Madison Square Garden Entertainment Corp 10-Q for FY2024 Q1

Madison Square Garden Entertainment Corp. (MSGE)

10-Q 2023-11-07 For: 2023-09-30

Added on April 11, 2026

About this 10-Q

Madison Square Garden Entertainment Corp filed this 10-Q on November 7, 2023, covering the quarter ended September 30, 2023 (FY2024 Q1).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $142.21M; down 2.9% from $146.45M a year earlier
Net loss: $50.67M; compared with a net loss of $17.9M a year earlier
Diluted EPS: -$1.00; compared with -$0.35 a year earlier

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Delaware						92-0318813
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	MSGE	New York Stock Exchange


Class A Common Stock par value $0.01 per share	—	41,103,124
Class B Common Stock par value $0.01 per share	—	6,866,754


			Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Condensed Consolidated Balance Sheets as of September 30, 2023 and June 30, 2023 (unaudited)			2

Condensed Consolidated and Combined Statements of Operations for the three months ended September 30, 2023 and 2022 (unaudited)			3

C ondensed Consolidated and Combined Statement s of Comprehensive Loss for the three months ended September 30 , 2023 and 2022 (unaudited)			4

Condensed Consolidated and Combined Statements of Cash Flows for the three months ended September 30, 2023 and 2022 (unaudited)			5

C ondensed Consolidated and Combined Statement s of (Deficit ) Equity for the three months ended September 30 , 2023 and 202 2 (unaudited)			6

Notes to the C ondensed Consolidated and Combined Financial Statements (unaudited)			7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21

Item 3. Quantitative and Qualitative Disclosures About Market Risk			32

Item 4. Controls and Procedures			32

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			33

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities			33

Item 6. Exhibits			33





	As of
	September 30,		June 30,
	2023		2023

ASSETS
Current Assets:
Cash, cash equivalents, and restricted cash	$	39,516	$	84,355
Accounts receivable, net	100,203		63,898
Related party receivables, current	47,445		69,466
Prepaid expenses and other current assets	96,415		77,562
Total current assets	283,579		295,281
Non-Current Assets:
Property and equipment, net	619,928		628,888
Right-of-use lease assets	229,038		235,790
Goodwill	69,041		69,041
Intangible assets, net	63,801		63,801
Other non-current assets	83,150		108,356
Total assets	$	1,348,537	$	1,401,157
LIABILITIES AND DEFICIT
Current Liabilities:
Accounts payable, accrued and other current liabilities	$	187,187	$	214,725
Related party payables, current	69,914		47,281
Long-term debt, current	20,313		16,250
Operating lease liabilities, current	38,211		36,529
Deferred revenue	289,027		225,855
Total current liabilities	604,652		540,640
Non-Current Liabilities:
Long-term debt, net of deferred financing costs	699,427		630,184
Operating lease liabilities, non-current	213,020		219,955
Deferred tax liabilities, net	22,900		23,518
Other non-current liabilities	43,739		56,332
Total liabilities	1,583,738		1,470,629
Commitments and contingencies (see Note 8)
Deficit:
Class A Common Stock (a)	454		450
Class B Common Stock (b)	69		69
Additional paid-in-capital	17,980		17,727
Treasury stock at cost (4,365 and 840 shares outstanding as of September 30, 2023 and June 30, 2023, respectively)	(140,512)		(25,000)
Accumulated deficit	(79,368)		(28,697)
Accumulated other comprehensive loss	(33,824)		(34,021)
Total deficit	(235,201)		(69,472)


Total liabilities and deficit	$	1,348,537	$	1,401,157


			☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended
	September 30,
	2023		2022
Revenues (a)	$	142,212	$	146,452

Direct operating expenses (a)	(101,677)		(101,662)
Selling, general, and administrative expenses (a)	(48,822)		(40,114)
Depreciation and amortization	(13,585)		(15,985)

Restructuring charges	(11,553)		—
Operating loss	(33,425)		(11,309)

Interest income (a)	851		1,510
Interest expense	(14,287)		(11,427)
Other (expense) income, net	(4,469)		886

Loss from operations before income taxes	(51,330)		(20,340)
Income tax benefit	659		2,066
Net loss	(50,671)		(18,274)
Less: Net loss attributable to nonredeemable noncontrolling interest	—		(372)
Net loss attributable to MSG Entertainment’s stockholders	$	(50,671)	$	(17,902)

