,674			617,785
Total Spinco divisional equity (deficit)		(51,225	)					98,889						(1,475	)		495,902
Pro forma earnings (loss) per share:
Basic	$	1.03		$	(3.91	)
Diluted	$	1.03		$	(3.91	)
Pro forma weighted-average common shares outstanding:
Basic		51,558			51,127
Diluted		51,624			51,127
Non-GAAP Financial measures ^(a)
Adjusted operating income (loss)	$	110,649		$	11,637		$	137,798		$	26,418		$	79,095		$	(123,384	)	$	92,250

^(a)

See “Adjusted operating income (loss) (“AOI”)” below.


	Pro Forma Combined						Historical
	Six Months Ended December 31, 2022			Year Ended June 30, 2022			Six Months Ended December 31,						Years Ended June 30,
	Six Months Ended December 31, 2022			Year Ended June 30, 2022			2022			2021			2022			2021			2020
	(in thousands)
Other Financial Data:
Reconciliation of Operating income (loss) to Adjusted operating income (loss):
Operating income (loss)	$	76,846		$	(70,162	)	$	102,134		$	(15,931	)	$	(5,648	)	$	(237,288	)	$	225,332
Non-cash portion of arena license fees from MSG Sports ^(a)		(12,929	)		(27,754	)		(12,929	)		(11,889	)		(27,754	)		(13,026	)		—
Share-based compensation expense		12,104			34,802			13,965			21,079			37,746			40,663			26,110
Depreciation and amortization		31,571			69,534			31,571			33,159			69,534			71,576			81,591
Restructuring charges		7,359			5,171			7,359			—			5,171			14,691			—
Gains, net on dispositions		(4,412	)		—			(4,412	)		—			—			—			(240,783	)
Amortization for capitalized cloud computing arrangement costs		104			—			104			—			—			—			—
Remeasurement of deferred compensation plan liabilities		6			46			6			—			46			—			—

Adjusted operating income (loss)	$	110,649		$	11,637		$	137,798		$	26,418		$	79,095		$	(123,384	)	$	92,250

^(a)

This adjustment represents the non-cash portion of operating lease revenue related to the Company’s Arena License Agreements with MSG Sports. Pursuant to GAAP, recognition of operating lease revenue is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement. As a result, operating lease revenue is comprised of a contractual cash component plus or minus a non-cash component for each period presented. Operating income on a GAAP basis includes lease income of (i) $20,220 and $17,293 of revenue collected in cash for the six months ended December 31, 2022 and 2021, respectively, and (ii) a non-cash portion of $12,929 and $11,889 for the six months ended December 31, 2022 and 2021, respectively. For Fiscal Years 2022, 2021 and 2020, operating income on a GAAP basis includes lease income of (i) $40,319, $8,319 and nil, respectively, collected in cash, and (ii) a non-cash portion of $27,754, $13,026 and nil, respectively.

Adjusted operating income (loss) (“AOI”)

The Company evaluates performance based on several factors, of which the key financial measure is adjusted operating income (loss), a non-GAAP financial measure. We define adjusted income (loss) as operating income (loss) excluding:

(i)

the impact of non-cash straight-line leasing revenue associated with the Arena License Agreements with MSG Sports,

(ii)

depreciation, amortization and impairments of property and equipment, goodwill and intangible assets,

(iii)

amortization for capitalized cloud computing arrangement costs,

(iv)

share-based compensation expense,

(v)

restructuring charges or credits,

(vi)

merger and acquisition-related costs, including litigation expenses,

(vii)

gains or losses on sales or dispositions of businesses and associated settlements,

(viii)

the impact of purchase accounting adjustments related to business acquisitions, and

(ix)

gains and losses related to the remeasurement of liabilities under MSG Entertainment’s Executive Deferred Compensation Plan (which was established in November 2021).

The Company believes that given the length of the Arena License Agreements and resulting magnitude of the difference in leasing revenue recognized and cash revenue received, the exclusion of non-cash leasing revenue provides investors with a clearer picture of the Company’s operating performance. Management believes that this adjustment is beneficial for other incremental reasons as well. This adjustment provides senior management, investors and analysts with important information regarding a long-term related party agreement with MSG Sports. In addition, this adjustment is included under the Company’s debt covenant compliance calculations and is a component of the performance measures used to evaluate, and compensate, senior management of the Company. The Company believes that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the Company’s business without regard to the settlement of an obligation that is not expected to be made in cash. The Company eliminates merger and acquisition-related costs, when applicable, because the Company does not consider such costs to be indicative of the ongoing operating performance of the Company as they result from an event that is of a non-recurring nature, thereby enhancing comparability. In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the MSG Entertainment’s Executive Deferred Compensation Plan, which were included for the first time in Fiscal Year 2022, provides investors with a clearer picture of the Company’s operating performance given that, in accordance with GAAP, gains and losses related to the remeasurement of liabilities under the MSG Entertainment’s Executive Deferred Compensation Plan are recognized in Operating (income) loss whereas gains and losses related to the remeasurement of the assets under the MSG Entertainment’s Executive Deferred Compensation Plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recognized in Other income (expense), net, which is not reflected in Operating income (loss).

The Company believes AOI is an appropriate measure for evaluating the operating performance of the Company on a combined basis. AOI and similar measures with similar titles are common performance measures used by investors and analysts to analyze the Company’s performance. The Company uses revenues and AOI measures as the most important indicators of its business performance and evaluates management’s effectiveness with specific reference to these indicators.

AOI should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Since AOI 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 (loss), the most directly comparable GAAP financial measure, to AOI.

QUESTIONS AND ANSWERS ABOUT THE DISTRIBUTION

The following is a brief summary of the terms of the Distribution. Please see “The Distribution” for a more detailed description of the matters described below.

Q:	What is the Distribution?

The Distribution is the method by which MSG Entertainment will separate the business of our Company from MSG Entertainment’s other business, creating two separate, publicly traded companies. In the Distribution, MSG Entertainment will distribute to its stockholders shares of our Class A Common Stock and Class B Common Stock that it owns. Following the Distribution, we will be a separate company from MSG Entertainment. MSG Entertainment will continue to own approximately 38% of our outstanding Class A Common Stock (approximately 33% of our total outstanding common stock). The number of shares of MSG Entertainment common stock you own will not change as a result of the Distribution.

Q:	What is being distributed in the Distribution?

Approximately [●] shares of our Class A Common Stock and [●] shares of our Class B Common Stock will be distributed in the Distribution, based upon the number of shares of MSG Entertainment Class A Common Stock and MSG Entertainment Class B Common Stock outstanding on the record date. The shares of our Class A Common Stock and Class B Common Stock to be distributed by MSG Entertainment will constitute approximately 62% of the issued and outstanding shares of our Class A Common Stock and all of the Class B Common Stock immediately after the Distribution. For more information on the shares being distributed in the Distribution, see “Description of Capital Stock — Class A Common Stock and Class B Common Stock.”

Q:	Which business and assets will remain with MSG Entertainment and which business and assets will transfer to the Company?

A:	Following the Distribution, the Company will include:

•

A diverse collection of venues: The Garden, The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre;

•

The entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually;

•

Long-term Arena License Agreements with the New York Knicks and New York Rangers, which require both teams to play their home games exclusively at The Garden;

•

The Radio City Rockettes and Christmas Spectacular production; and

•

approximately $50 million in cash.

Following the Distribution, MSG Entertainment will include:

•

MSG Sphere, which are planned state-of-the-art venues that will employ cutting-edge technology and multi-sensory storytelling to deliver immersive experiences on an unparalleled scale. The first MSG Sphere is under construction in Las Vegas and is expected to open in the second half of calendar 2023;

•

MSG Networks, which owns two regional sports and entertainment networks, MSG Network and MSG Sportsnet, as well as a companion streaming service, MSG GO, and other digital properties;

•

Majority interest in Tao Group Hospitality, a global entertainment dining and nightlife provider;

•

an approximately 33% economic interest in the Company (for the avoidance of doubt, MSG Entertainment will not own any of the Company’s Class B Common Stock following the Distribution); and

•

approximately $330 million in cash.

Q:	What will I receive in the Distribution?

Holders of MSG Entertainment Class A Common Stock will receive a distribution of one share of our Class A Common Stock for every one share of MSG Entertainment Class A Common Stock held by them on the record date, and holders of MSG Entertainment Class B Common Stock will receive a distribution of one share of our Class B Common Stock for every one share of MSG Entertainment Class B Common Stock held by them on the record date. As a result of the Distribution, your proportionate interest in MSG Entertainment will not change. For a more detailed description, see “The Distribution.”

Q:	What is the record date for the Distribution?

Record ownership will be determined as of the close of business, New York City time, on [●], 2023, which we refer to as the “record date.” The person in whose name shares of MSG Entertainment common stock are registered as of the close of business on the record date is the person to whom shares of the Company’s common stock will be issued in the Distribution. As described below, if a record holder of MSG Entertainment Class A Common Stock sells those shares regular way after the record date and on or prior to the Distribution date, the seller will be obligated to deliver to the purchaser the shares of our common stock that are issued in respect of the transferred MSG Entertainment Class A Common Stock.

Q:	When will the Distribution occur?

A:	Shares of our Class A Common Stock and Class B Common Stock will be distributed by the transfer and distribution agent, on behalf of MSG Entertainment, effective at 11:59 p.m., New York City time, on [●], 2023, which we refer to as the “Distribution date.”

Q:	What will the relationship between MSG Entertainment and us be following the Distribution?

Following the Distribution, we will be a separate public company. MSG Entertainment will initially own approximately 38% of the outstanding Class A Common Stock, representing an approximately 33% economic interest in us. In connection with the Distribution, we and MSG Entertainment have entered into a Distribution Agreement and several other agreements for the purpose of accomplishing the Distribution of our common stock to MSG Entertainment’s common stockholders. These agreements also govern our relationship with MSG Entertainment subsequent to the Distribution and provide for the allocation of employee benefit, tax and some other liabilities and obligations attributable to periods prior to, at and after the Distribution. These agreements also include arrangements with respect to transition services under the Transition Services Agreement and a number of ongoing commercial relationships. The Distribution Agreement provides that we and MSG Entertainment will provide each other with appropriate indemnities with respect to liabilities arising out of the business being transferred to us by MSG Entertainment. We will also be party to other arrangements with MSG Entertainment and its subsidiaries. See “Certain Relationships and Related Party Transactions.” Following the Distribution, we and MSG Entertainment will both be controlled by the Dolan Family Group.

Following the Distribution, there will be an overlap between an officer of the Company and MSG Entertainment. James L. Dolan will serve as the Executive Chairman and Chief Executive Officer of both the Company and MSG Entertainment and as the Executive Chairman of MSG Sports. James L. Dolan also

currently serves as Non-Executive Chairman of AMC Networks. In addition, Gregg G. Seibert will serve as a Vice Chairman of the Company, MSG Sports, MSG Entertainment and AMC Networks and Charles F. Dolan will serve as Chairman Emeritus of AMC Networks concurrently with his service on our Board. Furthermore, immediately following the Distribution, we expect nine of the members of the Board of Directors of the Company will also serve as directors of MSG Entertainment, nine will serve as directors of MSG Sports and five will serve as directors of AMC Networks, including our Executive Chairman and Chief Executive Officer, who serves as Non-Executive Chairman of AMC Networks. There will be no overlap of Class A Directors as between MSG Entertainment and the Company.

See “Certain Relationships and Related Party Transactions — Certain Relationships and Potential Conflicts of Interest” for a discussion of the policy that will be in place for dealing with potential conflicts of interest that may arise from our ongoing relationships with MSG Entertainment, MSG Sports and AMC Networks.

Q:	What voting power will current MSG Entertainment shareholders (including the Dolan Family Group) and others hold in the Company immediately following the Distribution?

In the Distribution, holders of MSG Entertainment Class A Common Stock will receive a distribution of one share of our Class A Common Stock for every one share of MSG Entertainment Class A Common Stock held by them on the record date, and holders of MSG Entertainment Class B Common Stock will receive a distribution of one share of our Class B Common Stock for every one share of MSG Entertainment Class B Common Stock held by them on the record date. The Company’s Class A Common Stock is entitled to one vote per share and to collectively elect 25% of our Board of Directors, and the Company’s Class B Common Stock will be entitled to ten votes per share and to collectively elect the remaining 75% of our Board of Directors. See “Description of Capital Stock” for more information. The Dolan Family Group will collectively own all of our Class B Common Stock, approximately [●]% of our outstanding Class A Common Stock and approximately [●]% of the total voting power of all our outstanding common stock. As a result, the Company will be a “controlled company” within the meaning of the corporate governance standards of the NYSE and the Dolan Family Group will have the ability to determine all matters requiring approval by stockholders (other than the election of the Class A Directors and any matters requiring a separate vote by the holders of the Class A common stock).

Q:	What do I have to do to participate in the Distribution?

No action is required on your part. Stockholders of MSG Entertainment on the record date for the Distribution are not required to pay any cash or deliver any other consideration, including any shares of MSG Entertainment common stock, for the shares of our common stock distributable to them in the Distribution.

Q:	If I sell, on or before the Distribution date, shares of MSG Entertainment Class A Common Stock that I held on the record date, am I still entitled to receive shares of Spinco Class A Common Stock distributable with respect to the shares of MSG Entertainment Class A Common Stock I sold?

It depends on the market in which you sell your shares. Beginning on [●], 2023 and continuing until the occurrence of the Distribution, MSG Entertainment expects that the MSG Entertainment Class A Common Stock will trade in two markets on the NYSE: in the “regular way” market under the symbol “MSGE” and in the “ex-distribution” market under the symbol “SPHR WI”. If you own shares of MSG Entertainment Class A Common Stock on the record date and thereafter sell those shares regular way on or prior to the Distribution date, you will also be selling the shares of our Class A Common Stock that would have been distributed to you in the Distribution with respect to the shares of MSG Entertainment Class A Common Stock you sell.

Conversely, a person who purchases shares of MSG Entertainment Class A Common Stock after the record date and on or prior to the Distribution date will be entitled to receive from the seller of those shares the shares of our Class A Common Stock issued in the Distribution with respect to the transferred MSG Entertainment Class A Common Stock.

However, if you own shares of MSG Entertainment Class A Common Stock on the record date and thereafter sell those shares in the ex-distribution market on or prior to the Distribution date, you will not be selling the shares of our Class A Common Stock that will be distributed to you in the Distribution with respect to the shares of MSG Entertainment Class A Common Stock you sell. Conversely, a person who purchases shares of MSG Entertainment Class A Common Stock in the ex-distribution market after the record date and on or prior to the Distribution date will not be entitled to receive from the seller of those shares the shares of our Class A Common Stock issued in the Distribution with respect to the transferred MSG Entertainment Class A Common Stock.

Q:	How will fractional shares be treated in the Distribution?

If you would be entitled to receive a fractional share of our common stock in the Distribution, you will instead receive a cash payment. See “The Distribution — Manner of Effecting the Distribution” for an explanation of how the cash payments will be determined and “The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution” for an explanation of the tax consequences of such cash payments.

Q:	How will MSG Entertainment distribute shares of Spinco common stock to me?

A:	Holders of shares of MSG Entertainment Class A Common Stock or MSG Entertainment Class B Common Stock on the record date will receive shares of the same class of our common stock in book entry form. See “The Distribution — Manner of Effecting the Distribution” for a more detailed explanation.

Q:	What is the reason for the Distribution?

A:	The potential benefits considered by MSG Entertainment’s board of directors in making the determination to consummate the Distribution included the following:

•

to provide each of MSG Entertainment and the Company with increased flexibility to fully pursue and fund its business plan, including capital expenditures, investments and acquisitions that would be more difficult to consider or effectuate in the absence of the Distribution. This increased financial flexibility reflects the belief that investors in a company with the mix of assets that each of MSG Entertainment and the Company will own following the Distribution will be more receptive to strategic initiatives that MSG Entertainment and the Company may respectively pursue;

•

to increase the aggregate value of the stock of MSG Entertainment and the Company above the value that the stock of MSG Entertainment would have had if it had continued to represent an interest in both the businesses of MSG Entertainment and the Company, so as to: (i) allow each company to use its stock to pursue and achieve strategic objectives, including evaluating and effectuating acquisitions and increasing the long-term attractiveness of equity compensation programs in a significantly more efficient and effective manner with significantly less dilution to existing stockholders; and (ii) allow each company to offer a more focused investment profile to investors; and

•

MSG Entertainment’s Sphere initiative. In addition, upon the Distribution, MSG Entertainment will pledge the entire retained equity interest to secure the $275 million senior secured term loan facility of MSG Las Vegas, LLC, an indirect wholly-owned subsidiary of MSG Entertainment, which was entered into on December 22, 2022. This pledge will be released once the Las Vegas Sphere has been substantially completed and certain of its systems are ready to be used in live, immersive events. The Company will have no interest, contractual or otherwise, in the Sphere venues.

MSG Entertainment’s board of directors also considered several factors that might have a negative effect on MSG Entertainment as a result of the Distribution. MSG Entertainment’s common stock may come under initial selling pressure as certain MSG Entertainment stockholders sell their shares because they are not interested in holding an investment in MSG Entertainment’s remaining business. Moreover, certain factors, such as a lack of comparable public companies, may limit investors’ ability to appropriately value MSG Entertainment’s common stock. In addition, the Distribution would separate from MSG Entertainment the business and assets of the Company, which represent significant value. Because the Company will no longer be part of MSG Entertainment, the Distribution will also affect the terms upon which MSG Entertainment can pursue cross-company business transactions and initiatives with the Company. In addition, after the Distribution, MSG Entertainment’s results will not reflect the generally more predictable cash flow from the Entertainment business segment, which may result in more volatile and less predictable operating results and cash flow for MSG Entertainment. Finally, following the Distribution, MSG Entertainment and its remaining business will need to absorb certain corporate and administrative costs previously allocated to its Entertainment business segment.

MSG Entertainment’s board of directors considered certain aspects of the Distribution that may be adverse to the Company. The Company’s common stock may come under initial selling pressure as certain MSG Entertainment stockholders sell their shares in the Company because they are not interested in holding an investment in the Company’s business. Moreover, certain factors, such as a lack of comparable public companies, may limit investors’ ability to appropriately value the Company’s common stock. Because the Company will no longer be part of MSG Entertainment, the Distribution will also affect the terms upon which the Company can pursue cross-company business transactions and initiatives with MSG Entertainment’s other businesses. In addition, after the Distribution, the Company’s results will not reflect cash flow from the MSG Networks and Tao Group Hospitality businesses. As a result of the Distribution, the Company will bear significant incremental costs associated with being a publicly held company and will need to absorb certain corporate and operational support costs previously allocated to MSG Entertainment. This cost increase will be partially offset by payments that the Company will receive from MSG Entertainment resulting from the establishment of the Transition Services Agreement, which will be recorded as a reduction of operating expenses. Refer to the “Unaudited Pro Forma Condensed Combined Financial Information” section for further details.

Q:	What are the federal income tax consequences to me of the Distribution?

U.S. Federal Income Tax Consequences of the Distribution.” Certain transactions related to the Distribution that are not addressed (or expected to be addressed) by the opinion could result in the recognition of income or gain by MSG Entertainment. The opinion will rely on factual representations and reasonable assumptions, which, if incorrect or inaccurate, may jeopardize the ability to rely on such opinion. MSG Entertainment does not intend to request any ruling from the IRS as to the U.S. federal income tax consequences of the Distribution. MSG Entertainment will be required by applicable tax rules to dispose of the retained shares within a fixed period of time, which may occur through a series of steps, including sales, exchange offers or pro rata distributions.

Q:	Does Spinco intend to pay cash dividends?

A:	No. We do not expect to pay any cash dividends on our common stock in the foreseeable future. All decisions regarding the payment of dividends will be made by our Board of Directors from time to time in accordance with applicable law.

Q:	How will Spinco common stock trade?

Currently, there is no public market for our common stock. We will apply for our Class A Common Stock to be listed on the NYSE under the symbol “MSGE” (and we will change our name to “Madison Square Garden Entertainment Corp.”) and we expect that Madison Square Garden Entertainment Corp. will change its symbol on the NYSE to “SPHR” (and be renamed “MSG Sphere Corp.”) in connection with the Distribution. It is anticipated that trading will commence on a when-issued basis prior to the Distribution. On the first trading day following the Distribution date, when-issued trading in respect of our Class A Common Stock will end and regular way trading will begin. Our Class B Common Stock will not be listed on a securities exchange.

Q:	Will the Distribution affect the trading price of my MSG Entertainment Class A Common Stock?

Yes. After the initial distribution of our Class A Common Stock, the trading price of MSG Entertainment Class A Common Stock may be lower than the trading price of the MSG Entertainment Class A Common Stock immediately prior to the Distribution. Moreover, until the market has evaluated the operations of MSG Entertainment without the operations of the Entertainment business segment (except for MSG Sphere) that was owned and operated by MSG Entertainment, the trading price of MSG Entertainment Class A Common Stock may fluctuate significantly. MSG Entertainment believes that the separation of the Company from MSG Entertainment offers its stockholders the greatest long-term value. However, the combined trading prices of MSG Entertainment Class A Common Stock and Spinco Class A Common Stock after the Distribution may be lower than the trading price of MSG Entertainment Class A Common Stock prior to the Distribution. See “Risk Factors” beginning on page 27.

Q:	Can MSG Entertainment decide to cancel the Distribution?

Yes. The occurrence of the Distribution will be subject to certain conditions, including the final approval of the MSG Entertainment board of directors. The MSG Entertainment board of directors may, in its sole and absolute discretion, determine to impose or waive conditions to the Distribution or abandon the Distribution. If the MSG Entertainment board of directors decides to cancel the Distribution or otherwise materially amend the terms of the Distribution, MSG Entertainment will notify stockholders of such decision by issuing a press release and/or filing a current report on Form 8-K.

Q:	What is the Delayed Draw Term Loan Credit Agreement, why is it being extended to MSG Entertainment and what are the risks associated with it?

Prior to or concurrently with the consummation of the Distribution, we expect to enter into the Delayed Draw Term Loan Credit Agreement with MSG Entertainment, pursuant to which our subsidiary MSG Entertainment Holdings will commit to lend on an unsecured basis up to $65 million in delayed draw term loans to MSG Entertainment for a period of 18 months following the consummation of the Distribution. The loans will provide MSG Entertainment with an additional source of liquidity if needed for funding costs related to the MSG Sphere initiative and the refinancing of indebtedness under the MSG Networks Credit Facility (as defined below). See “Certain Relationships and Related Party Transactions—Delayed Draw Term Loan Facility.”

The loans will be unsecured. No assurances can be made that MSG Entertainment will be in a position to make repayment of the loan, and accordingly, we are subject to the risk that MSG Entertainment may default on the financing that we provide. MSG Entertainment is a highly leveraged business with existing credit facilities at Tao Group Hospitality, MSG Networks and has continued to incur indebtedness, most recently when its subsidiary MSG Las Vegas, LLC entered into a credit agreement in December 2022. Our loan to MSG Entertainment will be structurally subordinated to the approximately $1.3 billion of debt of MSG Entertainment’s subsidiaries. MSG Entertainment continues to have significant cash needs including continued expenditures on its Sphere initiative and the expectation that it will pay down a portion of MSG Networks’ term loan in connection with its refinancing prior to its maturity in October 2024. MSG Entertainment’s ability to make payments on, repay or refinance, its debt – including the financing we provided – depends upon its future operating performance and execution of its business plan, which could be impacted by a recession or economic downturn, or other changes specifically affecting its business or industry. Accordingly, no assurances can be made that MSG Entertainment will be in a position to make repayment of the loan. If MSG Entertainment defaults on its loan, it could impair our assets and create losses related to such loan, and as a result, our business could be adversely affected. If we are unable to recover the principal amount of the loan from a default, there may be a material adverse effect on our business, results of operations, financial condition, and liquidity. See “Risk Factors—Risks Related to Our Business—We Have Extended Credit to MSG Entertainment, Which is a Highly Leveraged Business, on an Unsecured Basis, and a Default on the Loan Could Impact Our Results of Operations and Cash Flows.”

Q:	Do I have appraisal rights?

A:	No. Holders of MSG Entertainment common stock are not entitled to appraisal rights in connection with the Distribution.

Q:	Who is the transfer and distribution agent for Spinco common stock?

A:	EQ Shareowner Services, P.O. Box 64874, St. Paul, Minnesota 55164-0854. Telephone: 1-800-468-9716 (U.S. toll free) or 651-450-4064 (International). Corporate website: www.shareowneronline.com.

Q:	Where can I get more information?

A:	If you have questions relating to the mechanics of the Distribution of shares of Spinco common stock, you should contact the transfer and distribution agent:

EQ Shareowner Services, P.O. Box 64874, St. Paul, Minnesota 55164-0854. Telephone: 1-800-468-9716 (U.S. toll free) or 651-450-4064 (International). Corporate website: www.shareowneronline.com.

If you have questions relating to the Distribution or Spinco, you should contact:

Madison Square Garden Entertainment Corp.

Investor Relations Department

Two Pennsylvania Plaza

New York, NY 10121

Telephone: 1-212-631-5422

RISK FACTORS

You should carefully consider the following risk factors and all the other information contained in this information statement in evaluating us and our common stock.

Risks Related to Our Business

Our Business Faces Intense and Wide-Ranging Competition That May Have a Material Negative Effect on Our Business and Results of Operations.

Our business competes, in certain respects and to varying degrees, with other leisure-time activities such as television, radio, motion pictures, sporting events and other live performances, the Internet, social media and social networking platforms, and online and mobile services, including sites for online content distribution, video on demand and other alternative sources of entertainment and information, in addition to competing for concerts with other event venues, for total entertainment dollars in our marketplace.

The success of our business is largely dependent on the continued success of the Christmas Spectacular, and the availability of, and our venues’ ability to attract, concerts, family shows, sporting events and other events, competition for which is intense, and the ability of performers to attract strong attendance at our venues. For example, The Garden, The Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre all compete with other entertainment options in the New York City metropolitan area. The Chicago Theatre faces similar competition from other entertainment options in its market and elsewhere.

In addition, our business is highly sensitive to customer tastes and depends on our ability to attract artists and events. The success of our business depends in part upon our ability to offer live entertainment that is popular with customers. We contract with promoters and others to provide performers and events at our venues. There may be a limited number of popular artists, groups or events that can attract audiences to our venues, and our business would suffer to the extent that we are unable to continue to attract such artists, groups and events to perform at our venues. See “— Risks Related to Our Business — Our Operations and Operating Results Were, and May in the Future be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”

In order to maintain the competitive positions of The Garden and our other venues, we must invest on a continuous basis in state-of-the-art technology. In addition, we must maintain a competitive pricing structure for events that may be held in our venues, many of which have alternative venue options available to them in New York and other cities. We invest a substantial amount in our Christmas Spectacular to continue to attract audiences. We cannot be assured that such investments will generate revenues that are sufficient to justify our investment or even that exceed our expenses.

The Success of Our Business Depends on the Continued Popularity of the Christmas Spectacular Production, and the Sporting Events We Host at Our Venues, the Decline of Which Could Have a Material Negative Effect on Our Business and Results of Operations.

The financial results of our business are dependent on the Christmas Spectacular production, for which the 2019 production (the last production presented prior to the impact of the COVID-19 pandemic) represented 22% of our revenues in Fiscal Year 2020. Fan and consumer tastes also change frequently and it is a challenge to anticipate what will be successful at any point in time. Should the popularity of the Christmas Spectacular decline (including, for example, due to customer unwillingness to travel to New York City, purchase tickets to a full-capacity indoor event, comply with safety protocols or satisfy vaccination requirements to the extent applicable, all as a result of the COVID-19 pandemic), our revenues from ticket sales and concession and merchandise sales would likely decline, and we might not be able to replace the lost revenue with revenues from other sources.

As a result of our commercial agreements with MSG Sports, the success of our business is also impacted in part by the popularity of MSG Sports’ Knicks and Rangers franchises with their fan bases and, in varying degrees, the teams achieving on-court and on-ice success, which can generate fan enthusiasm, resulting in additional suite, sponsorship, food and beverage and merchandise sales during the teams’ regular seasons. Furthermore, success in the regular season may qualify the Knicks and Rangers for participation in post-season playoffs, which provides us with additional revenue by increasing the number of games played by the teams at The Garden, potentially helping improve attendance in subsequent seasons and increasing the popularity of our suites and sponsorships.

Our Operations and Operating Results Were, and May in the Future be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.

As a result of government-mandated assembly limitations and closures, all of our venues were closed beginning in March 2020 and substantially all of our business operations were suspended for the majority of Fiscal Year 2021. Use of The Garden resumed for Knicks and Rangers home games without fans in December 2020 and January 2021, respectively, and was available at 10% seating capacity from February through May 2021 subject to certain safety protocols and social distancing. As a result, the payments we received under the Arena License Agreements during this period were materially impacted. Beginning in May 2021, all of our New York venues were permitted to host guests at full capacity, subject to certain restrictions, and effective June 2021, The Chicago Theatre was permitted to host events without restrictions. Guests of our Chicago and New York venues were also subject to certain vaccination requirements until February and March 2022, respectively. During Fiscal Year 2022, we had fewer ticketed events at our venues in the first half of the fiscal year as compared with Fiscal Year 2019 (the last full fiscal year not impacted by COVID-19) due to the lead-time required to book touring acts and artists, and an increase in COVID-19 cases due to a new variant, which resulted in a number of events at our venues being cancelled or postponed in the second and third fiscal quarters. The impact of the COVID-19 pandemic on our operations also included (i) the partial cancellation of the 2021 production of the Christmas Spectacular and (ii) the cancellation of the 2020 production of the Christmas Spectacular. As a direct response to this disruption, during Fiscal Years 2020 and 2021, the Company implemented cost savings initiatives in order to streamline operations and preserve liquidity, including furloughing our venue employees while activities were limited, reducing our full-time workforce and implementing additional comprehensive cost reduction measures, such as terminating certain third-party services, negotiating reduced rates and/or reduced service levels with third parties, pursuing targeted savings and reductions in spending on marketing and travel and entertainment, and deferring or limiting non-essential operating or other discretionary expenses. During Fiscal Years 2021 and 2020, over 90% and over 70% of the respective overall declines in our revenues were the result of the COVID-19 pandemic, in each case compared to the prior year period. While the Company substantially recovered from the COVID-19 pandemic during Fiscal Year 2022, the Company still experienced some softness in bookings and attendance, most notably at the beginning of the year along with certain event postponements and cancellations throughout the year, although not at the level of the prior two fiscal years. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Results of Operations.”

It is unclear to what extent COVID-19 concerns, including with respect to new variants, could result in renewed government or league-mandated capacity restrictions or vaccination/mask requirements or impact the use of and/or demand for our venues, demand for our sponsorship and signage assets, deter our employees and vendors from working at our venues (which may lead to difficulties in staffing) or otherwise materially impact our operations. Governmental regulations enacted in response to the COVID-19 pandemic may impact the revenue we derive and/or the expenses we incur from events that we choose to host such that events that were historically profitable would instead result in losses. Concerns about the COVID-19 pandemic could deter artists from touring and/or substantially decrease the use of and demand for our venues. Both the NBA and NHL

determined to complete their 2019-20 seasons with games away from home arenas, reduce the number of regular season games for the 2020-21 seasons, and conduct the majority of the shortened 2020-21 seasons without fans in attendance, and it is possible that concerns related to COVID-19 could cause professional sports teams in the United States to play games without an audience during future seasons or to suspend, cancel or otherwise reduce the number of games scheduled in the regular reason or playoffs, which could have a material impact on the payments we receive under the Arena License Agreements. See “— Economic and Operational Risks — We Are Subject to Extensive Governmental Regulation and Our Failure to Comply with These Regulations May Have a Material Negative Effect on Our Business and Results of Operations.”

Our business is particularly sensitive to reductions in travel and discretionary consumer spending. A pandemic, such as COVID-19, could also impede economic activity in impacted regions and globally over the long term, potentially causing a global recession and leading to a further decline in discretionary spending on sports and entertainment events and other leisure activities, which could result in long-term effects on our business. To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those relating to our liquidity, indebtedness and our ability to comply with the covenants contained in the agreements that govern our indebtedness.

Our Business Strategy Includes the Development of New Productions, Which Could Require Us to Make Considerable Investments for Which There Can Be No Guarantee of Success.

