Sphere Entertainment Co.

All amounts included in the following notes to condensed consolidated financial statements (unaudited) are presented in USD and in thousands, except per share data or as otherwise noted.0

Note 1. Description of Business and Basis of Presentation

Description of Business

Sphere Entertainment Co. (together with its subsidiaries, the “Company” or “Sphere Entertainment”) is a premier live entertainment and media company comprised oftwo reportable segments, Sphere and MSG Networks. Sphere is a next-generation entertainment medium, and MSG Networks operatestwo regional sports and entertainment networks, as well as a direct-to-consumer (“DTC”) and authenticated streaming product.

Sphere: This segment reflects Sphere TM, a next-generation entertainment medium powered by cutting-edge technologies to create multi-sensory experiences at an unparalleled scale. The Company’s first Sphere opened in Las Vegas in September 2023. The venue can accommodate up to 20,000 guests and can host a wide variety of events year-round, including The Sphere Experience TM, which features original immersive productions, as well as concerts and residencies from renowned artists, and marquee sports and corporate events. Production efforts are supported by Sphere Studios TM, an immersive content studio dedicated to creating multi-sensory entertainment experiences exclusively for Sphere. Sphere Studios is home to a team of creative, production, technology and software experts who provide full in-house creative and production services. The studio campus in Burbank includes a 68,000-square-foot development facility, as well as Big Dome, a 28,000-square-foot,100-foot high custom dome, with a quarter-sized version of the interior display plane at Sphere in Las Vegas, that serves as a specialized screening, production facility, and lab for content at Sphere. The entire exterior surface of Sphere, referred to as the Exosphere TM, is covered with nearly 580,000 square feet of fully programmable LED paneling, creating the largest LED screen in the world — and an impactful display for artists, brands and partners. In October 2024, the Company and the Department of Culture and Tourism – Abu Dhabi (“DCT Abu Dhabi”) announced that they will work together to bring the world’s second Sphere to Abu Dhabi, United Arab Emirates.

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 now 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 (the “Knicks”) of the National Basketball Association (the “NBA”) and the New York Rangers (the “Rangers”), New York Islanders, New Jersey Devils and Buffalo Sabres of the National Hockey League (the “NHL”), as well as significant coverage of the New York Giants and the Buffalo Bills of the National Football League.

The Company conducts substantially all of its business activities presented in the accompanying condensed consolidated financial statements through Sphere Entertainment Group, LLC (“Sphere Entertainment Group”) and MSG Networks Inc. (together with its subsidiaries, “MSG Networks”), and each of their direct and indirect subsidiaries.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions of Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). In connection with its fiscal year-end change from June 30 to December 31, the Company filed audited consolidated financial statements and notes thereto with the SEC on March 3, 2025, on a Transition Report on Form 10-KT for the transition period ended December 31, 2024. The condensed consolidated financial statements herein should be read in conjunction with the consolidated financial statements and the notes thereto (the “Audited Consolidated Financial Statements”) included in the Form 10-KT.

In the opinion of the Company, the accompanying condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the Company’s financial position as of March 31, 2025 and its results of operations for the three months ended March 31, 2025 and 2024, and cash flows for the three months ended March 31, 2025 and 2024. The condensed consolidated balance sheet as of December 31, 2024, and the accompanying notes were derived from the Audited Consolidated Financial Statements, but do not contain all of the footnote disclosures from the Audited Consolidated Financial Statements.

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 year. For example, our MSG Networks segment earns a higher share of its annual revenues in the first and fourth quarters as aresult of MSG Networks’ advertising revenue being largely derived from the sale of inventory in its live NBA and NHL professional sports programming.

Reclassifications

For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation in accordance with GAAP.

Note 2. Accounting Policies

Principles of Consolidation

The condensed consolidated financial statements of the Company include the accounts of Sphere Entertainment Co. and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the provision for credit losses, valuation of investments, goodwill, intangible assets, deferred production content costs, other long-lived assets, deferred tax assets, pension and other postretirement benefit obligations and the related net periodic benefit cost, ultimate revenue (as described below), and other liabilities. In addition, estimates are used in revenue recognition, rights fees expense, performance and share-based compensation, depreciation and amortization, litigation matters and other matters. Management believes its use of estimates in the condensed consolidated financial statements to be reasonable.

Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and, as such, these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the Company’s condensed consolidated financial statements in future periods.

Liquidity and Going Concern

As of the date the accompanying unaudited condensed consolidated financial statements were issued (the “issuance date”), management evaluated the presence of the following conditions and events at the Company in accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40):

As of March 31, 2025, the Company’s unrestricted cash and cash equivalents balance was $465,017, as compared to $501,954 as of December 31, 2024. Included in unrestricted cash and cash equivalents as of March 31, 2025 was (1) $244,380 in advance cash proceeds primarily from ticket sales, a portion of which the Company expects to pay to artists and promoters, and (2) $110,132 of cash and cash equivalents at MSG Networks, which were not available for distribution to the Company in order to maintain compliance with the Forbearance Agreement (as defined below and superseded by the Transaction Support Agreement (as defined below). In addition, as of March 31, 2025, the Company had $33,864 of Accounts payable and $413,454 of Accrued expenses and other current liabilities, including $135,829 of capital expenditure accruals primarily related to Sphere construction (a significant portion of which is in dispute and which the Company does not expect to pay).

The Company’s primary sources of liquidity are cash and cash equivalents and cash flows from the operations of our businesses. The Company’s uses of cash over the next 12 months beyond the issuance date and thereafter are expected to be substantial and include working capital-related items (including funding its operations and satisfying its accounts payable and accrued liabilities), capital spending (including the creation of additional original content for Sphere), required debt service payments (including principal amortization payments and excess cash flow payments pursuant to the proposed new term loan facility at MSG Networks), payments the Company expects MSG Networks to make in connection with the refinancing of its indebtedness (of at least $80,000, including a $15,000 capital contribution from Sphere Entertainment Co. as part of the transactions contemplated by the Transaction Support Agreement), and investments and related loans and advances that the Company may fund from time to time. The Company may also use cash to repurchase its common stock. The Company’s decisions as to the use of its available liquidity will be based upon the ongoing review of the funding needs of its businesses, the optimal allocation of cash resources, and the timing of cash flow generation. To the extent that the Company desires to access alternative sources of funding through the capital and credit markets, market conditions could adversely impact its ability to do so at that time.

The Company’s ability to have sufficient liquidity to fund its operations and refinance its indebtedness is dependent on the ability of Sphere to generate significant positive cash flow. Although Sphere has been embraced by guests, artists, promoters, advertisers and marketing partners, and the Company anticipates that Sphere will generate substantial revenue and adjusted operating income on an annual basis over time, there can be no assurance that guests, artists, promoters, advertisers and marketing partners will continue to embrace this platform. Original immersive productions, such as Postcard From Earth, V-U2 An Immersive Concert Film, The Wizard of Oz at Sphere and From The Edge, have not been previously pursued on the scale of Sphere, which increases the uncertainty of the Company’s operating expectations. To the extent that the Company’s efforts do not result in viable shows, or to the extent that any such productions do not achieve expected levels of popularity among audiences, the Company may not generate the cash flows from operations necessary to fund its operations. To the extent the Company does not realize expected cash flows from operations from Sphere, it would have to take several actions to improve its financial flexibility and preserve liquidity, including significant reductions in both labor and non-labor expenses as well as reductions and/or deferrals in capital spending. Therefore, while the Company currently believes it will have sufficient liquidity from cash and cash equivalents and cash flows from operations (including expected cash flows from operations from Sphere) to fund its operations, no assurance can be provided that its liquidity will be sufficient in the event any of the preceding uncertainties facing Sphere are realized over the next 12 months beyond the issuance date.

