MSG Entertainment swings to $8.9M profit in Q1
Several agreements with MSGE were assigned to MSG Rangers in connection with MSG Sports’ distribution and name change.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
Madison Square Garden Entertainment Corp. (MSGE) reported first-quarter fiscal 2027 revenue of $217.1 million for the three months ended September 30, 2026, up 37% from $158.3 million a year earlier. Operating income was $9.7 million versus an operating loss of $29.7 million; net income was $8.9 million versus a net loss of $21.7 million.
Entertainment offerings revenue was $174.9 million; increases were attributed mainly to more concerts at The Garden and higher per-concert revenue, along with more other live events. Adjusted operating income, a non-GAAP measure, was $34.3 million versus $7.1 million. Operating activities used $26.2 million of cash, compared with $19.8 million provided a year earlier.
At September 30, unrestricted cash and cash equivalents were $193.7 million, principal debt was $571.3 million, and $131.8 million remained available under the revolving credit facility. MSGE repurchased 314,000 Class A shares for $25.0 million during the quarter, with $19.8 million remaining under its program. On October 26, 2026, Madison Square Garden Sports Corp. distributed MSG Rangers Corp. shares to stockholders and changed its name to MSG Knickerbockers Corp.; MSG Knicks assigned several agreements with MSGE to MSG Rangers.
2 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointRevenue reached $217.1 million, up 37% year over year.
- Moderate pointNet income was $8.9 million after a $21.7 million prior-year loss.
Negative
- Moderate pointOperating cash flow was a $26.2 million outflow, versus $19.8 million provided.
Filing Explained
By September 30, 2026, MSGE reported 772,024 thousand dollars of remaining contract performance obligations, half expected to be recognized through June 30, 2028.
This unaudited 10-Q reports MSGE’s position at
At that date, MSGE reported
Key Figures
Total revenue: $217.1 million
Operating income: $9.7 million
Net income: $8.9 million
+5 more
8 metrics
Total revenue
$217.1 million
Three months ended September 30, 2026; $158.3 million in 2025
Operating income
$9.7 million
Three months ended September 30, 2026; operating loss of $29.7 million in 2025
Net income
$8.9 million
Three months ended September 30, 2026; net loss of $21.7 million in 2025
Adjusted operating income
$34.3 million
Three months ended September 30, 2026; $7.1 million in 2025
Net cash used in operating activities
$26.2 million outflow
Three months ended September 30, 2026; $19.8 million provided in 2025
Unrestricted cash and cash equivalents
$193.7 million
As of September 30, 2026
Principal debt outstanding
$571.3 million
As of September 30, 2026
Available borrowing capacity
$131.8 million
Under the National Properties Revolving Credit Facility as of September 30, 2026
Key Terms
Adjusted operating income, Remaining performance obligations, Term SOFR, Debt service coverage ratio
4 terms
Adjusted operating income financial
"adjusted operating income, a non-GAAP financial measure"
Adjusted operating income is a company's profit from its main activities, excluding certain one-time or unusual costs and gains. It helps investors see how well the business is performing in its normal operations, without distractions from rare events or expenses. This way, they get a clearer picture of the company’s true profitability.
Remaining performance obligations financial
"remaining performance obligations under contracts were $772,024"
Remaining performance obligations are the work a company still needs to complete for its customers, like finishing a service or delivering a product. It’s important because it shows how much future income the company has coming in from current agreements, giving a clearer picture of its ongoing business.
Term SOFR financial
"Term Secured Overnight Financing Rate (“Term SOFR”)"
Term SOFR is a benchmark interest rate that reflects the cost of borrowing money over a specific period, based on actual transactions in the financial markets. It is used by lenders and borrowers to set the interest rates on loans and financial contracts, helping to ensure rates are fair and transparent. For investors, understanding term SOFR helps gauge borrowing costs and the overall direction of interest rates in the economy.
Debt service coverage ratio financial
"specified minimum debt service coverage ratio"
Debt service coverage ratio measures how many times a company's available cash flow can pay its scheduled debt payments (interest plus principal). Think of it like checking how many months of take-home pay it would take to cover your mortgage and loan bills; a higher number means a bigger cushion against missed payments. Investors use it to gauge credit risk, the likelihood of default, and whether a company can afford dividends or new borrowing.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was MSGE’s revenue in the September 2026 quarter?
MSGE reported $217.1 million in revenue for the three months ended September 30, 2026, up 37% from $158.3 million a year earlier. Entertainment offerings revenue was $174.9 million. The company attributed increases mainly to more concerts at The Garden and higher per-concert revenue, along with more other live events.
Did MSGE make a profit in the September 2026 quarter?
MSGE reported net income of $8.9 million, compared with a net loss of $21.7 million in the three months ended September 30, 2025. Operating income was $9.7 million, compared with an operating loss of $29.7 million in the prior-year quarter.
How much contracted revenue does MSGE expect to recognize after September 2026?
As of September 30, 2026, MSGE reported $772.0 million in remaining performance obligations under contracts. It expected 50% to be recognized through June 30, 2028, and the remaining 50% thereafter. These obligations primarily relate to sponsorship and suite license agreements with original expected durations longer than one year and non-variable consideration.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 10-Q
________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the quarterly period ended September 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period from to
Commission File Number: 001-41627
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Registrant’s telephone number, including area code: (212) 465-6000
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☑ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No
Number of shares of common stock outstanding as of October 30, 2026:
| Class A Common Stock par value $0.01 per share | — | |||||||
| Class B Common Stock par value $0.01 per share | — | |||||||
INDEX TO FORM 10-Q
| Page | |||||
PART I. FINANCIAL INFORMATION | |||||
Item 1. Financial Statements (unaudited) | |||||
Condensed Consolidated Balance Sheets as of September 30, 2026 and June 30, 2026 (unaudited) | 2 | ||||
Condensed Consolidated Statements of Operations for the three months ended September 30, 2026 and 2025 (unaudited) | 3 | ||||
Condensed Consolidated Statements of Comprehensive Income for the three months ended September 30, 2026 and 2025 (unaudited) | 4 | ||||
Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2026 and 2025 (unaudited) | 5 | ||||
Condensed Consolidated Statements of Equity (Deficit) for the three months ended September 30, 2026 and 2025 (unaudited) | 6 | ||||
Notes to the Condensed Consolidated 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 | 31 | ||||
Item 4. Controls and Procedures | 31 | ||||
PART II - OTHER INFORMATION | |||||
Item 1. Legal Proceedings | 32 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 32 | ||||
Item 6. Exhibits | 33 | ||||
1
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except per share data)
| As of | ||||||||||||||
| September 30, | June 30, | |||||||||||||
| 2026 | 2026 | |||||||||||||
| ASSETS | ||||||||||||||
| Current Assets: | ||||||||||||||
| Cash, cash equivalents, and restricted cash | $ | $ | ||||||||||||
| Accounts receivable, net | ||||||||||||||
| Related party receivables, current | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Non-Current Assets: | ||||||||||||||
Property and equipment, net (a) | ||||||||||||||
| Right-of-use lease assets | ||||||||||||||
| Goodwill | ||||||||||||||
| Indefinite-lived intangible assets | ||||||||||||||
Deferred tax assets, net | ||||||||||||||
| Other non-current assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Current Liabilities: | ||||||||||||||
| Accounts payable, accrued and other current liabilities | $ | $ | ||||||||||||
| Related party payables, current | ||||||||||||||
| Long-term debt, current | ||||||||||||||
| Operating lease liabilities, current | ||||||||||||||
| Deferred revenue | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Non-Current Liabilities: | ||||||||||||||
| Long-term debt, net of deferred financing costs | ||||||||||||||
| Operating lease liabilities, non-current | ||||||||||||||
| Other non-current liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| Commitments and contingencies (see Note 7) | ||||||||||||||
| Equity: | ||||||||||||||
Class A Common Stock (b) | ||||||||||||||
Class B Common Stock (c) | ||||||||||||||
| Additional paid-in-capital | ||||||||||||||
Treasury stock at cost ( | ( | ( | ||||||||||||
Retained earnings | ||||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
| Total equity | ||||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
_________________
(a) Net of accumulated depreciation of $955,464 and $944,752 as of September 30, 2026 and June 30, 2026, respectively.
(b) Class A Common Stock, $0.01 120,000 46,980 and 46,545 shares issued as of September 30, 2026 and June 30, 2026, respectively.
(c) Class B Common Stock, $0.01 30,000 6,867
See accompanying notes to the unaudited condensed consolidated financial statements.
2
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
| Three Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Revenues: | ||||||||||||||
Revenues from entertainment offerings | $ | $ | ||||||||||||
| Food, beverage, and merchandise revenues | ||||||||||||||
Arena license fees and other leasing revenue | ||||||||||||||
Total revenues (a) | ||||||||||||||
Direct operating expenses: | ||||||||||||||
Entertainment offerings, arena license fees, and other leasing direct operating expenses | ( | ( | ||||||||||||
Food, beverage, and merchandise direct operating expenses | ( | ( | ||||||||||||
Total direct operating expenses (a) | ( | ( | ||||||||||||
Selling, general, and administrative expenses (a) | ( | ( | ||||||||||||
| Depreciation and amortization | ( | ( | ||||||||||||
| Impairment of long-lived assets | ( | |||||||||||||
| Restructuring charges | ( | |||||||||||||
| Operating income (loss) | ( | |||||||||||||
| Interest income | ||||||||||||||
| Interest expense | ( | ( | ||||||||||||
| Other expense, net | ( | ( | ||||||||||||
| Income (loss) from operations before income taxes | ( | |||||||||||||
| Income tax benefit | ||||||||||||||
| Net income (loss) | $ | $ | ( | |||||||||||
| Earnings (loss) per share: | ||||||||||||||
| Basic | $ | $ | ( | |||||||||||
| Diluted | $ | $ | ( | |||||||||||
| Weighted-average number of common shares outstanding: | ||||||||||||||
| Basic | ||||||||||||||
| Diluted | ||||||||||||||
_________________
(a) See Note 10 . Related Party Transactions for further information on related party arrangements.
