Madison Square Garden Entertainment Corp.MSGE
Madison Square Garden Entertainment Corp. Stock Compensation Disclosure
Share-based Compensation
Prior to the MSGE Distribution Date, certain employees of the Company participated in the share-based compensation plans of Sphere Entertainment. The plans provide for discretionary grants of incentive stock options and non-qualified stock options, restricted shares, restricted stock units, performance stock units, stock appreciation rights and other share-based awards. All awards granted under the Sphere Entertainment Employee Stock Plans will settle in shares of Sphere Entertainment’s Class A common stock, or, at the option of the Compensation Committee of the Sphere Entertainment Board of Directors, in cash. Prior to the MSGE Distribution Date, the consolidated and combined financial statements only reflect the expenses for the awards provided to the Company’s direct employees, net of expenses related to the Company’s corporate employees who participate in the Sphere Entertainment Employee Stock Plans that were charged to Sphere Entertainment.
Effective as of the MSGE Distribution Date, the Company adopted two share-based compensation plans: the 2023 Employee Stock Plan (the “Employee Stock Plan”) and the 2023 Stock Plan for Non-Employee Directors (the “Non-Employee Director Plan”). Under the Employee Stock Plan, the Company is authorized to grant incentive stock options, non-qualified stock options, restricted shares, restricted stock units (“RSUs”), performance stock units (“PSUs”), stock appreciation rights and other equity-based awards. The Company may grant awards under the Employee Stock Plan for up to an aggregate number of 11,000 shares of Class A Common stock, which may be either treasury shares or authorized but unissued shares. Options and stock appreciation rights under the Employee Stock Plan must be granted with an exercise price of not less than the fair market value of a share of the Company’s Class A common stock on the date of grant and must expire no later than 10 years from the date of grant (or up to additional year in the case of the death of a holder). The terms and conditions of awards granted under the Employee Stock Plan, including vesting and exercisability, are determined by the Compensation Committee of the Board of Directors (“Compensation Committee”) and may include terms or conditions based upon performance criteria. RSUs that were awarded by the Company to its employees will settle in shares of the Company's Class A common stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash. Under the Non-Employee Director Plan, the Company is authorized to grant non-qualified stock options, RSUs, restricted shares, stock appreciation rights and other equity-based awards. The Company may grant awards under this plan for up to an aggregate number of 750 shares of Class A common stock, which may be either treasury shares or authorized but unissued shares. Options under the Non-Employee Director Plan must be granted with an exercise price of not less than the fair market value of a share of the Company’s Class A common stock on the date of grant and must expire no later than 10 years from the date of grant (or up to one additional year in the case of the death of a holder). The terms and conditions of awards granted under the Non-Employee Director Plan, including vesting and exercisability, are determined by the Compensation Committee. Unless otherwise provided in an applicable award agreement, options granted under this plan will be fully vested and exercisable upon the date of grant. Unless otherwise provided in an applicable award agreement, RSUs granted under this plan will be fully vested upon the date of grant and will settle in shares of the Company's Class A common stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash.
Treatment After the MSGE Distribution of Share-based Payment Awards Initially Granted Under Sphere Entertainment Equity Award Programs
Prior to the MSGE Distribution, certain employees and the non-employee directors of Sphere Entertainment (some of whom are now employees or non-employee directors of the Company) participated in Sphere Entertainment equity award programs (the “Sphere Entertainment Stock Plans”). In connection with the MSGE Distribution:
•Each option to purchase Sphere Entertainment’s Class A common stock became two options: one option to acquire Sphere Entertainment Class A common stock and one option to acquire the Company’s Class A common stock granted under the Employee Stock Plan. The exercise price of the option was allocated between the existing Sphere Entertainment options and new Company options based upon the weighted average price of each of the Sphere Entertainment Class A common stock and the Company’s Class A Common Stock over the ten trading days immediately following the Distribution.
•Each holder of a Sphere Entertainment RSU received one MSG Entertainment RSU in respect of every one Sphere Entertainment RSU owned on the Record Date and continues to be entitled to a share of Sphere Entertainment Class A common stock (or cash or other property) for each Sphere Entertainment RSU in accordance with the Sphere Entertainment award agreement.
•Each holder of a Sphere Entertainment employee PSU received one Company PSU (at target performance) in respect of every one Sphere Entertainment PSU (at target performance) owned on the Record Date and continues to be entitled to a share of Sphere Entertainment Class A common stock (or cash or other property) for each Sphere Entertainment PSU in accordance with the Sphere Entertainment award agreement.
