MSG Knickerbockers quarterly loss widens to $31.1M
MSGK will present the Rangers business as discontinued operations beginning with the quarter ending December 31, 2026.
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
MSG Knickerbockers Corp. (MSGK) reported $45.489 million in revenue and a $31.137 million net loss for the three months ended September 30, 2026. Revenue rose 15% from $39.454 million, while operating loss narrowed to $25.457 million from $27.425 million. Net loss widened from $8.798 million as miscellaneous income, net, of $15.085 million shifted to miscellaneous expense, net, of $3.663 million.
Cash used in operations was $146.268 million, versus $84.954 million a year earlier, and cash and cash equivalents were $40.046 million as of September 30. The Knicks Revolving Credit Facility balance was $282 million as of that date; $40 million was borrowed during the quarter and another $30 million on October 22.
On October 26, MSGK completed the distribution of MSG Rangers Corp., which owns the Rangers business. Holders of record on October 20 received one MSG Rangers Class A share for every two MSGK Class A shares, and one Class B share for every two MSGK Class B shares. MSGK contributed $19.095 million in cash to MSG Rangers. The Rangers results will be presented as discontinued operations beginning with the quarter ending December 31, 2026.
2 points · 0 major0 major · 2 points
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 rose 15% to $45.489 million for the quarter.
- Minor pointOperating loss narrowed to $25.457 million from $27.425 million.
Negative
- Moderate pointQuarterly net loss widened to $31.137 million from $8.798 million.
- Moderate pointOperating cash use rose to $146.268 million from $84.954 million.
Filing Explained
The quarterly report says the Rangers distribution is complete: the
Key Figures
Revenue: $45.489 million
Operating loss: ($25.457 million)
Net loss: ($31.137 million)
+4 more
7 metrics
Revenue
$45.489 million
Three months ended September 30, 2026; $39.454 million in 2025
Operating loss
($25.457 million)
Three months ended September 30, 2026; ($27.425 million) in 2025
Net loss
($31.137 million)
Three months ended September 30, 2026; ($8.798 million) in 2025
Net cash used in operating activities
($146.268 million)
Three months ended September 30, 2026; ($84.954 million) in 2025
Cash and cash equivalents
$40.046 million
As of September 30, 2026
Knicks Revolving Credit Facility balance
$282 million
As of September 30, 2026
Cash contributed to MSG Rangers
$19.095 million
In connection with the October 26, 2026 Rangers Distribution
Key Terms
discontinued operations, remaining performance obligations, Level III inputs, debt service ratio
4 terms
discontinued operations financial
"presented as discontinued operations under U.S. generally accepted accounting principles"
Discontinued operations are parts of a company that it has decided to sell or shut down, and no longer plans to run in the future. This matters to investors because it helps them understand which parts of the business are ongoing and which are being phased out, providing a clearer picture of the company’s current performance and future prospects. Think of it like a store closing a department—it no longer contributes to sales or profits.
remaining performance obligations financial
"performance obligations that are unsatisfied (or partially unsatisfied)"
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.
Level III inputs financial
"considered Level III inputs under the fair value hierarchy"
debt service ratio financial
"comply with a debt service ratio of at least 1.5:1.0"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What revenue and net loss did MSGK report for the September 2026 quarter?
MSGK reported $45.489 million in revenue and a $31.137 million net loss for the three months ended September 30, 2026. Revenue was $39.454 million and net loss was $8.798 million in the comparable 2025 quarter.
What were the terms of MSGK's Rangers distribution?
The distribution was completed on October 26, 2026. Holders of record on October 20 received one MSG Rangers Class A share for every two MSGK Class A shares and one Class B share for every two MSGK Class B shares. MSGK contributed $19.095 million in cash to MSG Rangers.
How much was outstanding on MSGK's Knicks revolving credit facility?
The outstanding balance under the Knicks Revolving Credit Facility was $282 million as of September 30, 2026. MSGK reported borrowing $40 million during the quarter and another $30 million on October 22. The interest rate was 5.25% as of September 30.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
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: 1-36900
(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 ) 465-6300
(Former name, former address and former fiscal year, if changed since last report)
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 | — | |||||||
Table of Contents
MSG KNICKERBOCKERS CORP.
INDEX TO FORM 10-Q
| Page | |||||
PART I. FINANCIAL INFORMATION | |||||
Item 1. Financial Statements | |||||
Consolidated Balance Sheets as of September 30, 2026 (unaudited) and June 30, 2026 | 1 | ||||
Consolidated Statements of Operations for the three months ended September 30, 2026 and 2025 (unaudited) | 3 | ||||
Consolidated Statements of Comprehensive Loss for the three months ended September 30, 2026 and 2025 (unaudited) | 4 | ||||
Consolidated Statements of Cash Flows for the three months ended September 30, 2026 and 2025 (unaudited) | 5 | ||||
Consolidated Statements of Equity for the three months ended September 30, 2026 and 2025 (unaudited) | 6 | ||||
Notes to Consolidated Financial Statements (unaudited) | 7 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 35 | ||||
Item 4. Controls and Procedures | 35 | ||||
PART II. OTHER INFORMATION | |||||
Item 1. Legal Proceedings | 36 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 36 | ||||
Item 6. Exhibits | 37 | ||||
Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
MSG KNICKERBOCKERS CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
| September 30, 2026 | June 30, 2026 | |||||||||||||
| (Unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Current Assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net of allowance for doubtful accounts of $ | ||||||||||||||
| Net related party receivables | ||||||||||||||
| Prepaid expenses | ||||||||||||||
| Other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
Property and equipment, net of accumulated depreciation and amortization of $ | ||||||||||||||
| Right-of-use lease assets | ||||||||||||||
| Indefinite-lived intangible assets | ||||||||||||||
| Goodwill | ||||||||||||||
| Investments | ||||||||||||||
| Deferred tax assets, net | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| See accompanying notes to consolidated financial statements. | ||||||||||||||
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MSG KNICKERBOCKERS CORP.
CONSOLIDATED BALANCE SHEETS (Continued)
(in thousands, except per share data)
| September 30, 2026 | June 30, 2026 | |||||||||||||
| (Unaudited) | ||||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Current Liabilities: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Net related party payables | ||||||||||||||
| Debt | ||||||||||||||
| Accrued liabilities: | ||||||||||||||
| Employee-related costs | ||||||||||||||
| League-related accruals | ||||||||||||||
| Other accrued liabilities | ||||||||||||||
| Operating lease liabilities, current | ||||||||||||||
| Deferred revenue | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt | ||||||||||||||
| Operating lease liabilities, noncurrent | ||||||||||||||
| Other employee-related costs | ||||||||||||||
| Deferred revenue, noncurrent | ||||||||||||||
| Total liabilities | ||||||||||||||
| Commitments and contingencies (see Note 12) | ||||||||||||||
| MSG Knickerbockers Corp. Stockholders’ Equity: | ||||||||||||||
Class A Common Stock, par value $ | ||||||||||||||
Class B Common Stock, par value $ | ||||||||||||||
Preferred stock, par value $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
Treasury stock, at cost, | ( | ( | ||||||||||||
| Accumulated deficit | ( | ( | ||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
| Total equity | ( | ( | ||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
See accompanying notes to consolidated financial statements.
2
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MSG KNICKERBOCKERS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Revenues (a) | $ | $ | ||||||||||||
| Operating expenses: | ||||||||||||||
Direct operating expenses (b) | ||||||||||||||
Selling, general and administrative expenses (c) | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Restructuring charges | ||||||||||||||
| Operating loss | ( | ( | ||||||||||||
| Other income (expense): | ||||||||||||||
| Interest income | ||||||||||||||
| Interest expense | ( | ( | ||||||||||||
| Miscellaneous (expense) income, net | ( | |||||||||||||
| ( | ||||||||||||||
| Loss before income taxes | ( | ( | ||||||||||||
| Income tax benefit | ||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Basic loss per common share attributable to MSG Knickerbockers Corp.’s stockholders | $ | ( | $ | ( | ||||||||||
| Diluted loss per common share attributable to MSG Knickerbockers Corp.’s stockholders | $ | ( | $ | ( | ||||||||||
| Weighted-average number of common shares outstanding: | ||||||||||||||
| Basic | ||||||||||||||
| Diluted | ||||||||||||||
_________________
(a)Includes revenues from related parties of $6,902 and $6,760 for the three months ended September 30, 2026 and 2025, respectively.
(b)Includes net charges from related parties of $2,854 and $2,454 for the three months ended September 30, 2026 and 2025, respectively.
(c)Includes net charges from related parties of $15,300 and $14,732 for the three months ended September 30, 2026 and 2025, respectively.
See accompanying notes to consolidated financial statements.
3
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MSG KNICKERBOCKERS CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
(in thousands)
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Other comprehensive income, before income taxes: | ||||||||||||||
| Pension plans: | ||||||||||||||
Amounts reclassified from accumulated other comprehensive loss: | ||||||||||||||
| Amortization of actuarial loss included in net periodic benefit cost | ||||||||||||||
| Other comprehensive income, before income taxes | ||||||||||||||
| Income tax expense related to items of other comprehensive income | ( | |||||||||||||
| Other comprehensive income, net of income taxes | ||||||||||||||
| Comprehensive loss | $ | ( | $ | ( | ||||||||||
See accompanying notes to consolidated financial statements.
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MSG KNICKERBOCKERS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Deferred income taxes | ( | ( | ||||||||||||
| Share-based compensation expense | ||||||||||||||
| Unrealized loss (gain) on equity investments with readily determinable fair value and warrants | ( | |||||||||||||
| Other non-cash adjustments | ||||||||||||||
| Change in assets and liabilities: | ||||||||||||||
| Accounts receivable | ( | ( | ||||||||||||
| Net related party receivables | ( | ( | ||||||||||||
| Prepaid expenses and other assets | ( | ( | ||||||||||||
| Investments | ( | ( | ||||||||||||
| Accounts payable | ( | ( | ||||||||||||
| Net related party payables | ( | |||||||||||||
| Accrued and other liabilities | ( | ( | ||||||||||||
| Deferred revenue | ||||||||||||||
| Operating lease right-of-use assets and lease liabilities | ( | ( | ||||||||||||
| Net cash used in operating activities | ( | ( | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Purchases of investments | ( | ( | ||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Dividends paid | ( | |||||||||||||
| Taxes paid in lieu of shares issued for equity-based compensation | ( | ( | ||||||||||||
| Proceeds from revolving credit facilities | ||||||||||||||
| Net cash provided by (used in) financing activities | ( | |||||||||||||
| Net decrease in cash, cash equivalents and restricted cash | ( | ( | ||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||||||||
| Non-cash investing and financing activities: | ||||||||||||||
| Capital expenditures incurred but not yet paid | $ | $ | ||||||||||||
See accompanying notes to consolidated financial statements.
5
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MSG KNICKERBOCKERS CORP.
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(in thousands)
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Common Stock Issued | $ | $ | ||||||||||||
| Additional Paid-In Capital | ||||||||||||||
| Beginning Balance | ||||||||||||||
| Share-based compensation | ||||||||||||||
| Tax withholding associated with shares issued for equity-based compensation | ( | ( | ||||||||||||
| Common stock issued under stock incentive plans | ( | ( | ||||||||||||
| Ending Balance | ||||||||||||||
| Treasury Stock | ||||||||||||||
| Beginning Balance | ( | ( | ||||||||||||
| Common stock issued under stock incentive plans | ||||||||||||||
| Ending Balance | ( | ( | ||||||||||||
| Accumulated Deficit | ||||||||||||||
| Beginning Balance | ( | ( | ||||||||||||
| Net loss | ( | ( | ||||||||||||
Dividends declared ($ | ( | |||||||||||||
| Common stock issued under stock incentive plans | ( | |||||||||||||
| Ending Balance | ( | ( | ||||||||||||
| Accumulated Other Comprehensive Loss | ||||||||||||||
| Beginning Balance | ( | ( | ||||||||||||
| Other comprehensive income | ||||||||||||||
| Ending Balance | ( | ( | ||||||||||||
| Total Equity | $ | ( | $ | ( | ||||||||||
See accompanying notes to consolidated financial statements.
