Madison Square Garden Entertainment Corp

Previous wording

•the level of our revenues, which depends in part on the popularity of the Christmas Spectacular Starring the Radio City Rockettes (the“Christmas Spectacular”), the professional sports teams whose games are played at Madison Square Garden (“The Garden”) and other events which are presented in our venues, and our ability to attract such events;

Current wording

•the level of our revenues, which depends in part on the popularity of the Christmas Spectacular Starring the Radio City Rockettes (the“Christmas Spectacular”), the sports teams whose games are played at Madison Square Garden (“The Garden”) and other events which are presented in our venues, and our ability to attract such events;

Previous wording

•the on-ice and on-court performance of the professional sports teams whose games we host in our venues;

Current wording

•the on-ice and on-court performance of the sports teams whose games we host in our venues;

Previous wording

•general economic conditions, especially in the New York City and Chicago metropolitan areas where we have business activities;

Current wording

•general economic conditions, especially in the New York City and Chicago metropolitan areas where we have business activities, including the impact of a recession on our business;

Previous wording

•activities or other developments (such as a pandemic or other public health emergency) that discourage or maydiscourage congregation at prominent places of public assembly, including our venues;

Current wording

•activities or other developments that discourage or maydiscourage congregation at prominent places of public assembly, including our venues;

Previous wording

•failure of the Company or Sphere Entertainment Co. (together with its subsidiaries, as applicable, “Sphere Entertainment”) to satisfy its obligations under transition services agreements, or other agreements entered into in connection with the Distribution; and

Current wording

•failure of the Company or Sphere Entertainment Co. (together with its subsidiaries, as applicable, “Sphere Entertainment”) to satisfy its obligations under services agreements or agreements entered into in connection with the Distribution; and

Previous wording

This MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s unaudited financial statements and accompanying notes thereto included in this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated and combined financial statements and notes thereto as of June 30, 2024 and 2023 and for the three years ended June 30, 2024, 2023 and 2022 (the “Audited Consolidated and Combined Annual Financial Statements”) included in the 2024 Form 10-K, to help provide an understanding of our financial condition, changes in financial condition and results of operations.

Current wording

This MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s unaudited condensed and consolidated financial statements and accompanying notes thereto included in this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated and combined financial statements and notes thereto as of June 30, 2024 and 2023 and for the three years ended June 30, 2024, 2023 and 2022 (the “Audited Consolidated and Combined Annual Financial Statements”) included in the 2024 Form 10-K, to help provide an understanding of our financial condition, changes in financial condition and results of operations.

Previous wording

Results of Operations. This section provides an analysis of our unaudited results of operations for the three and six months ended December 31, 2024 and 2023.

Current wording

Results of Operations. This section provides an analysis of our unaudited results of operations for the three and nine months ended March 31, 2025 and 2024.

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 six months ended December 31, 2024 and 2023, as well as certain contractual obligations.

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 nine months ended March 31, 2025 and 2024, as well as certain contractual obligations.

Previous wording

We manage our business through one reportable segment. The Company’s portfolio of venues includes: The Garden, The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. The Company’s business also includes the original production, the Christmas Spectacular. The Company also has an entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually.

Current wording

We manage our business through one reportable segment. The Company’s portfolio of venues includes: The Garden, The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. The Company’s business includes the original production, the Christmas Spectacular. The Company also has an entertainment and sports bookings business, which showcases a broad array of compelling concerts, family shows and special events, as well as a diverse mix of sporting events, for millions of guests annually.

Previous wording

Our operating results are largely dependent on our ability to attract concerts and other events to our venues, revenues under various agreements entered into with MSG Sports, and the continuing popularity of the Christmas Spectacular. Certain of these factors in turn depend on the popularity and/or performance of the professional sports teams whose games we host at The Garden.

Current wording

Our operating results are largely dependent on our ability to attract concerts and other events to our venues, revenues under various agreements entered into with MSG Sports, and the continuing popularity of the Christmas Spectacular. Certain of these factors in turn depend on the popularity and/or performance of the sports teams whose games we host at The Garden.

Previous wording

Our Company’s future performance is dependent in part on general economic conditions and the effect of these conditions on our customers. Weak economic conditions may lead to lower demand for suite licenses and tickets to our live productions, concerts, family shows and other events, which would also negatively affect concession and merchandise sales, and lower levels of sponsorship and venue signage. These conditions may also affect the number of concerts, family shows and other events that take place in the future. An economic downturn could adversely affect our business and results of operations.