As part of our business strategy, we intend to develop new productions for our existing venues, which may include expansions or enhancements of our existing productions or the creation of entirely new productions. Expansion or enhancement of productions and/or the development of new productions could require significant upfront expense that may never result in a viable show, as well as investment in sets, staging, creative processes, commissioning and/or licensing of intellectual property, casting and advertising, and may lead to dislocation of other alternative sources of entertainment that may have played in our venues absent these productions. To the extent that any efforts at expanding or enhancing productions or creating new productions do not result in a viable show, or to the extent that any such productions do not achieve expected levels of popularity among audiences, we may not recover the substantial expenses we previously incurred for non-capitalized investments, or may need to write-off all or a portion of capitalized investments. In addition, any delay in launching such productions or enhancements could result in the incurrence of operating costs which may not be recouped. For example, we wrote off approximately $75.4 million of deferred production costs across Fiscal Years 2016 and 2017 related to the New York Spectacular Starring the Radio City Rockettes.

Our Business is Highly Sensitive to Customer Tastes and Depends on Our Ability to Attract Artists and Events.

The success of our business depends in part upon our ability to offer live entertainment that is popular with customers. We contract with promoters and others to provide performers and events at our venues. There may be a limited number of popular artists, groups or events that can attract audiences to our venues, and our business would suffer to the extent that we are unable to continue to attract such artists, groups and events to perform at our venues.

We Depend on Licenses from Third Parties for the Performance of Musical Works at Our Venues, the Loss of Which or Renewal of Which on Less Favorable Terms May Have a Negative Effect on Our Business and Results of Operations.

We are required to obtain public performance licenses from music performing rights organizations, commonly known as “PROs,” in connection with the performance of musical works at concerts and certain other live events held at our venues. In exchange for public performance licenses, PROs are paid a per-event royalty, traditionally calculated either as a percentage of ticket revenue or a per-ticket amount. The PRO royalty obligation of any individual event is generally paid by, or charged to, the promoter of the event.

If we are unable to obtain these licenses, or are unable to obtain them on favorable terms consistent with past practice, it may have a negative effect on our business and results of operations. An increase in the royalty rate and/or the revenue base on which the royalty rate is applied could substantially increase the cost of presenting concerts and certain other live events at our venues. If we are no longer able to pass all or a portion of these royalties on to promoters (or other venue licensees), it may have a negative effect on our business and results of operations.

Our Properties Are Subject to, and Benefit from, Certain Easements, the Availability of Which May Not Continue on Terms Favorable to Us or at All.

Our properties are subject to, and benefit from, certain easements. For example, the “breezeway” into the Madison Square Garden Complex from Seventh Avenue in New York City is a significant easement that we share with other property owners. Our ability to continue to utilize these and other easements, including for advertising and promotional purposes, requires us to comply with a number of conditions. Certain adjoining property owners have easements over our property, which we are required to maintain so long as those property owners meet certain conditions. It is possible that we will be unable to continue to access or maintain any easements on terms favorable to us, or at all, which could have a material negative effect on our business and results of operations.

A Change to or Withdrawal of a New York City Real Estate Tax Exemption for the Madison Square Garden Complex May Have a Material Negative Effect on Our Business and Results of Operations.

Many arenas, ballparks and stadiums nationally and in New York City have received significant public support, such as tax exempt financing, other tax benefits, direct subsidies and other contributions, including for public infrastructure critical to the facilities such as parking lots and transit improvements. Our Madison Square Garden Complex benefits from a more limited real estate tax exemption pursuant to an agreement with the City of New York, subject to certain conditions, and legislation enacted by the State of New York in 1982. For Fiscal Year 2022, the tax exemption was $41.9 million. From time to time, there have been calls to repeal or amend the tax exemption. For example, in January 2023, a number of elected representatives issued a public letter noting the tax exemption status should be reexamined. Notwithstanding the suggestion in the public letter, any repeal or amendment of the tax exemption status would require legislative action by New York State.

We are party to Arena License Agreements with subsidiaries of MSG Sports that require two of MSG Sports’ professional sports teams — the Knicks and Rangers — to play all of their home games at The Garden. Under the Arena License Agreements, which each have a term of 35 years (unless extended), the Knicks and the Rangers pay an annual license fee in connection with their respective use of The Garden. In addition, the Arena License Agreements provide us with additional revenue opportunities. Under the Arena License Agreements, the teams are responsible for 100% of any real property or similar taxes applicable to The Garden.

If the tax exemption is repealed or the teams are otherwise subject to the property tax due to no fault of the teams, the revenue that we generate from team events will be reduced on a percentage basis as set forth in the Arena License Agreements. The value of any such revenue reduction could be significant but is expected to be substantially less than the property tax paid by the teams. There can be no assurance that the tax exemption will not be amended in a manner that imposes property tax or repealed in its entirety, either of which could have a material negative effect on our business and results of operations.

We Have Extended Credit to MSG Entertainment, Which is a Highly Leveraged Business, on an Unsecured Basis, and a Default on the Loan Could Impact Our Results of Operations and Cash Flows.

Prior to or concurrently with the consummation of the Distribution, we expect to enter into a Delayed Draw Term Loan Credit Agreement with MSG Entertainment (the “DDTL Facility”), pursuant to which a subsidiary of Spinco will commit to lend on an unsecured basis up to $65 million in delayed draw term loans to MSG Entertainment for a period of 18 months following the consummation of the Distribution. MSG Entertainment is

a highly leveraged business with existing credit facilities at Tao Group Hospitality, MSG Networks and has continued to incur indebtedness, most recently when its subsidiary MSG Las Vegas, LLC entered into a credit agreement in December 2022. Our loan to MSG Entertainment will be structurally subordinated to the approximately $1.3 billion of debt of MSG Entertainment’s subsidiaries. MSG Entertainment continues to have significant cash needs including continued expenditures on its Sphere initiative and the expectation that it will pay down a portion of MSG Networks’ term loan in connection with its refinancing prior to its maturity in October 2024. MSG Entertainment’s ability to make payments on, repay or refinance, its debt – including the financing we provided – depends upon its future operating performance and execution of its business plan, which could be impacted by a recession or economic downturn, or other changes specifically affecting its business or industry. Accordingly, no assurances can be made that MSG Entertainment will be in a position to make repayment of the loan.

If MSG Entertainment defaults on its loan, it could impair our assets and create losses related to such loan, and as a result, our business could be adversely affected. If we are unable to recover the principal amount of the loan from a default, there may be a material adverse effect on our business, results of operations, financial condition, and liquidity.

Economic and Operational Risks

Our Business Has Been Adversely Impacted and May, in the Future, Be Materially Adversely Impacted by an Economic Downturn, Recession, Financial Instability, Inflation or Changes in Consumer Tastes and Preferences.

Our business depends upon the ability and willingness of consumers and businesses to purchase tickets at our venues, license suites and club memberships at The Garden, spend on food and beverages and merchandise, and drive continued sponsorship and signage revenues, and these revenues are sensitive to general economic conditions, recession, fears of recession and consumer behavior. For example, following the 2008 financial crisis, we experienced a lower level of event bookings and reduced renewals of certain of our suite licenses, which adversely affected the Company’s results of operations. Further, the industry is often affected by changes in consumer tastes, national, regional and local economic conditions, discretionary spending priorities, demographic trends, traffic patterns and the type, number and location of competing businesses.

Consumer and corporate spending may decline at any time for reasons beyond our control, and the risks associated with our businesses may become more acute in periods of a slowing economy or recession, which may be accompanied by reductions in corporate sponsorship and signage and decreases in attendance at live events, among other things. In addition, inflation, which has significantly risen, has and may continue to increase operational costs, including labor costs, and continued increases in interest rates in response to concerns about inflation may have the effect of further increasing economic uncertainty and heightening these risks. As a result, instability and weakness of the U.S. and global economies, including due to the effects caused by disruptions to financial markets, inflation, recession, high unemployment, geopolitical events and other effects caused by the COVID-19 pandemic and the negative effects on consumers’ and businesses’ discretionary spending, have and may continue to materially negatively affect our business and results of operations. A prolonged period of reduced consumer or corporate spending, including with respect to sponsorship, such as during the COVID-19 pandemic, could have an adverse effect on our business and our results of operations. See “— Risks Related to Our Business — Our Operations and Operating Results Were, and May in the Future be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”

We Do Not Own All of Our Venues and Our Failure to Renew Our Leases on Economically Attractive Terms May Have a Material Negative Effect on Our Business and Results of Operations.

We lease the Beacon Theatre and Radio City Music Hall under long-term leases that expire in 2036 and 2038, respectively. MSG Entertainment Group, LLC (“MSG Entertainment Group”), the entity that guarantees

the lease for Radio City Music Hall is required to maintain a certain net worth that if not maintained would require the entity to post a letter of credit or provide cash collateral. In connection with the Distribution, we expect MSG Entertainment Holdings, LLC (“MSG Entertainment Holdings”) to become the entity that guarantees the lease.

The Geographic Concentration of Our Business Could Subject Us to Greater Risk Than Our Competitors and Have a Material Negative Effect on Our Business and Results of Operations.

The Company primarily operates in New York City and, as a result, is subject to greater degrees of risk than competitors with more operating properties or that operate in more markets. The Garden, The Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre are all located in New York City. Therefore, the Company is particularly vulnerable to adverse events (including acts of terrorism, natural disasters, epidemics, pandemics, weather conditions, labor market disruptions and government actions) and economic conditions in New York City and surrounding areas. For example, our operations and operating results were materially impacted by the COVID-19 pandemic. See “— Risks Related to Our Business — Our Operations and Operating Results Were, and May in the Future be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”

Our Business Could Be Adversely Affected by Terrorist Activity or the Threat of Terrorist Activity, Weather and Other Conditions That Discourage Congregation at Prominent Places of Public Assembly.

The success of our business is dependent upon the willingness and ability of patrons to attend events at our venues. The venues we operate, like all prominent places of public assembly, could be the target of terrorist activities, including acts of domestic terrorism, or other actions that discourage attendance. Any such activity or threatened activity at or near one of our venues or other similar venues, including those located elsewhere, could result in reduced attendance at our venues and a material negative effect on our business and results of operations. Similarly, a major epidemic or pandemic, such as the COVID-19 pandemic, or the threat or perceived threat of such an event, could adversely affect attendance at our events and venues by discouraging public assembly at our events and venues. Moreover, the costs of protecting against such incidents, including the costs of implementing additional protective measures for the health and safety of our guests, could reduce the profitability of our operations. See “— Risks Related to Our Business — Our Operations and Operating Results Were, and May in the Future be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”

Weather or other conditions, including natural disasters, in locations where we own or operate venues may affect patron attendance as well as sales of food and beverages and merchandise, among other things. Weather conditions may also require us to cancel or postpone events. Any of these events may have a material negative effect on our business and results of operations, and any such events may harm our ability to obtain or renew insurance coverage on favorable terms or at all.

We May Pursue Acquisitions and Other Strategic Transactions and/or Investments to Complement or Expand Our Business That May Not Be Successful.

From time to time, we may continue to explore opportunities to purchase or invest in other businesses, venues or assets that we believe will complement, enhance or expand our current business or that might otherwise offer us growth opportunities, including opportunities that may differ from the Company’s current business. Any transactions that we are able to identify and complete may involve risks, including the commitment of significant capital, the incurrence of indebtedness, the payment of advances, the diversion of management’s attention and resources from our existing business to develop and integrate the acquired or combined business, the inability to successfully integrate such business or assets into our operations, litigation or other claims in connection with acquisitions or against companies we invest in or acquire, our lack of control over certain companies, including joint ventures and other minority investments, the risk of not achieving the intended results and the exposure to losses if

the underlying transactions or ventures are not successful. At times, we have had significant investments in businesses that we account for under the equity method of accounting, and we may again in the future. Certain of these investments have generated operating losses in the past and certain have required additional investments from us in the form of equity or loans. There can be no assurance that these investments will become profitable individually or in the aggregate or that they will not require material additional funding from us in the future.

We may not control the day-to-day operations of these investments. We have in the past written down and, to the extent that these investments are not successful in the future, we may write down all or a portion of such investments. Additionally, these businesses may be subject to laws, rules and other circumstances, and have risks in their operations, which may be similar to, or different from, those to which we are subject. Any of the foregoing risks could result in a material negative effect on our business and results of operations or adversely impact the value of our investments.

We Are Subject to Extensive Governmental Regulation and Our Failure to Comply with These Regulations May Have a Material Negative Effect on Our Business and Results of Operations.

Our business is subject to the general powers of federal, state and local governments, as well as foreign governmental authorities. We are also subject to the rules, regulations and decisions of the NBA and NHL.

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Public Health and Safety. As a result of government mandated assembly limitations and closures implemented in response to the COVID-19 pandemic, our venues were unable to host events for the substantial majority of Fiscal Year 2021. There can be no assurance that some or all of these restrictions will not be imposed again in the future due to increased infection rates of COVID-19 or another pandemic. We are unable to predict what the long-term effects of these events, including renewed government regulations or requirements, will be. For example, future governmental regulations adopted in response to the COVID-19 pandemic may impact the revenue we derive and/or the expenses we incur from the events that we choose to host, such that events that were historically profitable would instead result in losses. See “— Risks Related to Our Business — Our Operations and Operating Results Have Been, and May in the Future be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”

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Hospitality-related Permits/Licenses. We hold liquor licenses at each of our venues and are subject to licensing requirements with respect to the sale of alcoholic beverages in the jurisdictions in which we serve those beverages. Failure to receive or retain, or the suspension of, liquor licenses or permits could interrupt or terminate our ability to serve alcoholic beverages at the applicable venue and could have a material negative effect on our business and our results of operations. Additional regulation relating to liquor licenses may limit our activities in the future or significantly increase the cost of compliance, or both. In the jurisdictions in which our venues are located, we are subject to statutes that generally provide that serving alcohol to a visibly intoxicated or minor patron is a violation of the law and may provide for strict liability for certain damages arising out of such violations. Our liability insurance coverage may not be adequate or available to cover any potential liability.

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Environmental Laws. We and our venues are subject to environmental laws and regulations relating to the use, disposal, storage, emission and release of hazardous and non-hazardous substances, as well as zoning and noise level restrictions which may affect, among other things, the operations of our venues. Compliance with these regulations and the associated costs may be heightened as a result of the purchase, construction or renovation of a venue. Additionally, certain laws and regulations could hold us strictly, jointly and severally responsible for the remediation of hazardous substance contamination at our facilities or at third-party waste disposal sites, as well as for any personal injury or property damage related to any contamination.

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Zoning and Building Regulations. Our venues are subject to zoning and building regulations including permits relating to the operation of The Garden. The Garden requires a special zoning permit, which was originally granted by the New York City Planning Commission in 1963 and renewed in July 2013 for 10 years. Certain government officials and special interest groups sought to use the renewal process to pressure

us to improve Penn Station or to relocate The Garden. There can be no assurance regarding the future renewal of the permit or the terms thereof, and the failure to obtain such renewal or to do so on favorable terms could have a negative effect on our business.

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Data Privacy. We are subject to various data privacy and protection laws, regulations, policies and contractual obligations that apply to the collection, transmission, storage, processing and use of personal information or personal data, which, among other things, impose certain requirements relating to the privacy and security of personal information. The variety of laws and regulations governing data privacy and protection, and the use of the internet as a commercial medium, are rapidly evolving, extensive and complex, and may include provisions and obligations that are inconsistent with one another or uncertain in their scope or application.

The data protection landscape is rapidly evolving in the United States. As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities. For example, California has passed a comprehensive data privacy law, the California Consumer Privacy Act of 2018 (the “CCPA”), and other states, including Virginia and Colorado, have also passed similar laws. Additionally, the California Privacy Rights Act (the “CPRA”) imposed additional data protection obligations on covered businesses, including additional consumer rights procedures and obligations, limitations on data uses, new audit requirements for higher-risk data, and constraints on certain uses of sensitive data. The majority of the CPRA provisions went into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required. Further, there are several legislative proposals in the United States, at both the federal and state level, that could impose new privacy and security obligations. We cannot yet determine the impact that these future laws and regulations may have on our business.

In addition, governmental authorities and private litigants continue to bring actions against companies for online collection, use, dissemination and security practices that are unfair or deceptive.

Our business is, and may in the future be, subject to a variety of other laws and regulations, including licensing, permitting, and historic designation and similar requirements; working conditions, labor, immigration and employment laws; health, safety and sanitation requirements; and compliance with the Americans with Disabilities Act (and related state and local statutes).

Any changes to the legal and regulatory framework applicable to our business could have an adverse impact on our business and our failure to comply with applicable governmental laws and regulations, or to maintain necessary permits or licenses, could result in liability or government actions that could have a material negative effect on our business and results of operations.

Our Business Is Subject to Seasonal Fluctuations, and Our Operating Results and Cash Flow Could Vary Substantially from Period to Period.

Our revenues and expenses have been seasonal and we expect they will continue to be seasonal. For example, 22% of our revenues in Fiscal Year 2020 were derived from the Christmas Spectacular (the last production presented prior to the impact of the COVID-19 pandemic). Our revenues are highest in the second quarter of our fiscal year when these performances primarily occur. As a result, our business earns a disproportionate amount of its revenue and operating income in the second quarter of each fiscal year. Therefore, our operating results and cash flow reflect significant variation from period to period and will continue to do so in the future. Consequently, period-to-period comparisons of our operating results may not necessarily be meaningful and the operating results of one period are not indicative of our financial performance during a full fiscal year. This variability may adversely affect our business, results of operations and financial condition.

Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations.

As a result of ongoing labor market disruptions due to the COVID-19 pandemic and otherwise, we have faced difficulty in maintaining staffing at our venues and retaining talent in our corporate departments. As a

result, we have had to scale back hours and days of operations in certain markets and venues. If we are unable to attract and retain qualified people or to do so on reasonable terms, our venues could be short staffed or become more expensive to operate and affect our ability to meet our customers’ demand, any of which could materially adversely affect our business and results of operations.

Our business is dependent upon the efforts of unionized workers. As of December 31, 2022, approximately 4,900 full-time and part-time employees, who represent approximately 70% of the Company’s workforce, were subject to collective bargaining agreements (“CBAs”). Approximately 3% were subject to CBAs that expired as of December 31, 2022 and approximately 38% were subject to CBAs that will expire by June 30, 2023, if they are not extended prior thereto. Any labor disputes, such as strikes or lockouts, with the unions with which we have CBAs could have a material negative effect on our business and results of operations (including our ability to produce or present concerts, programming, theatrical productions, sporting events and other events).

Additionally, NBA and NHL players are covered by CBAs. Both leagues have experienced labor difficulties in the past and may have labor issues in the future, such as player strikes or management lockouts. If any Knicks or Rangers games are cancelled because of any such labor difficulties, the loss of revenue, including from customers who would have attended home games at The Garden would have a negative impact on our business and results of operations.

The Unavailability of Systems Upon Which We Rely May Have a Material Negative Effect on Our Business and Results of Operations.

We rely upon various internal and third-party software or systems in the operation of our business, including, with respect to ticket sales, credit card processing, email marketing, point of sale transactions, database, inventory, human resource management and financial systems. From time to time, certain of these arrangements may not be covered by long-term agreements. The failure or unavailability of these internal or third-party services or systems, depending upon its severity and duration, could have a material negative effect on our business and results of operations.

There Is a Risk of Injuries and Accidents in Connection with Our Venues, Which Could Subject Us to Personal Injury or Other Claims; We Are Subject to the Risk of Adverse Outcomes in Other Types of Litigation.

There are inherent risks associated with producing and hosting events and operating, maintaining, renovating or constructing our venues. As a result, personal injuries, accidents and other incidents have occurred and may occur from time to time, which could subject us to claims and liabilities.

These risks may not be covered by insurance or could involve exposures that exceed the limits of any applicable insurance policy. Incidents in connection with events at any of our venues could also reduce attendance at our events and may have a negative impact on our revenue and results of operations. We seek to obtain contractual indemnities for events at our venues that we do not promote, and under the Arena License Agreements, MSG Sports and the Company have reciprocal indemnity obligations to each other in connection with the home games of the Knicks and Rangers held at The Garden. While we also maintain insurance policies that provide coverage for incidents in the ordinary course of business, there can be no assurance that such indemnities or insurance will be adequate at all times and in all circumstances.

From time to time, the Company and its subsidiaries are involved in various legal proceedings, including proceedings or lawsuits brought by governmental agencies, stockholders, customers, employees, private parties and other stakeholders. The outcome of litigation is inherently unpredictable and, regardless of the merits of the claims, litigation may be expensive, time-consuming, disruptive to our operations, harmful to our reputation and distracting to management. As a result, we may incur liability from litigation (including in connection with settling such litigation) which could be material and for which we may not have available or adequate insurance coverage, or be subject to other forms of non-monetary relief which may adversely affect the Company. By its

nature, the outcome of litigation is difficult to assess and quantify, and its continuing defense is costly. The liabilities and any defense costs we incur in connection with any such litigation could have an adverse effect on our business and results of operations.

Risks Related to Indebtedness and Financial Condition

We Have Substantial Indebtedness and Are Highly Leveraged, Which Could Adversely Affect Our Business.

The Company will be highly leveraged with a significant amount of debt and may continue to incur additional debt in the future. On June 30, 2022, MSG National Properties, LLC (“MSG National Properties”) and certain other subsidiaries entered into a five-year $650 million senior secured term loan facility (the “National Properties Term Loan Facility”) and a five-year $100 million revolving credit facility (the “National Properties Revolving Credit Facility” and, together with the National Properties Term Loan Facility, the “National Properties Facilities”), which are guaranteed by MSG Entertainment Group, to fund working capital needs, for general corporate purposes of MSG National Properties and its subsidiaries, and to make distributions to MSG Entertainment Group (the “National Properties Credit Agreement”). As of December 31, 2022, outstanding letters of credit were $7.9 million and the remaining balance available under the National Properties Revolving Credit Facility was $63.0 million. The National Properties Facilities will mature on June 30, 2027. The principal obligations under the National Properties Term Loan Facility are to be repaid in quarterly installments beginning with the fiscal quarter ending March 31, 2023, in an aggregate amount equal to 2.50% per annum (0.625% per quarter), stepping up to 5.0% per annum (1.25% per quarter) in the fiscal quarter ending September 30, 2025, with the balance due at the maturity of the facility. The principal obligations under the National Properties Revolving Credit Facility are due at the maturity of the facility. The National Properties Credit Agreement also includes financial covenants requiring MSG National Properties and its restricted subsidiaries to maintain a specified minimum liquidity level, a specified minimum debt service coverage ratio and specified maximum total leverage ratio. In connection with the Distribution, we expect MSG Entertainment Holdings to become the entity that guarantees the National Properties Credit Agreement on the same terms.

As a result of this indebtedness, we will be required to make interest and principal payments on our borrowings that are significant in relation to our revenues and cash flows. These payments reduce our earnings and cash available for other potential business purposes. Furthermore, our interest expense could increase if interest rates increase (including in connection with rising inflation) because our indebtedness bears interest at floating rates or to the extent we have to refinance existing debt with higher cost debt.

In addition, the ability of MSG National Properties to draw on its revolving credit facility will depend on its ability to meet certain financial covenants and other conditions. This leverage also exposes us to significant risk by limiting our flexibility in planning for, or reacting to, changes in our business (whether through competitive pressure or otherwise), the entertainment and hospitality industries and the economy at large. Although our cash flows could decrease in these scenarios, our required payments in respect of indebtedness would not decrease.

In addition, our ability to make payments on, or repay or refinance, such debt, and to fund our operating and capital expenditures, depends largely upon our future operating performance. Our future operating performance, to a certain extent, is subject to general economic conditions, recession, fears of recession, and financial, competitive, regulatory and other factors that are beyond our control. The failure to satisfy the covenants, including any inability to attain a covenant waiver, and other requirements under the credit agreement could trigger a default thereunder, acceleration of outstanding debt thereunder and a demand for payment under the guarantee provided by MSG Entertainment Group, or, following the distribution, MSG Entertainment Holdings, as applicable, which would negatively impact our liquidity and could have a negative effect on our business.

In addition, MSG Entertainment has made investments in, or otherwise extended loans to, one or more of its joint ventures or other parties and we may make additional investments in, or otherwise extend loans to, one or more of such parties in the future. To the extent that such parties do not perform as expected, including with respect to repayment of such loans, it could impair such assets or create losses related to such loans, and, as a result, have a negative effect on our business and results of operations.

Our Variable Rate Indebtedness Subjects Us to Interest Rate Risk, Which Could Cause Our Debt Service Obligations to Increase Significantly.

Borrowings under our facilities are at variable rates of interest and expose us to interest rate risk. If interest rates increase (including in connection with rising inflation), our debt service obligations on certain of our variable rate indebtedness will increase even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.

The United Kingdom’s Financial Conduct Authority, which regulates the London Interbank Offered Rate (“LIBOR”), has announced that it will not compel banks to contribute to LIBOR after 2021. In November 2020, the ICE Benchmark Administration Limited announced a plan to extend the date as of which most U.S. LIBOR values would cease being computed from December 31, 2021 to June 30, 2023. On July 29, 2021 the Alternative Reference Rates Committee announced that it was formally recommending the forward-looking Secured Overnight Financing Rate (“SOFR”) term rate. Our National Properties Facilities have been amended to adjust to SOFR-based rates. The consequences of these developments with respect to LIBOR cannot be entirely predicted but may affect the level of interest payments on the portion of our indebtedness that bears interest at variable rates, which may adversely impact the amount of our interest payments under such debt.

We Have Incurred Substantial Operating Losses, Adjusted Operating Losses and Negative Cash Flow and There is No Assurance We Will Have Operating Income, Positive Adjusted Operating Income or Positive Cash Flow in the Future.

We incurred operating losses of $5.6 million and $237.3 million for Fiscal Years 2022 and 2021, respectively, and operating income of $225.3 million for Fiscal Year 2020. In addition, we have in prior periods incurred operating losses and negative cash flow and there is no assurance that we will have operating income, adjusted operating income, or positive cash flow in the future. Significant operating losses may limit our ability to raise necessary financing, or to do so on favorable terms, as such losses could be taken into account by potential investors, lenders and the organizations that issue investment ratings on indebtedness. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors Affecting Results of Operations.”

MSG Entertainment’s Management Identified a Material Weakness During Fiscal Year 2022, Which Has Now Been Remediated. If We Identify Other Material Weaknesses or Adverse Findings in the Future, Our Ability to Report Our Financial Condition or Results of Operations Accurately or Timely May Be Adversely Affected, Which May Result in a Loss of Investor Confidence in Our Financial Reports, Significant Expenses to Remediate Any Internal Control Deficiencies, and Ultimately Have an Adverse Effect on the Market Price of Our Common Stock.

Pursuant to Section 404 of the Sarbanes-Oxley Act, our management will be required to report on, and our independent registered public accounting firm will be required to attest to, the effectiveness of our internal control over financial reporting. Currently, we are an emerging growth company, and are exempt from complying with the auditor attestation requirements of Section 404, but we will be subject to the requirements in the future. The rules governing the standards that must be met for management to assess internal control over financial reporting are complex and require significant documentation, testing and possible remediation. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, we will not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. If we fail to achieve and maintain an effective internal control environment, we could suffer misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could result in significant expenses to remediate any internal control deficiencies and lead to a decline in our stock price.

Subsequent to the filing of the Fiscal Year 2021 Form 10-K, MSG Entertainment management evaluated an immaterial accounting error related to interest costs that should have been capitalized for the MSG Sphere in Las

Vegas in Fiscal Years 2021, 2020 and 2019 and in the fiscal quarter ended September 30, 2021, as prescribed by Accounting Standards Codification (“ASC”) Topic 835-20 — Capitalization of Interest. As a result of the accounting error, MSG Entertainment re-evaluated the effectiveness of its internal control over financial reporting and identified a material weakness as of June 30, 2021, September 30, 2021, December 31, 2021 and March 31, 2022. MSG Entertainment undertook certain remediation efforts by implementing additional controls which were operating effectively as of June 30, 2022, and as a result, MSG Entertainment’s management has concluded that the material weakness has been remediated and its internal control over financial reporting was effective as of June 30, 2022. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Once we are subject to these requirements, our management may be unable to conclude in future periods that our disclosure controls and procedures are effective due to the effects of various factors, which may, in part, include unremediated material weaknesses in internal controls over financial reporting. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in those reports is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. In addition, we may not be able to identify and remediate other control deficiencies, including material weaknesses, in the future.

Risks Related to Cybersecurity and Intellectual Property

We Face Continually Evolving Cybersecurity and Similar Risks, Which Could Result in Loss, Disclosure, Theft, Destruction or Misappropriation of, or Access to, Our Confidential Information and Cause Disruption of Our Business, Damage to Our Brands and Reputation, Legal Exposure and Financial Losses.

Through our operations, we may collect and store, including by electronic means, certain personal, proprietary and other sensitive information, including payment card information, that is provided to us through purchases, registration on our websites, mobile applications, or otherwise in communication or interaction with us. These activities require the use of online services and centralized data storage, including through third-party service providers. Data maintained in electronic form is subject to the risk of security incidents, including breach, compromise, intrusion, tampering, theft, destruction, misappropriation or other malicious activity. Our ability to safeguard such personal and other sensitive information, including information regarding the Company and our customers, sponsors, partners and employees, independent contractors and vendors, is important to our business. We take these matters seriously and take significant steps to protect our stored information, including the implementation of systems and processes to thwart malicious activity. These protections are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. See “— Economic and Operational Risks — We Are Subject to Extensive Governmental Regulation and Our Failure to Comply with These Regulations May Have a Material Negative Effect on Our Business and Results of Operations.”

Despite our efforts, the risks of a security incident cannot be entirely eliminated and our information technology and other systems that maintain and transmit consumer, sponsor, partner, Company, employee and other confidential and proprietary information may be compromised due to employee error or other circumstances such as malware or ransomware, viruses, hacking and phishing attacks, denial-of-service attacks, business email compromises, or otherwise. Such compromise could affect the security of information on our network or that of a third-party service provider. Additionally, outside parties may attempt to fraudulently induce employees, vendors or users to disclose sensitive, proprietary or confidential information in order to gain access to data and systems. As a result, such sensitive, proprietary and/or confidential information may be lost, disclosed, accessed or taken without consent. For example, in November 2016, a payment card issue that affected cards used at merchandise and food and beverage locations at several of our New York venues and The Chicago Theatre was identified and addressed with the assistance of security firms. The issue was promptly fixed and enhanced security measures were implemented.

The Company also continues to review and enhance our security measures in light of the constantly evolving techniques used to gain unauthorized access to networks, data, software and systems. The Company may be required to incur significant expenses in order to address any actual or potential security incidents that arise and we may not have insurance coverage for any or all of such expenses. If we experience an actual or perceived security incident, our ability to conduct business may be interrupted or impaired, we may incur damage to our systems, we may lose profitable opportunities or the value of those opportunities may be diminished and we may lose revenue as a result of unlicensed use of our intellectual property. Unauthorized access to or security breaches of our systems could result in the loss of data, loss of business, severe reputational damage adversely affecting customer or investor confidence, diversion of management’s attention, regulatory investigations and orders, litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations and significant costs for remediation that may include liability for stolen or lost assets or information and repair of system damage that may have been caused, incentives offered to customers or other business partners in an effort to maintain business relationships after a breach and other liabilities. In addition, in the event of a security incident, changes in legislation may increase the risk of potential litigation. For example, the CCPA, which provides a private right of action (in addition to statutory damages) for California residents whose sensitive personal information is breached as a result of a business’ violation of its duty to reasonably secure such information, took effect on January 1, 2020 and was expanded by the CPRA, which took effect in January 2023. Our insurance coverage may not be adequate to cover the costs of a data breach, indemnification obligations or other liabilities.

In addition, in some instances, we may have obligations to notify relevant stakeholders of security breaches. Such mandatory disclosures are costly, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to or alleviate problems caused by an actual or perceived security breach.

We May Become Subject to Infringement or Other Claims Relating to Our Content or Technology.

From time to time, third parties may assert against us alleged intellectual property infringement claims (e.g., copyright, trademark and patent) or other claims relating to our productions, venues and brands, technologies, digital content or other content or material, some of which may be important to our business. In addition, our productions could potentially subject us to claims of defamation, violation of rights of privacy or publicity or similar types of allegations. Any such claims, regardless of their merit or outcome, could cause us to incur significant costs that could harm our results of operations. We may not be indemnified against, or have insurance coverage for, claims or costs of these types. In addition, if we are unable to continue the use of certain intellectual property rights, our business and results of operations could be materially negatively impacted.

Theft of Our Intellectual Property May Have a Material Negative Effect on Our Business and Results of Operations.