Loss per share attributable to MSG Entertainment’s stockholders:
Basic and diluted	$	(1.00)	$	(0.35)

Weighted-average number of shares of common stock:
Basic and diluted (b)	50,437		51,768






	Common Stock		Sphere Entertainment Co. Investment		Additional Paid- Capital		Treasury Stock		Accumulated deficit		Accumulated Other Comprehensive Loss		Total Madison Square Garden Entertainment Corp. Stockholders’ (Deficit) Equity		Nonredeemable Noncontrolling Interest		Total (Deficit) Equity
Balance as of June 30, 2023	$	519	$	—	$	17,727	$	(25,000)	$	(28,697)	$	(34,021)	$	(69,472)	$	—	$	(69,472)
Net loss	—		—		—		—		(50,671)		—		(50,671)		—		(50,671)
Other comprehensive income	—		—		—		—		—		197		197		—		197
Comprehensive loss	—		—		—		—		—		—		(50,474)		—		(50,474)
Share-based compensation	—		—		12,965		—		—		—		12,965		—		12,965
Tax withholding associated with shares issued for share-based compensation	4		—		(11,838)		—		—		—		(11,834)		—		(11,834)
Stock repurchases, inclusive of tax	—		—		(874)		(115,512)		—		—		(116,386)		—		(116,386)
Balance as of September 30, 2023	$	523	$	—	$	17,980	$	(140,512)	$	(79,368)	$	(33,824)	$	(235,201)	$	—	$	(235,201)

Balance as of June 30, 2022	$	—	$	33,265	$	—	$	—	$	—	$	(34,740)	$	(1,475)	$	(114)	$	(1,589)
Net loss	—		(17,902)		—		—		—		—		(17,902)		(372)		(18,274)
Other comprehensive income	—		—		—		—		—		305		305		—		305
Comprehensive loss	—		—		—		—		—		—		(17,597)		(372)		(17,969)
Net increase in Sphere Entertainment Co. Investment	—		109,383		—		—		—		—		109,383		—		109,383
Balance as of September 30, 2022	$	—	$	124,746	$	—	$	—	$	—	$	(34,435)	$	90,311	$	(486)	$	89,825


	As of
	September 30, 2023		June 30, 2023
Receivables from contracts with customers, net (a)	$	101,926	$	69,295
Contract assets, current (b)	$	7,708	$	11,254
Deferred revenue, including non-current portion (c)	$	289,160	$	226,029


	Restructuring Liability
June 30, 2023	$	2,530
Restructuring charges (excluding share-based compensation expense)	7,570
Payments	(1,243)

September 30, 2023	$	8,857


	Interest Payments				Loan Principal Repayments
	Three Months Ended				Three Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
National Properties Facilities	$	13,193	$	2,804	$	—	$	—


	Pension Plans				Postretirement Plan
	Three Months Ended				Three Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Service cost	$	17	$	30	$	6	$	8
Interest cost	1,469		927		24		11
Expected return on plan assets	(1,091)		(1,504)		—		—
Recognized actuarial loss	238		362		—		9
Net periodic (benefit) cost	$	633	$	(185)	$	30	$	28


	Pension Plans and Postretirement Plan
	Three Months Ended
	September 30,
	2023		2022
Balance at beginning of period	$	(34,021)	$	(34,740)
Other comprehensive income:
Amounts reclassified from accumulated other comprehensive loss (a)	238		371
Income tax expense	(41)		(66)
Other comprehensive income, net of income taxes	197		305
Balance at end of period	$	(33,824)	$	(34,435)


	Three Months Ended
	September 30,				Change
	2023		2022		Amount		Percentage
Revenues	$	142,212	$	146,452	$	(4,240)	(3)	%
Direct operating expenses	(101,677)		(101,662)		(15)		—	%
Selling, general, and administrative expenses	(48,822)		(40,114)		(8,708)		22	%
Depreciation and amortization	(13,585)		(15,985)		2,400		(15)	%

Restructuring charges	(11,553)		—		(11,553)		NM
Operating loss	(33,425)		(11,309)		(22,116)		(196)	%

Interest income	851		1,510		(659)		(44)	%
Interest expense	(14,287)		(11,427)		(2,860)		25	%
Other (expense) income, net	(4,469)		886		(5,355)		NM



