MSGS 10-K & 10-Q changes, risk factors and insider trading

The success of a sports business, like ours, is dependent upon the performance and/or popularity of its franchises. The Knicks and Rangers and other sports franchises compete for attendance, viewership and/or advertising, in varying respects and degrees, with other live sporting events, and with sporting events delivered over television networks, radio, the Internet and online services, streaming devices and applications, and other alternative sources, as well as with other leisure-time activities and entertainment options in the New York City metropolitan area, such as television, motion pictures, concerts, music festivals and other live performances, restaurants and nightlife venues, the Internet, social media and social networking platforms and online and mobile services, including sites for online content distribution, video on demand and other alternative sources of entertainment. During some or all of the basketball and hockey seasons, our sports teams face competition from professional baseball (including the Yankees and the Mets), professional football (including the Giants and the Jets), professional soccer (including the New York Red Bulls, the New York City Football Club and the NJ/NY Gotham FC), professional women’s hockey (including the New York Sirens), professional women’s basketball (including the New York Liberty), collegiate sporting events, such as the Big East basketball tournament, other sporting events, including those held at The Garden, and each other. For fans who prefer the unique experience of NHL hockey, we must compete with two other NHL hockey teams located in the New York City metropolitan area (the Islanders and the Devils) as well as with other NHL hockey teams and the NHL itself. Similarly, for those fans attracted to the equally unique experience of NBA basketball, we must compete with another NBA team located in the New York City metropolitan area (the Nets) as well as with other NBA teams and the NBA itself.

Our Business Is Substantially Dependent on the Continued Popularity and/or Competitive Success of the Knicks and the Rangers, Including the Significant Additional Revenue Generated by Advancing in the Playoffs, Which Cannot Be Assured.

Our financial results have historically beenare substantially dependent on, and are expected to continue to substantially depend in large part on, the Knicks and the Rangers remaining popular with our fan bases and, in varying degrees, on the teams achieving on-court and on-ice success, which have a direct effect on ticket sales for the teams’ home games, a large source of revenue for our sports teams. In addition, the popularity of our sports teams can generate fan enthusiasm, resulting in sustained ticket, premium seating, suite, sponsorship, food and beverage and merchandise sales during the season. In addition, the popularity of our sports teams impacts television ratings, which could affect the long-term value of the media rights for the Knicks and/or the Rangers. Furthermore, success in the regular season may qualify one or both of our sports teams for participation in post-season playoffs, which provides us with a significant source of additional revenue, operating income and adjusted operating income. The increased revenue is generated by increasingthe theadditional number of home games played by our sports teams and, more importantly, by generatingthe increased excitement and interest in our sports teams, whichteams can help drive a number of our revenue streams, including by improving attendance and sponsorships, in subsequent seasons. The Knicks last qualified for the post-season during the 2024-252025-26 NBA season and the Rangers last qualified for the post-season during the 2023-24 NHL season. In addition, league, team and/or player actions or inactions, including protests, may impact the popularity of the Knicks, the Rangers or the leagues in which they play. There can be no assurance that any of our sports teams, including the Knicks and the Rangers, will maintain continued popularity or compete in post-season play in the future.

Creating and maintaining our sports teams’ popularity and/or on-court and on-ice competitiveness is key to the success of our business. Accordingly, efforts to improve our revenues and earnings from operations from period to period may be secondary to actions that management believes will generate long-term growth and asset value creation. The competitive positions of our sports teams depend primarily on our ability to develop, obtain and retain talented players, coaches and team executives, for whom we compete with other professional sports teams. Our efforts in this regard may include, among other things, trading for highly compensated players, signing draft picks, free agents or current players to new contracts, engaging in salary arbitration or contract renegotiationnegotiation with existing players, terminating and waiving players and replacing coaches and team executives. Any of these actions could increase expenses (including incurring NBA luxury tax) for a particular period, subject to any salary cap restrictions contained in the respective leagues’ CBAs. There can be no assurance that any actions taken by management to generate and increase our long-term growth and asset value creation will be successful.

•The NBA and the NHL may assert control over certain matters, under certain circumstances, that may affect our revenues such as the local, national and international rights to telecast the games of league members, including the Knicks and the Rangers, licensing of the rights to produce and sell merchandise bearing the logos and/or other intellectual property of our sports teams and the leagues, and the Internet and mobile-based activities of our sports teams. The NBA and NHL have each entered into agreements regarding the national and international telecasts of NBA and NHL games. For example, during the fiscal year ended June 30, 2025, the NBA entered into new national media rights agreements that increased the number of games available for national distribution. As a result, during the 2025-26 season, 34 Knicks games were broadcast nationally, inclusive of games also broadcast by MSG Networks, as compared to 25 games during the 2024-25 season. We receive a share of the income the NBA and the NHL generate from these contracts, which expire at various times. There can be no assurance that the NBA or the NHL will be able to renew or replace these contracts following their expiration on terms as favorable to us as those in the current agreements or that we will continue to receive the same level of revenues in the future. Even though we previously agreed to substantially reduce the amount of media rights fees we receive from MSG Networks for the right to telecast games of the Knicks and the Rangers,Rangers during fiscal year 2025, we still receive significant revenues from MSG Networks for media rights. Changes to league rules, regulations and/or agreements, including changes to league schedules and national and international media rights, have in the past impacted and in the future will likely continue to impact the availability of games covered by our local media rights and negatively affect the rights fees we receive from MSG Networks, which could negatively affect our business and results of operations. For example, underduring the new2025-26 NBA media rights agreements, when the NBA allocates additional Knicks games to the national broadcasters,season, our revenues under the local mediatelecast rights agreements with MSG Networks wouldwere likelyreduced beby reduced.$13.2 million as a result of the decrease in the number of games exclusively available to MSG Networks, compared to a reduction of $5.2 million in the 2024-25 season.

