Sphere Entertainment Co.

Previous wording

•our ability to negotiate and execute definitive agreements for the development of a Sphere venue at National Harbor, Maryland, as well as the receipt of certain governmental incentives and approvals from Prince George’s County and the State of Maryland related to the development and construction of the venue;

Current wording

•our ability to negotiate and execute definitive agreements for the financing and development of a Sphere venue at National Harbor, Maryland, as well as the receipt of certain governmental incentives and approvals from Prince George’s County and the State of Maryland related to the development and construction of the venue;

Previous wording

•our ability to construct, finance and operate new Sphere venues, and the investments, costs and timing associated with those efforts, including obtaining financing, the impact of inflation and tariffs, and any construction delays and/or cost overruns;

Current wording

•our ability to construct, finance and operate new Sphere venues, and the investments, costs and timing associated with those efforts, including obtaining financing and governmental incentives, the impact of inflation and tariffs, and any construction delays and/or cost overruns;

Previous wording

•our ability to successfully execute MSG Networks’ strategy for its direct-to-consumer (“DTC”) and authenticated streaming offering, MSG+ (which is included in the Gotham Sports streaming product), the success of such offering and our ability to adapt to new content distribution platforms or changes in consumer behavior resulting from emerging technologies;

Current wording

•our ability to successfully execute MSG Networks’ strategy for its direct-to-consumer (“DTC”) and authenticated streaming offering, MSG+ (which is currently included in the Gotham Sports streaming product and is anticipated to be available through the DAZN streaming product during the 2026-2027 National Basketball Association (the “NBA”) and National Hockey League (the “NHL”) seasons), the success of such offering and our ability to adapt to new content distribution platforms or changes in consumer behavior resulting from emerging technologies;

Previous wording

•any economic, social or political actions, such as boycotts, protests, work stoppages or campaigns by labor organizations, including the unions representing players and officials of the National Basketball Association (the “NBA”) and the National Hockey League (the “NHL”), artists or employees involved in our productions or other work stoppages that may impact us or our business partners;

Current wording

•any economic, social or political actions, such as boycotts, protests, work stoppages or campaigns by labor organizations, including the unions representing players and officials of the NBA and the NHL, artists or employees involved in our productions or other work stoppages that may impact us or our business partners;

Previous wording

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

Current wording

•business, reputational and litigation risk due to a cyber or other security incident resulting in loss, disclosure or misappropriation of stored personal information, disruption of our Sphere or MSG Networks businesses or disclosure of confidential information or other breaches of our information security;

Previous wording

The Company is focused on creating a global network of Spheres. The Company is working with DCT Abu Dhabi to bring Sphere to Abu Dhabi, United Arab Emirates. In January 2026, the Company, the State of Maryland, Prince George’s County, and Peterson Companies announced the Company’s intent to develop a new Sphere venue at National Harbor, Maryland.

Current wording

The Company is focused on creating a global network of Spheres. The Company is working with DCT Abu Dhabi to bring Sphere to Abu Dhabi, United Arab Emirates. In May 2026, Yas Island was selected as the site for Sphere Abu Dhabi. DCT Abu Dhabi is funding construction, which is expected to be completed by end of 2029. In January 2026, the Company, the State of Maryland, Prince George’s County, and Peterson Companies announced the Company’s intent to develop a new Sphere venue at National Harbor, Maryland.

Previous wording

MSG Networks: This segment is comprised of the Company’s regional sports and entertainment networks, MSG Network and MSG Sportsnet, as well as its DTC and authenticated streaming offering, MSG+ (which is included in the Gotham Sports streaming product). MSG Networks serves the New York designated market area, as well as other portions of New York, New Jersey, Connecticut and Pennsylvania and features a wide range of sports content, including exclusive live local games and other programming of the New York Knicks of the NBA and the New York Rangers, New York Islanders, New Jersey Devils and Buffalo Sabres of the NHL, as well as significant coverage of the New York Giants and the Buffalo Bills of the National Football League.

