Madison Square Garden Entertainment Corp 10-Q for FY2024 Q2

Madison Square Garden Entertainment Corp. (MSGE)

10-Q 2024-02-07 For: 2023-12-31

Added on April 11, 2026

About this 10-Q

Madison Square Garden Entertainment Corp filed this 10-Q on February 7, 2024, covering the quarter ended December 31, 2023 (FY2024 Q2).

Headline figures

Quarter ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $402.67M; up 13.1% from $355.88M a year earlier
Net income: $125.25M; up 28.8% from net income of $97.26M a year earlier
Diluted EPS: $2.59; up 37.8% from $1.88 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	—	41,121,950
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 December 3 1 , 2023 and June 30, 2023 (unaudited)			2

Condensed Consolidated and Combined Statements of Operations for the three and six months ended December 31 , 2023 and 2022 (unaudited)			3

Condensed Consolidated and Combined Statement s of Comprehensive Income for the three and six months ended December 31 , 2023 and 2022 (unaudited)			4

Condensed Consolidated and Combined Statements of Cash Flows for the six months ended December 31 , 2023 and 2022 (unaudited)			5

Condensed Consolidated and Combined Statement s of (Deficit ) Equity for the three and six months ended December 31 , 2023 and 2022 (unaudited)			6

Notes to the Condensed Consolidated and Combined Financial Statements (unaudited)			8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23

Item 3. Quantitative and Qualitative Disclosures About Market Risk			35

Item 4. Controls and Procedures			35

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			36

Item 6. Exhibits			36





	As of
	December 31,		June 30,
	2023		2023

ASSETS
Current Assets:
Cash, cash equivalents, and restricted cash	$	37,572	$	84,355
Accounts receivable, net	101,955		63,898
Related party receivables, current	41,318		69,466
Prepaid expenses and other current assets	69,408		77,562
Total current assets	250,253		295,281
Non-Current Assets:
Property and equipment, net	626,172		628,888
Right-of-use lease assets	310,219		235,790
Goodwill	69,041		69,041
Intangible assets, net	63,801		63,801
Other non-current assets	100,789		108,356
Total assets	$	1,420,275	$	1,401,157
LIABILITIES AND RETAINED EARNINGS (DEFICIT)
Current Liabilities:
Accounts payable, accrued and other current liabilities	$	197,256	$	214,725
Related party payables, current	52,677		47,281
Long-term debt, current	16,250		16,250
Operating lease liabilities, current	35,539		36,529
Deferred revenue	236,349		225,855
Total current liabilities	538,071		540,640
Non-Current Liabilities:
Long-term debt, net of deferred financing costs	605,685		630,184
Operating lease liabilities, non-current	310,952		219,955
Deferred tax liabilities, net	24,070		23,518
Other non-current liabilities	43,544		56,332
Total liabilities	1,522,322		1,470,629
Commitments and contingencies (see Note 9)
Deficit:
Class A Common Stock (a)	455		450
Class B Common Stock (b)	69		69
Additional paid-in-capital	25,339		17,727
Treasury stock at cost (4,365 and 840 shares outstanding as of December 31, 2023 and June 30, 2023, respectively)	(140,512)		(25,000)
Retained earnings (deficit)	45,881		(28,697)
Accumulated other comprehensive loss	(33,279)		(34,021)
Total deficit	(102,047)		(69,472)


Total liabilities and deficit	$	1,420,275	$	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				Six Months Ended
	December 31,				December 31,
	2023		2022		2023		2022
Revenues (a)	$	402,666	$	355,880	$	544,878	$	502,332

Direct operating expenses (a)	(202,761)		(180,603)		(304,438)		(282,265)
Selling, general, and administrative expenses (a)	(48,389)		(43,301)		(97,211)		(83,415)
Depreciation and amortization	(13,205)		(15,586)		(26,789)		(31,571)
Gains, net on dispositions	—		4,412		—		4,412
Restructuring charges	(888)		(7,359)		(12,441)		(7,359)
Operating income	137,423		113,443		103,999		102,134

Interest income (a)	1,083		1,812		1,935		3,322
Interest expense	(15,049)		(13,205)		(29,336)		(24,632)
Other income (expense), net	2,846		(2,172)		(1,625)		(1,286)