•The NBA imposes a luxury tax and escrow system with respect to player salaries and a revenue sharing plan, and the NHL imposes an escrow system with respect to player salaries and a revenue sharing plan. For fiscal year 2025,2026, the Knicks and the Rangers recorded approximately $81.7$109.6 million in estimated revenue sharing expenses, net of escrow.escrow, and $44.4 million in luxury tax expense. The actual amounts for the 2024-252025-26 season may vary significantly from the estimate based on actual operating results for the respective leagues and all teams for the season and other factors. For a discussion of the NBA luxury tax impacts, see “— Our Basketball and Hockey Decisions, Especially Those Concerning Player and Coach Selection and Salaries, May Have a Material Negative Effect on Our Business and Results of Operations.”

•The possibility of further NBA and/or NHL expansion could create increased competition for the Knicks and the Rangers, respectively. The most recent NHL expansion occurred in 2021 with the addition of the Seattle Kraken (following the addition of the Vegas Golden Knights in 2017). and theThe most recent NBA expansion occurred in 2004 with the addition of the Charlotte Bobcats (now Charlotte Hornets)., and in March 2026, the NBA Board of Governors authorized the league to formally explore potential expansion franchises in Las Vegas and Seattle. Because revenue from national media rights agreements is divided equally among all NBA and NHL teams, any further expansion would dilute the revenue realized by the Knicks and/or the Rangers from such agreements. Expansion also increases competition for talented players among NBA and/or NHL teams. Any expansion in the New York City metropolitan area, in particular, could also draw fan, consumer and viewership interest away from the Knicks and/or the Rangers.

To the degree that our financial results are dependent on our sports teams’ popularity and/or on-court and on-ice success, the likelihood of achieving such popularity or competitive success may be substantially impacted by serious and/or untimely injuries to, or illness of, our players. Even if we take health and safety precautions, our players may nevertheless contract serious illnesses or suffer serious injuries, and, as a result, our ability to participate in games may be substantially impacted. Nearly all of our Knicks and Rangers players, including those with multi-year contracts, have partially or fully guaranteed contracts, meaning that in some cases (subject to the terms of the applicable player contract and CBA), a player or his estate may be entitled to receive his salary even if the player is unable to play as a result of injury or death. These salaries represent significant financial commitments for our sports teams. We maintain insurance policies to mitigate some of the risk of paying certain player salaries in the event of a player’s death or disability. In the event of injuries sustained resulting in lost services (as defined in the applicable insurance policies), generally the insurance policies provide for payment to us of a portion of the player’s salary for the remaining term of the contract or until the player can resume play, in each case following a deductible number of missed games. In no event do the insurance policies provide for payment of lost revenues from any impacts of reduced popularity or competitive success as a result of player injuries. Such insurance may not be available in every circumstance, may not be available on terms that are commercially feasible, or may contain significant dollar limits and/or exclusions from coverage for pre-existing medical conditions. We may choose not to obtain (or may not be able to obtain) such insurance in some cases and we may change coverage levels (or be unable to change coverage levels) in the future.

In October 2015, the Knicks and the Rangers entered into 20-year local mediatelecast rights agreements with MSG Networks, a regional sports network and wholly-owned subsidiary of Sphere Entertainment.Entertainment These agreementsto provide MSG Networks with exclusive local linear and digital rights to home and away games of the Knicks and the Rangers, as well as other team-related programming.

MSG Networks was not able to refinance its credit facilities prior to their maturity in October 2024. After a series of forbearances from its lenders, on June 27, 2025, MSG Networks restructured its indebtedness, with MSG Networks’ lenders writing off approximately $510 million of indebtedness. As part of MSG Networks’ debt restructuring process, the medialocal telecast rights agreements between subsidiaries of MSG Networks, on the one hand, and the Knicks and the Rangers, on the other hand, were amended to effect fee reductions of 28% for the Knicks and 18% for the Rangers, both effective as of January 1, 2025, with no annual rights fee escalators. In addition, the term of the medialocal telecast rights agreements was reduced to end after the 2028-29 seasons,seasons. subjectIn connection with the expiration of each of the rights agreements, MSG Networks has the right to make a firm offer for an additional term of not less than three seasons and the right to match a third party offer that provides for rights fees that are not at least 110% of the rights fees for the first refusalthree years of the term specified in favorthe offirm MSG Networks.offer. As a result of the amendments,amendments and other terms of the local telecast rights agreements, media rights fees for the Knicks and the Rangers were approximately $17.9 million lower for the fiscal year ended June 30, 20252025, compared to the prior fiscal year. Local media rights revenues for the Knicksyear, and theapproximately Rangers totaled $157.4$31.6 million inlower thefor fiscal year ended June 30, 2025,2026, compared to $175.3 million in the fiscal year ended June 30, 2024. Stated annual local media rights fees, subject to reduction in certain circumstances, including if the Company does not make available a minimum number of games in the year, after consideration of the media rights amendments are approximately $139.2 million for the year ending June 30, 2026 as compared to $162.9 million in stated annual local media rights fees for the year ended June 30, 2025. See “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Matters Affecting Comparability — Amendments to Media Rights Agreements” for more information regarding the amendments to the local mediatelecast rights agreements.

Although MSG Networks completed the workout of its indebtedness on June 27, 2025, MSG Networks could in the future default on its obligations under the medialocal telecast rights agreements or seek bankruptcy protection, including as a result of loss of carriage of its programming by its distributors through non-renewal of affiliation agreements, loss of subscribers or transition of MSG Networks to a more limited tier of service.

If MSG Networks were to default on its medialocal telecast rights agreements with us or discharge its medialocal telecast rights agreements with us as part of a bankruptcy proceeding or otherwise, or if we do not renew the agreements upon their expiration, we would lose a significant recurring revenue stream, and would also lose the exposure provided by the MSG Networks broadcasting related to the Knicks and the Rangers, any of which could have a material negative effect on our business and results of operations. Although we would pursue alternative sources of distribution for home and away games of the Knicks and the Rangers, as well as other team-related programming, there can be no assurances as to the timing or success of such alternative sources of distribution, all of which would be subject to the approval of the applicable league.