The success of our business depends in part on our ability to maintain and monetize our intellectual property rights, including our brand logos, our technologies, digital content and other content that is material to our business. Theft of our intellectual property, including content, could have a material negative effect on our business and results of operations because it may reduce the revenue that we are able to receive from the legitimate exploitation of such intellectual property, undermine lawful distribution channels and limit our ability to control the marketing of our content and inhibit our ability to recoup or profit from the costs incurred to create such content. Litigation may be necessary to enforce our intellectual property rights or protect our trade secrets. Any litigation of this nature, regardless of the outcome, could cause us to incur significant costs.

Risks Related to the Spin-off Transaction

Following the Distribution, We Will Be Materially Dependent on Affiliated Entities’ Performances Under Various Agreements.

Following the Distribution, we will enter into various agreements with MSG Entertainment and MSG Sports that will govern our ongoing commercial relationship subsequent to the Distribution, including sponsorship agency agreements in connection with the sale of sponsorships for the Knicks and Rangers, as well as MSG

Sports’ other teams, and a trademark license agreement regarding the use of the “MSG” name. These agreements will each be subject to potential termination in the event MSG Entertainment or MSG Sports and the Company are no longer affiliates.

The Company will provide to MSG Entertainment certain business services that were performed by MSG Entertainment prior to the Distribution, such as information technology, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, government affairs, investor relations, corporate communications, benefit plan administration and reporting, and internal audit functions as well as certain marketing functions. These services include the collection and storage of certain personal information regarding employees and/or customers as well as information regarding the Company, MSG Entertainment and our sponsors and partners. See also “— Risks Related to Cybersecurity and Intellectual Property — We Face Continually Evolving Cybersecurity and Similar Risks, Which Could Result in Loss, Disclosure, Theft, Destruction or Misappropriation of, or Access to, Our Confidential Information and Cause Disruption of Our Business, Damage to Our Brands and Reputation, Legal Exposure and Financial Losses.”

The Company and its affiliated entities will each rely on the other to perform its obligations under all of these agreements. If one of the affiliated entities were to breach, be unable to satisfy its material obligations under these agreements, including a failure to satisfy its indemnification or other financial obligations, or these agreements otherwise terminate or expire and we do not enter into replacement agreements, we could suffer operational difficulties and/or significant losses.

Because There Has Not Been Any Public Market for Our Common Stock, the Market Price and Trading Volume of Our Common Stock May Be Volatile and You May Not Be Able to Resell Your Shares at or Above the Initial Market Price of Our Stock Following the Distribution.

Prior to the Distribution, there will have been no regular way trading market for our common stock. We cannot predict the extent to which investors’ interest will lead to a liquid trading market or whether the market price of our common stock will be volatile. The market price of our common stock could fluctuate significantly for many reasons, including in response to the risk factors listed in this information statement or for reasons unrelated to our specific performance, such as reports by industry analysts, investor perceptions or negative developments for our customers, competitors or suppliers, as well as general economic and industry conditions.

The Combined Post-Distribution Value of MSG Entertainment and Spinco Shares May Not Equal or Exceed the Pre-Distribution Value of MSG Entertainment Shares.

After the Distribution, MSG Entertainment Class A Common Stock will continue to be listed and traded on the NYSE. We cannot assure you that the combined trading prices of MSG Entertainment Class A Common Stock and Spinco Class A Common Stock after the Distribution, as adjusted for any changes in the combined capitalization of these companies, will be equal to or greater than the trading price of MSG Entertainment Class A Common Stock prior to the Distribution. Until the market has fully evaluated the business of MSG Entertainment without the business of Spinco, the price at which MSG Entertainment Class A Common Stock trades may fluctuate significantly. Similarly, until the market has fully evaluated the business of Spinco, the price at which shares of Spinco Class A Common Stock trade may fluctuate significantly.

A Significant Amount of Our Total Outstanding Shares May Be Sold Freely into the Market. This Could Cause the Market Price of Our Common Shares to Drop Significantly, Even if Our Business is Doing Well.

additional equity securities. Immediately following the Distribution, this significant amount of our common shares will be freely tradable, without restrictions or further registration under the Securities Act, subject to certain restrictions applicable to shares held by our affiliates as defined in Rule 144.

The Distribution is Subject to Various Risks and Uncertainties and May Not Be Completed in Accordance With the Expected Plans or Anticipated Timeline, or At All, and Will Involve Significant Time and Expense, Which Could Disrupt or Adversely Affect Our Business.

In August 2022, MSG Entertainment announced its plan to separate the Company into an independent, publicly-traded company by way of a tax free spin-off. The Distribution is subject to the satisfaction of certain conditions, including final approval by MSG Entertainment’s Board of Directors of the final terms of the Distribution and certain other conditions. Furthermore, the Distribution is complex in nature, and unanticipated developments or changes, including changes in the law, the macroeconomic environment, competitive conditions of MSG Entertainment’s markets, regulatory approvals or clearances, the uncertainty of the financial markets and challenges in executing the Distribution, could delay or prevent the completion of the proposed Distribution, or cause the Distribution to occur on terms or conditions that are different or less favorable than expected.

Until the Distribution occurs, MSG Entertainment will have the discretion to determine and change the terms of the Distribution. For example, in December 2022, MSG Entertainment announced its plan to revise the structure of the proposed transaction and no longer include the MSG Networks business in the Company.

In addition, MSG Entertainment may decide at any time not to proceed with the Distribution. The process of completing the proposed Distribution has been and is expected to continue to require management’s attention and involves significant costs and expenses. The Distribution costs may be significantly higher than what we currently anticipate and may not yield a discernible benefit if the Distribution is not completed, or if the expected benefits of the Distribution are not realized. We cannot predict the extent to which MSG Entertainment’s investors’ interest in the Distribution and the Company will impact the market price of its stock if the Distribution is not completed.

The Distribution Could Result in Significant Tax Liability.

MSG Entertainment expects to obtain an opinion from Sullivan & Cromwell LLP substantially to the effect that, among other things, the distribution by MSG Entertainment of our Class A Common Stock and Class B Common Stock to the holders of MSG Entertainment Class A Common Stock and MSG Entertainment Class B Common Stock, respectively (i.e., the Distribution), should qualify as a tax-free distribution under the Code. Accordingly, for U.S. federal income tax purposes, the Distribution is not expected to result in the recognition of gain to MSG Entertainment with respect to the distribution of our Class A Common Stock or our Class B Common Stock to the MSG Entertainment stockholders and, except to the extent a stockholder receives cash in lieu of fractional shares of our common stock, no income, gain or loss should be recognized by, and no amount should be included in the income of such holder upon the receipt of shares of our common stock pursuant to the Distribution. The opinion will not be binding on the IRS or the courts. See “The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution.” Certain transactions related to the Distribution that are not addressed (or expected to be addressed) by the opinion could result in the recognition of income or gain by MSG Entertainment. The opinion will rely on factual representations and reasonable assumptions, which, if incorrect or inaccurate, may jeopardize the ability to rely on such opinion. MSG Entertainment does not intend to request any ruling from the IRS as to the U.S. federal income tax consequences of the Distribution.

If the Distribution does not qualify for tax-free treatment for U.S. federal income tax purposes, then, in general, MSG Entertainment would recognize taxable gain in an amount equal to the excess of the fair market value of our common stock distributed in the Distribution over MSG Entertainment’s tax basis therein (i.e., as if it had sold such common stock in a taxable sale for its fair market value). In addition, the receipt by MSG Entertainment stockholders of common stock of our Company would be a taxable distribution, and each U.S. holder that receives our common stock in the Distribution would be treated as if the U.S. holder had received a

distribution equal to the fair market value of our common stock that was distributed to it, which generally would be treated first as a taxable dividend to the extent of such holder’s pro rata share of MSG Entertainment’s earnings and profits, then as a non-taxable return of capital to the extent of the holder’s tax basis in its MSG Entertainment common stock, and thereafter as capital gain with respect to any remaining value. It is expected that the amount of any such taxes to MSG Entertainment stockholders and MSG Entertainment would be substantial. See “The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution.”

We May Have a Significant Indemnity Obligation to MSG Entertainment if the Distribution Is Treated as a Taxable Transaction.

We will enter into a Tax Disaffiliation Agreement with MSG Entertainment, which will set out each party’s rights and obligations with respect to federal, state, local or foreign taxes for periods before and after the Distribution and related matters such as the filing of tax returns and the conduct of IRS and other audits. Pursuant to the Tax Disaffiliation Agreement, we will be required to indemnify MSG Entertainment for losses and taxes of MSG Entertainment resulting from the breach of certain covenants and for certain taxable gain recognized by MSG Entertainment, including as a result of certain acquisitions of our stock or assets. If we are required to indemnify MSG Entertainment under the circumstances set forth in the Tax Disaffiliation Agreement, we may be subject to substantial liabilities, which could materially adversely affect our financial position.

The Tax Rules Applicable to the Distribution May Restrict Us from Engaging in Certain Corporate Transactions or from Raising Equity Capital Beyond Certain Thresholds for a Period of Time After the Distribution.

To preserve the tax-free treatment of the Distribution to MSG Entertainment and its stockholders, under the Tax Disaffiliation Agreement with MSG Entertainment, for the two-year period following the Distribution, we will be subject to restrictions with respect to:

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entering into any transaction pursuant to which 50% or more of our shares or assets would be acquired, whether by merger or otherwise, unless certain tests are met;

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issuing equity securities, if any such issuances would, in the aggregate, constitute 50% or more of the voting power or value of our capital stock;

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certain repurchases of our common shares;

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ceasing to actively conduct our business;

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amendments to our organizational documents (i) affecting the relative voting rights of our stock or (ii) converting one class of our stock to another;

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liquidating or partially liquidating; and

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taking any other action that prevents the Distribution and certain related transactions from being tax-free.

These restrictions may limit our ability during such period to pursue strategic transactions of a certain magnitude that involve the issuance or acquisition of our stock or engage in new businesses or other transactions that might increase the value of our business. These restrictions may also limit our ability to raise significant amounts of cash through the issuance of stock, especially if our stock price were to suffer substantial declines, or through the sale of certain of our assets. For more information, see the sections entitled “The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution” and “Certain Relationships and Related Party Transactions — Relationship Between MSG Entertainment and Us After the Distribution — Tax Disaffiliation Agreement.”

Certain Adverse U.S. Federal Income Tax Consequences Might Apply to Non-U.S. Holders That Hold Our Class A Common Stock and Class B Common Stock After the Distribution If We Are Treated as a USRPHC.

The Company has not made a determination as to whether we will be deemed to be a USRPHC, as defined in section 897(c)(2) of the Code. In general, we will be a USRPHC if 50% or more of the fair market value of our

assets constitute “United States real property interests” within the meaning of the Code. However, the determination of whether we are a USRPHC turns on the relative fair market value of our United States real property interests and our other assets, and because the USRPHC rules are complex and the determination of whether we are a USRPHC depends on facts and circumstances that may be beyond our control, we can give no assurance as to our USRPHC status after the Distribution. If we are treated as a USRPHC, certain adverse U.S. federal income tax consequences might apply to non-U.S. holders that hold our Class A Common Stock and Class B Common Stock after the Distribution. A beneficial owner of MSG Entertainment common stock that is a non-U.S. holder should consult its tax advisor as to the particular tax consequences that would be applicable to such holder if we are treated as a USRPHC after the Distribution. For more information, see the section entitled “The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution.”

We Do Not Have an Operating History as a Stand-Alone Public Company.

In the past, our operations have been a part of MSG Entertainment and MSG Entertainment provided us with various financial, operational and managerial resources for conducting our business. Following the Distribution, we will maintain our own credit and banking relationships and perform certain of our own financial and operational functions. We cannot assure you that we will be able to successfully put in place the financial, operational and managerial resources necessary to operate as a public company or that we will be able to be profitable doing so.

Our Historical Financial Results and Our Unaudited Pro Forma Condensed Combined Financial Statements May Not Be Representative of Our Results as a Separate, Stand-Alone Company.

The historical financial information we have included in this information statement has been derived from the consolidated financial statements and accounting records of MSG Entertainment and does not necessarily reflect what our financial position, results of operations or cash flows would have been had we been a separate, stand-alone company during the periods presented. Although MSG Entertainment did account for the Entertainment business (with the addition of MSG Sphere) as a separate business segment, we were not operated as a separate, stand-alone company for the historical periods presented. The historical costs and expenses reflected in our combined financial statements include an allocation for certain corporate functions historically provided by MSG Entertainment, including general corporate expenses and employee benefits and incentives. These allocations were based on what we and MSG Entertainment considered to be reasonable reflections of the historical utilization levels of these services required in support of our business. The historical information does not necessarily indicate what our results of operations, financial position, cash flows or costs and expenses will be in the future. Our pro forma financial information set forth under “Unaudited Pro Forma Condensed Combined Financial Information” reflects changes to our operations as a result of the separation. However, there can be no assurances that this unaudited pro forma combined financial information will appropriately reflect our financial position or results of operations as a separate, stand-alone company.

We May Incur Material Costs and Expenses as a Result of Our Separation from MSG Entertainment.

We may incur costs and expenses greater than those we currently incur as a result of our separation from MSG Entertainment. These increased costs and expenses may arise from various factors, including financial reporting and costs associated with complying with federal securities laws (including compliance with the Sarbanes-Oxley Act). In addition, we expect to either maintain similar or have increased corporate and administrative costs and expenses to those we incurred while part of MSG Entertainment, even though following the Distribution we will be a smaller, stand-alone company. We cannot assure you that these costs will not be material to our business.

If, Following the Distribution, We Are Unable to Satisfy the Requirements of Section 404 of the Sarbanes-Oxley Act, or Our Internal Control Over Financial Reporting is Not Effective, the Reliability of Our Financial Statements May Be Questioned and Our Stock Price May Suffer.

Section 404 of the Sarbanes-Oxley Act requires any company subject to the reporting requirements of the U.S. securities laws to do a comprehensive evaluation of its and its consolidated subsidiaries’ internal control over financial reporting. To comply with this statute, we will eventually be required to document and test our internal control procedures, our management will be required to assess and issue a report concerning our internal control over financial reporting, and our independent auditors will be required to issue an opinion on the Company’s internal controls over financial reporting. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, our management may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley Act. If our management cannot favorably assess the effectiveness of our internal control over financial reporting or our auditors identify material weaknesses in our internal controls, investor confidence in our financial results may weaken, and our stock price may suffer.

The Reduced Disclosure Requirements Applicable to Us as an “Emerging Growth Company” May Make Our Class A Common Stock Less Attractive to Investors.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may avail ourselves of certain exemptions from various reporting requirements of public companies that are not “emerging growth companies,” including, but not limited to, an exemption from complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, and, like smaller reporting companies, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirement of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may remain an emerging growth company for up to five full fiscal years following the Distribution. We would cease to be an emerging growth company, and, therefore, become ineligible to rely on the above exemptions, if we: (a) have more than $1.235 billion in annual revenue in a fiscal year; (b) issue more than $1 billion of non-convertible debt over a three-year period; or (c) become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) which would generally occur after: (i) we have filed at least one annual report; (ii) we have been a Securities and Exchange Commission (“SEC”) reporting company for at least 12 months; and (iii) the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

If some investors find our common stock less attractive as a result of the exemptions available to us as an emerging growth company, there may be a less active trading market for our common stock and our value may be more volatile than that of an otherwise comparable company that does not avail itself of the same or similar exemptions.

We Are Controlled by the Dolan Family. As a Result of Their Control, the Dolan Family Has the Ability to Prevent or Cause a Change in Control or Approve, Prevent or Influence Certain Actions by the Company.

We have two classes of common stock:

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Class A Common Stock, par value $0.01 per share, which is entitled to one vote per share and is entitled collectively to elect 25% of our Board of Directors; and

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Class B Common Stock, par value $0.01 per share, which is entitled to 10 votes per share and is entitled collectively to elect the remaining 75% of our Board of Directors.

As of the Distribution date, the Dolan Family Group will collectively own all of our Class B Common Stock, approximately [●]% of our outstanding Class A Common Stock and approximately [●]% of the total

voting power of all our outstanding common stock. The members of the Dolan Family Group holding Class B Common Stock will execute a Stockholders Agreement prior to the Distribution that will have the effect of causing the voting power of the holders of our Class B Common Stock to be cast as a block with respect to all matters to be voted on by holders of Class B Common Stock. Under the Stockholders Agreement, the shares of Class B Common Stock owned by members of the Dolan Family Group (representing all of the outstanding Class B Common Stock) are to be voted on all matters in accordance with the determination of the Dolan Family Committee (as defined below), except that the decisions of the Dolan Family Committee are non-binding with respect to the Class B Common Stock owned by certain Dolan family trusts that collectively own [●]% of the outstanding Class B Common Stock (“Excluded Trusts”). The “Dolan Family Committee” will consist of Charles F. Dolan and his six children, James L. Dolan, Thomas C. Dolan, Patrick F. Dolan, Kathleen M. Dolan, Marianne Dolan Weber and Deborah A. Dolan-Sweeney. The Dolan Family Committee generally acts by majority vote, except that approval of a going-private transaction must be approved by a two-thirds vote and approval of a change-in-control transaction must be approved by not less than all but one vote. The voting members of the Dolan Family Committee will be James L. Dolan, Thomas C. Dolan, Kathleen M. Dolan, Deborah A. Dolan-Sweeney and Marianne Dolan Weber, with each member having one vote other than James L. Dolan, who has two votes. Because James L. Dolan has two votes, he will have the ability to block Dolan Family Committee approval of any Company change in control transaction. Shares of Class B Common Stock owned by Excluded Trusts will on all matters be voted on in accordance with the determination of the Excluded Trusts holding a majority of the Class B Common Stock held by all Excluded Trusts, except in the case of a vote on a going-private transaction or a change in control transaction, in which case a vote of trusts holding two-thirds of the Class B Common Stock owned by Excluded Trusts will be required.

The Dolan Family Group is able to prevent a change in control of our Company and no person interested in acquiring us will be able to do so without obtaining the consent of the Dolan Family Group. The Dolan Family Group, by virtue of its stock ownership, has the power to elect all of our directors subject to election by holders of Class B Common Stock, and is able collectively to control stockholder decisions on matters on which holders of all classes of our common stock vote together as a single class. These matters could include the amendment of some provisions of our certificate of incorporation and the approval of fundamental corporate transactions.

In addition, the affirmative vote or consent of the holders of at least 66²/₃% of the outstanding shares of the Class B Common Stock, voting separately as a class, is required to approve:

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the authorization or issuance of any additional shares of Class B Common Stock, and

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any amendment, alteration or repeal of any of the provisions of our certificate of incorporation that adversely affects the powers, preferences or rights of the Class B Common Stock.

As a result, the Dolan Family Group has the power to prevent such issuance or amendment.

The members of the Dolan Family Group will enter into an agreement with the Company in which they agree that, during the 12-month period beginning on the Distribution date, the Dolan Family Group must obtain the prior approval of a majority of the Company’s Independent Directors prior to acquiring common stock of the Company through a tender offer that results in members of the Dolan Family Group owning more than 50% of the total number of outstanding shares of common stock of the Company. For purposes of this agreement, the term “Independent Directors” means the directors of the Company who have been determined by our Board of Directors to be independent directors for purposes of NYSE corporate governance standards.

Following the Distribution, the Company and MSG Entertainment will still be controlled by the Dolan Family Group. The Dolan Family Group also controls MSG Sports and AMC Networks.

We Have Elected to Be a “Controlled Company” for NYSE Purposes Which Allows Us Not to Comply with Certain of the Corporate Governance Rules of the NYSE.

We have been informed that, prior to the Distribution, the members of the Dolan Family Group will enter into a Stockholders Agreement relating, among other things, to the voting of their shares of our Class B Common Stock. As a result, following the Distribution, we will be a “controlled company” under the corporate governance rules of the NYSE. As a controlled company, we will have the right to elect not to comply with the corporate governance rules of the NYSE requiring: (i) a majority of independent directors on our Board of Directors; (ii) an independent corporate governance and nominating committee; and (iii) an independent compensation committee. Our Board of Directors has elected for the Company to be treated as a “controlled company” under NYSE corporate governance rules and not to comply with the NYSE requirement for a majority-independent board of directors and for an independent corporate governance and nominating committee because of our status as a controlled company. Nevertheless, we expect our Board of Directors to elect to comply with the NYSE requirement for an independent compensation committee.

Future Stock Sales, Including as a Result of the Exercise of Registration Rights by Certain of Our Stockholders, Could Adversely Affect the Trading Price of Our Class A Common Stock.

All of the shares of Class A Common Stock will be freely tradable without restriction or further registration under the Securities Act unless the shares are owned by our “affiliates” as that term is defined in the rules under the Securities Act. Shares held by “affiliates” may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144 which is summarized under “Shares Eligible for Future Sale.” Further, we plan to file a registration statement to cover the shares issued under our equity-based benefit plans.

As described under “Shares Eligible for Future Sale — Registration Rights Agreements,” certain parties have registration rights covering a portion of our shares.

We expect to enter into registration rights agreements with Charles F. Dolan, members of his family, certain Dolan family interests and the Dolan Family Foundation that provide them with “demand” and “piggyback” registration rights with respect to approximately [●] million shares of Class A Common Stock, including shares issuable upon conversion of shares of Class B Common Stock.

We also expect to enter into a Stockholder and Registration Rights Agreement with MSG Entertainment, pursuant to which we will provide MSG Entertainment with “demand” and “piggyback” registration rights with respect to the approximately [●] shares of Class A Common Stock it will own following the Distribution. In addition, MSG Entertainment will agree to vote the Class A Common Stock that it owns in proportion to the votes cast by the other holders of the Company’s Class A Common Stock on such matter, to the extent such shares of Class A Common Stock are entitled to be voted on such matter. The shares of Class A Common Stock owned by MSG Entertainment will be present at all stockholder meetings for quorum purposes. MSG Entertainment will grant the Company an irrevocable proxy to implement these voting agreements. Although no final decisions have been made, MSG Entertainment is required by applicable tax rules to dispose of all the retained shares, which will represent approximately 38% of the outstanding shares of our Class A Common Stock, as soon as practicable consistent with the business purposes for the retention, and expects to dispose of such retained shares within one year, subject to market conditions. This disposition may be through one or more sales, exchange offers or pro-rata distributions.

Sales of a substantial number of shares of Class A Common Stock, including sales pursuant to these registration rights agreements, could adversely affect the market price of the Class A Common Stock and could impair our future ability to raise capital through an offering of our equity securities. Such adverse effects could be particularly negative during the period between the completion of the Distribution and the time when MSG Entertainment completes its disposition of the retained shares.

We Will Share Certain Directors and Officers with MSG Entertainment, MSG Sports and/or AMC Networks, Which Means Those Officers Will Not Devote Their Full Time and Attention to Our Affairs and the Overlap May Give Rise to Conflicts.

James L. Dolan will serve as the Executive Chairman and Chief Executive Officer of both the Company and MSG Entertainment and as the Executive Chairman of MSG Sports. James L. Dolan also currently serves as Non-Executive Chairman of AMC Networks. In addition, Gregg G. Seibert will serve as a Vice Chairman of the Company, MSG Sports, MSG Entertainment and AMC Networks and Charles F. Dolan will serve as Chairman Emeritus of AMC Networks concurrently with his service on our Board. Furthermore, immediately following the Distribution, we expect nine of the members of the Board of Directors of the Company will also serve as directors of MSG Entertainment, nine will serve as directors of MSG Sports and five will serve as directors of AMC Networks, including our Executive Chairman and Chief Executive Officer, who serves as Non-Executive Chairman of AMC Networks. There will be no overlap of Class A Directors as between MSG Entertainment and the Company. The Overlap Persons may have actual or apparent conflicts of interest with respect to matters involving or affecting each company. For example, there will be the potential for a conflict of interest when we on the one hand, and MSG Entertainment, MSG Sports, and/or AMC Networks and their respective subsidiaries and successors on the other hand, look at certain acquisitions and other corporate opportunities that may be suitable for more than one of the companies. Also, conflicts may arise if there are issues or disputes under the commercial arrangements that will exist between an Other Entity and us. In addition, after the Distribution, certain of our directors and officers will continue to own stock and/or stock options or other equity awards of an Other Entity. These ownership interests could create actual, apparent or potential conflicts of interest when these individuals are faced with decisions that could have different implications for our Company and an Other Entity. See “Certain Relationships and Related Party Transactions — Certain Relationships and Potential Conflicts of Interest” for a discussion of certain procedures we will institute to help ameliorate such potential conflicts that may arise.

Our Overlapping Directors and Officers with MSG Entertainment, MSG Sports and/or AMC Networks May Result in the Diversion of Corporate Opportunities to MSG Entertainment, MSG Sports and/or AMC Networks and Other Conflicts and Provisions in Our Amended and Restated Certificate of Incorporation May Provide Us No Remedy in That Circumstance.

The Company’s amended and restated certificate of incorporation will acknowledge that directors and officers of the Company may also be serving as directors, officers, employees or agents of an Other Entity, and that the Company may engage in material business transactions with such Other Entities. The Company will renounce its rights to certain business opportunities and the Company’s amended and restated certificate of incorporation will provide that no Overlap Person will be liable to the Company or its stockholders for breach of any fiduciary duty that would otherwise occur by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of opportunities set forth in our amended and restated certificate of incorporation) to one or more of the Other Entities instead of the Company, or does not refer or communicate information regarding such corporate opportunities to the Company. These provisions in our amended and restated certificate of incorporation will also expressly validate certain contracts, agreements, arrangements and transactions (and amendments, modifications or terminations thereof) between the Company and the Other Entities and, to the fullest extent permitted by law, provide that the actions of the Overlap Person in connection therewith are not breaches of fiduciary duties owed to the Company, any of its subsidiaries or their respective stockholders. See “Description of Capital Stock — Certain Corporate Opportunities and Conflicts.”

THE DISTRIBUTION

General

MSG Entertainment will distribute approximately 67% of our outstanding stock to the holders of MSG Entertainment’s Class A Common Stock and Class B Common Stock and will retain approximately 33% of our outstanding common stock in the form of Class A Common Stock. MSG Entertainment will not own any of our Class B Common Stock following the Distribution. We refer to this distribution of securities as the “Distribution,” the Class A Common Stock distributed as the “Distributed Class A Common Stock,” the Class B Common Stock distributed as the “Distributed Class B Common Stock” (and, together with the Distributed Class A Common Stock, the “Distributed Common Stock”) and the shares retained by MSG Entertainment as the “Retained Common Stock.” The Distributed Common Stock will include approximately 62% of the outstanding shares of Class A Common Stock (the holders of which will have the right to collectively elect 25% of our Board of Directors, rounded up to the nearest whole number of directors) and 100% of the outstanding shares of Class B Common Stock (the holders of which will have the right to collectively elect the remaining 75% of our Board of Directors). As a result, the Distributed Common Stock will represent at least 90% of the combined voting power of the outstanding common stock with respect to the election of directors.

In the Distribution, each holder of MSG Entertainment common stock will receive a distribution of one share of our common stock for every one share of MSG Entertainment common stock held as of the close of business, New York City time, on [●], 2023, which will be the record date. Immediately following the Distribution, MSG Entertainment will own approximately 38% of our Class A Common Stock (representing approximately 33% of our common stock), the Class A Common Stockholders of MSG Entertainment will own approximately 62% of our Class A Common Stock (representing approximately 53% of our common stock), and the Class B Common Stockholders of MSG Entertainment will own 100% of our Class B Common Stock (representing approximately 13% of our common stock).

Manner of Effecting the Distribution

The general terms and conditions relating to the Distribution are set forth in the Distribution Agreement between us and MSG Entertainment. Under the Distribution Agreement, the Distribution will be effective at 11:59 p.m., New York City time, on [●], 2023. For most MSG Entertainment stockholders who own MSG Entertainment common stock in registered form on the record date, our transfer and distribution agent will credit their shares of our common stock to book entry accounts established to hold these shares. Our transfer and distribution agent will send these stockholders a statement reflecting their ownership of our common stock. Book entry refers to a method of recording stock ownership in our records in which no physical certificates are used. For stockholders who own MSG Entertainment common stock through a broker or other nominee, their shares of our common stock will be credited to these stockholders’ accounts by the broker or other nominee. As further discussed below, fractional shares will not be distributed. Following the Distribution, stockholders whose shares are held in book entry form may request that their shares of our common stock be transferred to a brokerage or other account at any time, as well as delivery of physical stock certificates for their shares, in each case without charge.

MSG ENTERTAINMENT STOCKHOLDERS WILL NOT BE REQUIRED TO PAY FOR SHARES OF OUR COMMON STOCK RECEIVED IN THE DISTRIBUTION, OR TO SURRENDER OR EXCHANGE SHARES OF MSG ENTERTAINMENT COMMON STOCK IN ORDER TO RECEIVE OUR COMMON STOCK, OR TO TAKE ANY OTHER ACTION IN CONNECTION WITH THE DISTRIBUTION. NO VOTE OF MSG ENTERTAINMENT STOCKHOLDERS IS REQUIRED OR SOUGHT IN CONNECTION WITH THE DISTRIBUTION, AND MSG ENTERTAINMENT STOCKHOLDERS HAVE NO APPRAISAL RIGHTS IN CONNECTION WITH THE DISTRIBUTION.

Fractional shares of our common stock will not be issued to MSG Entertainment stockholders as part of the Distribution or credited to book entry accounts. In lieu of receiving fractional shares, each holder of MSG Entertainment common stock who would otherwise be entitled to receive a fractional share of our common stock

will receive cash for the fractional interest, which generally will be taxable to such holder. An explanation of the tax consequences of the Distribution can be found below in the subsection captioned “— Material U.S. Federal Income Tax Consequences of the Distribution.” The transfer and distribution agent will, as soon as practicable after the Distribution date, aggregate fractional shares of our Class A Common Stock into whole shares and sell them in the open market at the prevailing market prices and distribute the aggregate proceeds, net of brokerage fees, ratably to stockholders otherwise entitled to fractional interests in our Class A Common Stock. Similarly, fractional shares of our Class B Common Stock will be aggregated, converted to Class A Common Stock, and sold in the public market by the transfer and distribution agent. The amount of such payments will depend on the prices at which the aggregated fractional shares are sold by the transfer and distribution agent in the open market shortly after the Distribution date.

See “Executive Compensation — Treatment of Outstanding Awards,” for a discussion of how outstanding MSG Entertainment options, restricted stock units and performance stock units will be affected by the Distribution.

In order to be entitled to receive shares of our common stock in the Distribution, MSG Entertainment stockholders must be stockholders of record of MSG Entertainment common stock at the close of business, New York City time, on the record date, [●], 2023.

Reasons for the Distribution

MSG Entertainment’s board of directors has determined that separation of our business from MSG Entertainment’s other business is in the best interests of MSG Entertainment and its stockholders. The potential benefits considered by MSG Entertainment’s board of directors in making the determination to consummate the Distribution included the following:

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to provide MSG Entertainment, through the retained equity interest, with the opportunity to raise cash proceeds for corporate purposes, including capital expenditures, and/or to use such shares for other transactions that would be advantageous for MSG Entertainment and its stockholders. These capital expenditures will include funds utilized to pursue growth opportunities associated with MSG Entertainment’s Sphere initiative. In addition, upon the Distribution, MSG Entertainment will pledge the entire retained equity interest to secure the $275 million senior secured term loan facility of MSG Las Vegas, LLC, an indirect wholly-owned subsidiary of MSG Entertainment, which was entered into on December 22, 2022. This pledge will be released once the Las Vegas Sphere has been substantially completed and certain of its systems are ready to be used in live, immersive events. The Company will have no interest, contractual or otherwise, in the Sphere venues.

holding an investment in MSG Entertainment’s remaining business. Moreover, certain factors, such as a lack of comparable public companies, may limit investors’ ability to appropriately value MSG Entertainment’s common stock. In addition, the Distribution would separate from MSG Entertainment the business and assets of the Company, which represent significant value. Because the Company will no longer be part of MSG Entertainment, the Distribution will also affect the terms upon which MSG Entertainment can pursue cross-company business transactions and initiatives with the Company. In addition, after the Distribution, MSG Entertainment’s results will not reflect the generally more predictable cash flow from the Entertainment business segment, which may result in more volatile and less predictable operating results and cash flow for MSG Entertainment. Finally, following the Distribution, MSG Entertainment and its remaining business will need to absorb certain corporate and administrative costs previously allocated to its Entertainment business segment.

MSG Entertainment’s board of directors considered certain aspects of the Distribution that may be adverse to the Company. The Company’s common stock may come under initial selling pressure as certain MSG Entertainment stockholders sell their shares in the Company because they are not interested in holding an investment in the Company’s business. Moreover, certain factors, such as a lack of comparable public companies, may limit investors’ ability to appropriately value the Company’s common stock. Because the Company will no longer be part of MSG Entertainment, the Distribution will also affect the terms upon which the Company can pursue cross-company business transactions and initiatives with MSG Entertainment’s other business. In addition, after the Distribution, the Company’s results will not reflect cash flow from the MSG Networks and Tao Group Hospitality business segments. As a result of the Distribution, the Company will bear significant incremental costs associated with being a publicly held company and will need to absorb certain corporate and operational support costs previously allocated to MSG Entertainment. This cost increase will be partially offset by payments that the Company will receive from MSG Entertainment resulting from the establishment of the Transition Services Agreement, which will be recorded as a reduction of operating expenses. Refer to the “Unaudited Pro Forma Condensed Combined Financial Information” section for further details.

Results of the Distribution

After the Distribution, we will be a public company owning and operating the Entertainment business segment, excluding the MSG Sphere business, currently owned and operated by MSG Entertainment. Immediately after the Distribution, we expect to have approximately [●] holders of record of our Class A Common Stock and [●] holders of record of our Class B Common Stock and approximately [●] shares of Class A Common Stock and [●] shares of Class B Common Stock outstanding, based on the number of stockholders of record and outstanding shares of MSG Entertainment common stock on [●], 2023 and after giving effect to the delivery to stockholders of cash in lieu of fractional shares of our common stock. The actual number of shares to be distributed will be determined on the record date. You can find information regarding options, restricted stock units and performance stock units that will be outstanding after the Distribution in the section captioned, “Executive Compensation — Treatment of Outstanding Awards.” We and MSG Entertainment will both be controlled by the Dolan Family Group.

In connection with the Distribution, we have entered or will enter into a number of other agreements with MSG Entertainment and MSG Sports (and certain of their subsidiaries) to provide for an orderly transition and to govern the ongoing relationships between the Company, MSG Entertainment and MSG Sports after the Distribution. These agreements are summarized below, and described in more detail in the “Certain Relationships and Related Party Transactions” section below.

Agreements between MSG Entertainment and the Company

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Distribution Agreement. We will enter into a Distribution Agreement with MSG Entertainment as part of a series of transactions pursuant to which we have acquired or will acquire prior to the Distribution the subsidiaries, businesses and other assets of MSG Entertainment that constitute our business.

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Transition Services Agreement. We will enter into a Transition Services Agreement with MSG Entertainment under which, in exchange for the fees specified in such agreement, the Company will agree to

provide certain corporate and other services to MSG Entertainment, including with respect to such areas as information technology, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, government affairs, investor relations, corporate communications, benefit plan administration and reporting, and internal audit functions as well as certain marketing functions. MSG Entertainment similarly will agree to provide certain transition services to the Company.

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Tax Disaffiliation Agreement. We will enter into a Tax Disaffiliation Agreement with MSG Entertainment that will govern MSG Entertainment’s and our respective rights, responsibilities and obligations with respect to taxes and tax benefits, the filing of tax returns, the control of audits and other tax matters.

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Employee Matters Agreement. We will enter into an employee matters agreement with MSG Entertainment that allocates assets, liabilities and responsibilities with respect to certain employee compensation and benefit plans and programs and certain other related matters upon completion of the Distribution.

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Stockholder and Registration Rights Agreement. The Company will enter into stockholder and registration rights agreements with MSG Entertainment.

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Delayed Draw Term Loan Facility. Prior to or concurrently with the consummation of the Distribution, it is expected that MSG Entertainment Holdings will enter into the DDTL Facility with MSG Entertainment, pursuant to which MSG Entertainment Holdings would commit to lend up to $65 million in delayed draw term loans to MSG Entertainment on an unsecured basis for a period of 18 months following the consummation of the Distribution.

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Two Pennsylvania Plaza. Following the Distribution, the Company will sublease approximately 20,000 square feet of office space at Two Pennsylvania Plaza in New York City to MSG Entertainment.

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Aircraft Arrangements. We will enter into various arrangements with MSG Entertainment, pursuant to which MSG Entertainment will have the right to lease on a “time-sharing” basis certain aircraft to which we have access.

Agreements with MSG Sports and/or AMC Networks

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Arena License Agreements. In connection with the Distribution, MSG Entertainment will assign its Arena License Agreements with subsidiaries of MSG Sports that require the Knicks and Rangers to play their home games at The Garden to the Company.

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Sponsorship Sales and Service Representative Agreements. In connection with the Distribution, MSG Entertainment expects to assign its sponsorship sales and service representation agreements with the Knicks and the Rangers, under which MSG Entertainment is the exclusive sales and service representative for all sponsorship benefits available for sale in connection with the Knicks and Rangers, as well as the Knicks’ development team, the Westchester Knicks, and Knicks Gaming, the official NBA 2K esports franchise of the Knicks, subject to certain exceptions.

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Team Sponsorship Allocation Agreement. In connection with the Distribution, MSG Entertainment will assign its team sponsorship allocation agreement with MSG Sports that memorializes certain agreements to distribute payments received under third-party sponsorship agreements that include the assets of both companies, with either MSG Entertainment or MSG Sports serving as the contracting party, and payments being allocated generally in accordance with the relative value of the assets provided by each company.

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Group Ticket Sales and Service Representation Agreement. In connection with the Distribution, MSG Entertainment will assign its group ticket sales and service representation agreement with MSG Sports, pursuant to which MSG Sports is MSG Entertainment’s sales and service representative to sell group tickets and ticket packages.

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Two Pennsylvania Plaza Sublease. In connection with the Distribution, the Company will sublease approximately 47,000 square feet of office space at Two Pennsylvania Plaza in New York City to MSG Sports.

The Distribution will not affect the number of outstanding shares of MSG Entertainment common stock or any rights of MSG Entertainment stockholders.

Material U.S. Federal Income Tax Consequences of the Distribution

The following is a summary of the material U.S. federal income tax consequences of the Distribution to us, MSG Entertainment and MSG Entertainment stockholders. This summary is based on the Code, the regulations promulgated under the Code by the Department of the Treasury, and interpretations of such authorities by the courts and the IRS, all as of the date of this information statement and all of which are subject to change at any time, possibly with retroactive effect. This summary is limited to holders of MSG Entertainment common stock that are U.S. holders, as defined below, that hold their shares of MSG Entertainment common stock as capital assets, within the meaning of Section 1221 of the Code. Further, this summary does not discuss all tax considerations that may be relevant to holders of MSG Entertainment common stock in light of their particular circumstances, nor does it address the consequences to holders of MSG Entertainment common stock subject to special treatment under the U.S. federal income tax laws, such as tax-exempt entities, partnerships (including arrangements treated as partnerships for U.S. federal income tax purposes), persons who acquired such shares of MSG Entertainment common stock pursuant to the exercise of employee stock options or otherwise as compensation, financial institutions, insurance companies, dealers in securities or currencies, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, persons liable for the alternative minimum tax, persons who hold their shares of MSG Entertainment common stock as part of a straddle, hedge, conversion, constructive sale, synthetic security, integrated investment or other risk-reduction transaction for U.S. federal income tax purposes, and persons whose functional currency is not the U.S. dollar. This summary does not address any U.S. federal estate, gift or other non-income tax consequences or any applicable state, local, foreign, or other tax consequences. Each stockholder’s individual circumstances may affect the tax consequences of the Distribution.

For purposes of this summary, a “U.S. holder” is a beneficial owner of MSG Entertainment common stock that is, for U.S. federal income tax purposes:

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an individual who is a citizen or a resident of the United States;

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a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States or any state or political subdivision thereof;

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an estate, the income of which is subject to United States federal income taxation regardless of its source; or

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a trust, if (i) a court within the United States is able to exercise primary jurisdiction over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or (ii) it has a valid election in place under applicable U.S. Department of Treasury regulations to be treated as a U.S. person.

A “non-U.S. holder” is a beneficial owner of MSG Entertainment common stock that is not a U.S. holder for U.S. federal income tax purposes.

If a partnership (including any arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of MSG Entertainment common stock, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. A partner of a partnership holding shares of MSG Entertainment common stock should consult its tax advisor regarding the tax consequences of the Distribution.

On the basis of the opinion we expect to receive, and assuming that MSG Entertainment common stock is a capital asset in the hands of an MSG Entertainment stockholder on the Distribution date:

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Except for any cash received in lieu of a fractional share of our common stock, an MSG Entertainment stockholder should not recognize any income, gain or loss as a result of the receipt of our common stock in the Distribution.

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An MSG Entertainment stockholder’s holding period for our common stock received (including, for this purpose, any fractional share of our common stock for which cash is received) in the Distribution should include the period for which that stockholder’s MSG Entertainment common stock was held.

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An MSG Entertainment stockholder’s tax basis for our common stock received in the Distribution should be determined by allocating to that common stock, on the basis of the relative fair market values of MSG Entertainment common stock and our common stock at the time of the Distribution, a portion of the stockholder’s tax basis in its MSG Entertainment common stock. An MSG Entertainment stockholder’s tax basis in its MSG Entertainment common stock should be decreased by the portion allocated to our common stock. Within a reasonable period of time after the Distribution, MSG Entertainment will provide its stockholders who receive our common stock pursuant to the Distribution with a worksheet for calculating their tax bases in our common stock and their MSG Entertainment common stock.

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The receipt of cash in lieu of a fractional share of our common stock generally should be treated as a sale of the fractional share of our common stock, and an MSG Entertainment stockholder should recognize gain or loss equal to the difference between the amount of cash received and the stockholder’s tax basis in the fractional share of our common stock, as determined above. The gain or loss should be long-term capital gain or loss if the holding period for the fractional share of our common stock, as determined above, is more than one year.

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The Distribution should not be a taxable transaction to us or MSG Entertainment. However, certain transactions related to the Distribution that are not expected to be addressed by the opinion could result in the recognition of income or gain by MSG Entertainment.

MSG Entertainment is required by applicable tax rules to dispose of all retained shares as soon as practicable consistent with the business purposes for the retention, and expects to dispose of such retained shares within one year, subject to market conditions. If the Distribution does not qualify for tax-free treatment for U.S. federal income tax purposes, then, in general, MSG Entertainment would recognize taxable gain in an amount equal to the excess of the fair market value of our common stock distributed in the Distribution over MSG Entertainment’s tax basis therein (i.e., as if it had sold such common stock in a taxable sale for its fair market value). In addition, the receipt by MSG Entertainment stockholders of our common stock would be a taxable distribution, and each U.S. holder that receives our common stock in the Distribution would be treated as if the U.S. holder had received a distribution equal to the fair market value of our common stock that was distributed to it, which generally would be treated first as a taxable dividend to the extent of such holder’s pro rata share of MSG Entertainment’s earnings and profits, then as a non-taxable return of capital to the extent of the holder’s tax basis in its MSG Entertainment common stock, and thereafter as capital gain with respect to any remaining value.

Even if the Distribution otherwise qualifies for tax-free treatment under the Code, the Distribution may be taxable to MSG Entertainment and would result in a significant U.S. federal income tax liability to MSG Entertainment (but not to the MSG Entertainment stockholders) under Section 355(e) of the Code if the Distribution were deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, stock representing a 50% or greater interest by vote or value, in MSG Entertainment or us. For this purpose, any acquisitions of MSG Entertainment’s stock or our stock within the period beginning two years before the Distribution and ending two years after the Distribution are presumed to be part of such a plan, although MSG Entertainment or we may be able to rebut that presumption. The process for determining whether a prohibited acquisition has occurred under the rules described in this paragraph is complex, inherently factual and subject to interpretation of the facts and circumstances of a particular case. MSG Entertainment or we might inadvertently cause or permit a prohibited change in the ownership of MSG Entertainment or us to occur, thereby triggering tax to MSG Entertainment, which could have a material adverse effect. If such an acquisition of our stock or MSG

Entertainment’s stock triggers the application of Section 355(e) of the Code, MSG Entertainment would recognize taxable gain equal to the excess of the fair market value of our common stock distributed in the Distribution over MSG Entertainment’s tax basis therein, but the Distribution would be tax-free to each MSG Entertainment stockholder. In certain circumstances, under the tax disaffiliation agreement between MSG Entertainment and us (the “Tax Disaffiliation Agreement”), we would be required to indemnify MSG Entertainment against certain taxes imposed on MSG Entertainment if they resulted from certain actions by us after the Distribution. Please see “Certain Relationships and Related Party Transactions — Relationship Between MSG Entertainment and Us After the Distribution — Tax Disaffiliation Agreement” for a more detailed discussion of the Tax Disaffiliation Agreement between MSG Entertainment and us.

Payments of cash in lieu of a fractional share of our common stock made in connection with the Distribution may, under certain circumstances, be subject to backup withholding, unless a holder provides proof of an applicable exception or a correct taxpayer identification number, and otherwise complies with the applicable requirements of the backup withholding rules. Any amounts withheld under the backup withholding rules are not additional tax and may be refunded or credited against the holder’s U.S. federal income tax liability, provided that the holder furnishes the required information to the IRS.

U.S. Treasury regulations require certain MSG Entertainment stockholders with significant ownership in MSG Entertainment that receive shares of our stock in the Distribution to attach to their U.S. federal income tax return for the year in which such stock is received a detailed statement setting forth such data as may be appropriate to show that the Distribution is tax-free under the Code. Within a reasonable period of time after the Distribution, MSG Entertainment will provide its stockholders who receive our common stock pursuant to the Distribution with the information necessary to comply with such requirement.

The Company has not made a determination as to whether we will be deemed to be a “United States real property holding corporation” as defined in section 897(c)(2) of the Code. In general, we will be a USRPHC if 50% or more of the fair market value of our assets constitute “United States real property interests” within the meaning of the Code. However, the determination of whether we are a USRPHC turns on the relative fair market value of our United States real property interests and our other assets, and because the USRPHC rules are complex and the determination of whether we are a USRPHC depends on facts and circumstances that may be beyond our control, we can give no assurance as to our USRPHC status after the Distribution.

If we are treated as a USRPHC, certain adverse U.S. federal income tax consequences might apply to non-U.S. holders that hold our Class A Common Stock and Class B Common Stock after the Distribution. Specifically, a non-U.S. holder that holds a class of shares that is traded on an established securities market will be subject to the Foreign Investment in Real Property Tax Act of 1980, as amended (“FIRPTA”), in respect of a sale or disposition of such shares if the holder owned more than 5% of the shares of such class at any time during the shorter of the period that the non-U.S. holder owned such shares or the five-year period ending on the date when the holder sold or disposed of the shares. We expect that our Class A Common Stock, but not our Class B Common Stock, will be traded on an established securities market after the Distribution, but there can be no assurance that our Class A Common Stock will in fact be traded on an established securities market after the Distribution. A non-U.S. holder that holds our Class B Common Stock will be subject to FIRPTA in respect of a sale or disposition of such stock if on the date the stock was acquired by the holder, it had a fair market value greater than the fair market value on that date of 5% of our Class A Common Stock. If a non-U.S. holder holds our Class B Common Stock, and subsequently acquires additional interests of the same class, then all such interests must be aggregated and valued as of the date of the subsequent acquisition for purposes of the 5% test that is described in the preceding sentence. If tax under FIRPTA applies to the gain on the sale or disposition of shares, non-U.S. holders will be taxed at the normal capital gain rates applicable to U.S. holders, subject to any applicable alternative minimum tax in the case of nonresident alien individuals. For purposes of determining the amount of shares owned by a holder, complex constructive ownership rules apply.

Furthermore, if we are treated as a USRPHC, we could potentially be required to withhold at least 15% of any distribution in excess of our current and accumulated earnings and profits, even if the non-U.S. holder is not

liable for U.S. tax on the receipt of that distribution. However, a non-U.S. holder may seek a refund of these amounts from the IRS if the non-U.S. holder’s tax liability with respect to the distribution is less than the amount withheld. Such withholding should generally not be required if a non-U.S. holder would not be taxed under FIRPTA upon a sale or disposition of our shares, as discussed in the previous paragraph.

A beneficial owner of MSG Entertainment common stock that is a non-U.S. holder should consult its tax advisor as to the particular tax consequences that would be applicable to such holder if we are treated as a USRPHC after the Distribution.

EACH MSG ENTERTAINMENT STOCKHOLDER SHOULD CONSULT ITS TAX ADVISOR ABOUT THE PARTICULAR CONSEQUENCES OF THE DISTRIBUTION TO SUCH STOCKHOLDER, INCLUDING THE APPLICATION OF STATE, LOCAL AND FOREIGN TAX LAWS, AND POSSIBLE CHANGES IN TAX LAW THAT MAY AFFECT THE TAX CONSEQUENCES DESCRIBED ABOVE.

Listing and Trading of Our Common Stock

There is not currently a public market for our common stock. We will apply for our Class A Common Stock to be listed on the NYSE under the symbol “MSGE” (and we will change our name to “Madison Square Garden Entertainment Corp.”) and we expect that Madison Square Garden Entertainment Corp. will change its symbol on the NYSE to “SPHR” (and be renamed “MSG Sphere Corp.”) in connection with the Distribution. It is anticipated that trading will commence on a when-issued basis prior to the Distribution. On the first trading day following the Distribution date, when-issued trading in our Class A Common Stock will end and regular-way trading will begin. “When-issued trading” refers to trading which occurs before a security is actually issued. These transactions are conditional with settlement to occur if and when the security is actually issued and NYSE determines transactions are to be settled. “Regular way trading” refers to normal trading transactions, which are settled by delivery of the securities against payment on the third business day after the transaction.

We cannot assure you as to the price at which our Class A Common Stock will trade before, on or after the Distribution date. Until our Class A Common Stock is fully distributed and an orderly market develops in our Class A Common Stock, the price at which such stock trades may fluctuate significantly. In addition, the combined trading prices of our Class A Common Stock and MSG Entertainment Class A Common Stock held by stockholders after the Distribution may be less than, equal to, or greater than the trading price of the MSG Entertainment Class A Common Stock prior to the Distribution. Our Class B Common Stock will not be listed on a securities exchange or publicly traded.

The shares of our common stock distributed to MSG Entertainment stockholders will be freely transferable, except for shares received by people who may have a special relationship or affiliation with us or shares subject to contractual restrictions. People who may be considered our affiliates after the Distribution generally include individuals or entities that control, are controlled by, or are under common control with us. This may include certain of our officers, directors and significant stockholders, including MSG Entertainment. Persons who are our affiliates will be permitted to sell their shares only pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), or an exemption from the registration requirements of the Securities Act, or in compliance with Rule 144 under the Securities Act (“Rule 144”). As described under “Shares Eligible for Future Sale — Registration Rights Agreements,” we expect that certain persons will have registration rights with respect to our stock.

Reason for Furnishing this Information Statement

This information statement is being furnished by MSG Entertainment solely to provide information to stockholders of MSG Entertainment who will receive shares of our common stock in the Distribution. It is not, and is not to be construed as, an inducement or encouragement to buy or sell any of our securities. We and MSG Entertainment will not update the information in this information statement except in the normal course of our and MSG Entertainment’s respective public disclosure obligations and practices.

BUSINESS

We are a Delaware corporation with our principal executive offices at Two Pennsylvania Plaza, New York, NY 10121. Our telephone number is +1 (212) 465-6000. Spinco is a holding company and conducts substantially all of its operations through its subsidiaries.

We expect that on or prior to the Distribution, Madison Square Garden Entertainment Corp. will change its name to “MSG Sphere Corp.” and MSGE Spinco, Inc. will change its name to “Madison Square Garden Entertainment Corp.” We will apply for our Class A Common Stock to be listed on the NYSE under the symbol “MSGE” and we expect that Madison Square Garden Entertainment Corp. (renamed “MSG Sphere Corp.”) will change its symbol on the NYSE to “SPHR” in connection with the Distribution. We will not list our Class B Common Stock on any securities exchange.

General

Our company includes (i) our portfolio of venues: The Garden, The Theater at Madison Square Garden (formerly the Hulu Theater), Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre, (ii) the original production, the Christmas Spectacular, and (iii) our entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually.

We manage our business through a single reportable segment.

Impact of the COVID-19 Pandemic on Our Business

As a result of government-mandated assembly limitations and closures, all of our venues were closed beginning in March 2020. Use of The Garden resumed for Knicks and Rangers home games without fans in December 2020 and January 2021, respectively, and was available at 10% seating capacity from February through May 2021 subject to certain safety protocols and social distancing. Beginning in May 2021, all of our New York venues were permitted to host guests at full capacity, subject to certain restrictions, and effective June 2021, The Chicago Theatre was permitted to host events without restrictions. Guests of our Chicago and New York venues were also subject to certain vaccination requirements until February and March 2022, respectively. Our venues no longer require guests to provide proof of COVID-19 vaccination before entering, but

specific performers may require enhanced protocols. We continue to monitor risks related to COVID-19 and prepare so that we can respond to any increased safety protocols that may be needed in response to a change in circumstances, request from a performer or new governmental or league mandates. However, existing or prior procedures may not be sufficient as COVID-19 continues to evolve, including through new case levels or variants.

The Company has Arena License Agreements with MSG Sports that require the Knicks and Rangers to play their home games at The Garden. As discussed above, capacity restrictions, use limitations and social distancing requirements were in place for the entirety of the Knicks and Rangers 2020-21 regular seasons, which materially impacted the payments we received under the Arena License Agreements for Fiscal Year 2021. On July 1, 2021, the Knicks and Rangers began paying the full amounts provided for under their respective Arena License Agreements. The Knicks and the Rangers each completed their 2021-2022 82-game regular seasons, with the Rangers advancing to the playoffs.

It is unclear to what extent COVID-19 concerns, including with respect to new variants, could result in new government or league-mandated capacity restrictions or vaccination/mask requirements or impact the use of and/or demand for our venues, demand for our sponsorship and signage assets, deter our employees and vendors from working at our venues (which may lead to difficulties in staffing) or otherwise materially impact our operations.

Our Strengths

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Strong position in live entertainment through:

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A portfolio of world-renowned venues; and

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Marquee live entertainment brands and content.

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Significant presence in the New York market – the nation’s number one DMA;

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Deep industry relationships that drive top-tier performers and a wide variety of events to the Company’s venues;

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Proven track record of delivering significant value for partners through innovative sponsorships and premium hospitality;

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Reputation for world-class customer experience driven by decades of expertise in sales and marketing, and venue operations;

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Expertise in utilizing data to drive decisions to maximize revenue and the experience of our guests;

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Long-term agreements to host home games at The Garden for two of the most recognized franchises in professional sports — the Knicks and the Rangers; and a

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Strong and seasoned management team.

Our Strategy

Our strategy is to create world-class live experiences for our guests and partners by leveraging (i) our Company’s unique portfolio of live entertainment assets and brands; (ii) our expertise in venue management, bookings and productions, sponsorship, ticketing, marketing and premium hospitality and content development; (iii) our deep relationships across the entertainment and sports industries; and (iv) our strong connection with diverse and passionate audiences. We believe this strategy will enable us to generate long-term value creation for our shareholders.

Key components of our strategy include:

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Delivering unrivaled marketing exposure for our partners. Our assets are highly sought after by companies that value the popularity of our venues and entertainment brands. Our value proposition is further strengthened by our sponsorship sales representation agreement with MSG Sports which enables us to deliver broad-based marketing platforms that combine our assets with MSG Sports’ professional sports brands. We plan to continue utilizing this integrated approach to both renew and extend our relationships with existing partners, as well as to form partnerships with leading companies in emerging industries and in industry verticals where we are currently underpenetrated. We also offer our partners expanded reach through outdoor signage around the Madison Square Garden Complex and Penn Station, a major commuter hub in Manhattan. We plan to selectively explore additional opportunities to grow our external signage portfolio which could increase our existing marketing partnerships packages as well as attract new partners.

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Exploring opportunities to expand proprietary entertainment content. We plan to selectively explore opportunities to create new live entertainment content, including by leveraging owned intellectual property like the Rockettes. This would enable us to benefit from the economics of being both content owner and venue operator. Additional owned content would also make us less reliant on third-party events to drive utilization of our venues.

Our Business

Our Company delivers unforgettable live experiences — all in extraordinary settings, with a substantial presence in the New York market, our nation’s largest DMA. This creates significant demand for our brands by a wide selection of artists, sporting events, premier companies and the public. And with a foundation of iconic venues, our Company has a proven ability to leverage the strength of our industry relationships, marketing assets, customer database and live event expertise to create compelling performance, promotion and distribution opportunities for artists, events and productions.

Specifically, the Company produces, presents and hosts a variety of live entertainment events, such as concerts, sporting events, family shows, performing arts events, special events and the wholly-owned Christmas Spectacular production which features the world-famous Rockettes. In addition, the Company hosts two of the most recognized franchises in professional sports — the NBA’s Knicks and the NHL’s Rangers. These live events are held at the Company’s venues: The Garden, The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. With seating capacities and configurations that range from 2,800 to 21,000, our diverse collection of venues enables us to showcase a multitude of acts and events that cover a wide spectrum of genres to diverse audiences.

Prior to December 2, 2022, the Company also owned a controlling interest in Boston Calling Events, LLC (“BCE”), the entertainment production company that owns and operates the Boston Calling Music Festival. The Company disposed of its controlling interest in BCE in Fiscal Year 2023.

Our Bookings Business

Live Entertainment

Our Company is an established industry leader that books a wide variety of live entertainment events in our venues, which perennially include some of the biggest names in music and entertainment. Over the last several years, our venues have been key destinations for artists such as the Eagles, U2, Foo Fighters, Paul McCartney, Drake, Bruno Mars, Justin Bieber, Harry Styles, Dead and Company, Phish, Fleetwood Mac, Kacey Musgraves, Eric Clapton, Josh Groban, Andrea Boccelli, Jennifer Lopez, Carrie Underwood, Justin Timberlake, P!nk, Chris Stapleton, Radiohead, Barbra Streisand, Olivia Rodrigo, Ariana Grande, Sebastian Maniscalco, Trevor Noah, John Mulaney and Dave Chappelle.

In addition, we have successfully developed new ways to increase the utilization of our venues, while creating unique experiences for artists and fans with our various residencies — including The Garden’s first music franchise: Billy Joel at The Garden. This extraordinary residency is at a historic 87 performances and counting since it began in January 2014, bringing Billy Joel’s lifetime performances at The World’s Most Famous Arena to 133 (through February 2023). The Company’s other current residencies include the multi-year, dual-city residency of Tedeschi

Trucks Band at both the Beacon Theatre and The Chicago Theatre. The Company has also in recent years successfully created other unique bookings and residencies across its portfolio of venues, including Jerry Seinfeld at the Beacon Theatre, Dave Chappelle at Radio City Music Hall, Phish’s 13-night “Baker’s Dozen” run at The Garden, Ali Wong at the Beacon Theatre, Josh Groban’s “Great Big Radio City Show,” Trey Anastasio’s eight-week virtual residency at the Beacon Theatre — a first for the Company — and Harry Styles’ 15-night run at The Garden.

Our venues also attract family shows and theatrical productions, which have included: ‘Twas the Night Before… by Cirque du Soleil at both The Chicago Theatre and The Theater at Madison Square Garden, as well as Peppa Pig Live!, Paw Patrol Live! and Sesame Street Live!. Other significant events that have taken place at our venues include the Tony Awards, the MTV Video Music Awards, New York Comic Con, Tribeca Festival events and the final season premieres of both HBO’s Game of Thrones and STARZ’s POWER. We have also hosted appearances by luminaries such as His Holiness Pope Francis, His Holiness the Dalai Lama and the Prime Minister of India, Narendra Modi, along with graduations, television upfronts, product launches and film premieres.

Although we primarily license our venues to third-party promoters for a fee, we also promote or co-promote shows. If we serve as promoters or co-promoters of a show, we have economic risk relating to the event.

Sports

MSG Sports’ professional sports teams, the Knicks and Rangers, are two of the most recognized franchises in sports, with passionate, multi-generational fanbases. The Company has long-term Arena License Agreements with MSG Sports that require the Knicks and the Rangers to play their home games at The Garden, allowing us to continue hosting their long-time fans at The World’s Most Famous Arena.

Our Company also promotes, produces and/or presents a broad array of other live sporting events, including professional boxing, college basketball, college hockey, professional bull riding, mixed martial arts, esports and wrestling. Many of these events are among the most popular in our history and are perennial highlights on our annual calendar, as well as some of The Garden’s longest-running associations.

Professional boxing has had a long history with The Garden. The Garden famously hosted Muhammad Ali and Joe Frazier’s 1971 “Fight of the Century,” considered among the greatest sporting events in modern history, as well as numerous other boxing greats, including: Joe Louis, Rocky Marciano, Sugar Ray Robinson, Willie Pep, Emile Griffith, George Foreman, Roberto Duran, Oscar De La Hoya, Sugar Ray Leonard, Lennox Lewis, Roy Jones, Jr., Mike Tyson, Evander Holyfield, Miguel Cotto and Wladimir Klitschko. In recent years, boxing’s top fighters have called The Garden home, including former unified lightweight world champion Teofimo Lopez, former three weight class champion Vasiliy Lomachenko, former unified middleweight champion Gennadiy Golovkin and boxing superstar Canelo Alvarez. In 2022, for the first-time in The Garden’s history, two women headlined a boxing event when Katie Taylor faced off against Amanda Serrano in front of a sold-out crowd for the undisputed lightweight championship.

Since the return of professional mixed martial arts in New York State in 2016, The Garden regularly hosts top UFC events, as well as Bellator MMA events and the Professional Fighters League, which has held events at The Theater at Madison Square Garden, including its inaugural World Championships.

College sports have been a mainstay at The Garden for decades, with college basketball being featured at The World’s Most Famous Arena for nearly 90 years. The Garden hosted the annual Big East Tournament in March 2023 for the 41st straight year. It is the longest-running conference tournament at one site in all of college basketball and will celebrate its 42nd anniversary at The Garden in March 2024. In addition, St. John’s University has called The Garden its “home away from home” for decades. The Garden also continues to build its college hockey tradition, with a popular biennial event featuring Cornell University vs. Boston University, as well as recent visits from top national teams such as Boston College, North Dakota, Harvard, Yale, Michigan and Minnesota.

For the first time in venue history, the Madison Square Garden Complex hosted professional darts when the US Darts Masters and the North American Championship took place at The Theater at Madison Square Garden in 2022, which also marked the first time a professional darts championship was held in New York City.

Other world-class sporting events have included the NBA All-Star Game in 2015, and the NCAA Division I Men’s Basketball East Regional Finals, which The Garden hosted in 2014 and 2017. The widely popular season-ending tournament is set to return to The Garden in 2023.

Our Productions

One of the Company’s core properties, the Christmas Spectacular — which runs exclusively at Radio City Music Hall and features the world-famous Rockettes — has been performed at the Music Hall since 1933. This production has become a tradition for many, creating a holiday touchstone that generations of fans want to return to, time and again. The show’s enduring popularity is driven by the incomparable Rockettes, the longest-running precision dance company in America, admired for their iconic style of dance, talent and athleticism, as well as their unity both on and off the stage.

In 2021, the production returned for a shortened run — a result of the COVID-19 pandemic — welcoming over 400,000 guests across 101 performances and serving as a source of joy and inspiration for many fans. The Rockettes perform in nine numbers throughout the 90-minute production — with more technically complex and different styles of dance than ever before.

We acquired the rights to the Christmas Spectacular in 1997, and those rights are separate from, and do not depend on the continuation of, our lease of Radio City Music Hall. We also hold rights to the Rockettes brand in the same manner. We lease Radio City Music Hall pursuant to a long-term lease agreement. See “— Our Business — Our Venues — Radio City Music Hall.”

The Company believes it has a significant and unique asset in the Rockettes and continues to strengthen and broaden the Rockettes brand by targeting the most prominent and effective vehicles that elevate their visibility and underscore their reputation as beloved American cultural icons. The Rockettes have appeared or performed at high-profile events and award shows, including Presidential Inaugurations, Macy’s Thanksgiving Day Parade, Macy’s 4th of July Fireworks event, the Rockefeller Center Tree Lighting, New Year’s Eve Times Square Ball Drop, Tony Awards, MTV Video Music Awards, World Pride events, and television shows and holiday specials (Saturday Night Live, America’s Got Talent, Project Runway, The Kacey Musgraves Christmas Show, The Today Show, Live with Kelly and Ryan and The Tonight Show Starring Jimmy Fallon), among many others. In November 2022, the Rockettes were featured in Hallmark Channel’s movie, “A Holiday Spectacular,” which was shot in part on location at Radio City Music Hall and will debut as part of the network’s Countdown to Christmas programming.

We continue to pursue opportunities to generate greater brand awareness, including through television and public appearances and dance education offerings. We are also committed to ensuring that the best dancers from all backgrounds, cultures, races, religions and ethnicities can become Rockettes, and are actively strengthening our relationships within the dance community, expanding where we hold auditions and scouting sessions, and eliminating financial barriers to entry, including for Rockettes Conservatory, our dancer development program. Rockettes Conservatory is an invite-only, week-long intensive training program held at Radio City Music Hall and offered at no cost to participants. The program was designed as an investment in promising dancers’ futures, and in addition to becoming an inclusive talent pipeline for future Rockettes, conservatory ensures the dance company continues to evolve by attracting the best dancers. Additionally, to create a more inclusive line by broadening the number of dancers eligible to become Rockettes, the organization announced an expanded height requirement beginning with the April 2022 audition. The dance company continues to foster relationships with diverse dance organizations, including Dance Theatre of Harlem, Harlem School of the Arts, The Ailey School, International Association of Blacks in Dance and The Chloé and Maud Foundation, to provide program support,

introduce staff and students to the unique world of precision dance and actively engage with dancers for Rockettes Conservatory.

Our Venues

The Company operates a mix of iconic venues that continue to build on their historic prominence as destinations for unforgettable experiences and events.

We own or operate under long-term leases a total of five venues in New York City and Chicago. These venues are: The Garden, The Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre in New York City; and The Chicago Theatre.

The Garden

The Garden has been a celebrated center of New York life since it first opened its doors in 1879. Over its 143-year history, there have been four Garden buildings, each known for showcasing the best of the era’s live sports and entertainment offerings. We believe that The Garden has come to epitomize the power and passion of live sports and entertainment to people around the world, with an appearance at The Garden often representing a pinnacle of an athlete’s or performer’s career. Known as “The World’s Most Famous Arena,” The Garden has been the site of some of the most memorable events in sports and entertainment, and together with The Theater at Madison Square Garden, has hosted hundreds of events and millions of visitors each year. In 2009, Billboard magazine ranked The Garden the number-one venue of the decade in its respective class based upon gross ticket sales. Music industry subscribers to the trade magazine Pollstar have voted The Garden “Arena of the Year” 23 times since the inception of the awards in 1989. The Garden also regularly ranks as the highest-grossing entertainment venue of its size in the world based on Billboard magazine’s mid-year and year-end rankings. The venue was ranked number one worldwide four times in the last five years for venues with a capacity over 15,001, according to Billboard’s year-end rankings.

Over The Garden’s history, it has been the setting for countless “big events,” inspired performances and one-of-a-kind moments that have helped define sports, entertainment and culture. Highlights include “The Fight of the Century” between Muhammad Ali and Joe Frazier in 1971, the 1970 Knicks’ NBA Championship, the Rangers’ 1994 Stanley Cup Championship, three Democratic National Conventions and one Republican National Convention, Marilyn Monroe’s famous birthday serenade to President John F. Kennedy, Frank Sinatra’s “Main Event” concert in 1974, the only U.S. concerts from the reunited Cream, the 25th Anniversary Rock and Roll Hall of Fame concerts, the 60th Annual Grammy Awards, and Billy Joel’s record-breaking 133 total performances at The Garden (through February 2023). In September 2015, His Holiness Pope Francis celebrated Mass at The Garden as part of his successful U.S. visit, which marked the first time a current pope has visited The Garden since Pope John Paul II in 1979. The Garden has also hosted four prominent benefit concerts, which galvanized the public to respond to national and global crises, including the first of its kind, “The Concert for Bangladesh” in 1972, as well as “The Concert for New York City,” following the events of 9/11, “From the Big Apple to the Big Easy,” held after Hurricane Katrina in 2005, and “12-12-12, The Concert for Sandy Relief” in 2012. And in February 2020, To Kill a Mockingbird became the first-ever Broadway play to perform at The Garden with an entirely free performance for 18,000 New York City public school students. The Garden also continues to be home to two of MSG Sports’ professional sports franchises – the Knicks and Rangers.

The current Madison Square Garden Complex, located between 31st and 33rd Streets and Seventh and Eighth Avenues on Manhattan’s West Side, opened on February 11, 1968 with a salute to the United Service Organizations hosted by Bob Hope and Bing Crosby. From a structural standpoint, the construction of the current Garden was considered an engineering wonder for its time, including its famous circular shape and unique, cable supported ceiling, which contributes to its intimate feel. It was the first large structure built over an active railroad track. The builder, R.E. McKee, had a national reputation and was later recognized as a “Master Builder” by the construction industry. Architect Charles Luckman had one of the largest firms in the country and designed such buildings as the Prudential Tower in Boston, NASA’s flight center in Houston and the Forum in Inglewood, CA.

Following a three-year, top-to-bottom renovation, in October 2013, The Garden was fully transformed, featuring improved sightlines, additional entertainment and dining options, new concourses, upgraded hospitality areas, new technology, unique historic exhibits, and a completely transformed interior, where the intimacy of the arena bowl and The Garden’s world-famous ceiling were maintained. Focused on the total fan experience, the renovation was designed to benefit everyone in attendance, whether first-time visitors, season ticket subscribers, athletes, artists, suite holders or marketing partners. The Garden’s transformation ensured that attending an event at “The World’s Most Famous Arena” remained unlike anywhere else.

We own the Madison Square Garden Complex, the platform on which it is built and development rights (including air rights) above our property. Madison Square Garden sits atop Penn Station, a major commuter hub in Manhattan, which is owned by the National Railroad Passenger Corporation (Amtrak). While the development rights we own would permit us to expand in the future, any such use of development rights would require various approvals from the City of New York. The Garden seats up to approximately 21,000 spectators for entertainment and sporting events and, along with The Theater at Madison Square Garden, contains approximately 1,100,000 square feet of floor space over 11 levels.

The Theater at Madison Square Garden

The Theater at Madison Square Garden, which has approximately 5,600 seats, opened as part of the fourth Madison Square Garden Complex in 1968. Since then, some of the biggest names in live entertainment have performed at The Theater at Madison Square Garden, including The Who, Diana Ross, Elton John, James Taylor, Mary J. Blige, Pentatonix, John Legend, Karol G, Ellie Goulding, Chris Rock, Neil Young, Bill Maher, Jerry Seinfeld, Tyler, the Creator, J Balvin, Ricky Gervais, Nicky Jam, Aziz Ansari, Alejandro Sanz, Bert Kreischer and Van Morrison. The Theater at Madison Square Garden has also been the site for several boxing events including the inaugural World Championships of the Professional Fighters League as well as the NBA and NFL Drafts. In addition, it has hosted various product launches, upfronts, award shows, and other special events such as Wheel of Fortune and audition shows for America’s Got Talent, as well as a variety of theatrical productions and family shows, including ‘Twas the Night Before… by Cirque du Soleil, A Christmas Story, Elf The Musical, Paw Patrol Live! and Sesame Street Live!. The Theater at Madison Square Garden regularly ranks as one of the highest-grossing entertainment venues of its size in the world, based on Billboard magazine’s mid-year and year-end rankings.

Radio City Music Hall

Radio City Music Hall has a rich history as a national theatrical and cultural mecca since it was first built by theatrical impresario S.L. “Roxy” Rothafel in 1932. Known as “The Showplace of the Nation,” it was the first building in the Rockefeller Center complex and, at the time, the largest indoor theater in the world. Radio City Music Hall, a venue with approximately 6,000 seats, hosts concerts, family shows and special events, and is home to the Christmas Spectacular. See “— Our Business — Our Productions.” Over its history, entertainers who have graced the Great Stage include: Aretha Franklin, Lady Gaga, Brian Wilson, Harry Styles, Diana Ross, Lizzo, Olivia Rodrigo, Josh Groban, Mariah Carey, Lorde, Nine Inch Nails, Trey Anastasio, Christina Aguilera, Britney Spears, Tony Bennett, Hasan Minhaj, Billie Eilish, Sebastian Maniscalco, Jim Gaffigan, David Gilmour and Dave Chappelle. Radio City Music Hall was recognized by Pollstar magazine as Theatre of the Decade for 2009-2019 and regularly ranks as the highest-grossing entertainment venue of its size in the world, based on Billboard magazine’s mid-year and year-end rankings. The venue has ranked number one worldwide nine of the last ten years for venues with capacities of 5,001 to 10,000, according to Billboard’s year-end rankings.

In 1978, Radio City Music Hall was designated a New York City landmark by the NYC Landmarks Preservation Commission and a national landmark on the National Register of Historic Places. We acquired the lease in 1997, and in 1999, performed a complete restoration that returned the legendary theater to its original grandeur. The acclaimed restoration touched all aspects of the venue, including burnishing the ceilings of Radio City Music Hall with 720,000 sheets of gold and aluminum leaf, replacing the existing stage curtain with a new 112-foot wide golden silk curtain, and cleaning the three-story tall mural “The Fountain of Youth,” by Ezra

Winter, which looms above the grand staircase. State-of-the-art sound systems, lighting and HDTV capabilities were also installed.

We lease Radio City Music Hall, located at Sixth Avenue and 50th Street in Manhattan, pursuant to a long-term lease agreement. In July 2021, the Company extended the term of the lease, previously set to expire in 2023, until August 31, 2038 with an option to renew for an additional 10 years by providing two years’ notice prior to expiration.

Beacon Theatre

In November 2006, we entered into a long-term lease agreement to operate the legendary Beacon Theatre, a venue with approximately 2,800 seats, which sits on the corner of Broadway and 74th Street in Manhattan. The Beacon Theatre was conceived by S. L. “Roxy” Rothafel and is considered the “older sister” to Radio City Music Hall. Designed by Chicago architect Walter Ahlschlager, the Beacon Theatre opened in 1929 as a forum for vaudeville acts, musical productions, drama, opera and movies. The Beacon Theatre was designated a New York City landmark by the NYC Landmarks Preservation Commission in 1979 and a national landmark on the National Register of Historic Places in 1982. Over its history, the Beacon Theatre has been a venerable rock and roll room for some of the greatest names in music, including: Steely Dan, Coldplay, Alice Cooper, Dave Matthews Band, Crosby Stills & Nash, Elton John, Hozier, Tom Petty and the Heartbreakers, Tedeschi Trucks Band, Eddie Vedder, John Mellencamp, Widespread Panic and Bob Dylan, as well as The Allman Brothers Band, which played their 238th show at the Beacon Theatre in October 2014, marking their final concert as a band. In recent years, the venue has become a comedy haven, hosting a monthly Jerry Seinfeld residency and multi-night stands from comedians including Ali Wong, Sebastian Maniscalco, Chelsea Handler, Eddie Izzard, Nate Bargatze and Russell Peters. The venue has also hosted special events, such as film premieres for the Tribeca Festival, along with numerous luminaries such as His Holiness the Dalai Lama in 2009 and 2013, and President Bill Clinton in 2006, when the Rolling Stones played a private concert in honor of his 60th birthday. In Fall 2020, the Company and Trey Anastasio presented The Beacon Jams, the venue’s first-ever virtual residency which included eight weekly shows that were streamed live to hundreds of thousands of fans and raised more than $1 million for charity.

In August 2008, the Beacon Theatre was closed for a seven-month restoration project to return the theater to its original 1929 grandeur. The restoration of the Beacon Theatre focused on all historic, interior public spaces of the building, backstage and back-of-house areas, and was based on extensive historic research, as well as detailed, on-site examination of original, decorative painting techniques that had been covered by decades-old layers of paint. The Beacon Theatre has won several architectural awards recognizing its outstanding restoration. The widely acclaimed, comprehensive restoration was similar to our restoration of Radio City Music Hall and reflects our commitment to New York City. The Beacon Theatre regularly ranks as one of the highest-grossing entertainment venues of its size in the world, based on Billboard magazine’s mid-year and year-end rankings.

In August 2022, the Beacon Theatre debuted a groundbreaking new sound system — Sphere Immersive Sound — which was developed for MSG Sphere at The Venetian, substantially improving the audio experience at the venue and providing greater programming control and flexibility for artists and engineers.

In December 2021, the Company extended the term of our lease on the Beacon Theatre, previously set to expire in 2026, until December 31, 2036 with an option to renew for an additional 10 years by providing notice prior to expiration.

The Chicago Theatre

In October 2007, to provide us with an anchor for content and distribution in a key market in the Midwest, we purchased the legendary The Chicago Theatre, a venue with approximately 3,600 seats. The Chicago Theatre, which features its famous six-story-high “C-H-I-C-A-G-O” marquee, was built in 1921 and designed in the

French Baroque style by architects Cornelius W. Rapp and George L. Rapp. It is the oldest surviving example of this architectural style in Chicago today, and was designated a Chicago landmark building in 1983.

The Chicago Theatre has become a highly attractive destination for concerts, comedy shows and other live events, hosting a wide range of entertainers, including Bob Dylan, Mumford & Sons, David Byrne, Neil Young, Diana Ross, Madonna, Jerry Seinfeld, Janet Jackson, Elvis Costello, Bob Weir, Jim Gaffigan, Conan O’Brien, Amy Schumer, Steely Dan and Brett Eldredge. The venue has also hosted theatrical tours such as ‘Twas the Night Before… by Cirque du Soleil, A Christmas Story, The Wizard of Oz, Paw Patrol Live! and Dr. Seuss’ How The Grinch Stole Christmas! The Musical. The Chicago Theatre regularly ranks as one of the highest-grossing entertainment venues of its size in the world, based on Billboard magazine’s mid-year and year-end rankings.

Intellectual Property

We create, own and license intellectual property in the countries in which we operate, have operated or intend to operate, and it is our practice to protect our trademarks, brands, copyrights, inventions and other original and acquired works. We have registered many of our trademarks and have filed applications for certain others. Additionally, we have filed for patent protection in the United States. Our registrations and applications relate to trademarks and inventions associated with, among other of our brands, Madison Square Garden and the Radio City Rockettes brands. We believe our ability to maintain and monetize our intellectual property rights, including our brand logos, are important to our business, our brand-building efforts and the marketing of our products and services. We cannot predict, however, whether steps taken by us to protect our proprietary rights will be adequate to prevent misappropriation of these rights or protect against vulnerability to oppositions or cancellation actions due to non-use. See “— Risk Factors — Risks Related to Cybersecurity and Intellectual Property — We May Become Subject to Infringement or Other Claims Relating to Our Content or Technology” and “— Risk Factors — Risks Related to Cybersecurity and Intellectual Property — Theft of Our Intellectual Property May Have a Material Negative Effect on Our Business and Results of Operations.”

Other Investments

Our Company explores investment opportunities that strengthen its existing position within the entertainment landscape and/or allow us to exploit our assets and core competencies for growth.

Our Community

The Company actively engages with and supports the communities we serve through a variety of important initiatives.

We are proud to play a leadership role organizing extraordinary events such as opening The Garden to the “12-12-12” benefit concert organized post-Superstorm Sandy, which raised more than $50 million for hurricane victims. In February 2020, The Garden opened its doors to 18,000 New York City public school students for an exclusive, free performance of the Broadway production of To Kill a Mockingbird. In addition to these events, the Company provides funding annually to various non-profit organizations across the country, as well as in-kind contributions such as tickets, promotional items and food to schools, charities and community-based organizations in the local area. During the COVID-19 pandemic, the Company worked with dozens of local restaurants and charities to donate approximately 200,000 meals to families in need. In addition, the Company is a long-time supporter of the Lustgarten Foundation for Pancreatic Cancer Research, the nation’s largest private supporter of pancreatic cancer research, which has directed more than $225 million to research and assembled the best scientific minds to help find a cure.

Our Company also has a close association with The Garden of Dreams Foundation (the “Foundation”), a non-profit charity dedicated to bringing life changing opportunities to young people in need. In partnership with the Company and MSG Sports, the Foundation provides young people in our communities with access to

educational and skills opportunities, mentoring programs, and memorable experiences that enhance their lives, help shape their futures and create lasting joy. Specific initiatives include the Inspire Scholarship program, which has committed since its inception over $5.8 million in aid to high school seniors to provide financial assistance related to college and trade school expenses. All of the Foundation’s activities target young people facing illness or financial challenges, as well as children of uniformed personnel who have been lost or injured while serving our communities. Since its inception in 2006, the Foundation has impacted more than 400,000 young people and their families.

Regulation

The rules, regulations, policies and procedures affecting our business are subject to change. The following paragraphs describe the existing legal and regulatory requirements that are most significant to our business today; they do not purport to describe all present and proposed laws and regulations affecting our business.

Our business is subject to the general powers of federal, state and local government, as well as foreign governmental authorities, to deal with matters of health and public safety.

Venue Licenses

Our venues, like all public spaces, are subject to building and health codes and fire regulations imposed by the state and local governments in the jurisdictions in which they are located. Our venues are also subject to zoning and outdoor advertising regulations, and, with respect to Radio City Music Hall, the Beacon Theatre and The Chicago Theatre, landmark regulations which restrict us from making certain modifications to our facilities as of right or from operating certain types of businesses. Our venues also require a number of licenses to operate, including occupancy permits, exhibition licenses, food and beverage permits, liquor licenses and other authorizations and, with respect to The Garden, a zoning special permit granted by the New York City Planning Commission. In the jurisdictions in which these venues are located, the operator is subject to statutes that generally provide that serving alcohol to a visibly intoxicated or minor guest is a violation of the law and may provide for strict liability for certain damages arising out of such violations. In addition, our venues are subject to the federal Americans with Disabilities Act (and related state and local statutes), which requires us to maintain certain accessibility features at each of our facilities. We and our venues are also subject to environmental laws and regulations. See “— Risk Factors — Economic and Operational Risks — We Are Subject to Extensive Governmental Regulation and Our Failure to Comply with These Regulations May Have a Material Negative Effect on Our Business and Results of Operations.”

Labor

Our business is also subject to regulation regarding working conditions, overtime and minimum wage requirements. See “— Risk Factors — Economic and Operational Risks — Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations.”

Ticket Sales

Our business is subject to legislation governing the sale and resale of tickets and consumer protection statutes generally.

Data and Privacy

We are subject to data privacy and protection laws, regulations, policies and contractual obligations that apply to the collection, transmission, storage, processing and use of personal information or personal data, which among other things, impose certain requirements relating to the privacy and security of personal information. The variety of laws and regulations governing data privacy and protection, and the use of the internet as a commercial medium are rapidly evolving, extensive and complex, and may include provisions and obligations that are inconsistent with one another or uncertain in their scope or application.

The data protection landscape is rapidly evolving in the United States. For example, California passed a comprehensive data privacy law, the CCPA, and other states including Virginia and Colorado have also passed similar laws. Additionally, the CPRA imposed additional data protection obligations on covered businesses, including additional consumer rights procedures and obligations, limitations on data uses, new audit requirements for higher risk data, and constraints on certain uses of sensitive data. The majority of the CPRA provisions went into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required. Further, there are several legislative proposals in the United States, at both the federal and state level, that could impose new privacy and security obligations.

In addition, governmental authorities and private litigants continue to bring actions against companies for online collection, use, dissemination and security practices that are unfair or deceptive.

Website and Mobile Application Requirements

Our business is also subject to certain regulations applicable to our Internet websites and mobile applications. We maintain various websites and mobile applications that provide information and content regarding our business, offer merchandise and tickets for sale, make available sweepstakes and/or contests and offer hospitality services. The operation of these websites and applications may be subject to third-party application store requirements, as well as a range of federal, state and local laws including those related to privacy and protection of personal information, accessibility for persons with disabilities and consumer protection regulations. In addition, to the extent any of our websites seek to collect information from children under 13 years of age, they may be subject to the Children’s Online Privacy Protection Act, which places restrictions on websites’ and online services’ collection and use of personally identifiable information online from children under age 13 without parental consent.

Competition

Our business competes, in certain respects and to varying degrees, with other live performances, sporting events, movies, home entertainment (including the Internet and online services, social media and social networking platforms, television, video and gaming devices), and the large number of other entertainment and public attraction options available to members of the public. Our business typically represents alternative uses for the public’s entertainment dollars. The primary geographic area in which we operate, New York City, is among the most competitive entertainment markets in the world, with the world’s largest live theater industry and extensive performing arts venues, 12 major professional sports teams, numerous museums, galleries and other attractions, and numerous movie theaters available to the public. Our venues and live offerings outside of New York City similarly compete with other entertainment options in their respective markets and elsewhere. We compete with these other entertainment options on the basis of the quality of our offerings, the public’s interest in our content and the price of our tickets.

We compete for bookings with a large number of other venues both in the cities in which our venues are located and in alternative locations capable of booking the same productions and events. Generally, we compete for bookings on the basis of the size, quality, expense and nature of the venue required for the booking. Some of our competitors may have a larger network of venues and/or greater financial resources.

In addition to competition for bookings and ticket sales, we also compete to varying degrees with other productions and sporting events for sponsorship dollars.

Human Capital Resources

We believe the strength of our workforce is one of the significant contributors to our success. Our key human capital management objectives are to invest in and support our employees in order to attract, develop and retain a high performing and diverse workforce.

Diversity and Inclusion (“D&I”)

We aim to create an employee experience that fosters the Company’s culture of respect and inclusion. By welcoming the diverse perspectives and experiences of our employees, we all share in the creation of a more vibrant, unified, and engaging place to work. To advance these efforts, we maintain a Diversity and Inclusion Council (the “D&I Council”) comprised of employees from the Company, MSG Entertainment and MSG Sports who have demonstrated a high level of passion and commitment to diversity and inclusion.

Several D&I Council initiatives have furthered these objectives under the expanded Talent Management, Diversity and Inclusion function led by MSG Entertainment’s VP, Talent Management and Chief Diversity Officer, including:

Workforce: Embedding Diversity and Inclusion through Talent Actions

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Introduced bi-annual workforce demographic dashboards to the extended management team and facilitated four diversity and inclusion content-specific working sessions to advise leaders on strategies to build and retain inclusive teams.

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Revisited our mandatory Inclusive Selection Training for managers and developed guidelines to de-bias talent review conversations with an aim to increase objectivity and consistency around leadership potential.

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Developed an Emerging Talent List to expand our talent pool to better identify and develop high performing diverse talent for expanded roles and promotion opportunities.

Workplace: Building an Inclusive and Accessible Community

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In fiscal year 2022, MSG Entertainment launched the MSG Diversity & Inclusion Heritage Month enterprise calendar to acknowledge and celebrate culturally relevant days and months of recognition, anchored by our six employee resource groups: Asian Americans and Pacific Islanders (AAPI), Black, LatinX, PRIDE, Veterans, and Women. Viewership of D&I related content on our internal employee communications portal by MSG Entertainment and MSG Sports personnel more than doubled year-over-year.

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Introduced a Paid Military Leave benefit to support our employees who are called to military service, demonstrating our commitment to be a military-friendly employer.

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Launched our first employer-branded campaign, “We Are MSG”, reflecting the values of the Company, MSG Entertainment and MSG Sports and the diversity that unites our community. The first video, Faces of MSG, was publicly released on internal and external platforms, anchoring our careers website and LinkedIn page.

Community: Bridging the Divide through Expansion to Diverse Stakeholders

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Focused on connecting with minority-owned businesses to increase the diversity of our vendors and suppliers by leveraging employee resource groups and our community, which creates revenue generating opportunities for diverse suppliers to promote their businesses and products. In Fiscal Year 2022, MSG Entertainment and MSG Sports hosted the Black Fashion Pop-Up Shop and Pride Fest for Black and LGBTQ+ entrepreneurs, respectively.

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Invested in an external facing supplier diversity portal on our website, which we expect to launch in Fiscal Year 2023. The portal is intended to expand opportunities for MSG Entertainment to do business with diverse suppliers, including minority-, women-, LGBTQ+- and veteran-owned businesses.

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Strengthened our commitment to higher education institutions to increase campus recruitment pipelines. In partnership with the Knicks and our social impact team, MSG Entertainment and MSG Sports hosted the 1st

Annual Historically Black Colleges and Universities (“HBCU”) Night highlighting the important contributions of these institutions. In partnership with Chase, MSG Entertainment and MSG Sports awarded a twenty-five-thousand-dollar scholarship to a Spelman College student. Additionally, we hosted HBCU SpringComing Innovation Lab for select HBCU alumni and students, leveraging their insights to strengthen our recruitment outreach strategy. We also partnered with select City University of New York students to host resume workshops curated and sponsored by the PRIDE employee resource group.

Talent

As of December 31, 2022, we had approximately 970 full-time union and non-union employees and 6,021 part-time union and non-union employees.

We aim to attract top talent through our prestigious brands and venues, as well as through the many benefits we offer. We aim to retain and develop our talent by emphasizing our competitive rewards, offering opportunities that support employees both personally and professionally, and our commitment to fostering career development in a positive corporate culture.

Our performance management practice includes ongoing feedback and conversations between managers and team members, and talent reviews designed to identify potential future leaders and inform succession plans. We value continuous learning and development opportunities for our employees, which include a career development tool, leadership development programs, a learning platform, and tuition assistance.

Our benefit offerings are designed to meet the range of needs of our diverse workforce and include: domestic partner coverage, an employee assistance program which also provides assistance with child and elder care resources, legal support, pet insurance, wellness programs and financial planning seminars. These resources are intended to support the physical, emotional and financial well-being of our employees.

As of December 31, 2022, approximately 4,900 full-time and part-time employees, who represent approximately 70% of the Company’s workforce, were subject to CBAs. Approximately 3% were subject to CBAs that expired as of December 31, 2022 and approximately 38% were subject to CBAs that will expire by June 30, 2023, if they are not extended prior thereto. Labor relations can be volatile, though our current relationships with our unions taken as a whole are positive. We have from time to time faced labor action or had to make contingency plans because of threatened or potential labor actions.

COVID-19

The health and safety of our employees, contractors, performing artists, athletes and guests at our venues is our top priority. In response to COVID-19, measures were taken to ensure that health and safety protocols were in place and enforced throughout our offices and our venues, to the extent applicable. We also supported our employees through our relief fund, wellness programming and remote working capabilities. At times this included capacity restrictions and social distancing and vaccination and mask requirements. Although these policies are not currently required, we continue to monitor the evolving risks related to COVID-19 so that we can reintroduce these or other policies as needed. We believe we have been able to resume our business operations without sacrificing this commitment to keeping our employees and contractors safe while working on-site.

Properties

We own the Madison Square Garden Complex, which includes The Garden (with a maximum capacity of approximately 21,000 seats) and The Theater at Madison Square Garden (approximately 5,600 seats) in New York City, comprising approximately 1,100,000 square feet; and The Chicago Theatre (approximately 3,600 seats) in Chicago comprising approximately 72,600 square feet.

Significant properties that are leased in New York City include approximately 373,000 square feet housing Madison Square Garden Entertainment Corp.’s administrative and executive offices with approximately 47,000

square feet of space that is subleased to MSG Sports, approximately 577,000 square feet comprising Radio City Music Hall (approximately 6,000 seats) and approximately 57,000 square feet comprising the Beacon Theatre (approximately 2,800 seats). For more information on our venues, see “— Our Business — Our Venues.”

Our Madison Square Garden Complex is subject to and benefits from various easements, including over the “breezeway” into Madison Square Garden from Seventh Avenue in New York City (which we share with other property owners). Our ability to continue to utilize easements requires us to comply with certain conditions. Moreover, certain adjoining property owners have easements over our property, which we are required to maintain so long as those property owners meet certain conditions.

Legal Proceedings

Fifteen complaints were filed in connection with MSG Entertainment’s acquisition of MSG Networks Inc. (the “Networks Merger”) by purported stockholders of MSG Entertainment 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 MSG Entertainment and MSG Networks Inc. in connection with the Networks Merger. These disclosure actions were subsequently voluntarily dismissed with prejudice. Six complaints involved allegations of fiduciary breaches in connection with the negotiation and approval of the Networks Merger and have since been consolidated into two remaining litigations. MSG Entertainment and MSG Networks Inc. will retain all rights and obligations with respect to these claims, as applicable, and MSG Entertainment will indemnify the Company from and release the Company from all present and future costs, expenses, and liabilities, if any, related to these claims. On March 14, 2023, the parties to the MSG Entertainment litigation reached an agreement in principle to settle the litigation on the terms and conditions set forth in a binding term sheet (the “Term Sheet”), which will be incorporated into a long-form settlement agreement. The Term Sheet provides for, among other things, the final dismissal of the MSG Entertainment litigation in exchange for a settlement payment to MSG Entertainment of $85 million, subject to customary reduction for attorneys’ fees and expenses, in an amount to be determined by the court. The settlement amount will be fully funded by defendants’ insurers. The settlement of the litigation is subject to the final approval of the Court of Chancery of the State of Delaware.

The Company is a defendant in various lawsuits. Although the outcome of these lawsuits cannot be predicted with certainty (including the extent of available insurance, if any), management does not believe that resolution of these lawsuits will have a material adverse effect on the Company.

Financial Information about Geographic Areas

All revenues and assets of the Company are attributed to or located in the United States. A majority of the Company’s revenues and assets are concentrated in the New York City metropolitan area.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the JOBS Act and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” These exemptions generally include, but are not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Although we are still evaluating the JOBS Act, we may take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us as long as we qualify as an emerging growth company, except that we have irrevocably elected not to take advantage of the extension of time to comply with new or revised financial accounting standards available under Section 102(b) of the JOBS Act.

We will, in general, remain as an emerging growth company for up to five full fiscal years following the Distribution. We would cease to be an emerging growth company and, therefore, become ineligible to rely on the above exemptions, if we:

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have more than $1.235 billion in annual revenue in a fiscal year;

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issue more than $1 billion of non-convertible debt during the preceding three-year period; or

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become a “large accelerated filer” as defined in Exchange Act Rule 12b-2, which would occur after: (i) we have filed at least one annual report pursuant to the Exchange Act; (ii) we have been an SEC-reporting company for at least 12 months; and (iii) the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.

DIVIDEND POLICY

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

All amounts included in the Unaudited Pro Forma Condensed Combined Financial Information are presented in thousands, except per share data or as otherwise noted.

On December 6, 2022, the board of directors of Madison Square Garden Entertainment Corp. (“MSG Entertainment”) authorized MSG Entertainment management to explore a potential tax-free spin-off of the traditional live entertainment business from the MSG Sphere, MSG Networks, and Tao Group Hospitality businesses.

MSGE Spinco, Inc. (“we”, “us”, “our”, “Spinco” or the “Company”) was incorporated in the state of Delaware on September 15, 2022 to be the company to hold the traditional live entertainment business of MSG Entertainment. In the first step of the transaction, record holders of MSG Entertainment Class A and Class B common stock would receive a pro-rata distribution expected to be equivalent, in the aggregate, to approximately 67% of the economic interest in the Company (the “Distribution”). The remaining approximately 33% economic interest in the Company would be retained by MSG Entertainment, subject to completion of the Distribution. These transfers to us by MSG Entertainment are treated as a contribution to our capital at MSG Entertainment’s historical cost.

The following unaudited pro forma condensed combined balance sheet as of December 31, 2022 and the unaudited pro forma condensed combined statements of operations for the six months ended December 31, 2022 and the year ended June 30, 2022 have been derived from the historical annual and interim combined financial statements of the Company, including the unaudited condensed combined balance sheet as of December 31, 2022, the unaudited condensed combined statement of operations for the six months ended December 31, 2022, and the audited combined statement of operations for the year ended June 30, 2022, included elsewhere in this information statement. The unaudited pro forma condensed combined financial information presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical annual and interim combined financial statements and corresponding notes thereto included elsewhere in this information statement. The unaudited pro forma combined financial information reflects certain known impacts as a result of the Distribution to separate the Company from MSG Entertainment.

The following unaudited pro forma condensed combined financial information gives effect to the Distribution and related adjustments in accordance with Article 11 of Regulation S-X under the Exchange Act.

The unaudited pro forma condensed combined balance sheet has been prepared giving effect to the Distribution as if this transaction had occurred as of December 31, 2022. The unaudited pro forma condensed combined statements of operations have been prepared giving effect to the Distribution as if this transaction had occurred on July 1, 2021. The unaudited pro forma condensed combined financial information also reflects certain assumptions that we believe are reasonable given the information currently available.