See accompanying notes to the unaudited condensed consolidated financial statements.
3
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(in thousands)
| Three Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net income (loss) | $ | $ | ( | |||||||||||
| Other comprehensive income: | ||||||||||||||
Pension plans and other postretirement plans adjustments | ||||||||||||||
| Income tax expense related to items of other comprehensive income | ( | ( | ||||||||||||
Other comprehensive income, net of income taxes | ||||||||||||||
| Comprehensive income (loss) | $ | $ | ( | |||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
4
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
| Three Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| OPERATING ACTIVITIES: | ||||||||||||||
| Net income (loss) | $ | $ | ( | |||||||||||
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Impairment of long-lived assets | ||||||||||||||
| Share-based compensation expense | ||||||||||||||
| Amortization of deferred financing costs | ||||||||||||||
| Deferred income tax benefit | ( | ( | ||||||||||||
| Other non-cash adjustments | ( | |||||||||||||
| Change in assets and liabilities: | ||||||||||||||
| Accounts receivable, net | ( | ( | ||||||||||||
Related party receivables and payables, net | ||||||||||||||
| Prepaid expenses and other current and non-current assets | ( | ( | ||||||||||||
| Accounts payable | ||||||||||||||
| Accrued and other current, and non-current liabilities | ( | ( | ||||||||||||
| Deferred revenue | ||||||||||||||
| Operating lease right-of-use assets and lease liabilities | ||||||||||||||
| Net cash (used in) provided by operating activities | $ | ( | $ | |||||||||||
| INVESTING ACTIVITIES: | ||||||||||||||
| Capital expenditures | $ | ( | $ | ( | ||||||||||
| Other investing activities | ( | ( | ||||||||||||
Net cash used in investing activities | $ | ( | $ | ( | ||||||||||
| FINANCING ACTIVITIES: | ||||||||||||||
| Proceeds from revolving credit facilities | $ | $ | ||||||||||||
| Principal repayments on long-term debt | ( | ( | ||||||||||||
| Repurchases of Class A common stock | ( | ( | ||||||||||||
| Taxes paid in lieu of shares issued for equity-based compensation | ( | ( | ||||||||||||
| Other financing activities | ( | |||||||||||||
| Net cash used in financing activities | $ | ( | $ | ( | ||||||||||
| Net decrease in cash, cash equivalents, and restricted cash | ( | ( | ||||||||||||
Cash, cash equivalents, and restricted cash, beginning of period | ||||||||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | $ | ||||||||||||
| Non-cash investing and financing activities: | ||||||||||||||
| Capital expenditures incurred but not yet paid or paid by landlord | $ | $ | ||||||||||||
| Non-cash finance lease obligation | $ | $ | ||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
5
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) (UNAUDITED)
(in thousands)
Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Equity (Deficit) | |||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Tax withholding associated with shares issued for share-based compensation | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Repurchases of Class A common stock | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Tax withholding associated with shares issued for share-based compensation | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||
| Repurchases of Class A common stock | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
6
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
All amounts included in the following Notes to Condensed Consolidated Financial Statements (unaudited) are presented in thousands, except per share data or as otherwise noted.
Note 1. Description of Business and Basis of Presentation
Description of Business
Madison Square Garden Entertainment Corp. (together with its subsidiaries, as applicable, the “Company” or “MSG Entertainment”), is 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. The Company operates and reports financial information in one reportable segment. The Company’s decision to organize as one reportable segment is based upon its internal organizational structure, the manner in which its operations are managed, and the criteria used by the Company’s Executive Chairman and Chief Executive Officer, its Chief Operating Decision Maker (“CODM”), to evaluate segment performance. The Company’s CODM reviews total company operating results to assess overall performance and allocate resources.
The Company conducts a significant portion of its operations at venues that it either owns or operates under long-term leases. The Company owns Madison Square Garden (“The Garden”), the Infosys Theater at Madison Square Garden, and The Chicago Theatre, and leases Radio City Music Hall and the Beacon Theatre. The Company also owns and produces the original production, the Christmas Spectacular Starring the Radio City Rockettes (the “Christmas Spectacular”). In addition, the Company has an 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.
All of the Company’s revenues and assets are attributed to or located in the United States and are primarily concentrated in New York City.
On October 26, 2026 (the “MSG Sports Distribution Date”), Madison Square Garden Sports Corp. (together with its subsidiaries, as applicable, “MSG Sports”) distributed to its stockholders (the “MSG Sports Distribution”) (a) one share of MSG Rangers (as defined below) Class A common stock, par value $0.01 per share, for every two shares of MSG Sports Class A common stock, par value $0.01 per share, held of record at the close of business on October 20, 2026 (the “Record Date”), and (b) one share of MSG Rangers Class B common stock, par value $0.01 per share, for every two shares of MSG Sports Class B common stock, par value $0.01 per share, held of record at the close of business on the Record Date. Concurrent with the MSG Sports Distribution, MSG Sports changed its name to “MSG Knickerbockers Corp.” (together with its subsidiaries, as applicable, “MSG Knicks”) and the newly created company was named MSG Rangers Corp. (together with its subsidiaries, as applicable, “MSG Rangers”). In connection with the MSG Sports Distribution, MSG Knicks assigned several of its agreements with the Company to MSG Rangers.
Basis of Presentation
The Company reports on a fiscal year basis ending on June 30th (“Fiscal Year”). In these unaudited condensed consolidated financial statements, the fiscal years ending or ended on June 30, 2027, and 2026 are referred to as “Fiscal Year 2027,” and “Fiscal Year 2026,” respectively.
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of June 30, 2026 and 2025 and for the years ended June 30, 2026, 2025 and 2024 (the “Audited Consolidated Annual Financial Statements”) included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2026 filed with the SEC on August 12, 2026.
In the opinion of the Company, the accompanying condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2026 and its results of operations for the three months ended September 30, 2026 and 2025 and cash flows for the three months ended September 30, 2026 and 2025. The accompanying condensed consolidated balance sheet as of June 30, 2026 was derived from the Audited Consolidated Annual Financial Statements but does not contain all of the footnote disclosures from the Audited Consolidated Annual Financial Statements.
7
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
The results of operations for the periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full fiscal year. As a result of the production of the Christmas Spectacular and arena license fees in connection with the use of The Garden by the New York Knicks (the “Knicks”) of the National Basketball Association and the New York Rangers (the “Rangers”) of the National Hockey League, the Company generally earns a disproportionate share of its annual revenues in the second and third quarters of its fiscal year.
Reclassifications
For purposes of comparability, certain prior period amounts in the accompanying condensed consolidated statements of cash flows have been reclassified to conform to the current year presentation in accordance with GAAP.
Note 2. Summary of Significant Accounting Policies
A. Principles of Consolidation
All intercompany transactions and balances within the Company’s consolidated businesses have been eliminated.
B. Use of Estimates
The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the provision for credit losses, valuation of goodwill, intangible assets, other long-lived assets, deferred tax assets, pension and other postretirement benefit obligations and the related net periodic benefit cost, and other liabilities. In addition, estimates are used in revenue recognition, depreciation and amortization, litigation matters and other matters. Management believes its use of estimates in the accompanying condensed consolidated financial statements to be reasonable.
Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and, as such, these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the condensed consolidated financial statements in future periods.
C. Revenue Recognition and Direct Operating Expenses
The Company generates revenue from the provision of services and sale of tangible products, as well as leasing transactions. Revenues are presented under these three categories in the accompanying condensed consolidated statements of operations, as described below.
Service revenue, presented as “Revenues from entertainment offerings,” primarily includes:
•Ticket sales and other ticket-related revenue
•Venue license fees for events held at the Company’s venues that the Company does not produce or promote/co-promote
•Sponsorship and signage
•Suite licenses and single night suite rentals
•Advertising commissions and related service fees
•Commissions related to the sale of merchandise for which the Company is not the principal in the underlying transaction
Direct operating expenses related to the provision of services and leasing, presented as “Entertainment offerings, arena license fees, and other leasing direct operating expenses,” primarily include:(a)
•Event production costs including direct personnel expenses
•Venue operations and infrastructure costs (a)
•Venue rental costs for venues not owned by the Company
•Sponsorship and signage fulfillment costs
•Contractual revenue sharing expenses related to suite licenses and certain internal signage
8
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
•Event-related marketing and advertising costs
Product revenue, presented as “Food, beverage, and merchandise revenues,” includes:
•Sales of food and beverage during events held at the Company’s venues
•Sales of the Company’s merchandise at the Company’s venues and via traditional retail channels
Direct operating expenses related to the sale of products, presented as “Food, beverage, and merchandise direct operating expenses,” include:
•Costs of goods sold including direct personnel expenses
•Contractual revenue sharing expenses related to food and beverage sold at events held by MSG Knicks and MSG Rangers at The Garden
Lease revenue, presented as “Arena license fees and other leasing revenue,” includes:
•Rental fees related to the arena license agreements that require the Knicks and the Rangers to play their home games at The Garden (the “Arena License Agreements”) with MSG Knicks and MSG Rangers
•Sublease income
_________________
(a) Leasing direct operating expenses primarily consist of venue operations and infrastructure costs. Venue operations and infrastructure costs are not specifically allocated to each revenue category, but are instead attributed in their entirety to service revenue, which is the Company’s principal revenue category. As a result, the Company combines service and leasing direct operating expenses within “Entertainment offerings, arena license fees, and other leasing direct operating expenses” for presentation purposes.