Current wording

The Company’s future performance is dependent in part on general economic conditions and the effect of these conditions on our customers. Weak economic conditions may lead to lower demand for suite licenses and tickets to our live productions, concerts, family shows and other events, which would also negatively affect concession and merchandise sales, and lower levels of sponsorship and venue signage. These conditions may also affect the number of concerts, family shows and other events that take place in the future. An economic downturn could adversely affect our business and results of operations.

Previous wording

Comparison of the three and six months ended December 31, 2024 versus the three and six months ended December 31, 2023.

Current wording

Comparison of the three and nine months ended March 31, 2025 versus the three and nine months ended March 31, 2024.

Previous wording

(b) During the third quarter of Fiscal Year 2024, the Company amended the definition of adjusted operating income (loss) so that the non-cash portion of operating lease revenue related to the Company’s Arena License Agreements with MSG Sports is no longer excluded in all periods presented. Pursuant to GAAP, recognition of operating lease revenue is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement. As a result, operating lease revenue is comprised of a contractual cash component plus or minus a non-cash component for each period presented. Adjusted operating income (loss) includes operating lease revenue of (i) $17,447 and $18,301 of revenue collected in cash for thethree and six months ended December 31, 2024, respectively, and $15,409 and $16,238 for the three and six months ended December 31, 2023, respectively, and (ii) a non-cash portion of $9,514 and $9,984 for the three and six months ended December 31, 2024 and , respectively, and $9,120 and $9,615 for the three and six months ended December 31, 2023, respectively.

Current wording

(a) Arena license fees and other leasing revenue are recognized on a straight line basis and are comprised of a contractual cash component plus or minus a non-cash component for each period presented. Arena license fees include operating lease revenue of (i) $21,746 and $40,048 collected in cash for thethree and nine months ended March 31, 2025, respectively, and$22,372 and$38,610 for the three and nine months ended March 31, 2024, respectively, and (ii) a non-cash portion of $11,848 and $21,833 for the three and nine months ended March 31, 2025 respectively, and $13,216 and $22,831 for the three and nine months ended March 31, 2024, respectively.

Previous wording

Revenues for the three and six months ended December 31, 2024 increased $4,751 and $1,253, respectively, as compared to the prior year period.

Current wording

Revenues for the three and nine months ended March 31, 2025 increased $14,152 and $15,405, respectively, as compared to the prior year period.

Previous wording

For the six months ended December 31, 2024, the decrease in Revenues from entertainment offerings was primarily due to lower event-related revenues of $24,055 which was partially offset by higher revenue from the presentation of the Christmas Spectacular production of $15,151 and higher revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $7,179.

Current wording

For the three months ended March 31, 2025 the increase in revenues from entertainment offerings was primarily due to (i) higher revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $6,250, (ii) higher revenues from the presentation of the Christmas Spectacular production of $4,907, and (iii) higher revenues from venue-related sponsorship, signage, and suite license fees of $4,628, partially offset by lower event-related revenues of $3,601.

Previous wording

For the three months ended December 31, 2024, the increase in revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License agreements was primarily due to higher suite license fee revenues.

Current wording

The increase in revenues of $6,250 subject to the sharing of economics with MSG Sports pursuant to the Arena License agreements was primarily due to higher suite license revenues (excluding the portion retained by the Company).

Previous wording

The increase in revenues from the presentation of the Christmas Spectacular production was primarily due to an increase in ticket-related revenue, which reflected higher per-show revenue and, to a lesser extent, two additional performances as compared to the prior year period. The increase in per-show revenue was primarily due to higher average ticket yield and, to a lesser extent, higher average per-show attendance as compared to the prior year period. The Company had 200 Christmas Spectacular performances during this year’s holiday season, of which 185 took place in the fiscal 2025 second quarter, as compared to 193 performances in the prior year’s holiday season, of which 183 took place in the fiscal 2024 second quarter. For this year’s holiday season, approximately 1.1 million tickets were sold, as compared to more than 1.0 million tickets sold in the prior year.

