Madison Square Garden Entertainment Corp.MSGE
Madison Square Garden Entertainment Corp. Leases Disclosure
Leases
The following table summarizes the ROU assets and lease liabilities recorded on the Company’s consolidated balance sheets as of June 30, 2025 and 2024:
| As of June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| ROU assets | $ | 484,544 | $ | 388,658 | ||||||||||
| Lease liabilities: | ||||||||||||||
| Operating leases, current | 35,100 | 27,736 | ||||||||||||
| Operating leases, non-current | 566,484 | 427,014 | ||||||||||||
| Total lease liabilities | $ | 601,584 | $ | 454,750 | ||||||||||
The following table summarizes the activity related to lease costs recorded within the Company’s consolidated and combined statements of operations for Fiscal Years 2025, 2024 and 2023:
Classification within the Company’s Consolidated and Combined Statements of Operations | Years Ended June 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Operating lease cost | Direct operating expenses | $ | 21,291 | $ | 21,071 | $ | 20,729 | |||||||||||||||||||
| Operating lease cost | Selling, general and administrative expenses | 32,112 | 26,023 | 11,176 | ||||||||||||||||||||||
| Variable lease cost | Direct operating expenses | 1,840 | 716 | 346 | ||||||||||||||||||||||
| Variable lease cost | Selling, general and administrative expenses | — | — | 39 | ||||||||||||||||||||||
| Total lease cost | $ | 55,243 | $ | 47,810 | $ | 32,290 | ||||||||||||||||||||
In November 2021, Sphere Entertainment executed an agreement with the existing landlord for its New York corporate office space, which was assigned to the Company in connection with the MSGE Distribution, pursuant to which the Company would relocate from the space that it previously occupied to newly renovated office space within the same building. Throughout Fiscal Year 2024, the Company took possession of certain of the newly renovated space. The Company was not involved in the design or construction of the new space for purposes of the Company’s build out prior to obtaining possession. Upon obtaining possession of the space, the Company recognized an additional lease obligation of $206,410 and a ROU lease asset of $198,294, net of tenant improvement incentives received on the possession date.
In February 2025, the Company recognized a right-of-use lease asset of $116,963 and an additional lease obligation of $115,335 as the Company took possession of additional space in its New York corporate office. Subsequently, the Company recognized an impairment loss of $11,202 on the Company’s right-of-use lease assets and related lease costs due to the Company’s decision to stop utilizing one of the floors in its New York office, which was reported in Impairment of long-lived assets in the accompanying consolidated and combined statements of operations for the fiscal year ended June 30, 2025.
While lease payments under the new lease agreement will be recognized as a lease expense on a straight-line basis over the lease term, the Company will begin paying full rent starting in the second half of Fiscal Year 2026 due to certain tenant incentives included in the arrangement. Base rent payments will increase every five years beginning in Fiscal Year 2031 in accordance with the terms of the lease.
Supplemental cash flow information related to operating leases is as follows:
| Years Ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | 37,829 | $ | 37,908 | $ | 35,400 | ||||||||||||||
| Lease assets obtained in exchange for new lease obligations | $ | 116,957 | $ | 198,294 | $ | 478 | ||||||||||||||
Maturities of operating lease liabilities as of June 30, 2025 were as follows:
| As of June 30, 2025 | ||||||||
| Fiscal year ending June 30, 2026 | $ | 30,760 | ||||||
| Fiscal year ending June 30, 2027 | 62,653 | |||||||
| Fiscal year ending June 30, 2028 | 63,159 | |||||||
| Fiscal year ending June 30, 2029 | 52,627 | |||||||
| Fiscal year ending June 30, 2030 | 62,762 | |||||||
| Thereafter | 837,617 | |||||||
| Total lease payments | 1,109,578 | |||||||
| Less: imputed interest | 507,994 | |||||||
| Total lease liabilities | $ | 601,584 | ||||||
The weighted average remaining lease term and weighted average discount rate for our operating leases are as follows:
| As of June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Weighted average remaining lease term (in years) | 17.08 | 17.36 | ||||||||||||
| Weighted average discount rate | 7.11 | % | 7.09 | % | ||||||||||
As of June 30, 2025, the Company’s existing operating leases, which are recorded on the accompanying consolidated and combined financial statements, had remaining lease terms ranging from 0.6 years to 20.6 years.
Lessor Arrangements
The Company is party to Arena License Agreements with MSG Sports that, among other things, require the Knicks and the Rangers to play their home games at The Garden in exchange for fixed annual license fees scheduled to be paid monthly over the term of the agreements. The Company accounts for these license fees as operating lease revenue given that the Company provides MSG Sports with the right to direct the use of and obtain substantially all of the economic benefit from The Garden during Knicks and Rangers home games. Operating lease revenue is recognized on a straight-line basis over the lease term, adjusted pursuant to the terms of the Arena License Agreements. In the case of the Arena License Agreements, the lease terms relate to non-consecutive periods of use when MSG Sports uses The Garden for their professional sports teams’ home games, and operating lease revenue is therefore recognized ratably as events occur.
The Arena License Agreements provide that license fees are not required to be paid by MSG Sports during periods when The Garden is unavailable for use due to a force majeure event.
The following table summarizes the Company’s revenues recognized under Arena License Agreements and revenues from third party and related party lease and sublease arrangements for Fiscal Years 2025, 2024 and 2023.
| Years Ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Arena License Agreements | $ | 68,068 | $ | 68,068 | $ | 68,068 | ||||||||||||||
| Third party and related party lease and sublease arrangements | 11,866 | 5,208 | 3,610 | |||||||||||||||||
| Total Arena license fees and other leasing revenue | $ | 79,934 | $ | 73,276 | $ | 71,678 | ||||||||||||||
The maturities of operating lease cash flows to be received on an undiscounted basis for the Arena license fees and other leasing revenues were as follows:
| As of June 30, 2025 | ||||||||
| Fiscal year ending June 30, 2026 | $ | 46,955 | ||||||
| Fiscal year ending June 30, 2027 | 50,135 | |||||||
| Fiscal year ending June 30, 2028 | 51,564 | |||||||
| Fiscal year ending June 30, 2029 | 53,024 | |||||||
| Fiscal year ending June 30, 2030 | 54,511 | |||||||
| Thereafter | 1,975,925 | |||||||
| Total future minimum receipts | $ | 2,232,114 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 13, 2025 | Showing above |
| 2023 | Aug 18, 2023 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.