Cover
Cover - shares | 6 Months Ended | |
Dec. 31, 2023 | Jan. 31, 2024 | |
Document [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39245 | |
Entity Registrant Name | SPHERE ENTERTAINMENT CO. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-3755666 | |
Entity Address, Address Line One | Two Penn Plaza | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10121 | |
City Area Code | 725 | |
Local Phone Number | 258-0001 | |
Title of 12(b) Security | Class A Common Stock | |
Trading Symbol | SPHR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001795250 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Common Class A | ||
Document [Line Items] | ||
Entity Common Stock, Shares Outstanding | 28,272,107 | |
Common Class B | ||
Document [Line Items] | ||
Entity Common Stock, Shares Outstanding | 6,866,754 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 | |
Current Assets: | |||
Cash, cash equivalents, and restricted cash | $ 627,827 | $ 429,114 | |
Prepaid expenses and other current assets | 46,810 | 56,085 | |
Total current assets | 878,648 | 623,913 | |
Non-Current Assets: | |||
Investments in nonconsolidated affiliates | 50,906 | 394,519 | |
Property and equipment, net | 3,287,933 | 3,307,161 | |
Right-of-use lease assets | 86,599 | 84,912 | |
Goodwill | 456,807 | 456,807 | |
Intangible assets, net | 16,353 | 17,910 | |
Other non-current assets | 106,038 | 87,793 | |
Total assets | 4,883,284 | 4,973,015 | |
Current Liabilities: | |||
Accounts payable, accrued and other current liabilities | 391,903 | 515,731 | |
Current portion of long-term debt, net | 890,110 | 82,500 | |
Operating lease liabilities, current | 14,727 | 10,127 | |
Deferred revenue | 78,381 | 27,337 | |
Total current liabilities | 1,398,528 | 692,141 | |
Non-Current Liabilities: | |||
Long-term debt, net | 521,413 | 1,118,387 | |
Operating lease liabilities, non-current | 109,296 | 110,259 | |
Deferred tax liabilities, net | 272,447 | 379,552 | |
Other non-current liabilities | 116,436 | 88,811 | |
Total liabilities | 2,418,120 | 2,389,150 | |
Commitments and contingencies (see Note 10) | |||
Equity: | |||
Additional paid-in capital | 2,365,913 | 2,376,420 | |
Retained earnings | 105,213 | 212,036 | |
Accumulated other comprehensive loss | (6,314) | (4,938) | |
Total stockholders’ equity | 2,465,164 | 2,583,865 | |
Total liabilities and equity | 4,883,284 | 4,973,015 | |
Nonrelated Party | |||
Current Assets: | |||
Accounts receivable, net | 179,964 | 112,309 | |
Related Party | |||
Current Assets: | |||
Accounts receivable, net | 24,047 | 26,405 | |
Current Liabilities: | |||
Related party payables, current | 23,407 | 56,446 | |
Common Class A | |||
Equity: | |||
Common stock | [1] | 283 | 278 |
Common Class B | |||
Equity: | |||
Common stock | [2] | $ 69 | $ 69 |
[1]Class A Common Stock, $0.01 par value per share, 120,000 shares authorized; 28,263 and 27,812 shares issued and outstanding as of December 31, 2023 and June 30, 2023, respectively.[2]Class B Common Stock, $0.01 par value per share, 30,000 shares authorized; 6,867 shares issued and outstanding as of December 31, 2023 and June 30, 2023. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Common Class A | ||
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 120,000 | 120,000 |
Common stock, shares, outstanding (in shares) | 28,263 | 27,812 |
Common stock, shares, issued (in shares) | 28,263 | 27,812 |
Common Class B | ||
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 30,000 | 30,000 |
Common stock, shares, outstanding (in shares) | 6,867 | 6,867 |
Common stock, shares, issued (in shares) | 6,867 | 6,867 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | ||
Revenues | $ 314,157 | $ 159,541 | $ 432,164 | $ 282,670 | |
Depreciation and amortization | (94,290) | (58,814) | |||
Restructuring charges | (1,287) | (8,075) | (4,678) | (8,075) | |
Other (expense) income, net | (1,130) | (1,355) | 41,066 | (1,770) | |
Loss from continuing operations | (173,248) | (27,308) | (106,176) | (73,611) | |
Income (loss) from discontinued operations, net of taxes | 0 | 97,865 | (647) | 100,125 | |
Net (loss) income | (173,248) | 70,557 | (106,823) | 26,514 | |
Less: Net income attributable to redeemable noncontrolling interests from discontinued operations | 3,029 | 4,153 | |||
Net (loss) income attributable to Sphere Entertainment Co.’s stockholders | $ (173,248) | $ 67,584 | $ (106,823) | $ 22,827 | |
Basic (loss) earnings per common share | |||||
Continuing operations (in dollars per share) | $ (4.91) | $ (0.79) | $ (3.02) | $ (2.13) | |
Discontinued operations (in dollars per share) | 0 | 2.74 | (0.02) | 2.79 | |
Basic (loss) earnings per common share attributable to Sphere Entertainment Co.'s stockholders (in dollars per share) | (4.91) | 1.95 | (3.04) | 0.66 | |
Diluted (loss) earnings per common share | |||||
Continuing operations (in dollars per share) | (4.91) | (0.79) | (3.02) | (2.13) | |
Discontinued operations (in dollars per share) | 0 | 2.74 | (0.02) | 2.79 | |
Diluted (loss) earnings per common share attributable to Sphere Entertainment Co.'s stockholders (in dollars per share) | $ (4.91) | $ 1.95 | $ (3.04) | $ 0.66 | |
Weighted-average number of common shares outstanding: | |||||
Basic (in shares) | 35,309 | 34,684 | 35,110 | 34,544 | |
Diluted (in shares) | 35,309 | 34,710 | 35,110 | 34,609 | |
Continuing Operations | |||||
Revenues | [1] | $ 314,157 | $ 159,541 | $ 432,164 | $ 282,670 |
Direct operating expenses | [1] | (159,766) | (90,400) | (244,265) | (165,820) |
Selling, general and administrative expenses | [1] | (115,520) | (104,415) | (202,664) | (199,046) |
Depreciation and amortization | (80,031) | (7,386) | (94,290) | (13,519) | |
Impairment and other (losses) gains, net | (117,235) | 1,000 | (115,738) | 3,000 | |
Restructuring charges | (1,287) | (8,075) | (4,678) | (8,075) | |
Operating loss | (159,682) | (49,735) | (229,471) | (100,790) | |
Interest income | 5,926 | 2,669 | 10,304 | 6,002 | |
Interest expense | (25,828) | 0 | (25,828) | 0 | |
Other (expense) income, net | (1,130) | (1,355) | 41,066 | (1,770) | |
Loss from continuing operations before income taxes | (180,714) | (48,421) | (203,929) | (96,558) | |
Income tax benefit | 7,466 | 21,113 | 97,753 | 22,947 | |
Net (loss) income | (173,248) | 70,557 | (106,823) | 26,514 | |
Discontinued Operations | |||||
Less: Net loss attributable to nonredeemable noncontrolling interests from discontinued operations | 0 | (56) | 0 | (466) | |
Less: Net income attributable to redeemable noncontrolling interests from discontinued operations | $ 0 | $ 3,029 | $ 0 | $ 4,153 | |
[1]See Note 15. Related Party Transactions, for further information on related party revenues and expenses. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Net (loss) income | $ (173,248) | $ 70,557 | $ (106,823) | $ 26,514 |
Other comprehensive income (loss), before income taxes: | ||||
Other comprehensive income (loss), net of income taxes | 4,669 | 12,418 | (1,376) | (208) |
Less: Net income attributable to redeemable noncontrolling interests from discontinued operations | 3,029 | 4,153 | ||
Comprehensive (loss) income attributable to Sphere Entertainment Co.’s stockholders | (168,579) | 80,002 | (108,199) | 22,619 |
Continuing Operations | ||||
Net (loss) income | (173,248) | 70,557 | (106,823) | 26,514 |
Other comprehensive income (loss), before income taxes: | ||||
Amortization of net actuarial gain (loss) included in net periodic benefit cost | 103 | 510 | (138) | 1,020 |
Cumulative translation adjustments | 6,199 | 14,803 | (1,720) | (1,277) |
Other comprehensive income (loss), before income taxes | 6,302 | 15,313 | (1,858) | (257) |
Income tax (expense) benefit | (1,633) | (2,895) | 482 | 49 |
Other comprehensive income (loss), net of income taxes | 4,669 | 12,418 | (1,376) | (208) |
Comprehensive (loss) income | (168,579) | 82,975 | (108,199) | 26,306 |
Discontinued Operations | ||||
Other comprehensive income (loss), before income taxes: | ||||
Less: Net loss attributable to nonredeemable noncontrolling interests from discontinued operations | 0 | (56) | 0 | (466) |
Less: Net income attributable to redeemable noncontrolling interests from discontinued operations | $ 0 | $ 3,029 | $ 0 | $ 4,153 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
OPERATING ACTIVITIES: | ||
Net (loss) income | $ (106,823) | $ 26,514 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 94,290 | 58,814 |
Impairment and other losses (gains), net | 115,738 | (7,885) |
Amortization of debt discount and deferred financing costs | 1,154 | 2,634 |
Amortization of deferred production content | 5,545 | 0 |
Deferred income tax (benefit) expense | (106,690) | 2,257 |
Share-based compensation expense | 16,851 | 35,666 |
Non-cash lease expense | 2,041 | 13,310 |
Net unrealized and realized loss on equity investments with readily determinable fair value and loss in nonconsolidated affiliates | 19,880 | 2,978 |
Other non-cash adjustments | 961 | (435) |
Change in assets and liabilities: | ||
Accounts receivable, net | (67,492) | 9,421 |
Related party receivables and payables, net | (30,681) | 5,233 |
Prepaid expenses and other current and non-current assets | (5,652) | (22,513) |
Accounts payable, accrued and other current and non-current liabilities | (54,033) | (42,690) |
Deferred revenue | 67,438 | (17,295) |
Right-of-use lease assets and operating lease liabilities | (765) | (11,044) |
Net cash (used in) provided by operating activities | (48,238) | 54,965 |
INVESTING ACTIVITIES: | ||
Proceeds from sale of MSGE Retained Interest | 256,501 | 0 |
Capital expenditures, net | (230,475) | (558,808) |
Capitalized interest | (25,053) | (50,335) |
Proceeds from dispositions, net | 0 | 27,904 |
Proceeds from sale of equity securities | 0 | 3,819 |
Other investing activities | 0 | 1,511 |
Net cash provided by (used in) investing activities | 973 | (575,909) |
FINANCING ACTIVITIES: | ||
Proceeds from issuance of 3.50% Convertible Senior Notes due 2028 | 251,634 | 0 |
Proceeds from Delayed Draw Term Loan Facility | 65,000 | 0 |
Taxes paid in lieu of shares issued for equity-based compensation | (14,618) | (14,980) |
Principal repayments on long-term debt | (41,250) | (26,625) |
Purchase of capped call related to 3.50% Convertible Senior Notes due 2028 | (14,309) | 0 |
Payments for financing costs | (484) | (5,112) |
Proceeds from issuance of term loan | 0 | 275,000 |
Noncontrolling interest holders’ capital contributions | 0 | 2,000 |
Distributions to noncontrolling interest holders | 0 | (1,325) |
Distributions to related parties associated with the settlement of certain share-based awards | 0 | (571) |
Other financing activities | 0 | 788 |
Net cash provided by financing activities | 245,973 | 229,175 |
Effect of exchange rates on cash, cash equivalents, and restricted cash | 5 | (505) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 198,713 | (292,274) |
Cash, cash equivalents, and restricted cash at beginning of period | 429,114 | 846,010 |
Cash, cash equivalents, and restricted cash at end of period | 627,827 | 553,736 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Capital expenditures incurred but not yet paid | 64,543 | 38,127 |
Non-cash repayment of the Delayed Draw Term Loan Facility | 65,512 | 0 |
Share-based compensation capitalized in property and equipment | 1,574 | 1,802 |
Continuing Operations | ||
OPERATING ACTIVITIES: | ||
Net (loss) income | (106,823) | 26,514 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 94,290 | 13,519 |
Impairment and other losses (gains), net | (3,000) | |
Share-based compensation expense | 16,799 | 27,845 |
FINANCING ACTIVITIES: | ||
Cash, cash equivalents, and restricted cash at beginning of period | 429,114 | 760,312 |
Cash, cash equivalents, and restricted cash at end of period | 627,827 | 366,748 |
Discontinued Operations | ||
FINANCING ACTIVITIES: | ||
Cash, cash equivalents, and restricted cash at beginning of period | 0 | 85,698 |
Cash, cash equivalents, and restricted cash at end of period | $ 0 | $ 186,988 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) | Dec. 08, 2023 |
3.50% Convertible Senior Notes | Senior Notes | |
Interest rate | 3.50% |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS (UNAUDITED) - USD ($) $ in Thousands | Total | Total Sphere Entertainment Co. Stockholders’ Equity | Common Stock Issued | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Non - redeemable Noncontrolling Interests |
Balance at the beginning of the period at Jun. 30, 2022 | $ 1,975,384 | $ 1,963,221 | $ 342 | $ 2,301,970 | $ (290,736) | $ (48,355) | $ 12,163 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 22,361 | 22,827 | 22,827 | (466) | |||
Other comprehensive income (loss) | (208) | (208) | (208) | ||||
Share-based compensation | 36,295 | 36,295 | 36,295 | ||||
Tax withholding associated with shares issued for equity-based compensation | (14,980) | (14,980) | 4 | (14,984) | |||
BCE disposition | 667 | 667 | |||||
Accretion of put options and adjustments | (895) | (895) | (895) | ||||
Contributions | 2,000 | 2,000 | |||||
Distributions | (1,704) | (379) | (379) | (1,325) | |||
Balance at the end of the period at Dec. 31, 2022 | 2,018,920 | 2,005,881 | 346 | 2,322,007 | (267,909) | (48,563) | 13,039 |
Balance at the beginning of the period at Jun. 30, 2022 | 184,192 | ||||||
Increase (Decrease) in Redeemable Noncontrolling Interests [Roll Forward] | |||||||
Net income (loss) attributable to redeemable noncontrolling interest | 4,153 | ||||||
Noncontrolling interest non-cash acquisition attributable to redeemable noncontrolling interests | 2,069 | ||||||
Noncontrolling interest, decrease from distributions to noncontrolling interest holders | (192) | ||||||
Balance at the end of the period at Dec. 31, 2022 | 190,222 | ||||||
Balance at the beginning of the period at Sep. 30, 2022 | 1,918,726 | 1,907,003 | 342 | 2,303,135 | (335,493) | (60,981) | 11,723 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 67,528 | 67,584 | 67,584 | (56) | |||
Other comprehensive income (loss) | 12,418 | 12,418 | 12,418 | ||||
Share-based compensation | 20,784 | 20,784 | 20,784 | ||||
Tax withholding associated with shares issued for equity-based compensation | (1,013) | (1,013) | 4 | (1,017) | |||
BCE disposition | 667 | 667 | |||||
Accretion of put options and adjustments | (895) | (895) | (895) | ||||
Contributions | 1,500 | 1,500 | |||||
Distributions | (795) | (795) | |||||
Balance at the end of the period at Dec. 31, 2022 | 2,018,920 | 2,005,881 | 346 | 2,322,007 | (267,909) | (48,563) | 13,039 |
Balance at the beginning of the period at Sep. 30, 2022 | 185,711 | ||||||
Increase (Decrease) in Redeemable Noncontrolling Interests [Roll Forward] | |||||||
Net income (loss) attributable to redeemable noncontrolling interest | 3,029 | ||||||
Noncontrolling interest non-cash acquisition attributable to redeemable noncontrolling interests | 1,482 | ||||||
Balance at the end of the period at Dec. 31, 2022 | 190,222 | ||||||
Balance at the beginning of the period at Jun. 30, 2023 | 2,583,865 | 2,583,865 | 347 | 2,376,420 | 212,036 | (4,938) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (106,823) | (106,823) | (106,823) | ||||
Other comprehensive income (loss) | (1,376) | (1,376) | (1,376) | ||||
Share-based compensation | 18,425 | 18,425 | 18,425 | ||||
Purchase of capped call related to 3.50% Convertible Senior Notes due 2028 | (14,309) | (14,309) | (14,309) | ||||
Tax withholding associated with shares issued for equity-based compensation | (14,618) | (14,618) | 5 | (14,623) | |||
Balance at the end of the period at Dec. 31, 2023 | 2,465,164 | 2,465,164 | 352 | 2,365,913 | 105,213 | (6,314) | 0 |
Balance at the end of the period at Dec. 31, 2023 | 0 | ||||||
Balance at the beginning of the period at Sep. 30, 2023 | 2,635,888 | 2,635,888 | 351 | 2,368,059 | 278,461 | (10,983) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (173,248) | (173,248) | (173,248) | ||||
Other comprehensive income (loss) | 4,669 | 4,669 | 4,669 | ||||
Share-based compensation | 12,636 | 12,636 | 12,636 | ||||
Purchase of capped call related to 3.50% Convertible Senior Notes due 2028 | (14,309) | (14,309) | (14,309) | ||||
Tax withholding associated with shares issued for equity-based compensation | (472) | (472) | 1 | (473) | |||
Balance at the end of the period at Dec. 31, 2023 | 2,465,164 | $ 2,465,164 | $ 352 | $ 2,365,913 | $ 105,213 | $ (6,314) | $ 0 |
Balance at the end of the period at Dec. 31, 2023 | $ 0 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS (UNAUDITED) (Parenthetical) | Dec. 08, 2023 |
3.50% Convertible Senior Notes | Senior Notes | |
Interest rate | 3.50% |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Dec. 31, 2023 | |
Description Of Business And Basis Of Presentation [Abstract] | |
Description of Business and Basis of Presentation | 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 of two reportable segments, Sphere and MSG Networks. Sphere is a next-generation entertainment medium, and MSG Networks operates two regional sports and entertainment networks, as well as a direct-to-consumer and authenticated streaming product. Sphere : This segment reflects Sphere TM , a next-generation entertainment medium powered by cutting-edge technologies that enable multi-sensory storytelling 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 sporting and corporate events. Supporting this strategy is Sphere Studios TM , which 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. MSG Networks: This segment is comprised of the Company’s regional sports and entertainment networks, MSG Network and MSG Sportsnet, as well as its direct-to-consumer and authenticated streaming product, MSG+. 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 (the “Islanders”), New Jersey Devils (the “Devils”) and Buffalo Sabres (the “Sabres”) of the National Hockey League (the “NHL”), as well as significant coverage of the New York Giants (the “Giants”) and the Buffalo Bills (the “Bills”) of the National Football League (the “NFL”). The Company (formerly Madison Square Garden Entertainment Corp.) was incorporated on November 21, 2019 as a direct, wholly-owned subsidiary of Madison Square Garden Sports Corp. (“MSG Sports”). On April 17, 2020, MSG Sports distributed all outstanding common stock of the Company to MSG Sports’ stockholders (the “2020 Entertainment Distribution”). MSG Entertainment Distribution On April 20, 2023 (the “MSGE Distribution Date”), the Company distributed approximately 67% of the outstanding common stock of Madison Square Garden Entertainment Corp. (“MSG Entertainment”, formerly MSGE Spinco, Inc.) to its stockholders (the “MSGE Distribution”), with the Company retaining approximately 33% of the outstanding common stock of MSG Entertainment (in the form of MSG Entertainment Class A common stock) immediately following the MSGE Distribution (the “MSGE Retained Interest”). Following the MSGE Distribution Date, the Company retained the Sphere and MSG Networks businesses and MSG Entertainment now owns the traditional live entertainment business previously owned and operated by the Company through its Entertainment business segment, excluding the Sphere business. In the MSGE Distribution, stockholders of the Company received (a) one share of MSG Entertainment’s Class A common stock, par value $0.01 per share, for every share of the Company’s Class A common stock, par value $0.01 per share (“Class A Common Stock”), held of record as of the close of business, New York City time, on April 14, 2023 (the “Record Date”), and (b) one share of MSG Entertainment’s Class B common stock, par value $0.01 per share (“Class B Common Stock”), for every share of the Company’s Class B common stock, par value $0.01 per share, held of record as of the close of business, New York City time, on the Record Date. See Note 1. Description of Business and Basis of Presentation, to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023 (the “2023 Form 10-K”), for more information. As of December 31, 2023, following the sales of portions of the MSGE Retained Interest and the repayment of the delayed draw term loan with MSG Entertainment using a portion of the MSGE Retained Interest (further discussed in Note 6. Investments in Nonconsolidated Affiliates and Note 11. Credit Facilities and Convertible Notes), the Company no longer holds any of the outstanding common stock of MSG Entertainment. As of April 20, 2023, the MSG Entertainment business met the criteria for discontinued operations. See Note 3. Discontinued Operations, to the consolidated financial statements included in the 2023 Form 10-K, for more information about the MSGE Distribution. Tao Group Hospitality Disposition On May 3, 2023, the Company completed the sale of its 66.9% majority interest in TAO Group Sub-Holdings LLC (“Tao Group Hospitality”) to a subsidiary of Mohari Hospitality Limited, a global investment company focused on the luxury lifestyle and hospitality sectors (the “Tao Group Hospitality Disposition”). See Note 3. Discontinued Operations, for more information about the Tao Group Hospitality Disposition. Basis of Presentation The Company reports on a fiscal year basis ending on June 30 th (“Fiscal Year”). In these unaudited condensed consolidated financial statements, the years ended on June 30, 2024 and 2023 are referred to as “Fiscal Year 2024” and “Fiscal Year 2023,” respectively. The Company has presented both the MSG Entertainment business and Tao Group Hospitality as discontinued operations for all periods presented. See Note 3. Discontinued Operations, for further discussion on accounting for the MSGE Distribution and Tao Group Hospitality Disposition. 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”), and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for Fiscal Year 2023 included in the 2023 Form 10-K. In the opinion of the Company, the accompanying condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the Company’s financial position as of December 31, 2023 and its results of operations for the three and six months ended December 31, 2023 and 2022, and cash flows for the six months ended December 31, 2023 and 2022. The condensed consolidated financial statements and the accompanying notes as of December 31, 2023 were derived from audited annual consolidated financial statements but do not contain all of the footnote disclosures from the audited annual 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. Our MSG Networks segment earns a higher share of its annual revenues in the second and third quarters of its fiscal year as a result 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. |
