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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 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. (formerly The Madison Square Garden Company) and its direct and indirect subsidiaries (collectively, “we,” “us,” “our,” or the “Company”) including, the completion of the National Basketball Association (the “NBA”) and National Hockey League (the “NHL”) 2019-20 and 2020-21 seasons, and the impact of COVID-19 on our future operations. See “Part I – Item 1. Business” for further discussion of the MSGE Distribution (defined below). 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 duration and severity of the coronavirus pandemic and our ability to effectively manage the impacts, including the unavailability of the Madison Square Garden Arena (“The Garden”) and league decisions regarding the resumption of play;

the impact of the suspension or cancellation of the 2019-20 or 2020-21 NBA and NHL seasons on our ability to recognize revenue from national media rights fees;

the level of our revenues, which depends in part on the popularity and competitiveness of our sports teams;

costs associated with player injuries, waivers or contract terminations of players and other team personnel;

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

the level of our capital expenditures and other investments;

general economic conditions, especially in the New York City;

the demand for sponsorship arrangements and for advertising;

competition, for example, from other teams, and other sports and entertainment options;

changes in laws, NBA or NHL rules, regulations, guidelines, bulletins, directives, policies and agreements, including the leagues’ respective collective bargaining agreements (each a “CBA”) with their players’ associations, salary caps, escrow requirements, revenue sharing, NBA luxury tax thresholds and media rights, or other regulations under which we operate;

any NBA, NHL or other work stoppage in addition to those related to COVID-19 impacts;

any economic, political or other actions, such as boycotts, protests, work stoppages or campaigns by labor organizations;

seasonal fluctuations and other variation in our operating results and cash flow from period to period;

the level of our expenses, including our corporate expenses;

business, reputational and litigation risk if there is a security incident resulting in loss, disclosure or misappropriation of stored personal information or other breaches of our information security;

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

the evolution of the esports industry and its potential impact on our esports businesses;

the acquisition or disposition of assets or businesses and/or the impact of, and our ability to successfully pursue, acquisitions or other strategic transactions;

our ability to successfully integrate acquisitions or new businesses into our operations;

the operating and financial performance of our strategic acquisitions and investments, including those we may not control;

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

the impact of any government plans to redesign New York City’s Pennsylvania Station;

a default by our subsidiaries under their respective credit facilities;

business, economic, reputational and other risks associated with, and the outcome of, litigation and other proceedings;

financial community and rating agency perceptions of our business, operations, financial condition and the industry in which we operate;

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

the tax free treatment of the distribution of the outstanding common stock of the Company to the shareholders of MSG Networks Inc. in fiscal year 2016 and the MSGE Distribution;

the performance by MSG Entertainment of its obligations under various agreements with the Company related to the MSGE Distribution and ongoing commercial arrangements; and

the factors described under “Part I – Item 1A. Risk Factors” included in this Annual Report on Form 10-K.

We disclaim any obligation to update or revise the forward-looking statements contained herein, except as otherwise required by applicable federal securities laws.

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Seasonality of Our Business. This section discusses the seasonal performance of our Company.

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Suites and Clubs

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and the Rangers will pay an annual license fee in connection with their respective use of The Garden. The license fee for the first full contract year ending June 30, 2021 will be approximately $22,500 for the Knicks and approximately $16,700 for the Rangers, and then for each subsequent year, the license fees will be 103% of the license fees for the immediately preceding contract year.

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assessments on playoff ticket revenues and through collective league sources. We record our revenue sharing expense net of the amount we expect to receive from the escrow. Our net provision for these items for the year ended June 30, 2020 was approximately $6,529. The actual amounts for the 2019-20 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, including the NBA’s return-to-play plans to complete the 2019-20 season.

Aug 31, 2020


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