Current wording

The increase in revenues of $4,907 from the presentation of the Christmas Spectacular production was primarily due to an increase in ticket-related revenue, which reflected higher per-show revenue and, to a lesser extent, five additional performances as compared to the prior year quarter. The increase in per-show revenue was primarily due to higher average per-show attendance and, to a lesser extent, higher average ticket yield as compared to the prior year period.

Previous wording

The decrease in event-related revenues reflects (i) lower revenues from concerts of $18,590, which reflects lower per-concert revenues due to a shift in the mix of the events at The Garden from promoted events to rentals and a decrease in the number of events at The Garden, and (ii) lower revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) of $5,465 which was primarily due to lower per-show revenues from other live entertainment events, partially offset by an increase in the number of other live entertainment events and higher per-show revenue for sporting events.

Current wording

The decrease in event-related revenues of $3,601 was due to (i) lower revenues from concerts of $21,912, which mainly reflects lower per-concert revenues primarily due to a shift in the mix of events at The Garden from promoted events to rentals and a decrease in the number of events at the Company’s venues, partially offset by (ii) higher revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) of $18,311, which was primarily due to higher per-event revenues and an increase in the number of events at the Company’s venues.

Previous wording

For the three months ended December 31, 2024 the decrease in Revenues from entertainment offerings was primarily due to lower event-related revenues of $22,521 largely offset by (i) higher revenues from the presentation of the Christmas Spectacular production of $15,140, and (ii) higher revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $7,706.

Current wording

For the nine months ended March 31, 2025, the increase in revenues from entertainment offerings was primarily due to (i) higher revenues from the presentation of the Christmas Spectacular production of $20,058, (ii) higher revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $13,429, and (iii) higher revenues from sponsorship and suites of $5,069, which was partially offset by lower event-related revenues of $27,656.

Previous wording

The decrease in event-related revenues was due to (i) lower revenues from concerts of $17,599, which reflects lower per-concert revenues primarily due to a shift in the mix of the events at The Garden from promoted events to rentals and a decrease in the number of events at The Garden, and (ii) lower revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) of $4,922, which was primarily due to lower per-show revenues from other live entertainment events, partially offset by an increase in the number of other live entertainment events and higher per-show revenue for sporting events.

Current wording

The decrease in event-related revenues of $27,656 was due to lower revenues from concerts of $40,502 which reflects lower per-concert revenues primarily due to a shift in the mix of the events at The Garden from promoted events to rentals, and a decrease in the number of events at The Garden, partially offset by and higher revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) of $12,846, which was primarily due to an increase in the number of events at The Garden and to a lesser extent, higher per-show revenues from other live entertainment and sporting events.

Previous wording

For the three months ended December 31, 2024, the increase in Food, beverage, and merchandise revenues was primarily due to (i) higher food and beverage sales at Knicks and Rangers games, (ii) higher food, beverage and merchandise sales related to the Christmas Spectacular production and (iii) other revenue increases, all as compared to the prior year quarter partially offset by (iv) lower food and beverage sales at concerts at the Company’s venues.

Current wording

For the three months ended March 31, 2025, the increase in food, beverage, and merchandise revenues was primarily due to higher food and beverage sales at other live entertainment and sporting events (excluding the Knicks and Rangers), partially offset by lower food and beverage sales at concerts.

Previous wording

The decrease in food and beverage sales at concerts was due to fewer concerts at The Garden and, to a lesser extent, lower per-concert revenues, both as compared to the prior year quarter.

Current wording

The decrease in food and beverage sales at concerts was primarily due to fewer concerts held at the Company’s venues as compared to the prior year quarter.

Previous wording

For the six months ended December 31, 2024, the decrease in food, beverage and merchandise revenues was primarily due to (i) lower food and beverage sales at concerts at the Company’s venues as compared to the prior year period partially offset by (ii) higher food and beverage sales at Knicks and Rangers games, and (iii) higher food, beverage and merchandise sales related to the Christmas Spectacular production.

Current wording

For the nine months ended March 31, 2025, the decrease in food, beverage and merchandise revenues was primarily due to (i) lower food and beverage sales at concerts at the Company’s venues as compared to the prior year period, partially offset by (ii) higher food and beverage sales at other live entertainment and sporting events, (iii) higher food, beverage and merchandise sales related to the Christmas Spectacular production, and (iv) higher food and beverage sales at Knicks and Rangers games.

Previous wording

The decrease in food and beverage sales at concerts was due to fewer concerts at The Garden and, to a lesser extent, lower per-concert revenues, both as compared to the prior year period.

Current wording

The decrease in food and beverage sales at concerts was due to lower per-concert revenues and, to a lesser extent, fewer concerts at The Garden, both as compared to the prior year period.

Previous wording

The increase in food and beverage sales at Knicks and Rangers games was due to the impact of three more Knicks and Rangers games played at The Garden and, to a lesser extent, higher average per-game revenues in the current year period.

Current wording

The increase in food and beverage sales at Knicks and Rangers games was due to higher average per-game revenues in the current year period, and to a lesser extent, the impact of one combined additional Knicks and Rangers game played at The Garden.

Previous wording

The increase in food, beverage and merchandise sales related to the Christmas Spectacular production was due to higher average per-show revenues and, to a lesser extent, the impact of two additional shows, both as compared to the prior year period.

Current wording

The increase in food, beverage and merchandise sales related to the Christmas Spectacular production was due to higher average per-show revenues and, to a lesser extent, the impact of seven additional shows, both as compared to the prior year period.

Previous wording

For the three months ended December 31, 2024, the increase in revenues was due to higher arena license fees from MSG Sports pursuant to the Arena License Agreements due to three more Knicks and Rangers games played at The Garden in the current year period, and an increase in other leasing revenue.

Current wording

For the three months ended March 31, 2025, the decrease in revenues was due to lower arena license fees from MSG Sports pursuant to the Arena License Agreements due to a combined two fewer Knicks and Rangers games played at The Garden in the current year period, mostly offset by an increase in other leasing revenue.

Previous wording

For the six months ended December 31, 2024, the increase in revenues was primarily due to other leasing revenue and, to a lesser extent, higher arena license fees from MSG Sports pursuant to the Arena License Agreements due to three more Knicks and Rangers games played at The Garden in the current year period.

Current wording

For the nine months ended March 31, 2025, the increase in revenues was primarily due to other leasing revenue and, to a lesser extent, higher arena license fees from MSG Sports pursuant to the Arena License Agreements due to one combined additional Knicks and Rangers game played at The Garden in the current year period.

Previous wording

In the three and six months ended December 31, 2024, the Knicks and Rangers played a combined 35 and 37 pre/regular season games at The Garden, respectively, as compared to 32 and 34 combined pre/regular season games, respectively, in the prior year periods.

Current wording

In the three and nine months ended March 31, 2025, the Knicks and Rangers played a combined 43 and 80 pre/regular season games at The Garden, respectively, as compared to 45 and 79 combined pre/regular season games, respectively, in the prior year periods.

Previous wording

Direct operating expenses for the three and six months ended December 31, 2024 decreased $5,687 and $9,655, respectively as compared to the prior year period.

Current wording

Direct operating expenses for the three and nine months ended March 31, 2025 decreased $3,151 and $12,806, respectively as compared to the prior year period.

Previous wording

For the six months ended December 31, 2024, the decrease in direct operating expenses associated with entertainment offerings, arena license fees, and other leasing primarily reflects lower event-related expenses of $17,139, partially offset by an increase in direct operating expenses subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $5,975.

Current wording

For the three months ended March 31, 2025, the decrease in direct operating expenses associated with entertainment offerings, arena license fees, and other leasing primarily reflects lower event-related expenses of $8,977 and, to a lesser extent, a decrease in venue operating costs of $2,240, partially offset by an increase in direct operating expenses subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $6,589.

Previous wording

The decrease in event-related expenses reflects lower direct operating expenses from concerts of $14,738, primarily due to lower per-concert expenses due to a shift in the mix of events at The Garden from promoted events to rentals, and to a lesser extent, a decrease in the number of events at The Garden, partially offset by higher direct operating expenses from other live entertainment and sporting events (excluding the Knicks and Rangers) of $1,082.

Current wording

The decrease in event-related expenses of $8,977 reflects (i) lower direct operating expenses from concerts of $17,543, mainly due to lower per-concert expenses, primarily as a result of a shift in the mix of events at The Garden from promoted events to rentals and, to a lesser extent, a decrease in the number of events at the Company’s venues partially offset by (ii) higher direct operating expenses from other live entertainment and sporting events (excluding the Knicks and Rangers) of $8,566, primarily due to higher per-event expenses and an increase in the number of events at the Company’s venues.