•Each holder of a Sphere Entertainment director RSU received one share of the Company’s Class A common stock in respect of every one Sphere Entertainment RSU owned on the Record Date and continues to be entitled to a share of Sphere Entertainment Class A common stock (or cash or other property) in accordance with the Sphere Entertainment award agreement.
Share-based Compensation Expense
Share-based compensation expense is generally recognized straight-line over the vesting term of the award, which typically provides for three-year cliff or graded vesting subject to continued employment with the Company, Sphere Entertainment or MSG Sports.
The Company’s RSUs, PSUs and/or stock options held by individuals who are solely Sphere Entertainment and/or MSG Sports employees are not expensed by the Company; however, such RSUs/PSUs and/or stock options do have a dilutive effect on earnings (loss) per share available to the Company’s common stockholders.
Share-based compensation expense was recognized in the consolidated and combined statements of operations as a component of Direct operating expenses or Selling, general and administrative expenses. The following table presents the share-based compensation expense recorded during Fiscal Years 2025, 2024 and 2023:
| Years Ended June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
Share-based compensation expense (a) | $ | 27,694 | $ | 24,544 | $ | 29,521 | ||||||||||||||
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(a) For Fiscal Years 2024 and 2023 share-based compensation excludes costs of $6,788, and $2,293, respectively, that have been reclassified to Restructuring charges in the consolidated and combined statements of operations, as detailed in Note 5. Restructuring Charges.
RSU and PSU Award Activity
The following table summarizes activity related to MSG Entertainment’s RSUs and PSUs held by the Company, MSG Sports, and Sphere’s employees for Fiscal Year 2025:
| Number of | Weighted-Average Grant-date Fair Value (a) | ||||||||||||||||
| RSUs | PSUs | ||||||||||||||||
Unvested award balance as of June 30, 2024 | 815 | 1,182 | $ | 32.18 | |||||||||||||
| Granted | 553 | 406 | $ | 40.57 | |||||||||||||
Vested (b) | (562) | (449) | $ | 35.26 | |||||||||||||
| Forfeited | (73) | (79) | $ | 34.25 | |||||||||||||
Unvested award balance as of June 30, 2025 | 733 | 1,060 | $ | 34.75 | |||||||||||||
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(a) The weighted-average grant-date fair value for unvested awards granted prior to the MSGE Distribution Date reflects 1:2 conversion ratio adjustment associated with the MSGE Distribution as described above.
(b) The fair value of RSUs and PSUs that vested and were distributed during Fiscal Year 2025 was $39,319. Upon delivery, RSUs granted by the Company were net share-settled to cover the required statutory tax withholding obligations. To fulfill the employees’ statutory minimum tax withholding obligations for the applicable income and other employment taxes, 412 of these awards, with an aggregate value of $16,169 were retained by MSG Entertainment.
As of June 30, 2025, there was $35,328 of unrecognized compensation cost related to unvested RSUs and PSUs held by the Company’s direct employees. The cost is expected to be recognized over a weighted-average period of approximately 1.9 years.
Stock Options Award Activity
Compensation expense for MSG Entertainment stock options held by the Company’s employees is determined based on the grant date fair value of the award calculated using the Black-Scholes options-pricing model. Stock options generally vest over a three year service period and expire 7.5 to 10 years from the date of grant.
The following table summarizes activity related to the Company’s stock options during Fiscal Year 2025:
| Number of Time Vesting Options | Weighted-Average Exercise Price Per Share (a) | Weighted-Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value | |||||||||||||||||||||||
Balance as of June 30, 2024 | 540 | $ | 55.93 | |||||||||||||||||||||||
| Forfeited | (146) | $ | 67.54 | |||||||||||||||||||||||
Balance as of June 30, 2025 | 394 | $ | 51.61 | 1.58 | $ | 503 | ||||||||||||||||||||
Exercisable on June 30, 2025 | 394 | $ | 51.61 | 1.58 | $ | 503 | ||||||||||||||||||||
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(a) The weighted-average grant-date fair value for awards granted prior to the MSGE Distribution Date reflects a conversion ratio adjustment associated with the MSGE Distribution as described above.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 13, 2025 | Showing above |
| 2023 | Aug 18, 2023 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.