The principal balance of the Company’s total debt outstanding as of March 31, 2025 was $1,337,875, including $804,125 of debt under the MSGN Term Loan Facility (as defined under Note 10. Credit Facilities and Convertible Notes) which matured without repayment on October 11, 2024 (the “Maturity Date”), and is classified as short-term on the condensed consolidated balance sheets. In anticipation of the Maturity Date, MSG Networks began to pursue the refinancing of the MSGN Term Loan Facility through a work-out with its syndicate of lenders. An event of default occurred under the MSGN Credit Agreement (as defined under Note 10. Credit Facilities and Convertible Notes) due to MSGN Holdings, L.P.’s (“MSGN L.P.”) failure to make payment on the outstanding principal amount on the Maturity Date, and on that date, MSGN L.P. and the MSGN Guarantors (as defined under Note 10. Credit Facilities and Convertible Notes) entered into a Forbearance Agreement (as amended or supplemented from time to time, the “Forbearance Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders (the “Supporting Lenders”) under the MSG Networks Credit Facilities. Subject to the terms of the Forbearance Agreement, the Supporting Lenders agreed to forbear, during the forbearance period, from exercising certain of their available remedies under the MSGN Credit Agreement, including with respect to or arising out of MSGN L.P.’s failure to make payment on the outstanding principal amount under the MSGN Term Loan Facility on the Maturity Date. The Forbearance Agreement was superseded by the Transaction Support Agreement and the forbearance period expired on April 24, 2025.

As further described under Note 17. Subsequent Events, on April 24, 2025, MSG Networks Inc., MSGN L.P., certain other subsidiaries of MSG Networks Inc., the lenders under the MSGN Credit Agreement identified therein (the “Consenting Lenders”), New York Rangers, LLC, New York Knicks, LLC (together with New York Rangers, LLC, the “Teams”) and the Company (together with the Consenting Lenders and the Teams, the “Consenting Stakeholders”) entered into a Transaction Support Agreement (the “Transaction Support Agreement”) with respect to the restructuring the MSGN Term Loan Facility, amendments to the media rights agreements between MSG Networks and the Teams, and certain other matters (collectively, the “Proposed Transactions”). Pursuant to the Transaction Support Agreement, the Consenting Stakeholders agreed to support the Proposed Transactions on the terms set forth in the Transaction Support Agreement and to use commercially reasonable efforts and timely take all reasonable actions necessary to support, implement and consummate the Proposed Transactions.

Under the Transaction Support Agreement, the Consenting Lenders have agreed to forbear from exercising certain of their available remedies under the MSGN Credit Agreement with respect to or arising out of (i) MSGN L.P.’s failure to make payment on the outstanding principal amount of the MSGN Term Loan Facility on the Maturity Date, (ii) the failure to deliver the budget of the MSG Networks Inc. and its subsidiaries for the following year by March 31, 2025 (which, if not cured by April 30, 2025, would have resulted in an event of default), (iii) a failure to maintain a total leverage ratio of less than 5.50:1.00 for the MSGN Holdings Entities (as defined under Note 10. Credit Facilities and Convertible Notes) and MSGN L.P. and its restricted subsidiaries on a consolidated basis and (iv) a failure to maintain an interest coverage ratio of not less than 2.00:1.00 for the MSGN Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis, in each case, until the earlier of the date on which the termination of the Transaction Support Agreement is effective with respect to the Consenting Lenders and the date on which the Proposed Transactions are consummated.

As disclosed in Note 10. Credit Facilities and Convertible Notes, all of the outstanding principal amount under the MSG Networks Credit Facilities is guaranteed by the MSGN Guarantors and secured by the MSGN Collateral (each as defined under Note 10. Credit Facilities and Convertible Notes). In the event MSG Networks is unable to successfully refinance or achieve a work-out of the MSGN Term Loan Facility as contemplated by the Transaction Support Agreement, the lenders could exercise their remedies under the MSGN Credit Agreement, which would include, but not be limited to, foreclosing on the MSGN Collateral. If MSG Networks is not able to achieve a refinancing or work-out of its indebtedness (including as contemplated by the Transaction Support Agreement), the

Company believes it is probable that MSG Networks Inc. and/or its subsidiaries would seek bankruptcy protection or the lenders would foreclose on the MSGN Collateral.

In the event of an MSG Networks bankruptcy, the MSG Networks entities whose operations represent the entirety of the Company’s MSG Networks segment, would be deconsolidated from the Company’s consolidated financial statements effective as of the bankruptcy filing date. In the event of bankruptcy proceedings, MSG Networks Inc. and/or its subsidiaries (and in certain circumstances, its creditors) may elect to investigate and potentially assert claims against the Company and certain of its directors and officers, including for potential claims related to fraudulent transfers, unlawful distributions and payments, veil piercing, alter ego theories, breaches of contracts and unjust enrichment. If such claims are brought, the claimants could seek, among other relief, avoidance of alleged fraudulent transfers and/or unlawful distributions, and monetary damages. In addition, the Company’s stockholders may assert claims against the Company and its directors and officers for breaches of fiduciary duties relating to the Company’s ownership of MSG Networks Inc. and its subsidiaries. Further, the Company would incur legal fees and other expenses in connection with defending any claims. The ultimate court-approved structure and organization of MSG Networks post-bankruptcy could also result in adverse tax consequences to the Company, including the loss of net operating losses (“NOLs”) as a result of any debt extinguishment. Sphere Entertainment Co., Sphere Entertainment Group and the subsidiaries of Sphere Entertainment Group (collectively, the “Non-Credit Parties”) are not legally obligated to fund the outstanding amounts under the MSG Networks Credit Facilities, nor are the assets of the Non-Credit Parties pledged as security under the MSG Networks Credit Facilities. In the event of an exercise of post-default rights and remedies, the Company believes the lenders would have no remedies or recourse against the Non-Credit Parties pursuant to the terms of the MSGN Credit Agreement. In the absence of a refinancing or the achievement of a work-out, management believes it is probable that MSG Networks Inc. and/or its subsidiaries will seek bankruptcy protection or the lenders would foreclose on the MSGN Collateral. While this condition raises substantial doubt about the Company’s ability to continue as a going concern, for the reasons stated above, we have concluded that our plans have effectively alleviated substantial doubt about the Company’s ability to continue as a going concern as of the issuance date.

Recently Issued and Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Disaggregation of Income Statement Expenses, requiring additional disclosures about specified categories of expenses included in certain expense captions presented on the face of the income statement. This standard will be effective for the Company as of and for the annual period ending December 31, 2027, and may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this guidance on the Company’s consolidated financial statements.