All revenue recognized in the accompanying condensed consolidated statements of operations is considered to be revenue from contracts with customers in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts with Customers (“ASC Topic 606”), except for revenues from the Arena License Agreements and leases and subleases that are accounted for in accordance with ASC Topic 842, Leases (“ASC Topic 842”).
The Company recognizes revenue when, or as, performance obligations under the terms of a contract are satisfied, which generally occurs when, or as, control of promised goods or services is transferred to customers. Revenue is measured as the amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services (“transaction price”). To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and the determination of whether to include such estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available. The Company accounts for taxes collected from customers and remitted to governmental authorities on a net basis and excludes these amounts from revenues.
In addition, the Company defers certain costs to fulfill the Company’s contracts with customers to the extent such costs relate directly to the contracts, are expected to generate resources that will be used to satisfy the Company’s performance obligations under the contracts and are expected to be recovered through revenue generated under the contracts. Contract fulfillment costs are expensed as the Company satisfies the related performance obligations.
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 the Company, as well as Sphere Entertainment Co. (together with its subsidiaries, as applicable, “Sphere Entertainment”), MSG Knicks and MSG Rangers within a single arrangement. The Company also derives revenue from similar types of arrangements which are entered into by Sphere Entertainment, MSG Knicks and MSG Rangers. 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, event or property-specific advertising, as well as non-advertising benefits such as suite licenses and event tickets. Further, these arrangements may require the Company to purchase the customers’ goods or services. 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
9
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
obligation is satisfied.
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.
Principal versus Agent Revenue Recognition
The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service before transfer to the customer. When the Company concludes that it controls the good or service before transfer to the customer, the Company is considered a principal in the transaction and records revenue on a gross basis. When the Company concludes that it does not control the good or service before transfer to the customer but arranges for another entity to provide the good or service, the Company acts as an agent and records revenue on a net basis in the amount it earns for its agency service.
Revenue for the Company’s suite license arrangements is recorded on a gross basis, as the Company is the principal in such transactions and controls the related goods or services before transfer to the customer. MSG Knicks and MSG Rangers are entitled to a 35 % and a 32.5 % share of the Company’s suite license revenue, respectively, pursuant to the terms of the Arena License Agreements, which is recognized as a component of Direct operating expenses in the consolidated statements of operations.
For sponsorship agreements entered into by the Company, MSG Knicks or MSG Rangers that contain performance obligations satisfied solely by the Company, revenue is recorded on a gross basis as the Company is the principal with respect to such performance obligations and controls the related goods or services before transfer to the customer. In accordance with the Arena License Agreements, MSG Knicks and MSG Rangers are entitled to a share of the revenue generated from certain signage performance obligations where the Company is the principal. The Company records this signage revenue on a gross basis and MSG Knicks’ and MSG Rangers’ share of such revenue as a component of Direct operating expenses in the consolidated statements of operations.
The Company is a party to advertising sales representation agreements with certain subsidiaries of MSG Knicks and MSG Rangers. Pursuant to these agreements, the Company has the exclusive right and obligation to sell sponsorship assets on behalf of the respective subsidiaries of MSG Knicks and MSG Rangers. The Company is entitled to both fixed and variable commissions under the terms of these agreements. The Company recognizes the fixed component ratably over the term of the arrangement which corresponds with the Company’s satisfaction of its service-based performance obligations. Variable commissions are earned and recognized as the related sponsorship performance obligations are satisfied by the subsidiaries of MSG Knicks and MSG Rangers, as applicable. The Company is not the principal in such arrangements as it does not control the related goods or services prior to transfer to the customer. As an agent under these arrangements, the Company recognizes the advertising commission revenue in the Revenues from entertainment offerings in the consolidated statements of operations.
See Note 10. Related Party Transactions for more information regarding the advertising sales representation agreements with subsidiaries of MSG Knicks, MSG Rangers and Sphere Entertainment.
10
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Contract Balances
Amounts collected in advance of the Company’s satisfaction of its contractual performance obligations are recorded as a contract liability in Deferred revenue, and are recognized as revenue as the related performance obligations are satisfied. Amounts collected in advance of events for which the Company is not the promoter or co-promoter do not represent contract liabilities and are recorded in Accounts payable, accrued and other current liabilities in the accompanying condensed consolidated balance sheets. Amounts recognized as revenue for which the Company has a right to consideration for goods or services transferred to customers and for which the Company does not have an unconditional right to bill as of the reporting date are recorded as contract assets in Prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets. Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional.
Production Costs for the Company’s Original Productions
The Company defers certain costs of productions such as creative design, scenery, wardrobes, rehearsal and other related costs for the Company’s proprietary shows, recorded in Prepaid expenses and other current assets and Other non-current assets in the accompanying condensed consolidated balance sheets. Deferred production costs are amortized on a straight-line basis over the course of a production’s performance period using the expected life of a show’s assets and are recorded as a component of Entertainment offerings, arena license fees, and other leasing direct operating expenses in the accompanying condensed consolidated statements of operations. Deferred production costs are subject to recoverability assessments whenever there is an indication of potential impairment.
Revenue Sharing Expenses
Revenue sharing expenses are determined based on contractual agreements between the Company, MSG Knicks and MSG Rangers, primarily related to suite licenses, certain internal signage and in-venue food and beverage sales and are recorded as a component of Entertainment offerings, arena license fees, and other leasing direct operating expenses in the accompanying condensed consolidated statements of operations.
D. Recently Issued and Adopted Accounting Pronouncements
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, as amended by ASU 2025-01, which was issued in January 2025, requiring disclosure, in the notes to financial statements, of specified information about certain costs and expenses at each interim and annual reporting period. This standard will be effective for the Company for annual periods beginning with the Company’s fiscal year ending June 30, 2028, and interim reporting periods beginning with the first quarter of the Company’s fiscal year ending June 30, 2029. Early adoption of ASU 2024-03 is permitted. This amended ASU may be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this standard on the Company’s consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU amends the existing standard to remove all references to prescriptive and sequential software development project stages. Under this standard, an entity will be required to start capitalizing software costs when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. This standard will be effective for the Company in the first quarter of the Company’s fiscal year ending June 30, 2029, and early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on the Company’s consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. This standard will be effective for the Company in the first quarter of the Company’s fiscal year ending June 30, 2029, and early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on the Company’s consolidated financial statements.
11
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides all entities with a practical expedient that allows for the assumption that current conditions as of the balance sheet date do not change for the remaining life of the asset when estimating credit losses for such assets. This standard became effective for the Company in the first quarter of Fiscal Year 2027, and was adopted on a prospective basis. The Company elected to apply the practical expedient. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.
Note 3. Revenue Recognition
The Company’s revenues by category are outlined in Note 2. Summary of Significant Accounting Policies.
Disaggregation of Revenue
The following table disaggregates the Company’s revenues by revenue category for the three months ended September 30, 2026 and 2025. The footnotes to the table provide additional disclosure with respect to the timing of transfer of goods or services to the customer for each category.
Three Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Ticketing and venue license fee revenues (a) | $ | $ | ||||||||||||
Sponsorship and signage, suite license, and advertising commission revenues (b) | ||||||||||||||
Other (c) | ||||||||||||||
| Total revenues from entertainment offerings | ||||||||||||||
Food, beverage, and merchandise revenues (d) | ||||||||||||||
Total revenues from contracts with customers | ||||||||||||||
| Arena license fees and other leasing revenue | ||||||||||||||
Total revenues | $ | $ | ||||||||||||
_________________
(a) Amounts include ticket sales, including single night suite rentals and other ticket-related revenue, and venue license fees from the Company’s events such as (i) concerts, (ii) the presentation of the Christmas Spectacular and (iii) other live entertainment and sporting events. Ticketing and venue license fee revenues are generally recognized at a point in time.
(b) Sponsorship and signage, suite license, and advertising commission revenues are generally recognized over time.
(c) Other primarily consists of venue tours which are generally recognized at a point in time.
(d) Food, beverage, and merchandise revenues are generally recognized at a point in time.
Contract Balances
The following table provides information about contract balances from the Company’s contracts with customers as of September 30, 2026 and June 30, 2026. The Company recorded provisions for credit losses on receivables or contract assets arising from contracts with customers of $899 and $29 for the three months ended September 30, 2026 and 2025, respectively. The Company recorded an allowance for credit losses of $1,506 and $943 as of September 30, 2026 and June 30, 2026, respectively.
As of | ||||||||||||||
| September 30, 2026 | June 30, 2026 | |||||||||||||
Receivables from contracts with customers, net (a) | $ | $ | ||||||||||||
Contract assets, current | $ | $ | ||||||||||||
Deferred revenue, including non-current portion (b) | $ | $ | ||||||||||||
(a) Receivables from contracts with customers, net, which are recorded in Accounts receivable, net and Related party receivables, current in the Company’s accompanying condensed consolidated balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers. As of September 30, 2026 and June 30, 2026, the Company’s receivables from contracts with customers above included $2,803 and $4,526 , respectively, related to various related parties. See Note 10. Related Party Transactions for further details on related party arrangements.