Current wording

MSG Networks: This segment is comprised of the Company’s regional sports and entertainment networks, MSG Network and MSG Sportsnet, as well as its DTC and authenticated streaming offering, MSG+ (which is currently included in the Gotham Sports streaming product and is anticipated to be available through the DAZN streaming product during the 2026-2027 NBA and NHL seasons). MSG Networks serves the New York designated market area, as well as other portions of New York, New Jersey, Connecticut and Pennsylvania and features a wide range of sports content, including exclusive live local games and other programming of the New York Knicks of the NBA and the New York Rangers, New York Islanders, New Jersey Devils and Buffalo Sabres of the NHL, as well as significant coverage of the New York Giants and the Buffalo Bills of the National Football League.

Previous wording

Results of Operations. This section provides an analysis of our unaudited results of operations for the three months ended March 31, 2026 and 2025 on both a (i) consolidated basis and (ii) segment basis.

Current wording

Results of Operations. This section provides an analysis of our unaudited results of operations for the three and six months ended June 30, 2026 and 2025 on both a (i) consolidated basis and (ii) segment basis.

Previous wording

Liquidity and Capital Resources. This section provides a discussion of our financial condition and liquidity, an analysis of our cash flows for the three months ended March 31, 2026 and 2025, as well as certain contractual obligations and off-balance sheet arrangements.

Current wording

Liquidity and Capital Resources. This section provides a discussion of our financial condition and liquidity, an analysis of our cash flows for the six months ended June 30, 2026 and 2025, as well as certain contractual obligations and off-balance sheet arrangements.

Previous wording

The operating results of our Sphere segment are largely dependent on our ability to continue to attract (i) audiences to The Sphere Experience, (ii) advertisers and marketing partners, and (iii) guests to attend, and artists, entertainers and athletes, to perform at, residencies, concerts and other events at our venue. The operating results of our MSG Networks segment are largely dependent on (i) the terms of MSG Networks’ affiliation agreements with Distributors (including renewals thereof), (ii) the number of subscribers of MSG Networks’ Distributors, (iii) the terms of MSG Networks’ media rights agreements (including renewals thereof), (iv) the ability of MSG Networks to make its required debt service payments, including quarterly principal amortization payments pursuant to the terms of its term loan facility, (v) the success of MSG+, MSG Networks’ DTC and authenticated streaming offering (which is included in the Gotham Sports streaming product), and (vi) the advertising rates MSG Networks charges advertisers. Certain of these factors in turn depend on the popularity and/or performance of the professional sports teams whose games MSG Networks broadcasts on its networks.

Current wording

The operating results of our Sphere segment are largely dependent on our ability to continue to attract (i) audiences to The Sphere Experience, (ii) advertisers and marketing partners, and (iii) guests to attend, and artists, entertainers and athletes, to perform at, residencies, concerts and other events at our venue. The operating results of our MSG Networks segment are largely dependent on (i) the terms of MSG Networks’ affiliation agreements with Distributors (including renewals thereof), (ii) the number of subscribers of MSG Networks’ Distributors, (iii) the terms of MSG Networks’ media rights agreements (including renewals thereof), (iv) the ability of MSG Networks to make its required debt service payments, including quarterly principal amortization payments pursuant to the terms of its term loan facility, (v) the success of MSG+, MSG Networks’ DTC and authenticated streaming offering, and (vi) the advertising rates MSG Networks charges advertisers. Certain of these factors in turn depend on the popularity and/or performance of the professional sports teams whose games MSG Networks broadcasts on its networks.

Previous wording

Comparison of the Three Months Ended March 31, 2026 versus the Three Months Ended March 31, 2025

Current wording

Comparison of the Three and Six Months Ended June 30, 2026 versus the Three and Six Months Ended June 30, 2025

Previous wording

The following is a summary of changes in our segments’ operating results for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, which are discussed below under “—Business Segment Results.”

Current wording

The following is a summary of changes in our segments’ operating results for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025, which are discussed below under “—Business Segment Results.”