In November 2024, the FASB issued ASU 2024-04, Induced Conversions of Convertible Debt Instruments, providing clarification on the requirements for determining whether certain settlements of convertible debt should be accounted for as induced conversions. This ASU will be effective for the Company as of and for the annual period ending December 31, 2026, and may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this guidance on the Company’s consolidated financial statements.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures. This ASU aims to improve segment disclosures through enhanced disclosures about significant segment expenses. The standard requires disclosure of significant expense categories and amounts for such expenses, including those segment expenses that are regularly provided to the chief operating decision maker, easily computable from information that is regularly provided, or significant expenses that are expressed in a form other than actual amounts. This standard was effective for the Company as of and for the six-month period ended December 31, 2024 and was applied retrospectively to all prior periods, as presented in Note 15. Segment Information.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures which applies to all entities subject to income taxes. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. This standard is effective for the Company’s Annual Report on Form 10-K for the annual period beginning January 1, 2025, and is required to be applied prospectively. This standard affects financial statement disclosure only and, as a result, does not affect our statement of operations, balance sheet or statement of cash flows.

Note 3. Revenue Recognition

Contracts with Customers

See Note 2. Summary of Significant Accounting Policies and Note 5. Revenue Recognition, to the Audited Consolidated Financial Statements included in the Form 10-KT, for more information regarding the details of the Company’s revenue recognition policies. All revenue recognized in the condensed consolidated statements of operations is considered to be revenue from contracts with customers in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts with Customers, except for revenues from subleases that are accounted for in accordance with ASC Topic 842, Leases.

Disaggregation of Revenue

The following tables disaggregate the Company’s revenue by major source and reportable segment based upon the timing of transfer of goods or services to the customer for the three months ended March 31, 2025 and 2024:

(a) Event-related revenues consist of (i) ticket sales and other revenue directly related to the exhibition of The Sphere Experience, (ii) ticket sales and other ticket-related revenues to other events at our venue, (iii) venue license fees from third-party promoters, and (iv) food, beverage and merchandise sales. Event-related revenues are recognized at a point in time. As such, these revenues have been included in the same category in the tables above.

(b) See Note 2. Summary of Significant Accounting Policies, Revenue Recognition, and Note 5. Revenue Recognition, to the Audited Consolidated Financial Statements included in the Form 10-KT, for further details on the pattern of recognition of sponsorship, signage, Exosphere advertising, suite licenses, and media related revenue.

In addition to the disaggregation of the Company’s revenue by major source based upon the timing of transfer of goods or services to the customer disclosed above, the following tables disaggregate the Company’s consolidated revenues by type of goods or services in accordance with the required entity-wide disclosure requirements of 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 March 31, 2025 and 2024:

(a) Amounts include ticket sales, other ticket-related revenue, and venue license fees from the Company’s events such as (i) concerts, (ii) The Sphere Experience and (iii) other live entertainment and sporting events.

(b) Primarily consists of affiliation fees from cable, satellite, fiber-optic and other platforms that distribute MSG Networks’ programming and, to a lesser extent, advertising revenues through the sale of commercial time and other advertising inventory during MSG Networks programming.

Contract Balances

The following table provides information about contract balances from the Company’s contracts with customers as of March 31, 2025 and December 31, 2024:

(a) As of March 31, 2025 and December 31, 2024, the Company’s receivables from contracts with customers above included $654 and $325, respectively, related to various related parties. See Note 14 . Related Party Transactions for further details on these related party arrangements.

(b) Contract assets, current, which are reported as Prepaid expenses and other current assets in the Company’s condensed consolidated balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to customers, 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.

(c) Revenue recognized for the three months ended March 31, 2025 relating to the deferred revenue balance as of December 31, 2024 was $57,740.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2025, the Company’s remaining performance obligations were $195,289, of which 68% is expected to be recognized over the nexttwo years and 32% of the balance is expected to be recognized thereafter. This primarily relates to performance obligations under sponsorship agreements that have original expected durations longer than one year and for which the respective consideration is not variable. In developing the estimated revenue, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

Note 4. Restructuring Charges

During the three months ended March 31, 2025, the Company incurred costs for termination benefits for certain employees in the

Sphere segment. As a result, the Company recognized restructuring charges of $1,841 for the three months ended March 31, 2025, which were recorded in Accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheets. Restructuring charges of $4,667 were recorded for the three months ended March 31, 2024, which are recorded in Accrued expenses and other current liabilities, and Related party payables, current on the accompanying condensed consolidated balance sheets.

Changes to the Company’s restructuring liability through March 31, 2025 were as follows:

Note 5. Investments

As of March 31, 2025 and December 31, 2024, the Company’s investments consisted of the following:

(a)The Company’s investments with readily determinable fair values are classified within Level I of the fair value hierarchy as they are valued based on quoted prices in active markets. Refer to Note 11. Pension Plans and Other Postretirement Benefit Plan, for further detail on the Company’s Executive Deferred Compensation Plan.

For the three months ended March 31, 2025 and 2024, the Company had an unrealized gain on equity investments with and without readily determinable fair values of $21 and $127, respectively, which are reported in Other expense, net.

Note 6. Property and Equipment, net

As of March 31, 2025 and December 31, 2024, property and equipment, net consisted of the following:

The property and equipment balances above include $135,829 and $142,989 of capital expenditure accruals (primarily related to Sphere construction) as of March 31, 2025 and December 31, 2024, respectively, which are reflected in Accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. See Note 2. Summary of Significant Accounting Policies, to the Audited Consolidated Financial Statements included in the Form 10-KT, for details on the Company’s estimated useful lives for each major category of property and equipment.

The Company recorded depreciation expense on property and equipment of $82,629 and $79,088 for the three months ended March 31, 2025 and 2024, respectively, which is recognized in Depreciation and amortization in the accompanying condensed consolidated statements of operations.

Note 7. Original Immersive Production Content

The Company’s deferred production content costs for its original immersive productions are included within Other non-current assets in the accompanying condensed consolidated balance sheets.

As of March 31, 2025 and December 31, 2024, total deferred immersive production content costs consisted of the following:

The following table summarizes the Company’s amortization of production content costs, which are reported in Direct operating expenses in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 as follows:

(a) For purposes of amortization and impairment, each deferred immersive production content cost is classified based on its predominant monetization strategy. The Company’s current original immersive productions are monetized individually. Refer to Note 2. Summary of Significant Accounting Policies, Production Costs for the Company’s Original Immersive Productions, to the Audited Consolidated Financial Statements included in the Form 10-KT, for further explanation of the monetization strategy.

Note 8. Goodwill and Intangible Assets

The carrying amounts of goodwill as of March 31, 2025 and December 31, 2024 were as follows:

During the quarterly period ended September 30, 2024, the Company performed its annual impairment tests of goodwill and determined that there wereno impairments identified as of the impairment test date.

On December 31, 2024, MSG Networks’ affiliation agreement with CSC Holdings, LLC, a subsidiary of Altice USA (“Altice”), one of its major distributors, expired, subsequent to which the Company’s programming networks were not carried by Altice from January 1, 2025 through February 21, 2025. On February 22, 2025, MSG Networks and Altice entered into a multi-year renewal of the affiliation agreement and Altice resumed carriage of the Company’s programming networks. In connection with the preparation of the Audited Consolidated Financial Statements, and in light of changes affecting the MSG Networks reporting unit and the programming industry, the Company concluded that a triggering event had occurred for the reporting unit as of December 31, 2024, and performed an interim quantitative impairment test. As a result of the interim impairment test, the Company recorded a non-cash goodwill impairment charge of $61,200 as of December 31, 2024 within the MSG Networks segment.