Accounting Policies
Accounting Policies | 6 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Principles of Consolidation The condensed consolidated financial statements of the Company include the accounts of Sphere Entertainment Co. and its subsidiaries. They also historically included accounts of Tao Group Hospitality, MSG Entertainment, and Boston Calling Events, LLC (“BCE”) until their dispositions on May 3, 2023, April 20, 2023, and December 2, 2022, respectively. All significant intercompany transactions and balances have been eliminated in consolidation. Prior to their dispositions, Tao Group Hospitality and BCE were consolidated with the equity owned by other stockholders shown as redeemable or nonredeemable noncontrolling interests of discontinued operations in the accompanying condensed consolidated balance sheets, and the other stockholders’ portion of net earnings (loss) and other comprehensive income (loss) shown as net income (loss) or comprehensive income (loss) attributable to redeemable or nonredeemable noncontrolling interests from discontinued operations in the accompanying consolidated statements of operations and consolidated statements of comprehensive income (loss), respectively. See Note 3. Discontinued Operations, for details regarding the Tao Group Hospitality Disposition, and MSGE Distribution. See Note 2. Summary of Significant Accounting Policies, to the audited annual consolidated financial statements included in the 2023 Form 10-K, regarding the classification of redeemable noncontrolling interests of Tao Group Hospitality. 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, 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. Production Costs for the Company’s Original Immersive Productions The Company debuted its first original immersive production, Postcard From Earth TM , on October 6, 2023, which resulted in the amortization of the related production costs. The following reflects the Company’s complete policies with respect to immersive production costs. The Company defers certain costs during the production phase of its original immersive productions for Sphere that are directly related to production activities. Such costs include, but are not limited to, fees paid to writers, directors and producers as well as video and music production costs and production-specific overhead. For purposes of evaluating the recognition of amortization and any potential impairment, deferred immersive production costs are classified based on their predominant monetization strategy. The determination of the predominant monetization strategy is made at the commencement of production and is based on the means by which the Company expects to derive third-party revenues from use of the content. The Company’s primary monetization strategy and classification for its current content is on an individual production basis, which the Company defines as content where the lifetime value is predominantly derived from third-party revenues that are directly attributable to the specific production. The classification of content only changes if there is a significant change to the production’s monetization strategy relative to management’s initial assessment. Deferred immersive production costs are amortized beginning in the month the production debuts, in the same ratio that current period actual revenue bears to estimated remaining unrecognized ultimate revenue as of the beginning of the current fiscal year. Estimates of ultimate revenues are prepared on an individual production basis and reviewed regularly by management and revised where necessary to reflect the most current information. Ultimate revenues reflect management’s estimates of future revenue over a period not to exceed ten years following the premiere of the production. Deferred immersive production costs are subject to recoverability assessments whenever there is an indication of potential impairment. 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 December 31, 2023, the Company’s unrestricted cash and cash equivalents balance was $614,549, as compared to $433,507 as of September 30, 2023. Included in unrestricted cash and cash equivalents as of December 31, 2023 was (1) $120,930 in advance cash proceeds primarily from ticket sales, a majority of which the Company expects to pay to artists and promoters, and (2) $82,687 of cash and cash equivalents at MSG Networks, which is not available for distribution to the Company in order to maintain compliance with the covenants under the MSG Networks Credit Facilities (as defined below). As of December 31, 2023, the Company’s restricted cash balance was $13,278, as compared to $18,235 as of September 30, 2023. In addition, as of December 31, 2023, the Company had $391,903 of accounts payable, accrued and other current liabilities, including $164,247 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 principal balance of the Company’s total debt outstanding as of December 31, 2023 was $1,424,750, including $891,000 of debt under the MSG Networks Credit Facilities, which is classified as short-term on the condensed consolidated balance sheets. Our 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 are expected to be substantial and include working capital-related items (including funding our operations), capital spending (including the creation of additional original content for Sphere), required debt service payments, and payments we expect to be made in connection with the refinancing of our indebtedness, and investments and related loans and advances that we may fund from time to time. We may also use cash to repurchase our common stock. The remaining net proceeds from the issuance of our 3.50% Convertible Senior Notes (as defined below) in December 2023 are to be used for general corporate purposes, including Sphere-related growth initiatives. Our decisions as to the use of our available liquidity will be based upon the ongoing review of the funding needs of our businesses, the optimal allocation of cash resources, and the timing of cash flow generation. To the extent that we desire to access alternative sources of funding through the capital and credit markets, market conditions could adversely impact our ability to do so at that time. Our ability to have sufficient liquidity to fund our operations and refinance the MSG Networks Credit Facilities is dependent on the ability of Sphere in Las Vegas to generate significant positive cash flow during Fiscal Year 2024. Although we anticipate that Sphere in Las Vegas 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 new platform. Original immersive productions, such as Postcard From Earth , have not been previously pursued on the scale of Sphere, which increases the uncertainty of our operating expectations. To the extent that our efforts do not result in viable shows, or to the extent that any such productions do not achieve expected levels of popularity among audiences, we may not generate the cash flows from operations necessary to fund our operations. To the extent we do not realize expected cash flows from operations from Sphere in Las Vegas, we would have to take several actions to improve our 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 we currently believe we will have sufficient liquidity from cash and cash equivalents and cash flows from operations (including expected cash flows from operations from Sphere in Las Vegas) to fund our operations and, at a minimum, make required quarterly amortization payments of $61,875 on the MSG Networks Credit Facilities, as described below, no assurance can be provided that our liquidity will be sufficient in the event any of the preceding uncertainties facing Sphere in Las Vegas are realized over the next 12 months beyond the issuance date. The Company also anticipates MSG Networks will pay a portion of its term loan upon refinancing of the MSG Networks Credit Facilities prior to its maturity in October 2024. As disclosed in Note 11. Credit Facilities and Convertible Notes, all of the outstanding borrowings under the MSG Networks Credit Facilities are guaranteed by the MSGN Guarantors (as defined under Note 11. Credit Facilities and Convertible Notes) and secured by the MSGN Collateral (as defined under Note 11. Credit Facilities and Convertible Notes). Sphere Entertainment Co., Sphere Entertainment Group, LLC (“Sphere Entertainment Group”) and the subsidiaries of Sphere Entertainment Group (collectively, the “Non-Credit Parties”) are not legally obligated to fund the outstanding borrowings under the MSG Networks Credit Facilities, nor are the assets of the Non-Credit Parties pledged as security under the MSG Networks Credit Facilities. Prior to maturity of the MSG Networks Credit Facilities in October 2024, MSG Networks expects to make $61,875 in required quarterly amortization payments on the MSG Networks Credit Facilities. The remaining outstanding borrowings under the MSG Networks Credit Facilities of $829,125 are scheduled to mature in October 2024, which is within one year of the issuance date of the accompanying unaudited condensed consolidated financial statements. However, MSG Networks will be unable to generate sufficient operating cash flows prior to the maturity to settle the remaining outstanding borrowings under the MSG Networks Credit Facilities when they become due. Therefore, management plans to refinance the MSG Networks Credit Facilities prior to maturity. Management has had discussions with certain of its lenders with respect to the refinancing of the MSG Networks Credit Facilities, which refinancing would include extending the maturity date and could also include amending certain terms, such as amortization, interest rates, covenants and financial ratios. While MSG Networks has historically been able to refinance its indebtedness, management can provide no assurance that MSG Networks will be able to refinance the MSG Networks Credit Facilities, or that such refinancing will be secured on terms that are acceptable to MSG Networks. In the event MSG Networks is unable to refinance the amount scheduled to mature under the MSG Networks Credit Facilities or secure alternative sources of funding through the capital and credit markets on acceptable terms, the lenders could exercise their remedies under the MSG Networks Credit Facilities, which would include, but not be limited to, declaring an event of default and foreclosing on the MSGN Collateral. In the event of an exercise of post-default rights and remedies, the Company believes the lenders would have no further remedies or recourse against the Non-Credit Parties pursuant to the terms of the MSG Networks Credit Facilities. While this condition raises substantial doubt about the Company’s ability to continue as a going concern, for the reasons stated in this paragraph, we have concluded this condition has been effectively alleviated and the Company will be able to continue as a going concern for at least one year beyond the issuance date of the accompanying unaudited condensed consolidated financial statements. Recently Issued and Adopted Accounting Pronouncements Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2023-07, Improvement 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 will be effective for the Company in Fiscal Year 2025 and is required to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s condensed consolidated financial statements. 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 will be effective for the Company in Fiscal Year 2026 and is required to be applied prospectively. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s condensed consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Dec. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations As a result of the MSGE Distribution and Tao Group Hospitality Disposition, the results of the traditional live entertainment business previously owned and operated by the Company through its MSG Entertainment business segment (excluding the Sphere business) and the entertainment dining and nightlife business previously owned and operated by the Company through its Tao Group Hospitality business segment, as well as transaction costs related to the MSGE Distribution and Tao Group Hospitality Disposition, have been classified in the accompanying condensed consolidated statements of operations as discontinued operations. See Note 3. Discontinued Operations, to the consolidated financial statements included in the 2023 Form 10-K, for more information about the MSGE Distribution and Tao Group Hospitality Disposition. For the six months ended December 31, 2023, the Company recognized a loss from discontinued operations of $647, net of $294 of income tax benefit, related to the final purchase price adjustment from the Tao Group Hospitality Disposition. For the three months ended December 31, 2023, the Company did not recognize any loss from discontinued operations or any income tax benefit related to the final purchase price adjustment from the Tao Group Hospitality Disposition. The table below sets forth operating results of discontinued operations for the three and six months ended December 31, 2022. Amounts presented below differ from historically reported results for the MSG Entertainment and Tao Group Hospitality business segments due to reclassifications and adjustments made for purposes of discontinued operations. Three Months Ended December 31, 2022 MSG Entertainment Tao Group Hospitality Eliminations Total Revenues $ 348,637 $ 134,645 $ (625) $ 482,657 Direct operating expenses (181,730) (76,903) 871 (257,762) Selling, general and administrative expenses (36,237) (42,116) (462) (78,815) Depreciation and amortization (15,586) (6,087) — (21,673) Impairment and other gains, net 4,412 473 — 4,885 Restructuring charges (5,607) — — (5,607) Operating income 113,889 10,012 (216) 123,685 Interest income 911 23 — 934 Interest expense (58) (836) — (894) Other loss, net (2,171) (327) — (2,498) Income from operations before income taxes 112,571 8,872 (216) 121,227 Income tax expense (18,479) (4,883) — (23,362) Net income 94,092 3,989 (216) 97,865 Less: Net (loss) income attributable to nonredeemable noncontrolling interests (181) 125 — (56) Less: Net income attributable to redeemable noncontrolling interests — 3,029 — 3,029 Net income from discontinued operations attributable to Sphere Entertainment Co.’s stockholders $ 94,273 $ 835 $ (216) $ 94,892 Six Months Ended December 31, 2022 MSG Entertainment Tao Group Hospitality Eliminations Total Revenues $ 494,712 $ 267,221 $ (1,187) $ 760,746 Direct operating expenses (282,393) (154,066) 1,247 (435,212) Selling, general and administrative expenses (64,966) (84,659) — (149,625) Depreciation and amortization (31,572) (13,723) — (45,295) Impairment and other gains, net 4,412 473 — 4,885 Restructuring charges (5,607) — — (5,607) Operating income 114,586 15,246 60 129,892 Interest income 1,519 36 — 1,555 Interest expense (1,083) (1,978) — (3,061) Other (loss) income, net (1,285) 727 — (558) Income from operations before income taxes 113,737 14,031 60 127,828 Income tax expense (21,415) (6,288) — (27,703) Net income 92,322 7,743 60 100,125 Less: Net (loss) income attributable to nonredeemable noncontrolling interests (553) 87 — (466) Less: Net income attributable to redeemable noncontrolling interests — 4,153 — 4,153 Net income from discontinued operations attributable to Sphere Entertainment Co.’s stockholders $ 92,875 $ 3,503 $ 60 $ 96,438 As permitted under Accounting Standards Codification (“ASC”) Subtopic 205-20-50-5b(2), the Company has elected not to adjust the condensed consolidated statements of cash flows for the six months ended December 31, 2022 to exclude cash flows attributable to discontinued operations. The table below sets forth, for the period presented, significant selected financial information related to discontinued activities included in the accompanying condensed consolidated financial statements: Three Months Ended Six Months Ended December 31, 2022 December 31, 2022 MSG Entertainment Tao Group Hospitality MSG Entertainment Tao Group Hospitality Non-cash items included in net income: Depreciation and amortization $ 15,586 $ 6,087 $ 31,572 $ 13,723 Share-based compensation (credit) expense, net (543) 2,374 1,104 4,426 Cash flows from investing activities: Capital expenditures, net $ 4,353 $ 5,686 $ 9,208 $ 11,455 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Dec. 31, 2023 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Revenue Recognition Contracts with Customers See Note 2. Summary of Significant Accounting Policies and Note 4. Revenue Recognition, to the consolidated financial statements included in the 2023 Form 10-K, 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 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 and six months ended December 31, 2023 and 2022: Three Months Ended December 31, 2023 Sphere MSG Networks Total Event-related (a) $ 148,097 $ — $ 148,097 Sponsorship, signage, Exosphere TM advertising, and suite licenses revenues (b) 17,522 690 18,212 Media related, primarily from affiliation agreements (b) — 143,096 143,096 Other 1,418 2,572 3,990 Total revenues from contracts with customers 167,037 146,358 313,395 Revenues from subleases 762 — 762 Total revenues $ 167,799 $ 146,358 $ 314,157 Three Months Ended December 31, 2022 Sphere MSG Networks Total Sponsorship, signage, Exosphere advertising, and suite licenses (b) $ — $ 2,404 $ 2,404 Media related, primarily from affiliation agreements (b) — 154,401 154,401 Other — 2,093 2,093 Total revenues from contracts with customers — 158,898 158,898 Revenues from subleases 643 — 643 Total revenues $ 643 $ 158,898 $ 159,541 Six Months Ended December 31, 2023 Sphere MSG Networks Total Event-related (a) $ 152,156 $ — $ 152,156 Sponsorship, signage, Exosphere TM advertising, and suite licenses revenues (b) 20,082 908 20,990 Media related, primarily from affiliation agreements (b) — 252,891 252,891 Other 1,849 2,787 4,636 Total revenues from contracts with customers 174,087 256,586 430,673 Revenues from subleases 1,491 — 1,491 Total revenues $ 175,578 $ 256,586 $ 432,164 Six Months Ended December 31, 2022 Sphere MSG Networks Total Sponsorship, signage, Exosphere advertising, and suite licenses (b) $ — $ 2,648 $ 2,648 Media related, primarily from affiliation agreements (b) — 276,213 276,213 Other — 2,516 2,516 Total revenues from contracts with customers — 281,377 281,377 Revenues from subleases 1,293 — 1,293 Total revenues $ 1,293 $ 281,377 $ 282,670 _________________ (a) Event-related revenues consists of (i) the Sphere Experience, (ii) ticket sales and other ticket-related revenues, (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 table above. (b) See Note 2. Summary of Significant Accounting Policies, Revenue Recognition, and Note 4. Revenue Recognition, to the consolidated financial statements included in the 2023 Form 10-K, 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 and six months ended December 31, 2023 and 2022: Three Months Ended December 31, 2023 Sphere MSG Networks Total Ticketing and venue license fee revenues (a) $ 121,821 $ — $ 121,821 Sponsorship, signage, Exosphere advertising, and suite revenues 23,406 — 23,406 Food, beverage, and merchandise revenues 21,810 — 21,810 Media networks revenues (b) — 146,358 146,358 Total revenues from contracts with customers 167,037 146,358 313,395 Revenues from subleases 762 — 762 Total revenues $ 167,799 $ 146,358 $ 314,157 Three Months Ended December 31, 2022 Sphere MSG Networks Total Media networks revenues (b) $ — $ 158,898 $ 158,898 Revenues from subleases 643 — 643 Total revenues $ 643 $ 158,898 $ 159,541 Six Months Ended December 31, 2023 Sphere MSG Networks Total Ticketing and venue license fee revenues (a) $ 124,628 $ — $ 124,628 Sponsorship, signage, Exosphere advertising, and suite revenues 26,306 — 26,306 Food, beverage, and merchandise revenues 23,153 — 23,153 Media networks revenues (b) — 256,586 256,586 Total revenues from contracts with customers 174,087 256,586 430,673 Revenues from subleases 1,491 — 1,491 Total revenues $ 175,578 $ 256,586 $ 432,164 Six Months Ended December 31, 2022 Sphere MSG Networks Total Media networks revenues (b) $ — $ 281,377 $ 281,377 Revenues from subleases 1,293 — 1,293 Total revenues $ 1,293 $ 281,377 $ 282,670 _________________ (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 Distributors (as defined below) 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 December 31, 2023 and June 30, 2023: As of December 31, June 30, 2023 2023 Receivables from contracts with customers, net (a) $ 180,589 $ 115,039 Contract assets, current (b) — 314 Deferred revenue, including non-current portion (c) 78,381 27,397 _________________ (a) Receivables from contracts with customers, net, which are reported in Accounts receivable, net in the Company’s condensed consolidated balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers. As of December 31, 2023 and June 30, 2023, the Company’s receivables from contracts with customers above included $625 and $2,730, respectively, related to various related parties. See Note 15. 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 and six months ended December 31, 2023 relating to the deferred revenue balance as of June 30, 2023 was $19,254 and $20,724, respectively. Transaction Price Allocated to the Remaining Performance Obligations As of December 31, 2023, the Company’s remaining performance obligations were $175,820 of which 50% is expected to be recognized over the next two years and an additional 27% of the balance to be recognized in the following two years. 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. |
Restructuring Charges