(b) Deferred revenue primarily relates to the Company’s receipt of consideration from customers in advance of the Company’s transfer of goods or services to the customers. Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to a customer. Revenue recognized for the three months ended September 30, 2026 relating to the Deferred revenue balance as of June 30, 2026 was $140,490 .
12
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Transaction Price Allocated to the Remaining Performance Obligations
As of September 30, 2026, the Company’s remaining performance obligations under contracts were $772,024 , of which 50 % is expected to be recognized through June 30, 2028, and the remaining 50 % of the balance is expected to be recognized thereafter. This primarily relates to performance obligations under sponsorship and suite license agreements that have original expected durations longer than one year and for which the consideration is not variable. In developing the estimated revenue, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
Note 4. Computation of Earnings Per Share
The following table presents a reconciliation of weighted-average shares used in the calculations of basic and diluted earnings (loss) per share (“EPS”) attributable to the Company’s stockholders for the three months ended September 30, 2026 and 2025.
| Three Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net income (loss) allocable to common shares, basic and diluted (numerator): | ||||||||||||||
| Net income (loss) | $ | $ | ( | |||||||||||
| Weighted-average shares (denominator): | ||||||||||||||
| Weighted-average shares for basic EPS | ||||||||||||||
| Dilutive effect of shares issuable under share-based compensation plans | ||||||||||||||
| Weighted-average shares for diluted EPS | ||||||||||||||
| Weighted-average anti-dilutive shares | ||||||||||||||
| Earnings (loss) per share: | ||||||||||||||
| Basic | $ | $ | ( | |||||||||||
| Diluted | $ | $ | ( | |||||||||||
Note 5. Investments
As of September 30, 2026, the Company held equity investments with readily determinable fair values, including equity investments in trust under the Company’s Executive Deferred Compensation Plan. Refer to Note 12. Pension Plans and Other Postretirement Benefit Plans included in the Company’s Audited Consolidated Annual Financial Statements, for further details regarding the plan.
The fair value of the Company’s equity investments with readily determinable fair values is determined based on quoted market prices in active markets, which are classified within Level I of the fair value hierarchy.
The carrying value of the Company’s investments, which is recorded in Other non-current assets in the accompanying condensed consolidated balance sheets as of September 30, 2026 and June 30, 2026, is as follows:
As of | ||||||||||||||
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Equity investments with readily determinable fair values | $ | $ | ||||||||||||
Equity investments without readily determinable fair values | ||||||||||||||
| Total investments | $ | $ | ||||||||||||
The Company recorded an unrealized (loss) gain on equity investments with readily determinable fair values of $(275 ) and $155 for the three months ended September 30, 2026 and 2025, respectively, which was recorded in Other expense, net in the accompanying condensed consolidated statements of operations.
Note 6. Goodwill and Intangible Assets
As of September 30, 2026 and June 30, 2026, the carrying amount of Goodwill was $69,041 one reportable segment and one reporting unit.
13
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
The Company’s Indefinite-lived intangible assets as of September 30, 2026 and June 30, 2026 were as follows:
| As of | ||||||||||||||
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Trademarks | $ | $ | ||||||||||||
| Photographic related rights | ||||||||||||||
| Total Indefinite-lived intangible assets | $ | $ | ||||||||||||
Note 7. Commitments and Contingencies
Commitments
See Note 10. Commitments and Contingencies, included in the Company’s Audited Consolidated Annual Financial Statements, for details on the Company’s commitments.
For the three months ended September 30, 2026, the Company did not have any material changes in its non-cancelable contractual obligations (other than activities in the ordinary course of business). See Note 8. Debt for details of the principal repayments required under the Company’s credit facilities.
Legal Matters
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.
Note 8. Debt
The following table summarizes the presentation of the outstanding balances under the Company’s credit facilities as of September 30, 2026 and June 30, 2026:
| As of | ||||||||||||||
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Current Portion | ||||||||||||||
National Properties Term Loan Facility | $ | $ | ||||||||||||
| Long-term debt, current | $ | $ | ||||||||||||
As of | ||||||||||||||||||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | |||||||||||||||||||||||||||||||||||||
| Principal | Unamortized Deferred Financing Costs | Net | Principal | Unamortized Deferred Financing Costs | Net | |||||||||||||||||||||||||||||||||
| Non-current Portion | ||||||||||||||||||||||||||||||||||||||
National Properties Term Loan Facility | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Long-term debt, net of deferred financing costs | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
14
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
National Properties Facilities
General. On June 27, 2025, MSG National Properties, LLC (“MSG National Properties”), MSG Entertainment Holdings, LLC (“MSG Entertainment Holdings”) and certain subsidiaries of MSG National Properties entered into Amendment No. 4 (“Amendment No. 4”) to the credit agreement dated June 30, 2022 (as amended, supplemented and otherwise modified prior to June 27, 2025, the “Prior National Properties Credit Agreement” and, as amended by Amendment No. 4, the “National Properties Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent, and the lenders and letter of credit issuers party thereto, pursuant to which, among other things, (i) the term loan facility under the Prior National Properties Credit Agreement (the “Prior National Properties Term Loan Facility”) was refinanced in its entirety with a five-year $609,375 senior secured term loan facility (the “National Properties Term Loan Facility”) and (ii) the revolving credit facility under the Prior National Properties Credit Agreement (the “Prior National Properties Revolving Credit Facility” and, together with the Prior National Properties Term Loan Facility, the “Prior National Properties Facilities”) was refinanced in its entirety with a five-year , $150,000 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 September 30, 2026, outstanding letters of credit were $18,169 and the remaining balance available under the National Properties Revolving Credit Facility was $131,831 .
Proceeds. Proceeds of the National Properties Revolving Credit Facility may be used to fund working capital needs, for general corporate purposes of MSG National Properties and its subsidiaries and to make distributions to MSG Entertainment Holdings.
Interest Rates. Borrowings under the National Properties Facilities bear interest at a floating rate, which at the option of MSG National Properties may be either (a) Term Secured Overnight Financing Rate (“Term SOFR”) plus an applicable margin ranging from 1.75 % to 2.50 % per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries, or (b) a base rate plus an applicable margin ranging from 0.75 % to 1.50 % per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries. The National Properties Credit Agreement requires MSG National Properties to pay a commitment fee ranging from 0.20 % to 0.30 % in respect of the daily unused commitments under the National Properties Revolving Credit Facility. MSG National Properties is also required to pay customary letter of credit fees, as well as fronting fees, to banks that issue letters of credit pursuant to the National Properties Credit Agreement. The interest rate on the National Properties Term Loan Facility as of September 30, 2026 was 5.90 %.
Principal Repayments. Subject to customary notice and minimum amount conditions, the Company may voluntarily repay outstanding loans under the National Properties Facilities or terminate commitments under the National Properties Revolving Credit Facility, at any time, in whole or in part, subject only to customary breakage costs in the case of prepayment of Term SOFR loans. The National Properties Facilities will mature on June 27, 2030. The principal obligations under the National Properties Term Loan Facility are repaid in quarterly installments that commenced with the fiscal quarter ended September 30, 2025, in an aggregate amount equal to 5.00 % per annum (1.25 % per quarter) 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. 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.
Covenants. The National Properties Credit Agreement includes financial covenants requiring MSG National Properties and its restricted subsidiaries to maintain a specified minimum debt service coverage ratio and specified maximum total leverage ratio. The debt service coverage ratio covenant is set at a ratio of 2.50 :1. The leverage ratio covenant is tested based on the ratio of MSG National Properties and its restricted subsidiaries’ consolidated total indebtedness to adjusted operating income, each as defined in the National Properties Credit Agreement, with a maximum ratio of 3.50 :1. As of September 30, 2026, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Credit Agreement.
In addition to the financial covenants discussed above, the National Properties Credit Agreement and the related security agreement contain certain customary representations and warranties, affirmative and negative covenants and events of default. The National Properties Credit Agreement contains certain restrictions on the ability of MSG National Properties and its restricted subsidiaries to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the National Properties Credit Agreement, including the following: (i) incur additional indebtedness; (ii) create liens on certain assets; (iii) make investments, loans or advances in or to other persons; (iv) pay dividends and distributions or repurchase capital stock (which will restrict the ability of MSG National Properties to make cash distributions to the Company); (v) repay, redeem or repurchase certain indebtedness; (vi) change its lines of business; (vii) engage in certain transactions with affiliates; (viii) amend their respective organizational documents; (ix) merge or consolidate; and (x) make certain dispositions.
15
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Guarantors and Collateral. All obligations under the National Properties Facilities are guaranteed by MSG Entertainment Holdings and MSG National Properties’ existing and future direct and indirect domestic subsidiaries, other than the subsidiaries that own The Garden and certain other excluded subsidiaries (the “Subsidiary Guarantors”). All obligations under the National Properties Facilities, including the guarantees of those obligations, are secured by certain of the assets of MSG National Properties and the Subsidiary Guarantors (collectively, “Collateral”) including, but not limited to, a pledge of some or all of the equity interests held directly or indirectly by MSG National Properties in each Subsidiary Guarantor. The Collateral does not include, among other things, any interests in The Garden, the Infosys Theater at Madison Square Garden or The Chicago Theatre or the leasehold interests in Radio City Music Hall or the Beacon Theatre.