Previous wording

For the three months ended March 31, 2026, depreciation and amortization increased $138 as compared to the prior year period due to the increase in total property and equipment, gross in 2026 as compared to 2025.

Current wording

For the three and six months ended June 30, 2026, depreciation and amortization increased $401 and $539, respectively, as compared to the prior year periods due to the increase in total property and equipment, gross in 2026 as compared to 2025.

Previous wording

During the three months ended March 31, 2026, the Company recognized impairments and other losses, net of $79. During the three months ended March 31, 2025, the Company recognized impairments and other losses, net of $521 relating to fixed assets at Sphere Las Vegas that were removed from the venue and were impaired.

Current wording

During the three and six months ended June 30, 2026, the Company recognized impairments and other losses, net of $0 and $79, respectively. During the three and six months ended June 30, 2025, the Company recognized impairments and other losses, net of $3,641 and $4,162, respectively, primarily due to the recorded losses of $3,741 from the sale of the Company’s land in Stratford, London and fixed assets at Sphere Las Vegas that were removed from the venue and were impaired.

Previous wording

For the three months ended March 31, 2026, the Company recorded restructuring charges of $3,414, as compared to restructuring charges of $1,841 in the three months ended March 31, 2025, respectively, primarily related to termination benefits provided as part of a voluntary exit program the Company implemented during the period.

Current wording

For the three and six months ended June 30, 2026, the Company recorded restructuring charges of $323 and $3,737, respectively, as compared to restructuring charges of $947 and $2,788, in the three and six months ended June 30, 2025, respectively, primarily related to termination benefits provided as part of a voluntary exit program the Company conducted during each six month period.

Previous wording

Loss on extinguishment of debt

Current wording

Gain (loss) on extinguishment of debt

Previous wording

For the three months ended March 31, 2026, the Company recorded a loss on extinguishment of debt of $2,071, related to the write-off of deferred financing costs in connection with the partial repayment of its 2022 LV Term Loan Facility.

Current wording

For the three and six months ended June 30, 2026, the Company recorded a loss on extinguishment of debt of $0 and $2,071, respectively, related to the write-off of deferred financing costs in connection with the partial repayment of its 2022 LV Sphere Term Loan Facility.

Previous wording

For the three months ended March 31, 2026, interest income increased $73 as compared to the prior year period, primarily due to higher average cash and cash equivalent balances.

Current wording

For the three and six months ended June 30, 2026, interest income increased $702 and $775, respectively, as compared to the prior year periods, primarily due to higher average cash and cash equivalent balances.

Previous wording

For the three months ended March 31, 2026, interest expense decreased $18,167 as compared to the prior year period primarily due to (i) a reduction in the average outstanding principal balance of the MSGN Term Loan Facility as compared to the prior year period and (ii) the application of troubled debt restructuring for interest expense recognition for the MSGN Term Loan Facility as described in Note 10. Credit Facilities and Convertible Notes to the condensed consolidated financial statements included in “— Item 1. Financial Statements” of this Form 10-Q.

Current wording

For the three and six months ended June 30, 2026, interest expense decreased $17,589 and $35,756, respectively, as compared to the prior year periods primarily due to the application of troubled debt restructuring for interest expense recognition for the MSGN Term Loan Facility as described in Note 10. Credit Facilities and Convertible Notes to the condensed consolidated financial statements included in “— Item 1. Financial Statements” of this Form 10-Q.

Previous wording

For the three months ended March 31, 2026, other expense, net increased $84 as compared to the prior year period, primarily due to smaller losses on equity method investments and foreign exchange.

Current wording

For the three and six months ended June 30, 2026, other expense, net increased $104 and $188, respectively, as compared to the prior year periods, primarily due to higher losses on equity method investments and foreign exchange.

Previous wording

Income tax benefit for the three months ended March 31, 2025 of $20,323 reflects an effective tax rate of 20%. The estimated annual effective tax rate is lower than the statutory federal tax rate of 21% primarily due to income tax expense related to nondeductible officer’s compensation, partially offset by income tax benefit from state and local taxes.