Restructuring Charges | 6 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges During Fiscal Year 2024, the Company incurred costs for termination benefits for certain executives and employees in the Sphere segment. As a result, the Company recognized restructuring charges of $1,287 and $4,678 for the three and six months ended December 31, 2023, respectively, which are recorded in Accounts payable, accrued and other current liabilities and Related party payables, current, on the condensed consolidated balance sheets. Restructuring charges of $8,075 were recorded for the three and six months ended December 31, 2022, respectively, which were recorded in Accounts payable, accrued and other current liabilities on the condensed consolidated balance sheets. Changes to the Company’s restructuring liability through December 31, 2023 were as follows: Restructuring Liability June 30, 2023 $ 8,891 Restructuring charges 4,678 Payments (6,820) December 31, 2023 $ 6,749 |
Investments in Nonconsolidated
Investments in Nonconsolidated Affiliates | 6 Months Ended |
Dec. 31, 2023 | |
Equity Method Investments, Joint Ventures And Cost Method Investments [Abstract] | |
Investments in Nonconsolidated Affiliates | Investments in Nonconsolidated Affiliates The Company’s investments in nonconsolidated affiliates, which are accounted for under the equity method of accounting or as equity investments without readily determinable fair value, consisted of the following: Investment As of Ownership Percentage as of December 31, 2023 December 31, June 30, Equity method investments: SACO Technologies Inc. (“SACO”) 30 % $ 19,750 $ 22,246 Holoplot Loan (a) 21,741 20,971 Holoplot 25 % 694 1,542 MSG Entertainment (b) — % — 341,039 Equity investments without readily determinable fair values 8,721 8,721 Total investments in nonconsolidated affiliates $ 50,906 $ 394,519 _________________ (a) In January 2023, the Company, through an indirect subsidiary, extended financing to Holoplot GmbH (“Holoplot”) in the form of a three-year convertible loan (the “Holoplot Loan”) of €18,804, equivalent to $20,484 using the applicable exchange rate at the time of the transaction. Absent conversion, which is currently not available under the terms of the Holoplot Loan, the Holoplot Loan and interest accrued thereon are due and payable at the conclusion of the three-year term. (b) As of December 31, 2023, following the sale of portions of the MSGE Retained Interest and the repayment of the DDTL Facility (as defined below) with MSG Entertainment using a portion of the MSGE Retained Interest, the Company no longer holds any of the outstanding common stock of MSG Entertainment. The Company elected the fair value option for its investment in MSG Entertainment as of June 30, 2023, when it held approximately 20% of the outstanding shares of common stock of MSG Entertainment (in the form of Class A common stock). The fair value of the investment was determined based on quoted market prices on the New York Stock Exchange (“NYSE”), which were classified within Level I of the fair value hierarchy. The following table summarizes the realized and unrealized gain (loss) on equity investments with and without readily determinable fair values, which is reported in Other (expense) income, net, for the three and six months ended December 31, 2023 and 2022: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Unrealized gain $ — $ — $ — $ 1,969 Realized loss from shares of MSG Entertainment Class A common stock sold — — (19,027) — Total realized and unrealized (loss) gain on equity investments $ — $ — $ (19,027) $ 1,969 Supplemental information on realized loss: Shares of MSG Entertainment Class A common stock disposed (a) — — 1,923 — Shares of MSG Entertainment Class A common stock sold (b) — — 8,221 — Cash proceeds from shares of MSG Entertainment Class A common stock sold $ — $ — $ 256,501 $ — _________________ (a) Refer to Note 11. Credit Facilities and Convertible Notes, for further explanation of the approximately 1,923 shares disposed related to the repayment of the DDTL Facility. (b) The sale of approximately 8,221 shares of MSG Entertainment Class A common stock resulted in the cash proceeds from common stock sold. |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net As of December 31, 2023 and June 30, 2023, property and equipment, net consisted of the following: As of December 31, June 30, Land $ 44,569 $ 80,878 Buildings 2,287,504 69,049 Equipment, furniture, and fixtures 1,111,070 159,786 Leasehold improvements 18,491 18,491 Construction in progress 6,565 3,066,785 Total property and equipment, gross 3,468,199 3,394,989 Less accumulated depreciation and amortization (180,266) (87,828) Property and equipment, net $ 3,287,933 $ 3,307,161 The property and equipment balances above include $164,247 and $236,593 of capital expenditure accruals (primarily related to Sphere construction) as of December 31, 2023 and June 30, 2023, respectively, which are reflected in Accounts payable, accrued and other current liabilities in the accompanying condensed consolidated balance sheets. During the first quarter of Fiscal Year 2024, the Company placed $3,130,028 of construction in progress assets into service with the opening of Sphere, and began depreciating them over their corresponding estimated useful lives. See Note 2. Summary of Significant Accounting Policies, to the consolidated financial statements included in the 2023 Form 10-K, 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 $79,253 and $92,733 for the three and six months ended December 31, 2023, respectively, and $6,607 and $11,961 for the three and six months ended December 31, 2022, respectively, which is recognized in Depreciation and amortization in the condensed consolidated statements of operations. On November 21, 2023, the Company announced that it was formally notified by the Mayor of London that its planning application for a Sphere venue in Stratford, London was not approved. In light of this decision, the Company no longer plans to allocate resources towards the development of a Sphere in the United Kingdom. In connection with this decision, the Company recorded an impairment charge of $116,541 on construction in progress and land assets reported within the Sphere segment. This charge is recognized in Impairment and other (losses) gains, net within the condensed consolidated statements of operations for the three and six month ended December 31, 2023. The fair value of the land was determined using an estimate of the assumed exit value from a market participant perspective. |
Original Immersive Production C
Original Immersive Production Content | 6 Months Ended |
Dec. 31, 2023 | |
Other Industries [Abstract] | |
Original Immersive Production Content | Original Immersive Production Content The Company’s production content for its original immersive productions are included within Other non-current assets in the accompanying condensed consolidated balance sheets. As of December 31, 2023 and June 30, 2023, total deferred immersive production content costs consisted of the following: As of December 31, June 30, Production content Released, less amortization $ 76,194 $ — In-process — 61,421 Total production content $ 76,194 $ 61,421 The following table summarizes the Company’s amortization of production content costs, which is reported in Direct operating expenses in the accompanying condensed consolidated statements of operations for the three and six months ended December 31, 2023 and 2022 as follows: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Production content costs (a) $ 5,545 $ — $ 5,545 $ — _________________ (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. Accounting Policies, for further explanation of the monetization strategy. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The carrying amounts of goodwill as of December 31, 2023 and June 30, 2023 were as follows: As of December 31, June 30, Sphere $ 32,299 $ 32,299 MSG Networks 424,508 424,508 Total Goodwill $ 456,807 $ 456,807 During the first quarter of Fiscal Year 2024, the Company performed its annual impairment test of goodwill and determined that there was no impairment of goodwill identified as of the impairment test date. The Company’s intangible assets subject to amortization, which relate to affiliate relationships, as of December 31, 2023 and June 30, 2023 were as follows: As of December 31, June 30, Gross carrying amount $ 83,044 $ 83,044 Accumulated amortization (66,691) (65,134) Intangible assets, net $ 16,353 $ 17,910 The Company recognized amortization expense on intangible assets of $778 and $1,557 for the three and six months ended December 31, 2023, respectively, and $779 and $1,558 for the three and six months ended December 31, 2022, respectively, which is recognized in Depreciation and amortization in the accompanying condensed consolidated statements of operations. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments See Note 11. Commitments and Contingencies, to the consolidated financial statements included in the 2023 Form 10-K, for details on the Company’s commitments. The Company’s commitments as of June 30, 2023 included a total of $3,134,884 of contract obligations (primarily related to media rights agreements from the MSG Networks segment). During the three and six months ended December 31, 2023, the Company did not have any material changes in its non-cancelable contractual obligations (other than activities in the ordinary course business). See Note 11. 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 into two remaining litigations. On September 10, 2021, the Court of Chancery of the State of Delaware (the “Court”) entered an order consolidating two 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 $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. A realized gain of $62,647 was recognized in Other income (expense), net on the 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 $48,500, of which $28,000 has been paid as of December 31, 2023 , with approximately $20,500 accrued for in Accounts payable, accrued and other current liabilities . The MSGN Settlement Agreement was approved by the Court on August 14, 2023, which constituted the final judgment in the action. MSG Networks has a dispute with its insurers over whether and to what extent there is insurance coverage for the settlement. Unless MSG Networks Inc. and the insurers settle that insurance dispute, it is expected to be resolved in a pending Delaware insurance coverage action. In the interim, and subject to final resolution of the parties’ insurance coverage dispute, certain of MSG Networks’ insurers agreed to advance $20,500 to fund the settlement and related class notice costs. 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. |
Credit Facilities and Convertib
Credit Facilities and Convertible Notes | 6 Months Ended |
Dec. 31, 2023 | |
Line of Credit Facility [Abstract] | |
Credit Facilities and Convertible Notes | Credit Facilities and Convertible Notes The following table summarizes the presentation of the outstanding balances under the Company’s credit agreements as of December 31, 2023 and June 30, 2023: As of December 31, 2023 June 30, 2023 Principal Unamortized Deferred Financing Costs Net Principal Unamortized Deferred Financing Costs Net Current portion MSG Networks Term Loan $ 891,000 $ (890) $ 890,110 $ 82,500 $ — $ 82,500 Current portion of long-term debt, net $ 891,000 $ (890) $ 890,110 $ 82,500 $ — $ 82,500 As of December 31, 2023 June 30, 2023 Principal Debt Discount Unamortized Deferred Financing Costs Net Principal Debt Discount Unamortized Deferred Financing Costs Net Non-current portion MSG Networks Term Loan $ — $ — $ — $ — $ 849,750 $ — $ (1,483) $ 848,267 LV Sphere Term Loan Facility 275,000 — (4,331) 270,669 275,000 — (4,880) 270,120 3.50% Convertible Senior Notes 258,750 (7,116) (890) 250,744 — — — — Long-term debt, net $ 533,750 $ (7,116) $ (5,221) $ 521,413 $ 1,124,750 $ — $ (6,363) $ 1,118,387 MSG Networks Credit Facilities General. MSGN Holdings, L.P. (“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. have senior secured credit facilities pursuant to a credit agreement (as amended and restated on October 11, 2019, the “MSGN Credit Agreement”) consisting of: (i) an initia l $1,100,000 term l oan 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 of five years. Up to $35,000 of the MSGN Revolving Credit Facility is available for the issuance of letters of credit. As of December 31, 2023, there were no borrowings or letters of credit issued and outstanding under the MSGN Revolving Credit Facility. Interest Rates. Borrowings under the MSGN Credit Agreement bear interest at a floating rate, which at the option of MSGN L.P. may be either (i) a base rate plus an additional rate ranging from 0.25% to 1.25% per annum (determined based on a total net 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). Upon a payment default in respect of principal, interest or other amounts due and payable under the MSGN Credit Agreement or related loan documents, default interest will accrue on all overdue amounts at an additional rate of 2.00% per annum. The MSGN Credit Agreement requires that MSGN L.P. pay a commitment fee ranging from 0.225% to 0.30% (determined based on a total leverage ratio) in respect of the average daily unused commitments under the MSGN Revolving Credit Facility. MSGN L.P. will also be required to pay customary letter of credit fees, as well as fronting fees, to banks that issue letters of credit. The interest rate on the MSGN Term Loan Facility as of December 31, 2023 was 7.46% . Principal Repayments. Subject to customary notice and minimum amount conditions, MSGN L.P. may voluntarily repay outstanding loans under the MSGN Credit Agreement at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to Eurodollar loans). The MSGN Term Loan Facility amortizes quarterly in accordance with its terms beginning March 31, 2020 through September 30, 2024 with a final maturity date of October 11, 2024. MSGN L.P. is required to make mandatory prepayments in certain circumstances, including without limitation from the net cash proceeds of certain sales of assets (including MSGN Collateral) or casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights) and the incurrence of certain indebtedness, subject to certain exceptions. Covenants. The MSGN Credit Agreement generally requires the MSGN Holdings Entities and MSGN L.P. and its restricted subsidiaries on a c onsolidated basis to comply with a maximum total leverage ratio of 5.50:1.00, subject, at the option of MSGN L.P. to an upward adjustment to 6.00:1.00 during the continuance of certain events. As of December 31, 2023, the total leverage ratio was 5.29:1:00. In addition, the MSGN Credit Agreement requires a minimum interest coverage ratio of 2.00:1.00 for the MSGN Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis. As of December 31, 2023, the interest coverage ratio was 2.47:1:00. All borrowings under the MSGN Credit Agreement are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties. As of December 31, 2023, the MSGN Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis were in compliance with the covenants. In addition to the financial covenants discussed above, the MSGN Credit Agreement and the related security agreement contain certain customary representations and warranties, affirmative covenants, and events of default. The MSGN Credit Agreement contains certain restrictions 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 a five-year, $275,000 senior secured term loan facility (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 December 31, 2023 was 9.83%. 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 fiscal 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. 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 fiscal 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. Delayed Draw Term Loan Facility On April 20, 2023, the Company entered into a delayed draw term loan facility (the “DDTL Facility”) with MSG Entertainment Holdings, LLC (“MSG Entertainment Holdings”). Pursuant to the DDTL Facility, MSG Entertainment Holdings committed to lend up to $65,000 in delayed draw term loans to the Company on an unsecured basis for a period of 18 months following the consummation of the MSGE Distribution. On July 14, 2023, the Company drew down the full amount of the $65,000 under the DDTL Facility. On August 9, 2023, the Company repaid all amounts outstanding under the DDTL Facility (including accrued interest and commitment fees) by delivering to MSG Entertainment Holdings approximately 1,923 shares of MSG Entertainment Class A common stock . 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. The Company used $14,309 of the net proceeds from the Offering to fund the cost of entering into the capped call transactions described below, with the remaining net proceeds from the Offering designated for general corporate purposes, including capital for Sphere-related growth initiatives. The capped call transactions met all of the applicable criteria for equity classification in accordance with ASC 815-10-15-74(a), “Derivatives and Hedging—Embedded Derivatives—Certain Contracts Involving an Entity’s Own Equity,” and were recorded as a reduction to Equity on the Company’s condensed consolidated statements of stockholder’s equity and condensed consolidated balance sheets. On December 8, 2023, the Company entered into an Indenture, dated as of December 8, 2023 (the “Indenture”), with U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), relating to 3.50% Convertible Senior Notes. The 3.50% Convertible Senior Notes constitute a senior general unsecured obligation of the Company. The 3.50% Convertible Senior Notes bear interest at a rate of 3.50% per year, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2024. The 3.50% Convertible Senior Notes will mature on December 1, 2028, unless earlier redeemed, repurchased or converted. Subject to the terms of the Indenture, the 3.50% Convertible Senior Notes may be converted at an initial conversion rate of 28.1591 shares of Class A Common Stock per $1,000 principal amount of 3.50% Convertible Senior Notes (equivalent to an initial conversion price of approximately $35.51 per share of Class A Common Stock). Upon conversion of the 3.50% Convertible Senior Notes, the Company will pay or deliver, as the case may be, cash, shares of Class A Common Stock or a combination of cash and shares of Class A Common Stock, at the Company’s election, in accordance with the Indenture. Holders of the 3.50% Convertible Senior Notes may convert their 3.50% Convertible Senior Notes at their option at any time on or after September 1, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date. Holders of the 3.50% Convertible Senior Notes will also have the right to convert the 3.50% Convertible Senior Notes prior to September 1, 2028, but only upon the occurrence of specified events described in the Indenture. The conversion rate is subject to anti-dilution adjustments if certain events occur. Prior to December 6, 2026, the 3.50% Convertible Senior Notes will not be redeemable. On or after December 6, 2026, the Company may redeem for cash all or part of the 3.50% Convertible Senior Notes (subject to certain exceptions), at its option, if the last reported sale price of the Class A Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any period of 30 consecutive trading days (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 3.50% Convertible Senior Notes to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date. No sinking fund is provided for the 3.50% Convertible Senior Notes. If certain corporate events occur or the Company delivers a notice of redemption prior to the maturity date of the 3.50% Convertible Senior Notes, and a holder elects to convert its 3.50% Convertible Senior Notes in connection with such corporate event or notice of redemption, as the case may be, the Company will, under certain circumstances, increase the conversion rate for the 3.50% Convertible Senior Notes so surrendered for conversion by a number of additional shares of Class A Common Stock in accordance with the Indenture. No adjustment to the conversion rate will be made if the price paid or deemed to be paid per share of Class A Common Stock in such corporate event or redemption, as the case may be, is either less than $28.41 per share or exceeds $280.00 per share. If a specified “Fundamental Change” (as defined in the Indenture) occurs prior to the maturity date of the 3.50% Convertible Senior Notes, under certain circumstances each holder may require the Company to repurchase all or part of its 3.50% Convertible Senior Notes at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest to, but not including, the repurchase date. Under the Indenture, the 3.50% Convertible Senior Notes may be accelerated upon the occurrence of certain events of default. In the case of an event of default with respect to the 3.50% Convertible Senior Notes arising from specified events of bankruptcy or insolvency of the Company, 100% of the principal of and accrued and unpaid interest on the 3.50% Convertible Senior Notes will automatically become due and payable. If any other event of default with respect to the 3.50% Convertible Senior Notes under the Indenture occurs or is continuing, the Trustee or holders of at least 25% in aggregate principal amount of the then outstanding 3.50% Convertible Senior Notes may declare the principal amount of the 3.50% Convertible Senior Notes to be immediately due and payable. On December 5, 2023, in connection with the pricing of the 3.50% Convertible Senior Notes, and on December 6, 2023, in connection with the exercise in full by the initial purchasers of their option to purchase additional 3.50% Convertible Senior Notes, the Company entered into capped call transactions with certain of the initial purchasers of the 3.50% Convertible Senior Notes or their respective affiliates and other financial institutions, pursuant to capped call confirmations. The capped call transactions are expected generally to reduce the potential dilution to the Class A Common Stock upon any conversion of the 3.50% Convertible Senior Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 3.50% Convertible Senior Notes, as the case may be, with such reduction and/or offset subject to a cap based on a cap price initially equal to approximately $42.62 per share (which represents a premium of approximately 50% over the last reported sale price of the Class A Common Stock of $28.41 per share on the New York Stock Exchange (the “NYSE”) on December 5, 2023), and is subject to certain adjustments under the terms of the capped call transactions. Interest payments and loan principal repayments made by the Company under the credit agreements were as follows: Interest Payments Loan Principal Repayments Six Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 MSG Networks Credit Facilities $ 34,825 $ 24,468 $ 41,250 $ 24,750 LV Sphere Term Loan Facility 13,412 — — — Delayed Draw Term Loan Facility 460 — 65,000 — Total Payments $ 48,697 $ 24,468 $ 106,250 $ 24,750 The carrying value and fair value of the Company’s debt reported in the accompanying condensed consolidated balance sheets are as follows: As of December 31, 2023 June 30, 2023 Carrying Value (a) Fair Carrying Value (a) Fair Liabilities: MSG Networks Credit Facilities $ 891,000 $ 886,545 $ 932,250 $ 927,589 LV Sphere Term Loan Facility 275,000 273,625 275,000 272,250 3.50% Convertible Senior Notes 251,634 298,779 — — Total Long-term debt $ 1,417,634 $ 1,458,949 $ 1,207,250 $ 1,199,839 _________________ (a) The total carrying value of the Company’s debt as of December 31, 2023 and June 30, 2023 is equal to the current and non-current principal payments for the Company’s credit agreements, net of discount, excluding unamortized deferred financing costs of $6,111 and $6,363, respectively. The Company’s long-term debt is classified within Level II of the fair value hierarchy as it is valued using quoted indices of similar instruments for which the inputs are readily observable. |