Income from operations before income taxes	126,303		99,878		74,973		79,538
Income tax expense	(1,054)		(2,797)		(395)		(731)
Net income	125,249		97,081		74,578		78,807
Less: Net loss attributable to nonredeemable noncontrolling interest	—		(181)		—		(553)
Net income attributable to MSG Entertainment’s stockholders	$	125,249	$	97,262	$	74,578	$	79,360

Income per share attributable to MSG Entertainment’s stockholders:
Basic	$	2.61	$	1.88	$	1.52	$	1.53
Diluted	$	2.59	$	1.88	$	1.52	$	1.53

Weighted-average number of shares of common stock:
Basic (b)	48,029		51,768		48,955		51,768
Diluted (b)	48,293		51,768		49,168		51,768






	Common Stock		Sphere Entertainment Co. Investment		Additional Paid- Capital		Treasury Stock		Retained Earnings (Deficit)		Accumulated Other Comprehensive Loss		Total Madison Square Garden Entertainment Corp. Stockholders’ (Deficit) Equity		Nonredeemable Noncontrolling Interest		Total (Deficit) Equity
Balance as of September 30, 2023	$	523	$	—	$	17,980	$	(140,512)	$	(79,368)	$	(33,824)	$	(235,201)	$	—	$	(235,201)
Net income	—		—		—		—		125,249		—		125,249		—		125,249
Other comprehensive income	—		—		—		—		—		545		545		—		545
Comprehensive income	—		—		—		—		—		—		125,794		—		125,794
Share-based compensation	—		—		7,773		—		—		—		7,773		—		7,773
Tax withholding associated with shares issued for share-based compensation	1		—		(414)		—		—		—		(413)		—		(413)
Balance as of December 31, 2023	$	524	$	—	$	25,339	$	(140,512)	$	45,881	$	(33,279)	$	(102,047)	$	—	$	(102,047)

Balance as of September 30, 2022	$	—	$	124,746	$	—	$	—	$	—	$	(34,435)	$	90,311	$	(486)	$	89,825
Net income	—		97,262		—		—		—		—		97,262		(181)		97,081
Other comprehensive income	—		—		—		—		—		306		306		—		306
BCE Disposition	—		—		—		—		—		—		—		667		667
Comprehensive income	—		—		—		—		—		—		97,568		486		98,054
Net decrease in Sphere Entertainment Co. Investment	—		(88,990)		—		—		—		—		(88,990)		—		(88,990)
Balance as of December 31, 2022	$	—	$	133,018	$	—	$	—	$	—	$	(34,129)	$	98,889	$	—	$	98,889


	As of
	December 31, 2023		June 30, 2023
Receivables from contracts with customers, net (a)	$	100,831	$	69,295
Contract assets, current (b)	$	7,889	$	11,254
Deferred revenue, including non-current portion (c)	$	236,349	$	226,029


	Restructuring Liability
June 30, 2023	$	2,530
Restructuring charges (excluding share-based compensation expense)	8,458
Payments	(2,476)

December 31, 2023	$	8,512


	Interest Payments				Loan Principal Repayments
	Six Months Ended				Six Months Ended
	December 31,				December 31,
	2023		2022		2023		2022
National Properties Facilities	$	27,424	$	22,410	$	98,225	$	—


	Pension Plans				Postretirement Plan
	Three Months Ended				Three Months Ended
	December 31,				December 31,
	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	662		330		—		9
Net periodic cost (benefit)	$	1,057	$	(217)	$	30	$	28


	Pension Plans and Postretirement Plan
	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2023		2022		2023		2022
Balance at beginning of period	$	(33,824)	$	(34,435)	$	(34,021)	$	(34,740)
Other comprehensive income:
Amounts reclassified from accumulated other comprehensive loss (a)	662		371		899		742
Income tax expense	(117)		(65)		(157)		(131)
Other comprehensive income, net of income taxes	545		306		742		611
Balance at end of period	$	(33,279)	$	(34,129)	$	(33,279)	$	(34,129)