Loss from operations before income taxes	(51,330)		(20,340)		(30,990)		(152)	%
Income tax benefit	659		2,066		(1,407)		NM
Net loss	(50,671)		(18,274)		(32,397)		(177)	%
Less: Net loss attributable to nonredeemable noncontrolling interest	—		(372)		372		NM
Net loss attributable to MSG Entertainment’s stockholders	$	(50,671)	$	(17,902)	$	(32,769)	(183)	%


	Three Months Ended
	September 30,
	2023		2022
Event-related and entertainment offerings (a)	$	95,764	$	102,790
Sponsorship, signage and suite licenses (b)	43,494		38,393
Other (c)	508		3,115
Total revenues from contracts with customers	139,766		144,298
Revenues from Arena License Agreements, leases and subleases	2,446		2,154
Total revenues	$	142,212	$	146,452


	Three Months Ended
	September 30,
	2023		2022
Ticketing and venue license fee revenues (a)	$	65,166	$	72,132
Sponsorship and signage, suite, and advertising commission revenues (b)	46,565		45,134
Food, beverage and merchandise revenues	26,103		26,303
Other	1,932		729
Total revenues from contracts with customers	139,766		144,298
Revenues from Arena License Agreements, leases and subleases	2,446		2,154
Total revenues	$	142,212	$	146,452


	Three Months Ended
	September 30,
	2023		2022
Unrealized loss — Townsquare	$	(5,449)	$	(2,983)
Unrealized gain — DraftKings	—		2,324
Gain from shares sold — DraftKings	1,548		1,489
Total realized and unrealized (loss) gain	$	(3,901)	$	830
Supplemental information on realized gain:
Shares of common stock sold — DraftKings	425		200
Cash proceeds from common stock sold — DraftKings	$	12,844	$	3,819


	As of
	September 30, 2023		June 30, 2023
Land	$	62,768	$	62,768
Buildings	1,002,699		999,205
Equipment, furniture, and fixtures	353,159		351,596
Leasehold improvements	105,877		105,877
Construction in progress	2,396		2,828
Total Property and equipment	$	1,526,899	$	1,522,274
Less: accumulated depreciation and amortization	(906,971)		(893,386)
Property and equipment, net	$	619,928	$	628,888


	Three Months Ended
	September 30, 2023
Decrease in event-related revenues	$	(8,270)



Increase in revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements	2,716

Other net increases	1,314
	$	(4,240)


	Three Months Ended
	September 30, 2023
Increase in expenses associated with the sharing of economics with MSG Sports pursuant to the Arena License Agreements	$	2,380
Increase in direct operating expenses associated with the Arena License Agreements	507

Decrease in event-related direct operating expenses	(4,737)

Other net increases	1,865
	$	15


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Fair Value of Shares that May Yet Be Purchased Under the Program
July 2023	—	$	—	—	$	225,000,023
August 2023	1,922,750	34.07		1,922,750	159,488,470
September 2023	1,602,564	31.20		1,602,564	109,488,473
	3,525,314	$	32.77	3,525,314	$	109,488,473


EXHIBIT NO.						DESCRIPTION
















10.1						Amendment No. 3 to Credit Agreement, dated as of September 15, 2023, among MSG National Properties, LLC, the guarantors party thereto, the lender party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company ’s Current Report on Form 8-K filed on September 21, 2023).
31.1						Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1						Certification by the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2						Certification by the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101						The following materials from Madison Square Garden Entertainment Corp. Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) condensed consolidated balance sheets, (ii) condensed consolidated and combined statements of operations, (iii) condensed consolidated and combined statements of comprehensive loss, (iv) condensed consolidated and combined statements of cash flows, (v) condensed consolidated and combined statements of (deficit) equity, and (vi) notes to condensed consolidated and combined financial statements.
104						The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 formatted in Inline XBRL and contained in Exhibit 101.


Madison Square Garden Entertainment Corp.

By:	/S/ DAVID F. BYRNES
	Name:	David F. Byrnes
	Title:	Executive Vice President and Chief Financial Officer


/s/ JAMES L. DOLAN
James L. Dolan
Executive Chairman and Chief Executive Officer


/s/ DAVID F. BYRNES
David F. Byrnes
Executive Vice President and Chief Financial Officer