Current wording

Income tax benefit for the three and six months ended June 30, 2026 of $26,926 and $31,767, respectively, reflects an effective tax rate of 41% and 48%, respectively. The effective tax rate is higher than the statutory federal tax rate of 21% primarily due to discrete income tax benefit related to the impact of CODI, excess tax benefit related to share based award compensation, partially offset by nondeductible officers’ compensation.

Previous wording

The following is a reconciliation of operating income (loss) to adjusted operating income (as defined in Note 15. Segment Information to the condensed consolidated financial statements included in “— Item 1. Financial Statements” of this Form 10-Q) for the three months ended March 31, 2026 as compared to the prior year period:

Current wording

The following is a reconciliation of operating loss to adjusted operating income (as defined in Note 15. Segment Information to the condensed consolidated financial statements included in “— Item 1. Financial Statements” of this Form 10-Q) for the three and six months ended June 30, 2026 as compared to the prior year period:

Previous wording

Adjusted operating income for the three months ended March 31, 2026 increased $74,008 as compared to the prior year period adjusted operating income of $109,976. The changes in adjusted operating income were attributable to the Company’s segments as follows:

Current wording

Adjusted operating income for the three months ended June 30, 2026 decreased $10,542 as compared to the prior year period to $50,924. Adjusted operating income for the six months ended June 30, 2026 increased $63,466 as compared to the prior year period to $160,900. The changes in adjusted operating income were attributable to the Company’s segments as follows:

Previous wording

For the three months ended March 31, 2026, revenues increased $108,420 as compared to the prior year period. The change in revenues was attributable to the following:

Current wording

For the three and six months ended June 30, 2026, revenues increased $50,766 and $159,186, respectively, as compared to the prior year periods. The change in revenues was attributable to the following:

Previous wording

For the three months ended March 31, 2026, the increase in revenues for The Sphere Experience primarily reflects higher average per-show revenue due to the impact of The Wizard of Oz at Sphere, which debuted on August 28, 2025. In the current year period, The Sphere Experience reflected 209 performances of The Wizard of Oz at Sphere (which generated per-show revenue of approximately $746). In the prior year period, The Sphere Experience reflected 200 total performances, comprised of 166 performances of Postcard From Earth and 34 performances of V-U2 An Immersive Concert Film (with generated a combined per-show revenue of approximately $371).

Current wording

For the three and six months ended June 30, 2026, the increase in revenues for The Sphere Experience primarily reflects higher per-show revenue as compared to the prior year period due to the impact of The Wizard of Oz at Sphere, which debuted on August 28, 2025. In the current year period, The Sphere Experience reflected 220 and 429 performances of The Wizard of Oz at Sphere (which generated per-show revenue of approximately $553 and $647) for the three and six months ended June 30, 2026, respectively. For the three months ended June 30, 2025, The Sphere Experience reflected 215 total performances, comprised of 198 performances of Postcard From Earth and 17 performances of V-U2 An Immersive Concert Film (which generated a combined per-show revenue of approximately $315). For the six months ended June 30, 2025, The Sphere Experience reflected 415 total performances, comprised of 364 performances of Postcard From Earth and 51 performances of V-U2 An Immersive Concert Film (which generated a combined per-show revenue of approximately $342).

Previous wording

For the three months ended March 31, 2026, the increase in revenues from sponsorship, signage, Exosphere advertising and suite license fees primarily reflects higher sponsorship revenues (due to increased sales of existing sponsorship inventory) and suite license fee revenues.

Current wording

For the three and six months ended June 30, 2026, the increase in revenues from sponsorship, signage, Exosphere advertising and suite license fees reflects higher Exosphere advertising revenue and, to a lesser extent, higher sponsorship revenues (due to increased sales of existing sponsorship inventory) and suite license fee revenues.

Previous wording

For the three months ended March 31, 2026, the increase in event-related revenues reflects (i) higher revenues from brand events, due to the impact of one additional brand event held during the three months ended March 31, 2026 and higher per-event revenues, and (ii) higher revenues from concerts, primarily due to six additional concert residency shows held at Sphere in Las Vegas during the period.