Interest payments and loan principal repayments made by the Company under the National Properties Facilities for the three months ended September 30, 2026 and 2025 were as follows:
| Interest Payments | Loan Principal Repayments | |||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
National Properties Facilities | $ | $ | $ | $ | ||||||||||||||||||||||
The carrying value and fair value of the Company’s debt reported in the accompanying condensed consolidated balance sheets as of September 30, 2026 and June 30, 2026 were as follows:
As of | ||||||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | |||||||||||||||||||||||||
Carrying Value (a) | Fair Value | Carrying Value (a) | Fair Value | |||||||||||||||||||||||
National Properties Facilities | $ | $ | $ | $ | ||||||||||||||||||||||
(a) The total carrying value of the Company’s debt as of September 30, 2026 and June 30, 2026 is equal to the current and non-current principal payments for the Company’s credit agreements excluding unamortized deferred financing costs of $7,596 and $8,104 , respectively.
The Company’s long-term debt is classified within Level II of the fair value hierarchy as it is valued using quoted indices of similar instruments for which the inputs are readily observable.
Note 9. Share-based Compensation
The Company has two share-based compensation plans: the 2023 Employee Stock Plan and the 2023 Stock Plan for Non-Employee Directors. See Note 13. Share-based Compensation, included in the Company’s Audited Consolidated Annual Financial Statements, for more information on these plans.
Share-based compensation expense for the Company’s restricted stock units (“RSUs”) and performance stock units (“PSUs”) are recorded in the accompanying condensed consolidated statements of operations as a component of direct operating expenses or selling, general, and administrative expenses. The following table summarizes the Company’s share-based compensation expense for the three months ended September 30, 2026 and 2025:
| Three Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Share-based compensation expense | $ | $ | ||||||||||||
Fair value of awards vested (a) | $ | $ | ||||||||||||
(a) To fulfill required statutory tax withholding obligations for the applicable income and other employment taxes, RSUs and PSUs with an aggregate value of $28,345 and $13,369 were retained by the Company for the three months ended September 30, 2026 and 2025, respectively.
As of September 30, 2026, there was $59,864 of unrecognized compensation cost related to unvested RSUs and PSUs held by the Company’s direct employees. The cost is expected to be recognized over a weighted-average period of approximately 2.4 years.
16
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Award Activity
The following table summarizes activity for the three months ended September 30, 2026 and 2025 related to MSG Entertainment’s RSUs and PSUs held by employees of the Company, MSG Knicks, MSG Rangers and Sphere Entertainment:
| Three Months Ended | |||||||||||||||||||||||
| September 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| RSUs | PSUs | RSUs | PSUs | ||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Vested | |||||||||||||||||||||||
_________________
(a) Vested PSUs for the three months ended September 30, 2026 include 21 shares in excess of target, reflecting a performance adjustment.
Note 10. Related Party Transactions
As of September 30, 2026, certain members of the Dolan family, including certain trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”), for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, collectively beneficially owned 100 % of the Company’s outstanding Class B common stock, $0.01 par value per share (“Class B common stock”) and approximately 4.1 % of the Company’s outstanding Class A common stock (inclusive of options exercisable within 60 days of September 30, 2026). Such shares of Class A common stock and Class B common stock, collectively, represent approximately 64.3 % of the aggregate voting power of the Company’s outstanding common stock. Members of the Dolan Family Group are also the controlling stockholders of Sphere Entertainment, MSG Knicks, MSG Rangers and AMC Global Media Inc.
See Note 15. Related Party Transactions, included in the Company’s Audited Consolidated Annual Financial Statements for a description of the Company’s current related party arrangements. There have been no material changes in such related party arrangements as of September 30, 2026. As described in Note 1. Description of Business and Basis of Presentation, in connection with the MSG Sports Distribution, several of the agreements between the Company and MSG Knicks are now between the Company and MSG Rangers.
Revenues and Operating Expenses
The following table summarizes the composition and amounts of the transactions with the Company’s related parties. The significant components of these amounts are discussed below. These amounts are reflected in revenues and operating expenses in the accompanying condensed consolidated statements of operations for the three months ended September 30, 2026 and 2025:
| Three Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Revenues: | ||||||||||||||
| Revenues under Arena License Agreements | $ | $ | ||||||||||||
| Revenues under sponsorship sales and service representation agreements with related parties | ||||||||||||||
| Merchandise sharing revenues with related parties | ||||||||||||||
| Sublease revenue from related parties | ||||||||||||||
| Other revenues | ||||||||||||||
| Total revenues | ||||||||||||||
| Operating credits (expenses): | ||||||||||||||
Revenue sharing expenses (a) | ( | ( | ||||||||||||
| Reimbursement under Arena License Agreements | ||||||||||||||
| Cost reimbursement from related parties | ||||||||||||||
| Other operating credits, net | ||||||||||||||
Total operating credits, net (b) | $ | $ | ||||||||||||
(a) Amounts exclude revenue sharing expenses of $21,359 and $19,491 for the three months ended September 30, 2026 and 2025, respectively, related to suites revenue sharing with related parties and are included in Direct operating expenses in the accompanying condensed consolidated statements of operations.
(b) Of the total operating credits (expenses), net, $(1,703 ) and $(1,340 ) for the three months ended September 30, 2026 and 2025, respectively, are recorded in Direct
17
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
operating expenses in the accompanying condensed consolidated statements of operations, and $29,179 and $28,974 for the three months ended September 30, 2026 and 2025, respectively, are recorded in Selling, general, and administrative expenses in the accompanying condensed consolidated statements of operations.
Note 11. Segment Information
The Company is managed on a consolidated basis through one
The Company’s MSG Entertainment segment derives revenues primarily from entertainment offerings held at its venues that drive ticket sales and other ticket-related revenues, venue license fees from third-party promoters, sponsorships and signage, suite license fees at The Garden, concessions, merchandising and tours at certain of the Company’s 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, MSG Knicks or MSG Rangers.
The CODM regularly reviews consolidated net income as the measure of segment profit or loss to evaluate operating performance and make strategic decisions regarding the allocation of resources. The CODM is regularly provided with the consolidated expense categories presented in the condensed consolidated statements of operations. As a result, there are no other significant segment expense categories that would require disclosure. The CODM does not review segment assets at a different asset level or category than those disclosed in the condensed consolidated balance sheets.
Note 12. Additional Financial Information
The following table provides a summary of the amounts recorded as Cash, cash equivalents, and restricted cash as of September 30, 2026 and June 30, 2026:
| As of | ||||||||||||||
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash | ||||||||||||||
Total cash, cash equivalents, and restricted cash | $ | $ | ||||||||||||
The Company’s cash equivalents are classified within Level I of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets. The Company’s restricted cash includes cash deposited in escrow and operating accounts, primarily related to general liability insurance obligations.
Prepaid expenses and other current assets consisted of the following as of September 30, 2026 and June 30, 2026:
| As of | ||||||||||||||
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Prepaid and deferred revenue sharing expenses | $ | $ | ||||||||||||
Other prepaid expenses | ||||||||||||||
Current contract assets (a) | ||||||||||||||
Inventory (b) | ||||||||||||||
| Other | ||||||||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||||||||
(a) See Note 3. Revenue Recognition for more information on contract assets.
(b) Inventory is primarily comprised of food and beverages for the venues.
18
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Other non-current assets consisted of the following as of September 30, 2026 and June 30, 2026:
| As of | ||||||||||||||
| September 30, 2026 | June 30, 2026 | |||||||||||||
Unbilled lease receivable (a) | $ | $ | ||||||||||||
Investments (b) | ||||||||||||||
| Deferred costs | ||||||||||||||
| Other | ||||||||||||||
| Total other non-current assets | $ | $ | ||||||||||||
(a) Unbilled lease receivable relates to the amounts recorded under the Arena License Agreements.
(b) See Note 5. Investments for more information on long-term investments.
Accounts payable, accrued and other current liabilities consisted of the following as of September 30, 2026 and June 30, 2026:
| As of | ||||||||||||||
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accrued payroll and employee related liabilities | ||||||||||||||
| Cash due to promoters | ||||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||
| Total accounts payable, accrued and other current liabilities | $ | $ | ||||||||||||
Leases
In September 2026, the Company recognized a finance lease right-of-use asset and a corresponding lease obligation, as the Company took possession of equipment for one of its venues. The following table summarizes the activity related to the finance lease recorded in the accompanying condensed consolidated balance sheets as of September 30, 2026:
| As of | ||||||||
| September 30, 2026 | ||||||||
| Finance lease right-of-use asset, net (recorded in Property and equipment, net) | $ | |||||||
| Finance lease liabilities: | ||||||||
| Finance lease, current (recorded in Accounts payable, accrued and other current liabilities) | ||||||||
| Finance lease, non-current (recorded in Other non-current liabilities) | ||||||||
| Total finance lease liabilities | $ | |||||||
For the three months ended September 30, 2026, finance lease costs consisted of amortization of right-of-use assets of $66 and interest on lease obligations of $18 and were recorded in Depreciation and amortization and Interest expense, respectively, in the accompanying condensed consolidated statements of operations.
Stock Repurchase Program
On March 29, 2023, the Company’s Board of Directors authorized a share repurchase program to repurchase up to $250,000 of the Company’s Class A common stock (the “Stock Repurchase Program”). Pursuant to the Stock Repurchase Program, shares of Class A common stock may be purchased from time to time in open market or private transactions, block trades or such other manner as the Company may determine in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. For the three months ended September 30, 2026, the Company repurchased 314 shares of Class A common stock for $25,000 . As of September 30, 2026, the Company had $19,796 remaining available for repurchases under the Stock Repurchase Program.
Income Taxes
During the three months ended September 30, 2026 and 2025, the Company made income tax payments of $6,032 and $26 , respectively.
19
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Income tax benefit for the three months ended September 30, 2026 of $6,578 reflects an effective tax rate of (282 %). The estimated annual effective tax rate is below the statutory federal tax rate of 21% primarily due to excess tax benefits related to share-based compensation and state and local taxes, partially offset by nondeductible officers’ compensation.