	Three Months				Six Months Ended
	December 31,				December 31,
	2023		2022		2023		2022
Revenues	$	33,630	$	49,630	$	38,789	$	55,188
Operating expenses (credits):
Revenue sharing expenses	$	6,315	$	7,099	$	7,467	$	8,286
Reimbursement under Arena License Arrangements	(7,878)		(9,357)		(8,307)		(9,850)
Cost reimbursement from MSG Sports	(9,527)		(9,475)		(19,388)		(18,992)
Cost reimbursement from Sphere Entertainment (after April 20, 2023) and Corporate allocations to Sphere Entertainment (before April 20, 2023)	(26,341)		(38,219)		(56,677)		(73,967)
Other operating expenses, net	2,142		2,460		2,695		3,355
Total operating expenses (credits), net (a)	$	(35,289)	$	(47,492)	$	(74,210)	$	(91,168)


	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2023		2022		2023		2022
Ticketing and venue license fee revenues (a)	$	222,341	$	173,725	$	287,509	$	245,857
Sponsorship and signage, suite, and advertising commission revenues (b)	87,441		92,174		134,004		137,308
Food, beverage, and merchandise revenues	63,797		55,387		89,900		81,690
Other	3,458		1,945		5,390		2,674
Total revenues from contracts with customers	377,037		323,231		516,803		467,529
Revenues from Arena License Agreements, leases, and subleases	25,629		32,649		28,075		34,803
Total revenues	$	402,666	$	355,880	$	544,878	$	502,332


	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2023		2022		2023		2022
Unrealized gain (loss) — Townsquare	$	3,143	$	(32)	$	(2,306)	$	(3,015)
Unrealized loss — DraftKings	—		(2,512)		—		(188)
Gain from shares sold — DraftKings	—		—		1,548		1,489
Total realized and unrealized gain (loss)	$	3,143	$	(2,544)	$	(758)	$	(1,714)
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
	December 31, 2023		June 30, 2023
Land	$	62,768	$	62,768
Buildings	1,008,051		999,205
Equipment, furniture, and fixtures	355,909		351,596
Leasehold improvements	105,877		105,877
Construction in progress (a)	13,734		2,828
Total Property and equipment	$	1,546,339	$	1,522,274
Less: accumulated depreciation and amortization	(920,167)		(893,386)
Property and equipment, net	$	626,172	$	628,888


	As of
	December 31, 2023		June 30, 2023
Trademarks	$	61,881	$	61,881
Photographic related rights	1,920		1,920
Total indefinite-lived intangible assets	$	63,801	$	63,801


	Three Months Ended
	December 31,				Change
	2023		2022		Amount		Percentage
Revenues	$	402,666	$	355,880	$	46,786	13	%
Direct operating expenses	(202,761)		(180,603)		(22,158)		(12)	%
Selling, general, and administrative expenses	(48,389)		(43,301)		(5,088)		(12)	%
Depreciation and amortization	(13,205)		(15,586)		2,381		15	%
Gains, net on dispositions	—		4,412		(4,412)		NM
Restructuring charges	(888)		(7,359)		6,471		88	%
Operating income	137,423		113,443		23,980		21	%
Interest income	1,083		1,812		(729)		(40)	%
Interest expense	(15,049)		(13,205)		(1,844)		(14)	%
Other income (expense), net	2,846		(2,172)		5,018		NM
Income from operations before income taxes	126,303		99,878		26,425		26	%
Income tax expense	(1,054)		(2,797)		1,743		62	%
Net income	125,249		97,081		28,168		29	%
Less: Net loss attributable to nonredeemable noncontrolling interest	—		(181)		181		NM
Net income attributable to MSG Entertainment’s stockholders	$	125,249	$	97,262	$	27,987	29	%


EXHIBIT NO.						DESCRIPTION
















10.1						Employment Agreement dated December 18, 2023, between Madison Square Garden Entertainment Corp. and Laura Franco .†
10.2						Employment Agreement, dated as of February 1, 2024, between Madison Square Garden Entertainment Corp. and Michael Grau (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 5, 2024). †
31.1						Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification by the Principal 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 Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101						The following materials from the Madison Square Garden Entertainment Corp. Quarterly Report on Form 10-Q for the quarter ended December 31, 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 income, (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 December 31, 2023 formatted in Inline XBRL and contained in Exhibit 101.


Madison Square Garden Entertainment Corp.

By:	/S/ COURTNEY M. ZEPPETELLA
	Name:	Courtney M. Zeppetella
	Title:	Senior Vice President, Controller and Chief Accounting Officer


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


/s/ PHILIP D'AMBROSIO
Philip D'Ambrosio
Executive Vice President and Treasurer (Principal Financial Officer)