Current wording

For the three months ended June 30, 2026, the decrease in event-related revenues reflects (i) lower revenues from brand events, primarily due to the impact of two fewer brand events held in the current year period, partially offset by (ii) higher revenues from concerts. The increase in revenues from concerts reflected six additional concert residency shows held at Sphere in Las Vegas, offset by lower per-concert revenue due to the mix of concerts as compared to the prior year period.

Previous wording

For the three months ended March 31, 2026, direct operating expenses increased by $28,690 as compared to the prior year period. The change in direct operating expenses was attributable to the following:

Current wording

For the three and six months ended June 30, 2026, direct operating expenses increased by $11,379 and $40,069, respectively, as compared to the prior year periods. The change in direct operating expenses was attributable to the following:

Previous wording

For the three months ended March 31, 2026, the increase in direct operating expenses for The Sphere Experience was primarily due to higher per-show expenses, primarily due to the impact of The Wizard of Oz at Sphere, which debuted on August 28, 2025. In the current year period, The Sphere Experience reflected 209 performances of The Wizard of Oz at Sphere (which incurred per-show direct operating expenses of approximately $213). In the prior year period, The Sphere Experience reflected 200 total performances, comprised of 166 performances of Postcard From Earth and 34 performances of V-U2 An Immersive Concert Film (with incurred combined per-show direct operating expenses of approximately $130).

Current wording

For the three and six months ended June 30, 2026, the increase in direct operating expenses for The Sphere Experience was primarily due to higher per-show expenses as compared to the prior year period, due to the impact of The Wizard of Oz at Sphere, which debuted on August 28, 2025. In the current year period, The Sphere Experience reflected 220 and 429 performances of The Wizard of Oz at Sphere (which incurred per-show direct operating expenses of approximately $193 and $203) for the three and six months ended

Previous wording

For the three months ended March 31, 2026, the increase in venue operating expenses was primarily related to an increase in employee compensation and benefits and repairs and maintenance expenses.

Current wording

For the six months ended June 30, 2026, the increase in venue operating expenses was primarily related to an increase in employee compensation and benefits and repairs and maintenance expenses.

Previous wording

For the three months ended March 31, 2026, the increase in event-related direct operating expenses reflects (i) higher expenses from brand events, due to an increase in per-event expenses and the impact of one additional brand event held during the current year period, and (ii) higher expenses from concerts, primarily due to an increase in the number of concert residency shows held at Sphere in Las Vegas as compared to the prior year period, partially offset by lower per-concert expenses.

Current wording

For the three months ended June 30, 2026, the decrease in event-related direct operating expenses reflects (i) lower expenses from brand events, primarily due to the impact of two fewer brand events, partially offset by (ii) higher expenses from concerts, due to six additional concert residency shows held at Sphere in Las Vegas as compared to the prior year period, partially offset by lower per-concert expenses. For the six months ended June 30, 2026, the increase in event-related direct operating expenses reflects (i) higher expenses from concerts due to the impact of twelve additional concert residency shows, partially offset by lower per-concert expenses and (ii) higher expenses from brand events due to higher per-event expenses, partially offset by one fewer brand event as compared to the prior year period.

Previous wording

For the three months ended March 31, 2026, selling, general, and administrative expenses increased $10,192 as compared to the prior year period, primarily due to the impact of mark-to-market adjustments on certain share-based compensation awards as a result of the Company’s stock price appreciation during the period.

Current wording

For the three and six months ended June 30, 2026, selling, general, and administrative expenses increased $29,201 and $39,393, respectively, as compared to the prior year periods, primarily due to (i) the impact of mark-to-market adjustments on certain share-based compensation awards as a result of the appreciation in the Company’s stock price during the current year quarter, (ii) higher employee compensation and related benefits and (iii) higher professional fees, including an increase in litigation-related expenses associated with the Networks Merger, partially offset by the absence of costs associated with pursuing a work-out of the Prior MSGN Credit Facilities in the prior year period.