Pension Plans and Other Postret
Pension Plans and Other Postretirement Benefit Plan | 6 Months Ended |
Dec. 31, 2023 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Pension Plans and Other Postretirement Benefit Plan | 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, 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 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 Plans are collectively referred to as the “Pension Plans.” Prior to the MSGE Distribution, the Company sponsored two 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 MSGE employees was transferred to MSG Entertainment in connection with MSGE Distribution. In addition, the liabilities associated with the postretirement plan for MSGE employees were transferred from the Company to MSG Entertainment in connection with the MSGE Distribution. See Note 13. Pension Plans and Other Postretirement Benefit Plans, to the consolidated financial statements included in the 2023 Form 10-K, 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 and six months ended December 31, 2023 and 2022. 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. Pension Plans Postretirement Plan Three Months Ended Three Months Ended December 31, December 31, 2023 2022 2023 2022 Service cost $ 61 $ 123 $ 5 $ 15 Interest cost 429 1,189 17 19 Expected return on plan assets 79 (1,719) — — Recognized actuarial loss (gain) 120 501 (17) 9 Net periodic benefit cost $ 689 $ 94 $ 5 $ 43 Pension Plans Postretirement Plan Six Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Service cost $ 122 $ 246 $ 10 $ 30 Interest cost 868 2,378 34 38 Expected return on plan assets (134) (3,438) — — Recognized actuarial loss (gain) (104) 1,002 (34) 18 Net periodic benefit cost $ 752 $ 188 $ 10 $ 86 Contributions for Qualified Defined Benefit Plans The Company sponsors one non-contributory, qualified defined benefit pension plan covering certain of its union employees, the “Networks 1212 Plan.” The Company contributed $500 to the Networks 1212 Plan during the six months ended December 31, 2023. The Company contributed $500 to the Networks 1212 Plan during the six months ended December 31, 2022. The Company did not contribute any amounts to the Networks 1212 Plan during the three months ended December 31, 2023 and 2022. Defined Contribution Plans The Company sponsors the MSGN Holdings, L.P. Excess Savings Plan, the Sphere Entertainment Excess Savings Plan, and the Madison Square Garden 401(k) Savings Plan (collectively, “Savings Plans”). For the three and six months ended December 31, 2023 and 2022, expenses related to the Savings Plans included in the accompanying condensed consolidated statements of operations are as follows: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Continuing Operations $ 2,003 $ 1,734 $ 3,213 $ 3,121 Discontinued Operations — 1,008 — 2,186 Total Savings Plan Expenses $ 2,003 $ 2,742 $ 3,213 $ 5,307 Executive Deferred Compensation See Note 13. Pension Plans and Other Postretirement Benefit Plans, included in the Company’s Audited Consolidated Annual Financial Statements (as defined below), for more information regarding the Company’s Executive Deferred Compensation Plan (the “Deferred Compensation Plan”). The Company recorded compensation expense of $245 and $138 for the three and six months ended December 31, 2023, respectively, and $160 and $6 for the three and six months ended December 31, 2022, respectively, within Selling, general, and administrative expenses in the condensed, consolidated statements of operations to reflect the remeasurement of the Deferred Compensation Plan liability. In addition, the Company recorded gains of $245 and $138 for the three and six months ended December 31, 2023, respectively, and $160 and $6 for the three and six months ended December 31, 2022, respectively, within Other (expense) income, net in the condensed, consolidated statements of operations to reflect remeasurement of the fair value of assets under the Deferred Compensation Plan. The following table summarizes amounts recognized related to the Deferred Compensation Plan in the condensed consolidated balance sheets: As of December 31, June 30, Non-current assets (included in Other non-current assets) $ 2,856 $ 1,087 Non-current liabilities (included in Other non-current liabilities) $ (2,855) $ (1,087) |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based Compensation The Company has three 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 12. Share-based Compensation, to the consolidated financial statements included in the 2023 Form 10-K, 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: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Share-based compensation (a) $ 12,072 $ 16,355 $ 16,955 $ 27,845 Fair value of awards vested (b) $ 3,267 $ 2,995 $ 33,421 $ 35,127 _________________ (a) Share-based compensation excludes costs that have been capitalized of $1,574 and $1,802 for the six months ended December 31, 2023 and 2022, respectively. (b) To fulfill required statutory tax withholding obligations for the applicable income and other employment taxes, RSUs and PSUs with an aggregate value of $459 and $14,435, and $225 and $14,741 were retained by the Company during the three and six months ended December 31, 2023, and 2022, respectively. As of December 31, 2023, there was $93,115 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 2.55 years. For the three and six months ended December 31, 2023 all restricted stock units and stock options were excluded from the anti-dilutive calculation because the Company reported a net loss for the period and, therefore, their impact on reported loss per share would have been antidilutive. Award Activity RSUs During the six months ended December 31, 2023 and December 31, 2022, approximately 514 and 650 RSUs were granted, respectively, and approximately 630 and 546 RSUs vested, respectively. PSUs During the six months ended December 31, 2023 and December 31, 2022, approximately 404 and 566 PSUs were granted, respectively, and approximately 273 and 91 PSUs vested, respectively. Stock options During the six months ended December 31, 2023, approximately 3,344 stock options were granted. No stock options were granted during the six months ended December 31, 2022 and no options vested during the six months ended December 31, 2023 and December 31, 2022. SARs During the six months ended December 31, 2023, approximately 188 SARs were granted, and no SARs vested. During the six months ended December 31, 2022 no SARs were granted or vested. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock The Company is authorized to issue 15,000 shares of preferred stock, par value $0.01. As of December 31, 2023 and June 30, 2023, 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: Three Months Ended December 31, 2023 Pension Plans and Cumulative Accumulated Balance as of September 30, 2023 $ (5,316) $ (5,667) $ (10,983) Other comprehensive income: Other comprehensive income before reclassifications — 6,199 6,199 Amounts reclassified from accumulated other comprehensive loss (a) 103 — 103 Income tax expense (27) (1,606) (1,633) Other comprehensive income, total 76 4,593 4,669 Balance as of December 31, 2023 $ (5,240) $ (1,074) $ (6,314) Three Months Ended December 31, 2022 Pension Plans and Cumulative Accumulated Balance as of September 30, 2022 $ (39,787) $ (21,194) $ (60,981) Other comprehensive income: Other comprehensive income before reclassifications — 14,803 14,803 Amounts reclassified from accumulated other comprehensive loss (a) 510 — 510 Income tax expense (176) (2,719) (2,895) Other comprehensive income, total 334 12,084 12,418 Balance as of December 31, 2022 $ (39,453) $ (9,110) $ (48,563) Six Months Ended December 31, 2023 Pension Plans and Postretirement Plan Cumulative Accumulated Balance as of June 30, 2023 $ (5,138) $ 200 $ (4,938) Other comprehensive loss: Other comprehensive loss before reclassifications — (1,720) (1,720) Amounts reclassified from accumulated other comprehensive loss (a) (138) — (138) Income tax benefit 36 446 482 Other comprehensive loss, total (102) (1,274) (1,376) Balance as of December 31, 2023 $ (5,240) $ (1,074) $ (6,314) Six Months Ended December 31, 2022 Pension Plans and Cumulative Accumulated Balance as of June 30, 2022 $ (40,287) $ (8,068) $ (48,355) Other comprehensive income (loss): Other comprehensive loss before reclassifications — (1,277) (1,277) Amounts reclassified from accumulated other comprehensive loss (a) 1,020 — 1,020 Income tax (expense) benefit (186) 235 49 Other comprehensive income (loss), total 834 (1,042) (208) Balance as of December 31, 2022 $ (39,453) $ (9,110) $ (48,563) _________________ (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 12. Pension Plans and Other Postretirement Benefit Plans). |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of December 31, 2023, certain m embers of the Dolan family, including certain trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”), for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, collectively beneficially owned 100% of the Company’s outstanding Class B Common Stock and approximately 5.6% of the Company’s outstanding Class A Common Stock (inclusive of options exercisable within 60 days of December 31, 2023 ). Such shares of the Company’s Class A Common Stock and Class B Common Stock, collectively, represent approximately 72.1% 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, MSG Sports and AMC Networks Inc. See Note 17. Related Party Transactions, to the consolidated financial statements included in the 2023 Form 10-K, for a description of the Company’s related party arrangements. There have been no material changes in such related party arrangements except as described below. The Company has entered into arrangements with (i) MSG Sports, pursuant to which MSG Sports provides certain sponsorship and other business operations services to the Company in exchange for service fees, (ii) MSG Entertainment, pursuant to which MSG Entertainment provides certain sponsorship-related account management services to the Company in exchange for service fees, (iii) MSG Sports and MSG Entertainment, pursuant to which the three companies have agreed to allocate expenses in connection with the use by each company of aircraft owned or leased by MSG Entertainment and MSG Sports, and (iv) MSG Sports and MSG Entertainment pursuant to which the Company has certain sponsorship rights. In addition, in connection with the Company’s disposition of the MSGE Retained Interest, the Company no longer has “demand” or “piggyback” registration rights with respect to the MSGE Retained Interest. See Note 6. Investments in Nonconsolidated Affiliates, for additional information on the MSGE Retained Interest. The Company has also entered into certain commercial agreements with its equity method investment nonconsolidated affiliates in connection with Sphere. The Company recorded $2,374 and $8,042 for the three and six months ended December 31, 2023, respectively, and $22,416 and $73,086 for the three and six months ended December 31, 2022, respectively , of capital expenditures in connection with services provided to the Company under these agreements. As of December 31, 2023 and June 30, 2023, accrued liabilities associated with related parties were $17,575 and $13,412, respectively, and are reported under Accounts payable, accrued and other current liabilities in the accompanying condensed consolidated balance sheets. From time to time, the Company enters into arrangements with 605, LLC (“605”). Kristin Dolan, a director of the Company and the spouse of James L. Dolan, the Executive Chairman and Chief Executive Officer of the Company, founded and was the Chief Executive Officer of 605, an audience measurement and data analytics company in the media and entertainment industries, until February 2023. The Company’s Audit Committee approved the entry into one or more agreements with 605 to provide certain data analytics services to the Company for an aggregate amount of up to $1,000. On September 13, 2023, 605 was sold to iSpot.tv, and James L. Dolan and Kristin A. Dolan now hold a minority interest in iSpot.tv. As a result, from and after September 13, 2023, 605 is no longer considered to be a related party. Revenues and Operating Expenses The following table summarizes the composition and amounts of the transactions with the Company’s affiliates. These amounts are reflected in revenues and operating expenses in the accompanying condensed consolidated statements of operations for the three and six months ended December 31, 2023 and 2022: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Revenues $ 1,657 $ — $ 2,047 $ — Operating expenses (credits): Media rights fees 44,485 43,433 88,670 86,200 Cost reimbursement from MSG Sports - MSG Sports Services Agreement — (9,475) — (18,992) Corporate general and administrative expenses, net - MSG Entertainment Transition Services Agreement (a) 25,780 — 56,117 — Origination, master control and technical services 1,257 1,232 2,514 2,464 Other operating expenses (credits), net (b) 7,497 (285) 8,041 (296) Total operating expenses, net (c) $ 79,019 $ 34,905 $ 155,342 $ 69,376 _________________ (a) Included in the six months ended, Corporate general and administrative expenses, net - MSG Entertainment Transition Services Agreement (the “MSGE TSA”) are $2,805 related to Restructuring charges for employees who provided services to the Company under the MSGE TSA. (b) Other operating expenses, net, includes reimbursements to MSG Entertainment for aircraft-related expenses, professional and payroll fees. (c) Of the total operating expenses, net, $47,459 and $93,537 for three and six months ended December 31, 2023, respectively, and $44,859 and $89,107 for the three and six months ended December 31, 2022, respectively, are included in direct operating expenses in the accompanying condensed consolidated statements of operations, and $31,560 and $61,805 for three and six months ended December 31, 2023, respectively, and $(9,954) and $(19,731) for the three and six months ended December 31, 2022, respectively, are included as net credits in selling, general, and administrative expenses. Revenues Revenues from related parties relate primarily to certain advertising agreements between MSG Networks and MSG Sports. |
Segment Information
Segment Information | 6 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information As of December 31, 2023, the Company was comprised of two 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. The Company evaluates segment performance based on several factors, of which the key financial measure is adjusted operating income (loss), a non-GAAP financial measure. We define adjusted operating income (loss) as operating income (loss) 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 and acquisition-related costs, including merger-related litigation expenses, (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 and acquisition-related costs, when applicable, because the Company does not consider such costs to be indicative of the ongoing operating performance of the Company as they result from an event that is of a non-recurring nature, thereby enhancing comparability. In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the 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 income (loss) whereas gains and losses related to the remeasurement of the assets under the Company’s Executive Deferred Compensation Plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recognized in Other income (expense), net, which is not reflected in Operating income (loss). The Company believes adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of its business segments and the Company on a consolidated basis. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze the Company’s performance. The Company uses revenues and adjusted operating income (loss) measures as the most important indicators of its business performance, and evaluates management’s effectiveness with specific reference to these indicators. Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. The Company has presented the components that reconcile operating income (loss), the most directly comparable GAAP financial measure, to adjusted operating income (loss). Information as to the operations of the Company’s reportable segments is set forth below. Three Months Ended December 31, 2023 Sphere MSG Networks Total Revenues $ 167,799 $ 146,358 $ 314,157 Direct operating expenses (67,338) (92,428) (159,766) Selling, general and administrative expenses (97,804) (17,716) (115,520) Depreciation and amortization (78,044) (1,987) (80,031) Impairment and other losses, net (117,235) — (117,235) Restructuring charges (1,287) — (1,287) Operating (loss) income $ (193,909) $ 34,227 $ (159,682) Interest income 5,926 Interest expense (25,828) Other expense, net (1,130) Loss from operations before income taxes $ (180,714) Reconciliation of operating (loss) income to adjusted operating income: Operating (loss) income $ (193,909) $ 34,227 $ (159,682) Add back: Share-based compensation 10,985 931 11,916 Depreciation and amortization 78,044 1,987 80,031 Restructuring charges 1,287 — 1,287 Impairment and other losses, net 117,235 — 117,235 Merger and acquisition related costs, net of insurance recoveries 200 180 380 Amortization for capitalized cloud computing arrangement costs — 22 22 Remeasurement of deferred compensation plan liabilities 245 — 245 Adjusted operating income $ 14,087 $ 37,347 $ 51,434 Other information: Capital expenditures $ 44,298 $ 3,103 $ 47,401 Three Months Ended December 31, 2022 Sphere MSG Networks Total Revenues $ 643 $ 158,898 $ 159,541 Direct operating expenses — (90,400) (90,400) Selling, general and administrative expenses (74,759) (29,656) (104,415) Depreciation and amortization (5,749) (1,637) (7,386) Other gains 1,000 — 1,000 Restructuring charges (4,087) (3,988) (8,075) Operating (loss) income $ (82,952) $ 33,217 $ (49,735) Interest income 2,669 Other expense, net (1,355) Loss from operations before income taxes $ (48,421) Reconciliation of operating (loss) income to adjusted operating (loss) income: Operating (loss) income $ (82,952) $ 33,217 $ (49,735) Add back: Share-based compensation 13,056 3,299 16,355 Depreciation and amortization 5,749 1,637 7,386 Restructuring charges 4,087 3,988 8,075 Other gains (1,000) — (1,000) Merger and acquisition related costs (58) 5,544 5,486 Amortization for capitalized cloud computing arrangement costs 83 44 127 Remeasurement of deferred compensation plan liabilities 154 — 154 Adjusted operating (loss) income (60,881) $ 47,729 $ (13,152) Other information: Capital expenditures $ 277,014 $ 2,665 $ 279,679 Six Months Ended December 31, 2023 Sphere MSG Networks Total Revenues $ 175,578 $ 256,586 $ 432,164 Direct operating expenses (75,143) (169,122) (244,265) Selling, general and administrative expenses (181,954) (20,710) (202,664) Depreciation and amortization (90,421) (3,869) (94,290) Impairment and other losses, net (115,738) — (115,738) Restructuring charges (4,678) — (4,678) Operating (loss) income $ (292,356) $ 62,885 $ (229,471) Interest income 10,304 Interest expense (25,828) Other income, net 41,066 Loss from operations before income taxes $ (203,929) Reconciliation of operating (loss) income to adjusted operating (loss) income: Operating (loss) income $ (292,356) $ 62,885 $ (229,471) Add back: Share-based compensation 14,904 1,895 16,799 Depreciation and amortization 90,421 3,869 94,290 Restructuring charges 4,678 — 4,678 Impairment and other losses, net 115,738 — 115,738 Merger and acquisition related costs, net of insurance recoveries (2,502) (6,161) (8,663) Amortization for capitalized cloud computing arrangement costs — 44 44 Remeasurement of deferred compensation plan liabilities 138 — 138 Adjusted operating (loss) income $ (68,979) $ 62,532 $ (6,447) Other information: Capital expenditures $ 227,461 $ 4,511 $ 231,972 Six Months Ended December 31, 2022 Sphere MSG Networks Total Revenues $ 1,293 $ 281,377 $ 282,670 Direct operating expenses — (165,820) (165,820) Selling, general and administrative expenses (151,950) (47,096) (199,046) Depreciation and amortization (10,264) (3,255) (13,519) Other gains 3,000 — 3,000 Restructuring charges (4,087) (3,988) (8,075) Operating (loss) income $ (162,008) $ 61,218 $ (100,790) Interest income 6,002 Other expense, net (1,770) Loss from operations before income taxes $ (96,558) Reconciliation of operating (loss) income to adjusted operating (loss) income: Operating (loss) income $ (162,008) $ 61,218 $ (100,790) Add back: Share-based compensation 22,842 5,003 27,845 Depreciation and amortization 10,264 3,255 13,519 Restructuring charges 4,087 3,988 8,075 Other gains (3,000) — (3,000) Merger and acquisition related costs 2,691 7,445 10,136 Amortization for capitalized cloud computing arrangement costs 160 88 248 Adjusted operating (loss) income $ (124,964) $ 80,997 $ (43,967) Other information: Capital expenditures $ 537,253 $ 3,892 $ 541,145 Concentration of Risk Accounts receivable, net in the accompanying condensed consolidated balance sheets as of December 31, 2023 and June 30, 2023 include amounts due from the following individual customers, which accounted for the noted percentages of the gross balance: As of December 31, June 30, Customer A 13 % 23 % Customer B 13 % 22 % Customer C 10 % 17 % Revenues in the accompanying condensed consolidated statements of operations for the three and six months ended December 31, 2023 and December 31, 2022 include amounts from the following individual customers: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Customer 1 11 % 24 % 16 % 27 % Customer 2 11 % 24 % 16 % 27 % Customer 3 9 % 19 % 13 % 22 % |