Income tax benefit for the three months ended September 30, 2025 of $18,765 , reflects an effective tax rate of 46 %. The estimated annual effective tax rate exceeds the statutory federal tax rate of 21% primarily due to state and local taxes and excess tax benefits related to share-based compensation, partially offset by nondeductible officers’ compensation.
The Company was notified in August 2026 that the City of New York was commencing an audit of state income tax returns for the fiscal years ended June 2023 through June 2025. The Company does not expect the examinations, when finalized, to result in material changes.
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Item 2. 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 Madison Square Garden Entertainment Corp. and its direct and indirect subsidiaries (collectively, “we,” “us,” “our,” “MSG Entertainment,” or the “Company”). 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. 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 Starring the Radio City Rockettes (the “Christmas Spectacular”), the sports teams whose games are played at Madison Square Garden (“The Garden”) and other events which are presented in our venues, and our ability to attract such events;
•the on-ice and on-court performance of the sports teams whose games we host in our venues;
•competition, for example, from other venues and sports and entertainment options, including of new competing 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, including the impact of a recession on our business;
•the demand for sponsorship and suite arrangements;
•the effect of any postponements or cancellations by third-parties or the Company of scheduled events, whether as a result of a pandemic or other public health emergency due to operational challenges and other health and safety concerns or otherwise;
•the extent to which attendance at our venues may be impacted by government actions, renewed health concerns by potential attendees and reduced tourism;
•the impact on the payments we receive under the arena license agreements (the “Arena License Agreements”) that require the New York Knicks (the “Knicks”) of the National Basketball Association (the “NBA”) and the New York Rangers (the “Rangers”) of the National Hockey League (the “NHL”) to play their home games at The Garden as a result of government-mandated capacity restrictions, league restrictions and/or social-distancing or vaccination requirements, if any, at Knicks and Rangers games;
•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;
•geopolitical risks, including the direct and indirect impact of foreign wars and conflicts, including the conflict with Iran and related unrest in the Middle East, on international, domestic and local economies;
•seasonal fluctuations and other variations in our operating results and cash flow from period to period;
•enhancements or changes to existing productions and the investments associated with such 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 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;
21
•the costs associated with, and the outcome of, litigation, including any negative publicity, 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, including potential legislation related to ticketing, 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 the redevelopment of New York City’s Penn Station, including the impacts on The Garden and the potential transfer of the Infosys Theater at Madison Square Garden in connection with the redevelopment;
•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;
•changes in international trade policies and practices, including tariffs, and the economic impacts, volatility and uncertainty resulting therefrom;
•our ability to effectively manage any impacts of a pandemic or other public health emergency (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 performance by MSG Knickerbockers Corp. (together with its subsidiaries, as applicable, “MSG Knicks”) and MSG Rangers Corp. (together with its subsidiaries, as applicable, “MSG Rangers”) of their obligations under various agreements with the Company and ongoing commercial arrangements, including the Arena License Agreements;
•the tax-free treatment of the distribution by Sphere Entertainment Co. (together with its subsidiaries, as applicable, “Sphere Entertainment”) of approximately 67% of the outstanding stock of the Company on April 20, 2023;
•failure of the Company or Sphere Entertainment to satisfy its respective obligations under various agreements between the Company and Sphere Entertainment, including the services agreement; and
•the additional factors described under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2026 filed with the Securities and Exchange Commission on August 12, 2026 (the “2026 Form 10-K”).
We disclaim any obligation to update or revise the forward-looking statements contained herein, except as otherwise required by applicable federal securities laws. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
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 unaudited condensed consolidated financial statements and accompanying notes thereto included in this Quarterly Report on Form 10-Q, as well as the 2026 Form 10-K, to help provide an understanding of our financial condition, changes in financial condition and results of operations.
The Company operates and reports financial information in one segment.
The Company reports on a fiscal year basis ending on June 30th (“Fiscal Year”). In this MD&A, the years ending and ended on June 30, 2027 and 2026, respectively, are referred to as “Fiscal Year 2027” and “Fiscal Year 2026,” respectively.
This MD&A is organized as follows:
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.
22
Results of Operations. This section provides an analysis of our unaudited results of operations for the three months ended September 30, 2026 and 2025.
Liquidity and Capital Resources. This section provides a discussion of our financial condition and liquidity, an analysis of our cash flows for the three months ended September 30, 2026 and 2025, as well as certain contractual obligations.
Seasonality of Our Business. This section discusses the seasonal performance of our business.
Recently Issued Accounting Pronouncements and Critical Accounting Estimates. This section discusses accounting pronouncements that have been adopted by the Company and recently issued accounting pronouncements not yet adopted by the Company. This section should be read together with our critical accounting estimates, which are discussed in the 2026 Form 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recently Issued Accounting Pronouncements and Critical Accounting Estimates — Critical Accounting Estimates” and in the notes to the Audited Consolidated Annual Financial Statements of the Company included therein.
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 operate and report financial information in one reportable segment. 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 Infosys Theater at Madison Square Garden, and The Chicago Theatre, and leases Radio City Music Hall and the Beacon Theatre. The Company also owns and produces the original production, the Christmas Spectacular. In addition, the Company has an 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.
All of the Company’s revenues and assets are attributed to or located in the United States and are primarily concentrated in New York City.
Factors Affecting Results of Operations
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 Knicks and MSG Rangers, and the continuing popularity of the Christmas Spectacular. Certain of these factors in turn depend on the popularity and/or performance of the sports teams whose games we host at The Garden.
The 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.
23
Results of Operations
Comparison of the three months ended September 30, 2026 versus the three months ended September 30, 2025.
| Three Months Ended | ||||||||||||||||||||||||||
| September 30, | Change | |||||||||||||||||||||||||
| 2026 | 2025 | Amount | Percentage | |||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
Revenues from entertainment offerings | $ | 174,851 | $ | 131,310 | $ | 43,541 | 33 | % | ||||||||||||||||||
| Food, beverage, and merchandise revenues | 35,693 | 22,837 | 12,856 | 56 | % | |||||||||||||||||||||
Arena license fees and other leasing revenue(a) | 6,590 | 4,115 | 2,475 | 60 | % | |||||||||||||||||||||
| Total revenues | 217,134 | 158,262 | 58,872 | 37 | % | |||||||||||||||||||||
| Direct operating expenses | ||||||||||||||||||||||||||
Entertainment offerings, arena license fees, and other leasing direct operating expenses(b) | (107,608) | (88,558) | (19,050) | (22) | % | |||||||||||||||||||||
Food, beverage, and merchandise direct operating expenses | (19,147) | (13,812) | (5,335) | (39) | % | |||||||||||||||||||||
Total direct operating expenses | (126,755) | (102,370) | (24,385) | (24) | % | |||||||||||||||||||||
Selling, general, and administrative expenses | (66,862) | (56,585) | (10,277) | (18) | % | |||||||||||||||||||||
| Depreciation and amortization | (13,793) | (14,074) | 281 | 2 | % | |||||||||||||||||||||
| Impairment of long-lived assets | — | (13,782) | 13,782 | NM | ||||||||||||||||||||||
| Restructuring charges | — | (1,190) | 1,190 | NM | ||||||||||||||||||||||
| Operating income (loss) | 9,724 | (29,739) | 39,463 | NM | ||||||||||||||||||||||
| Interest income | 2,431 | 520 | 1,911 | NM | ||||||||||||||||||||||
| Interest expense | (9,136) | (11,028) | 1,892 | 17 | % | |||||||||||||||||||||
| Other expense, net | (688) | (172) | (516) | NM | ||||||||||||||||||||||
| Income (loss) from operations before income taxes | 2,331 | (40,419) | 42,750 | NM | ||||||||||||||||||||||
| Income tax benefit | 6,578 | 18,765 | (12,187) | (65) | % | |||||||||||||||||||||
| Net income (loss) | $ | 8,909 | $ | (21,654) | $ | 30,563 | NM | |||||||||||||||||||
______________________________________________________
(a) Arena license fees and other leasing revenue are recognized on a straight-line basis and are comprised of a contractual cash component plus or minus a non-cash component for each period presented. Arena license fees include operating lease revenue of (i) $906 and $879 collected in cash for the three months ended September 30, 2026 and 2025, respectively, and (ii) a non-cash portion of $418 and $445 for the three months ended September 30, 2026 and 2025, respectively.
(b) Venue operations and infrastructure costs are not specifically allocated to each revenue stream, but are instead attributed in their entirety to service revenue which is the Company’s principal revenue stream. Leasing direct operating expenses primarily consist of venue operations and infrastructure costs. As a result, the Company combines service and leasing direct operating expenses as “Entertainment offerings, arena license fees, and other leasing direct operating expenses” for presentation purposes.
NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.
24
Revenues
Revenues for the three months ended September 30, 2026 increased $58,872 as compared to the prior year period.
Revenues from Entertainment Offerings
Changes in revenues from entertainment offerings as compared to the prior year period were attributable to the following:
| Increase in revenues from concerts | $ | 30,059 | ||||||
| Increase in revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) | 11,164 | |||||||
| Increase in revenues from the sharing of economics pursuant to the Arena License Agreements | 2,250 | |||||||
| Other net increases | 68 | |||||||
| $ | 43,541 | |||||||
For the three months ended September 30, 2026, the increase in revenues from concerts was due to an increase in the number of concerts at The Garden and higher per-concert revenue, partially offset by a decrease in the number of concerts at the Company’s theaters.
For the three months ended September 30, 2026, the increase in revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) was due to an increase in the number of events at the Company’s venues and higher per-event revenue.