The Company continues to closely monitor the performance and fair value of its MSG Networks reporting unit and the results of its potential work-out of the MSG Networks Credit Facilities. A significant adverse change in market factors or the business outlook for the MSG Networks reporting unit could negatively impact the fair value of our MSG Networks reporting unit and result in an additional goodwill impairment charge at that time.

The Company’s intangible assets subject to amortization as of March 31, 2025 and December 31, 2024 were as follows:

The Company recognized amortization expense on intangible assets of $1,600 and $779 for the three months ended March 31, 2025 and 2024, respectively, which is recognized in Depreciation and amortization in the accompanying condensed consolidated statements of operations.

Note 9. Commitments and Contingencies

Commitments

See Note 13. Commitments and Contingencies, to the Audited Consolidated Financial Statements included in the Form 10-KT, for details on the Company’s commitments. The Company’s commitments as of December 31, 2024 included a total of up to $2,866,637 of contract obligations (primarily related to media rights agreements from the MSG Networks segment).

During the three months ended March 31, 2025, the Company did not have any material changes in its non-cancelable contractual obligations (other than activities in the ordinary course of business). See Note 10. Credit Facilities and Convertible Notes, for details of the principal repayments required under the Company’s various credit facilities.

Legal Matters

Fifteen complaints were filed in connection with the merger between a subsidiary of the Company and MSG Networks Inc. (the “Networks Merger”) by purported stockholders of the Company and MSG Networks Inc.

Nine of these complaints involved allegations of materially incomplete and misleading information set forth in the joint proxy statement/prospectus filed by the Company and MSG Networks Inc. in connection with the Networks Merger. As a result of supplemental disclosures made by the Company and MSG Networks Inc. on July 1, 2021, all of the disclosure actions were voluntarily dismissed with prejudice prior to or shortly following the consummation of the Networks Merger.

Six complaints involved allegations of fiduciary breaches in connection with the negotiation and approval of the Networks Merger and were consolidated intotwo remaining litigations.

On September 10, 2021, the Court of Chancery of the State of Delaware (the “Court”) entered an order consolidatingtwo derivative complaints filed by purported Company stockholders. The consolidated action is captioned: In re Madison Square Garden Entertainment Corp. Stockholders Litigation, C.A. No. 2021-0468-KSJM (the “MSG Entertainment Litigation”). The consolidated plaintiffs filed their Verified Consolidated Derivative Complaint on October 11, 2021. The complaint, which named the Company as only a nominal defendant, retained all of the derivative claims and alleged that the members of the board of directors and controlling stockholders violated their fiduciary duties in the course of negotiating and approving the Networks Merger. Plaintiffs sought, among other relief, an award of damages to the Company including interest, and plaintiffs’ attorneys’ fees. Pursuant to the indemnity rights in its bylaws and Delaware law, the Company advanced the costs incurred by defendants in this action, and defendants asserted indemnification rights in respect of any adverse judgment or settlement of the action.

On March 14, 2023, the parties to the MSG Entertainment Litigation reached an agreement in principle to settle the MSG Entertainment Litigation, without admitting liability, on the terms and conditions set forth in a binding term sheet, which was incorporated into a long-form settlement agreement (the “MSGE Settlement Agreement”) that was filed with the Court on April 20, 2023. The MSGE Settlement Agreement provided for, among other things, the final dismissal of the MSG Entertainment Litigation in exchange for a settlement payment to the Company of approximately $85,000, subject to customary reduction for attorneys’ fees and expenses, in an amount to be determined by the Court. The settlement’s amount was fully funded by the other defendants’ insurers. The MSGE Settlement Agreement was approved by the Court on August 14, 2023, which constituted the final judgment in the action. During the quarter ended September 30, 2023, a realized gain of approximately $62,600 was recognized in Other income (expense), net on the accompanying condensed consolidated statements of operations in connection with the settlement payment to the Company.

On September 27, 2021, the Court entered an order consolidating four complaints filed by purported former stockholders of MSG Networks Inc. The consolidated action is captioned: In re MSG Networks Inc. Stockholder Class Action Litigation, C.A. No. 2021-0575-KSJM (the “MSG Networks Litigation”). The consolidated plaintiffs filed their Verified Consolidated Stockholder Class Action Complaint on October 29, 2021. The complaint asserted claims on behalf of a putative class of former MSG Networks Inc. stockholders against each member of the board of directors of MSG Networks Inc. and the controlling stockholders prior to the Networks Merger. Plaintiffs alleged that the MSG Networks Inc. board of directors and controlling stockholders breached their fiduciary duties in negotiating and approving the Networks Merger. The Company was not named as a defendant but was subpoenaed to produce documents and testimony related to the Networks Merger. Plaintiffs sought, among other relief, monetary damages for the putative class and plaintiffs’ attorneys’ fees. Pursuant to the indemnity rights in its bylaws and Delaware law, the Company advanced the costs incurred by defendants in this action, and defendants asserted indemnification rights in respect of any adverse judgment or settlement of the action.

On April 6, 2023, the parties to the MSG Networks Litigation reached an agreement in principle to settle the MSG Networks Litigation, without admitting liability, on the terms and conditions set forth in a binding term sheet, which was incorporated into a long-form settlement agreement (the “MSGN Settlement Agreement”) that was filed with the Court on May 18, 2023. The MSGN Settlement Agreement provided for, among other things, the final dismissal of the MSG Networks Litigation in exchange for a settlement payment to the plaintiffs and the class of approximately $48,500, of which approximately $28,000 has been paid by the Company and approximately $20,500 has been paid to the plaintiffs by insurers (who agreed to advance these costs subject to final resolution of the parties’ insurance coverage dispute). The MSGN Settlement Agreement was approved by the Court on August 14, 2023, which constituted the final judgment in the action. MSG Networks Inc. has a dispute with its insurers over whether and to what extent there is insurance coverage for the settlement (and has settled with one of the insurers). As of March 31, 2025 and December 31, 2024, approximately $18,000 has been accrued in Accrued expenses and other current liabilities. Unless MSG Networks Inc. and the remaining insurers settle that insurance dispute, it is expected to be finally resolved in a pending Delaware insurance coverage action.

The Company is a defendant in various other lawsuits. Although the outcome of these other lawsuits cannot be predicted with certainty (including the extent of available insurance, if any), management does not believe that resolution of these other lawsuits will have a material adverse effect on the Company.

Note 10. Credit Facilities and Convertible Notes

The following table summarizes the presentation of the outstanding balances under the Company’s credit agreements and convertible notes as of March 31, 2025 and December 31, 2024:

MSG Networks Credit Facilities

General. In September 2019, MSGN L.P., MSGN Eden, LLC, an indirect subsidiary of the Company and the general partner of MSGN L.P., Regional MSGN Holdings LLC, an indirect subsidiary of the Company and the limited partner of MSGN L.P. (collectively with MSGN Eden, LLC, the “MSGN Holdings Entities”), and certain subsidiaries of MSGN L.P. entered into a credit agreement (as amended and restated on October 11, 2019, and as further amended through May 30, 2023, the “MSGN Credit Agreement”) providing for: (i) an initial $1,100,000 term loan facility (the “MSGN Term Loan Facility”) and (ii) a $250,000 revolving credit facility (the “MSGN Revolving Credit Facility” and, together with the MSGN Term Loan Facility, the “MSG Networks Credit Facilities”), each with a term offive years.

The MSGN Credit Agreement matured on October 11, 2024. On the Maturity Date, MSGN L.P. failed to repay the principal amount of $829,125 outstanding under the MSGN Term Loan Facility and an event of default occurred pursuant to the MSGN Credit Agreement. On the Maturity Date, there wereno borrowings or letters of credit issued and outstanding under the MSGN Revolving Credit Facility and all revolving credit commitments under the MSGN Revolving Credit Facility terminated.

On October 11, 2024, MSGN L.P. entered into the Forbearance Agreement. Subject to the terms of the Forbearance Agreement, the Supporting Lenders agreed to forbear, during the forbearance period, from exercising certain of their available remedies under the MSGN Credit Agreement, including with respect to or arising out of MSGN L.P.’s failure to make payment on the outstanding principal amount under the MSGN Term Loan Facility on the Maturity Date. The Forbearance Agreement was superseded by the Transaction Support Agreement and the forbearance period expired on April 24, 2025.

Under the Transaction Support Agreement, the Consenting Lenders have agreed to forbear from exercising certain of their available remedies under the MSGN Credit Agreement with respect to or arising out of (i) MSGN L.P.’s failure to make payment on the outstanding principal amount of the MSGN Term Loan Facility on the Maturity Date, (ii) the failure to deliver the budget of MSG Networks Inc. and its subsidiaries for the following year by March 31, 2025 (which, if not cured by April 30, 2025, would have resulted in an event of default), (iii) a failure to maintain a total leverage ratio of less than 5.50:1.00 for the MSGN Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis and (iv) a failure to maintain an interest coverage ratio of not less than 2.00:1.00 for the MSGN Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis, in each case, until the earlier of the date on which the termination of the Transaction Support Agreement is effective with respect to the Consenting Lenders and the date on which the Proposed Transactions are consummated.

Interest Rates. Prior to the Maturity Date, borrowings under the MSGN Credit Agreement bore interest at a floating rate, which at the option of MSGN L.P. could be either (i) a base rate plus an additional rate ranging from 0.25% to 1.25% per annum (determined based on a total leverage ratio), or (ii)adjusted Term SOFR (i.e., Term SOFR plus 0.10%) plus an additional rate ranging from 1.25% to 2.25% per annum (determined based on a total leverage ratio). After the Maturity Date, borrowings under the MSGN Credit Agreement bear interest at the default rate consisting of (i) adjusted Term SOFR (i.e., Term SOFR plus 0.10%) plus an additional rate ranging from 1.25% to 2.25% per annum (determined based on a total leverage ratio), plus (ii) the additional rate of 2.00% per annum. The default rate on the MSGN Term Loan Facility as of March 31, 2025 was 8.42%.

Covenants. The MSGN Credit Agreement generally requires the MSGN Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis to comply with a maximum total leverage ratio of 5.50:1.00 and a minimum interest coverage ratio of 2.00:1.00. The MSGN Holdings Entities and MSGN L.P. and its restricted subsidiaries were not in compliance with the financial covenants on a consolidated basis as of March 31, 2025. Under the Transaction Support Agreement, the Consenting Lenders have agreed to forbear from exercising their available remedies under the MSGN Credit Agreement with respect to or arising out of the failure to maintain compliance with the maximum total leverage ratio and the minimum interest coverage ratio described above until the earlier of the date on which the termination of the Transaction Support Agreement is effective with respect to the Consenting Lenders and the date on which the Proposed Transactions are consummated.

In addition to the financial covenants discussed above, the MSGN Credit Agreement and the related security agreement (as modified in certain cases by the Transaction Support Agreement) contain certain representations and warranties, affirmative covenants, and events of default. The MSGN Credit Agreement (as modified in certain cases by the Transaction Support Agreement) contains significant restrictions (and in some cases prohibitions) on the ability of MSGN L.P. and its restricted subsidiaries to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the MSGN Credit Agreement, including the following: (i) incurring additional indebtedness and contingent liabilities; (ii) creating liens on certain assets; (iii) making investments, loans or advances in or to other persons; (iv) paying dividends and distributions or repurchasing capital stock; (v) changing their lines of business; (vi) engaging in certain transactions with affiliates; (vii) amending specified material agreements; (viii) merging or consolidating; (ix) making certain dispositions; and (x) entering into agreements that restrict the granting of liens. The MSGN Holdings Entities are also subject to customary passive holding company covenants.

Guarantors and Collateral. All obligations under the MSGN Credit Agreement are guaranteed by the MSGN Holdings Entities and MSGN L.P.’s existing and future direct and indirect domestic subsidiaries that are not designated as excluded subsidiaries or unrestricted subsidiaries (the “MSGN Subsidiary Guarantors” and, together with the MSGN Holdings Entities, the “MSGN Guarantors”). All obligations under the MSGN Credit Agreement, including the guarantees of those obligations, are secured by certain assets of MSGN L.P. and each MSGN Guarantor (collectively, “MSGN Collateral”), including, but not limited to, a pledge of the equity interests in MSGN L.P. held directly by the MSGN Holdings Entities and the equity interests in each MSGN Subsidiary Guarantor held directly or indirectly by MSGN L.P.

LV Sphere Term Loan Facility

General. On December 22, 2022, MSG Las Vegas, LLC (“MSG LV”), an indirect, wholly-owned subsidiary of the Company, entered into a credit agreement with JP Morgan Chase Bank, N.A., as administrative agent and the lenders party thereto, providing for afive-year, $275,000 senior secured term loan facility (as amended, the “LV Sphere Term Loan Facility”).

Interest Rates. Borrowings under the LV Sphere Term Loan Facility bear interest at a floating rate, which at the option of MSG LV may be either (i) a base rate plus a margin of 3.375% per annum or (ii) adjusted Term SOFR (i.e., Term SOFR plus 0.10%) plus a margin of 4.375% per annum. The interest rate on the LV Sphere Term Loan Facility as of March 31, 2025 was 8.80%.

Principal Repayments. The LV Sphere Term Loan Facility will mature on December 22, 2027. The principal obligations under the LV Sphere Term Loan Facility are due at the maturity of the facility, with no amortization payments prior to maturity. Under certain circumstances, MSG LV is required to make mandatory prepayments on the loan, including prepayments in an amount equal to the net cash proceeds of casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights), subject to certain exceptions.

Covenants. The LV Sphere Term Loan Facility and related guaranty by Sphere Entertainment Group include financial covenants requiring MSG LV to maintain a specified minimum debt service coverage ratio and requiring Sphere Entertainment Group to maintain a specified minimum liquidity level.

The debt service coverage ratio covenant began testing in the quarter ended December 31, 2023 on a historical basis and on a prospective basis. Both the historical and prospective debt service coverage ratios are required to be at least 1.35:1.00. As of March 31, 2025, the historical and prospective debt service coverage ratios were 7.22:1.00 and 14.19:1.00, respe ctively. In addition, among other conditions, MSG LV is not permitted to make distributions to Sphere Entertainment Group unless the historical and prospective debt service coverage ratios are at least 1.50:1.00. The minimum liquidity level for Sphere Entertainment Group is set at $50,000, with $25,000 required to be held in cash or cash equivalents and is tested as of the last day of each quarter based on Sphere Entertainment Group’s unencumbered liquidity, consisting of cash and cash equivalents and available lines of credit, as of such date.

In addition to the covenants described above, the LV Sphere Term Loan Facility and the related guaranty and security and pledge agreements contain certain customary representations and warranties, affirmative and negative covenants and events of default. The LV Sphere Term Loan Facility contains certain restrictions on the ability of MSG LV and Sphere Entertainment Group to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the LV Sphere Term Loan Facility and the related guaranty and security and pledge agreements, including the following: (i) incur additional indebtedness; (ii) make investments, loans or advances in or to other persons; (iii) pay dividends and distributions (which will restrict the ability of MSG LV to make cash distributions to the Company); (iv) change its lines of business; (v) engage in certain transactions with affiliates; (vi) amend organizational documents; (vii) merge or consolidate; and (viii) make certain dispositions.

Guarantors and Collateral. All obligations under the LV Sphere Term Loan Facility are guaranteed by Sphere Entertainment Group. All obligations under the LV Sphere Term Loan Facility, including the guarantees of those obligations, are secured by all of the assets of MSG LV and certain assets of Sphere Entertainment Group including, but not limited to, MSG LV’s leasehold interest in the land on which Sphere in Las Vegas is located and a pledge of all of the equity interests held directly by Sphere Entertainment Group in MSG LV.

3.50% Convertible Senior Notes

On December 8, 2023, the Company completed a private unregistered offering (the “Offering”) of $258,750 in aggregate principal amount of its 3.50% Convertible Senior Notes due 2028 (the “3.50% Convertible Senior Notes”), which amount includes the full exercise of the initial purchasers’ option to purchase additional 3.50% Convertible Senior Notes. See Note 14. Credit Facilities and Convertible Notes to the Audited Consolidated Financial Statements included in the Form 10-KT for details on the 3.50% Convertible Senior Notes.

Debt Maturities

Debt maturities over the next five years for the outstanding principal balance under the MSG Networks Credit Facilities, LV Sphere Term Loan Facility and 3.50% Convertible Senior Notes as of March 31, 2025 were as follows:

Interest payments and loan principal repayments made by the Company under the credit agreements were as follows:

The carrying value and fair value of the Company’s debt reported in the accompanying condensed consolidated balance sheets are as follows:

(a) The total carrying value of the Company’s debt as of March 31, 2025 and December 31, 2024 is equal to the current and non-current principal payments for the Company’s debt, excluding unamortized deferred financing costs of $3,826 and $4,145, respectively.

The Company’s debt is classified within Level II of the fair value hierarchy as it is valued using quoted indices of similar instruments for which the inputs are readily observable.

Note 11. Pension Plans and Other Postretirement Benefit Plan

The Company sponsors (i) both funded and unfunded and qualified and non-qualified pension plans, including the Networks 1212 Plan (as defined below), Networks Excess Cash Balance Plan, and the Networks Excess Retirement Plan (together, the “Networks Plans”), (ii) an excess savings plan and (iii) a postretirement benefit plan (the “Postretirement Plan”). In connection with the distribution of approximately 67% of the outstanding common stock of MSGE Spinco, Inc. (now known as Madison Square Garden Entertainment Corp. and referred to herein as “MSG Entertainment”) to the Company’s stockholders on April 20, 2023 (the “MSGE Distribution”), the Company established an unfunded non-contributory, non-qualified frozen excess cash balance plan (the “Sphere Excess Plan”) covering certain employees who participated in the pre-MSGE Distribution cash balance plan, which was transferred to MSG Entertainment in connection with the MSGE Distribution. The Networks Plans and Sphere Excess Plan are collectively referred to as the “Pension Plans.” Prior to the MSGE Distribution, the Company sponsoredtwo contributory welfare plans which provided certain postretirement healthcare benefits to certain employees hired prior to January 1, 2001.

The sponsorship of the Postretirement Plan covering Networks employees was retained by the Company while the postretirement plan covering MSG Entertainment employees was transferred to MSG Entertainment in connection with MSGE Distribution. In addition, the liabilities associated with the postretirement plan for MSG Entertainment employees were transferred from the Company to MSG Entertainment in connection with the MSGE Distribution. See Note 15. Pension Plans and Other Postretirement Benefit Plan to the Audited Consolidated Financial Statements included in the Form 10-KT for more information regarding these plans.

Defined Benefit Pension Plans and Postretirement Benefit Plan

The following table presents components of net periodic benefit cost for the Pension Plans and Postretirement Plan included in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024. Service cost is recognized in direct operating expenses and selling, general and administrative expenses. All other components of net periodic benefit cost are reported in Other expense, net.

Contributions for Qualified Defined Benefit Plans

The Company sponsorsone non-contributory, qualified defined benefit pension plan covering certain of its union employees, the “Networks 1212 Plan.” During the three months ended March 31, 2025 and 2024 the Company didnot contribute any amounts to the Networks 1212 Plan.

Defined Contribution Plans

The Company sponsors the MSGN Holdings, L.P. Excess Savings Plan and the Sphere Entertainment Excess Savings Plan, and participates in the Madison Square Garden 401(k) Savings Plan (collectively, “Savings Plans”). For the three months ended March 31, 2025 and 2024, expenses related to the Savings Plans included in the accompanying condensed consolidated statements of operations were $1,596 and $1,743, respectively.

Executive Deferred Compensation

See Note 15. Pension Plans and Other Postretirement Benefit Plan, to the Company’s Audited Consolidated Financial Statements included in the Form 10-KT, for more information regarding the Company’s Executive Deferred Compensation Plan (the “Executive Deferred Compensation Plan”). The Company recorded compensation expense of $21 and $126 for the three months ended March 31, 2025 and 2024, respectively, within Selling, general, and administrative expenses in the accompanying condensed consolidated statements of operations to reflect the remeasurement of the Executive Deferred Compensation Plan liability. In addition, the Company recorded a gain of $21 and $126 for the three months ended March 31, 2025 and 2024, respectively, within Other expense, net in the accompanying condensed consolidated statements of operations to reflect remeasurement of the fair value of assets under the Executive Deferred Compensation Plan.

The following table summarizes amounts recognized related to the Executive Deferred Compensation Plan in the accompanying condensed consolidated balance sheets:

Note 12. Share-based Compensation

The Company hasthree share-based compensation plans: the 2020 Employee Stock Plan, the 2020 Stock Plan for Non-Employee Directors and the MSG Networks Inc. 2010 Employee Stock Plan, in each case as amended from time to time. See Note 15. Share-based Compensation, to the Audited Consolidated Financial Statements included in the Form 10-KT, for more detail on these plans.

Share-based compensation expense for the Company’s restricted stock units (“RSUs”), performance stock units (“PSUs”), stock options and/or cash-settled stock appreciation rights (“SARs”) are recognized in the condensed consolidated statements of operations as a component of direct operating expenses or selling, general and administrative expenses.

The following table summarizes the Company’s share-based compensation expense:

(a) Share-based compensation excludes costs that have been capitalized of $326 and $307 for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2024, share-based compensation expense excludes costs of $1,166 that have been reclassified to Restructuring charges in the consolidated statements of operations.

(b) To fulfill required statutory tax withholding obligations for the applicable income and other employment taxes, RSUs and PSUs with an aggregate value of $1,219 and $409, were retained by the Company during the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, there was $105,292 of unrecognized compensation cost related to unvested RSUs, PSUs, stock options and SARs held by the Company’s employees. The cost is expected to be recognized over a weighted-average period of approximately 2.3 years.

For the three months ended March 31, 2025 and 2024 all RSUs, PSUs and stock options were excluded from the calculation of diluted loss per share because the Company reported a net loss for the period and, therefore, their impact on reported loss per share would have been anti-dilutive.

Award Activity

RSUs

During the three months ended March 31, 2025, approximately 408 RSUs were granted. There wereno RSUs granted during the three months ended March 31, 2024. During the three months ended March 31, 2025 and 2024, approximately 40 and approximately 29 RSUs vested, respectively.

PSUs

During the three months ended March 31, 2025, approximately 368 PSUs were granted. There wereno PSUs granted during the three months ended March 31, 2024. During the three months ended March 31, 2025 approximately 28 PSUs vested. No PSUs vested during the three months ended March 31, 2024.

Stock options

During the three months ended March 31, 2025 and 2024, approximately 985 and approximately 475 stock options were granted, respectively. During the three months ended March 31, 2025 and 2024, no options and approximately 184 options were exercised, respectively.

Note 13. Stockholders’ Equity

Preferred Stock

The Company is authorized to issue 15,000 shares of preferred stock, par value $0.01. As of March 31, 2025 and December 31, 2024, no shares of preferred stock were outstanding.

Stock Repurchase Program

On March 31, 2020, the Company’s Board of Directors authorized the repurchase of up to $350,000 of the Company’s Class A Common Stock. The program was re-authorized by the Company’s Board of Directors on March 29, 2023. Under the authorization, shares of Class A Common Stock may be purchased from time to time 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. The Company has not engaged in any share repurchase activities under its share repurchase program to date.

Accumulated Other Comprehensive Loss

The following tables detail the components of accumulated other comprehensive loss:

(a) Amounts reclassified from accumulated other comprehensive loss represent the amortization of net actuarial loss and net unrecognized prior service credit included in net periodic benefit cost, which is reflected under Other income (expense), net in the accompanying condensed consolidated statements of operations (see Note 11. Pension Plans and Other Postretirement Benefit Plan).

Note 14. Related Party Transactions

As of March 31, 2025, certain members of the Dolan family, including certain trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”), collectively beneficially owned 100% of the Company’s outstanding Class B Common Stock, par value $0.01 per share (“Class B Common Stock”) and approximately 6.0% of the Company’s outstanding Class A Common Stock (inclusive of options exercisable within 60 days after March 31, 2025) for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended. Such shares of the Company’s Class A Common Stock and Class B Common Stock, collectively, represent approximately 71.9% of the aggregate voting power of the Company’s outstanding common stock. Members of the Dolan family are also the controlling stockholders of MSG Entertainment, Madison Square Garden Sports Corp. (“MSG Sports”) and AMC Networks Inc.

See Note 19. Related Party Transactions, to the Audited Consolidated Financial Statements included in the Form 10-KT, for a description of the Company’s related party arrangements. There were no material changes in such related party arrangements during thethree months ended March 31, 2025, except that pursuant to the Transaction Support Agreement, the parties have agreed that the Transaction Support Agreement will terminate if MSG Networks pays any rights fees due and payable under the media rights agreements with the Teams prior to the date on which the Proposed Transactions are consummated and that the Teams will forbear from exercising any rights or remedies they may have under the media rights agreements with respect to such non-payment. As further described under Note 17. Subsequent Events, on April 24, 2025, MSG Networks Inc., MSGN L.P., certain other subsidiaries of MSG Networks Inc., the Consenting Lenders, the Teams and the Company entered into the Transaction Support Agreement. Under the Transaction Support Agreement, each of the Knicks and the Rangers have agreed to support the Proposed Transactions through a proposed reduction in the rights fees payable by MSG Networks, by 28% and 18%, respectively, with no annual rights fee escalators, effective as of January 1, 2025, and in connection therewith, MSG Networks has agreed to reduce the term of those agreements such that they would expire after the 2028-29 NBA and NHL seasons, respectively, subject to a right of first refusal in favor of MSG Networks.

As of March 31, 2025 and December 31, 2024, accrued liabilities associated with related parties were $48,739 and $18,242, respectively, and are reported under Accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets.

The Company has also entered into certain commercial agreements with its equity method investment nonconsolidated affiliates in connection with Sphere, including an arrangement with Crown Properties Collection LLC (“CPC”), pursuant to which CPC provided the Company sponsorship and sales services. Under this arrangement, the Company recorded commission expense of $873 and$3,323 for thethree months ended March 31, 2025 and 2024, respectively. The Company provided a notice of termination with respect to the agreement with CPC on September 20, 2024 and subsequently negotiated a wind down.

Revenues and Operating Expenses

The following table summarizes the composition and amounts of the transactions with the Company’s related parties. These amounts are reflected in revenues and operating expenses in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024:

(a) Included in Corporate general and administrative expenses, net - MSG Entertainment Transition Services Agreement (the “MSGE TSA”) are expenses of $0 and $588, related to Restructuring charges for employees who provided services to the Company under the MSGE TSA for the three months ended March 31, 2025 and 2024, respectively.

(b) Other operating expenses, net, includes reimbursements to MSG Entertainment for aircraft-related expenses, professional and payroll fees, and CPC commissions.

(c) Of the total operating expenses, net, $46,287 and $45,332 for three months ended March 31, 2025 and 2024, respectively, are included in direct operating expenses in the accompanying condensed consolidated statements of operations. Of the total operating expenses, net $20,631 and $32,494 for three months ended March 31, 2025 and 2024, respectively, are included in selling, general, and administrative expenses in the accompanying condensed consolidated statements of operations.

Note 15. Segment Information

As of March 31, 2025, the Company was comprised oftwo reportable segments: Sphere and MSG Networks. The Company takes into account whether two or more operating segments can be aggregated together as one reportable segment as well as the type of discrete financial information that is available and regularly reviewed by its Chief Operating Decision Maker (“CODM”). The CODM is the Company’s Executive Chairman and Chief Executive Officer.

The CODM evaluates segment performance and determines how to allocate resources based on the Company’s key financial measure of adjusted operating income (“AOI”), a non-GAAP financial measure. The Company defines AOI as operating income excluding:

(i) depreciation, amortization and impairments of property and equipment, goodwill and intangible assets,

(ii) amortization for capitalized cloud computing arrangement costs,

(iii) share-based compensation expense,

(iv) restructuring charges or credits,

(v) merger, debt work-out, and acquisition-related costs, including merger-related litigation expenses, net of insurance recoveries,

(vi) gains or losses on sales or dispositions of businesses and associated settlements,

(vii) the impact of purchase accounting adjustments related to business acquisitions, and

(viii) gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan (which was established in November 2021).

The Company believes that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the Company’s business without regard to the settlement of an obligation that is not expected to be made in cash. The Company eliminates merger, debt work-out, and acquisition-related costs, including merger-related litigation expenses, net of insurance recoveries, when applicable, because the Company does not consider such costs to be indicative of the ongoing operating performance of the Company as they result from an event that is of a non-recurring nature, thereby enhancing comparability. In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan provides investors with a clearer picture of the Company’s operating performance given that, in accordance with GAAP, gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan are recognized in Operating (loss) income 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 Other (expense) income, net, which is not reflected in Operating (loss) income.

The CODM uses AOI for each segment predominantly throughout the annual budget and forecasting process. The CODM also considers budget-to-actual variances in AOI, at least quarterly, when making decisions about the allocation of operating and capital resources to each segment. Management believes AOI is an appropriate measure for evaluating the operating performance of its business segments and the Company on a consolidated basis. AOI and similar measures with similar titles are common performance measures used by investors and analysts to analyze the Company’s performance. The Company uses revenues and AOI measures as the most important indicators of its business performance, and evaluates management’s effectiveness with specific reference to these indicators.

AOI should be viewed as a supplement to and not a substitute for operating (loss) income, net loss, cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Since AOI is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. The Company has presented the components that reconcile operating (loss) income, the most directly comparable GAAP financial measure, to AOI.

Information as to the operations of the Company’s reportable segments is set forth below.

(a)Event-related expenses include, but are not limited to, day-of-event costs, direct operating expenses for The Sphere Experience, venue operating expenses, and other event-related direct operating expenses. Other direct operating expenses include, but are not limited to, expenses related to sponsorship, signage, Exosphere advertising, suite licenses, and other operating expenses. In total, these expenses when combined with MSG Networks rights fee expense and network programming and production costs represent the Company’s Direct operating expenses as presented on the accompanying condensed consolidated statements of operations.

(b)For each reportable segment, Overhead expenses currently include selling, general and administrative costs.

(c)For each reportable segment, Other segment expenses include all other expenses that do not meet the definition of other previously disclosed expenses, primarily depreciation and amortization, impairment and other losses, net and restructuring charges.

Concentration of Risk

Accounts receivable, net in the accompanying condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 include amounts due from the following individual customers, which accounted for the noted percentages of the gross balance:

Revenues in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 include amounts from the following individual customers:

Note 16. Additional Financial Information

The following table provides a summary of the amounts recorded as cash, cash equivalents and restricted cash.

The Company’s cash, cash equivalents, and restricted cash are classified within Level I of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets. The Company’s restricted cash includes cash deposited in escrow accounts. The Company has deposited cash in interest-bearing escrow accounts related to credit support, debt facilities, and collateral to its workers compensation and general liability insurance obligations.

Prepaid expenses and other current assets consisted of the following:

Accrued expenses and other current liabilities consisted of the following:

Income Taxes

During the three months ended March 31, 2025 and 2024, the Company made income tax payments, net of refunds, of $627 and $70, respectively.

Note 17. Subsequent Events

On April 24, 2025, the Company, MSG Networks Inc. and certain subsidiaries of MSG Networks Inc. entered into the Transaction Support Agreement with respect to the restructuring of the debt of subsidiaries of MSG Networks Inc. and amendments to the media rights agreements between MSG Networks and New York Knicks, LLC and New York Rangers, LLC (collectively, the “Teams”), each an indirect subsidiary of MSG Sports, respectively (the “Proposed Transactions”).

The Transaction Support Agreement is among MSG Networks Inc., MSGN L.P., certain of MSG Networks Inc.’ other subsidiaries (together with MSG Networks and MSGN L.P., the “MSGN Parties”), the lenders under MSGN L.P.’s existing credit facilities identified therein (the “Consenting Lenders”), the Teams and the Company (together with the Consenting Lenders and the Teams, the “Consenting Stakeholders”), pursuant to which the Consenting Stakeholders agreed to support the Proposed Transactions on the terms set forth in the Transaction Support Agreement and in the term sheet attached thereto as Exhibit A (the “Term Sheet”).

The Term Sheet sets forth the principal terms of the Transactions that will be consummated upon the execution of definitive documents containing terms consistent with those set forth in the Term Sheet and such other terms as agreed to by the MSGN Parties and the Consenting Stakeholders. The Term Sheet contemplates, among other things:

•that the Company will make a $15 million capital contribution to MSGN L.P.;

•that MSGN L.P.’s existing credit facilities will be replaced with a new $210 million term loan facility (the “New Term Loan Facility”), which will mature in December 2029, have a fixed amortization of $10 million per quarter and require 100% of the MSGN L.P.’s excess free cash flow generated through operating activities to be used to repay the principal amount outstanding under the New Term Loan Facility until fully repaid, subject to limited exceptions set forth in the Term Sheet and otherwise to be agreed;

•that outstanding borrowings under the New Term Loan Facility will bear interest at a rate per annum equal to SOFR plus 5.00%;

•that MSGN L.P. will make a minimum cash payment of $80 million (including the $15 million capital contribution from the Company to MSGN L.P.) to the Consenting Lenders upon the closing of the New Term Loan Facility;

•amendments to media rights agreements, effective as of January 1, 2025, as follows:

◦Knicks:

▪a reduction of 28% in the annual rights fee;

◦Rangers:

▪a reduction of 18% in the annual rights fee;

•the issuance by MSG Networks Inc. of penny warrants to MSG Sports exercisable for 19.9% of the equity interests in MSG Networks Inc.;

•beginning with the first calendar year-end following the repayment in full of the New Term Loan Facility, annual payments to the Consenting Lenders in an amount equal to 50% of the difference between MSGN L.P.’s balance sheet cash and the Minimum Cash Balance (as defined in the Term Sheet) until the earlier of the December 31, 2029 payment and payment of $100 million in the aggregate to the Consenting Lenders; and

•the entry into a mutual release agreement by and among the parties to the Transaction Support Agreement providing for a customary mutual release of claims among the parties thereto.

The Non-Credit Parties will not be legally obligated to fund the outstanding borrowings under the New Term Loan Facility, nor will the assets of the Non-Credit Parties be pledged as security under the New Term Loan Facility.

The Transaction Support Agreement contains certain covenants on the part of each of the Consenting Stakeholders, including, among other things, (i) commitments to support, and to use commercially reasonable efforts and timely take all reasonable actions necessary to support, implement and consummate the Transactions and (ii) commitments to negotiate in good faith and use commercially reasonable efforts to execute and implement definitive documents that are consistent with the Transaction Support Agreement.

Pursuant to the Transaction Support Agreement, the Consenting Stakeholders have agreed to implement the Transactions by June 27, 2025, which date may be extended or waived in writing by each of the Consenting Stakeholders and MSG Networks. The Company expects to record a non-cash gain in connection with the completion of the refinancing transaction contemplated by the Transaction Support Agreement. Such refinancing would also result in adverse tax consequences to the Company, including the elimination of approximately half of the Company’s net operating losses as a result of the debt extinguishment.