Additional Financial Informatio
Additional Financial Information | 6 Months Ended |
Dec. 31, 2023 | |
Additional Financial Information [Abstract] | |
Additional Financial Information | Additional Financial Information The following table provides a summary of the amounts recorded as cash, cash equivalents and restricted cash. As of December 31, June 30, Cash and cash equivalents $ 614,549 $ 131,965 Restricted cash 13,278 297,149 Total cash, cash equivalents and restricted cash $ 627,827 $ 429,114 The Company’s c ash, cash equivalents, and restricted cash are classified within Level I of the fair value hierarchy as it is 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: As of December 31, June 30, Prepaid expenses $ 21,201 $ 22,616 Note and other receivables 11,050 21,453 Inventory 894 — Current deferred production content costs 9,772 6,524 Other 3,893 5,492 Total prepaid expenses and other current assets $ 46,810 $ 56,085 Accounts payable, accrued and other current liabilities consisted of the following: As of December 31, June 30, Accounts payable $ 28,032 $ 39,654 Accrued payroll and employee related liabilities 61,316 75,579 Cash due to promoters 67,121 73,611 Capital expenditure accruals 164,247 236,593 Accrued legal fees 23,159 53,857 Other accrued expenses 48,028 36,437 Total accounts payable, accrued and other current liabilities $ 391,903 $ 515,731 Other income (expense), net includes the following: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Gain on litigation settlement $ — $ — $ 62,647 $ — Realized loss on equity method investments — — (19,027) — Other (1,130) (1,355) (2,554) (1,770) Total other (expense) income, net $ (1,130) $ (1,355) $ 41,066 $ (1,770) Income Taxes During the six months ended December 31, 2023 and 2022, the Company made income tax payments, net of refunds, of $18,789 and $4,075, respectively. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company reports on a fiscal year basis ending on June 30 th (“Fiscal Year”). In these unaudited condensed consolidated financial statements, the years ended on June 30, 2024 and 2023 are referred to as “Fiscal Year 2024” and “Fiscal Year 2023,” respectively. The Company has presented both the MSG Entertainment business and Tao Group Hospitality as discontinued operations for all periods presented. See Note 3. Discontinued Operations, for further discussion on accounting for the MSGE Distribution and Tao Group Hospitality Disposition. 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”), and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for Fiscal Year 2023 included in the 2023 Form 10-K. In the opinion of the Company, the accompanying condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the Company’s financial position as of December 31, 2023 and its results of operations for the three and six months ended December 31, 2023 and 2022, and cash flows for the six months ended December 31, 2023 and 2022. The condensed consolidated financial statements and the accompanying notes as of December 31, 2023 were derived from audited annual consolidated financial statements but do not contain all of the footnote disclosures from the audited annual 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. Our MSG Networks segment earns a higher share of its annual revenues in the second and third quarters of its fiscal year as a result of MSG Networks’ advertising revenue being largely derived from the sale of inventory in its live NBA and NHL professional sports programming. |
Reclassifications | Reclassifications For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation in accordance with GAAP. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements of the Company include the accounts of Sphere Entertainment Co. and its subsidiaries. They also historically included accounts of Tao Group Hospitality, MSG Entertainment, and Boston Calling Events, LLC (“BCE”) until their dispositions on May 3, 2023, April 20, 2023, and December 2, 2022, respectively. All significant intercompany transactions and balances have been eliminated in consolidation. Prior to their dispositions, Tao Group Hospitality and BCE were consolidated with the equity owned by other stockholders shown as redeemable or nonredeemable noncontrolling interests of discontinued operations in the accompanying condensed consolidated balance sheets, and the other stockholders’ portion of net earnings (loss) and other comprehensive income (loss) shown as net income (loss) or comprehensive income (loss) attributable to redeemable or nonredeemable noncontrolling interests from discontinued operations in the accompanying consolidated statements of operations and consolidated statements of comprehensive income (loss), respectively. See Note 3. Discontinued Operations, for details regarding the Tao Group Hospitality Disposition, and MSGE Distribution. See Note 2. Summary of Significant Accounting Policies, to the audited annual consolidated financial statements included in the 2023 Form 10-K, regarding the classification of redeemable noncontrolling interests of Tao Group Hospitality. |
Use of Estimates | 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, 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. |
Production Costs for the Company's Original Immersive Productions | Production Costs for the Company’s Original Immersive Productions The Company debuted its first original immersive production, Postcard From Earth TM , on October 6, 2023, which resulted in the amortization of the related production costs. The following reflects the Company’s complete policies with respect to immersive production costs. The Company defers certain costs during the production phase of its original immersive productions for Sphere that are directly related to production activities. Such costs include, but are not limited to, fees paid to writers, directors and producers as well as video and music production costs and production-specific overhead. For purposes of evaluating the recognition of amortization and any potential impairment, deferred immersive production costs are classified based on their predominant monetization strategy. The determination of the predominant monetization strategy is made at the commencement of production and is based on the means by which the Company expects to derive third-party revenues from use of the content. The Company’s primary monetization strategy and classification for its current content is on an individual production basis, which the Company defines as content where the lifetime value is predominantly derived from third-party revenues that are directly attributable to the specific production. The classification of content only changes if there is a significant change to the production’s monetization strategy relative to management’s initial assessment. Deferred immersive production costs are amortized beginning in the month the production debuts, in the same ratio that current period actual revenue bears to estimated remaining unrecognized ultimate revenue as of the beginning of the current fiscal year. Estimates of ultimate revenues are prepared on an individual production basis and reviewed regularly by management and revised where necessary to reflect the most current information. Ultimate revenues reflect management’s estimates of future revenue over a period not to exceed ten years following the premiere of the production. Deferred immersive production costs are subject to recoverability assessments whenever there is an indication of potential impairment. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2023-07, Improvement 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 will be effective for the Company in Fiscal Year 2025 and is required to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s condensed consolidated financial statements. 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 will be effective for the Company in Fiscal Year 2026 and is required to be applied prospectively. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s condensed consolidated financial statements. |
Revenue, Remaining Performance Obligation | 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. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The table below sets forth operating results of discontinued operations for the three and six months ended December 31, 2022. Amounts presented below differ from historically reported results for the MSG Entertainment and Tao Group Hospitality business segments due to reclassifications and adjustments made for purposes of discontinued operations. Three Months Ended December 31, 2022 MSG Entertainment Tao Group Hospitality Eliminations Total Revenues $ 348,637 $ 134,645 $ (625) $ 482,657 Direct operating expenses (181,730) (76,903) 871 (257,762) Selling, general and administrative expenses (36,237) (42,116) (462) (78,815) Depreciation and amortization (15,586) (6,087) — (21,673) Impairment and other gains, net 4,412 473 — 4,885 Restructuring charges (5,607) — — (5,607) Operating income 113,889 10,012 (216) 123,685 Interest income 911 23 — 934 Interest expense (58) (836) — (894) Other loss, net (2,171) (327) — (2,498) Income from operations before income taxes 112,571 8,872 (216) 121,227 Income tax expense (18,479) (4,883) — (23,362) Net income 94,092 3,989 (216) 97,865 Less: Net (loss) income attributable to nonredeemable noncontrolling interests (181) 125 — (56) Less: Net income attributable to redeemable noncontrolling interests — 3,029 — 3,029 Net income from discontinued operations attributable to Sphere Entertainment Co.’s stockholders $ 94,273 $ 835 $ (216) $ 94,892 Six Months Ended December 31, 2022 MSG Entertainment Tao Group Hospitality Eliminations Total Revenues $ 494,712 $ 267,221 $ (1,187) $ 760,746 Direct operating expenses (282,393) (154,066) 1,247 (435,212) Selling, general and administrative expenses (64,966) (84,659) — (149,625) Depreciation and amortization (31,572) (13,723) — (45,295) Impairment and other gains, net 4,412 473 — 4,885 Restructuring charges (5,607) — — (5,607) Operating income 114,586 15,246 60 129,892 Interest income 1,519 36 — 1,555 Interest expense (1,083) (1,978) — (3,061) Other (loss) income, net (1,285) 727 — (558) Income from operations before income taxes 113,737 14,031 60 127,828 Income tax expense (21,415) (6,288) — (27,703) Net income 92,322 7,743 60 100,125 Less: Net (loss) income attributable to nonredeemable noncontrolling interests (553) 87 — (466) Less: Net income attributable to redeemable noncontrolling interests — 4,153 — 4,153 Net income from discontinued operations attributable to Sphere Entertainment Co.’s stockholders $ 92,875 $ 3,503 $ 60 $ 96,438 The table below sets forth, for the period presented, significant selected financial information related to discontinued activities included in the accompanying condensed consolidated financial statements: Three Months Ended Six Months Ended December 31, 2022 December 31, 2022 MSG Entertainment Tao Group Hospitality MSG Entertainment Tao Group Hospitality Non-cash items included in net income: Depreciation and amortization $ 15,586 $ 6,087 $ 31,572 $ 13,723 Share-based compensation (credit) expense, net (543) 2,374 1,104 4,426 Cash flows from investing activities: Capital expenditures, net $ 4,353 $ 5,686 $ 9,208 $ 11,455 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Revenue Recognition [Abstract] | |
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 and six months ended December 31, 2023 and 2022: Three Months Ended December 31, 2023 Sphere MSG Networks Total Event-related (a) $ 148,097 $ — $ 148,097 Sponsorship, signage, Exosphere TM advertising, and suite licenses revenues (b) 17,522 690 18,212 Media related, primarily from affiliation agreements (b) — 143,096 143,096 Other 1,418 2,572 3,990 Total revenues from contracts with customers 167,037 146,358 313,395 Revenues from subleases 762 — 762 Total revenues $ 167,799 $ 146,358 $ 314,157 Three Months Ended December 31, 2022 Sphere MSG Networks Total Sponsorship, signage, Exosphere advertising, and suite licenses (b) $ — $ 2,404 $ 2,404 Media related, primarily from affiliation agreements (b) — 154,401 154,401 Other — 2,093 2,093 Total revenues from contracts with customers — 158,898 158,898 Revenues from subleases 643 — 643 Total revenues $ 643 $ 158,898 $ 159,541 Six Months Ended December 31, 2023 Sphere MSG Networks Total Event-related (a) $ 152,156 $ — $ 152,156 Sponsorship, signage, Exosphere TM advertising, and suite licenses revenues (b) 20,082 908 20,990 Media related, primarily from affiliation agreements (b) — 252,891 252,891 Other 1,849 2,787 4,636 Total revenues from contracts with customers 174,087 256,586 430,673 Revenues from subleases 1,491 — 1,491 Total revenues $ 175,578 $ 256,586 $ 432,164 Six Months Ended December 31, 2022 Sphere MSG Networks Total Sponsorship, signage, Exosphere advertising, and suite licenses (b) $ — $ 2,648 $ 2,648 Media related, primarily from affiliation agreements (b) — 276,213 276,213 Other — 2,516 2,516 Total revenues from contracts with customers — 281,377 281,377 Revenues from subleases 1,293 — 1,293 Total revenues $ 1,293 $ 281,377 $ 282,670 _________________ (a) Event-related revenues consists of (i) the Sphere Experience, (ii) ticket sales and other ticket-related revenues, (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 table above. (b) See Note 2. Summary of Significant Accounting Policies, Revenue Recognition, and Note 4. Revenue Recognition, to the consolidated financial statements included in the 2023 Form 10-K, 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 and six months ended December 31, 2023 and 2022: Three Months Ended December 31, 2023 Sphere MSG Networks Total Ticketing and venue license fee revenues (a) $ 121,821 $ — $ 121,821 Sponsorship, signage, Exosphere advertising, and suite revenues 23,406 — 23,406 Food, beverage, and merchandise revenues 21,810 — 21,810 Media networks revenues (b) — 146,358 146,358 Total revenues from contracts with customers 167,037 146,358 313,395 Revenues from subleases 762 — 762 Total revenues $ 167,799 $ 146,358 $ 314,157 Three Months Ended December 31, 2022 Sphere MSG Networks Total Media networks revenues (b) $ — $ 158,898 $ 158,898 Revenues from subleases 643 — 643 Total revenues $ 643 $ 158,898 $ 159,541 Six Months Ended December 31, 2023 Sphere MSG Networks Total Ticketing and venue license fee revenues (a) $ 124,628 $ — $ 124,628 Sponsorship, signage, Exosphere advertising, and suite revenues 26,306 — 26,306 Food, beverage, and merchandise revenues 23,153 — 23,153 Media networks revenues (b) — 256,586 256,586 Total revenues from contracts with customers 174,087 256,586 430,673 Revenues from subleases 1,491 — 1,491 Total revenues $ 175,578 $ 256,586 $ 432,164 Six Months Ended December 31, 2022 Sphere MSG Networks Total Media networks revenues (b) $ — $ 281,377 $ 281,377 Revenues from subleases 1,293 — 1,293 Total revenues $ 1,293 $ 281,377 $ 282,670 _________________ (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 Distributors (as defined below) and, to a lesser extent, advertising revenues through the sale of commercial time and other advertising inventory during MSG Networks programming. |
Contract with Customer, Contract Assets and Liabilities | The following table provides information about contract balances from the Company’s contracts with customers as of December 31, 2023 and June 30, 2023: As of December 31, June 30, 2023 2023 Receivables from contracts with customers, net (a) $ 180,589 $ 115,039 Contract assets, current (b) — 314 Deferred revenue, including non-current portion (c) 78,381 27,397 _________________ (a) Receivables from contracts with customers, net, which are reported in Accounts receivable, net in the Company’s condensed consolidated balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers. As of December 31, 2023 and June 30, 2023, the Company’s receivables from contracts with customers above included $625 and $2,730, respectively, related to various related parties. See Note 15. 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 and six months ended December 31, 2023 relating to the deferred revenue balance as of June 30, 2023 was $19,254 and $20,724, respectively. |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges | Changes to the Company’s restructuring liability through December 31, 2023 were as follows: Restructuring Liability June 30, 2023 $ 8,891 Restructuring charges 4,678 Payments (6,820) December 31, 2023 $ 6,749 |
Investments in Nonconsolidate_2
Investments in Nonconsolidated Affiliates (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Equity Method Investments, Joint Ventures And Cost Method Investments [Abstract] | |
Cost and Equity Method Investments | The Company’s investments in nonconsolidated affiliates, which are accounted for under the equity method of accounting or as equity investments without readily determinable fair value, consisted of the following: Investment As of Ownership Percentage as of December 31, 2023 December 31, June 30, Equity method investments: SACO Technologies Inc. (“SACO”) 30 % $ 19,750 $ 22,246 Holoplot Loan (a) 21,741 20,971 Holoplot 25 % 694 1,542 MSG Entertainment (b) — % — 341,039 Equity investments without readily determinable fair values 8,721 8,721 Total investments in nonconsolidated affiliates $ 50,906 $ 394,519 _________________ (a) In January 2023, the Company, through an indirect subsidiary, extended financing to Holoplot GmbH (“Holoplot”) in the form of a three-year convertible loan (the “Holoplot Loan”) of €18,804, equivalent to $20,484 using the applicable exchange rate at the time of the transaction. Absent conversion, which is currently not available under the terms of the Holoplot Loan, the Holoplot Loan and interest accrued thereon are due and payable at the conclusion of the three-year term. (b) As of December 31, 2023, following the sale of portions of the MSGE Retained Interest and the repayment of the DDTL Facility (as defined below) with MSG Entertainment using a portion of the MSGE Retained Interest, the Company no longer holds any of the outstanding common stock of MSG Entertainment. The Company elected the fair value option for its investment in MSG Entertainment as of June 30, 2023, when it held approximately 20% of the outstanding shares of common stock of MSG Entertainment (in the form of Class A common stock). The fair value of the investment was determined based on quoted market prices on the New York Stock Exchange (“NYSE”), which were classified within Level I of the fair value hierarchy. |
Gain (Loss) on Securities | The following table summarizes the realized and unrealized gain (loss) on equity investments with and without readily determinable fair values, which is reported in Other (expense) income, net, for the three and six months ended December 31, 2023 and 2022: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Unrealized gain $ — $ — $ — $ 1,969 Realized loss from shares of MSG Entertainment Class A common stock sold — — (19,027) — Total realized and unrealized (loss) gain on equity investments $ — $ — $ (19,027) $ 1,969 Supplemental information on realized loss: Shares of MSG Entertainment Class A common stock disposed (a) — — 1,923 — Shares of MSG Entertainment Class A common stock sold (b) — — 8,221 — Cash proceeds from shares of MSG Entertainment Class A common stock sold $ — $ — $ 256,501 $ — _________________ (a) Refer to Note 11. Credit Facilities and Convertible Notes, for further explanation of the approximately 1,923 shares disposed related to the repayment of the DDTL Facility. (b) The sale of approximately 8,221 shares of MSG Entertainment Class A common stock resulted in the cash proceeds from common stock sold. |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | As of December 31, 2023 and June 30, 2023, property and equipment, net consisted of the following: As of December 31, June 30, Land $ 44,569 $ 80,878 Buildings 2,287,504 69,049 Equipment, furniture, and fixtures 1,111,070 159,786 Leasehold improvements 18,491 18,491 Construction in progress 6,565 3,066,785 Total property and equipment, gross 3,468,199 3,394,989 Less accumulated depreciation and amortization (180,266) (87,828) Property and equipment, net $ 3,287,933 $ 3,307,161 |
Original Immersive Production_2
Original Immersive Production Content (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Other Industries [Abstract] | |
Schedule Of Deferred Immersive Production Costs | As of December 31, 2023 and June 30, 2023, total deferred immersive production content costs consisted of the following: As of December 31, June 30, Production content Released, less amortization $ 76,194 $ — In-process — 61,421 Total production content $ 76,194 $ 61,421 |
Schedule Of Amortization Of Deferred Immersive Production Costs | The following table summarizes the Company’s amortization of production content costs, which is reported in Direct operating expenses in the accompanying condensed consolidated statements of operations for the three and six months ended December 31, 2023 and 2022 as follows: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Production content costs (a) $ 5,545 $ — $ 5,545 $ — _________________ (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. Accounting Policies, for further explanation of the monetization strategy. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Carrying Amount of Goodwill by Reportable Segment | The carrying amounts of goodwill as of December 31, 2023 and June 30, 2023 were as follows: As of December 31, June 30, Sphere $ 32,299 $ 32,299 MSG Networks 424,508 424,508 Total Goodwill $ 456,807 $ 456,807 |
Schedule of Intangible Assets Subject to Amortization | The Company’s intangible assets subject to amortization, which relate to affiliate relationships, as of December 31, 2023 and June 30, 2023 were as follows: As of December 31, June 30, Gross carrying amount $ 83,044 $ 83,044 Accumulated amortization (66,691) (65,134) Intangible assets, net $ 16,353 $ 17,910 |
Credit Facilities and Convert_2
Credit Facilities and Convertible Notes (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Line of Credit Facility [Abstract] | |
Schedule of Debt Outstanding and Deferred Financing Costs | The following table summarizes the presentation of the outstanding balances under the Company’s credit agreements as of December 31, 2023 and June 30, 2023: As of December 31, 2023 June 30, 2023 Principal Unamortized Deferred Financing Costs Net Principal Unamortized Deferred Financing Costs Net Current portion MSG Networks Term Loan $ 891,000 $ (890) $ 890,110 $ 82,500 $ — $ 82,500 Current portion of long-term debt, net $ 891,000 $ (890) $ 890,110 $ 82,500 $ — $ 82,500 As of December 31, 2023 June 30, 2023 Principal Debt Discount Unamortized Deferred Financing Costs Net Principal Debt Discount Unamortized Deferred Financing Costs Net Non-current portion MSG Networks Term Loan $ — $ — $ — $ — $ 849,750 $ — $ (1,483) $ 848,267 LV Sphere Term Loan Facility 275,000 — (4,331) 270,669 275,000 — (4,880) 270,120 3.50% Convertible Senior Notes 258,750 (7,116) (890) 250,744 — — — — Long-term debt, net $ 533,750 $ (7,116) $ (5,221) $ 521,413 $ 1,124,750 $ — $ (6,363) $ 1,118,387 |
Interest Payments and Loan Principal Repayments | Interest payments and loan principal repayments made by the Company under the credit agreements were as follows: Interest Payments Loan Principal Repayments Six Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 MSG Networks Credit Facilities $ 34,825 $ 24,468 $ 41,250 $ 24,750 LV Sphere Term Loan Facility 13,412 — — — Delayed Draw Term Loan Facility 460 — 65,000 — Total Payments $ 48,697 $ 24,468 $ 106,250 $ 24,750 The carrying value and fair value of the Company’s debt reported in the accompanying condensed consolidated balance sheets are as follows: As of December 31, 2023 June 30, 2023 Carrying Value (a) Fair Carrying Value (a) Fair Liabilities: MSG Networks Credit Facilities $ 891,000 $ 886,545 $ 932,250 $ 927,589 LV Sphere Term Loan Facility 275,000 273,625 275,000 272,250 3.50% Convertible Senior Notes 251,634 298,779 — — Total Long-term debt $ 1,417,634 $ 1,458,949 $ 1,207,250 $ 1,199,839 _________________ (a) The total carrying value of the Company’s debt as of December 31, 2023 and June 30, 2023 is equal to the current and non-current principal payments for the Company’s credit agreements, net of discount, excluding unamortized deferred financing costs of $6,111 and $6,363, respectively. |
Pension Plans and Other Postr_2
Pension Plans and Other Postretirement Benefit Plan (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Schedule of Net Periodic Benefit Cost | 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 and six months ended December 31, 2023 and 2022. 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. Pension Plans Postretirement Plan Three Months Ended Three Months Ended December 31, December 31, 2023 2022 2023 2022 Service cost $ 61 $ 123 $ 5 $ 15 Interest cost 429 1,189 17 19 Expected return on plan assets 79 (1,719) — — Recognized actuarial loss (gain) 120 501 (17) 9 Net periodic benefit cost $ 689 $ 94 $ 5 $ 43 Pension Plans Postretirement Plan Six Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Service cost $ 122 $ 246 $ 10 $ 30 Interest cost 868 2,378 34 38 Expected return on plan assets (134) (3,438) — — Recognized actuarial loss (gain) (104) 1,002 (34) 18 Net periodic benefit cost $ 752 $ 188 $ 10 $ 86 |
Schedule of Defined Contribution Plans | For the three and six months ended December 31, 2023 and 2022, expenses related to the Savings Plans included in the accompanying condensed consolidated statements of operations are as follows: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Continuing Operations $ 2,003 $ 1,734 $ 3,213 $ 3,121 Discontinued Operations — 1,008 — 2,186 Total Savings Plan Expenses $ 2,003 $ 2,742 $ 3,213 $ 5,307 |
Schedule of Defined Benefit Plans Disclosures | The following table summarizes amounts recognized related to the Deferred Compensation Plan in the condensed consolidated balance sheets: As of December 31, June 30, Non-current assets (included in Other non-current assets) $ 2,856 $ 1,087 Non-current liabilities (included in Other non-current liabilities) $ (2,855) $ (1,087) |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation Expense | The following table summarizes the Company’s share-based compensation expense: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Share-based compensation (a) $ 12,072 $ 16,355 $ 16,955 $ 27,845 Fair value of awards vested (b) $ 3,267 $ 2,995 $ 33,421 $ 35,127 _________________ (a) Share-based compensation excludes costs that have been capitalized of $1,574 and $1,802 for the six months ended December 31, 2023 and 2022, respectively. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables detail the components of accumulated other comprehensive loss: Three Months Ended December 31, 2023 Pension Plans and Cumulative Accumulated Balance as of September 30, 2023 $ (5,316) $ (5,667) $ (10,983) Other comprehensive income: Other comprehensive income before reclassifications — 6,199 6,199 Amounts reclassified from accumulated other comprehensive loss (a) 103 — 103 Income tax expense (27) (1,606) (1,633) Other comprehensive income, total 76 4,593 4,669 Balance as of December 31, 2023 $ (5,240) $ (1,074) $ (6,314) Three Months Ended December 31, 2022 Pension Plans and Cumulative Accumulated Balance as of September 30, 2022 $ (39,787) $ (21,194) $ (60,981) Other comprehensive income: Other comprehensive income before reclassifications — 14,803 14,803 Amounts reclassified from accumulated other comprehensive loss (a) 510 — 510 Income tax expense (176) (2,719) (2,895) Other comprehensive income, total 334 12,084 12,418 Balance as of December 31, 2022 $ (39,453) $ (9,110) $ (48,563) Six Months Ended December 31, 2023 Pension Plans and Postretirement Plan Cumulative Accumulated Balance as of June 30, 2023 $ (5,138) $ 200 $ (4,938) Other comprehensive loss: Other comprehensive loss before reclassifications — (1,720) (1,720) Amounts reclassified from accumulated other comprehensive loss (a) (138) — (138) Income tax benefit 36 446 482 Other comprehensive loss, total (102) (1,274) (1,376) Balance as of December 31, 2023 $ (5,240) $ (1,074) $ (6,314) Six Months Ended December 31, 2022 Pension Plans and Cumulative Accumulated Balance as of June 30, 2022 $ (40,287) $ (8,068) $ (48,355) Other comprehensive income (loss): Other comprehensive loss before reclassifications — (1,277) (1,277) Amounts reclassified from accumulated other comprehensive loss (a) 1,020 — 1,020 Income tax (expense) benefit (186) 235 49 Other comprehensive income (loss), total 834 (1,042) (208) Balance as of December 31, 2022 $ (39,453) $ (9,110) $ (48,563) _________________ (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 12. Pension Plans and Other Postretirement Benefit Plans). |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table summarizes the composition and amounts of the transactions with the Company’s affiliates. These amounts are reflected in revenues and operating expenses in the accompanying condensed consolidated statements of operations for the three and six months ended December 31, 2023 and 2022: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Revenues $ 1,657 $ — $ 2,047 $ — Operating expenses (credits): Media rights fees 44,485 43,433 88,670 86,200 Cost reimbursement from MSG Sports - MSG Sports Services Agreement — (9,475) — (18,992) Corporate general and administrative expenses, net - MSG Entertainment Transition Services Agreement (a) 25,780 — 56,117 — Origination, master control and technical services 1,257 1,232 2,514 2,464 Other operating expenses (credits), net (b) 7,497 (285) 8,041 (296) Total operating expenses, net (c) $ 79,019 $ 34,905 $ 155,342 $ 69,376 _________________ (a) Included in the six months ended, Corporate general and administrative expenses, net - MSG Entertainment Transition Services Agreement (the “MSGE TSA”) are $2,805 related to Restructuring charges for employees who provided services to the Company under the MSGE TSA. (b) Other operating expenses, net, includes reimbursements to MSG Entertainment for aircraft-related expenses, professional and payroll fees. (c) Of the total operating expenses, net, $47,459 and $93,537 for three and six months ended December 31, 2023, respectively, and $44,859 and $89,107 for the three and six months ended December 31, 2022, respectively, are included in direct operating expenses in the accompanying condensed consolidated statements of operations, and $31,560 and $61,805 for three and six months ended December 31, 2023, respectively, and $(9,954) and $(19,731) for the three and six months ended December 31, 2022, respectively, are included as net credits in selling, general, and administrative expenses. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information, by Segment | Information as to the operations of the Company’s reportable segments is set forth below. Three Months Ended December 31, 2023 Sphere MSG Networks Total Revenues $ 167,799 $ 146,358 $ 314,157 Direct operating expenses (67,338) (92,428) (159,766) Selling, general and administrative expenses (97,804) (17,716) (115,520) Depreciation and amortization (78,044) (1,987) (80,031) Impairment and other losses, net (117,235) — (117,235) Restructuring charges (1,287) — (1,287) Operating (loss) income $ (193,909) $ 34,227 $ (159,682) Interest income 5,926 Interest expense (25,828) Other expense, net (1,130) Loss from operations before income taxes $ (180,714) Reconciliation of operating (loss) income to adjusted operating income: Operating (loss) income $ (193,909) $ 34,227 $ (159,682) Add back: Share-based compensation 10,985 931 11,916 Depreciation and amortization 78,044 1,987 80,031 Restructuring charges 1,287 — 1,287 Impairment and other losses, net 117,235 — 117,235 Merger and acquisition related costs, net of insurance recoveries 200 180 380 Amortization for capitalized cloud computing arrangement costs — 22 22 Remeasurement of deferred compensation plan liabilities 245 — 245 Adjusted operating income $ 14,087 $ 37,347 $ 51,434 Other information: Capital expenditures $ 44,298 $ 3,103 $ 47,401 Three Months Ended December 31, 2022 Sphere MSG Networks Total Revenues $ 643 $ 158,898 $ 159,541 Direct operating expenses — (90,400) (90,400) Selling, general and administrative expenses (74,759) (29,656) (104,415) Depreciation and amortization (5,749) (1,637) (7,386) Other gains 1,000 — 1,000 Restructuring charges (4,087) (3,988) (8,075) Operating (loss) income $ (82,952) $ 33,217 $ (49,735) Interest income 2,669 Other expense, net (1,355) Loss from operations before income taxes $ (48,421) Reconciliation of operating (loss) income to adjusted operating (loss) income: Operating (loss) income $ (82,952) $ 33,217 $ (49,735) Add back: Share-based compensation 13,056 3,299 16,355 Depreciation and amortization 5,749 1,637 7,386 Restructuring charges 4,087 3,988 8,075 Other gains (1,000) — (1,000) Merger and acquisition related costs (58) 5,544 5,486 Amortization for capitalized cloud computing arrangement costs 83 44 127 Remeasurement of deferred compensation plan liabilities 154 — 154 Adjusted operating (loss) income (60,881) $ 47,729 $ (13,152) Other information: Capital expenditures $ 277,014 $ 2,665 $ 279,679 Six Months Ended December 31, 2023 Sphere MSG Networks Total Revenues $ 175,578 $ 256,586 $ 432,164 Direct operating expenses (75,143) (169,122) (244,265) Selling, general and administrative expenses (181,954) (20,710) (202,664) Depreciation and amortization (90,421) (3,869) (94,290) Impairment and other losses, net (115,738) — (115,738) Restructuring charges (4,678) — (4,678) Operating (loss) income $ (292,356) $ 62,885 $ (229,471) Interest income 10,304 Interest expense (25,828) Other income, net 41,066 Loss from operations before income taxes $ (203,929) Reconciliation of operating (loss) income to adjusted operating (loss) income: Operating (loss) income $ (292,356) $ 62,885 $ (229,471) Add back: Share-based compensation 14,904 1,895 16,799 Depreciation and amortization 90,421 3,869 94,290 Restructuring charges 4,678 — 4,678 Impairment and other losses, net 115,738 — 115,738 Merger and acquisition related costs, net of insurance recoveries (2,502) (6,161) (8,663) Amortization for capitalized cloud computing arrangement costs — 44 44 Remeasurement of deferred compensation plan liabilities 138 — 138 Adjusted operating (loss) income $ (68,979) $ 62,532 $ (6,447) Other information: Capital expenditures $ 227,461 $ 4,511 $ 231,972 Six Months Ended December 31, 2022 Sphere MSG Networks Total Revenues $ 1,293 $ 281,377 $ 282,670 Direct operating expenses — (165,820) (165,820) Selling, general and administrative expenses (151,950) (47,096) (199,046) Depreciation and amortization (10,264) (3,255) (13,519) Other gains 3,000 — 3,000 Restructuring charges (4,087) (3,988) (8,075) Operating (loss) income $ (162,008) $ 61,218 $ (100,790) Interest income 6,002 Other expense, net (1,770) Loss from operations before income taxes $ (96,558) Reconciliation of operating (loss) income to adjusted operating (loss) income: Operating (loss) income $ (162,008) $ 61,218 $ (100,790) Add back: Share-based compensation 22,842 5,003 27,845 Depreciation and amortization 10,264 3,255 13,519 Restructuring charges 4,087 3,988 8,075 Other gains (3,000) — (3,000) Merger and acquisition related costs 2,691 7,445 10,136 Amortization for capitalized cloud computing arrangement costs 160 88 248 Adjusted operating (loss) income $ (124,964) $ 80,997 $ (43,967) Other information: Capital expenditures $ 537,253 $ 3,892 $ 541,145 |
Schedules of Concentration of Risk, by Risk Factor | Concentration of Risk Accounts receivable, net in the accompanying condensed consolidated balance sheets as of December 31, 2023 and June 30, 2023 include amounts due from the following individual customers, which accounted for the noted percentages of the gross balance: As of December 31, June 30, Customer A 13 % 23 % Customer B 13 % 22 % Customer C 10 % 17 % Revenues in the accompanying condensed consolidated statements of operations for the three and six months ended December 31, 2023 and December 31, 2022 include amounts from the following individual customers: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Customer 1 11 % 24 % 16 % 27 % Customer 2 11 % 24 % 16 % 27 % Customer 3 9 % 19 % 13 % 22 % |
Additional Financial Informat_2
Additional Financial Information (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Additional Financial Information [Abstract] | |
Schedule Of Cash, Cash Equivalents, and Restricted Cash | The following table provides a summary of the amounts recorded as cash, cash equivalents and restricted cash. As of December 31, June 30, Cash and cash equivalents $ 614,549 $ 131,965 Restricted cash 13,278 297,149 Total cash, cash equivalents and restricted cash $ 627,827 $ 429,114 |
Cash, Cash Equivalents and Restricted Cash | The following table provides a summary of the amounts recorded as cash, cash equivalents and restricted cash. As of December 31, June 30, Cash and cash equivalents $ 614,549 $ 131,965 Restricted cash 13,278 297,149 Total cash, cash equivalents and restricted cash $ 627,827 $ 429,114 |
Schedule of Other Current Assets | Prepaid expenses and other current assets consisted of the following: As of December 31, June 30, Prepaid expenses $ 21,201 $ 22,616 Note and other receivables 11,050 21,453 Inventory 894 — Current deferred production content costs 9,772 6,524 Other 3,893 5,492 Total prepaid expenses and other current assets $ 46,810 $ 56,085 |
Other Current Liabilities | Accounts payable, accrued and other current liabilities consisted of the following: As of December 31, June 30, Accounts payable $ 28,032 $ 39,654 Accrued payroll and employee related liabilities 61,316 75,579 Cash due to promoters 67,121 73,611 Capital expenditure accruals 164,247 236,593 Accrued legal fees 23,159 53,857 Other accrued expenses 48,028 36,437 Total accounts payable, accrued and other current liabilities $ 391,903 $ 515,731 |
Schedule of Other Nonoperating Income (Expense) | Other income (expense), net includes the following: Three Months Ended Six Months Ended December 31, December 31, 2023 2022 2023 2022 Gain on litigation settlement $ — $ — $ 62,647 $ — Realized loss on equity method investments — — (19,027) — Other (1,130) (1,355) (2,554) (1,770) Total other (expense) income, net $ (1,130) $ (1,355) $ 41,066 $ (1,770) |
Description of Business and B_2
Description of Business and Basis of Presentation (Details) | 6 Months Ended | |||
Apr. 20, 2023 $ / shares shares | Dec. 31, 2023 ft² segment network guest ft $ / shares | Jun. 30, 2023 $ / shares | May 03, 2023 | |
Conversion of Stock [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Number of networks | network | 2 | |||
Venue occupancy, number of guests | guest | 20,000 | |||
Building height, feet (in feet) | ft | 100 | |||
Common Class A | ||||
Conversion of Stock [Line Items] | ||||
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 | ||
Common Class B | ||||
Conversion of Stock [Line Items] | ||||
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 | ||
Discontinued Operations, Disposed of by Sale | Tao Group Hospitality | ||||
Conversion of Stock [Line Items] | ||||
Disposal group, including discontinued operation, ownership percentage in disposed asset | 66.90% | |||
Spinoff | MSG Entertainment | Common Class A | ||||
Conversion of Stock [Line Items] | ||||
Number of shares received for every one common stock shares held on record date (in shares) | shares | 1 | |||
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | |||
Spinoff | MSG Entertainment | Common Class B | ||||
Conversion of Stock [Line Items] | ||||
Number of shares received for every one common stock shares held on record date (in shares) | shares | 1 | |||
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | |||
Spinoff | Sphere | Common Class A | ||||
Conversion of Stock [Line Items] | ||||
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | |||
MSG Entertainment | Spinoff | MSG Stockholders | ||||
Conversion of Stock [Line Items] | ||||
Noncontrolling interest, ownership percentage by parent | 67% | |||
Noncontrolling interest, ownership percentage by noncontrolling owners | 33% | |||
Studio Campus | ||||
Conversion of Stock [Line Items] | ||||
Building, square footage (in square feet) | ft² | 68,000 | |||
Big Dome | ||||
Conversion of Stock [Line Items] | ||||
Building, square footage (in square feet) | ft² | 28,000 |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Thousands | 8 Months Ended | |||||
Sep. 30, 2024 | Oct. 31, 2024 | Dec. 31, 2023 | Dec. 08, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | |
Cash and Cash Equivalents [Line Items] | ||||||
Cash and cash equivalents | $ 614,549 | $ 433,507 | ||||
Customer advances | 120,930 | |||||
Restricted cash | 13,278 | $ 18,235 | ||||
Accounts payable, accrued and other current liabilities | 391,903 | $ 515,731 | ||||
Capital expenditure accruals | 164,247 | 236,593 | ||||
Net | 1,424,750 | |||||
Current portion of long-term debt, net | 890,110 | 82,500 | ||||
Secured Debt | MSG Networks | Forecast [Member] | ||||||
Cash and Cash Equivalents [Line Items] | ||||||
Repayments of secured debt | $ 61,875 | |||||
MSG Networks Term Loan | Line of Credit | Secured Debt | ||||||
Cash and Cash Equivalents [Line Items] | ||||||
Current portion of long-term debt, net | $ 890,110 | 82,500 | ||||
Long-term debt, term | 1 year | |||||
MSG Networks Term Loan | Line of Credit | Forecast [Member] | Secured Debt | ||||||
Cash and Cash Equivalents [Line Items] | ||||||
Current portion of long-term debt, net | $ 829,125 | |||||
MSG Networks Term Loan | Debt | ||||||
Cash and Cash Equivalents [Line Items] | ||||||
Carrying value | $ 891,000 | 932,250 | ||||
3.50% Convertible Senior Notes | Senior Notes | ||||||
Cash and Cash Equivalents [Line Items] | ||||||
Interest rate | 3.50% | |||||
3.50% Convertible Senior Notes | Debt | ||||||
Cash and Cash Equivalents [Line Items] | ||||||
Carrying value | 251,634 | $ 0 | ||||
MSG Networks | ||||||
Cash and Cash Equivalents [Line Items] | ||||||
Cash and cash equivalents | $ 82,687 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Income (loss) from discontinued operations, net of taxes | $ 0 | $ 97,865 | $ (647) | $ 100,125 |
Income tax expense | $ 0 | $ 294 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Disposed Income Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income tax expense | $ 0 | $ (294) | ||
Net income | $ 0 | $ 97,865 | $ (647) | $ 100,125 |
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues | 482,657 | 760,746 | ||
Direct operating expenses | (257,762) | (435,212) | ||
Selling, general and administrative expenses | (78,815) | (149,625) | ||
Depreciation and amortization | (21,673) | (45,295) | ||
Impairment and other gains, net | 4,885 | 4,885 | ||
Restructuring charges | (5,607) | (5,607) | ||
Operating income | 123,685 | 129,892 | ||
Interest income | 934 | 1,555 | ||
Interest expense | (894) | (3,061) | ||
Other (loss) income, net | (2,498) | (558) | ||
Income from operations before income taxes | 121,227 | 127,828 | ||
Income tax expense | (23,362) | (27,703) | ||
Net income | 97,865 | 100,125 | ||
Less: Net (loss) income attributable to nonredeemable noncontrolling interests | (56) | (466) | ||
Less: Net income attributable to redeemable noncontrolling interests | 3,029 | 4,153 | ||
Net income from discontinued operations attributable to Sphere Entertainment Co.’s stockholders | 94,892 | 96,438 | ||
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | MSG Entertainment | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Depreciation and amortization | (15,586) | (31,572) | ||
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Tao Group Hospitality | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Depreciation and amortization | (6,087) | (13,723) | ||