6
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
All amounts included in the following Notes to Consolidated Financial Statements are presented in thousands, except per share data or as otherwise noted.
Note 1. Description of Business and Basis of Presentation
Description of Business
MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp. and referred to herein together with its subsidiaries, collectively, as “we,” “us,” “our,” “MSG Knicks,” or the “Company”), owns and operates one of the most storied franchises in all of professional sports, the New York Knickerbockers (“Knicks”) of the National Basketball Association (“NBA”) and, prior to the Rangers Distribution (as defined below), owned and operated the New York Rangers (“Rangers”) of the National Hockey League (“NHL”). Both the Knicks and the Rangers play their home games in Madison Square Garden Arena (“The Garden”). The Company also includes the Westchester Knicks of the NBA G League, and prior to the Rangers Distribution, the Hartford Wolf Pack of the American Hockey League. These professional sports franchises are collectively referred to herein as the “sports teams” or the “teams.” Prior to the Rangers Distribution, the Company also operated a professional sports team performance center — the Madison Square Garden Training Center in Greenburgh, NY.
The Company operates and reports financial information in one segment. The Company’s decision to organize as one operating segment and report in one
The Company was originally incorporated in Delaware on March 4, 2015 as an indirect, wholly-owned subsidiary of MSG Networks Inc. (“MSG Networks”). All the outstanding common stock of the Company was distributed to MSG Networks stockholders (the “MSGS Distribution”) on September 30, 2015.
On April 17, 2020, the Company distributed all of the outstanding common stock of Sphere Entertainment Co. (“Sphere Entertainment”) to its stockholders (the “Sphere Distribution”).
On July 9, 2021, MSG Networks merged with a subsidiary of Sphere Entertainment and became a wholly-owned subsidiary of Sphere Entertainment. Accordingly, agreements between the Company and MSG Networks are now effectively agreements with Sphere Entertainment on a consolidated basis.
On June 10, 2025, the Company completed its conversion from a corporation organized under the laws of the State of Delaware to a corporation organized under the laws of the State of Nevada.
Unless the context otherwise requires, all references to Madison Square Garden Entertainment Corp. (“MSG Entertainment”), Sphere Entertainment and MSG Networks refer to such entity, together with its direct and indirect subsidiaries.
Spin-off Transaction
On October 26, 2026 (the “Distribution Date”), the Company distributed 100 % of the outstanding common stock of MSG Rangers Corp. (“MSG Rangers”, formerly MSGS Spinco, Inc.) to its stockholders (the “Rangers Distribution”). MSG Rangers owns the New York Rangers business previously owned and operated by the Company. In the Rangers Distribution, stockholders of the Company received (a) one share of MSG Rangers’ Class A common stock, par value $0.01 per share, for every two shares of the Company’s Class A common stock, par value $0.01 per share (“Class A Common Stock”), held of record as of the close of business, New York City time, 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 the Company’s Class B common stock, par value $0.01 per share, held of record as of the close of business, New York City time, on the Record Date. In connection with the Rangers Distribution, the Company contributed $19,095 of cash to MSG Rangers.
The accompanying unaudited consolidated interim financial statements include the financial results of the Company’s Rangers business in continuing operations for all periods presented. Beginning with the Company’s Quarterly Report on Form 10-Q for the quarterly period ending December 31, 2026, the historical financial results of the Rangers business through the Distribution Date will be presented as discontinued operations under U.S. generally accepted accounting principles (“GAAP”) for all periods presented.
Basis of Presentation
The accompanying unaudited consolidated interim financial statements (referred to as the “Financial Statements” herein) have been prepared in accordance with GAAP and Article 10 of Regulation S-X of the Securities and Exchange Commission for interim financial information, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
fiscal year ended June 30, 2026 (our “2026 Form 10-K”). Certain information and note disclosures normally included in the annual financial statements have been condensed or omitted from these Financial Statements. The Financial Statements presented in this Quarterly Report on Form 10-Q are unaudited; however, in the opinion of management, the Financial Statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. 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. The Company’s dependence on revenues from the Knicks, and prior to the Rangers Distribution, the Rangers, generally means that it earns a disproportionate share of its revenues in the second and third quarters of the Company’s fiscal year, which is when the majority of the teams’ games are played.
Note 2. Accounting Policies
Principles of Consolidation
The consolidated financial statements of the Company include the accounts of MSG Knickerbockers Corp. and its subsidiaries. All significant intracompany transactions and accounts within the Financial Statements have been eliminated.
Use of Estimates
The preparation of the 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 valuation of accounts receivable, other current assets, goodwill, intangible assets, other long-lived assets, fair value of investments, deferred tax valuation allowance, tax accruals and other liabilities. In addition, estimates are used in revenue recognition, revenue sharing expense (net of escrow), luxury tax expense, income tax expense (benefit), performance and share-based compensation, depreciation and amortization, litigation matters and other matters. Management believes its use of estimates in the Financial Statements to be reasonable.
Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and, as such, these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the Company’s financial statements in future periods.
Recent Accounting Pronouncements
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires the disclosure of additional information about specific expense categories in the notes to the financial statements. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ending June 30, 2028 and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) - Targeted Improvements to the Accounting for Internal-Use Software. The ASU modernizes and clarifies the threshold for when an entity is required to start capitalizing software costs and is based on 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. The ASU is effective for the Company in the first quarter of the fiscal year ending June 30, 2029. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 3. Revenue Recognition
Contracts with Customers
All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers. For the three months ended September 30, 2026, the Company recorded impairment losses of $901 on receivables arising from contracts with customers. For the three months ended September 30, 2026, the Company did not record impairment losses on contract assets arising from contracts with customers. For the three months ended September 30, 2025, the Company did not
Disaggregation of Revenue
The following table disaggregates the Company’s revenues by type of goods or services in accordance with the disclosure requirements set forth in Accounting Standards Codification (“ASC”) Subtopic 280-10-50-38 to 40 and the disaggregation of revenue required disclosures in accordance with ASC Subtopic 606-10-50-5 for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Event-related (a) | $ | $ | ||||||||||||
Media rights (b) | ||||||||||||||
| Sponsorship, signage and suite licenses | ||||||||||||||
| League distributions and other | ||||||||||||||
| Total revenues from contracts with customers | $ | $ | ||||||||||||
_________________
(a)Consists of (i) ticket sales and other ticket-related revenues and (ii) food, beverage and merchandise sales at The Garden.
(b)Consists of (i) local media rights fees from MSG Networks and (ii) revenue from distributions through league-wide national and international media contracts.
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed receivables, contract assets and contract liabilities in the consolidated balance sheets. The following table provides information about contract balances from the Company’s contracts with customers as of September 30, 2026 and June 30, 2026:
| September 30, | June 30, | |||||||||||||
| 2026 | 2026 | |||||||||||||
Receivables from contracts with customers, net (a) | $ | $ | ||||||||||||
Contract assets, current (b) | ||||||||||||||
Deferred revenue, including non-current portion (c), (d) | ||||||||||||||
_________________
(a)Receivables from contracts with customers, net, which are reported in Accounts receivable, net, Other assets and Net related party receivables in the accompanying 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 reported above included $1,337 and $1,409 , respectively, related to contracts with customers that are related parties. See Note 16 for further details on these related party arrangements. Receivables from contracts with customers, net, exclude amounts recorded in Accounts receivable, net, associated with amounts due from the NBA and NHL related to escrow.
(b)Contract assets, current, which are reported as Other current assets in the accompanying consolidated balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to the customer, for which the Company does not have an unconditional right to bill as of the reporting date. Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
(c)Deferred revenue, including non-current portion primarily relates to the Company’s receipt of consideration from customers, inclusive of sales tax collected, or billing customers in advance of the Company’s transfer of goods or services to those customers. Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to the customer. The Company had deferred revenue related to local media rights of $16,430 and $0 as of September 30, 2026 and June 30, 2026, respectively. See Note 16 for further details on these related party arrangements.
(d)Revenue recognized for the three months ended September 30, 2026 relating to the deferred revenue balance as of July 1, 2026 was $5,795 .
Transaction Price Allocated to the Remaining Performance Obligations
The following table depicts the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2026. 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. Additionally, the Company has elected to exclude variable consideration from its disclosure related to the remaining performance obligations under its local telecast rights arrangements with MSG Networks, league-wide national and international media contracts, and certain other arrangements with variable consideration.
| Fiscal year ending June 30, 2027 (remainder) | $ | |||||||
| Fiscal year ending June 30, 2028 | ||||||||
| Fiscal year ending June 30, 2029 | ||||||||
| Fiscal year ending June 30, 2030 | ||||||||
| Fiscal year ending June 30, 2031 | ||||||||
| Thereafter | ||||||||
| $ | ||||||||
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 4. Computation of Earnings (Loss) per Common Share
The following table presents a reconciliation of earnings (loss) allocated to common shares and a reconciliation of weighted-average shares used in the calculations of basic and diluted earnings (loss) per common share attributable to the Company’s stockholders (“EPS”) and the number of shares excluded from diluted earnings (loss) per common share, as they were anti-dilutive:
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net loss allocable to common shares, basic and diluted (numerator): | ||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
Less: Dividends to other-than-common stockholders (a) | ||||||||||||||
| Net loss allocable to common shares, basic and diluted (numerator): | $ | ( | $ | ( | ||||||||||
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 shares excluded from diluted EPS | ||||||||||||||
| Basic loss per common share attributable to MSG Knickerbockers Corp.’s stockholders | $ | ( | $ | ( | ||||||||||
| Diluted loss per common share attributable to MSG Knickerbockers Corp.’s stockholders | $ | ( | $ | ( | ||||||||||
_________________
(a)Dividends to other-than-common stockholders consist of forfeitable rights to dividends declared and payable to holders of the Company’s unvested restricted stock units and performance restricted stock units.
Note 5. Restructuring Charges
During the three months ended September 30, 2026, the Company recorded restructuring charges related to termination benefits provided to certain employees of $579 , which were recognized within accrued employee-related costs in the accompanying consolidated balance sheets.
There were no restructuring charges for the three months ended September 30, 2025.
| Restructuring Liability | |||||
| June 30, 2026 | $ | ||||
| Restructuring charges | |||||
| Payments | ( | ||||
| September 30, 2026 | $ | ||||
Note 6. Team Personnel Transactions
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 7. Cash, Cash Equivalents and Restricted Cash
The following table provides a summary of the amounts recorded as cash, cash equivalents and restricted cash as of September 30, 2026, June 30, 2026 and September 30, 2025:
| As of | ||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | September 30, 2025 | ||||||||||||||||||
| Captions on the consolidated balance sheets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | |||||||||||||||||
Restricted cash (a) | ||||||||||||||||||||
Cash, cash equivalents and restricted cash on the consolidated statements of cash flows | $ | $ | $ | |||||||||||||||||
_________________
(a)Restricted cash as of September 30, 2025 included cash deposited in an escrow account (see Note 2 to the consolidated financial statements included in our 2026 Form 10-K for more information).