The unaudited pro forma condensed combined balance sheet as of December 31, 2022 and the unaudited pro forma condensed combined statements of operations for the six months ended December 31, 2022 and the year ended June 30, 2022, respectively, have been prepared to reflect transaction accounting and autonomous entity adjustments to the Company’s historical combined financial statements to present the financial condition and results of operations as if we were a separate stand-alone entity. The unaudited pro forma condensed combined financial information has been adjusted to give effect to the following items (collectively, the “Pro Forma Adjustments”):

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Adjustments for differences between the historical combined balance sheet prepared on a carve-out basis and assets and liabilities expected to be transferred between MSG Entertainment and the Company. Adjustments also give effect to the related impacts to the unaudited pro forma condensed combined statements of operations;

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The distribution of approximately 67% of the Company’s issued and outstanding common stock by MSG Entertainment in connection with the Distribution;

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The impact of transactions contemplated by the Transition Services Agreement (the “TSA”);

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The impact of and transactions contemplated by other contracts entered into between MSG Entertainment and the Company at the time of Distribution, such as the Employee Matters Agreement;

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Other adjustments as described in the notes to this unaudited pro forma condensed combined financial information; and

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Income tax impacts of the adjustments described above.

In preparing the pro forma condensed combined financial information, we did not include adjustments for the following items:

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The Company’s historical combined financial statements reflect net operating loss (“NOL”) carryforwards calculated on a separate return basis. These NOL carryforwards were calculated as if the Company operated as a separate stand-alone entity for the periods presented in the historical annual and interim combined financial statements of the Company included elsewhere in this Information Statement. Because the Distribution involves a spin-off of the Company, these NOLs do not carry over to the Company in connection with the reorganization transactions related to the Distribution. Historically, amounts that we collected for sponsorships and suite rentals in advance were recorded as deferred revenue and were recognized as revenues when earned for both accounting and tax purposes. In connection with the reorganization transactions related to the Distribution, the tax recognition for certain of these deferred revenues will be accelerated to the date of the Distribution, rather than recognized over the course of one year. Assuming the Distribution occurred on December 31, 2022, the estimated tax on the acceleration of such deferred revenue is $58,000. Such tax will be the responsibility of MSG Entertainment, however MSG Entertainment will fully offset the deferred revenue income with their NOLs. The Company will not reimburse MSG Entertainment for such taxes. This one-time benefit will not recur in the future.

•

The Company’s wholly owned subsidiary, MSG Entertainment Holdings, LLC (the “DDTL Lender”), is expected to enter into the DDTL Facility with MSG Entertainment (the “DDTL Borrower”) on or prior to the date of the Distribution. The DDTL Borrower will be able to draw up to $65,000 of senior unsecured delayed draw term loans (“Delayed Draw Term Loans”) for a period of 18 months following the effective date of the facility. Any Delayed Draw Term Loans that are funded will bear interest at a variable rate equal to either, at the option of the DDTL Borrower, (a) a base rate plus an applicable margin, or (b) the Term Secured Overnight Financing Rate (“SOFR”) plus 0.10%, plus an applicable margin. The applicable margin is expected to be equal to the then applicable margin under the National Properties Facilities plus 1.00% per annum. In addition, the DDTL Facility will include an unused commitment fee in respect of the daily unused commitments under the facility at a rate equal to the unused commitment fee rate under the National Properties Revolving Credit Facility plus 0.10% per annum. All interest and commitment fees accruing prior to January 1, 2024 will be payable in kind by capitalizing and adding such interest or fee to the outstanding principal amount of the Delayed Draw Term Loans. All interest and commitment fees accruing on and after January 1, 2024 will be payable in cash or by delivering to the DDTL Lender shares of Class A common stock of the Company as described below. Subject to customary borrowing conditions, the DDTL Borrower will be able to draw down on the DDTL Facility in up to six increments of $5,000 or more in an aggregate amount not to exceed $65,000. If the DDTL Borrower draws down on the DDTL Facility, the outstanding principal balance will be due, together with any unpaid interest thereon, 18 months following the Distribution. The DDTL Facility is pre-payable at any time without penalty and amounts drawn under the DDTL Facility may not be reborrowed. There are no financial covenants associated with the DDTL Facility. The DDTL Borrower will have the option to make any payments of principal, interest or fees under the DDTL Facility either in cash or by delivering to the DDTL Lender shares of the Company’s Class A

Common Stock. If the DDTL Borrower elects to make any payment in the form of the Company’s Class A Common Stock, the amount of such payment shall be calculated based on the dollar volume-weighted average trading price for the Company’s Class A Common Stock for the twenty trading days ending on the day on which the DDTL Borrower makes such election.

The Company does not expect the DDTL Borrower to draw on the DDTL Facility prior to or at the completion of the Distribution; however, if the DDTL Borrower were to do so, the Company may concurrently draw the same amount from the National Properties Revolving Credit Facility. If this occurs, the Company’s cash balance would remain unchanged and it would recognize a loan payable for the National Properties Revolving Credit Facility and a corresponding loan receivable from the DDTL Borrower up to a maximum of $65,000. In addition, future periods would reflect an interest payable for the National Properties Revolving Credit Facility and the related interest expense, and an interest receivable from the DDTL Borrower and the related interest income. If the full capacity of the DDTL Facility was utilized assuming the rates in place as of December 31, 2022, and the corresponding amount was drawn from the National Properties Revolving Credit Facility, the Company would have recorded approximately $2,659 and $5,317 of interest expense for the six months ended December 31, 2022 and the year ended June 30, 2022, respectively, and approximately $2,984 and $5,967 of interest income for the six months ended December 31, 2022 and the year ended June 30, 2022, respectively, in its unaudited pro forma combined statements of operations. Assuming the DDTL Facility was fully drawn and the same amount was funded by the National Properties Revolving Credit Facility, a 1% change in the interest rate on the National Properties Revolving Credit Facility would result in approximately $650 of incremental interest expense by the Company, which would be primarily offset by the additional interest income from MSG Entertainment. The amounts of deferred financing costs attributable to the DDTL Facility have not yet been determined. As the DDTL Borrower is not currently expected to exercise its right to utilize the DDTL Facility prior to or at the completion of the Distribution, management has not adjusted the unaudited pro forma combined financial information herein.

Our historical combined financial statements, which were the basis for the unaudited pro forma condensed combined financial information, were prepared on a carve-out basis as we did not operate as a stand-alone entity for the periods presented. As part of the Distribution, certain corporate and operational support functions are being transferred to the Company and therefore, allocations of corporate overhead and shared services expense to MSG Entertainment from the Company were recorded for corporate and operational functions as a reduction of either direct operating expenses or selling, general and administrative expense in the historical combined financial statements. The allocations and estimates in such historical financial statements are based on assumptions that management believes are reasonable. See Note 1, “Description of the Business and Basis of Presentation”, Note 19, “Related Party Transactions” to the audited combined financial statements included elsewhere in this Information Statement for further information on the allocation of corporate costs.

We expect to experience changes in our ongoing cost structure when we become an independent, publicly-traded company. Our historical combined financial statements include allocations of certain corporate expenses to MSG Entertainment, including certain public company costs incurred as a combined entity, of $73,967 for the six months ended December 31, 2022 and $161,189 for the year ended June 30, 2022. Following the Distribution, the Company will bear substantially all corporate overhead and support costs, including amounts previously allocated to MSG Entertainment. The Company will continue to provide support services to MSG Entertainment pursuant to the TSA. Payments received by the Company for transition services provided will be presented as a reduction of direct operating expense or selling, general and administrative expense. Refer to note (f) for further details related to the pro forma impact of these adjustments.

As discussed above, the costs to operate our business as an independent public entity are expected to vary from the historical allocations, including corporate and administrative charges from MSG Entertainment for the six months ended December 31, 2022 and for the year ended June 30, 2022 reflected in the accompanying historical

annual and interim combined financial statements included elsewhere within this information statement. The accompanying unaudited pro forma condensed combined statements of operations are not adjusted for these expenses as many of the costs are estimates based on projections and are not quantifiable at this time. Such costs principally relate to areas that include, but are not limited to:

•

corporate personnel overhead expenses as a result of the Company operating on a stand-alone basis;

•

professional fees associated with internal and external audits including compliance with Sarbanes-Oxley Act of 2002, tax, legal and other services;

•

anticipated executive compensation costs related to existing and new executive management and excluding future share-based compensation expense; and

•

stock market listing fees, investor relations costs and fees for preparing and distributing periodic filings with the SEC.

This unaudited pro forma condensed combined financial information reflects other adjustments that, in the opinion of management, are necessary to present fairly the pro forma condensed combined results of operations and combined financial position of the Company as of and for the periods indicated. The unaudited pro forma condensed combined financial information is subject to the assumptions and adjustments described in the accompanying notes. This unaudited pro forma condensed combined financial information is subject to change as MSG Entertainment and the Company finalize the terms of the separation and distribution agreement and other agreements and transactions related to the separation. The unaudited pro forma condensed combined financial information is for illustrative and informational purposes only and is not intended to represent or be indicative of what our financial condition or results of operations would have been had the Company operated historically as a company independent of MSG Entertainment, or if the Distribution had occurred on the dates indicated. The unaudited pro forma condensed combined financial information also should not be considered representative of our future condensed combined financial condition or combined results of operations.

MSG ENTERTAINMENT SPINCO, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

As of December 31, 2022 (in thousands)


	Historical Spinco ^(a)			Transaction Accounting Adjustments			Notes	Autonomous Entity Adjustments		Notes	Pro Forma
ASSETS
Current Assets:
Cash, cash equivalents and restricted cash	$	153,746		$	(103,746	)	(b)	$	—		$	50,000
Accounts receivable, net		100,820			—				—			100,820
Related party receivables, current		95,064			(52,513	)	(c)		6,145	(g)		48,696
Prepaid expenses and other current assets		69,686			—				—			69,686

Total current assets		419,316			(156,259	)			6,145			269,202
Property and equipment, net		649,962			—				—			649,962
Right-of-use lease assets		255,024			—				—			255,024
Goodwill		69,041			—				—			69,041
Intangible assets, net		63,801			—				—			63,801
Other non-current assets		91,817			—				—			91,817

Total assets	$	1,548,961		$	(156,259	)		$	6,145		$	1,398,847

LIABILITIES AND DIVISIONAL EQUITY (DEFICIT)
Current Liabilities:
Accounts payable, accrued and other current liabilities	$	176,287		$	—			$	—		$	176,287
Related party payables, current		70,379			—				—			70,379
Current portion of long-term debt		16,250			—				—			16,250
Operating lease liabilities, current		36,623			—				—			36,623
Deferred revenue		188,842			—				—			188,842

Total current liabilities		488,381			—				—			488,381
Long-term debt, net of deferred financing costs		648,397			—				—			648,397
Operating lease liabilities, non-current		238,015			—				—			238,015
Deferred tax liabilities, net		23,386			—				—			23,386
Other non-current liabilities		51,893			—				—			51,893

Total liabilities		1,450,072			—				—			1,450,072
Commitments and contingencies
Spinco Divisional Equity (Deficit):
MSG Entertainment investment		133,018			(133,018	)	(d)		—			—
Class A Common Stock		—			447		(d)		—			447
Class B Common Stock		—			69		(d)		—			69
Accumulated deficit		—			(23,757	)	(b), (c), (d)		6,145	(g)		(17,612	)
Accumulated other comprehensive loss		(34,129	)		—				—			(34,129	)

Total Spinco divisional equity (deficit)		98,889			(156,259	)			6,145			(51,225	)
Nonredeemable noncontrolling interest		—			—				—			—

Total liabilities and divisional equity (deficit)	$	1,548,961		$	(156,259	)		$	6,145		$	1,398,847

MSG ENTERTAINMENT SPINCO, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Six Months Ended December 31, 2022

(in thousands, except per share data)


	Historical Spinco ^(a)			Transaction Accounting Adjustments			Notes	Autonomous Entity Adjustments			Notes	Pro Forma
Revenues	$	502,332		$	—			$	—			$	502,332
Operating expenses:
Direct operating expenses		282,265			—				1,145		(f)		283,410
Selling, general and administrative expenses		83,415			—				24,143		(f)		107,558
Depreciation and amortization		31,571			—				—				31,571
Gains, net on dispositions		(4,412	)		—				—				(4,412	)
Restructuring charges		7,359			—				—				7,359

Operating income (loss)		102,134			—				(25,288	)			76,846
Other income (expense):
Interest income		3,322			(1,804	)	(c)		—				1,518
Interest expense		(24,632	)		—				—				(24,632	)
Other income (expense), net		(1,286	)		—				—				(1,286	)

		(22,596	)		(1,804	)			—				(24,400	)

Income (loss) from operations before income taxes		79,538			(1,804	)			(25,288	)			52,446
Income tax (expense) benefit		(731	)		54		(e)		697		(h)		20

Net income (loss)		78,807			(1,750	)			(24,591	)			52,466
Less: Net loss attributable to nonredeemable noncontrolling interest		(553	)		—				—				(553	)

Net income (loss) attributable to Spinco’s stockholders	$	79,360		$	(1,750	)		$	(24,591	)		$	53,019

Pro Forma earnings per share:
Basic											(i)	$	1.03
Diluted											(i)	$	1.03
Pro forma weighted-average common shares outstanding:
Basic											(i)		51,558
Diluted											(i)		51,624

MSG ENTERTAINMENT SPINCO, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Year Ended June 30, 2022

(in thousands, except per share data)


	Historical Spinco ^(a)			Transaction Accounting Adjustments			Notes		Autonomous Entity Adjustments			Notes			Pro Forma
Revenues	$	653,490		$	—				$	—					$	653,490
Operating expenses:
Direct operating expenses		417,301			—					2,514			(f)			419,815
Selling, general and administrative expenses		167,132			—					62,000			(f)			229,132
Depreciation and amortization		69,534			—					—						69,534
Gain on disposal of assets held for sale and associated settlements		—			—					—						—
Restructuring charges		5,171			—					—						5,171

Operating income (loss)		(5,648	)		—					(64,514	)					(70,162	)
Other income (expense):
Interest income		7,150			(2,117	)		(c)		—						5,033
Interest expense		(53,110	)		—					—						(53,110	)
Loss on extinguishment of debt		(35,629	)		—					—						(35,629	)
Other income (expense), net		(49,033	)		—					—						(49,033	)

		(130,622	)		(2,117	)				—						(132,739	)

Income (loss) from operations before income taxes		(136,270	)		(2,117	)				(64,514	)					(202,901	)
Income tax (expense) benefit		70			—			(e)		—			(h)			70

Net income (loss)		(136,200	)		(2,117	)				(64,514	)					(202,831	)
Less: Net loss attributable to nonredeemable noncontrolling interest		(2,864	)		—					—						(2,864	)

Net income (loss) attributable to Spinco’s stockholders	$	(133,336	)	$	(2,117	)			$	(64,514	)				$	(199,967	)

Pro Forma earnings per share:
Basic													(i	)	$	(3.91	)
Diluted													(i	)	$	(3.91	)
Pro forma weighted-average common shares outstanding:
Basic													(i	)		51,127
Diluted													(i	)		51,127

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

(a)	Represents Spinco’s unaudited condensed combined balance sheet as of December 31, 2022, unaudited condensed combined statement of operations for the six months ended December 31, 2022 and audited combined statement of operations for the year ended June 30, 2022.

Adjustments Related to the Distribution Transaction:

(b)

Adjustment reflects assets attributed to Spinco in the historical condensed combined balance sheet as of December 31, 2022 that will not be transferred from MSG Entertainment to Spinco in connection with the Distribution. To reflect this impact, an adjustment to Cash, cash equivalents and restricted cash of $103,746 was recorded. Refer to Note 1. Description of Business and Basis of Presentation of our annual historical audited combined financial statements for further discussion of the Company’s attribution of assets and liabilities.

(c)

Adjustment reflects the transfer from MSG Entertainment to Spinco of the loan payable to the Company’s wholly-owned captive insurance subsidiary, Eden Insurance Company Inc. (“Eden”), which will occur prior to the Distribution. This results in a reduction of Spinco’s loan receivable from MSG Entertainment of $52,513. The unaudited pro forma condensed combined statements of operations reflect an adjustment of $1,804 and $2,117 to reflect the removal of interest income related to the aforementioned loan receivable from MSG Entertainment for the six months ended December 31, 2022 and for the year ended June 30, 2022, respectively.

(d)

Adjustment reflects the pro forma recapitalization of our equity. As of the Distribution date, MSG Entertainment’s net investment in the Company will be distributed to MSG Entertainment’s stockholders through the distribution of approximately 67% of Spinco’s common stock with the remaining approximately 33% held by MSG Entertainment as a retained interest. As the unaudited pro forma condensed combined financial information are presented for the Company on a standalone basis, the entire balance of historical MSG Entertainment investment has been recorded as common stock and accumulated deficit, respectively, as a result of this adjustment. The par value of Spinco’s stock was recognized as a component of common stock, with the remaining balance recorded as accumulated deficit in the unaudited pro forma condensed combined balance sheet as of December 31, 2022.

Common stock reflects approximately 44.7 million shares of Class A Common Stock, par value $0.01 per share, and approximately 6.9 million shares of Class B Common Stock, par value $0.01 per share. The number of shares of common stock assumes each MSG Entertainment Class A and Class B common stockholder will receive one Spinco Class A or Class B common share for each MSG Entertainment Class A or Class B common share held on the record date for the Distribution. We expect approximately 33% of our common stock to be owned by MSG Entertainment immediately following the spin-off, representing approximately 1.5 shares of Spinco for every 1 outstanding share of MSG Entertainment.

This adjustment is based on MSG Entertainment’s December 31, 2022 issued and outstanding Class A and Class B common shares, although the actual number of shares issued will not be known until the record date for the Distribution. The adjustments to accumulated deficit including assets transferred between MSG Entertainment and Spinco as described in notes (b) and (c) are summarized below:


	($ in thousands)
Reduction of Cash, cash equivalents and restricted cash ^(b)	$	103,746
Elimination of loan receivable from MSG Entertainment ^(c)		52,513
Recapitalization of MSG Entertainment investment ^(d)		(133,018	)
Establishment of Class A Common Stock ^(d)		447
Establishment of Class B Common Stock ^(d)		69

Accumulated deficit	$	23,757

(e)	The income tax effects of the pro forma adjustments are fully offset by the valuation allowance for the year ended June 30, 2022.

The income tax effects of the pro forma adjustments are recorded at the applicable federal statutory tax rate for the six months ended December 31, 2022, net of adjustments to the Company’s valuation allowance and the limitation on the utilization of net operating loss carryforwards. This resulted in an overall tax benefit of $54 for the six months ended December 31, 2022 on the unaudited pro forma condensed combined statement of operations.

Autonomous Entity Adjustments:

(f)	Reflects the impact of the TSA and related agreements entered into in connection with the Distribution, which resulted in incremental corporate and administrative costs not included in the Company’s historical combined financial statements.

Following the Distribution, the Company will bear substantially all corporate overhead and support costs, including amounts previously charged back to MSG Entertainment. The Company will continue to provide support services to MSG Entertainment pursuant to the TSA. Payments received by the Company for transition services provided will be presented as a reduction of direct operating expenses or selling, general, and administrative expenses. The adjustment was derived by comparing contractual payments required by the TSA and related agreements to amounts historically allocated by the Company to MSG Entertainment on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis of certain measures of the Company or MSG Entertainment in the Company’s historical combined financial statements.

(g)

Adjustment reflects the effect of the Employee Matters Agreement, which entitles the Company to receive reimbursement for services provided to MSG Entertainment prior to the Distribution. An adjustment of $6,145 was recorded to recognize a Net receivable balance from MSG Entertainment to the Company in the unaudited pro forma condensed combined balance sheet as of December 31, 2022.

(h)	The income tax effects of the pro forma adjustments are fully offset by the valuation allowance for the year ended June 30, 2022.

The income tax effects of the pro forma adjustments are recorded at the applicable federal statutory tax rate for the six months ended December 31, 2022, net of adjustments to the Company’s valuation allowance and the limitation on the utilization of net operating loss carryforwards. This resulted in an overall tax benefit of $697 for the six months ended December 31, 2022 on the unaudited pro forma condensed combined statement of operations.

Earnings (Loss) Per Share:

(i)

Pro forma earnings per share and pro forma weighted-average basic shares outstanding are based on the weighted-average number of shares of MSG Entertainment Class A Common Stock and MSG Entertainment Class B Common Stock outstanding of 51.6 million during the six months ended December 31, 2022 and 51.1 million during the year ended June 30, 2022. Spinco’s weighted average shares outstanding assumes a distribution ratio of one share of our common stock for each share of MSG Entertainment Class A Common Stock and MSG Entertainment Class B Common Stock held on the record date of the Distribution for the approximately 67% to be distributed to shareholders. In addition, the approximately 33% interest in the outstanding shares of our common stock that will be owned by MSG Entertainment at the time of the spin-off is reflected in the weighted-average share counts presented herein. As a result, the Company’s pro forma weighted-average basic shares outstanding, after giving effect to the Distribution and the approximately 33% retained interest held by MSG Entertainment, represents approximately 1.5 shares of Spinco for every 1 outstanding share of MSG Entertainment.

Pro forma diluted weighted-average shares outstanding reflect potential dilution from the issuance of Spinco common shares from MSG Entertainment equity plans, giving effect to the distribution ratio and conversion

of certain MSG Entertainment equity awards into Spinco equity awards. Potentially dilutive shares for the unaudited pro forma condensed combined statements of operations for the year ended June 30, 2022 are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. While the actual impact on a go-forward basis will depend on various factors, including employees who may change employment from one company to another, we believe the estimate provided yields a reasonable approximation of the dilutive impact of MSG Entertainment equity plans. We expect that the actual amounts will differ from these estimates.

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 (“MD&A”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this MD&A, there are statements concerning the future operating and future financial performance of Spinco, including our potential spin-off from MSG Entertainment, and the impact of the COVID-19 pandemic and COVID-19 variants on our future operations. 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 future financial performance 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. References to “Spinco” or the “Company” include the subsidiaries of MSG Entertainment that will be subsidiaries of the Company at the time of the Distribution. Factors that may cause such differences to occur include, but are not limited to:

•

the level of our expenses, including our corporate expenses;

•

the level of our revenues, which depends in part on the popularity of the Christmas Spectacular, the sports teams whose games are played at The Garden, and other events which are presented in our venues;

•

our ability to effectively manage any impacts of the COVID-19 pandemic (including COVID-19 variants) as well as renewed actions taken in response by governmental authorities or certain professional sports leagues, including ensuring compliance with rules and regulations imposed upon our venues, to the extent applicable;

•

the effect of any postponements or cancellations by third-parties or the Company as a result of the COVID-19 pandemic due to operational challenges and other health and safety concerns (such as the partial cancellation of the 2021 production of the Christmas Spectacular);

•

the extent to which attendance at our venues may be impacted by government actions, continuing health concerns by potential attendees and reduced tourism;

•

the impact on the payments we receive under the Arena License Agreements as a result of government-mandated capacity restrictions, league restrictions and/or social-distancing or vaccination requirements, if any, at games of the Knicks of the NBA and the Rangers of the NHL;

•

lack of operating history as a stand-alone public company and costs associated with being an independent public company;

•

the on-ice and on-court performance of the professional sports teams whose games we host in our venues;

•

the level of our capital expenditures and other investments;

•

general economic conditions, especially in the New York City and Chicago metropolitan areas where we have business activities;

•

the demand for sponsorship arrangements;

•

competition, for example, from other venues and sports and entertainment options, including new competing venues;

•

changes in laws, guidelines, bulletins, directives, policies and agreements, and regulations under which we operate;

•

any economic, social or political actions, such as boycotts, protests, work stoppages or campaigns by labor organizations, including the unions representing players and officials of the NBA and NHL, or other work stoppage due to COVID-19 or otherwise;

•

seasonal fluctuations and other variations in our operating results and cash flow from period to period;

•

the successful development of new live productions, enhancements or changes to existing productions and the investments associated with such development, enhancements, or changes;

•

business, reputational and litigation risk if there is a cyber or other security incident resulting in loss, disclosure or misappropriation of stored personal information, or disclosure of confidential information or other breaches of our information security;

•

activities or other developments (such as pandemics, including the COVID-19 pandemic) that discourage or may discourage congregation at prominent places of public assembly, including our venues;

•

the acquisition or disposition of assets or businesses and/or the impact of, and our ability to successfully pursue, acquisitions or other strategic transactions;

•

our ability to successfully integrate acquisitions, new venues or new businesses into our operations;

•

our internal control environment and our ability to identify and remedy any future material weaknesses;

•

the costs associated with, and the outcome of, litigation and other proceedings to the extent uninsured, including litigation or other claims against companies we invest in or acquire;

•

the impact of governmental regulations or laws, changes in how those regulations and laws are interpreted, as well as the continued benefit of certain tax exemptions and the ability to maintain necessary permits or licenses;

•

the impact of any government plans to redesign New York City’s Penn Station;

•

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

•

the substantial amount of debt incurred, the ability of our subsidiaries to make payments on, or repay or refinance, such debt under the National Properties Credit Agreement and our ability to obtain additional financing, to the extent required;

•

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

•

the performance by MSG Sports of its obligations under various agreements with the Company and ongoing commercial arrangements, including the Arena License Agreements;

•

the tax-free treatment of the Distribution;

•

our ability to achieve the intended benefits of the Distribution;

•

failure of the Company or MSG Entertainment to satisfy its obligations under transition services agreements or other agreements entered into in connection with the Distribution;

•

our status as an emerging growth company; and

•

the additional factors described under “Risk Factors” in this information statement.

We disclaim 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

This MD&A is provided as a supplement to, and should be read in conjunction with the Company’s combined financial statements as of December 31, 2022 (unaudited) and June 30, 2022, and for the six months ended December 31, 2022 and 2021 (unaudited) and footnotes thereto (“Unaudited Combined Interim Financial Statements”) and the Company’s combined financial statements as of June 30, 2022 and 2021 and for the three years ended June 30, 2022, 2021, and 2020 and footnotes thereto (“Audited Combined Annual Financial Statements”) included elsewhere in this information statement to help provide an understanding of our financial condition, changes in financial condition and results of operations. The information included in this MD&A should also be read in conjunction with the financial data set forth under the pro forma condensed combined financial information. See “Unaudited Pro Forma Condensed Combined Financial Information” for further details. The Company reports on a fiscal year basis ending on June 30^th (“Fiscal Year”). In this MD&A, the years ended on June 30, 2023, 2022, 2021 and 2020 are referred to as “Fiscal Year 2023”, “Fiscal Year 2022”, “Fiscal Year 2021”, and “Fiscal Year 2020”, respectively.

Our MD&A is organized as follows:

Proposed Distribution and Basis of Presentation. This section provides a general description of the proposed spin-off that would separate the traditional live entertainment business from the MSG Sphere, MSG Networks, and Tao Group Hospitality businesses of MSG Entertainment.

Business Overview. This section provides a general description of our business, as well as other matters that we believe are important in understanding our results of operations and financial condition and in anticipating future trends.

Results of Operations. This section provides an analysis of our results of operations for the six months ended December 31, 2022 and 2021, and for Fiscal Years 2022, 2021, and 2020 on a combined basis.

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 six months ended December 31, 2022 and 2021, and Fiscal Years 2022, 2021, and 2020. The discussion of our financial condition and liquidity includes summaries of our primary sources of liquidity, our contractual obligations and off-balance sheet arrangements that existed at December 31, 2022 and June 30, 2022.

Seasonality of Our Business. This section discusses the seasonal performance of our business.

Recently Issued Accounting Pronouncements and Critical Accounting Estimates. This section cross-references a discussion of accounting policies considered to be important to our financial condition and results of operations and which require significant judgment and estimates on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies and recently issued accounting pronouncements, are discussed in the notes to our combined financial statements included elsewhere in this information statement.

Proposed Distribution and Basis of Presentation

MSGE Spinco, Inc. was incorporated in the state of Delaware on September 15, 2022 to be the company to hold the traditional live entertainment business of MSG Entertainment. The spin-off is expected to be completed through a tax-free pro rata distribution of approximately 67% of the common stock of the Company to MSG Entertainment stockholders (the “Distribution”). The remaining approximately 33% economic interest in the Company would be retained by MSG Entertainment, subject to completion of the Distribution. MSG Entertainment is required by applicable tax rules to dispose of the retained interest within a fixed period of time, which may occur through a series of steps including sales, exchange offers or pro rata distributions. MSG Entertainment expects to dispose of such retained shares within one year of the date of the Distribution, subject to market conditions.

Completion of the Distribution is subject to various conditions, including final approval by the board of directors of MSG Entertainment, receipt of a tax opinion from counsel and the filing and effectiveness of the registration statement with the SEC.

The combined financial statements of the Company were prepared on a stand-alone basis derived from the consolidated financial statements and accounting records of MSG Entertainment. These financial statements reflect the combined historical results of operations, financial position and cash flows of the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) and SEC Staff Accounting Bulletin Topic 1-B, Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity. References to U.S. GAAP issued by the Financial Accounting Standards Board (“FASB”) in this MD&A are to the FASB Accounting Standards Codification, also referred to as “ASC.”

Historically, separate financial statements have not been prepared for the Company and it has not operated as a stand-alone business from MSG Entertainment. The combined financial statements include certain assets and liabilities that have historically been held by MSG Entertainment or by other MSG Entertainment subsidiaries but are specifically identifiable or otherwise attributable to the Company. The combined financial statements are presented as if the Company’s businesses had been combined for all periods presented. The assets and liabilities in the combined financial statements have been reflected on a historical cost basis, as immediately prior to the Distribution of all of the assets and liabilities presented are wholly owned by MSG Entertainment and are being transferred to the Company at a carry-over basis.

Fiscal Year 2020 includes additional carve-out allocations as the combined financial statements for the period from July 1, 2019 to April 17, 2020 were prepared on a stand-alone basis derived from the consolidated financial statements and accounting records of MSG Sports. This was a result of a distribution of all the outstanding common stock of MSG Entertainment to MSG Sports stockholders (referred herein as the “2020 Entertainment Distribution”).

All significant intracompany accounts and balances within the Company’s combined businesses have been eliminated. Certain historical intercompany transactions between MSG Entertainment and the Company have been included as components of MSG Entertainment investment in the combined financial statements, as they are to be considered effectively settled upon effectiveness of the Distribution and were not historically settled in cash. Certain other historical intercompany transactions between MSG Entertainment and the Company have been classified as related party, rather than intercompany, in the combined financial statements as they were historically settled in cash. See Note 14, Related Party Transactions to the Unaudited Combined Interim Financial Statements, and Note 19, Related Party Transactions to the Audited Combined Annual Financial Statements included elsewhere in this information statement for additional information.

The combined statements of operations include allocations for certain support functions that are provided on a centralized basis and not historically recorded at the business unit level by MSG Entertainment, such as expenses related to executive management, finance, legal, human resources, government affairs, and information technology among others. As part of the Distribution, certain corporate and operational support functions are

being transferred to Spinco and therefore, charges were reflected in order to properly burden all business units comprising MSG Entertainment’s historical operations. These expenses have been allocated to MSG Entertainment on the basis of direct usage when identifiable, with the remainder allocated on a pro-rata basis of combined assets, headcount or other measures of Spinco or MSG Entertainment, which is recorded as a reduction of either direct operating expenses or selling, general & administrative (“SG&A”) expense. See Note 14, Related Party Transactions to the Unaudited Combined Interim Financial Statements, and Note 19, Related Party Transactions to the Audited Combined Annual Financial Statements included elsewhere in this information statement for additional information.

Management believes the assumptions underlying the combined financial statements, including the assumptions regarding allocating general corporate expenses, are reasonable. Nevertheless, the combined financial statements may not include all of the actual expenses that would have been incurred by the Company and may not reflect its combined results of operations, financial position and cash flows had it been a stand-alone company during the periods presented. Actual costs that would have been incurred if the Company had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. The Company is unable to quantify the amounts that it would have recorded during the historical periods on a stand-alone basis as it is not practicable to do so. See “Unaudited Pro Forma Condensed Combined Financial Information — Notes to Unaudited Pro Forma Condensed Combined Financial Information”, Note 2, Summary of Significant Accounting Policies to the Unaudited Combined Interim Financial Statements, and Note 2, Summary of Significant Accounting Policies to the Audited Combined Annual Financial Statements included elsewhere within this information statement for additional information.

Business Overview

We are a live entertainment company comprised of iconic venues and marquee entertainment content. 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.

We manage our business through one reportable segment. The Company’s portfolio of venues includes: The Garden, The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. The Company also includes the original production, the Christmas Spectacular, and our entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually.

The Company conducts a significant portion of its operations at venues that it either owns or operates under long-term leases. The Company owns The Garden, The Theater at Madison Square Garden and The Chicago Theatre, and leases Radio City Music Hall and the Beacon Theatre.

All of the Company’s revenues and assets are attributed to or located in the United States and are primarily concentrated in the New York City metropolitan area.