Previous wording

During the three months ended March 31, 2026, the Company recognized Impairments and other losses, net of $79. During the three months ended March 31, 2025, the Company recognized Impairments and other losses, net of $521 relating to fixed assets at Sphere Las Vegas that were removed from the venue and were impaired.

Current wording

During the three and six months ended June 30, 2026, the Company recognized Impairments and other losses, net of $0 and $79, respectively. During the three and six months ended June 30, 2025, the Company recognized Impairments and other losses, net of $3,641 and $4,162, respectively, primarily due to the recorded losses of $3,741 from the sale of the Company’s land in Stratford, London and fixed assets at Sphere Las Vegas that were removed from the venue and were impaired.

Previous wording

For the three months ended March 31, 2026, depreciation and amortization increased $269 as compared to the prior year period primarily due to the increase in total property and equipment, gross.

Current wording

For the three and six months ended June 30, 2026, depreciation and amortization increased $579 and $848, respectively, as compared to the prior year period primarily due to the increase in total property and equipment, gross.

Previous wording

For the three months ended March 31, 2026, the Company recognized restructuring charges of $2,673 as compared to restructuring charges of $1,841 for the three months ended March 31, 2025, primarily due to termination benefits provided as part of a voluntary exit program the Company implemented during the three months ended March 31, 2026.

Current wording

For the three and six months ended June 30, 2026, the Company recognized restructuring charges of $323 and $2,996, respectively, as compared to restructuring charges of $947 and $2,788 for the three and six months ended June 30, 2025, respectively, primarily due to termination benefits provided as part of a voluntary exit program the Company implemented during the six month period.

Previous wording

For the three months ended March 31, 2026, operating loss improved by $68,879 as compared to the prior year period, primarily due to an increase in revenue, offset by an increase in direct operating expenses and selling, general and administrative expenses.

Current wording

For the three and six months ended June 30, 2026, operating loss improved by $13,872 and $82,751, respectively as compared to the prior year period, primarily due to an increase in revenue and, to a lesser extent, the absence of impairment and other losses, net,, partially offset by an increase in selling, general and administrative expenses and direct operating expenses.

Previous wording

For the three months ended March 31, 2026, adjusted operating income improved by $61,143 as compared to the prior year period, primarily due to an increase in revenue, partially offset by an increase in direct operating expenses and selling, general and administrative expenses.

Current wording

For the three and six months ended June 30, 2026, adjusted operating income improved by $14,960 and $76,103 as compared to the prior year period, primarily due to an increase in revenue, partially offset by an increase in selling, general and administrative expenses and direct operating expenses.

Previous wording

For the three months ended March 31, 2026, revenues decreased $2,582, as compared to the prior year period. The change in revenues was attributable to the following:

Current wording

For the three and six months ended June 30, 2026, revenues decreased $19,804 and $22,386, respectively, as compared to the prior year periods. The change in revenues was attributable to the following:

Previous wording

For the three months ended March 31, 2026, distribution revenue increased $1,773, primarily due to the absence of revenues from Altice during the non-carriage period in the prior year period, partially offset by a decrease in total subscribers of approximately 16.0% (excluding the impact of the Altice non-carriage period in the prior year period).

Current wording

For the three and six months ended June 30, 2026, distribution revenue decreased $13,694 and $11,922, respectively, primarily due to a decrease in total subscribers of approximately 16.5% and 16.0%, respectively (excluding the impact of the Altice non-carriage period in the prior year six month period). In addition, the decrease in distribution revenue for the six months ended June 30, 2026 was partially offset by the absence of revenues from Altice during the non-carriage period in the prior year period.

Previous wording

For the three months ended March 31, 2026, advertising revenue decreased $4,896 primarily due to a lower number of live regular season professional sports telecasts.

Current wording

For the three and six months ended June 30, 2026, advertising revenue decreased $5,975 and $10,872, respectively, primarily due to a lower number of live postseason professional sports telecasts.