Our business depends upon the ability and willingness of consumers and businesses to purchase tickets (including season tickets) to our games, license suites at The Garden, spend on food and beverages and merchandise and drive continued advertising and sponsorship revenues, and these revenues are sensitive to general economic conditionsconditions, recessions, fears of recessions and consumer buyingbehavior, patterns.including due to the impacts of tariffs.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this MD&A, there are statements concerning the future operating and future financial performance of Madison Square Garden Sports Corp. and its direct and indirect subsidiaries (collectively, “we,” “us,” “our,” “MSG Sports,” or the “Company”) including statedthe annualpotential localspin-off mediaof rightsthe feesCompany’s New York Rangers (“Rangers”) business (the “Rangers Distribution”) through the distribution of the common stock of MSGS Spinco, Inc. (“Spinco”). See Note 1 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further discussion of the yearRangers ending June 30, 2026.Distribution. Words such as “expects,” “anticipates,” “believes,” “estimates,” “may,” “will,” “should,” “could,” “potential,” “continue,” “intends,” “plans,” and similar words and terms used in the discussion of future operating and future financial performance identify forward-looking statements. Investors are cautioned that such forward-looking statements are not guarantees of future performance, results or events and involve risks and uncertainties and that actual results or developments may differ materially from the forward-looking statements as a result of various factors. Factors that may cause such differences to occur include, but are not limited to:

•the level of our revenues, which depends in part on the popularity and competitiveness of our sports teams and their ability to reach and advance in the playoffs;

•changes in professional sports teams’ compensation, including the impact of signing free agents and executing trades, subject to league salary floors and caps and the impact of luxury tax;

•general economic conditions, especially in the New York City metropolitan area, including any economic downturn, recession, financial instabilityinstability, impacts from government shutdowns or inflation;

•developments affecting the regional sports network industry, including the effects of such developments on MSG Networks Inc.’s (“MSG Networks”) solvency and its ability to perform its obligations under its local mediatelecast rights agreements with us;

•a pandemic or another public health emergency, including a resurgence of the COVID-19 pandemic,emergency and our ability to effectively manage the impacts, including labor market disruptions;

•actual or threatened activities or other developments that discourage or may discourage congregation at prominent places of public assembly, including Madison Square Garden Arena (“The Garden”) where the home games of the New York Knickerbockers (the “Knicks”) and the New York Rangers (the “Rangers”) are played;

•the impact of governmental regulations or laws, changes in how those regulations and laws are interpreted and the continued benefit of certain tax exemptions (including for The Garden) or tax deductions and the ability for us and Madison Square Garden Entertainment Corp. (“MSG Entertainment”) to maintain necessary permits or licenses;

•certain restrictions on transfer and ownership of our common stock related to our ownership of professional sports franchises in the NBA and NHL; and

This MD&A is provided as a supplement to, and should be read in conjunction with, the audited consolidated financial statements and footnotes thereto included in Item 8 of this Annual Report on Form 10-K to help provide an understanding of our financial condition, changes in financial condition and results of operations. In this MD&A, the years ended on June 30, 2026, 2025 and 2024 are referred to as “fiscal year 2026” and “fiscal year 2025”, and “fiscal year 2024”, respectively.

Results of Operations. This section provides an analysis of our results of operations for thefiscal years ended June 30, 20252026 and 2024.2025. For the comparison of our results of operations for thefiscal years ended June 30, 20242025 and 2023,2024, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our 20242025 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on August 13,12, 2024.2025.

Liquidity and Capital Resources. This section provides a discussion of our financial condition,condition and liquidity, as well as an analysis of our cash flows for thefiscal years ended June 30, 20252026 and 2024.2025. The discussion of our financial condition and liquidity includes summaries of (i) our primary sources of liquidity and (ii) our contractual obligations and off-balance sheet arrangements that existed as of June 30, 2025.2026.

Recently Issued Accounting Pronouncements and Critical Accounting Policies.Estimates. This section includes a discussion of accounting policies considered to be important to our financial condition and results of operations and which require significant judgment and estimates on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies,policies and estimates and recently issued accounting pronouncements, are discussed in the notes to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

The Company owns and operates a portfolio of assets featuring some of the most recognized teams in all of sports, including the Knicks of the NBA and the Rangers of the NHL. Both the Knicks and the Rangers play their home games at The Garden. The Company’sCompany otheralso professional sports franchises includeincludes two development league teams — the Hartford Wolf Pack of the American Hockey League and the Westchester Knicks of the NBA G League. Our professional sports franchises are collectively referred to herein as “our sports teams” or the “teams.” In addition, the Company previously owned a controlling interest in Counter Logic Gaming (“CLG”), a North American esports organization. In April 2023, the Company sold its controlling interest in CLG to Hard Carry Gaming Inc. (“NRG”), a professional gaming and entertainment company, in exchange for a noncontrolling equity interest in the combined NRG/CLG company. The Company also operates a professional sports team performance center — the Madison Square Garden Training Center in Greenburgh, NY.

We earn revenue from several primary sources: ticket sales and a portion of suite rental fees at The Garden, our share of distributions from NHL and NBA league-wide national and international televisionmedia contracts and other league-wide revenue sources, sponsorships and signage, food and beverage sales at The Garden and merchandising. We also earn substantial fees from MSG Networks for the local media rights to telecast the games of our sports teams. The amount of revenue we earn is influenced by many factors, including the popularity and on-court or on-ice performance of our sports teams and general economic and health and safety conditions. In particular, when our sports teams have strong on-court and on-ice performance, we benefit from increased demand for tickets and premium hospitality, potentially greater food, beverage and merchandise sales from increased attendance and increased sponsorship opportunities. When our sports teams qualify for the playoffs, we also benefit from the attendance and in-game spending at the playoff games. The year-to-year impact of team performance is somewhat moderated by the fact that a significant portion of our revenue derives from media rights fees, suite rental fees and sponsorship and signage revenue, all of which are generally contracted on a multi-year basis. Nevertheless, the long-term performance of our business is tied to the success and popularity of our sports teams. In addition, due to the NBA and NHL playing seasons, revenues from our business are typically concentrated in the second and third quarters of each fiscal year.