Note 8. Leases
As of September 30, 2026, the Company’s leases primarily consisted of the lease of the Company’s principal executive offices at Two Pennsylvania Plaza in New York under the Sublease Agreement with MSG Entertainment (as defined below) and a lease agreement for an aircraft. In addition, the Company accounts for the rights of use of The Garden pursuant to the Arena License Agreements (as defined below) as leases under ASC Topic 842, Leases. See Note 8 to the consolidated financial statements included in our 2026 Form 10-K for more information regarding the Company’s accounting policies associated with its leases.
During the second quarter of fiscal year 2025, the Company amended and restated its prior sublease agreement with MSG Entertainment (the “Prior Sublease Agreement”) to enter into a short-term lease for new principal executive offices through December 31, 2024.
In January 2025, the Company entered into a new sublease agreement with MSG Entertainment for new principal executive offices at Two Pennsylvania Plaza in New York with a lease term which ends January 31, 2046 (the “New Sublease Agreement” and together with the Prior Sublease Agreement, the “Sublease Agreement”) and fixed lease payment obligations of $167,444 over the lease term. The Company recorded a lease right-of-use asset and liability based on the present value of minimum fixed lease payments over the lease term utilizing the Company’s incremental borrowing rate as of the lease commencement date. In addition, the Company entered into a commitment whereby if MSG Entertainment’s lease for principal executive offices at Two Pennsylvania Plaza in New York were terminated under certain circumstances, the Company would be required to enter into a new lease for executive offices at Two Pennsylvania Plaza directly with the landlord, with a consistent lease term ending January 31, 2046.
As of September 30, 2026, the Company’s existing operating leases, which are recorded in the Financial Statements, have remaining lease terms ranging from 5 to 29 years. In certain ins tances, leases include options to renew, with varying option terms. The exercise of lease renewals, if available under the lease options, is generally at the Company’s discretion and is considered in the Company’s assessment of the respective lease term. The Company’s lease agreements do not contain material residual value guarantees or material restrictive covenants.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
The following table summarizes the right-of-use assets and lease liabilities recorded in the accompanying consolidated balance sheets as of September 30, 2026 and June 30, 2026:
| Line Item in the Consolidated Balance Sheet | September 30, 2026 | June 30, 2026 | ||||||||||||||||||
| Right-of-use assets: | ||||||||||||||||||||
Operating leases | Right-of-use lease assets | $ | $ | |||||||||||||||||
| Lease liabilities: | ||||||||||||||||||||
Operating leases, current (a) | Operating lease liabilities, current | $ | $ | |||||||||||||||||
Operating leases, noncurrent (a) | Operating lease liabilities, noncurrent | |||||||||||||||||||
| Total lease liabilities | $ | $ | ||||||||||||||||||
_________________
(a)As of September 30, 2026, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $52,103 and $807,619 , respectively, that are payable to MSG Entertainment. As of June 30, 2026, Operating lease liabilities, current and Operating lease liabilities, noncurrent included balances of $51,255 and $818,966 , respectively, that are payable to MSG Entertainment.
The following table summarizes the activity recorded within the accompanying consolidated statements of operations for the three months ended September 30, 2026 and 2025:
| Line Item in the Consolidated Statement of Operations | Three Months Ended September 30, | |||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Operating lease costs | Direct operating expenses | $ | $ | |||||||||||||||||
| Operating lease costs | Selling, general and administrative expenses | |||||||||||||||||||
| Total lease cost | $ | $ | ||||||||||||||||||
Supplemental Information
For the three months ended September 30, 2026 and 2025, cash paid for amounts included in the measurement of lease liabilities was $14,708 and $13,039 , respectively.
For the three months ended September 30, 2026 and 2025, there were no
The weighted average remaining lease term for operating leases recorded in the accompanying consolidated balance sheets as of September 30, 2026 and June 30, 2026 was 27.0 years and 27.2 years, respectively. The weighted average discount rate was 7.05
Maturities of operating lease liabilities as of September 30, 2026 were as follows:
| Fiscal year ending June 30, 2027 (remainder) | $ | |||||||
| Fiscal year ending June 30, 2028 | ||||||||
| Fiscal year ending June 30, 2029 | ||||||||
| Fiscal year ending June 30, 2030 | ||||||||
| Fiscal year ending June 30, 2031 | ||||||||
| Thereafter | ||||||||
| Total lease payments | ||||||||
| Less imputed interest | ( | |||||||
| Total lease liabilities | $ | |||||||
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Note 9. Goodwill and Intangible Assets
During the first quarter of fiscal year 2027, the Company performed its annual impairment test of goodwill and determined that there were no impairments of goodwill identified as of the impairment test date. The carrying amount of goodwill was $226,523
The Company’s indefinite-lived intangible assets as of September 30, 2026 and June 30, 2026 were as follows:
| Sports franchises | $ | |||||||
| Photographic related rights | ||||||||
| $ | ||||||||
During the first quarter of fiscal year 2027, the Company performed its annual impairment test of identifiable indefinite-lived intangible assets and determined that there were no impairments identified as of the impairment test date.
Note 10. Investments
The Company’s Investments reported in the accompanying consolidated balance sheets consisted of the following as of September 30, 2026 and June 30, 2026:
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Equity method investments: | ||||||||||||||
| Hard Carry Gaming, Inc. (“HCG”) | $ | $ | ||||||||||||
| MSG Networks | ||||||||||||||
Other equity method investments (a) | ||||||||||||||
| Equity investments with readily determinable fair values: | ||||||||||||||
| Xtract One Technologies Inc. (“Xtract One”) common stock | ||||||||||||||
| Other equity investments with readily determinable fair values held in trust under the Company’s Executive Deferred Compensation Plan | ||||||||||||||
Equity investments without readily determinable fair values (a)(b) | ||||||||||||||
| Derivative instruments: | ||||||||||||||
| Xtract One warrants | ||||||||||||||
| Total investments | $ | $ | ||||||||||||
_________________
(a)During the three months ended September 30, 2026 and 2025, the Company did not
(b)During the three months ended September 30, 2026, the Company recognized income of $163 in Miscellaneous (expense) income, net within the accompanying consolidated statements of operations related to equity investments without readily determinable fair values. During the three months ended September 30, 2025, the Company recognized no income or loss related to equity investments without readily determinable fair values.
Equity Method Investments
HCG
The Company holds preferred shares of the capital stock of HCG, an online video production company. During the three months ended September 30, 2026 and 2025, the Company recognized its net share of income (losses) of $246 and $(274 ), respectively, in Miscellaneous (expense) income, net within the accompanying consolidated statements of operations. As of September 30, 2026 and June 30, 2026, the Company’s ownership in HCG was approximately 25
MSG Networks
In June 2025, the local telecast rights agreements between subsidiaries of MSG Networks, on the one hand, and New York Knicks, LLC (“Knicks LLC”) and New York Rangers, LLC (“Rangers LLC”), on the other hand, were amended as further described in Note 16. Concurrent with the amendments to the local telecast rights agreements, MSG Networks issued penny
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
warrants to the Company exercisable for 19.9 % of the equity interests in MSG Networks. The Company has accounted for the penny warrants issued to the Company as in-substance common stock in accordance with ASC Topic 323, Investments — Equity Method and Joint Ventures, and the Company determined that it has the ability to exert significant influence over the investee. The Company recorded the investment in MSG Networks penny warrants at fair value as an equity method investment. The Company estimated the fair value of the MSG Networks warrants based on a discounted cash flow model (income approach). This approach relied on numerous assumptions and judgments within the model that were subject to various risks and uncertainties. Principal assumptions utilized, all of which are considered Level III inputs under the fair value hierarchy, include the Company’s estimates of future revenue, estimates of future operating cost, margin assumptions, terminal growth rates and the discount rate applied to estimated future cash flows.
During the three months ended September 30, 2026, the Company recognized its net share of income of MSG Networks of $547 in Miscellaneous (expense) income, net within the accompanying consolidated statements of operations. During the three months ended September 30, 2025, the Company recognized no income or loss related to the MSG Networks equity method investment.
During the three months ended September 30, 2026, the Company recorded an other than temporary impairment of $547 related to the MSG Networks equity method investment in Miscellaneous (expense) income, net within the accompanying consolidated statements of operations. During the three months ended September 30, 2025, the Company did not record any impairments related to the MSG Networks equity method investment.
In connection with the Rangers Distribution, the Company assigned a portion of the warrants exercisable for approximately 6.5 % of the equity interests in MSG Networks.
Equity Investments with Readily Determinable Fair Values
The Company holds investments in equity instruments with readily determinable fair value:
•Xtract One, a technology-driven threat detection and security solution company that is listed on the Toronto Stock Exchange under the symbol “XTRA”. The Company holds common stock of Xtract One and holds warrants entitling the Company to acquire additional shares of common stock of Xtract One which are considered derivative instruments. Refer to Note 11 for further details regarding the Company’s warrants, including the inputs used in determining the fair value of the warrants.
•Other equity investments held in trust under the Company’s Executive Deferred Compensation Plan (the “Deferred Compensation Plan”). See Note 15 to the consolidated financial statements included in our 2026 Form 10-K for more information regarding the Deferred Compensation Plan. The Company recorded compensation expense of $140 and $963 for the three months ended September 30, 2026 and 2025, respectively, within Selling, general and administrative expenses within the accompanying consolidated statements of operations to reflect the remeasurement of the Deferred Compensation Plan liability. In addition, the Company recorded gains of $140 and $963 for the three months ended September 30, 2026 and 2025, respectively, within Miscellaneous (expense) income, net within the accompanying consolidated statements of operations to reflect the remeasurement of the fair value of assets under the Deferred Compensation Plan.
The fair value of the Company’s investments in common stock of Xtract One and other investments held in trust is determined based on quoted market prices in active markets, which are classified within Level I of the fair value hierarchy.
The cost basis and carrying value of equity investments with readily determinable fair values as of September 30, 2026 and June 30, 2026 were as follows:
| September 30, 2026 | June 30, 2026 | |||||||||||||||||||||||||
| Cost Basis | Carrying Value/Fair Value | Cost Basis | Carrying Value/Fair Value | |||||||||||||||||||||||
| Xtract One common stock | $ | $ | $ | $ | ||||||||||||||||||||||
| Other equity investments with readily determinable fair values | ||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
The following table summarizes amounts recognized related to the Deferred Compensation Plan in the accompanying consolidated balance sheets as of September 30, 2026 and June 30, 2026:
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Non-current assets (included in investments) | $ | $ | ||||||||||||
| Current liabilities (included in accrued employee-related costs) | ( | ( | ||||||||||||
| Non-current liabilities (included in other employee-related costs) | ( | ( | ||||||||||||
The following table summarizes the realized and unrealized gains (losses) on equity investments with readily determinable fair values, recorded within Miscellaneous (expense) income, net within the accompanying consolidated statements of operations, for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Unrealized (loss) gain - Xtract One common stock | $ | ( | $ | |||||||||||
| Unrealized gain - other equity investments with readily determinable fair values | ||||||||||||||
| $ | ( | $ | ||||||||||||
Note 11. Fair Value Measurements
The following table presents the Company’s assets that are measured at fair value on a recurring basis, which include cash equivalents, as of September 30, 2026 and June 30, 2026:
| Fair Value Hierarchy | September 30, 2026 | June 30, 2026 | ||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Money market accounts | I | $ | $ | |||||||||||||||||
| Time deposits | I | |||||||||||||||||||
| Equity investments | I | |||||||||||||||||||
| Warrants | III | |||||||||||||||||||
| Total assets measured at fair value | $ | $ | ||||||||||||||||||
Level I Inputs
Assets that are classified within Level I of the fair value hierarchy are valued using observable inputs that reflect quoted prices for identical assets in active markets. The carrying amount of the Company’s money market accounts and time deposits approximates fair value due to their short-term maturities. Refer to Note 10 for further details regarding equity investments.