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Operating segments | MSG Entertainment | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues | 348,637 | 494,712 | ||
Direct operating expenses | (181,730) | (282,393) | ||
Selling, general and administrative expenses | (36,237) | (64,966) | ||
Depreciation and amortization | (15,586) | (31,572) | ||
Impairment and other gains, net | 4,412 | 4,412 | ||
Restructuring charges | (5,607) | (5,607) | ||
Operating income | 113,889 | 114,586 | ||
Interest income | 911 | 1,519 | ||
Interest expense | (58) | (1,083) | ||
Other (loss) income, net | (2,171) | (1,285) | ||
Income from operations before income taxes | 112,571 | 113,737 | ||
Income tax expense | (18,479) | (21,415) | ||
Net income | 94,092 | 92,322 | ||
Less: Net (loss) income attributable to nonredeemable noncontrolling interests | (181) | (553) | ||
Less: Net income attributable to redeemable noncontrolling interests | 0 | 0 | ||
Net income from discontinued operations attributable to Sphere Entertainment Co.’s stockholders | 94,273 | 92,875 | ||
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Operating segments | Tao Group Hospitality | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues | 134,645 | 267,221 | ||
Direct operating expenses | (76,903) | (154,066) | ||
Selling, general and administrative expenses | (42,116) | (84,659) | ||
Depreciation and amortization | (6,087) | (13,723) | ||
Impairment and other gains, net | 473 | 473 | ||
Restructuring charges | 0 | 0 | ||
Operating income | 10,012 | 15,246 | ||
Interest income | 23 | 36 | ||
Interest expense | (836) | (1,978) | ||
Other (loss) income, net | (327) | 727 | ||
Income from operations before income taxes | 8,872 | 14,031 | ||
Income tax expense | (4,883) | (6,288) | ||
Net income | 3,989 | 7,743 | ||
Less: Net (loss) income attributable to nonredeemable noncontrolling interests | 125 | 87 | ||
Less: Net income attributable to redeemable noncontrolling interests | 3,029 | 4,153 | ||
Net income from discontinued operations attributable to Sphere Entertainment Co.’s stockholders | 835 | 3,503 | ||
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Other | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues | (625) | (1,187) | ||
Direct operating expenses | 871 | 1,247 | ||
Selling, general and administrative expenses | (462) | 0 | ||
Depreciation and amortization | 0 | 0 | ||
Impairment and other gains, net | 0 | 0 | ||
Restructuring charges | 0 | 0 | ||
Operating income | (216) | 60 | ||
Interest income | 0 | 0 | ||
Interest expense | 0 | 0 | ||
Other (loss) income, net | 0 | 0 | ||
Income from operations before income taxes | (216) | 60 | ||
Income tax expense | 0 | 0 | ||
Net income | (216) | 60 | ||
Less: Net (loss) income attributable to nonredeemable noncontrolling interests | 0 | 0 | ||
Less: Net income attributable to redeemable noncontrolling interests | 0 | 0 | ||
Net income from discontinued operations attributable to Sphere Entertainment Co.’s stockholders | $ (216) | $ 60 |
Discontinued Operations - Sch_2
Discontinued Operations - Schedule of Disposed Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Non-cash items included in net income: | |||
Share-based compensation | $ 16,851 | $ 35,666 | |
Cash flows from investing activities: | |||
Capital expenditures, net | $ 230,475 | 558,808 | |
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | |||
Non-cash items included in net income: | |||
Depreciation and amortization | $ 21,673 | 45,295 | |
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | MSG Entertainment | |||
Non-cash items included in net income: | |||
Depreciation and amortization | 15,586 | 31,572 | |
Share-based compensation | (543) | 1,104 | |
Cash flows from investing activities: | |||
Capital expenditures, net | 4,353 | 9,208 | |
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Tao Group Hospitality | |||
Non-cash items included in net income: | |||
Depreciation and amortization | 6,087 | 13,723 | |
Share-based compensation | 2,374 | 4,426 | |
Cash flows from investing activities: | |||
Capital expenditures, net | $ 5,686 | $ 11,455 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 313,395 | $ 158,898 | $ 430,673 | $ 281,377 |
Revenues from subleases | 762 | 643 | 1,491 | 1,293 |
Revenues | 314,157 | 159,541 | 432,164 | 282,670 |
Sphere | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 167,037 | 0 | 174,087 | 0 |
Revenues from subleases | 762 | 643 | 1,491 | 1,293 |
Revenues | 167,799 | 643 | 175,578 | 1,293 |
MSG Networks | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 146,358 | 158,898 | 256,586 | 281,377 |
Revenues from subleases | 0 | 0 | 0 | 0 |
Revenues | 146,358 | 158,898 | 256,586 | 281,377 |
Sponsorship, signage, exosphere advertising and suite license revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 23,406 | 26,306 | ||
Sponsorship, signage, exosphere advertising and suite license revenues | Sphere | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 23,406 | 26,306 | ||
Sponsorship, signage, exosphere advertising and suite license revenues | MSG Networks | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 0 | 0 | ||
Ticketing and venue license fee revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 121,821 | 124,628 | ||
Ticketing and venue license fee revenues | Sphere | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 121,821 | 124,628 | ||
Ticketing and venue license fee revenues | MSG Networks | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 0 | 0 | ||
Food, beverage and merchandise revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 21,810 | 23,153 | ||
Food, beverage and merchandise revenues | Sphere | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 21,810 | 23,153 | ||
Food, beverage and merchandise revenues | MSG Networks | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 0 | 0 | ||
Media networks revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 146,358 | 158,898 | 256,586 | 281,377 |
Media networks revenues | Sphere | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 0 | 0 | 0 | 0 |
Media networks revenues | MSG Networks | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 146,358 | 158,898 | 256,586 | 281,377 |
Transferred over Time | Event-related | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 148,097 | 152,156 | ||
Transferred over Time | Event-related | Sphere | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 148,097 | 152,156 | ||
Transferred over Time | Event-related | MSG Networks | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 0 | 0 | ||
Transferred over Time | Sponsorship, signage, exosphere advertising and suite license revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 18,212 | 2,404 | 20,990 | 2,648 |
Transferred over Time | Sponsorship, signage, exosphere advertising and suite license revenues | Sphere | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 17,522 | 0 | 20,082 | 0 |
Transferred over Time | Sponsorship, signage, exosphere advertising and suite license revenues | MSG Networks | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 690 | 2,404 | 908 | 2,648 |
Transferred over Time | Media related, primarily from affiliation agreements | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 143,096 | 154,401 | 252,891 | 276,213 |
Transferred over Time | Media related, primarily from affiliation agreements | Sphere | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 0 | 0 | 0 | 0 |
Transferred over Time | Media related, primarily from affiliation agreements | MSG Networks | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 143,096 | 154,401 | 252,891 | 276,213 |
Transferred at Point in Time | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 3,990 | 2,093 | 4,636 | 2,516 |
Transferred at Point in Time | Other | Sphere | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 1,418 | 0 | 1,849 | 0 |
Transferred at Point in Time | Other | MSG Networks | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 2,572 | $ 2,093 | $ 2,787 | $ 2,516 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2023 | Jun. 30, 2023 | |
Contract Assets and Liabilities [Line Items] | |||
Contract with customer, deferred revenue, revenue recognized | $ 19,254 | $ 20,724 | |
Receivables from contracts with customers, net | |||
Contract Assets and Liabilities [Line Items] | |||
Contracts with customers, assets, net | 180,589 | 180,589 | $ 115,039 |
Contract assets, current | |||
Contract Assets and Liabilities [Line Items] | |||
Contracts with customers, assets, net | 0 | 0 | 314 |
Deferred revenue, including non-current portion | |||
Contract Assets and Liabilities [Line Items] | |||
Deferred revenue, including non-current portion | 78,381 | 78,381 | 27,397 |
Affiliated Entities | Net related party receivables | |||
Contract Assets and Liabilities [Line Items] | |||
Contracts with customers, assets, net | $ 625 | $ 625 | $ 2,730 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligation (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 175,820 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 50% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 27% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
Restructuring and Related Activ
Restructuring and Related Activities - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | ||||
Restructuring charges | $ 1,287 | $ 8,075 | $ 4,678 | $ 8,075 |
Restructuring Charges - Schedul
Restructuring Charges - Schedule of Restructuring Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Restructuring Liability | ||||
Restructuring reserve, beginning balance | $ 8,891 | |||
Restructuring charges | $ 1,287 | $ 8,075 | 4,678 | $ 8,075 |
Payments | (6,820) | |||
Restructuring reserve, ending balance | $ 6,749 | $ 6,749 |
Investments in Nonconsolidate_3
Investments in Nonconsolidated Affiliates - Schedule Without Readily Determinable Fair Values (Details) € in Thousands, $ in Thousands | 1 Months Ended | |||
Jan. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jan. 31, 2023 EUR (€) | |
Schedule of Investments [Line Items] | ||||
Investments | $ 50,906 | $ 394,519 | ||
Equity Method Investments | SACO Technologies Inc. (“SACO”) | ||||
Schedule of Investments [Line Items] | ||||
Ownership Percentage as of December 31, 2023 | 30% | |||
Investments | $ 19,750 | 22,246 | ||
Equity Method Investments | Holoplot Loan | ||||
Schedule of Investments [Line Items] | ||||
Investments | $ 21,741 | 20,971 | ||
Financing receivable, term | 3 years | |||
Face amount | $ 20,484 | € 18,804 | ||
Equity Method Investments | Holoplot | ||||
Schedule of Investments [Line Items] | ||||
Ownership Percentage as of December 31, 2023 | 25% | |||
Investments | $ 694 | $ 1,542 | ||
Equity Method Investments | MSG Entertainment | ||||
Schedule of Investments [Line Items] | ||||
Ownership Percentage as of December 31, 2023 | 0% | 20% | ||
Investments | $ 0 | $ 341,039 | ||
Equity investments without readily determinable fair values | ||||
Schedule of Investments [Line Items] | ||||
Investments | $ 8,721 | $ 8,721 |
Investments in Nonconsolidate_4
Investments in Nonconsolidated Affiliates - Schedule With Readily Determinable Fair Values (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Debt and Equity Securities, FV-NI [Line Items] | ||||
Total realized and unrealized (loss) gain on equity investments | $ (19,880) | $ (2,978) | ||
Supplemental information on realized loss: | ||||
Cash proceeds from shares of MSG Entertainment Class A common stock sold | 0 | 3,819 | ||
MSG Entertainment | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Unrealized gain | $ 0 | $ 0 | 0 | 1,969 |
Realized loss from shares of MSG Entertainment Class A common stock sold | 0 | 0 | (19,027) | 0 |
Total realized and unrealized (loss) gain on equity investments | $ 0 | $ 0 | $ (19,027) | $ 1,969 |
Supplemental information on realized loss: | ||||
Shares of MSG Entertainment Class A common stock disposed (in shares) | 0 | 0 | 1,923 | 0 |
Shares of MSG Entertainment Class A common stock sold (in shares) | 0 | 0 | 8,221 | 0 |
Cash proceeds from shares of MSG Entertainment Class A common stock sold | $ 0 | $ 0 | $ 256,501 | $ 0 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 3,468,199 | $ 3,394,989 |
Less accumulated depreciation and amortization | (180,266) | (87,828) |
Property and equipment, net | 3,287,933 | 3,307,161 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 44,569 | 80,878 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,287,504 | 69,049 |
Equipment, furniture, and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,111,070 | 159,786 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 18,491 | 18,491 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 6,565 | $ 3,066,785 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | ||||||
Capital expenditure accruals | $ 164,247 | $ 164,247 | $ 236,593 | |||
Property, plant and equipment, transfers and changes | $ 3,130,028 | |||||
Depreciation and amortization expense on property and equipment | 79,253 | $ 6,607 | 92,733 | $ 11,961 | ||
Impairment charges | $ 116,541 | $ 116,541 |
Original Immersive Production_3
Original Immersive Production Content - Schedule of Deferred Immersive Production Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | |
Other Industries [Abstract] | |||||
Released, less amortization | $ 76,194 | $ 76,194 | $ 0 | ||
In-process | 0 | 0 | 61,421 | ||
Total production content | 76,194 | 76,194 | $ 61,421 | ||
Produced content costs | $ 5,545 | $ 0 | $ 5,545 | $ 0 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 456,807 | $ 456,807 |
Sphere | ||
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 32,299 | 32,299 |
MSG Networks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 424,508 | $ 424,508 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill, impairment loss | $ 0 | ||||
Amortization of intangible assets | $ 778,000 | $ 779,000 | $ 1,557,000 | $ 1,558,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying amount | $ 83,044 | $ 83,044 |
Accumulated amortization | (66,691) | (65,134) |
Intangible assets, net | $ 16,353 | $ 17,910 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Apr. 06, 2023 USD ($) | Mar. 14, 2023 USD ($) | Sep. 10, 2021 complaint | Dec. 31, 2023 USD ($) complaint | Dec. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) complaint | Dec. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) | Sep. 27, 2021 complaint | |
Loss Contingencies [Line Items] | |||||||||
Contractual obligation | $ 3,134,884 | ||||||||
Loss contingency, number of complaints filed | complaint | 15 | ||||||||
Loss contingency, remaining claims filed involving fiduciary breaches | complaint | 2 | 2 | |||||||
Loss contingency, new claims filed, number | complaint | 2 | ||||||||
Gain on litigation settlement | $ 0 | $ 0 | $ 62,647 | $ 0 | |||||
Loss contingency, number of consolidated claims | complaint | 4 | ||||||||
MSGE Settlement Agreement | Settled Litigation | |||||||||
Loss Contingencies [Line Items] | |||||||||
Litigation settlement, amount awarded from other party | $ 85,000 | ||||||||
Gain on litigation settlement | 62,647 | ||||||||
MSGE Networks Term Sheet | Settled Litigation | |||||||||
Loss Contingencies [Line Items] | |||||||||
Litigation settlement, amount awarded to other party | 48,500 | ||||||||
Payments for legal settlements | 28,000 | ||||||||
Loss contingency accrual | $ 20,500 | $ 20,500 | |||||||
MSGE Networks Term Sheet | Settled Litigation | MSG Network Insurers | |||||||||
Loss Contingencies [Line Items] | |||||||||
Payments for legal settlements | $ 20,500 | ||||||||
Networks Merger | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss contingency, new claims filed with incomplete and misleading information | complaint | 9 | ||||||||
Loss contingency, new claims filed involving fiduciary breaches | complaint | 6 |
Credit Facilities and Convert_3
Credit Facilities and Convertible Notes - Debt Outstanding and Deferred Financing Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 08, 2023 | Jun. 30, 2023 |
Current portion | |||
Principal | $ 891,000 | $ 82,500 | |
Unamortized Deferred Financing Costs | (890) | 0 | |
Net | 890,110 | 82,500 | |
Non-current portion | |||
Net | 521,413 | 1,118,387 | |
Line of Credit | Secured Debt | |||
Non-current portion | |||
Principal | 533,750 | 1,124,750 | |
Debt Discount | (7,116) | 0 | |
Unamortized Deferred Financing Costs | (5,221) | (6,363) | |
Net | 521,413 | 1,118,387 | |
Line of Credit | MSG Networks Term Loan | Secured Debt | |||
Current portion | |||
Principal | 891,000 | 82,500 | |
Unamortized Deferred Financing Costs | (890) | 0 | |
Net | 890,110 | 82,500 | |
Non-current portion | |||
Principal | 0 | 849,750 | |
Debt Discount | 0 | 0 | |
Unamortized Deferred Financing Costs | 0 | (1,483) | |
Net | 0 | 848,267 | |
Line of Credit | LV Sphere Term Loan Facility | Secured Debt | |||
Non-current portion | |||
Principal | 275,000 | 275,000 | |
Debt Discount | 0 | 0 | |
Unamortized Deferred Financing Costs | (4,331) | (4,880) | |
Net | 270,669 | 270,120 | |
Line of Credit | 3.50% Convertible Senior Notes | Secured Debt | |||
Non-current portion | |||
Principal | 258,750 | 0 | |
Debt Discount | (7,116) | 0 | |
Unamortized Deferred Financing Costs | (890) | 0 | |
Net | $ 250,744 | $ 0 | |
Senior Notes | 3.50% Convertible Senior Notes | |||
Non-current portion | |||
Interest rate | 3.50% |
Credit Facilities and Convert_4
Credit Facilities and Convertible Notes - MSG Networks - Narrative (Details) | 6 Months Ended | |
Oct. 11, 2019 USD ($) | Dec. 31, 2023 USD ($) | |
MSG Networks Credit Facilities | Measurement Input, Leverage Ratio | ||
Debt Instrument [Line Items] | ||
Debt instrument, measurement input | 5.29 | |
MSG Networks Credit Facilities | Measurement Input, Leverage Ratio | Incremental adjustment | ||
Debt Instrument [Line Items] | ||
Debt instrument, measurement input | 6 | |
MSG Networks Credit Facilities | Minimum | Measurement Input, Interest Coverage Ratio | ||
Debt Instrument [Line Items] | ||
Debt instrument, measurement input | 2 | |
MSG Networks Credit Facilities | Maximum | Measurement Input, Leverage Ratio | ||
Debt Instrument [Line Items] | ||
Debt instrument, measurement input | 5.50 | |
MSG Networks Credit Facilities | Maximum | Measurement Input, Interest Coverage Ratio | ||
Debt Instrument [Line Items] | ||
Debt instrument, measurement input | 2.47 | |
MSG Networks | MSG Networks Credit Facilities | Measurement Input, Default Rate | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, increase (decrease) | 2% | |
MSG Networks | MSG Networks Credit Facilities | Minimum | ||
Debt Instrument [Line Items] | ||
Commitment fee percentage | 0.225% | |
MSG Networks | MSG Networks Credit Facilities | Minimum | Base Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.25% | |
MSG Networks | MSG Networks Credit Facilities | Minimum | Secured Overnight Financing Rate (SOFR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.25% | |
MSG Networks | MSG Networks Credit Facilities | Maximum | ||
Debt Instrument [Line Items] | ||
Commitment fee percentage | 0.30% | |
MSG Networks | MSG Networks Credit Facilities | Maximum | Base Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.25% | |
MSG Networks | MSG Networks Credit Facilities | Maximum | Secured Overnight Financing Rate (SOFR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.25% | |
MSG Networks | Revolving Credit Facility | MSG Networks Credit Facilities | ||
Debt Instrument [Line Items] | ||
Long-term debt, term | 5 years | |
Principal | $ 0 | |
MSG Networks | Revolving Credit Facility | MSG Networks Term Loan | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding, amount | $ 35,000,000 | |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Face amount | 1,100,000,000 | |
Secured Debt | MSG Networks | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 7.46% | |
Revolving Credit Facility | MSG Networks | ||
Debt Instrument [Line Items] | ||
Face amount | $ 250,000,000 |
Credit Facilities and Convert_5
Credit Facilities and Convertible Notes - LV Sphere - Narrative (Details) $ in Thousands | Dec. 22, 2022 USD ($) | Oct. 11, 2019 USD ($) | Dec. 31, 2023 |
LV Sphere | Subsidiaries | |||
Debt Instrument [Line Items] | |||
Interest rate | 9.83% | ||
LV Sphere | Minimum Liquidity Step-Down | Subsidiaries | |||
Debt Instrument [Line Items] | |||
Debt instrument, covenant, held in cash | $ 25,000 | ||
LV Sphere | Measurement Input, Historical Debt Service Coverage Ratio | Subsidiaries | |||
Debt Instrument [Line Items] | |||
Debt instrument, measurement input | 1.35 | ||
LV Sphere | Measurement Input, Prospective Debt Service Coverage Ratio | Subsidiaries | |||
Debt Instrument [Line Items] | |||
Debt instrument, measurement input | 1.35 | ||
LV Sphere | Minimum | Minimum Liquidity Step-Down | Subsidiaries | |||
Debt Instrument [Line Items] | |||
Debt covenant, minimum consolidated liquidity | $ 50,000 | ||
LV Sphere | Minimum | Measurement Input, Historical Debt Service Coverage Ratio | Subsidiaries | |||
Debt Instrument [Line Items] | |||
Debt instrument, contingent measurement input | 1.50 | ||
LV Sphere | Minimum | Measurement Input, Prospective Debt Service Coverage Ratio | Subsidiaries | |||
Debt Instrument [Line Items] | |||
Debt instrument, contingent measurement input | 1.50 | ||
LV Sphere | Base Rate | Subsidiaries | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.375% | ||
LV Sphere | Secured Overnight Financing Rate (SOFR) | Subsidiaries | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.10% | 0.10% | |
Debt instrument, interest rate, increase (decrease) | 4.375% | ||
Secured Debt | |||
Debt Instrument [Line Items] | |||
Face amount | $ 1,100,000 | ||
Secured Debt | LV Sphere | Subsidiaries | |||
Debt Instrument [Line Items] | |||
Debt instrument term | 5 years | ||
Face amount | $ 275,000 |
Credit Facilities and Convert_6
Credit Facilities and Convertible Notes - Delayed Draw Term Loan Facility - Narrative (Details) - Delayed Draw Term Loan Facility - USD ($) shares in Thousands, $ in Thousands | Aug. 09, 2023 | Apr. 20, 2023 | Jul. 14, 2023 |
Sphere | MSG Entertainment | Common Class A | |||
Line of Credit Facility [Line Items] | |||
Debt conversion, converted instrument, shares issued (in shares) | 1,923 | ||
Line of Credit | Sphere | Secured Debt | MSG Entertainment Holdings | |||
Line of Credit Facility [Line Items] | |||