The Company and MSG Networks are parties to medialocal telecast rights agreements covering the local telecast rights for the Knicks and the Rangers. On June 27, 2025, our sports teams and MSG Networks entered into amendments with respect to the medialocal telecast rights agreements. See “— Factors Affecting Operating Results — Amendments to MediaLocal Telecast Rights Agreements” for more information.

We earn revenue through the sale of suite and premium club licenses at The Garden, which are generally sold by MSG Entertainment to corporate customers via multi-year licenses. Under standard licenses, the licenseeslicensee paypays an annual license fee, which varies depending on the location and type of the suite or club. The license fee includes, for each seat in the suite or club, tickets for our home games and other events at The Garden that are presented by MSG Entertainment for which tickets are sold to the general public, subject to certain exceptions. In addition, suite holders separately pay for food and beverage service in their suites at The Garden. Food and non-alcoholic beverage service is included in the annual license fee paid by club members.

Because suite and club licenses cover both our games and events that MSG Entertainment presents at The Garden, suite and club rental revenue is shared between us and MSG Entertainment under the Arena License Agreements (as defined below). Pursuant to the Arena License Agreements, the Knicks and the Rangers are entitled to 35% and 32.5%, respectively, of the revenues received by MSG Entertainment in connection with suite and club licenses.

We earn revenuesrevenue through the sale of sponsorships and signage specific to the teams. Sales of team specific signage generally involve the sale of advertising space within The Garden during our sports teams’ home games and include the sale of signage on the ice and on the boards of the hockey rink during Rangers games, courtside during Knicks games, and/or on the various scoreboards and display panels at The Garden, as well as virtual signage during Knicks and Rangers broadcasts. We offer both television camera-visible and non-camera-visible signage space. We also earn a portion of revenues through MSG Entertainment’s sale of venue indoor signage space and sponsorship rights at The Garden that are not specific to our teams pursuant to the Arena License Agreements. Under the Arena License Agreements, the Knicks and the Rangers are entitled to 25% and 22.5% of revenue from certain shared arena sponsorship assets, respectively, and 20% and 17.5% of revenue from any arena naming rights, respectively.

We earn revenuesrevenue from the sale of food and beverages during our sports teams’ games at The Garden. In addition to concession-style sales of food and beverages, which represent the majority of food and beverage revenues, The Garden also provides higher-end dining at premium clubs as well as catering for suites. Pursuant to the Arena License Agreements, the Knicks and the Rangers receive 50% of net profits from the sales of food and beverages during their games at The Garden.

Amounts collected for ticket sales, media rights, suite licenses and clubs, sponsorships, and venue signage in advance of the Company’s satisfaction of its contractual performance obligations are recorded as deferred revenue and are recognized as revenues when earned.

TheOur most significant expenses are player and other team personnel salaries. We also incur costs for travel, player insurance, league operating assessments (including a 6% NBA assessment on regular season ticket sales), NBA and NHL revenue sharing, NBA luxury tax, when applicable, and charges for transactions relating to players for career-ending and season-ending injuries, trades, and waivers and contract termination costs of players and other team personnel, including coaches and team executives.

In addition, we are party to long term leases with MSG Entertainment that end June 30, 2055 that allow the Knicks and the Rangers to play their home games at The Garden (the “Arena License Agreements”). The Arena License Agreements provide for fixed payments to be made from inception through June 30, 2055 in 12 equal installments during each year of the contractual term. The contracted license fee for the first full contract year endingended June 30, 2021 was approximately $22,500 for the Knicks and approximately $16,700 for the Rangers, and then for each subsequent year, the license fees are 103% of the license fees for the immediately preceding contract year. Recognition of operating lease costs is recorded on a straight-line basis over the term of the applicable agreement based upon the value of total future payments under the arrangement. Operating lease costs associated with the Knicks and the Rangers playing home games at The Garden includes operating lease costs of (i) $44,052$45,374 and $42,769$44,052 of expense paid in cash for thefiscal years ended June 30, 20252026 and 2024,2025, respectively, and (ii) a non-cash expense of $23,566$22,245 and $24,850$23,566 for thefiscal years ended June 30, 20252026 and 2024,2025, respectively.

NBA CBA. On April 26, 2023, the NBA and the National Basketball Players Association (“NBPA”) announced that a new seven-year CBA had been ratified by the NBA Board of Governors and the NBA players. The new NBA CBA expires after the 2029-30 season, but each of the NBA and the NBPA has the right to terminate the CBA effective following the 2028-29 season. The new CBA includes certain changes to certain league rules and regulations, including revised luxury tax rates which will becomebecame effective with the 2025-26 season.