Impact of the COVID-19 Pandemic on Our Business

The Company’s operations and operating results were not materially impacted by the COVID-19 pandemic during the six months ended December 31, 2022, as compared to the prior year period, which was impacted by fewer ticketed events at our venues due to the lead-time required to book touring acts and artists, and the postponement or cancellation of select events (including the partial cancellation of the 2021 production of the Christmas Spectacular) as a result of an increase in COVID-19 cases during the fiscal second quarter.

The Company has long-term Arena License Agreements with MSG Sports that require the Knicks and Rangers to play their home games at The Garden. As discussed above, capacity restrictions, use limitations and social distancing requirements were in place for the entirety of the Knicks and Rangers 2020-21 regular seasons, which materially impacted the payments we received under the Arena License Agreements for Fiscal Year 2021. On July 1, 2021, the Knicks and Rangers began paying the full amounts provided for under their respective Arena License Agreements. The Knicks and the Rangers each completed their 2021-2022 82-game regular seasons, with the Rangers advancing to the playoffs.

It is unclear to what extent COVID-19 concerns, including with respect to new variants, could result in new government or league-mandated capacity restrictions or vaccination/mask requirements or impact the use of and/or demand for our 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.

For more information about the risks to the Company as a result of the COVID-19 pandemic and its impact on our operating results, see “Risk Factors” included elsewhere in this information statement for further details.

Description of Our Business

The Company produces, presents and hosts live entertainment events, including (i) concerts, (ii) sports events, and (iii) other live events such as family shows, performing arts events and special events, in our diverse collection of venues. The scope of our collection of venues enables us to showcase acts that cover a wide spectrum of genres and popular appeal.

The Company also creates, produces and/or presents live productions that are performed in the Company’s venues. This includes the Christmas Spectacular production, which features the world-famous Rockettes and which has been performed at Radio City Music Hall for 89 years.

The Company also historically owned a controlling interest in BCE, the entertainment production company that owns and operates the Boston Calling Music Festival. The Company disposed of its controlling interest in BCE on December 2, 2022.

Revenue Sources

The Company earns revenue from several primary sources: ticket sales to our audiences for live events that we produce or promote/co-promote, license fees for our venues paid by third-party promoters or licensees in connection with events that we do not produce or promote/co-promote, facility and ticketing fees, concessions, sponsorships and signage, suite license fees at The Garden, merchandising and tours at certain of our venues. The amount of revenue and expense recorded by the Company for a given event depends to a significant extent on whether the Company is promoting or co-promoting the event or is licensing a venue to a third party or MSG Sports. See “— Description of Our Business — Revenue Sources — Venue License Fees” below for further discussion of our venue licensing arrangements with MSG Sports.

Ticket Sales and Suite Licenses

For our productions and for entertainment events in our venues that we promote, we recognize revenues from the sale of tickets to our audiences. We sell tickets to the public through our box office, via our websites and ticketing agencies and through group sales. The amount of revenue we earn from ticket sales depends on the number of shows and the mix of events that we promote, the capacity of the venue used, the extent to which we can sell to fully utilize the capacity, and our ticket prices.

The Garden has 21 Event Level suites, 58 Lexus Level suites, 18 Infosys Level suites, the Caesars Sportsbook Lounge, Suite Sixteen and the Hub Loft. Suite licenses at The Garden are generally sold to corporate customers with the majority being multi-year licenses with annual escalators. The Company licenses Suite Sixteen to Tao Group Hospitality in exchange for license fee payments.

Under standard suite licenses, the licensees pay an annual license fee, which varies depending on the location of the suite. The license fee includes, for each seat in the suite, tickets for events at The Garden for which tickets are sold to the general public, subject to certain exceptions. In addition, suite holders separately pay for food and beverage service in their suites at The Garden. Revenues from the sale of suite licenses are shared between the Company and MSG Sports. Revenues for the Company’s suite license arrangements are recorded on a gross basis, as the Company is the principal in such transactions and controls the related goods or services until transfer to the customer. MSG Sports’ share of the Company’s suite license revenue is recognized in the combined statements of operations as a component of direct operating expenses. The revenue sharing expense recognized by the Company for MSG Sports’ share of suite license revenue at The Garden is based on a 67.5% allocation to MSG Sports pursuant to the Arena License Agreements.

Venue License Fees

For entertainment events held at our venues that we do not produce, promote or co-promote, we typically earn revenue from venue license fees charged to the third-party promoter or producer of the event. The amount of license fees we charge varies by venue, as well as by the size of the production and the number of days utilized, among other factors. Our fees typically include both the cost of renting space in our venues and costs for

providing event staff, such as front-of-house and back-of-house staff, including stagehands, electricians, laborers, box office staff, ushers and security as well as production services such as staging, lighting and sound.

In connection with the 2020 Entertainment Distribution, the Company entered into Arena License Agreements with MSG Sports that, among other things, require the Knicks and the Rangers to play their home games at The Garden in exchange for fixed annual license fees scheduled to be paid monthly over the term of the agreement. The Company accounts for these license fees as operating lease revenue given that the Company provides MSG Sports with the right to direct the use of and obtain substantially all of the economic benefit from The Garden during Knicks and Rangers home games. Operating lease revenue is recognized on a straight-line basis over the term, adjusted pursuant to the terms of the Arena License Agreements, which is comprised of non-consecutive periods of use when MSG Sports uses The Garden generally for their professional sports teams’ preseason and regular season home games. As such, operating lease revenue is recognized ratably as events occur.

The Arena License Agreements allow for certain reductions in the license fees during periods when The Garden is not available for use due to a force majeure event. As a result of the government-mandated suspension of events at The Garden due to the impact of the COVID-19 pandemic, at the beginning of Fiscal Year 2021, The Garden was not available for use. Capacity restrictions, use limitations and social distancing requirements were in place for the entirety of the Knicks and Rangers 2020— 21 regular seasons, which materially impacted the payments we received under the Arena License Agreements for Fiscal Year 2021. On July 1, 2021, the Knicks and Rangers began paying the full amounts provided for under their respective Arena License Agreements. The Knicks and the Rangers each completed their 2021—2022 82-game regular seasons, with the Rangers advancing to the playoffs.

Facility and Ticketing Fees

For all public and ticketed events held in our venues aside from MSG Sports home games, we also earn additional revenues on substantially all tickets sold, whether we promote/co-promote the event or license the venue to a third party. These revenues are earned in the form of certain fees and assessments, including the facility fees we charge, and vary by venue.

Concessions

We sell food and beverages during substantially all events held at our venues. In addition to concession-style sales of food and beverages, which represent the majority of our concession revenues, we also generate revenue from catering for our suites at The Garden. Pursuant to the Arena License Agreements related to the use of The Garden by MSG Sports, the Company shares with MSG Sports revenues and related expenses associated with sales of food and beverages (including suite catering) during Knicks and Rangers games at The Garden.

Revenue generated from in-venue food and beverage sales at MSG Sports’ events is recognized by the Company on a gross basis, with a corresponding revenue sharing expense for MSG Sports’ share of such sales recorded within direct operating expense. The Arena License Agreements require the Company to pay 50% of the net proceeds generated from in-venue food and beverage sales to MSG Sports.

Merchandise

We earn revenues from the sale of merchandise related to our proprietary productions and other live entertainment events that take place at our venues. The majority of our merchandise revenues are generated through on-site sales during performances of our productions and other live events. We also generate revenues from the sales of our Christmas Spectacular merchandise, such as ornaments and apparel, through traditional retail channels. Revenues associated with Christmas Spectacular merchandise are generally recorded on gross basis (as principal). Typically, revenues from our merchandise sales at our non-proprietary events relate to sales

of merchandise provided by the artist, the producer or promoter of the event and are generally subject to a revenue sharing arrangement and are generally recorded on a net basis (as agent).

Pursuant to the Arena License Agreements, the Company receives 30% of revenues, net of taxes and credit card fees, recorded on a net basis (agent), from the sale of MSG Sports teams merchandise sold at The Garden.

Signage and Sponsorship

We earn revenues through the sale of signage space and sponsorship rights in connection with our venues, productions and other live entertainment events. Signage revenues generally involve the sale of advertising space at The Garden during entertainment events and otherwise in our venues. We also earn our revenues through the sale of outdoor signage around the Madison Square Garden complex and Penn Station.

Sponsorship agreements may require us to use the name, logos and other trademarks of sponsors in our advertising and in promotions for our venues, productions and other live entertainment events. Sponsorship arrangements may be exclusive within a particular sponsorship category or non-exclusive and generally permit a sponsor to use the name, logos and other trademarks of our productions, events and venues in connection with their own advertising and in promotions in our venues or in the community.

Prior to the 2020 Entertainment Distribution, for sponsorship agreements entered into by the Company or for arrangements that had performance obligations satisfied solely by the Company, revenue was generally recorded on a gross basis as the Company was the principal in such arrangements and controlled the related goods or services until transfer to the customer. MSG Sports’ share of the Company’s sponsorship and signage revenue was recognized in the combined statements of operations as a component of direct operating expenses. The revenue sharing expense was specifically identified where possible, with the remainder allocated proportionally based upon revenue.

Under the Arena License Agreements, the Company shares certain sponsorship and signage revenues with MSG Sports. Pursuant to these agreements, MSG Sports has the rights to sponsorship and signage revenue that is specific to Knicks and Rangers events. The Company and MSG Sports also entered into sponsorship sales representation agreements, under which the Company has the right and obligation to sell and service sponsorships for the sports teams of MSG Sports, in exchange for a commission.

Advertising Sales (“Ad Sales”) Commission

The Company is a party to an advertising sales representation agreement with MSG Networks. Pursuant to the agreement, the Company has the exclusive right and obligation to sell advertising availabilities of MSG Networks. The Company is entitled to, and earns, commission revenue on such sales. The expense associated with advertising personnel is recognized in selling, general and administrative expenses. The Company recorded revenues under the advertising sales representation agreement with MSG Networks of $8,802 and $7,395 for the six months ended December 31, 2022 and 2021, respectively. For Fiscal Years 2022, 2021, and 2020, the Company recognized $20,878, $13,698 and $12,653 of revenues, respectively, under the advertising sales representation agreement with MSG Networks.

Expenses

Our principal expenses are payments made to performers of our productions, staging costs and day-of-event costs associated with events, and advertising costs. In addition, our expenses include costs associated with the ownership, lease, maintenance and operation of our venues, along with our corporate and other supporting functions.

Performer Payments

Our proprietary productions are performed by talented actors, dancers, singers, musicians and entertainers. In order to attract and retain this talent, we are required to pay our performers an amount that is commensurate with both their abilities and the demand for their services from other entertainment companies. Our productions typically feature ensemble casts (such as the Rockettes), where most of our performers are paid based on a standard “scale,” pursuant to collective bargaining agreements we negotiate with the performers’ unions. Certain performers, however, have individually negotiated contracts.

Staging Costs

Staging costs for our proprietary events as well as other events that we promote include the costs of sets, lighting, display technologies, special effects, sound and all of the other technical aspects involved in presenting a live entertainment event. These costs vary substantially depending on the nature of the particular show, but tend to be highest for large-scale theatrical productions, such as the Christmas Spectacular. For concerts we promote, the performer usually provides a fully produced show. Along with performer salaries, the staging costs associated with a given production are an important factor in the determination of ticket prices.

Day-of-Event Costs

For days in which the Company stages its productions, promotes an event or provides one of our venues to a third-party promoter under a license fee arrangement, the event is charged the variable costs associated with such event, including box office staff, stagehands, ticket takers, ushers, security, and other similar expenses. In situations where we provide our venues to a third-party promoter under a license fee arrangement, day-of-event costs are typically included in the license fees charged to the promoter. Under the Arena License Agreements related to the use of The Garden by MSG Sports, the Company is reimbursed for day-of-event costs (as defined under the Arena License Agreements). The Company records such reimbursements as reductions to direct operating expenses.

Venue Usage

The Company’s combined financial statements include expenses associated with the ownership, maintenance and operation of The Garden, which the Company and MSG Sports use in their respective operations. Prior to the 2020 Entertainment Distribution, the Company did not charge rent expense to MSG Sports for use of The Garden. However, for purposes of the Company’s combined financial statements, a portion of the historical depreciation expense as well as other non-event related venue operations costs are allocated to MSG Sports, in order to properly burden all business units comprising MSG Sports’ historical operations, related to use of The Garden. This allocation is based on event count and revenue, which the Company’s management believes is a reasonable allocation methodology. This allocation is reported as a reduction of direct operating expense in the combined statements of operations. This allocation is reflected for the portion of Fiscal Year 2020 prior to the 2020 Entertainment Distribution.

Revenue Sharing Expenses

As discussed above, MSG Sports’ share of the Company’s suites licenses, venue signage and certain sponsorship and concessions revenue is reflected within direct operating expense as revenue sharing expenses. For periods prior to the 2020 Entertainment Distribution, such amounts were either specifically identified where possible, or allocated proportionally within the combined financial statements.

Marketing and Advertising Costs

We incur significant costs promoting our productions and other events through various advertising campaigns, including advertising on social and digital platforms, television, outdoor platforms and radio, and in

newspapers. In light of the intense competition for entertainment events, such expenditures are a necessity to drive interest in our productions and encourage members of the public to purchase tickets to our shows.

Other Expenses

The Company’s selling, general and administrative expenses primarily consist of administrative costs, including compensation, professional fees, advertising sales commissions, as well as sales and marketing costs, including non-event related advertising expenses. Operating expenses also include corporate overhead costs and venue operating expenses. Venue operating expenses include the non-event related costs of operating the Company’s venues, and include such costs as rent for the Company’s leased venues, real estate taxes, insurance, utilities, repairs and maintenance, and labor related to the overall management of the venues.

Factors Affecting Results of Operations

In addition the discussion under the section “ — Business Overview — Impact of the COVID-19 Pandemic on Our Business” above, our operating results are largely dependent on our ability to attract concerts and other events to our venues, revenues under various agreements entered into with MSG Sports, and the continuing popularity of the Christmas Spectacular at Radio City Music Hall. Certain of these factors in turn depend on the popularity and/or performance of the professional sports teams whose games we host in our venues.

Our Company’s future performance is dependent in part on general economic conditions and the effect of these conditions on our customers. Weak economic conditions may lead to lower demand for suite licenses and tickets to our live productions, concerts, family shows and other events, which would also negatively affect concession and merchandise sales, and lower levels of sponsorship and venue signage. These conditions may also affect the number of concerts, family shows and other events that take place in the future. An economic downturn could adversely affect our business and results of operations.

Factors Affecting Comparability

Due to the impact of the COVID-19 pandemic discussed above, each of Fiscal Year 2021 and Fiscal Year 2022 results are not comparable to the prior year and are not indicative of future results.

Combined Results of Operations

Comparison of the Six Months Ended December 31, 2022 versus the Six Months Ended December 31, 2021

The table below sets forth, for the periods presented, certain historical financial information.


	Six Months Ended December 31,						Change
	2022			2021			Amount			Percentage
Revenues	$	502,332		$	281,162		$	221,170			79%
Direct operating expenses		282,265			182,236			100,029			55%
Selling, general and administrative expenses		83,415			81,698			1,717			2%
Depreciation and amortization		31,571			33,159			(1,588	)		(5)%
Gains, net on dispositions		(4,412	)		—			(4,412	)		NM
Restructuring charges		7,359			—			7,359			NM

Operating income (loss)		102,134			(15,931	)		118,065			NM
Interest income		3,322			3,604			(282	)		(8)%
Interest expense		(24,632	)		(26,795	)		2,163			(8)%
Other expense, net		(1,286	)		(19,247	)		17,961			(93)%

Income (loss) from operations before income taxes		79,538			(58,369	)		137,907			NM
Income tax (expense) benefit		(731	)		—			(731	)		NM

Net income (loss)		78,807			(58,369	)		137,176			NM
Less: Net loss attributable to nonredeemable noncontrolling interests		(553	)		(367	)		(186	)		51%

Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders		79,360			(58,002	)		137,362			NM

NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.

Revenues

Revenues for the six months ended December 31, 2022 increased $221,170 as compared to the prior year period. The change in revenues was attributable to the following:


	Six Months Ended December 31, 2022
	Six Months Ended December 31, 2022
Increase in event-related revenues, as discussed below	$	88,214
Increase in revenues from the presentation of the Christmas Spectacular		71,414
Increase in revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements		35,404
Increase in venue-related sponsorship, signage and suite license fee revenues		16,643
Increase in arena license fees from MSG Sports pursuant to the Arena License Agreements		3,968
Other net increases		5,527

	$	221,170

For the six months ended December 31, 2022, the increase in event-related revenues primarily reflects higher revenues from concerts of $88,072. The increase in revenues for the six months ended December 31, 2022 was primarily due to the return of live events at the Company’s venues as compared to limited live events held during the first six months of Fiscal Year 2022 (due to the COVID-19 pandemic). See “ — Business Overview — Impact of the COVID-19 Pandemic on Our Business” for more information.

The Company had 181 Christmas Spectacular performances during this year’s holiday season, of which 174 took place in the second quarter of Fiscal Year 2023, as compared to 101 performances in the prior year’s holiday season (due to the partial cancellation of the 2021 production as a result of an increase in COVID-19 cases), all of which took place in the second quarter of Fiscal Year 2022. For this year’s holiday season, more than 930,000 tickets were sold, representing an over 25% increase in attendance on a per-show basis as compared to the prior year.

For the six months ended December 31, 2022, the increase in revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements primarily reflected higher suite license fee revenues and, to a lesser extent, higher food, beverage and merchandise sales at Knicks and Rangers games.

For the six months ended December 31, 2022, the increase in venue-related sponsorship, signage and suite license fee revenues primarily reflects higher suite license fee revenues, which was mainly due to the return of live events at the Company’s venues as compared to limited live events held during the first six months of Fiscal Year 2022 (due to the COVID-19 pandemic).

Direct operating expenses

Direct operating expenses for the six months ended December 31, 2022 increased $100,029 as compared to the prior year period. The change in direct operating expenses was attributable to the following:


	Six Months Ended December 31, 2022
	Six Months Ended December 31, 2022
Increase in event-related direct operating expenses as discussed below	$	47,644
Increase in expenses associated with the sharing of economics with MSG Sports pursuant to the Arena License Agreements		28,693
Increase in direct operating expenses associated with the Christmas Spectacular		9,854
Increase in venue operating costs		6,627
Increase in direct operating expenses associated with the Arena License Agreements		4,732
Other net increases		2,479

	$	100,029

For the six months ended December 31, 2022, the increase in event-related direct operating expenses primarily reflects higher direct operating expenses from concerts of $46,422, which was primarily due to the increase in the number of events held at the Company’s venues as compared to the prior year period.

For the six months ended December 31, 2022, the increase in direct operating expenses associated with the sharing of economics with MSG Sports pursuant to the Arena License Agreements primarily reflects the increase in suite license fees and, to a lesser extent, the increase in Knicks’ and Rangers’ food and beverage sales.

For the six months ended December 31, 2022, the increase in direct operating expenses associated with the Christmas Spectacular production was primarily due to the increase in the number of performances as compared to the prior year period.

For the six months ended December 31, 2022, the increase in expenses associated with the Arena License Agreements primarily reflects an increase in food and beverage costs associated with the increase in Knicks’ and Rangers’ food and beverage sales.

Selling, general and administrative expenses

For the six months ended December 31, 2022, selling, general and administrative expenses increased $1,717, or 2%, to $83,415 as compared to the prior year period. The increase primarily reflects higher advertising and general administrative expenses.

Gains, net on dispositions

For the six months ended December 31, 2022, the Company recorded net gains of $4,412 primarily due to the gain on sale of the company’s controlling interest in BCE, partially offset by the net loss on the disposal of a corporate aircraft.

Restructuring Charges

For the six months ended December 31, 2022, the Company recorded total restructuring charges of $7,359 related to termination benefits provided for a workforce reduction of certain executives and employees as part of the Company’s cost reduction program implemented in Fiscal Year 2023. No amounts were recorded as restructuring charges during the comparative prior period.

Operating income (loss)

Operating income for the six months ended December 31, 2022 was $102,134 as compared to a loss of $15,931 in the prior year period, an improvement of $118,065. The improvement in operating income (loss) was primarily due to an increase in revenues, partially offset by higher direct operating expenses, as discussed above.

Interest income

Interest income for the six months ended December 31, 2022 decreased $282 as compared to the prior year period primarily due to lower related party interest of $1,660 as a result of MSG Entertainment’s repayment of the TAO Subordinated Credit Agreement (defined below) on June 9, 2022, partially offset by higher interest income of $1,378 due to higher rates and average investment balances.

Interest expense

Interest expense for the six months ended December 31, 2022 decreased $2,163 as compared to the prior year period primarily due to lower amortization of deferred financing costs of $1,774 as a result of the extinguishment of MSG National Properties’ prior term loan facility in June 2022.

Other expense, net

Other expense, net for the six months ended December 31, 2022 decreased $17,961 as compared to the prior year period primarily due to lower unrealized losses of approximately $21,300 associated with the Company’s investments in DraftKings Inc., partially offset by the realized gain of $1,489 on shares sold of DraftKings.

Income tax (expense) benefit

Income tax expense for the six months ended December 31, 2022 of $731 reflected an effective income tax rate of 1% and differs from the income tax expense derived from applying the statutory federal rate of 21% to the pretax income primarily due to (i) tax expense related to state and local taxes of $11,769, (ii) tax expense of $5,103 related to share-based payment awards and (iii) tax expense of $1,993 related to nondeductible officers’ compensation, partially offset by (i) tax benefit of $33,001 resulting from a decrease in the valuation allowance and (ii) a tax benefit of $2,066 related to a federal income tax refund.

Income tax expense for the six months ended December 31, 2021 of nil reflected an effective income tax rate of 0% and differs from income tax benefit derived from applying the statutory federal rate of 21% to the pretax loss primarily due to (i) tax expense of $13,741 resulting from an increase in the valuation allowance and (ii) tax expense of $3,527 related to nondeductible officers’ compensation, partially offset by state income tax benefit of $4,926.

Adjusted operating income (loss) (“AOI”)

(i)

the impact of non-cash straight-line leasing revenue associated with the Arena License Agreements with MSG Sports,

(ii)

depreciation, amortization and impairments of property and equipment, goodwill and intangible assets,

(iii)

amortization for capitalized cloud computing arrangement costs,

(iv)

share-based compensation expense,

(v)

restructuring charges or credits,

(vi)

merger and acquisition-related costs, including litigation expenses,

(vii)

gains or losses on sales or dispositions of businesses and associated settlements,

(viii)

the impact of purchase accounting adjustments related to business acquisitions, and

(ix)

gains and losses related to the remeasurement of liabilities under MSG Entertainment’s Executive Deferred Compensation Plan (which was established in November 2021).

The following is a reconciliation of operating income (loss) to adjusted operating income for the six months ended December 31, 2022 as compared to the prior year period:


	Six Months Ended						Change
	2022			2021			Amount		Percentage
Operating income (loss)		102,134			(15,931	)		118,065		NM
Non-cash portion of arena license fees from MSG Sports		(12,929	)		(11,889	)
Share-based compensation expense		13,965			21,079
Depreciation and amortization		31,571			33,159
Gains, net on dispositions		(4,412	)		—
Restructuring charges		7,359			—
Amortization for capitalized cloud computing arrangement costs		104			—
Remeasurement of deferred compensation plan liabilities		6			—

Adjusted operating income		137,798			26,418			111,380		NM

NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.

^(a)

This adjustment represents the non-cash portion of operating lease revenue related to the Company’s Arena License Agreements with MSG Sports. Pursuant to GAAP, recognition of operating lease revenue is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement. As a result, operating lease revenue is comprised of a contractual cash component plus or minus a non-cash component for each period presented. Operating income on a GAAP basis includes lease income of (i) $20,220 and $17,293 of revenue collected in cash for the six months ended December 31, 2022, and 2021, respectively and (ii) a non-cash portion of $12,929 and $11,889 for the six months ended December 31, 2022 and 2021, respectively.

Net income (loss) attributable to redeemable and nonredeemable noncontrolling interests

For the six months ended December 31, 2022, the Company recorded $553 of net loss attributable to nonredeemable noncontrolling interests as compared to $367 of net loss attributable to nonredeemable noncontrolling interests for the six months ended December 31, 2021. These amounts represent the share of net loss of BCE that is not attributable to the Company.

Comparison of the Fiscal Year Ended June 30, 2022 versus the Fiscal Year Ended June 30, 2021

Combined Results of Operations

The table below sets forth, for the periods presented, certain historical financial information.


	Years Ended June 30,						Change
	2022			2021			Amount			Percentage
Revenues	$	653,490		$	81,812		$	571,678			NM
Direct operating expenses		417,301			96,236			321,065			NM
Selling, general and administrative expenses		167,132			136,597			30,535			22%
Depreciation and amortization		69,534			71,576			(2,042	)		(3)%
Restructuring charges		5,171			14,691			(9,520	)		(65)%

Operating loss		(5,648	)		(237,288	)		231,640			98%
Other income (expense):
Interest expense, net		(45,960	)		(27,293	)		(18,667	)		(68)%
Loss on extinguishment of debt		(35,629	)		—			(35,629	)		NM
Other income (expense), net		(49,033	)		50,622			(99,655	)		NM

Loss from operations before income taxes		(136,270	)		(213,959	)		77,689			36%
Income tax (expense) benefit		70			(5,349	)		5,419			NM

Net loss		(136,200	)		(219,308	)		83,108			38%
Less: Net loss attributable to nonredeemable noncontrolling interests		(2,864	)		(694	)		(2,170	)		NM

Net loss attributable to Spinco’s stockholders	$	(133,336	)	$	(218,614	)	$	85,278			39%

NM (not meaningful) — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.

The Company’s operating results were materially impacted during Fiscal Years 2022 and 2021 by the COVID-19 pandemic and government actions taken in response. See “— Business Overview — Impact of the COVID-19 Pandemic on Our Business” for more information.

Revenues

Revenues increased $571,678 from $81,812 for Fiscal Year 2021 to $653,490 for Fiscal Year 2022. The net increase was attributable to the following:


Increase in event-related revenues, as discussed below	$	239,574
Increase in revenues from signage, suite licenses, and sales of food, beverage and merchandise subject to revenue or profit sharing with MSG Sports pursuant to the Arena License Agreements		130,238
Increase in revenues from the shortened Christmas Spectacular 2021 holiday season run as compared to the cancellation of the 2020 production in Fiscal Year 2021 as a result of the COVID-19 pandemic		55,454
Increase in arena license fees from MSG Sports pursuant to the Arena License Agreements, as discussed below		46,727
Increase in suite license fee revenues, due to the return of live events at the Company’s venues during Fiscal Year 2022 as compared to limited live events held in Fiscal Year 2021 due to the COVID-19 pandemic		34,904
Increase in venue-related signage and sponsorship revenues primarily due to the return of live events at the Company’s venues during Fiscal Year 2022 as compared to limited live events held in Fiscal Year 2021 due to the COVID-19 pandemic		29,940
Increase in revenues from the Boston Calling Music Festival as compared to the cancellation of the festival in Fiscal Year 2021 as a result of the COVID-19 pandemic		18,313
Other net increases		16,528

	$	571,678

The increase in event-related revenues reflects (i) higher revenues from concerts of $179,892 during Fiscal Year 2022 and (ii) higher revenues from live entertainment and other sporting events of $59,682 during Fiscal Year 2022. These increases were due to the return of live events to the Company’s venues during Fiscal Year 2022 as compared to limited live events held in Fiscal Year 2021 due to the COVID-19 pandemic. See “— Business Overview — Impact of the COVID-19 Pandemic on Our Business” for more information.

In Fiscal Year 2022, the Knicks and Rangers played a combined 98 pre-season, regular season, and post-season games at The Garden without any capacity restrictions. As a result, the Company recorded $68,072 in arena license fees under the Arena License Agreements for Fiscal Year 2022. In Fiscal Year 2021, capacity restrictions, use limitations and social distancing requirements were in place for the entirety of the Knicks and Rangers 2020-21 regular seasons, which materially impacted the payments we received under the Arena License Agreements during Fiscal Year 2021.

Direct operating expenses

Direct operating expenses increased $321,065 from $96,236 for Fiscal Year 2021 to $417,301 for Fiscal Year 2022. The net increase was attributable to the following:


Increase in event-related direct operating expenses, as discussed below	$	125,931
Increase in direct operating expenses associated with revenue or profit sharing expense from signage, suite licenses and sales of food, beverage and merchandise with MSG Sports pursuant to the Arena License Agreements		94,226
Increase in direct operating expenses from the shortened Christmas Spectacular 2021 holiday season run as compared to the cancellation of the 2020 production in Fiscal Year 2021 as a result of the COVID-19 pandemic		39,029
Increase in direct operating expenses associated with the Boston Calling Music Festival as compared to the cancellation of the festival in Fiscal Year 2021 as a result of the COVID-19 pandemic		19,003
Increase in direct operating expenses associated with the Arena License Agreements		17,645
Increase in direct operating expenses associated with venue operating costs		15,445
Other net increases		9,786

	$	321,065

For Fiscal Year 2022, the increase in event-related direct operating expenses reflects (i) higher direct operating expenses from concerts of $91,938, and (ii) higher direct operating expenses from live entertainment and other sporting events of $33,993, primarily due to the return of events to the Company’s venues during Fiscal Year 2022 as compared to limited live events in Fiscal Year 2021 due to the COVID-19 pandemic.

Selling, general and administrative expenses

SG&A expenses for Fiscal Year 2022 increased $30,535, or 22%, to $167,132 as compared to Fiscal Year 2021 primarily due to a net increase in employee compensation and related benefits, which included the impact of severance-related costs attributable to separation agreements in Fiscal Year 2022.

Depreciation and amortization

Depreciation and amortization for Fiscal Year 2022 decreased $2,042, or 3%, to $69,534 as compared to Fiscal Year 2021 primarily due to certain assets in The Garden being fully depreciated and amortized.

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Restructuring charges

Restructuring charges for Fiscal Year 2022 were $5,171 as compared to $14,691 in Fiscal Year 2021, a decrease of $9,520, or 65%. The Company’s operations have been disrupted since March 2020 due to the COVID-19 pandemic. As a direct response to this disruption, the Company implemented cost savings initiatives to reduce labor costs. For Fiscal Year 2021, the Company recorded total restructuring charges of $14,691 related to termination benefits provided to employees associated with a full-time workforce reduction in August 2020 and November 2020. For Fiscal Year 2022, the Company underwent additional organizational changes to further streamline operations related to the elimination of certain executive and management level functions, resulting in additional restructuring charges but of a lesser amount.

Operating loss

Operating loss for Fiscal Year 2022 improved $231,640 to $5,648 as compared to an operating loss of $237,288 in Fiscal Year 2021. The improvement in operating loss was primarily due to the increase in revenues, and, to a lesser extent, the decrease in restructuring charges, offset by higher direct operating expenses and SG&A expenses.

Interest expense, net

Interest expense, net for Fiscal Year 2022 was $45,960 as compared to $27,293 in Fiscal Year 2021, an increase of $18,667, or 68%. The increase in net interest expense in Fiscal Year 2022 was primarily due to an increase in interest expense of $18,787 on the MSG National Properties, LLC facilities as a result of the balance of MSG National Properties’ prior term loan facility being outstanding for almost the full year of Fiscal Year 2022 (refinanced on June 30, 2022) compared to a partial year for Fiscal Year 2021, given the Company entered into the prior term loan facility on November 12, 2020. The increase in interest expense was partially offset by an increase in interest income from a related party.

Loss on extinguishment of debt

For Fiscal Year 2022, the Company incurred a loss on extinguishment of debt of $35,629 in connection with the extinguishment of MSG National Properties’ prior term loan facility.

Other income (expense), net

For Fiscal Year 2022, net other expense was $49,033 as compared to net other income of $50,622 for Fiscal Year 2021, a decrease of $99,655. The decrease was primarily due to an increase in unrealized losses of $62,155 and $41,192 associated with the investments in DraftKings Inc. (“DraftKings”) and Townsquare Media, Inc. (“Townsquare”), respectively, partially offset by (i) the absence of a $2,327 realized loss on the Company’s sale of investments in DraftKings in Fiscal Year 2021 and (ii) a $1,073 decrease in other pension costs.

Income taxes

Income tax benefit for Fiscal Year 2022 of $70 differs from income tax benefit derived from applying the statutory federal rate of 21% to the pretax loss primarily due to (i) an increase in the valuation allowance of $31,679 and (ii) tax expense of $8,125 related to nondeductible officers’ compensation, partially offset by state income tax benefit of $12,141.