For the three months ended September 30, 2026, the increase in revenues subject to the sharing of economics with the Knicks and the Rangers pursuant to the Arena License Agreements was primarily due to higher suite license revenues (excluding the portion retained by the Company).
Food, Beverage, and Merchandise Revenues
Changes in food, beverage, and merchandise revenues as compared to the prior year period were attributable to the following:
| Increase in revenues from concerts | $ | 12,546 | ||||||
| Other net increases | 310 | |||||||
| $ | 12,856 | |||||||
For the three months ended September 30, 2026, the increase in food and beverage sales from concerts was due to higher per-concert revenue and an increase in the number of concerts at The Garden, partially offset by a decrease in the number of concerts at the Company’s theaters.
Arena License Fees and Other Leasing Revenue
For the three months ended September 30, 2026, the increase in arena license fees and other leasing revenue of $2,475 was due to increases in other leasing revenue.
25
Direct operating expenses
Direct operating expenses for the three months ended September 30, 2026 increased $24,385 as compared to the prior year period.
Direct Operating Expenses Associated with Entertainment Offerings, Arena License Fees and Other Leasing
Changes in direct operating expenses associated with entertainment offerings, arena license fees and other leasing as compared to the prior year period were attributable to the following:
For the three months ended September 30, 2026, the increase in direct operating expenses from concerts was due to an increase in the number of concerts at The Garden and higher per-concert expenses, partially offset by a decrease in the number of concerts at the Company’s theaters.
| Increase in direct operating expenses from concerts | $ | 11,749 | ||||||
| Increase in direct operating expenses associated with other live entertainment and sporting events (excluding the Knicks and Rangers) | 2,320 | |||||||
| Increase in direct operating expenses associated with the sharing of economics pursuant to the Arena License Agreements | 1,946 | |||||||
Increase in direct operating expenses associated with the Christmas Spectacular production | 1,249 | |||||||
| Other net increases | 1,786 | |||||||
| $ | 19,050 | |||||||
For the three months ended September 30, 2026, the increase in direct operating expenses from other live entertainment and sporting events (excluding the Knicks and Rangers) was due to an increase in the number of events at the Company’s venues, partially offset by lower per-event expenses.
For the three months ended September 30, 2026, the increase in expenses associated with the sharing of economics with the Knicks and the Rangers pursuant to the Arena License Agreements primarily reflects a proportional increase in contractual revenue sharing as a result of the increase in suite license fee revenues.
For the three months ended September 30, 2026, the increase in direct operating expenses associated with the presentation of the Christmas Spectacular production was primarily due to higher production related costs.
Direct Operating Expenses Associated with Food, Beverage, and Merchandise
For the three months ended September 30, 2026, direct operating expenses associated with food, beverage, and merchandise increased $5,335 to $19,147, as compared to the prior year period, primarily due to the related increase in food and beverage sales at concerts held at the Company’s venues.
Selling, general, and administrative expenses
For the three months ended September 30, 2026, selling, general, and administrative expenses increased $10,277 as compared to the prior year period, primarily due to an increase in employee compensation and benefits and other cost increases.
Impairment of long-lived assets
For the three months ended September 30, 2026, the Company did not record an impairment of long-lived assets, as compared to $13,782 recorded in the prior year period due to impairment losses recognized on the Company’s right-of-use lease assets in its New York corporate office.
Operating income (loss)
For the three months ended September 30, 2026, operating income was $9,724, compared to an operating loss of $29,739 for the prior year period. The change of $39,463 was primarily due to (i) an increase in revenues, (ii) a decrease in impairment of long-lived assets, and (iii) a decrease in restructuring charges, partially offset by (iv) an increase in direct operating expenses and (v) an increase in selling, general and administrative expenses.
Interest income
For the three months ended September 30, 2026, interest income increased $1,911 as compared to the prior year period, primarily due to higher average balances in the Company’s cash, cash equivalents and restricted cash.
26
Interest expense
For the three months ended September 30, 2026, interest expense decreased $1,892 as compared to the prior year period, primarily due to lower average borrowings under the National Properties Facilities (as defined below under Liquidity and Capital Resources).
Income taxes
In general, the Company is required to use an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in an interim period. The estimated annual effective tax rate is revised on a quarterly basis.
See Note 12. Additional Financial Information to the condensed consolidated financial statements included in “— Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for discussions of the Company’s income taxes.
Adjusted operating income (“AOI”)
The Company evaluates its performance based on several factors, of which the key financial measure is adjusted operating income, a non-GAAP financial measure. We define adjusted operating income as operating income excluding:
(i) depreciation, amortization and impairments of property and equipment, goodwill and other long-lived assets, including right-of-use lease assets and related lease costs,
(ii) share-based compensation expense,
(iii) restructuring charges or credits,
(iv) merger, spin-off, and acquisition-related costs, including merger-related litigation expenses,
(v) gains or losses on sales or dispositions of businesses and associated settlements,
(vi) the impact of purchase accounting adjustments related to business acquisitions,
(vii) amortization for capitalized cloud computing arrangement costs, and
(viii) gains and losses related to the remeasurement of liabilities under the Executive Deferred Compensation Plan.
The Company excludes impairments of long-lived assets, including right-of-use lease assets and related lease costs, as these expenses do not represent core business operating results 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, spin-off, and acquisition-related transaction 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 Executive Deferred Compensation Plan, 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 Executive Deferred Compensation Plan are recorded in operating income (loss) whereas gains and losses related to the remeasurement of the assets under the Executive Deferred Compensation Plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recorded in other 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 consolidated 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.
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The following is a reconciliation of operating income (loss) to adjusted operating income for the three months ended September 30, 2026 as compared to the prior year period:
| Three Months Ended | ||||||||||||||||||||||||||
| September 30, | Change | |||||||||||||||||||||||||
| 2026 | 2025 | Amount | Percentage | |||||||||||||||||||||||
| Operating income (loss) | $ | 9,724 | $ | (29,739) | $ | 39,463 | NM | |||||||||||||||||||
| Depreciation and amortization | 13,793 | 14,074 | (281) | (2) | % | |||||||||||||||||||||
| Impairment of long-lived assets and related lease costs | 937 | 13,782 | (12,845) | (93) | % | |||||||||||||||||||||
| Share-based compensation | 9,594 | 7,293 | 2,301 | 32 | % | |||||||||||||||||||||
| Restructuring charges | — | 1,190 | (1,190) | NM | ||||||||||||||||||||||
| Amortization for capitalized cloud computing arrangement costs | 204 | 175 | 29 | 17 | % | |||||||||||||||||||||
| Remeasurement of deferred compensation plan liabilities | 24 | 306 | (282) | (92) | % | |||||||||||||||||||||
| Adjusted operating income | $ | 34,276 | $ | 7,081 | $ | 27,195 | NM | |||||||||||||||||||
________________________________________________________
NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.
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Liquidity and Capital Resources
Sources and Uses 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 Revolving Credit Facility (as defined below). Our principal uses of cash include working capital-related items (including funding our operations), capital spending, debt service, and investments and related loans and advances that we may fund from time to time. We may also use cash to continue to repurchase shares of our Class A common stock pursuant to the share repurchase program authorized by our Board of Directors on March 29, 2023, of which there was $19,796 remaining as of September 30, 2026. 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, 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 September 30, 2026, the Company’s unrestricted cash and cash equivalents balance was $193,653. The principal balance of the Company’s total debt outstanding as of September 30, 2026 was $571,289 and the Company had $131,831 of available borrowing capacity under the National Properties Revolving Credit Facility. We believe we have sufficient liquidity from cash and cash equivalents, available borrowing capacity under the National Properties Revolving Credit Facility and cash flows from operations to fund our operations and satisfy any obligations for the foreseeable future.
National Properties Facilities
General. On June 27, 2025, MSG National Properties, LLC (“MSG National Properties”), MSG Entertainment Holdings, LLC (“MSG Entertainment Holdings”) and certain subsidiaries of MSG National Properties entered into Amendment No. 4 (“Amendment No. 4”) to the credit agreement dated June 30, 2022 (as amended, supplemented and otherwise modified prior to June 27, 2025, the “Prior National Properties Credit Agreement” and, as amended by Amendment No. 4, the “National Properties Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent, and the lenders and letter of credit issuers party thereto, pursuant to which, among other things, (i) the term loan facility under the Prior National Properties Credit Agreement (the “Prior National Properties Term Loan Facility”) was refinanced in its entirety with a five-year $609,375 senior secured term loan facility (the “National Properties Term Loan Facility”) and (ii) the revolving credit facility under the Prior National Properties Credit Agreement (the “Prior National Properties Revolving Credit Facility” and, together with the Prior National Properties Term Loan Facility, the “Prior National Properties Facilities”) was refinanced in its entirety with a five-year, $150,000 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 September 30, 2026, outstanding letters of credit were $18,169 and the remaining balance available under the National Properties Revolving Credit Facility was $131,831.
Proceeds. Proceeds of the National Properties Revolving Credit Facility may be used to fund working capital needs, for general corporate purposes of MSG National Properties and its subsidiaries and to make distributions to MSG Entertainment Holdings.
Interest Rates. Borrowings under the National Properties Facilities bear interest at a floating rate, which at the option of MSG National Properties may be either (a) Term Secured Overnight Financing Rate (“Term SOFR”) plus an applicable margin ranging from 1.75% to 2.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries, or (b) a base rate plus an applicable margin ranging from 0.75% to 1.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries. The National Properties Credit Agreement requires MSG National Properties to pay a commitment fee ranging from 0.20% to 0.30% in respect of the daily unused commitments under the National Properties Revolving Credit Facility. MSG National Properties is also required to pay customary letter of credit fees, as well as fronting fees, to banks that issue letters of credit pursuant to the National Properties Credit Agreement. The interest rate on the National Properties Term Loan Facility as of September 30, 2026 was 5.90%.