Loans receivable, maximum borrowing amount | $ 65,000 | ||
Unsecured Debt | |||
Line of Credit Facility [Line Items] | |||
Debt instrument term | 18 months | ||
Face amount | $ 65,000 |
Credit Facilities and Convert_7
Credit Facilities and Convertible Notes - 3.5% Senior Notes - Narrative (Details) $ / shares in Units, $ in Thousands | Dec. 08, 2023 USD ($) day $ / shares | Dec. 05, 2023 $ / shares |
Common Class A | ||
Line of Credit Facility [Line Items] | ||
Option indexed to issuer's equity, cap price (in dollars per share) | $ 42.62 | |
Debt instrument, convertible, conversion price premium on stock price | 50% | |
Share price (in dollars per share) | $ 28.41 | |
3.50% Convertible Senior Notes | Senior Notes | ||
Line of Credit Facility [Line Items] | ||
Interest rate | 3.50% | |
Face amount | $ | $ 258,750 | |
Purchases of capped calls in connection with senior notes | $ | $ 14,309 | |
Debt instrument, convertible, conversion ratio | 0.0281591 | |
Debt instrument, convertible, conversion price (in dollars per share) | $ 35.51 | |
3.50% Convertible Senior Notes | Senior Notes | Debt Conversion Terms One | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, convertible, threshold percentage of stock price trigger | 130% | |
Debt instrument, convertible, threshold trading days | day | 20 | |
Debt instrument, convertible, threshold consecutive trading days | day | 30 | |
Debt instrument, redemption price, percentage of principal amount redeemed | 100% | |
3.50% Convertible Senior Notes | Senior Notes | Debt Conversion Terms Two | Minimum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, convertible, conversion price (in dollars per share) | $ 28.41 | |
3.50% Convertible Senior Notes | Senior Notes | Debt Conversion Terms Two | Maximum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, convertible, conversion price (in dollars per share) | $ 280 | |
3.50% Convertible Senior Notes | Senior Notes | Debt Conversion Terms Three | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, redemption price, percentage | 100% | |
3.50% Convertible Senior Notes | Senior Notes | Debt Conversion, Terms Four | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, redemption price, percentage | 100% | |
3.50% Convertible Senior Notes | Senior Notes | Debt Conversion, Terms Four | Minimum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, aggregate principal amount of the notes percentage | 25% |
Credit Facilities and Convert_8
Credit Facilities and Convertible Notes - Schedule of Interest, Carrying Value, and Fair Value (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 08, 2023 | Jun. 30, 2023 | |
Line of Credit Facility [Line Items] | ||||
Unamortized deferred financing costs | $ 6,111 | $ 6,363 | ||
MSG Networks, LV Sphere, Delayed Draw, 3.5% Senior Notes | ||||
Line of Credit Facility [Line Items] | ||||
Interest Payments | 48,697 | $ 24,468 | ||
Loan Principal Repayments | 106,250 | 24,750 | ||
Total long-term debt, carrying value | 1,417,634 | 1,207,250 | ||
Total long-term debt, fair value | 1,458,949 | 1,199,839 | ||
MSG Networks Term Loan | Debt | ||||
Line of Credit Facility [Line Items] | ||||
Carrying Value | 891,000 | 932,250 | ||
Fair Value | 886,545 | 927,589 | ||
MSG Networks Term Loan | MSG Networks | ||||
Line of Credit Facility [Line Items] | ||||
Interest Payments | 34,825 | 24,468 | ||
Loan Principal Repayments | 41,250 | 24,750 | ||
LV Sphere | Debt | ||||
Line of Credit Facility [Line Items] | ||||
Carrying Value | 275,000 | 275,000 | ||
Fair Value | 273,625 | 272,250 | ||
LV Sphere | LV Sphere | ||||
Line of Credit Facility [Line Items] | ||||
Interest Payments | 13,412 | 0 | ||
Loan Principal Repayments | 0 | 0 | ||
Delayed Draw Term Loan Facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest Payments | 460 | 0 | ||
Loan Principal Repayments | 65,000 | $ 0 | ||
3.50% Convertible Senior Notes | Senior Notes | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 3.50% | |||
3.50% Convertible Senior Notes | Debt | ||||
Line of Credit Facility [Line Items] | ||||
Carrying Value | 251,634 | 0 | ||
Fair Value | $ 298,779 | $ 0 |
Pension Plans and Other Postr_3
Pension Plans and Other Postretirement Benefit Plan - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2023 USD ($) plan | Dec. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) plan | Dec. 31, 2022 USD ($) | Apr. 19, 2023 plan | |
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined benefit plan, number of contributory welfare plans | plan | 2 | ||||
Defined benefit plan, number of sponsored plans | plan | 1 | 1 | |||
Deferred compensation arrangement with individual, compensation expense | $ 245 | $ 160 | $ 138 | $ 6 | |
Gain (loss) on remeasurement | 245 | 160 | 138 | 6 | |
Other Pension, Postretirement and Supplemental Plans | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Defined benefit plan, plan assets, contributions by employer | $ 0 | $ 0 | $ 500 | $ 500 |
Pension Plans and Other Postr_4
Pension Plans and Other Postretirement Benefit Plan - Schedule of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Pension Plans and Postretirement Plan | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | $ 61 | $ 123 | $ 122 | $ 246 |
Interest cost | 429 | 1,189 | 868 | 2,378 |
Expected return on plan assets | 79 | (1,719) | (134) | (3,438) |
Recognized actuarial loss (gain) | 120 | 501 | (104) | 1,002 |
Net periodic benefit cost | 689 | 94 | 752 | 188 |
Postretirement Plan | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | 5 | 15 | 10 | 30 |
Interest cost | 17 | 19 | 34 | 38 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Recognized actuarial loss (gain) | (17) | 9 | (34) | 18 |
Net periodic benefit cost | $ 5 | $ 43 | $ 10 | $ 86 |
Pension Plans and Other Postr_5
Pension Plans and Other Postretirement Benefit Plan - Schedule of Defined Contribution Plans (Details) - Savings Plan - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Total Savings Plan Expenses | $ 2,003 | $ 2,742 | $ 3,213 | $ 5,307 |
Continuing Operations | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Total Savings Plan Expenses | 2,003 | 1,734 | 3,213 | 3,121 |
Discontinued Operations | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Total Savings Plan Expenses | $ 0 | $ 1,008 | $ 0 | $ 2,186 |
Pension Plans and Other Postr_6
Pension Plans and Other Postretirement Benefit Plan - Schedule of Deferred Compensation Plan Amounts Recognized On Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Retirement Benefits [Abstract] | ||
Non-current assets (included in Other non-current assets) | $ 2,856 | $ 1,087 |
Non-current liabilities (included in Other non-current liabilities) | $ (2,855) | $ (1,087) |
Share-based Compensation, Restr
Share-based Compensation, Restricted Stock Units Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation capitalized in property and equipment | $ 1,574 | $ 1,802 | ||
Payment, tax withholding, share-based payment arrangement | 14,618 | 14,980 | ||
Performance Stock Units and Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 12,072 | $ 16,355 | 16,955 | 27,845 |
Vested in period, fair value | 3,267 | 2,995 | 33,421 | 35,127 |
Share-based compensation capitalized in property and equipment | 1,574 | 1,802 | ||
Payment, tax withholding, share-based payment arrangement | $ 459 | $ 225 | $ 14,435 | $ 14,741 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Details) $ in Thousands | 6 Months Ended | |
Dec. 31, 2023 USD ($) plan shares | Dec. 31, 2022 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of share-based compensation plans | plan | 3 | |
Share-based compensation arrangement by share-based payment award, options, grants in period, gross (in shares) | 3,344,000 | 0 |
Share-based compensation arrangement by share-based payment award, options, vested, number of shares (in shares) | 0 | 0 |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | 514,000 | 650,000 |
Awards vested (in shares) | 630,000 | 546,000 |
Performance Stock Units (PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | 404,000 | 566,000 |
Awards vested (in shares) | 273,000 | 91,000 |
Stock Appreciation Rights (SARs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement by share-based payment award, number of shares authorized (in shares) | 188,000 | 0 |
Share-based compensation arrangement by share-based payment award, accelerated vesting, number (in shares) | 0 | 0 |
Employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ | $ 93,115 | |
Period for recognition | 2 years 6 months 18 days |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 | |
Preferred stock, par or stated value per share (in shares) | $ 0.01 | $ 0.01 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | |
Common Class A | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Stock repurchase program, authorized amount | $ 350,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at the beginning of the period | $ 2,635,888 | $ 1,918,726 | $ 2,583,865 | $ 1,975,384 |
Other comprehensive income (loss), net of income taxes | 4,669 | 12,418 | (1,376) | (208) |
Balance at the end of the period | 2,465,164 | 2,018,920 | 2,465,164 | 2,018,920 |
Pension Plans and Postretirement Plan | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at the beginning of the period | (5,316) | (39,787) | (5,138) | (40,287) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 103 | 510 | (138) | 1,020 |
Income tax (expense) benefit | (27) | (176) | 36 | (186) |
Other comprehensive income (loss), net of income taxes | 76 | 334 | (102) | 834 |
Balance at the end of the period | (5,240) | (39,453) | (5,240) | (39,453) |
Cumulative Translation Adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at the beginning of the period | (5,667) | (21,194) | 200 | (8,068) |
Other comprehensive income (loss) before reclassifications | 6,199 | 14,803 | (1,720) | (1,277) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Income tax (expense) benefit | (1,606) | (2,719) | 446 | 235 |
Other comprehensive income (loss), net of income taxes | 4,593 | 12,084 | (1,274) | (1,042) |
Balance at the end of the period | (1,074) | (9,110) | (1,074) | (9,110) |
Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at the beginning of the period | (10,983) | (60,981) | (4,938) | (48,355) |
Other comprehensive income (loss) before reclassifications | 6,199 | 14,803 | (1,720) | (1,277) |
Amounts reclassified from accumulated other comprehensive loss | 103 | 510 | (138) | 1,020 |
Income tax (expense) benefit | (1,633) | (2,895) | 482 | 49 |
Other comprehensive income (loss), net of income taxes | 4,669 | 12,418 | (1,376) | (208) |
Balance at the end of the period | $ (6,314) | $ (48,563) | $ (6,314) | $ (48,563) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||||||
Capital expenditures incurred but not yet paid | $ 64,543 | $ 38,127 | ||||
Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Capital expenditures in connection with services provided | $ 2,374 | $ 22,416 | $ 8,042 | $ 73,086 | ||
Capital expenditures incurred but not yet paid | $ 17,575 | $ 13,412 | ||||
Dolan Family Group | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock exercisable term | 60 days | |||||
605 LLC | Audience Measurement And Data Analytics Services | ||||||
Related Party Transaction [Line Items] | ||||||
Miscellaneous expenses with related party | $ 1,000 | |||||
Dolan Family Group | ||||||
Related Party Transaction [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent | 72.10% | 72.10% | 72.10% | |||
Dolan Family Group | Common Class B | ||||||
Related Party Transaction [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent | 100% | 100% | 100% | |||
Dolan Family Group | Common Class A | ||||||
Related Party Transaction [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent | 5.60% | 5.60% | 5.60% |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Transactions by Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||||
Revenues | $ 314,157 | $ 159,541 | $ 432,164 | $ 282,670 |
Operating expenses (credits): | ||||
Other gains | 115,738 | (7,885) | ||
Restructuring charges | 1,287 | 8,075 | 4,678 | 8,075 |
Related Party | ||||
Related Party Transaction [Line Items] | ||||
Revenues | 1,657 | 0 | 2,047 | 0 |
Operating expenses (credits): | ||||
Operating loss | 79,019 | 34,905 | 155,342 | 69,376 |
Direct operating expenses | 47,459 | 44,859 | 93,537 | 89,107 |
Selling, general and administrative expenses | 31,560 | 9,954 | 61,805 | 19,731 |
Related Party | Media rights fees | ||||
Operating expenses (credits): | ||||
Other gains | 44,485 | 43,433 | 88,670 | 86,200 |
Related Party | Corporate general and administrative expenses, net - MSG Entertainment Transition Services Agreement | ||||
Operating expenses (credits): | ||||
Restructuring charges | 2,805 | |||
Related Party | Origination, master control and technical services | ||||
Operating expenses (credits): | ||||
Other gains | 1,257 | 1,232 | 2,514 | 2,464 |
Related Party | Other operating expenses (credits), net | ||||
Operating expenses (credits): | ||||
Other gains | 7,497 | (285) | 8,041 | (296) |
MSG Sports | Cost reimbursement from MSG Sports - MSG Sports Services Agreement | ||||
Operating expenses (credits): | ||||
Other gains | 0 | (9,475) | 0 | (18,992) |
MSG Entertainment | Corporate general and administrative expenses, net - MSG Entertainment Transition Services Agreement | ||||
Operating expenses (credits): | ||||
Other gains | $ 25,780 | $ 0 | $ 56,117 | $ 0 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Dec. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | ||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 314,157 | $ 159,541 | $ 432,164 | $ 282,670 | |
Depreciation and amortization | (94,290) | (58,814) | |||
Other gains | (115,738) | 7,885 | |||
Restructuring charges | (1,287) | (8,075) | (4,678) | (8,075) | |
Other expense, net | (1,130) | (1,355) | 41,066 | (1,770) | |
Add back: | |||||
Share-based compensation | 16,851 | 35,666 | |||
Depreciation and amortization | 94,290 | 58,814 | |||
Restructuring charges | 1,287 | 8,075 | 4,678 | 8,075 | |
Other gains | 115,738 | (7,885) | |||
Continuing Operations | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | [1] | 314,157 | 159,541 | 432,164 | 282,670 |
Direct operating expenses | [1] | (159,766) | (90,400) | (244,265) | (165,820) |
Selling, general and administrative expenses | [1] | (115,520) | (104,415) | (202,664) | (199,046) |
Depreciation and amortization | (80,031) | (7,386) | (94,290) | (13,519) | |
Impairment and other (losses) gains, net | (117,235) | 1,000 | (115,738) | 3,000 | |
Other gains | 1,000 | 3,000 | |||
Restructuring charges | (1,287) | (8,075) | (4,678) | (8,075) | |
Operating (loss) income | (159,682) | (49,735) | (229,471) | (100,790) | |
Interest income | 5,926 | 2,669 | 10,304 | 6,002 | |
Interest expense | (25,828) | 0 | (25,828) | 0 | |
Other expense, net | (1,130) | (1,355) | 41,066 | (1,770) | |
Loss from continuing operations before income taxes | (180,714) | (48,421) | (203,929) | (96,558) | |
Reconciliation of operating (loss) income to adjusted operating (loss) income: | |||||
Operating (loss) income | (159,682) | (49,735) | (229,471) | (100,790) | |
Add back: | |||||
Share-based compensation | 11,916 | 16,355 | 16,799 | 27,845 | |
Depreciation and amortization | 80,031 | 7,386 | 94,290 | 13,519 | |
Restructuring charges | 1,287 | 8,075 | 4,678 | 8,075 | |
Impairment and other losses, net | 117,235 | (1,000) | 115,738 | (3,000) | |
Other gains | (1,000) | (3,000) | |||
Merger and acquisition related costs, net of insurance recoveries | 380 | 5,486 | (8,663) | 10,136 | |
Amortization for capitalized cloud computing arrangement costs | 22 | 127 | 44 | 248 | |
Remeasurement of deferred compensation plan liabilities | 245 | 154 | 138 | ||
Adjusted operating income | 51,434 | (13,152) | (6,447) | (43,967) | |
Other information: | |||||
Capital expenditures | 47,401 | 279,679 | 231,972 | 541,145 | |
Operating segments | Sphere | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 167,799 | 643 | 175,578 | 1,293 | |
Operating segments | Sphere | Continuing Operations | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 167,799 | 643 | 175,578 | 1,293 | |
Direct operating expenses | (67,338) | 0 | (75,143) | 0 | |
Selling, general and administrative expenses | (97,804) | (74,759) | (181,954) | (151,950) | |
Depreciation and amortization | (78,044) | (5,749) | (90,421) | (10,264) | |
Impairment and other (losses) gains, net | (117,235) | (115,738) | |||
Other gains | 1,000 | 3,000 | |||
Restructuring charges | (1,287) | (4,087) | (4,678) | (4,087) | |
Operating (loss) income | (193,909) | (82,952) | (292,356) | (162,008) | |
Reconciliation of operating (loss) income to adjusted operating (loss) income: | |||||
Operating (loss) income | (193,909) | (82,952) | (292,356) | (162,008) | |
Add back: | |||||
Share-based compensation | 10,985 | 13,056 | 14,904 | 22,842 | |
Depreciation and amortization | 78,044 | 5,749 | 90,421 | 10,264 | |
Restructuring charges | 1,287 | 4,087 | 4,678 | 4,087 | |
Impairment and other losses, net | 117,235 | 115,738 | |||
Other gains | (1,000) | (3,000) | |||
Merger and acquisition related costs, net of insurance recoveries | 200 | (58) | (2,502) | 2,691 | |
Amortization for capitalized cloud computing arrangement costs | 0 | 83 | 0 | 160 | |
Remeasurement of deferred compensation plan liabilities | 245 | 154 | 138 | ||
Adjusted operating income | 14,087 | (60,881) | (68,979) | (124,964) | |
Other information: | |||||
Capital expenditures | 44,298 | 277,014 | 227,461 | 537,253 | |
Operating segments | MSG Networks | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 146,358 | 158,898 | 256,586 | 281,377 | |
Operating segments | MSG Networks | Continuing Operations | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 146,358 | 158,898 | 256,586 | 281,377 | |
Direct operating expenses | (92,428) | (90,400) | (169,122) | (165,820) | |
Selling, general and administrative expenses | (17,716) | (29,656) | (20,710) | (47,096) | |
Depreciation and amortization | (1,987) | (1,637) | (3,869) | (3,255) | |
Impairment and other (losses) gains, net | 0 | 0 | |||
Other gains | 0 | 0 | |||
Restructuring charges | 0 | (3,988) | 0 | (3,988) | |
Operating (loss) income | 34,227 | 33,217 | 62,885 | 61,218 | |
Reconciliation of operating (loss) income to adjusted operating (loss) income: | |||||
Operating (loss) income | 34,227 | 33,217 | 62,885 | 61,218 | |
Add back: | |||||
Share-based compensation | 931 | 3,299 | 1,895 | 5,003 | |
Depreciation and amortization | 1,987 | 1,637 | 3,869 | 3,255 | |
Restructuring charges | 0 | 3,988 | 0 | 3,988 | |
Impairment and other losses, net | 0 | 0 | |||
Other gains | 0 | 0 | |||
Merger and acquisition related costs, net of insurance recoveries | 180 | 5,544 | (6,161) | 7,445 | |
Amortization for capitalized cloud computing arrangement costs | 22 | 44 | 44 | 88 | |
Remeasurement of deferred compensation plan liabilities | 0 | 0 | 0 | ||
Adjusted operating income | 37,347 | 47,729 | 62,532 | 80,997 | |
Other information: | |||||
Capital expenditures | $ 3,103 | $ 2,665 | $ 4,511 | $ 3,892 | |
[1]See Note 15. Related Party Transactions, for further information on related party revenues and expenses. |
Segment Information - Schedul_2
Segment Information - Schedule of Concentration Risk (Details) - Customer Concentration Risk | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts Receivable | Customer A | ||||||
Revenue, Major Customer [Line Items] | ||||||
Concentration risk, percentage | 13% | 23% | ||||
Accounts Receivable | Customer B | ||||||
Revenue, Major Customer [Line Items] | ||||||
Concentration risk, percentage | 13% | 22% | ||||
Accounts Receivable | Customer C | ||||||
Revenue, Major Customer [Line Items] | ||||||
Concentration risk, percentage | 10% | 17% | ||||
Revenue Benchmark | Customer 1 | ||||||
Revenue, Major Customer [Line Items] | ||||||
Concentration risk, percentage | 11% | 24% | 16% | 27% | ||
Revenue Benchmark | Customer 2 | ||||||
Revenue, Major Customer [Line Items] | ||||||
Concentration risk, percentage | 11% | 24% | 16% | 27% | ||
Revenue Benchmark | Customer 3 | ||||||
Revenue, Major Customer [Line Items] | ||||||
Concentration risk, percentage | 9% | 19% | 13% | 22% |
Additional Financial Informat_3
Additional Financial Information - Schedule of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 |
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | $ 614,549 | $ 433,507 | |
Restricted cash | 13,278 | $ 18,235 | |
Total cash, cash equivalents and restricted cash | 627,827 | $ 429,114 | |
Continuing Operations | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 614,549 | 131,965 | |
Restricted cash | 13,278 | 297,149 | |
Total cash, cash equivalents and restricted cash | $ 627,827 | $ 429,114 |
Additional Financial Informat_4
Additional Financial Information - Schedule of Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Additional Financial Information [Abstract] | ||
Prepaid expenses | $ 21,201 | $ 22,616 |
Note and other receivables | 11,050 | 21,453 |
Inventory | 894 | 0 |
Current deferred production content costs | 9,772 | 6,524 |
Other | 3,893 | 5,492 |
Total prepaid expenses and other current assets | $ 46,810 | $ 56,085 |
Additional Financial Informat_5
Additional Financial Information - Schedule of Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Additional Financial Information [Abstract] | ||
Accounts payable | $ 28,032 | $ 39,654 |
Accrued payroll and employee related liabilities | 61,316 | 75,579 |
Cash due to promoters | 67,121 | 73,611 |
Capital expenditure accruals | 164,247 | 236,593 |
Accrued legal fees | 23,159 | 53,857 |
Other accrued expenses | 48,028 | 36,437 |
Total accounts payable, accrued and other current liabilities | $ 391,903 | $ 515,731 |
Additional Financial Informat_6
Additional Financial Information - Schedule of Other Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Additional Financial Information [Abstract] | ||||
Gain on litigation settlement | $ 0 | $ 0 | $ 62,647 | $ 0 |
Realized loss on equity method investments | 0 | 0 | (19,027) | 0 |
Other | (1,130) | (1,355) | (2,554) | (1,770) |
Other (expense) income, net | $ (1,130) | $ (1,355) | $ 41,066 | $ (1,770) |
Additional Financial Informat_7
Additional Financial Information - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Additional Financial Information [Abstract] | ||
Income taxes paid, net | $ 18,789 | $ 4,075 |