Level III Inputs
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Expected term | ||||||||||||||
| Expected volatility | % | % | ||||||||||||
| Risk-free interest rate | % | % | ||||||||||||
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
The following table presents additional information about our assets for which we utilize Level III inputs to determine fair value as of September 30, 2026 and June 30, 2026:
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||
| Unrealized (losses) gains on warrants | ( | |||||||||||||
| Balance at end of period | $ | $ | ||||||||||||
The carrying value and fair value of the Company’s financial instruments reported in the accompanying consolidated balance sheets as of September 30, 2026 and June 30, 2026 were as follows:
| September 30, 2026 | June 30, 2026 | |||||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
Debt, current (a) | $ | $ | $ | $ | ||||||||||||||||||||||
Long-term debt (b) | $ | $ | $ | $ | ||||||||||||||||||||||
(a)The Company’s debt, current is classified within Level II of the fair value hierarchy as it is valued using quoted indices of similar securities for which the inputs are readily observable. The fair value of the Company’s debt, current is the same as its carrying amount based on valuation of similar securities. See Note 13 for further details.
(b)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 securities for which the inputs are readily observable. The fair value of the Company’s long-term debt is the same as its carrying amount as the debt bears interest at a variable rate indexed to current market conditions. See Note 13 for further details.
Note 12. Commitments and Contingencies
Commitments
As more fully described in Note 13 to the consolidated financial statements included in our 2026 Form 10-K, the Company’s commitments consist primarily of the Company’s obligations under employment agreements that the Company has with its professional sports teams’ personnel that are generally guaranteed regardless of employee injury or termination. In addition, see Note 8 for more information on the contractual obligations related to future lease payments. The Company did not have any material changes in its contractual obligations, including off-balance sheet commitments, since the end of fiscal year 2026, other than activities in the ordinary course of business, except for the related party agreements entered into in connection with the Rangers Distribution as further described in Note 16.
Legal Matters
The Company is a defendant in various lawsuits. Although the outcome of these lawsuits cannot be predicted (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 13. Debt
Knicks Revolving Credit Facility
On September 30, 2016, Knicks LLC, a wholly owned subsidiary of the Company, entered into a credit agreement (the “2016 Knicks Credit Agreement”) with a syndicate of lenders providing for a senior secured revolving credit facility of up to $200,000 with a term of five years to fund working capital needs and for general corporate purposes.
On November 6, 2020, the Company amended and restated the 2016 Knicks Credit Agreement (the “2020 Knicks Credit Agreement”). On December 14, 2021, Knicks LLC entered into Amendment No. 2 to the 2020 Knicks Credit Agreement, which amended and restated the 2020 Knicks Credit Agreement (as amended and restated, the “2021 Knicks Credit Agreement”).
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
On November 6, 2025, Knicks LLC entered into Amendment No. 1 to the 2021 Knicks Credit Agreement, which amended and restated the 2021 Knicks Credit Agreement (as amended and restated, the “2025 Knicks Credit Agreement”).
The 2025 Knicks Credit Agreement provides for a senior secured revolving credit facility of up to $425,000 (the “Knicks Revolving Credit Facility”) to fund working capital needs and for general corporate purposes. The maturity date of the 2025 Knicks Credit Agreement is November 6, 2030. Amounts borrowed may be distributed to the Company except during an event of default.
All borrowings under the Knicks Revolving Credit Facility are subject to the satisfaction of certain customary conditions. Borrowings under the 2025 Knicks Credit Agreement bear interest at a floating rate, which at the option of Knicks LLC may be either (i) a base rate plus a margin ranging from 0.250 % to 0.375 % per annum or (ii) term Secured Overnight Financing Rate (“SOFR”) plus a credit spread adjustment of 0.100 % per annum plus a margin ranging from 1.250 % to 1.375 % per annum depending on the credit rating applicable to the NBA’s league-wide credit facility. Knicks LLC is required to pay a commitment fee ranging from 0.250 % to 0.300 % per annum in respect of the average daily unused commitments under the Knicks Revolving Credit Facility. During the three months ended September 30, 2026, the Company borrowed an additional $40,000 under the Knicks Revolving Credit Facility. The outstanding balance under the Knicks Revolving Credit Facility was $282,000 as of September 30, 2026, which was recorded as Long-term debt in the accompanying consolidated balance sheet. The interest rate on the Knicks Revolving Credit Facility as of September 30, 2026 was 5.25 %. During the three months ended September 30, 2026 and 2025, the Company made interest payments of $3,293 and $3,883 , respectively, in respect of the Knicks Revolving Credit Facility. In addition, on October 22, 2026, the Company borrowed an additional $30,000 under the Knicks Revolving Credit Facility.
Subject to customary notice and minimum amount conditions, Knicks LLC may voluntarily prepay outstanding loans under the Knicks Revolving Credit Facility at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to SOFR-based loans). Knicks LLC is required to make mandatory prepayments in certain circumstances, including without limitation if the maximum available amount under the Knicks Revolving Credit Facility is greater than 350 % of qualified revenues.
In addition to the financial covenant described above, the 2025 Knicks Credit Agreement and related security agreement contain certain customary representations and warranties, affirmative covenants and events of default. The Knicks Revolving Credit Facility contains certain restrictions on the ability of Knicks LLC to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the Knicks Revolving Credit Facility, including the following: (i) incurring additional indebtedness and contingent liabilities; (ii) creating liens on certain assets; (iii) making restricted payments during the continuance of an event of default under the Knicks Revolving Credit Facility; (iv) engaging in sale and leaseback transactions; (v) merging or consolidating; and (vi) taking certain actions that would invalidate the secured lenders’ liens on any Knicks LLC’s collateral.
The Knicks Revolving Credit Facility requires Knicks LLC to comply with a debt service ratio of at least 1.5 :1.0 over a trailing four quarter period. As of September 30, 2026, Knicks LLC was in compliance with this financial covenant.
Rangers Revolving Credit Facility
On January 25, 2017, Rangers LLC, a wholly owned subsidiary of the Company, entered into a credit agreement (the “2017 Rangers Credit Agreement”) with a syndicate of lenders providing for a senior secured revolving credit facility of up to $150,000 with a term of five years to fund working capital needs and for general corporate purposes.
On November 6, 2020, the Company amended and restated the 2017 Rangers Credit Agreement (the “2020 Rangers Credit Agreement”). On December 14, 2021, Rangers LLC entered into Amendment No. 3 to the 2020 Rangers Credit Agreement, which amended and restated the 2020 Rangers Credit Agreement (as amended and restated, the “2021 Rangers Credit Agreement”).
On November 6, 2025, Rangers LLC entered into Amendment No. 1 to the 2021 Rangers Credit Agreement, which amended the 2021 Rangers Credit Agreement (as amended, the “2025 Rangers Credit Agreement”).
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
The 2025 Rangers Credit Agreement provides for a senior secured revolving credit facility of up to $250,000 (the “Rangers Revolving Credit Facility”) to fund working capital needs and for general corporate purposes. The maturity date of the 2025 Rangers Credit Agreement is November 6, 2030. Prior to the Rangers Distribution, amounts borrowed could be distributed to the Company except during an event of default.
All borrowings under the Rangers Revolving Credit Facility are subject to the satisfaction of certain customary conditions. Borrowings under the Rangers Revolving Credit Facility bear interest at a floating rate, which at the option of Rangers LLC may be either (i) a base rate plus a margin ranging from 0.375 % to 0.625 % per annum or (ii) term SOFR plus a credit spread adjustment of 0.100 % per annum plus a margin ranging from 1.375 % to 1.625 % per annum depending on the credit rating applicable to the NHL’s league-wide credit facility. Rangers LLC is required to pay a commitment fee ranging from 0.350 % to 0.400 % per annum in respect of the average daily unused commitments under the Rangers Revolving Credit Facility. There were no borrowings under the Rangers Revolving Credit Facility as of September 30, 2026. The Company did not
Subject to customary notice and minimum amount conditions, Rangers LLC may voluntarily prepay outstanding loans under the Rangers Revolving Credit Facility at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to SOFR-based loans). Rangers LLC is required to make mandatory prepayments in certain circumstances, including without limitation if qualified revenues are less than 17 % of the maximum available amount under the 2025 Rangers Credit Agreement.
In addition to the financial covenant described above, the 2025 Rangers Credit Agreement and related security agreement contain certain customary representations and warranties, affirmative covenants and events of default. The Rangers Revolving Credit Facility contains certain restrictions on the ability of Rangers LLC to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the Rangers Revolving Credit Facility, including the following: (i) incurring additional indebtedness and contingent liabilities; (ii) creating liens on certain assets; (iii) making restricted payments during the continuance of an event of default under the Rangers Revolving Credit Facility; (iv) engaging in sale and leaseback transactions; (v) merging or consolidating; and (vi) taking certain actions that would invalidate the secured lenders’ liens on any of Rangers LLC’s assets securing the obligations under the Rangers Revolving Credit Facility.
The Rangers Revolving Credit Facility requires Rangers LLC to comply with a debt service ratio of at least 1.5 :1.0 over a trailing four quarter period. As of September 30, 2026, Rangers LLC was in compliance with this financial covenant .
The Rangers Revolving Credit Facility was transferred to MSG Rangers on the Distribution Date.
Rangers NHL Advance Agreement
On March 19, 2021, Rangers LLC, Rangers Holdings, LLC and MSG NYR Holdings LLC entered into an advance agreement with the NHL (the “Rangers NHL Advance Agreement”) pursuant to which the NHL advanced $30,000 to Rangers LLC. The advance is required to be utilized solely and exclusively to pay for Rangers LLC operating expenses.
All obligations under the Rangers NHL Advance Agreement are senior to and shall have priority over all secured and other indebtedness of Rangers LLC, Rangers Holdings, LLC and MSG NYR Holdings LLC. All borrowings under the Rangers NHL Advance Agreement were made on a non-revolving basis and bear interest at 3.00 % per annum, ending on the date any such advances are fully repaid. Advances received under the Rangers NHL Advance Agreement are payable upon demand by the NHL. The outstanding balance under the Rangers NHL Advance Agreement was $16,500 as of September 30, 2026 and was recorded as Debt in the accompanying consolidated balance sheet. During the three months ended September 30, 2026 and 2025, the Company made interest payments of $122 and $180 , respectively, in respect of the Rangers NHL Advance Agreement.
The Rangers NHL Advance Agreement was transferred to MSG Rangers on the Distribution Date.
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Deferred Financing Costs
The following table summarizes deferred financing costs, net of amortization, related to the Company’s credit facilities as reported in the accompanying consolidated balance sheets as of September 30, 2026 and June 30, 2026:
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Other current assets | $ | $ | ||||||||||||
| Other assets | ||||||||||||||
Note 14. Share-based Compensation
See Note 16 to the consolidated financial statements included in our 2026 Form 10-K for more information regarding the Company’s 2015 Employee Stock Plan, as amended (the “Employee Stock Plan”) and its 2015 Stock Plan for Non-Employee Directors (as amended, the “Non-Employee Director Plan”).