Income tax expense for Fiscal Year 2021 of $5,349 differs from income tax benefit derived from applying the statutory federal rate of 21% to the pretax loss primarily due to (i) an increase in the valuation allowance of $70,501 and (ii) tax expense of $5,209 related to nondeductible officers’ compensation, partially offset by (i) state income tax benefit of $22,882 and (ii) tax benefit of $2,545 related to a change in the estimated applicable tax rate used to determine deferred taxes.

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See Note 18, Income Taxes to the Audited Combined Annual Financial Statements included elsewhere in this information statement for further details on the components of income tax and a reconciliation of the statutory federal rate to the effective tax rate.

The following is a reconciliation of operating loss to adjusted operating income (loss):


	Years Ended June 30,						Change
	2022			2021			Amount		Percentage
Operating loss	$	(5,648	)	$	(237,288	)	$	231,640		98%
Non-cash portion of arena license fees from MSG Sports ^(a)		(27,754	)		(13,026	)
Share-based compensation expense		37,746			40,663
Depreciation and amortization		69,534			71,576
Restructuring charges		5,171			14,691
Remeasurement of deferred compensation plan liabilities		46			—

Adjusted operating income (loss)	$	79,095		$	(123,384	)	$	202,479		NM

NM (not meaningful) — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.

^(a)

This adjustment represents the non-cash portion of operating lease revenue related to the Company’s Arena License Agreements with MSG Sports. Pursuant to GAAP, recognition of operating lease revenue is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement. As a result, operating lease revenue is comprised of a contractual cash component plus or minus a non-cash component for each period presented. Operating income on a GAAP basis includes lease income of (i) $40,319 and $8,319 collected in cash for Fiscal Years 2022 and 2021, respectively, and (ii) a non-cash portion of $27,754 and $13,026 for Fiscal Years 2022 and 2021, respectively.

Net loss attributable to nonredeemable noncontrolling interests

For Fiscal Year 2022, the Company posted a net loss attributable to nonredeemable noncontrolling interests of $2,864 in comparison to a net loss attributable to nonredeemable noncontrolling interests of $694 for Fiscal Year 2021. These amounts represent the share of net loss of BCE that is not attributable to the Company.

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Comparison of the Fiscal Year Ended June 30, 2021 versus the Fiscal Year Ended June 30, 2020

See below for a discussion of the comparison of Fiscal Year 2021 versus Fiscal Year 2020 for the combined Company.

Combined Results of Operations

The table below sets forth, for the periods presented, certain historical financial information.


	Years Ended June 30,						Change
	2021			2020			Amount			Percentage
Revenues	$	81,812		$	584,601		$	(502,789	)		(86)%
Direct operating expenses		96,236			380,526			(284,290	)		(75)%
Selling, general and administrative expenses		136,597			137,935			(1,338	)		(1)%
Depreciation and amortization		71,576			81,591			(10,015	)		(12)%
Gain on disposal of assets held for sale and associated settlements		—			(240,783	)		240,783			100%
Restructuring charges		14,691			—			14,691			NM

Operating income (loss)		(237,288	)		225,332			(462,620	)		NM
Other income (expense):
Interest expense, net		(27,293	)		8,380			(35,673	)		NM
Other income, net		50,622			37,129			13,493			36%

Income (loss) from operations before income taxes		(213,959	)		270,841			(484,800	)		NM
Income tax expense		(5,349	)		(100,182	)		94,833			95%

Net income (loss)		(219,308	)		170,659			(389,967	)		NM
Less: Net loss attributable to nonredeemable noncontrolling interests		(694	)		(1,071	)		377			35%

Net income (loss) attributable to Spinco’s stockholders	$	(218,614	)	$	171,730		$	(390,344	)		NM

NM (not meaningful) — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.

Revenues

Revenues for Fiscal Year 2021 decreased $502,789, or 86%, to $81,812 as compared to Fiscal Year 2020. The net decrease was attributable to the following:


Decrease in event-related revenues from concerts, as discussed below	$	(212,899	)
Decrease in revenues from the Christmas Spectacular due to the cancellation of the 2020 holiday season production as a result of the COVID-19 pandemic		(128,488	)
Decrease in suite license fee revenues due to the government-mandated closures and restrictions on the use of our venues beginning in March 2020 as a result of the COVID-19 pandemic		(85,900	)
Decrease in venue-related signage and sponsorship revenues as well as the impact of government-mandated closures and restrictions on the use of our venues beginning in March 2020 as a result of the COVID-19 pandemic		(65,196	)
Absence of revenues from the Forum due to its disposition in May 2020		(45,719	)
Increase in arena license fees from MSG Sports pursuant to the Arena License Agreements, as discussed below		21,345
Increase in revenues from sponsorship sales and service representation agreements with MSG Sports, as discussed below		11,280
Other net increases		2,788

	$	(502,789	)

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The decrease in event-related revenues reflects (i) lower revenues from concerts of $158,580 during Fiscal Year 2021 and (ii) lower revenues from live entertainment and other sporting events of $54,319 during Fiscal Year 2021. Both of these declines were due to government-mandated closures and restrictions on the use of our venues beginning in March 2020 as a result of the COVID-19 pandemic. See “— Business Overview — Impact of the COVID-19 Pandemic on Our Business ” for more information.

The arena license fee revenues from MSG Sports in Fiscal Year 2021 were due to The Garden reopening for the Knicks games in December 2020 and the Rangers games in January 2021 with limited or no fans. There were no arena license fees recorded prior to the 2020 Entertainment Distribution.

The increase in revenues from the Company’s sponsorship sales and service representation agreements and Arena License Agreements with MSG Sports reflects the impact of entering into these agreements in connection with, and effective as of, the 2020 Entertainment Distribution.

Direct operating expenses

Direct operating expenses for Fiscal Year 2021 decreased $284,290, or 75%, to $96,236 as compared to Fiscal Year 2020. The net decrease was attributable to the following:


Decrease in event-related direct operating expenses from (i) concerts of $85,449 during Fiscal Year 2021 and (ii) live entertainment and other sporting events of $39,057, both due to government-mandated closures and restrictions on the use of our venues beginning in March 2020 as a result of the COVID-19 pandemic	$	(124,506	)
Decrease in direct operating expenses associated with suite license operations primarily due to the impact of lower revenue sharing expenses with MSG Sports corresponding to the lower suite revenue during Fiscal Year 2020 due to government-mandated closures and restrictions on the use of our venues beginning in March 2020 as a result of the COVID-19 pandemic		(58,096	)
Decrease in direct operating expenses associated with venue-related signage and sponsorship primarily due to the impact of lower revenue sharing expense with MSG Sports of $52,052		(53,392	)
Decrease in direct operating expenses associated with the Christmas Spectacular due to the cancellation of the 2020 holiday season production as a result of the COVID-19 pandemic		(50,714	)
Decrease in direct operating expenses associated with the Forum due to its disposition in May 2020		(26,576	)
Other net increases, primarily due to the absence of carve-out allocations to MSG Sports related to the 2020 Entertainment Distribution		28,994

	$	(284,290	)

Selling, general and administrative expenses

SG&A expenses for Fiscal Year 2021 decreased $1,338, or 1%, to $136,597 as compared to Fiscal Year 2020. The decrease was primarily due to a net decrease in employee compensation and related benefits as a result of the Company’s full-time workforce reduction in August 2020 as well as other net decreases in professional fees. The decrease was partially offset by an incremental expense for share-based compensation associated with the cancellation of certain awards pursuant to a settlement agreement.

Depreciation and amortization

Depreciation and amortization for Fiscal Year 2021 decreased $10,015, or 12%, to $71,576 as compared to Fiscal Year 2020 primarily due to certain assets in The Garden being fully depreciated and amortized, resulting in a decrease of $3,013, and lower depreciation and amortization of $5,827 associated with the Forum as the recording of depreciation ceased on March 24, 2020 when the venue was classified as assets held for sale.

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Gain on disposal of assets held for sale and associated settlements

In May 2020, the Company sold the Forum for cash consideration in the amount of $400,000 (including the settlement of related litigation). In connection with this transaction, the Company recorded a gain of $240,783 in the fourth quarter of Fiscal Year 2020, which included $140,495 attributable to the Forum associated settlement.

Restructuring charges

The Company’s operations were disrupted in March 2020 due to the COVID-19 pandemic and those disruptions have continued. As a direct response to this disruption, in Fiscal Year 2021, the Company implemented cost savings initiatives in order to streamline operations and preserve liquidity. For Fiscal Year 2021, the Company recorded total restructuring charges of $14,691 related to termination benefits provided to employees associated with a full-time workforce reduction in August 2020 and November 2020. No restructuring charges were incurred in Fiscal Year 2020.

Operating income (loss)

Operating income for Fiscal Year 2021 decreased $462,620 to an operating loss of $237,288 as compared to Fiscal Year 2020 primarily due to (i) the decrease in revenues, (ii) the gain on disposal of the Forum in Inglewood and associated settlement recorded in Fiscal Year 2020, and (iii) restructuring charges incurred in Fiscal Year 2021 as a response to the disruptions caused by the COVID-19 pandemic. The decrease in operating income was partially offset by the decrease in direct operating expenses.

Interest expense, net

Net interest expense for Fiscal Year 2021 increased $35,673 to $27,293 as compared to net interest income of $8,380 for Fiscal Year 2020. The increase was primarily due to (i) higher interest expense in Fiscal Year 2021 associated with the National Properties Term Loan Facility (as defined below) of $33,481, which was entered into in November 2020, (ii) lower interest income of $2,363 mainly due to the absence of $1,400 of interest income earned on a loan extended to Azoff Music as compared to Fiscal Year 2020 since the loan was repaid during the second quarter of Fiscal Year 2020, and (iii) lower interest income of $910 earned on the Eden Loan Agreement, as defined below.

Other income, net

Other income, net for Fiscal Year 2021 increased by $13,493 to $50,622 as compared to $37,129 for Fiscal Year 2020. The increase was primarily due to the net realized and unrealized gains of $13,550 recognized on the Company’s investments in DraftKings and Townsquare.

Income taxes

Income tax expense for Fiscal Year 2021 of $5,349 differs from income tax benefit derived from applying the statutory federal rate of 21% to the pretax loss primarily due to (i) an increase in the valuation allowance of $70,501 and (ii) tax expense of $5,209 related to nondeductible officers’ compensation, offset partially by (i) state income tax benefit of $22,882 and (ii) tax benefit of $2,545 related to a change in the estimated applicable tax rate used to determine deferred taxes.

Income tax expense for Fiscal Year 2020 of $100,182 differs from income tax expense derived from applying the statutory federal rate of 21% to the pretax income primarily due to (i) state income tax expense of $33,345, (ii) tax expense of $7,120 related to nondeductible transaction costs associated with the 2020 Entertainment Distribution, and (iii) tax expense of $4,407 related to nondeductible officers’ compensation, partially offset by an excess tax benefit related to share-based payment awards of $2,322.

105

Adjusted operating income (loss)

The following is a reconciliation of operating income (loss) to adjusted operating income (loss):


	Years Ended June 30,						Change
	2021			2020			Amount			Percentage
Operating income (loss)	$	(237,288	)	$	225,332		$	(462,620	)		(205	)%
Non-cash portion of arena license fees from MSG Sports ^(a)		(13,026	)		—
Share-based compensation expense		40,663			26,110
Depreciation and amortization		71,576			81,591
Restructuring charges		14,691			—
Gain on disposal of assets held for sale, including legal settlement		—			(240,783	)

Adjusted operating income (loss)	$	(123,384	)	$	92,250		$	(215,634	)		(234	)%

^(a)

This adjustment represents the non-cash portion of operating lease revenue related to the Company’s Arena License Agreements with MSG Sports. Pursuant to GAAP, recognition of operating lease revenue is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement. As a result, operating lease revenue is comprised of a contractual cash component plus or minus a non-cash component for each period presented. Operating income on a GAAP basis includes lease income of (i) $8,319 and nil collected in cash for Fiscal Years 2021 and 2020, respectively, and (ii) a non-cash portion of $13,026 and nil for Fiscal Years 2021 and 2020, respectively.

Net loss attributable to nonredeemable noncontrolling interests

For Fiscal Year 2021, the Company recorded a net loss attributable to nonredeemable noncontrolling interests of $694 as compared to $1,071 for Fiscal Year 2020. These amounts represent the share of net loss of BCE that is not attributable to the Company.

Liquidity and Capital Resources

Overview

Impact of the COVID-19 Pandemic

106

As a result of government-mandated assembly limitations and closures, all of our venues were closed beginning in March 2020. Use of The Garden resumed for Knicks and Rangers home games without fans in December 2020 and January 2021, respectively, and was available at 10% seating capacity from February through May 2021 subject to certain safety protocols and social distancing. Beginning in May 2021, all of our New York venues were permitted to host guests at full capacity, subject to certain restrictions, and effective June 2021, The Chicago Theatre was permitted to host events without restrictions. Guests of our Chicago and New York venues were also subject to certain vaccination requirements until February and March 2022, respectively. As a result, our venues no longer require guests to provide proof of COVID-19 vaccination before entering (although specific performers may require enhanced protocols).

It is unclear to what extent COVID-19 concerns, including with respect to new variants, could result in new government or league-mandated capacity restrictions or vaccination/mask requirements or impact the use of and/or demand for our 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.

For more information about the risks to the Company as a result of the COVID-19 pandemic and its impact on our operating results, see “Risk Factors” included in this information statement for further details.

Sources of Liquidity

Our primary sources of liquidity are cash and cash equivalents, cash flows from the operations of our businesses and available borrowing capacity under the National Properties Credit Agreement (as defined below). Our principal uses of cash include working capital-related items (including funding our operations), capital spending, and debt service. Our decisions as to the use of our 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. To the extent that we desire to access alternative sources of funding through the capital and credit markets, challenging U.S. and global economic and market conditions could adversely impact our ability to do so at that time.

We regularly monitor and assess our ability to meet our net funding and investing requirements. As of December 31, 2022, the Company’s unrestricted cash and cash equivalents balance was $153,496 as compared to $58,102 as of June 30, 2022. As of December 31, 2022 the Company’s restricted cash and cash equivalents

107

balance was $250 as compared to $4,471 as of June 30, 2022. The principal balance of the Company’s total debt outstanding as of December 31, 2022 was $679,100, compared to $679,737 as of June 30, 2022. We believe we have sufficient liquidity from cash and cash equivalents as of December 31, 2022 and future cash flows from operations (including savings generated by the Company’s cost reduction program) to fund our operations, and service the National Properties Credit Agreement for the foreseeable future.

See Note 10, Credit Facilities to the Unaudited Combined Interim Financial Statements, and Note 14, Credit Facilities to the Audited Combined Annual Financial Statements included elsewhere in this information statement for a discussion of the National Properties Facilities.

Financing Agreements

National Properties Credit Facilities

On June 30, 2022, MSG National Properties, LLC (“MSG National Properties”), MSG Entertainment Group, LLC (“MSG Entertainment Group”) and certain subsidiaries of MSG National Properties entered into a credit agreement with JP Morgan Chase Bank, N.A., as administrative agent and the lenders and L/C issuers party thereto (the “National Properties Credit Agreement”), providing for a five-year, $650,000 senior secured term loan facility (the “National Properties Term Loan Facility”) and a five-year, $100,000 revolving credit facility (the “National Properties Revolving Credit Facility” and, together with the National Properties Term Loan Facility, the “National Properties Facilities”).

Up to $25,000 of the National Properties Revolving Credit Facility is available for the issuance of letters of credit. As of December 31, 2022, outstanding letters of credit were $7,860 and the remaining balance available under the National Properties Revolving Credit Facility was $63,040. As of June 30, 2022, outstanding letters of credit were $6,631 and the remaining balance available under the National Properties Revolving Credit Facility was $70,900.

The principal obligations under the National Properties Term Loan Facility amortizes quarterly in accordance with its terms beginning March 31, 2023 through March 31, 2027, with the balance due at the maturity of the facility on June 30, 2027. The principal obligations under the National Properties Revolving Credit Facility are due at the maturity of the facility. Under certain circumstances, MSG National Properties is required to make mandatory prepayments on loans outstanding, including prepayments in an amount equal to the net cash proceeds of certain sales of assets or casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights), subject to certain exceptions.

The National Properties Credit Agreement includes financial covenants requiring MSG National Properties and its restricted subsidiaries to maintain a specified minimum liquidity level, a specified minimum debt service coverage ratio and specified maximum total leverage ratio. The minimum liquidity level is set at $50,000, and is tested based on the level of average daily liquidity, consisting of cash and cash equivalents and available revolving commitments, over the last month of each quarter over the life of the National Properties Facilities. The debt service coverage ratio covenant began testing in the fiscal quarter ending December 31, 2022, and is set at a ratio of 2:1 before stepping up to 2.5:1 in the fiscal quarter ending September 30, 2024. The leverage ratio covenant begins testing in the fiscal quarter ending June 30, 2023. It is tested based on the ratio of MSG National Properties and its restricted subsidiaries’ consolidated total indebtedness to adjusted operating income, with an initial maximum ratio of 6:1, stepping down to 5.5:1 in the fiscal quarter ending June 30, 2024 and 4.5:1 in the fiscal quarter ending June 30, 2026. As of December 31, 2022 and June 30, 2022, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Credit Agreement.

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Loans receivable from MSG Entertainment

The Company’s captive insurance entity, Eden Insurance Company, Inc. (“Eden”), entered into a loan agreement with MSG Entertainment (the “Eden Loan Agreement”), under which Eden granted MSG Entertainment an unsecured loan bearing interest at a rate of LIBOR plus 350 basis points with a principal amount not exceeding $60,000. This loan is in the form of a demand promissory note, payable immediately upon order from Eden. As of December 31, 2022, June 30, 2022 and June 30, 2021, Eden had an outstanding loan receivable from MSG Entertainment of $52,513, $56,060 and $57,962, respectively, inclusive of accrued interest. During the six months ended December 31, 2022 and Fiscal Year 2022, Eden declared dividends to MSG Entertainment through a reduction of the loan receivable from MSG Entertainment. During the six months ended December 31, 2021 and Fiscal Year 2021, no interest or principal payments were received by Eden and instead the accrued but unpaid interest was added to the outstanding principal amount of the loan. The cash flows related to this loan receivable are reflected as investing activities, as these balances represent amounts loaned by the Company to MSG Entertainment. The Company recorded related party interest income of $1,804, $1,062, $2,117, $1,888 and $2,798 related to the Eden Loan Agreement during the six months ended December 31, 2022 and 2021, and in Fiscal Years 2022, 2021 and 2020, respectively. See Note 14, Related Party Transactions to the Unaudited Combined Interim Financial Statements, and Note 19, Related Party Transactions to the Audited Combined Annual Financial Statements included elsewhere in this information statement for additional information.

Delayed Draw Term Loan Facility

Prior to or concurrently with the consummation of the Distribution, MSG Entertainment Holdings (referred to as the “DDTL Lender”) is expected to enter into the DDTL Facility with MSG Entertainment (the “DDTL Borrower”). The DDTL Facility is expected to provide for a $65 million senior unsecured delayed draw term loan facility for the DDTL Borrower. The DDTL Facility will mature and any unused commitments thereunder will expire 18 months after the effective date thereof. Borrowings under the DDTL Facility will bear interest at a variable rate equal to either, at the option of the DDTL Borrower, (a) a base rate plus an applicable margin, or (b) Term SOFR plus 0.10%, plus an applicable margin. The applicable margin is expected to be equal to the applicable margin under the National Properties Facilities plus 1.00% per annum. The DDTL Borrower will also be required to pay a commitment fee in respect of the daily unused commitments under the DDTL Facility at a rate equal to the unused commitment fee rate under the National Properties Facilities plus 0.10% per annum. All interest and commitment fees accruing prior to January 1, 2024 will be payable in kind by capitalizing and adding such interest or fee to the outstanding principal amount of the loans. All interest and commitment fees accruing on and after January 1, 2024 will be payable in cash or by transferring to the DDTL Lender shares of Class A Common Stock of the Company as described below. Subject to customary borrowing conditions, the DDTL Facility may be drawn in up to six separate borrowings of $5 million or more. The DDTL facility is prepayable at any time without penalty, and amounts repaid on the DDTL Facility may not be reborrowed. The DDTL Borrower will have the option to make any payments of principal, interest or fees under the DDTL Facility either in the form of cash or by delivering to the DDTL Lender shares of the Company’s Class A Common Stock. If the DDTL Borrower elects to make any payment in the form of the Company’s Class A Common Stock, the amount of such payment shall be calculated based on the dollar volume-weighted average price for the Class A Common Stock for the twenty trading days ending on the day on which the DDTL Borrower makes such election. The DDTL Borrower shall only be permitted to use the proceeds of the DDTL Facility (i) for funding costs associated with the MSG Sphere initiative and (ii) in connection with refinancing of the indebtedness under that certain amended and restated credit agreement, dated as of October 11, 2019, among MSGN Holdings, L.P., as borrower, the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, as amended, modified, restated or supplemented from time to time (the “MSG Networks Credit Facility”).

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Contractual Obligations

As of June 30, 2022, the approximate future payments under our contractual obligations are as follows:


	Payments Due by Period ^(c)
	Total		Year 1		Years 2-3		Years 4-5		More Than 5 Years
Leases ^(a)	$	404,502	$	40,730	$	75,998	$	34,075	$	253,699
Debt repayments ^(b)		679,737		8,762		32,500		638,475		—

	$	1,084,239	$	49,492	$	108,498	$	672,550	$	253,699

^(a)

Includes contractually obligated minimum lease payments for operating leases having an initial noncancellable term in excess of one year for the Company’s venues, including various corporate offices. These commitments are presented exclusive of the imputed interest used to reflect the payment’s present value. See Note 10, Leases to the Audited Combined Annual Financial Statements included elsewhere in this information statement for more information.

^(b)

See Note 14, Credit Facilities to the Audited Combined Annual Financial, and Note 10, to the Unaudited Combined Interim Financial Statements included elsewhere in this information statement for more information regarding the principal repayments required under the National Properties Credit Agreement.

^(c)

Pension obligations have been excluded from the table above as the timing of the future cash payments is uncertain. See Note 15, Pension Plans and Other Postretirement Benefit Plans to the Audited Combined Annual Financial Statements, and Note 11, Pension Plans and Other Postretirement Benefit Plans to the Unaudited Combined Interim Financial Statements included elsewhere in this information statement for more information on the future funding requirements under our pension obligations.

As of December 31, 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 9, Commitments and Contingencies to the Unaudited Combined Interim Financial Statements, and Note 13, Commitments and Contingencies to the Audited Combined Annual Financial Statements included elsewhere in this information statement for further details on the timing and amount of payments under various agreements.

Cash Flow Discussion

As of December 31, 2022 and June 30, 2022, 2021 and 2020, cash, cash equivalents and restricted cash totaled $153,746, $62,573, $318,069 and $3,038, respectively. The following table summarizes the Company’s cash flow activities for the six months ended December 31, 2022 and 2021, and Fiscal Years 2022, 2021 and 2020:


	Six Months Ended December 31,						Years Ended June 30,
	2022			2021			2022			2021			2020
Net income (loss)	$	78,807		$	(58,369	)	$	(136,200	)	$	(219,308	)	$	170,659
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities		53,200			80,574			209,669			65,952			1,861
Changes in working capital assets and liabilities		(62,671	)		35,972			21,882			5,238			(140,992	)

Net cash provided by (used in) operating activities	$	69,336		$	58,177		$	95,351		$	(148,118	)	$	31,528
Net cash provided by (used in) investing activities		22,390			(2,791	)		45,440			(10,339	)		276,388
Net cash provided by (used in) financing activities		(553	)		(141,696	)		(396,287	)		473,488			(315,379	)

Net increase (decrease) in cash, cash equivalents and restricted cash	$	91,173		$	(86,310	)	$	(255,496	)	$	315,031		$	(7,463	)

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Operating Activities

Net cash provided by operating activities for the six months ended December 31, 2022 increased by $11,159 to $69,336 as compared to the prior year period, primarily due to the increase in net income, partially offset by (i) changes in working capital assets and liabilities, which included a decrease in accounts payable, accrued and other current and non-current liabilities, a decrease in deferred revenue associated with customers’ advanced payments, a decrease in accounts receivable, net, and an increase in related party receivables, net of payables, (ii) a decrease in net unrealized loss on equity investments with readily determinable fair value, (iii) lower share-based compensation expense, and (iv) gains, net on dispositions recognized in the current year period.

Net cash provided by operating activities for Fiscal Year 2022 increased by $243,469 to $95,351 as compared to Fiscal Year 2021 primarily due to higher positive adjustments in reconciling net income (loss) to net cash provided by (used in) operating activities, which include (i) the add back of net unrealized loss on equity investments with readily determinable fair value in Fiscal Year 2022 compared to an unrealized gain in Fiscal Year 2021, (ii) the add back of the loss on extinguishment of debt in connection with the extinguishment of MSG National Properties’ prior term loan facility in Fiscal Year 2022, and (iii) a lower net loss in Fiscal Year 2022 compared to Fiscal Year 2021.

Net cash provided by operating activities for Fiscal Year 2021 decreased by $179,646 to net cash used in operating activities of $148,118 as compared to Fiscal Year 2020 primarily due to (i) a net loss in Fiscal Year 2021 compared to net income in Fiscal Year 2020 and (ii) a higher net unrealized gain on equity investments with readily determinable fair value in Fiscal Year 2021 compared to Fiscal Year 2020, partially offset by the gain on the sale of the Forum in Fiscal Year 2020.

Investing Activities

Net cash provided by investing activities for the six months ended December 31, 2022 increased by $25,181 to $22,390 as compared to the prior year period primarily due to (i) proceeds received from the dispositions of BCE and the corporate aircraft and (ii) proceeds received from the sale of investments, partially offset by the absence of proceeds received from a related party loan receivable in the current year period.

Net cash provided by investing activities for Fiscal Year 2022 increased by $55,779 to $45,440 as compared to Fiscal Year 2021 primarily due to higher proceeds received from related party loans in Fiscal Year 2022 and lower amounts loaned to a related party in Fiscal Year 2022, partially offset by the absence of proceeds from sale of securities investments in Fiscal Year 2022.

Net cash used in investing activities for Fiscal Year 2021 decreased by $286,727 to $10,339 as compared to Fiscal Year 2020 primarily due to (i) proceeds received in Fiscal Year 2020 from the sale of Forum, (ii) proceeds from a loan receivable in Fiscal Year 2020, and (iii) an increase in loans to related parties and decrease in repayments from related parties in Fiscal Year 2021 compared to Fiscal Year 2020, partially offset by a decrease in capital expenditures.

Financing Activities

Net cash provided by financing activities for the six months ended December 31, 2022 increased by $141,143 to $553 as compared to the prior year period primarily due to lower net transfers to MSG Entertainment and MSG Entertainment’s subsidiaries in the current year period as compared to the prior year period.

Net cash used in financing activities for Fiscal Year 2022 increased by $869,775 to $396,287 as compared to Fiscal Year 2021 primarily due to (i) higher principal repayments for the National Properties Term Loan Facility in Fiscal Year 2022 and (ii) higher net transfers to MSG Entertainment and MSG Entertainment’s subsidiaries in Fiscal Year 2022 as compared to Fiscal Year 2021.

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Net cash provided by financing activities for Fiscal Year 2021 increased by $788,867 to $473,488 as compared to Fiscal Year 2020 primarily due to (i) proceeds received in Fiscal Year 2021 from the National Properties Term Loan Facility and (ii) lower net transfers to MSG Entertainment and MSG Entertainment’s subsidiaries.

Seasonality of Our Business

The revenues the Company earns from the Christmas Spectacular and arena license fees from MSG Sports in connection with the Knicks’ and Rangers’ use of The Garden generally means the Company earns a disproportionate share of its revenues and operating income in the second and third quarters of the Company’s fiscal year, with the first fiscal quarter being disproportionally lower.

Recently Issued Accounting Pronouncements and Critical Accounting Estimates

Recently Issued and Adopted Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies, to the Audited Combined Annual Financial Statements, and Note 2, Summary of Significant Accounting Policies, to the Unaudited Combined Interim Financial Statements included elsewhere in this information statement for discussion of recently issued accounting pronouncements.

Critical Accounting Estimates

Critical accounting estimates are those that management believes are the most important to the portrayal of our financial condition and results and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain, especially in light of the current economic environment due to the COVID-19 pandemic. Judgments and uncertainties may result in materially different amounts being reported under different conditions or using different assumptions. In addition to the critical accounting estimates disclosed below, refer to the section above entitled Proposed Distribution and Basis of Presentation for further details on corporate allocations recorded in the combined financial statements.

The preparation of the Company’s combined 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. Management believes its use of estimates in the combined financial statements to be reasonable. The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:

Revenue Recognition — Arrangements with Multiple Performance Obligations

The Company enters into arrangements with multiple performance obligations, such as multi-year sponsorship agreements which may derive revenues for both the Company as well as MSG Sports within a single arrangement. The Company also derives revenue from similar types of arrangements which are entered into by MSG Sports. Payment terms for such arrangements can vary by contract, but payments are generally due in installments throughout the contractual term. The performance obligations included in each sponsorship agreement vary and may include advertising and other benefits such as, but not limited to, signage at The Garden and the Company’s other venues, digital advertising, and event or property specific advertising, as well as non-advertising benefits such as suite licenses and event tickets. To the extent the Company’s multi-year arrangements provide for performance obligations that are consistent over the multi-year contractual term, such performance obligations generally meet the definition of a series as provided for under the accounting guidance. If performance obligations are concluded to meet the definition of a series, the contractual fees for all years during the contract term are aggregated and the related revenue is recognized proportionately as the underlying performance obligations are satisfied.

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The timing of revenue recognition for each performance obligation is dependent upon the facts and circumstances surrounding the Company’s satisfaction of its respective performance obligation. The Company allocates the transaction price for such arrangements to each performance obligation within the arrangement based on the estimated relative standalone selling price of the performance obligation. The Company’s process for determining its estimated standalone selling prices involves management’s judgment and considers multiple factors including company specific and market specific factors that may vary depending upon the unique facts and circumstances related to each performance obligation. Key factors considered by the Company in developing an estimated standalone selling price for its performance obligations include, but are not limited to, prices charged for similar performance obligations, the Company’s ongoing pricing strategy and policies, and consideration of pricing of similar performance obligations sold in other arrangements with multiple performance obligations.

The Company may incur costs such as commissions to obtain its multi-year sponsorship agreements. The Company assesses such costs for capitalization on a contract by contract basis. To the extent costs are capitalized, the Company estimates the useful life of the related contract asset which may be the underlying contract term or the estimated customer life depending on the facts and circumstances surrounding the contract. The contract asset is amortized over the estimated useful life.

Impairment of Long-Lived and Indefinite-Lived Assets

The Company’s long-lived and indefinite-lived assets accounted for approximately 67% and 72% of the Company’s combined total assets as of December 31, 2022 and June 30, 2022, respectively, and consisted of the following:


	December 31, 2022		June 30, 2022
Goodwill	$	69,041	$	69,041
Indefinite-lived intangible assets		63,801		63,801
Amortizable intangible assets, net of accumulated amortization		—		1,638
Property and equipment, net		649,962		696,079
Right-of-use lease assets		255,024		271,154

	$	1,037,828	$	1,101,713

In assessing the recoverability of the Company’s long-lived and indefinite-lived assets when there is an indicator of potential impairment, the Company must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets. These estimates and assumptions could have a significant impact on whether an impairment charge is recognized as well as the magnitude of any such charge. Fair value estimates are made at a specific point in time, based on relevant information. These estimates are subjective in nature and involve significant uncertainties and judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. If these estimates or material related assumptions change in the future, the Company may be required to record impairment charges related to its long-lived and/or indefinite-lived assets.

Goodwill

Goodwill is tested annually for impairment as of August 31 and at any time upon the occurrence of certain events or substantive changes in circumstances. The Company performs its goodwill impairment test at the reporting unit level. As of December 31, 2022, the Company has one reportable segment, consistent with the way management makes decisions and allocates resources to the business.

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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 would not need to perform a quantitative 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, the first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill.

The estimate of the fair value of the Company’s reporting unit is primarily determined using discounted cash flows, comparable market transactions or other acceptable valuation techniques, including the cost approach. These valuations are based on estimates and assumptions including projected future cash flows, discount rates, cost-based assumptions, determination of appropriate market comparables and the determination of whether a premium or discount should be applied to comparab