NBA Luxury Tax. Amounts in this paragraph are in thousands, except for luxury tax rates. The NBA CBA generally provides for a luxury tax that is applicable to all teams with aggregate player salaries exceeding a threshold that is set prior to each season based upon projected league-wide revenues (as defined under the NBA CBA),. with theThe amount of luxury tax owed is determined based onupon the amount of aggregate player salaries exceeding the season’s luxury tax threshold and tax rates based upon that season’s luxury tax bracket and tax rates.bracket. The luxury tax bracketbrackets for the 2024-25 seasonand was2025-26 seasons were $5,168 and $5,685, respectively, and the luxury tax bracket for subsequent seasons will increase annually at the same rate as the NBA salary cap. Through the 2024-25 season, luxury tax rates for teams with aggregate player salaries above such threshold startstarted at $1.50 for each $1.00 of team salary exceeding the threshold by 0% - 100% of the luxury tax bracket and scalescaled up to $3.25 for each $1.00 of team salary exceeding the threshold by 300% - 400% of the luxury tax bracket. An additional tax rate increment of $0.50 appliesapplied for each additional 100% of the luxury tax bracket of each $1.00 of team salary exceeding the threshold by greater than 400% of the luxury tax bracket. In addition, through the 2024-25 season, for teams that arewere taxpayers in at least three of four previous seasons, the above tax rates arewere increased by $1.00 for each increment. Beginning with the 2025-26 season, luxury tax rates for teams with aggregate player salaries above such threshold start at $1.00 for each $1.00 of team salary exceeding the threshold by 0% - 100% of the luxury tax bracket and scale up to $4.75 for each $1.00 of team salary exceeding the threshold by 300% - 400% of the luxury tax bracket. An additional tax rate increment of $0.50 applies for each additional 100% of the luxury tax bracket of each $1.00 of team salary exceeding the threshold by greater than 400% of the luxury tax bracket. In addition, beginning with the 2025-26 season, for teams that are taxpayers in at least three of the four previous seasons, the above tax rates are increased by $2.00 for each increment. Fifty percent of the aggregate luxury tax payments is a funding source for the revenue sharing plan (described below) and the remaining 50% of such payments is distributed in equal shares to non-taxpaying teams. For the 2025-26 and 2024-25 season,seasons, the Knicks were a luxury tax payer and we recorded luxury tax expense of $38,035$44,437 and $38,035, respectively, for thefiscal yearyears ended2026 June 30,and 2025. For the 2023-24 season, the Knicks were not a luxury tax payer and we recorded $11,968 of luxury tax proceeds from tax-paying teams for thefiscal year ended June 30, 2024. Tax obligations for years beyond the 2024-252025-26 season will be subject to contractual player payroll obligations and corresponding NBA luxury tax thresholds. The Company recognizes the estimated amount associated with luxury tax expense or the amount it expects to receive as a non-tax paying team, if applicable, on a straight-line basis over the NBA regular season as a component of direct operating expenses.

Our net provisions for revenue sharing, net of escrow, for thefiscal year ended2026 June 30, 2025 waswere approximately $37,904.$66,065. The actual amounts for the 2024-252025-26 season may vary significantly from the recorded provision based on actual operating results for the league and all NBA teams for the season and other factors.

NHL CBA. The current NHL CBA expireswas scheduled to expire on September 15, 2026 (with the possibility of a one-year extension in certain circumstances).2026. On July 8, 2025, the NHL and the National Hockey League Players’ Association (“NHLPA”) announced that a new four-year CBA had been ratified by the NHL Board of Governors and the NHL players. The new NHL CBA will be effective on September 15, 2026 and expires after the 2029-30 season. The NHL CBA provides for a salary floor (i.e., a floor on each team’s aggregate player salaries) and a “hard” salary cap (i.e., teams may not exceed a stated maximum,maximum), which isare adjusted each season based upon league-wide revenues).revenues.

NHL Escrow System/Revenue Sharing. The NHL CBACBA, applicable prior to the 2026-27 season, provides that each season the NHL players in the aggregate receive as player compensation 50% of that season’s league-wide revenues. Because the aggregate amount to be paid to the players is based upon league-wide revenues and not on a team-by-team basis, the Company may pay its players a higher or lower percentage of the Rangers’ revenues than other NHL teams pay of their own revenues. In order to implement the escrow system, NHL teams may withhold a portion of each player’s salary and contribute the withheld amounts to an escrow account. If the league’s aggregate player compensation for a season exceeds the designated percentage (50%) of that season’s league-wide revenues, the excess is retained by the league. Any such excess funds are distributed to all teams in equal shares. In addition, the NHL CBA limits the amount of deductions to be withheld from player salaries each year. If annual escrow deductions from player salaries are insufficient to limit league-wide player salaries to 50% of that season’s league-wide revenues, any shortfall will be carried forward to future seasons and remain due from the players to the league. If the league’s aggregate player compensation for a season is less than the designated percentage (50%) of that season’s league-wide revenues, the deficiency is collected from the teams and distributed to the players.

The NHL CBA also provides for a revenue sharing plan. The plan generally requires the distribution of a pool of funds not more than 6.055% of league-wide revenues to certain qualifying lower-revenue teams and is funded as follows: (a) 50% from contributions by the top ten revenue earning teams (based on preseason and regular season revenues, net of arena costs) in accordance with a formula; (b) then from payments by teams participating in the playoffs, with each team contributing 35% of its gate receipts for each home playoff game; and (c) the remainder from centrally-generated NHL sources. Our net provisions for revenue sharing, net of escrow, for thefiscal yearyears ended2026 June 30,and 2025 waswere approximately $43,828.$43,530 and $43,828, respectively. The actual amounts for the 2025-26 and 2024-25 seasonseasons may vary significantly from the recorded provision based on actual operating results for the league and all NHL teams for the season and other factors. The Rangers are consistently among the top ten revenue earning teams and, accordingly, have consistently contributed to the top ten revenue earning teams component of the plan.

The new NHL CBACBA, which is applicable starting with the 2026-27 season, includes certain changes to league rules and regulations, including replacing one preseason home game with a regular season home game, and changes to the revenue sharing plan which, beginning with the 2026-27 season, will be funded as follows: (a) 50% from contributions by the top eleven revenue earning teams (based on preseason and regular season revenues, net of arena costs) in accordance with a formula; (b) then from payments by teams participating in the playoffs, with each team contributing 35% of its gate receipts for each home playoff game in the first round of the playoffs and 50% of its gate receipts for each home playoff game in subsequent playoff rounds; and (c) the remainder from centrally-generated NHL sources. The Rangers are consistently among the top eleven revenue earning teams and, accordingly, are expected to contribute to the top eleven revenue earning teams component of the plan.

Our teams also pay expenses associated with day-to-day operations, including for travel, equipment maintenance and player insurance. Direct variable day-of-event costs incurred at The Garden, such as the costs of front-of-house and back-of-house staff, including electricians, laborers, box office staff, ushers, security, and event production, are charged to the Company.Company, and we also incur costs associated with VIP amenities provided to certain ticket holders.