Share-based compensation expense was recognized in the accompanying consolidated statements of operations as a component of selling, general and administrative expenses. Share-based compensation expense was $3,953 and $4,844 for the three months ended September 30, 2026 and 2025, respectively. There were no
Restricted Stock Units Award Activity
The following table summarizes activity related to the Company’s restricted stock units (“RSUs”) and performance restricted stock units (“PSUs”), held by employees of the Company, Sphere Entertainment and MSG Entertainment, for the three months ended September 30, 2026:
| Number of | Weighted-Average Fair Value Per Share at Date of Grant | ||||||||||||||||
| RSUs | PSUs | ||||||||||||||||
| Unvested award balance, June 30, 2026 | $ | ||||||||||||||||
| Granted | $ | ||||||||||||||||
| Vested | ( | ( | $ | ||||||||||||||
| Forfeited / Cancelled | ( | ( | $ | ||||||||||||||
| Unvested award balance, September 30, 2026 | $ | ||||||||||||||||
The fair value of RSUs and PSUs that vested during the three months ended September 30, 2026 was $36,097 . Upon delivery, RSUs and PSUs granted under the Employee Stock Plan were net share-settled to cover the required statutory tax withholding obligations. To fulfill the employees’ statutory minimum tax withholding obligations for the applicable income and other employment taxes, 43 of these RSUs and PSUs, with an aggregate value of $16,966 , inclusive of $866 related to the Company’s former employees (who vested in the Company’s RSUs), were retained by the Company and the taxes paid are reflected as financing activity in the accompanying consolidated statement of cash flows for the three months ended September 30, 2026.
The fair value of RSUs and PSUs that vested during the three months ended September 30, 2025 was $21,962 . The weighted-average fair value per share at grant date of RSUs and PSUs granted during the three months ended September 30, 2025 was $195.27 .
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Stock Options Award Activity
The following table summarizes activity related to the Company’s stock options for the three months ended September 30, 2026:
| Number of Time Vesting Options | Weighted-Average Exercise Price Per Share (a) | Weighted-Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| Balance as of June 30, 2026 | $ | ||||||||||||||||||||||
| Granted | $ | ||||||||||||||||||||||
| Cancelled | $ | ||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | |||||||||||||||||||||
| Exercisable as of September 30, 2026 | $ | $ | |||||||||||||||||||||
_____________________
(a)Weighted-average exercise price per share does not reflect any adjustments to awards granted prior to the Sphere Distribution.
Treatment After the Rangers Distribution of Outstanding Awards Initially Granted Under MSG Knicks Stock Plans
In connection with the Rangers Distribution, (i) each holder of a Company employee restricted stock unit (“RSU”) or performance stock unit (“PSU”) received one MSG Rangers RSU or PSU, as applicable, in respect of every two Company RSUs or PSUs owned on the Record Date and continues to be entitled to one share of Class A Common Stock (or at the option of the Compensation Committee, cash or other property) for each Company RSU or PSU in accordance with the applicable Company award agreement, (ii) each holder of a Company non-employee director RSU received one share of MSG Rangers’ Class A common stock in respect of every two Company RSUs owned on the Record Date and continues to be entitled to one share of Class A Common Stock (or at the option of the Compensation Committee, cash or other property) in accordance with the applicable Company award agreement, and (iii) for each option to purchase Class A Common Stock owned on the Record Date, one option to purchase MSG Rangers’ Class A common stock was issued.
Note 15. Stock Repurchase Program
Effective as of October 1, 2015, the Board of Directors authorized the repurchase of up to $525,000 of Class A Common Stock. Under the authorization, 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.
During the three months ended September 30, 2026 and 2025, the Company did not 184,639 of availability remaining under its stock repurchase authorization. The program was reauthorized by the Board of Directors on September 30, 2026.
Note 16. 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, 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, par value $0.01 per share (“Class B Common Stock”) and beneficially owned approximately 3.1 % of the Company’s outstanding Class A Common Stock. Such shares of the Company’s Class A Common Stock and Class B Common Stock, collectively, represent approximately 70.7 % of the aggregate voting power of the Company’s outstanding common stock. Members of the Dolan family are also the controlling stockholders of MSG Rangers, Sphere Entertainment, MSG Entertainment and AMC Global Media Inc. (“AMC Global Media”).
Related Party Arrangements as of September 30, 2026
The Company was party to the following agreements and/or arrangements with MSG Entertainment as of September 30, 2026:
•Arena license agreements, entered into in April 2020 (the “Arena License Agreements”), pursuant to which MSG Entertainment (i) provides the right to use The Garden for games of the Knicks and the Rangers for a 35-year term ending June 30, 2055 in exchange for arena license fees, (ii) shares revenues collected for suite and club licenses, (iii)
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
operates and manages the sale of the sports teams’ merchandise at The Garden for a commission, (iv) operates and manages the sales of food and beverage concessions in exchange for 50 % of net profits from sales and catering services during Knicks and Rangers home games, (v) shares revenues collected for the sale of venue indoor signage space and sponsorship rights at The Garden that are not specific to our teams, (vi) provides day of game services, and (vii) provides other general services within The Garden;
•Sponsorship sales and service representation agreements, entered into in April 2020 (the “Sponsorship Sales and Service Representation Agreements”), pursuant to which MSG Entertainment has the exclusive right and obligation to sell the Company’s sponsorships for an initial stated term of 10 years for a commission. In addition, under these agreements, the Company is charged by MSG Entertainment for sales and service staff and overhead associated with the sales of sponsorship assets;
•Team sponsorship allocation agreement with MSG Entertainment, pursuant to which the teams receive an allocation of certain sponsorship and signage revenues associated with sponsorship agreements that include the assets of the Company, MSG Entertainment, and Sphere Entertainment, based on the percentage of revenue each company earns relative to the total contract value;
•Services agreement (the “Services Agreement”) pursuant to which the Company (i) receives certain services from MSG Entertainment, such as information technology, executive support, accounts payable, payroll, human resources, and other corporate functions, and communications, marketing and facilities-related services, in exchange for service fees and (ii) provides certain services to MSG Entertainment, such as certain communications and legal services, in exchange for service fees;
•Arrangements pursuant to which the Company provides MSG Entertainment certain services associated with the management of ticketing, premium hospitality sales, sponsorship sales and other business operations services;
•The Sublease Agreement, pursuant to which the Company leases office space from MSG Entertainment;
•Group ticket sales representation agreement, pursuant to which MSG Entertainment appointed the Company as its sales and service representative to sell group ticket packages related to MSG Entertainment events in exchange for a commission and reimbursement for sales and service staff and overhead associated with the ticket sales on behalf of MSG Entertainment;
•Single night rental commission agreement, pursuant to which the Company may, from time to time, sell (or make referrals for sales of) licenses for the use of suites at The Garden for individual MSG Entertainment events in exchange for a commission; and
•Other agreements with MSG Entertainment entered into in connection with the Sphere Distribution, including a trademark license agreement and certain other arrangements.
Following the Rangers Distribution, the Company is no longer party to certain of the arrangements described above, including the Rangers Arena License Agreement and the Rangers Sponsorship Sales and Service Representation Agreement.
The Company was also party to the following agreements and/or arrangements with Sphere Entertainment (including through its subsidiary MSG Networks) as of September 30, 2026:
•Local telecast rights agreements between the Company and MSG Networks, as amended in June 2025 and set to expire after the 2028-29 seasons, providing MSG Networks with local telecast rights for Knicks and Rangers games in exchange for media rights fees;
•An agreement with MSG Networks pursuant to which the Company was issued penny warrants exercisable for 19.9 % of the equity interests in MSG Networks, as further described in Note 10;
•Arrangements with MSG Networks pursuant to which the Knicks and the Rangers have allocated revenues with MSG Networks related to virtual advertising inventory;
•Arrangements pursuant to which the Company provides Sphere Entertainment with certain business operations services;
•Other agreements with Sphere Entertainment in connection with the Sphere Distribution, including a distribution agreement, a tax disaffiliation agreement and an employee matters agreement and certain other arrangements; and
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
•Other agreements with MSG Networks entered into in connection with the MSGS Distribution, including an employee matters agreement, agreements related to audio-only distribution rights for Knicks and Rangers games, and certain other arrangements.
Following the Rangers Distribution, the Company is no longer party to certain of the arrangements described above related to the Rangers, including the local telecast rights agreement, virtual signage inventory arrangement and audio rights agreement. In addition the Company assigned a portion of the warrants exercisable for approximately 6.5 % of the equity interests in MSG Networks.
The Company is also party to various arrangements with subsidiaries of MSG Entertainment, Sphere Entertainment, and, following the Rangers Distribution, MSG Rangers, pursuant to which the Company has the right to lease on a time-sharing and/or dry lease basis certain aircraft to which MSG Entertainment has access and MSG Entertainment, Sphere Entertainment, and MSG Rangers have the right to lease on a dry-lease basis certain aircraft leased by the Company, and pursuant to which MSG Entertainment provides certain aircraft support services.
In addition, the Company shares certain executive support costs, including office space, executive assistants, security and transportation costs for: (i) the Company’s Executive Chairman and Chief Executive Officer with Sphere Entertainment, MSG Entertainment and, following the Rangers Distribution, MSG Rangers, (ii) the Company’s Vice Chairman with AMC Global Media, Sphere Entertainment, MSG Entertainment and, following the Rangers Distribution, MSG Rangers (iii) the Company’s Executive Vice President with Sphere Entertainment, AMC Global Media and, following the Rangers Distribution, MSG Rangers. Additionally, the Company, Sphere Entertainment, AMC Global Media, MSG Entertainment and, following the Rangers Distribution, MSG Rangers, allocate the costs of certain personal aircraft and helicopter usage by their shared executives.
In connection with the Rangers Distribution, the Company entered into the following agreements and/or arrangements with MSG Rangers:
•Transition services agreement pursuant to which the Company provides certain corporate and other services to MSG Rangers, including with respect to such areas as information technology, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, government affairs, investor relations, corporate communications, benefit plan administration and reporting, and internal audit functions as well as certain marketing functions, in exchange for service fees, and MSG Rangers provides certain services to the Company in exchange for service fees;
•A lease agreement with MSG Rangers with respect to the Company’s use of the Madison Square Garden Training Center with a term of 10 years. Pursuant to the lease, the Company pays MSG Rangers an annual fixed rent of $2 million for the first contract year, and then for each subsequent year, the fixed rent will be 103 % of the fixed rent for the immediately preceding contract year. The Company also reimburses MSG Rangers for certain operating expenses and capital expenditures incurred in connection with the Madison Square Garden Training Center; and
•Group ticket sales representation agreement, pursuant to which MSG Rangers is appointed as the Company’s sales and service representative to sell group ticket packages related to Company and MSG Entertainment events in exchange for a commission and reimbursement for sales and service staff and overhead associated with the ticket sales on behalf of the Company;
•Single night rental commission agreement, pursuant to which MSG Rangers may, from time to time, sell (or make referrals for sales of) licenses for the use of suites at The Garden for individual Company and MSG Entertainment events in exchange for a commission; and
•Other agreements with MSG Rangers in connection with the Rangers Distribution, including a distribution agreement, a tax disaffiliation agreement and an employee matters agreement and certain other arrangements.
In connection with the Rangers Distribution, the Company also entered into a marketing sponsorship allocation agreement with MSG Rangers, MSG Entertainment and Sphere Entertainment, pursuant to which each party receives an allocation of certain sponsorship and signage revenues associated with sponsorship agreements that include the assets of the Company, MSG Rangers, MSG Entertainment and Sphere Entertainment, as applicable, based on the percentage of revenue each company earns relative to the total contract value.
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
Revenues and Operating Expenses (Credits)
The following table summarizes the composition and amounts of the transactions with the Company’s affiliates. These amounts are reflected in revenues and operating expenses in the accompanying consolidated statements of operations for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Revenues (a) | $ | $ | ||||||||||||
| Operating expenses: | ||||||||||||||
| Expense pursuant to the Services Agreement | $ | $ | ||||||||||||
| Rent expense pursuant to Sublease Agreement | ||||||||||||||
| Costs associated with the Sponsorship Sales and Service Representation Agreements | ||||||||||||||
| Operating lease expense associated with the Arena License Agreements | ||||||||||||||
| Other costs associated with the Arena License Agreements | ||||||||||||||
| Other operating credits, net | ( | ( | ||||||||||||
(a)Primarily consist of local media rights fees from MSG Networks.