Principal Repayments. Subject to customary notice and minimum amount conditions, the Company may voluntarily repay outstanding loans under the National Properties Facilities or terminate commitments under the National Properties Revolving Credit Facility, at any time, in whole or in part, subject only to customary breakage costs in the case of prepayment of Term SOFR loans. The National Properties Facilities will mature on June 27, 2030. The principal obligations under the National Properties Term Loan Facility are repaid in quarterly installments that commenced with the fiscal quarter ended September 30, 2025, in an aggregate amount equal to 5.00% per annum (1.25% per quarter) 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. 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
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certain sales of assets or casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights), subject to certain exceptions.
Covenants. The National Properties Credit Agreement includes financial covenants requiring MSG National Properties and its restricted subsidiaries to maintain a specified minimum debt service coverage ratio and specified maximum total leverage ratio. The debt service coverage ratio covenant is set at a ratio of 2.50:1. The leverage ratio covenant is tested based on the ratio of MSG National Properties and its restricted subsidiaries’ consolidated total indebtedness to adjusted operating income, each as defined in the National Properties Credit Agreement, with a maximum ratio of 3.50:1. As of September 30, 2026, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Credit Agreement.
In addition to the financial covenants discussed above, the National Properties Credit Agreement and the related security agreement contain certain customary representations and warranties, affirmative and negative covenants and events of default. The National Properties Credit Agreement contains certain restrictions on the ability of MSG National Properties and its restricted subsidiaries to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the National Properties Credit Agreement, including the following: (i) incur additional indebtedness; (ii) create liens on certain assets; (iii) make investments, loans or advances in or to other persons; (iv) pay dividends and distributions or repurchase capital stock (which will restrict the ability of MSG National Properties to make cash distributions to the Company); (v) repay, redeem or repurchase certain indebtedness; (vi) change its lines of business; (vii) engage in certain transactions with affiliates; (viii) amend their respective organizational documents; (ix) merge or consolidate; and (x) make certain dispositions.
Guarantors and Collateral. All obligations under the National Properties Facilities are guaranteed by MSG Entertainment Holdings and MSG National Properties’ existing and future direct and indirect domestic subsidiaries, other than the subsidiaries that own The Garden and certain other excluded subsidiaries (the “Subsidiary Guarantors”). All obligations under the National Properties Facilities, including the guarantees of those obligations, are secured by certain of the assets of MSG National Properties and the Subsidiary Guarantors (collectively, “Collateral”) including, but not limited to, a pledge of some or all of the equity interests held directly or indirectly by MSG National Properties in each Subsidiary Guarantor. The Collateral does not include, among other things, any interests in The Garden, the Infosys Theater at Madison Square Garden or The Chicago Theatre or the leasehold interests in Radio City Music Hall or the Beacon Theatre.
Contractual Obligations
The Company did not have any material changes in its contractual obligations since the end of Fiscal Year 2026 other than activities in the ordinary course of business. See Note 7. Commitments and Contingencies, to the condensed consolidated financial statements included in “— Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for further details on the Company’s contractual obligations.
Cash Flow Discussion
As of September 30, 2026, cash, cash equivalents and restricted cash totaled $194,212, as compared to $294,158 as of June 30, 2026. The following table summarizes the Company’s cash flow activities for the three months ended September 30, 2026 and 2025:
| Three Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net cash (used in) provided by operating activities | $ | (26,200) | $ | 19,808 | ||||||||||
| Net cash used in investing activities | (13,152) | (6,798) | ||||||||||||
| Net cash used in financing activities | (60,594) | (26,077) | ||||||||||||
| Net decrease in cash, cash equivalents, and restricted cash | $ | (99,946) | $ | (13,067) | ||||||||||
Operating Activities
Net cash used in operating activities for the three months ended September 30, 2026 was $26,200 in the current year period, as compared to net cash provided by operating activities of $19,808 in the prior year period, primarily due to an increase in cash outflows from changes in working capital of $78,306, partially offset by higher net income adjusted for non-cash items of $32,298. The increase in cash outflows from changes in working capital was mainly driven by (i) higher net cash outflows for accrued and other current and non-current liabilities, primarily due to an increase in payments to promoters, and (ii) a smaller increase in deferred revenue, due to the timing of billings and the recognition of event and sponsorship and signage revenues, partially offset by (iii) an increase in accounts payable, primarily due to the timing of event settlements, all as compared to the prior year period.
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Investing Activities
Net cash used in investing activities for the three months ended September 30, 2026 increased by $6,354 to $13,152 as compared to the prior year period due to an increase in capital expenditures.
Financing Activities
Net cash used in financing activities for the three months ended September 30, 2026 increased by $34,517 to $60,594 as compared to the prior year period primarily due to (i) the absence of proceeds from the National Properties Revolving Credit Facilities in the current year period, and (ii) an increase in taxes paid in lieu of shares issued for equity-based compensation, offset by (iii) lower principal repayments under the National Properties Facilities.
Seasonality of Our Business
The revenues the Company earns from the Christmas Spectacular and arena license fees from the Knicks and the Rangers in connection with their use of The Garden generally mean 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 and fourth fiscal quarters being disproportionately lower.
Recently Issued Accounting Pronouncements and Critical Accounting Estimates
Recently Issued Accounting Pronouncements
See Note 2. Summary of Significant Accounting Policies, to the condensed consolidated financial statements included in “— Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for discussion of recently issued accounting pronouncements.
Critical Accounting Estimates
There have been no material changes to the Company’s critical accounting estimates from those set forth in the 2026 Form 10-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There were no material changes to the disclosures regarding market risks in connection with our pension and postretirement plans. See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of the 2026 Form 10-K.
Potential Interest Rate Risk Exposure
The Company, through its subsidiary, MSG National Properties, is subject to potential interest rate risk exposure related to borrowings incurred under its credit facilities. Changes in interest rates may increase interest expense payments with respect to any borrowings incurred under these credit facilities. The effect of a hypothetical 200 basis point increase in floating interest rate prevailing as of September 30, 2026 and continuing for a full year would increase the Company’s interest expense on the outstanding amounts under the credit facilities by $11,426.
Item 4. Controls and Procedures
Our management, with the participation of our Executive Chairman and Chief Executive Officer and our Executive Vice President and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our Executive Chairman and Chief Executive Officer and our Executive Vice President and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On March 29, 2023, the Company’s Board of Directors authorized a share repurchase program to repurchase up to $250 million of the Company’s Class A common stock (the “Stock Repurchase Program”). Pursuant to the Stock Repurchase Program, shares of Class A common stock may be purchased from time to time in open market or private transactions, block trades or such other manner as the Company may determine in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. For the three months ended September 30, 2026, the Company repurchased 314,349 shares of Class A common stock for approximately $25 million. As of September 30, 2026, the Company had approximately $20 million remaining available for repurchases under the Stock Repurchase Program.
The following table provides information with respect to the Company’s purchases of its Class A common stock during the quarter ended September 30, 2026:
| Period | Total Number of Shares Purchased | Average Price Paid per Share (a) | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | ||||||||||||||||||||||
| July 2026 | — | $ | — | — | $ | 44,796,352 | ||||||||||||||||||||
| August 2026 | — | — | — | 44,796,352 | ||||||||||||||||||||||
| September 2026 | 314,349 | 79.53 | 314,349 | 19,796,425 | ||||||||||||||||||||||
| 314,349 | $ | 79.53 | 314,349 | $ | 19,796,425 | |||||||||||||||||||||
_________________
(a) The average price paid per share excludes excise tax.
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Item 6. Exhibits
(a) Index to Exhibits
_________________
EXHIBIT NO. | DESCRIPTION | |||||||
10.1 | Form of Madison Square Garden Entertainment Corp. Restricted Stock Units Agreement.† | |||||||
10.2 | Form of Madison Square Garden Entertainment Corp. Performance Restricted Stock Units Agreement.† | |||||||
10.3 | Form of Madison Square Garden Entertainment Corp. Option Agreement.† | |||||||
10.4 | Form of Madison Square Garden Entertainment Corp. Performance Option Agreement.† | |||||||
10.5 | Madison Square Garden Entertainment Corp. Executive Deferred Compensation Plan, as amended and restated.† | |||||||
10.6 | Madison Square Garden Entertainment Corp. Policy Concerning Certain Matters Relating to Sphere Entertainment Co., MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.), MSG Rangers Corp. (formerly MSGS Spinco, Inc.) and AMC Global Media Inc., Including Responsibilities of Overlapping Directors and Officers. | |||||||
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 the Madison Square Garden Entertainment Corp. Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of operations, (iii) condensed consolidated statements of comprehensive income, (iv) condensed consolidated statements of cash flows, (v) condensed consolidated statements of equity (deficit), and (vi) notes to condensed consolidated financial statements. | |||||||
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 formatted in Inline XBRL and contained in Exhibit 101. | |||||||
† This exhibit is a management contract or a compensatory plan or arrangement.
* Furnished herewith. These exhibits shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibits shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 4th day of November 2026.
| Madison Square Garden Entertainment Corp. | ||||||||
| By: | /s/ DAVID J. COLLINS | |||||||
| Name: | David J. Collins | |||||||
| Title: | Executive Vice President and Chief Financial Officer | |||||||
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