As members of the NBA and NHL, the Knicks and the Rangers, respectively, are also subject to league assessments.assessments, which include costs incurred by the NBA and NHL to operate each league. The governing bodies of each league determine the amount of each season’s league assessments that are required from each member team. The NBA imposes on each team a 6% assessment on regular season ticket revenue.

Other expenses primarily include Selling,selling, general and administrative expenses that consist of (i) administrative costs, including compensation, costs under the Company’s services agreement with MSG Entertainment, professional fees, and operating lease costs and professional fees,costs, (ii) fees related to the Company’s Sponsorship Sales and Service Representation Agreements (as defined below), and (iii) sales and marketing costs.

Our operating results are largely dependent on the continued popularity and/or on-court or on-ice competitiveness of our Knicks and Rangers teams, which have a direct effect on ticket sales for the teams’ home games and are each team’s largest single source of revenue. As with other sports teams, the competitive positions of our sports teams depend primarily on our ability to develop, obtain and retain talented players, for which we compete with other professional sports teams. A significant factor in our ability to attract and retain talented players is player compensation. The Company’s operating results reflect the impact of high costs for player salaries (including NBA luxury tax, if any) and salaries of non-player team personnel. In addition, we have incurred significant charges for costs associated with transactions relating to players on our sports teams for season-ending and career-ending injuries and for trades, waivers and contract terminations of players and other team personnel, including team executives. Waiver and termination costs reflect our efforts to improve the competitiveness of our sports teams. These transactions can result in significant charges as the Company recognizes the estimated ultimate costs of these events in the period in which they occur, although amounts due to these individuals are generally paid over their remaining contract terms. For example, the expenseexpenses for these transactions waswere a net provision of $49,148 and $781 for fiscal yearsyear 2025 and 2024, respectively.2025. These expenses add to the volatility of our operating results. We expect to continue to pursue opportunities to improve the overall quality of our sports teams and our efforts may result in continued significant expenses and charges. Such expenses and charges may result in future operating losses although it is not possible to predict their timing or amount. OurIn addition, our performance has been, and may in the future be, impacted by work stoppages. See “Part I — Item 1A. Risk Factors — Economic and Business Relationship Risks —Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations.”

In addition to our future performance being dependent upon the continued popularity and/or on-court or on-ice competitiveness of ourthe Knicks and Rangers teams,Rangers, it is also dependent on general economic conditions, in particular those in the New York City metropolitan area, and the effect of these conditions on our customers. An economic downturn could adversely affect our business and results of operations as it may lead to lower demand for suite licenses and tickets to the games of our sports teams, which would also negatively affect merchandise and concession sales, as well as decrease levels of sponsorship and venue signage revenues.

Amendments to MediaLocal Telecast Rights Agreements

On June 27, 2025, the medialocal telecast rights agreements between subsidiaries of MSG Networks, on the one hand, and KnicksNew LLCYork and RangersKnicks, LLC (each“Knicks asLLC”) definedand hereinNew York Rangers, LLC (“Rangers LLC”), on the other hand, were amended, as follows:

◦a change to the contract expiration date to the end of the 2028-29 season, subject to aMSG Networks’ right to make a firm offer for an additional term of not less than three seasons and to match a third-party offer unless the third-party offer provides rights fees for the first refusalthree inyears favorthat ofare MSGat Networks;least and Concurrent with the amendments to the media rights agreements, MSG Networks issued penny warrants to the Company exercisable for 19.9%110% of the equityrights interestsfees specified in MSG Networks.Networks’ firm offer.

As a result of the amendments to the medialocal telecast rights agreements, medialocal telecast rights fees revenues for thefiscal yearyears ended2026 June 30,and 2025 have been recorded at the applicable reduced rate described above. The Company willalso alsoexpects to record medialocal telecast rights fees revenues reflecting the reduced rates described above in future periods.

Comparison of theFiscal Year Ended June 30, 20252026 versus theFiscal Year Ended June 30, 20242025

Revenues for thefiscal year ended June 30, 20252026 increased $12,071,$114,602, or 1%,11%, to $1,039,220$1,153,822 as compared to thefiscal prioryear year.2025. The net increase was attributable to the following:

The increase in pre/regular season ticket-relatedsuite revenues was primarily due to higher averagenet per-gamesales revenue.of suite products.

The decreaseincrease in pre/regular season food, beverage and merchandise sales was primarily due to lowerhigher average per-game revenue and higher online sales of merchandise. Merchandise sales for thefiscal year ended June 30, 20242026 included the positive impact of new Rangers’ jersey launches.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this MD&A, there are statements concerning the future operating and future financial performance of Madison Square Garden Sports Corp. and its direct and indirect subsidiaries (collectively, “we,” “us,” “our,” “MSG Sports,” or the “Company”), including stated annual local media rights fees for the fiscal year ending June 30, 2026.2026 and the potential spin-off the Company’s New York Rangers (“Rangers”) business (the “Rangers Distribution”). See Note 1 to the consolidated financial statements included in “Part I — Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for further discussion of the Rangers Distribution. Words such as “expects,” “anticipates,” “believes,” “estimates,” “may,” “will,” “should,” “could,” “potential,” “continue,” “intends,” “plans,” and similar words and terms used in the discussion of future operating and future financial performance identify forward-looking statements. Investors are cautioned that such forward-looking statements are not guarantees of future performance, results or events and involve risks and uncertainties and that actual results or developments may differ materially from the forward-looking statements as a result of various factors. Factors that may cause such differences to occur include, but are not limited to:

•activities or other developments that discourage or may discourage congregation at prominent places of public assembly, including Madison Square Garden Arena (“The Garden”) where the home games of the New York Knickerbockers (the “Knicks”) and the New York Rangers (the “Rangers”) are played;

•certain restrictions on transfer and ownership of our common stock related to our ownership of professional sports franchises in the NBA and NHL; and

Results of Operations. This section provides an analysis of our unaudited results of operations for the three and sixnine months ended DecemberMarch 31, 20252026 compared to the three and sixnine months ended DecemberMarch 31, 2024.2025.