Note 17. 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 effective tax rate differs from the statutory federal tax rate of 21
Income tax benefit for the three months ended September 30, 2026 of $2,209 reflects an effective tax rate of 7 %.
Income tax benefit for the three months ended September 30, 2025 of $8,555 reflects an effective tax rate of 49 %.
During the three months ended September 30, 2026 and 2025, the Company made income tax payments, net of refunds, of $4,389 and $11,836 , respectively.
Note 18. Additional Financial Information
Prepaid expenses as of September 30, 2026 and June 30, 2026 consisted of the following:
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Prepaid employee-related costs | $ | $ | ||||||||||||
| Other prepaid expenses | ||||||||||||||
| Total prepaid expenses | $ | $ | ||||||||||||
Other current assets as of September 30, 2026 and June 30, 2026 consisted of the following:
| September 30, 2026 | June 30, 2026 | |||||||||||||
| Inventory | $ | $ | ||||||||||||
| Other current assets | ||||||||||||||
| Total | $ | $ | ||||||||||||
Note 19. Segment Information
The Company operates and presents financial information in one
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MSG KNICKERBOCKERS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Continued)
consolidated net income (loss) is used to assess financial performance, allocate resources, and make key operating decisions, such as entering into significant contracts, setting strategic objectives for the Company, and approving annual operating budgets, including approving significant investments in team personnel, and other key executive leadership positions. The CODM does not review segment assets at a different asset level or category than those disclosed in the accompanying consolidated balance sheets.
The following table presents selected financial information with respect to the Company’s single operating segment for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Revenues | $ | $ | ||||||||||||
| Significant segment expenses: | ||||||||||||||
Ticketing and sponsorship sales related expenses (a) | ( | ( | ||||||||||||
Marketing & event-related expenses (b) | ( | ( | ||||||||||||
Corporate & administrative (c) | ( | ( | ||||||||||||
Operating lease expenses and other rental expenses associated with the Arena License Agreements (d) | ( | ( | ||||||||||||
Team operating expenses (e) | ( | ( | ||||||||||||
| Depreciation and amortization | ( | ( | ||||||||||||
| Restructuring charges | ( | |||||||||||||
| Interest income | ||||||||||||||
| Interest expense | ( | ( | ||||||||||||
| Miscellaneous (expense) income, net | ( | |||||||||||||
| Income tax benefit | ||||||||||||||
Other segment items (f) | ( | ( | ||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
_________________
(a)Ticketing and sponsorship sales related expenses consist of (i) expenses related to selling tickets to our sports teams’ home games and primarily include employee compensation and related benefits, credit card fees, and other general and administrative expenses, and (ii) fees related to the Company’s Sponsorship Sales and Service Representation Agreements and sponsorship fulfillment costs. See Note 16 for further details related to the Sponsorship Sales and Service Representation Agreements.
(b)Marketing & event-related expenses primarily relate to marketing and production expenses and services provided to the Company by MSG Entertainment pursuant to the Arena License Agreements.
(c)Corporate & administrative expenses include certain selling, general and administrative costs.
(d)Operating lease expenses and other rental expenses associated with the Arena License Agreements primarily consist of operating lease costs, commercial rent tax, and other expenses associated with the Arena License Agreements. See Note 16 for further details related to the Arena License Agreements.
(e)Team operating expenses primarily consist of team personnel compensation (net of escrow), NBA luxury tax, expenses associated with day-to-day team operations, including for travel, player insurance, and operating costs of the Company’s training center in Greenburgh, NY.
(f)Other segment items primarily consist of net provisions for league revenue sharing expense (excluding playoffs), league assessments, playoff related expenses, cost of goods sold and commission expense related to merchandise revenues, and share-based compensation expense.
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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 MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) and its direct and indirect subsidiaries (collectively, “we,” “us,” “our,” “MSG Knicks,” or the “Company”), including the impact of the spin-off of the Company’s New York Rangers (“Rangers”) business (the “Rangers Distribution”) through the distribution of all of the common stock of MSG Rangers Corp. (formerly MSGS Spinco, Inc. and referred to herein as “MSG Rangers”). See Note 1 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for further discussion of the Rangers Distribution. 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 revenues, which depends in part on the popularity and competitiveness of the New York Knickerbockers (the “Knicks”) and their ability to reach and advance in the National Basketball Association (“NBA”) playoffs;
•costs associated with player injuries, waivers or contract terminations of players, coaches and other team personnel;
•changes in professional sports teams’ compensation, including the impact of signing free agents and executing trades, subject to league salary floors and caps and the impact of luxury tax;
•general economic conditions, especially in the New York City metropolitan area, including any economic downturn, recession, financial instability, impacts from government shutdowns or inflation;
•the demand for sponsorship arrangements and for advertising;
•competition, for example, from other teams and other sports and entertainment options;
•changes in laws, NBA rules, regulations, guidelines, bulletins, directives, policies and agreements, including the NBA’s collective bargaining agreement with their players’ association, salary caps, escrow requirements, revenue sharing, NBA luxury tax thresholds and media rights, or other regulations under which we operate;
•developments affecting the regional sports network industry, including the effects of such developments on MSG Networks Inc.’s (“MSG Networks”) solvency and its ability to perform its obligations under its local telecast rights agreement with us;
•a default by our subsidiary under its credit facility;
•any NBA or other work stoppage;
•any economic, political or other actions, such as boycotts, protests, work stoppages or campaigns by labor organizations;
•geopolitical risks, including the risks of foreign wars and conflicts, including the conflict with Iran and related unrest in the Middle East, on international, domestic and local economies;
•the performance by our affiliates of their obligations under various agreements with the Company;
•seasonal fluctuations and other variation in our operating results and cash flow from period to period;
•the level of our expenses, including our corporate expenses;
•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 or new businesses into our operations and the operating and financial performance of strategic acquisitions and investments, including those we may not control;
•a pandemic or another public health emergency and our ability to effectively manage the impacts, including labor market disruptions;
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•actual or threatened activities or other developments that discourage or may discourage congregation at prominent places of public assembly, including Madison Square Garden Arena (“The Garden”) where the home games of the Knicks are played;
•the impact of governmental regulations or laws, changes in how those regulations and laws are interpreted and the continued benefit of certain tax exemptions (including for The Garden) or tax deductions and the ability for us and Madison Square Garden Entertainment Corp. (“MSG Entertainment”) to maintain necessary permits or licenses;
•operational, business, reputational, litigation and other risk if there is a security incident resulting in loss, disclosure or misappropriation of stored personal information or other breaches of our information security or if third party facilities, systems and/or software upon which we rely are interrupted or unavailable;
•the impact of any government plans to redesign New York City’s Pennsylvania Station;
•changes in international trade policies and practices, including tariffs, and the economic impacts, volatility and uncertainty resulting therefrom;
•business, economic, reputational and other risks associated with, and the outcome of, litigation and other proceedings;
•financial community and rating agency perceptions of our business, operations, financial condition and the industry in which we operate;
•certain restrictions on transfer and ownership of our common stock related to our ownership of professional sports franchises in the NBA;
•the tax-free treatment of the Rangers Distribution;
•our ability to achieve the intended benefits of the Rangers Distribution;
•the performance by the Company and MSG Rangers of their obligations under transition services and other agreements entered into in connection with the Rangers Distribution; and
•the factors described under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (our “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.
All dollar amounts included in the following MD&A are presented in thousands, except as otherwise noted.
Spin-off Transaction
On October 26, 2026 (the “Distribution Date”) the Company distributed 100% of the outstanding common stock of MSG Rangers Corp. to its stockholders in the Rangers Distribution. MSG Rangers owns the New York Rangers business previously owned and operated by the Company. In the Distribution, stockholders of the Company received (a) one share of MSG Rangers’ Class A common stock, par value $0.01 per share, for every two shares of the Company’s Class A common stock, par value $0.01 per share, held of record as of the close of business, New York City time, 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 the Company’s Class B common stock, par value $0.01 per share, held of record as of the close of business, New York City time, on the Record Date.
The accompanying unaudited consolidated interim financial statements include the financial results of the Company’s Rangers business in continuing operations for all periods presented. Beginning with the Company’s Quarterly Report on Form 10-Q for the quarterly period ending December 31, 2026, the historical financial results of the Rangers business through the Distribution Date will be presented as discontinued operations under U.S. generally accepted accounting principles (“GAAP”) for all periods presented.
Introduction
This MD&A is provided as a supplement to, and should be read in conjunction with, the unaudited consolidated financial statements and footnotes thereto included in this Quarterly Report on Form 10-Q, as well as our 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.
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Our 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.
Results of Operations. This section provides an analysis of our unaudited results of operations for the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Liquidity and Capital Resources. This section focuses primarily on (i) the liquidity and capital resources of the Company, (ii) an analysis of the Company’s cash flows for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, and (iii) certain contractual obligations.
Seasonality of Our Business. This section discusses the seasonal performance of the Company.
Recently Issued Accounting Pronouncements and Critical Accounting Estimates. This section discusses accounting pronouncements that have been adopted by the Company, if any, as well as the results of the Company’s annual impairment testing of goodwill and identifiable indefinite-lived intangible assets performed during the first quarter of fiscal year 2027. This section should be read together with our critical accounting policies, which are discussed in our 2026 Form 10-K under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recently Issued Accounting Pronouncements and Critical Accounting Policies — Critical Accounting Estimates” and in the notes to the consolidated financial statements of the Company included therein.
Business Overview
The Company owns and operates one of the most storied franchises in all of sports, the Knicks of the NBA and, prior to the Rangers Distribution, owned and operated the Rangers of the National Hockey League (“NHL”). Both the Knicks and the Rangers play their home games at The Garden. The Company also includes the Westchester Knicks of the NBA G League and, prior to the Rangers Distribution, the Hartford Wolf Pack of the American Hockey League. Our professional sports franchises are collectively referred to herein as “our sports teams” or the “teams.” Prior to the Rangers Distribution, the Company also operated a professional sports team performance center — the Madison Square Garden Training Center in Greenburgh, NY.
Factors Affecting Operating Results
General
Our operating results are largely dependent on the continued popularity and/or on-court competitiveness of the Knicks and, prior to the Rangers Distribution, the on-ice competitiveness of the Rangers, which have a direct effect on ticket sales for the teams’ home games and are each team’s largest single source of revenue. In addition, the popularity of our sports teams can generate fan enthusiasm, resulting in sustained premium seating, suite, sponsorship, food and beverage and merchandise sales. Furthermore, success in the regular season may qualify our sports teams for participation in post-season playoffs, which provides us with a significant source of additional revenue, operating income and adjusted operating income. As with other sports teams, the competitive positions of our sports teams depend primarily on our ability to develop, obtain and retain talented players, for which we compete with other professional sports teams. A significant factor in our ability to attract and retain talented players is player compensation. The Company’s operating results reflect the impact of high costs for player salaries (including NBA luxury tax, if any) and salaries of non-player team personnel. In addition, we have incurred significant charges for costs associated with transactions relating to players on our sports teams for season-ending and career-ending injuries and for trades, waivers and contract terminations of players and other team personnel, including team executives. Waiver and termination costs reflect our efforts to improve the competitiveness of our sports teams. These transactions can result in significant charges as the Company recognizes the estimated ultimate costs of these events in the period in which they occur, although amounts due to these individuals are generally paid over their remaining contract terms. We expect to continue to pursue opportunities to improve the overall quality of our sports teams and our efforts may result in continued significant expenses and charges. Such expenses and charges may result in future operating losses although it is not possible to predict their timing or amount. In addition, our performance has been, and may in the future be, impacted by work stoppages. See “Part I — Item 1A. Risk Factors — Economic and Business Relationship Risks —Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations.” in our 2026 Form 10-K.
In addition to our future performance being dependent upon the continued popularity and/or on-court or on-ice competitiveness of the Knicks, it is also dependent on general economic conditions, in particular those in the New York City metropolitan area, and the effect of these conditions on our customers. An economic downturn could adversely affect our business and results of operations as it may lead to lower demand for suite licenses and tickets to Knicks’ games, which would also negatively affect merchandise and concession sales, as well as decrease levels of sponsorship and venue signage revenues.
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Results of Operations
Comparison of the three months ended September 30, 2026 versus the three months ended September 30, 2025
The table below sets forth, for the periods presented, certain historical financial information.
| Three Months Ended September 30, | Change | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Revenues | $ | 45,489 | $ | 39,454 | $ | 6,035 | 15 | % | ||||||||||||||||||
| Direct operating expenses | 8,824 | 8,279 | 545 | 7 | % | |||||||||||||||||||||
| Selling, general and administrative expenses | 60,762 | 57,789 | 2,973 | 5 | % | |||||||||||||||||||||
| Depreciation and amortization | 781 | 811 | (30) | (4) | % | |||||||||||||||||||||
| Restructuring charges | 579 | — | 579 | NM | ||||||||||||||||||||||
| Operating loss | (25,457) | (27,425) | 1,968 | 7 | % | |||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Interest income | 473 | 578 | (105) | (18) | % | |||||||||||||||||||||
| Interest expense | (4,699) | (5,591) | 892 | (16) | % | |||||||||||||||||||||
| Miscellaneous (expense) income, net | (3,663) | 15,085 | (18,748) | NM | ||||||||||||||||||||||
| Loss before income taxes | (33,346) | (17,353) | (15,993) | (92) | % | |||||||||||||||||||||
| Income tax benefit | 2,209 | 8,555 | (6,346) | (74) | % | |||||||||||||||||||||
| Net loss | $ | (31,137) | $ | (8,798) | $ | (22,339) | NM | |||||||||||||||||||
______________
NM - Percentage is not meaningful.
Revenues
Revenues increased $6,035, or 15%, to $45,489 for the three months ended September 30, 2026 as compared to the prior year period.
The net increase was attributable to the following:
| Increase in revenues from league distributions | $ | 3,129 | ||||||
| Increase in pre/regular season food, beverage and merchandise sales | 2,643 | |||||||
| Other net increases | 263 | |||||||
| $ | 6,035 | |||||||
The increase in revenues from league distributions for the three months ended September 30, 2026 was primarily due to an increase in certain league distributions unrelated to national media rights fees.
The increase in pre/regular season food, beverage and merchandise sales for the three months ended September 30, 2026 was primarily due to higher Knicks merchandise revenues driven by ongoing demand from the team winning the 2026 NBA Championship.
Direct operating expenses
Direct operating expenses increased $545, or 7%, to $8,824 for the three months ended September 30, 2026 as compared to the prior year period.
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The net increase was attributable to the following:
| Increase in pre/regular season expense associated with merchandise sales | $ | 1,556 | ||||||
| Increase in team personnel compensation | 1,259 | |||||||
| Increase in net provisions for certain team personnel transactions | 682 | |||||||
| Increase in other team operating expenses | 32 | |||||||
| Decrease in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax | (2,984) | |||||||
| $ | 545 | |||||||
The increase in pre/regular season expense associated with merchandise sales for the three months ended September 30, 2026 was primarily due to higher Knicks merchandise revenues driven by the team winning the 2026 NBA Championship.
The increase in team personnel compensation for the three months ended September 30, 2026 was primarily due to the timing of the start of the 2026-27 NHL regular season as compared to the 2025-26 NHL regular season.
Net provisions for certain team personnel transactions were as follows:
| Three Months Ended | ||||||||||||||||||||
| September 30, | ||||||||||||||||||||
| 2026 | 2025 | Increase (Decrease) | ||||||||||||||||||
| Player trades | $ | 3,275 | $ | — | $ | 3,275 | ||||||||||||||
| Waivers/contract terminations | (211) | 2,382 | (2,593) | |||||||||||||||||
| Net provisions for certain team personnel transactions | $ | 3,064 | $ | 2,382 | $ | 682 | ||||||||||||||
The decrease in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for the three months ended September 30, 2026 was primarily due to the impact of adjustments to prior seasons’ revenue sharing expense (net of escrow) in the current year period.
Selling, general and administrative expenses
Selling, general and administrative expenses primarily consist of (i) administrative costs, including compensation, costs under the Services Agreement with MSG Entertainment (the “Services Agreement”), professional fees, and operating lease costs, (ii) fees related to the Sponsorship Sales and Service Representation Agreements, and (iii) sales and marketing costs. Selling, general and administrative expenses generally do not fluctuate in line with changes in the Company’s revenues and direct operating expenses.
Selling, general and administrative expenses for the three months ended September 30, 2026 increased $2,973, or 5%, to $60,762 as compared to the prior year period primarily driven by expenses related to the Rangers Distribution of $3,554 in the current year period and higher other general and administrative expenses, partially offset by lower employee compensation and related benefits of $1,235.
Restructuring charges
Restructuring charges for the three months ended September 30, 2026 were $579 due to termination benefits provided to certain employees during the current year period. There were no restructuring charges for the three months ended September 30, 2025.
Operating loss
Operating loss for the three months ended September 30, 2026 decreased $1,968, or 7%, to $25,457 as compared to the prior year period primarily due to higher revenues, partially offset by higher selling, general and administrative expenses.
Interest income
Interest income for the three months ended September 30, 2026 decreased $105, or 18%, to $473 as compared to the prior year period.
Interest expense
Interest expense for the three months ended September 30, 2026 decreased $892, or 16%, to $4,699 as compared to the prior year period.
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Miscellaneous (expense) income, net
Miscellaneous (expense) income, net for the three months ended September 30, 2026 reflected net expense of $3,663 and miscellaneous (expense) income, net for the three months ended September 30, 2025 reflected net income of $15,085. The decrease in miscellaneous (expense) income, net relates to changes in fair value in the Company’s investments.
Income taxes
See Note 17 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for a discussion of the Company’s income taxes.
Changes in tax laws and regulations have limited and in the future could further limit the availability of tax benefits or deductions that the Company expects to claim or otherwise increase the taxes imposed on the Company’s operations. For example, Section 162(m) of the U.S. Internal Revenue Code generally limits a publicly held corporation’s deduction for compensation paid to each “covered employee” to $1 million per year. Effective for our tax year beginning July 1, 2027, Section 162(m) expands the definition of “covered employee” to include the five highest compensated employees for the taxable year other than our principal executive officer, principal financial officer, and three highest compensated executive officers. This expanded provision will apply to players on our sports teams and would cause a significant amount of compensation expense to be nondeductible in fiscal year 2028 and beyond. See “Item 1A. Risk Factors—Operational Risks—We Are Subject to Governmental Regulation, Including Tax Laws and Regulations, Which Can Change, and Any Failure to Comply With These Regulations May Have a Material Negative Effect on Our Business and Results of Operations” in our 2026 Form 10-K.
Adjusted operating income (loss)
The Company evaluates performance based on several factors, of which the key financial measure is operating income (loss) excluding (i) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits, (iv) gains or losses on sales or dispositions of businesses, (v) the impact of purchase accounting adjustments related to business acquisitions, and (vi) gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan, which is referred to as adjusted operating income (loss), a non-GAAP measure.
Management 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. In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan provides investors with a clearer picture of the Company’s operating performance given that, in accordance with generally accepted accounting principles (“GAAP”), gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan are recognized in Operating income (loss) whereas gains and losses related to the remeasurement of the assets under the Company’s Executive Deferred Compensation Plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recognized in Miscellaneous income (expense), net, which is not reflected in Operating income (loss).
The Company believes adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of the Company. Adjusted operating income (loss) 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 adjusted operating income (loss) measures as the most important indicators of its business performance and evaluates management’s effectiveness with specific reference to these indicators.
Adjusted operating income (loss) 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 adjusted operating income (loss) 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 adjusted operating income (loss).
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The following is a reconciliation of operating loss to adjusted operating loss for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Change | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Operating loss | $ | (25,457) | $ | (27,425) | $ | 1,968 | 7 | % | ||||||||||||||||||
| Depreciation and amortization | 781 | 811 | ||||||||||||||||||||||||
| Share-based compensation | 3,953 | 4,844 | ||||||||||||||||||||||||
| Restructuring charges | 579 | — | ||||||||||||||||||||||||
| Remeasurement of deferred compensation plan liabilities | 140 | 963 | ||||||||||||||||||||||||
| Adjusted operating loss | $ | (20,004) | $ | (20,807) | $ | 803 | 4 | % | ||||||||||||||||||
For the three months ended September 30, 2026, adjusted operating loss decreased $803, or 4%, to $20,004 as compared to the prior year period. The decrease in adjusted operating loss was primarily due to higher revenues, partially offset by higher selling, general and administrative expenses.
Liquidity and Capital Resources
Overview
Our primary sources of liquidity are cash and cash equivalents, cash flow from operations and available borrowing capacity under our credit facility. See Note 13 to the consolidated financial statements included in “Part I - Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for a discussion of the 2025 Knicks Credit Agreement.
Our principal uses of cash include the operation of our businesses, working capital-related items, the repayment of outstanding debt, repurchases of shares of the Company’s Class A Common Stock, dividends, if declared, and investments. In addition, in connection with the Rangers Distribution, the Company contributed $19,095 of cash to MSG Rangers.
As of September 30, 2026, we had $40,046 in Cash and cash equivalents. In addition, as of September 30, 2026, the Company’s deferred revenue obligations were $292,428, net of billed, but not yet collected deferred revenue. This balance is primarily comprised of obligations in connection with tickets and suites. The outstanding balance under the Knicks Revolving Credit Facility was $282,000 as of September 30, 2026.
We regularly monitor and assess our ability to meet our net funding and investing requirements. The decisions of the Company as to the use of its available liquidity will be based upon the ongoing review of the funding needs of the business, management’s view of a favorable allocation of cash resources, and the timing of cash flow generation. To the extent the Company desires to access alternative sources of funding through the capital and credit markets, restrictions imposed by the NBA and potentially challenging U.S. and global economic and market conditions could adversely impact its ability to do so at that time.
We believe we have sufficient liquidity, including $40,046 in Cash and cash equivalents as of September 30, 2026, along with $113,000 of additional available borrowing capacity under the 2025 Knicks Credit Agreement (as of the date of filing), to fund our operations and satisfy any obligations for the foreseeable future.
On October 22, 2026, the Company borrowed an additional $30,000 under the Knicks Revolving Credit Facility. In addition, in connection with the Rangers Distribution, in October 2026, the Company incurred additional one-time costs of approximately $20,000 for employee awards and financial advisory fees.
In addition, prior to the Rangers Distribution, amounts that we collected for tickets, suites and sponsorship sales in advance were recorded as deferred revenue and were recognized as revenues when earned for both accounting and tax purposes. In connection with the Rangers Distribution, the tax recognition by the Company for certain of these deferred revenues will be accelerated to the Distribution Date, rather than recognized over the course of one year. The Company will not be reimbursed by MSG Rangers for such taxes associated with collection of Rangers deferred revenue.
Financing Agreements and Stock Repurchases
See Note 13 and Note 15 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for discussions of the Company’s debt obligations and various financing agreements, and the Company’s stock repurchases, respectively.
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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, except for the related party agreements entered into in connection with the Rangers Distribution as further described in Note 16 to the consolidated financial statements included in “Part I - Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.
Cash Flow Discussion
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 loss | $ | (31,137) | $ | (8,798) | ||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | 7,509 | (16,681) | ||||||||||||
| Changes in working capital assets and liabilities | (122,640) | (59,475) | ||||||||||||
| Net cash used in operating activities | (146,268) | (84,954) | ||||||||||||
| Net cash used in investing activities | (1,231) | (1,848) | ||||||||||||
| Net cash provided by (used in) financing activities | 23,034 | (9,110) | ||||||||||||
| Net decrease in cash, cash equivalents and restricted cash | $ | (124,465) | $ | (95,912) | ||||||||||
Operating Activities
Net cash used in operating activities for the three months ended September 30, 2026 increased by $61,314 to $146,268. The increase was primarily due to changes in working capital assets and liabilities, partially offset by the change in net loss adjusted for non-cash items. The changes in working capital assets and liabilities were primarily driven by (i) a higher decrease in accrued and other liabilities of $89,002, primarily due to higher payments related to employee compensation and league revenue sharing in the current year period, (ii) a higher decrease in accounts payable of $8,292, primarily related to the timing of payment of playoff related expenses, and (iii) a higher increase in net related party receivables of $6,128, primarily related to the timing of receipts under the Arena License Agreements and Sponsorship Sales & Service Agreements. These changes were partially offset by a higher increase in deferred revenue of $34,590, primarily due to higher collections of ticket sales in advance of recognition in the current year period and a lower increase in accounts receivable, net of $8,449, primarily due to the collections of certain league receivables in the current year period.
Investing Activities
Net cash used in investing activities for the three months ended September 30, 2026 decreased by $617 to $1,231 as compared to the prior year period primarily due to lower purchases of investments in the current year period, partially offset by higher capital expenditures in the current year period.
Financing Activities
Net cash provided by financing activities for the three months ended September 30, 2026 increased by $32,144 to $23,034 as compared to the prior year period primarily due to additional borrowings under the Company’s credit facilities in the current year period. The increase was partially offset by higher taxes paid in lieu of shares issued for equity-based compensation in the current year period.
Seasonality of Our Business
The Company’s dependence on revenues from the Knicks, and prior to the Rangers Distribution, the Rangers, generally means that it earns a disproportionate share of its revenues in the second and third quarters of the Company’s fiscal year, which is when the majority of the teams’ games are played.
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Recently Issued Accounting Pronouncements and Critical Accounting Estimates
Recently Issued Accounting Pronouncements
See Note 2 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for discussion of recently issued accounting pronouncements.
Critical Accounting Estimates
The following discussion has been included to provide the results of our annual impairment testing of goodwill and identifiable indefinite-lived intangible assets performed during the first quarter of fiscal year 2027. There have been no material changes to the Company’s critical accounting policies from those set forth in our 2026 Form 10-K.
Goodwill
The carrying amount of goodwill as of September 30, 2026 was $226,523. Goodwill is tested annually for impairment as of August 31st and at any time upon the occurrence of certain events or changes in circumstances. The Company performs its goodwill impairment test at the reporting unit level, which is the same as or one level below the operating segment level. The Company has one operating and reportable segment, and one reporting unit for goodwill impairment testing purposes.
The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. If the Company can support the conclusion that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would not need to perform a quantitative impairment test for that reporting unit. If the Company cannot support such a conclusion or the Company does not elect to perform the qualitative assessment, a quantitative assessment is performed by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The estimates of the fair value of the Company’s reporting units are primarily determined using discounted cash flows and comparable market transactions. These valuations are based on estimates and assumptions including projected future cash flows, discount rates, determination of appropriate market comparables and the determination of whether a premium or discount should be applied to comparables. Significant judgments inherent in a discounted cash flow analysis include the selection of the appropriate discount rate, the estimate of the amount and timing of projected future cash flows and identification of appropriate continuing growth rate assumptions. The discount rates used in the analysis are intended to reflect the risk inherent in the projected future cash flows. The amount of an impairment loss is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company elected to perform the qualitative assessment of impairment for the Company’s reporting unit for the fiscal year 2027 impairment test. These assessments considered factors such as:
•macroeconomic conditions;
•industry and market considerations;
•market capitalization;
•cost factors;
•overall financial performance of the reporting unit;
•other relevant company-specific factors such as changes in management, strategy or customers; and
•relevant reporting unit specific events such as changes in the carrying amount of net assets.
The Company performed its most recent annual impairment test of goodwill during the first quarter of fiscal year 2027, and there was no impairment of goodwill. Based on this impairment test, the Company concluded it was not more likely than not that the fair value of the reporting unit was less than its carrying amount.
Identifiable Indefinite-Lived Intangible Assets
Identifiable indefinite-lived intangible assets are tested annually for impairment as of August 31st and at any time upon the occurrence of certain events or substantive changes in circumstances. The following table sets forth the amount of identifiable indefinite-lived intangible assets reported in the consolidated balance sheet as of September 30, 2026:
| Sports franchises | $ | 102,564 | |||
| Photographic related rights | 1,080 | ||||
| $ | 103,644 | ||||
The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. In the qualitative assessment, the Company must evaluate the totality of qualitative factors, including any recent fair value measurements, that impact whether an indefinite-lived intangible asset other than goodwill has a carrying amount that
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more likely than not exceeds its fair value. The Company must proceed to conducting a quantitative analysis, if the Company (i) determines that such an impairment is more likely than not to exist, or (ii) forgoes the qualitative assessment entirely. Under the quantitative assessment, the impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. For all periods presented, the Company elected to perform a qualitative assessment of impairment for the indefinite-lived intangible assets. These assessments considered the events and circumstances that could affect the significant inputs used to determine the fair value of the intangible asset. Examples of such events and circumstances include:
•cost factors;
•financial performance;
•legal, regulatory, contractual, business or other factors;
•other relevant company-specific factors such as changes in management, strategy or customers;
•industry and market considerations; and
•macroeconomic conditions.
The Company performed its most recent annual impairment test of identifiable indefinite-lived intangible assets during the first quarter of fiscal year 2027, and there were no impairments identified. Based on this impairment test, the Company concluded it was not more likely than not that the fair value of the indefinite-lived intangible assets was less than their carrying amount.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There were no material changes to the disclosures regarding market risks in connection with our interest rate risk exposure. See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our 2026 Form 10-K.
Potential interest rate risk exposure:
We have potential interest rate risk exposure related to outstanding borrowings incurred under our credit facilities. Changes in interest rates may increase interest expense payments with respect to any borrowings incurred under the credit facilities.
Borrowings under our credit facilities incur interest, depending on our election, at a floating rate based upon SOFR plus a credit spread adjustment, the U.S. Federal Funds Rate or the U.S. Prime Rate, plus, in each case, a fixed spread. If appropriate, we may seek to reduce such exposure through the use of interest rate swaps or similar instruments. See Note 13 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for more information on our credit facilities. As of September 30, 2026, we had a total of $282 million of borrowings outstanding under our credit facilities. The effect of a hypothetical 100 basis point increase in floating interest rates prevailing as of September 30, 2026 and continuing for a full year would increase interest expense by approximately $2.8 million.
Item 4. Controls and Procedures
An evaluation was carried out under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and Chief Financial Officer, of 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 of the end of the period covered by this report. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2026 the Company’s disclosure controls and procedures were effective.
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 Securities Exchange Act of 1934) during the 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 (including the extent of available insurance, if any), management does not believe that resolution of these lawsuits will have a material effect on the Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
As of September 30, 2026, the Company had approximately $185 million remaining under the $525 million Class A Common Stock share repurchase program authorized by the Company’s Board of Directors on September 11, 2015, which program was reauthorized by the Board of Directors on September 30, 2026. Under the authorization, 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, with the timing and amount of purchases depending on market conditions and other factors. The Company has been funding and expects to continue to fund stock repurchases through a combination of cash on hand, cash generated by operations and available borrowing capacity under its existing credit facilities. During the three months ended September 30, 2026, the Company did not engage in any share repurchase activity under its share repurchase program.
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Item 6. Exhibits
(a)Index to Exhibits
| EXHIBIT NO. | DESCRIPTION | |||||||
2.1 | Distribution Agreement, dated as of September 30, 2026, between MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) and MSG Rangers Corp. (formerly MSGS Spinco, Inc.) (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 30, 2026).# | |||||||
2.2 | Contribution Agreement, dated as of September 30, 2026, between MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) and MSG Rangers Corp. (formerly MSGS Spinco, Inc.) (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on September 30, 2026). # | |||||||
3.1 | Articles of Incorporation of MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.), dated June 10, 2025 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 11, 2025). | |||||||
3.2 | Certificate of Amendment to the Articles of Incorporation of MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.), dated October 26, 2026 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 27, 2026). | |||||||
3.3 | Amended and Restated Bylaws of MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.), dated October 26, 2026 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on October 27, 2026). | |||||||
10.1 | Transition Services Agreement, dated as of September 30, 2026, between MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) and MSG Rangers Corp. (formerly MSGS Spinco, Inc.) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 30, 2026).# | |||||||
10.2 | Tax Disaffiliation Agreement, dated as of September 30, 2026, between MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) and MSG Rangers Corp. (formerly MSGS Spinco, Inc.) (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 30, 2026).# | |||||||
10.3 | Employee Matters Agreement, dated as of September 30, 2026, between MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) and MSG Rangers Corp. (formerly MSGS Spinco, Inc.) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on September 30, 2026). | |||||||
10.4 | MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) Executive Deferred Compensation Plan, as amended and restated.† | |||||||
10.5 | Form of MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) Restricted Stock Units Agreement.† | |||||||
10.6 | Form of MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) Performance Restricted Stock Units Agreement.† | |||||||
10.7 | Form of MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) Option Agreement.† | |||||||
10.8 | Employment Agreement, dated as of September 28, 2026 between MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) and Jamaal Lesane (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on September 30, 2026).† | |||||||
10.9 | Employment Agreement, dated as of July 1, 2024, between MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) and James L. Dolan, as amended and restated as of October 26, 2026 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 27, 2026).† | |||||||
10.10 | Employment Agreement Amendment, dated as of October 26, 2026, between MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) and David Granville-Smith (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on October 27, 2026).† | |||||||
10.11 | Employment Agreement Amendment, dated as of October 26, 2026, between MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) and Paul DiCicco (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on October 27, 2026).† | |||||||
10.12 | Employment Agreement Amendment, dated as of October 26, 2026, between MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) and Jamaal Lesane (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on October 27, 2026).† | |||||||
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| EXHIBIT NO. | DESCRIPTION | |||||||
10.13 | NHL Transfer Consent Agreement, dated as of October 23, 2026, between the National Hockey League and New York Rangers LLC, Rangers Holdings, LLC, MSG NYR Holdings, LLC, MSG Rangers Corp. (formerly MSGS Spinco, Inc.),MSG Knicks, LLC (formerly MSG Sports, LLC) and MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 27, 2026).# | |||||||
10.14 | MSG Knickerbockers Corp. (formerly Madison Square Garden Sports Corp.) Policy Concerning Certain Matters Relating to MSG Rangers Corp. (formerly MSGS Spinco, Inc.), Madison Square Garden Entertainment Corp., Sphere Entertainment Co. 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 MSG Knickerbockers Corp. Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Loss, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Equity, and (vi) Notes to 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.
# Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant will furnish the omitted exhibits and schedules to the SEC upon request.
.
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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 6th day of November 2026.
| MSG Knickerbockers Corp. | ||||||||
| By: | /S/ PAUL DICICCO | |||||||
| Name: | Paul DiCicco | |||||||
| Title: | Executive Vice President, Chief Financial Officer and Treasurer | |||||||
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