Previous wording

The increase in direct operating expenses subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements primarily reflects direct operating expenses incurred as a result of the increase in suite license fee revenues.

Current wording

The increase in direct operating expenses of $6,589 subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements primarily reflects direct operating expenses incurred as a result of the increase in suite license fee revenues.

Previous wording

For the three months ended December 31, 2024, the decrease in direct operating expenses associated with entertainment offerings, arena license fees, and other leasing primarily reflects lower event-related expenses of $13,656, partially offset by an increase in direct operating expenses subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $6,560.

Current wording

For the nine months ended March 31, 2025, the decrease in direct operating expenses associated with entertainment offerings, arena license fees, and other leasing primarily reflects lower event-related expenses of $26,116 and a decrease in venue operating costs of partially $3,703, offset by an increase in direct operating expenses subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements of $12,564.

Previous wording

The decrease in event-related expenses reflects (i) lower direct operating expenses from concerts of $17,837, primarily due to lower per-concert expenses due to a shift in the mix of events at The Garden from promoted events to rentals, and (ii) higher direct operating expenses from other live entertainment and sporting events (excluding the Knicks and Rangers) of $698.

Current wording

The decrease in event-related expenses of $26,116 reflects (i) lower direct operating expenses from concerts of $35,380, primarily due to lower per-concert expenses due to a shift in the mix of events at The Garden from promoted events to rentals, and (ii) higher direct operating expenses from other live entertainment and sporting events (excluding the Knicks and Rangers) of $9,264.

Previous wording

For the three months ended December 31, 2024, the increase in food, beverage and merchandise direct operating expenses was primarily driven by an increase in food and beverage costs related to Knicks and Rangers games at The Garden, higher food, beverage and merchandise costs related to the Christmas Spectacular production and other cost increases, partially offset by a decrease in food and beverage costs related to concerts, primarily at The Garden.

Current wording

For the three months ended March 31, 2025, the increase in food, beverage and merchandise direct operating expenses was primarily driven by an increase in food and beverage costs related to other live entertainment and sporting events (excluding the Knicks and Rangers), partially offset by a decrease in food and beverage costs related to concerts at the Company’s venues.

Previous wording

For the six months ended December 31, 2024, the increase in food, beverage and merchandise direct operating expenses was primarily driven by higher food, beverage and merchandise costs related to Knicks and Rangers games at The Garden and the Christmas Spectacular production, which was partially offset by a decrease in food and beverage costs related to fewer concerts at The Garden.

Current wording

For the nine months ended March 31, 2025, the increase in food, beverage and merchandise direct operating expenses was primarily driven by higher food, beverage and merchandise costs related to other live entertainment and sporting events, Knicks and Rangers games at The Garden, and the Christmas Spectacular production, which was partially offset by a decrease in food and beverage costs related to fewer concerts at The Garden.

Previous wording

For the three and six months ended December 31, 2024, selling, general, and administrative expenses increased $8,800 and $5,724, respectively, as compared to the prior year period.

Current wording

For the three and nine months ended March 31, 2025, selling, general, and administrative expenses decreased $1,833 and increased $3,891, respectively, as compared to the prior year period.

Previous wording

For the six months ended December 31, 2024, the increase was primarily due to (i) higher rent expense, and (ii) an increase in employee compensation and benefits, including executive management transition costs of $4,544 recognized in the current year period partially offset by (iii) a decrease in professional fees.

Current wording

For the nine months ended March 31, 2025, the increase of $3,891 was primarily due to (i) higher rent expense, and (ii) an increase in employee compensation and benefits, including executive management transition costs of $4,562 recognized in the current year period partially offset by (iii) decreases in professional fees and other costs.

Previous wording

For the three and six months ended December 31, 2024, depreciation and amortization increased $978 and $1,175, respectively, as compared to the prior year period primarily due to the increase in fixed assets in the second quarter of Fiscal Year 2025.

Current wording

For the three and nine months ended March 31, 2025, depreciation and amortization increased $1,190 and $2,364, respectively, as compared to the prior year period primarily due to the increase in fixed assets in the first and second quarter of Fiscal Year 2025.