Liquidity and Capital Resources. This section focuses primarily on (i) the liquidity and capital resources of the Company, (ii) an analysis of the Company’s cash flows for the sixnine months ended DecemberMarch 31, 20252026 compared to the sixnine months ended DecemberMarch 31, 2024,2025, and (iii) certain contractual obligations.

The Company owns and operates a portfolio of assets featuring some of the most recognized teams in all of sports, including the Knicks of the NBA and the Rangers of the NHL. Both the Knicks and the Rangers play their home games at The Garden. The Company’s other professional sports franchises include two development league teams — the Hartford Wolf Pack of the American Hockey League and the Westchester Knicks of the NBA G League. The Company also operates a professional sports team performance center — the Madison Square Garden Training Center in Greenburgh, NY.

Amendments to MediaLocal Telecast Rights Agreements

On June 27, 2025, the medialocal telecast rights agreements between subsidiaries of MSG Networks, on the one hand, and New York Knicks, LLC (“Knicks LLC”) and New York Rangers, LLC (“Rangers LLC”), on the other hand, were amended, as follows:

Concurrent with the amendments to the medialocal telecast rights agreements, MSG Networks issued penny warrants to the Company exercisable for 19.9% of the equity interests in MSG Networks.

As a result of the amendments to the medialocal telecast rights agreements, medialocal telecast rights fees revenues for the three and sixnine months ended DecemberMarch 31, 2026 and 2025 have been recorded at the applicable reduced rate described above. The Company also expects to record medialocal telecast rights fees reflecting the reduced rates described above in future periods.

The Company’s operating results are impacted by the number of home games the Knicks and the Rangers play at The Garden during each quarter of the fiscal year. For the three and six months ended DecemberMarch 31, 2025,2026, the Knicks and the Rangers played a combined fourfive additionalfewer home games at The Garden during the current year periodsperiod as compared to the prior year periods.period. For the nine months ended March 31, 2026, the Knicks and the Rangers played a combined one fewer home game at The Garden during the current year period as compared to the prior year period. The Knicks played 2019 games at The Garden during the three months ended March 31, 2026 and six39 games at The Garden during the nine months ended DecemberMarch 31, 20252026 as compared to 1723 gamesand 40 games, respectively, during the prior year periods. As a result of the NBA Cup, the Knicks will play 43 pre/regular season home games at The Garden during the 25-26 season as compared to 44 pre/regular season home games during the 24-25 season. The Rangers played 19 games at The Garden during the three months ended DecemberMarch 31, 20252026 and 2140 games at The Garden during the sixnine months ended DecemberMarch 31, 20252026 as compared to 1820 and 2040 games, respectively, during the prior year periods.

Comparison of the three and sixnine months ended DecemberMarch 31, 20252026 versus the three and sixnine months ended DecemberMarch 31, 20242025

Revenues increased $45,665,$8,002, or 13%,2%, to $403,424$432,199 for the three months ended DecemberMarch 31, 20252026 as compared to the prior year period. Revenues increased $31,812,$39,814, or 8%,5%, to $442,878$875,077 for the sixnine months ended DecemberMarch 31, 20252026 as compared to the prior year period.

The increases in revenues from league distributions for the three and sixnine months ended DecemberMarch 31, 20252026 were primarily due to increased rights fees under the NBA’s new national media rights agreements, which began with the 2025-26 NBA regular season, as well as an incremental league distribution received from the NBA in the current year periods.related to the impact of the NBA Cup on the Knicks' 2025-26 game schedule. In addition, for the sixnine months ended DecemberMarch 31, 2025,2026, the increase was partially offset by a decrease in certain league distributions unrelated to national media rights fees.

The increasesincrease in suite revenues for the three and six months ended DecemberMarch 31, 20252026 werewas primarily due to higher net sales of suite productsproducts, andoffset by the Knicks and the Rangers playing a combined fourfive additionalfewer home games at The Garden during the current year periodsperiod as compared to the prior year periods.period. The increase in suite revenues for the nine months ended March 31, 2026 was primarily due to higher net sales of suite products.

The increasesdecrease in pre/regular season food,ticket-related beverage and merchandise salesrevenues for the three and six months ended DecemberMarch 31, 20252026 werewas primarily due to higher online sales of merchandise, the Knicks and the Rangers playing a combined fourfive additionalfewer home games at The Garden during the current year periodsperiod as compared to the prior year periods,period, andpartially offset by higher average per-game revenue. MerchandiseThe salesincrease in pre/regular season ticket-related revenues for the three and sixnine months ended DecemberMarch 31, 20252026 includedwas primarily due to higher average per-game revenue, partially offset by the positiveKnicks impactand ofthe newRangers Rangers’playing jerseya launches.combined one fewer home game during the current year period as compared to the prior year period.

The decreasesdecrease in revenuesrevenue from local media rights fees for the three andmonths sixended March 31, 2026 was primarily due to a reduction in local telecast rights fees due to a decrease in the number of games exclusively available to MSG Networks during the current fiscal year as compared to the prior fiscal year. The decrease in revenue from local media rights fees for the nine months ended DecemberMarch 31, 20252026 werewas primarily due to reduced local mediatelecast rights fees as a result of amendments to the Knicks’ and the Rangers’ local mediatelecast rights agreements with MSG Networks entered into in the fourth quarter of fiscal year 2025, and, to a lesser extent,and a reduction in local telecast rights fees due to a decrease in the number of games exclusively available to MSG Networks during the current fiscal year as compared to the prior fiscal year. Stated annual local media rights fees, subject to adjustments in certain circumstances, including if the Company does not make available a minimum number of games in the year, after consideration of the medialocal telecast rights amendments are $139,237 for the fiscal year ending June 30, 2026 as compared to $162,939 in stated annual local media rights fees for the fiscal year ended June 30, 2025.

Direct operating expenses increased $35,636,$38,168, or 13%,12%, to $311,389$354,503 for the three months ended DecemberMarch 31, 20252026 as compared to the prior year period. Direct operating expenses increased $35,704,$73,872, or 13%,12%, to $674,171 for the sixnine months ended DecemberMarch 31, 20252026 as compared to the prior year period.

The increases in team personnel compensation for the three and sixnine months ended DecemberMarch 31, 20252026 were primarily due to changes in the Knicks and the Rangers rosters.

The increases in net provisions for league revenue sharing expense (net of escrow and excluding playoffs) and NBA luxury tax for the three and sixnine months ended DecemberMarch 31, 20252026 were primarily due to higher provisions for league revenue sharing expense (net of escrow and excluding playoffs) and higher NBA luxury tax expense. In addition, for the six months ended December 31, 2025, the increase wasexpense, partially offset by the net impact of adjustments to prior seasons’ revenue sharing expense (net of escrow).

Net provisions (credits) for certain team personnel transactions were as follows:

Selling, general and administrative expenses for the three months ended DecemberMarch 31, 20252026 increaseddecreased $1,165,$998, or 2%,1%, to $69,065$73,699 as compared to the prior year period primarily driven by (i)lower higherprofessional employeefees compensationof $7,183 and related benefits of $2,096, (ii) higher costs related to the Services Agreement of $1,424, (iii) higher sales and marketing costs of $1,227, and (iv) higherlower other general and administrative expenses, partially offset by thehigher timingemployee compensation and related benefits of lower$7,528, operatingprimarily leasedue to executive management transition costs of $2,240,$6,939 andrecognized lowerin professionalthe feescurrent ofyear $2,070.period.

Selling, general and administrative expenses for the sixnine months ended DecemberMarch 31, 20252026 increased $6,367,$5,369, or 5%,3%, to $126,854$200,553 as compared to the prior year period primarily driven by (i) higher employee compensation and related benefits of $3,103,$10,632, including executive management transition costs of $6,939 recognized in the current year period, (ii) higher costs related to the Services Agreement of $3,038, (iii) higher sales and marketing costs of $1,389,$2,523 and (iviii) higher other general and administrative expenses,expenses. The increase was partially offset by lower professional fees of $1,982.$9,167.

Operating income for the three months ended DecemberMarch 31, 20252026 increaseddecreased $8,865,$30,379, or 67%,94%, to $22,180$1,963 as compared to the prior year period primarily due to higher revenues,direct operating expenses, partially offset by higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses.revenues.

Operating income (loss) for the sixnine months ended DecemberMarch 31, 20252026 decreased $10,287 toreflected an operating loss of $5,245$3,282 asand comparedoperating toincome (loss) for the priornine yearmonths periodended March 31, 2025 reflected operating income of $37,384. The decrease was primarily driven by higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, partially offset by higher revenues.

Interest income for the three months ended DecemberMarch 31, 20252026 decreased $194,$318, or 28%,30%, to $496$733 as compared to the prior year period.

Interest income for the sixnine months ended DecemberMarch 31, 20252026 decreased $480,$798, or 31%, to $1,074$1,807 as compared to the prior year period.

Interest expense for the three months ended DecemberMarch 31, 20252026 increaseddecreased $623,$185, or 11%,4%, to $6,210$4,835 as compared to the prior year period.

Interest expense for the sixnine months ended DecemberMarch 31, 20252026 increaseddecreased $159, or 1%,$26 to $11,801$16,636 as compared to the prior year period.

Miscellaneous (expense) income, net for the three months ended DecemberMarch 31, 20252026 and 20242025 reflected net expense of $1,506$11,155 and $6,609,$5,743, respectively. The decrease in miscellaneous (expense) income, net relates to changes in fair value in the Company’s investments.

Miscellaneous (expense) income, net for the sixnine months ended DecemberMarch 31, 20252026 reflected net income of $13,579$2,424 and miscellaneous (expense) income, net for the sixnine months ended DecemberMarch 31, 20242025 reflected net expense of $7,735.$13,478. The increase in miscellaneous (expense) income, net relates to changes in fair value in the Company’s investments.

Changes in tax regulations could limit the availability of tax benefits or deductions that the Company expects to claim or otherwise increase the taxes imposed on the Company’s operations. For example, to the extent the expansion of Section 162(m) of the U.S. Internal Revenue Code, which will become effective for the Company’s fiscal year ending June 30, 2028, reduces the amount of tax deductions available to us, our income tax expense would increase, which would reduce our net income.income, all of which could have a significant impact on our business and results of operations. See “Item 1A. Risk Factors—Operational Risks—We Are Subject to Governmental Regulation, Which Can Change, and Any Failure to Comply With These Regulations May Have a Material Negative Effect on Our Business and Results of Operations” in our 2025 Form 10-K.

The following are the reconciliations of operating income (loss) to adjusted operating income for the three and sixnine months ended DecemberMarch 31, 20252026 and 20242025:

For the sixthree months ended DecemberMarch 31, 2025,2026, adjusted operating income decreased $9,114,$26,623, or 51%,72%, to $8,867$10,308 as compared to the prior year period. The decrease in adjusted operating income was primarily due to higher direct operating expenses and, to a lesser extent, higher selling, general and administrative expenses, partially offset by higher revenues.revenues and lower selling, general and administrative expenses.

As of DecemberMarch 31, 2025,2026, we had $81,302$107,039 in Cash and cash equivalents. In addition, as of DecemberMarch 31, 2025,2026, the Company’s deferred revenue obligations were $205,141,$78,250, net of billed, but not yet collected deferred revenue. This balance is primarily comprised of obligations in connection with tickets and suites.

We believe we have sufficient liquidity, including approximately $81,302$107,039 in Cash and cash equivalents as of DecemberMarch 31, 2025,2026, along with $408,000$433,000 of additional available borrowing capacity under existing credit facilities (as of DecemberMarch 31, 20252026), to fund our operations and satisfy any obligations for the foreseeable future.

The following table summarizes the Company’s cash flow activities for the sixnine months ended DecemberMarch 31, 20252026 and 20242025: