MADISON SQUARE GARDEN SPORTS CORP. REPORTS FISCAL 2024 THIRD QUARTER RESULTS
During the fiscal 2024 third quarter, the
Subsequent to the end of the fiscal 2024 third quarter, both teams concluded their regular seasons and are currently competing in the NBA and NHL playoffs. In addition, the Company launched its 2024-25 Knicks and Rangers season ticket renewal initiative, which has seen strong demand to date.
In the fiscal 2024 third quarter, the Company generated revenues of
Results from Operations
Results for the three and nine months ended
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Three Months Ended |
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Nine Months Ended |
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Change |
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Change |
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$ millions |
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2024 |
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2023 |
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$ |
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% |
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2024 |
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2023 |
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$ |
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% |
Revenues |
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$ 430.0 |
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$ 382.7 |
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$ 47.2 |
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12 % |
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$ 799.9 |
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$ 760.5 |
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$ 39.4 |
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5 % |
Operating income |
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$ 79.7 |
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$ 81.8 |
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$ (2.0) |
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(2) % |
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$ 93.7 |
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$ 97.4 |
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$ (3.6) |
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(4) % |
Adjusted operating |
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$ 88.7 |
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$ 86.2 |
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$ 2.5 |
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3 % |
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$ 115.7 |
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$ 122.8 |
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$ (7.1) |
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(6) % |
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Note: Does not foot due to rounding |
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1. |
See page 3 of this earnings release for the definition of adjusted operating income (loss) included in the discussion of non-GAAP financial measures. During the fourth quarter of fiscal 2023, the Company amended this definition so that the impact of the non-cash portion of operating lease costs (which was |
Summary of Reported Results from Operations
For the fiscal 2024 third quarter, revenues of
Ticket-related revenues increased
Suite revenues increased
Food, beverage, and merchandise sales increased
Local media rights fees increased
Direct operating expenses of
Selling, general and administrative expenses of
Operating income of
About
Madison Square Garden Sports Corp. (
Non-GAAP Financial Measures
During the fourth quarter of fiscal 2023, the Company amended its definition of adjusted operating income (loss) so that the impact of the non-cash portion of operating lease costs related to the Company's arena license agreements with
We define adjusted operating income (loss), which is a non-GAAP financial measure, as operating income (loss) excluding (i) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits, (iv) gains or losses on sales or dispositions of businesses, (v) the impact of purchase accounting adjustments related to business acquisitions, and (vi) gains and losses related to the remeasurement of liabilities under the Company's Executive Deferred Compensation Plan. Because it is based upon operating income (loss), adjusted operating income (loss) also excludes interest expense (including cash interest expense) and other non-operating income and expense items. We believe that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of our business without regard to the settlement of an obligation that is not expected to be made in cash. In addition, we believe 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
We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of our Company. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and adjusted operating income (loss) as the most important indicators of our business performance, and evaluate 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. For a reconciliation of operating income (loss) to adjusted operating income (loss), please see page 5 of this release.
Forward-Looking Statements
This press release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments and events may differ materially from those in the forward-looking statements as a result of various factors, including financial community and rating agency perceptions of the Company and its business, operations, financial condition and the industry in which it operates, and the factors described in the Company's filings with the
Contacts:
Investor Relations and (212) 465-6072 |
(212) 465-6109 |
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Three Months Ended |
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Nine Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
Revenues |
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$ 429,954 |
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$ 382,744 |
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$ 799,898 |
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$ 760,527 |
Direct operating expenses |
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273,026 |
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239,051 |
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508,771 |
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468,434 |
Selling, general and administrative expenses |
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76,398 |
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61,102 |
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195,020 |
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192,019 |
Depreciation and amortization |
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788 |
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840 |
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2,372 |
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2,703 |
Operating income |
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79,742 |
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81,751 |
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93,735 |
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97,371 |
Other income (expense): |
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Interest income |
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477 |
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704 |
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1,549 |
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1,627 |
Interest expense |
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(6,921) |
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(7,004) |
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(21,269) |
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(16,395) |
Miscellaneous (expense) income, net |
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(1,403) |
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19,324 |
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(11,077) |
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19,543 |
Income before income taxes |
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71,895 |
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94,775 |
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62,938 |
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102,146 |
Income tax expense |
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(34,018) |
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(42,962) |
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(29,658) |
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(47,024) |
Net income |
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37,877 |
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51,813 |
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33,280 |
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55,122 |
Less: Net loss attributable to nonredeemable noncontrolling interests |
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— |
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(566) |
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— |
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(1,928) |
Net income attributable to |
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$ 37,877 |
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$ 52,379 |
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$ 33,280 |
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$ 57,050 |
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Basic earnings per common share attributable to |
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$ 1.58 |
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$ 2.19 |
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$ 1.39 |
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$ 2.28 |
Diluted earnings per common share attributable to |
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$ 1.57 |
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$ 2.18 |
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$ 1.38 |
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$ 2.27 |
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Basic weighted-average number of common shares outstanding |
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24,028 |
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23,971 |
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24,005 |
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24,133 |
Diluted weighted-average number of common shares outstanding |
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24,100 |
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24,062 |
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24,076 |
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24,225 |
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO
ADJUSTED OPERATING INCOME (LOSS)
(In thousands)
The following is a description of the adjustments to operating income in arriving at adjusted operating income as described in this earnings release:
- Depreciation and amortization. This adjustment eliminates depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets in all periods.
- Share-based compensation. This adjustment eliminates the compensation expense related to restricted stock units and stock options granted under the Company's employee stock plan and non-employee director plan in all periods.
- Remeasurement of deferred compensation plan liabilities. This adjustment eliminates the impact of gains and losses related to the remeasurement of liabilities under the Company's executive deferred compensation plan.
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Three Months Ended |
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Nine Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
Operating income |
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$ 79,742 |
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$ 81,751 |
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$ 93,735 |
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$ 97,371 |
Depreciation and amortization |
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788 |
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840 |
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2,372 |
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2,703 |
Share-based compensation |
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7,350 |
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3,220 |
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18,069 |
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22,059 |
Remeasurement of deferred compensation plan liabilities |
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821 |
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368 |
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1,556 |
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714 |
Adjusted operating income(1) |
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$ 88,701 |
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$ 86,179 |
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$ 115,732 |
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$ 122,847 |
____________________ |
(1)
During the fourth quarter of fiscal 2023, the Company amended its definition of adjusted operating income (loss) so that the impact of the non-cash portion of operating lease costs related to the Company's arena license agreements with |
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(Unaudited) |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ 40,033 |
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$ 40,398 |
Restricted cash |
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4,751 |
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61 |
Accounts receivable, net of allowance for doubtful accounts of |
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76,843 |
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40,139 |
Net related party receivables |
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23,190 |
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15,969 |
Prepaid expenses |
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31,800 |
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24,768 |
Other current assets |
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74,028 |
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27,898 |
Total current assets |
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250,645 |
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149,233 |
Property and equipment, net of accumulated depreciation and amortization of |
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29,062 |
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30,501 |
Right-of-use lease assets |
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697,464 |
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715,283 |
Indefinite-lived intangible assets |
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103,644 |
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103,644 |
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226,523 |
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226,523 |
Investments |
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61,443 |
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67,374 |
Other assets |
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19,690 |
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22,459 |
Total assets |
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$ 1,388,471 |
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$ 1,315,017 |
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(Unaudited) |
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LIABILITIES AND EQUITY |
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Current Liabilities: |
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Accounts payable |
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$ 5,906 |
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$ 9,093 |
Net related party payables |
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5,107 |
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5,842 |
Debt |
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30,000 |
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30,000 |
Accrued liabilities: |
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Employee related costs |
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151,731 |
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144,310 |
League-related accruals |
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117,472 |
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106,926 |
Other accrued liabilities |
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49,075 |
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17,561 |
Operating lease liabilities, current |
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50,376 |
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49,745 |
Deferred revenue |
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116,888 |
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157,051 |
Total current liabilities |
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526,555 |
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520,528 |
Long-term debt |
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330,000 |
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295,000 |
Operating lease liabilities, noncurrent |
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756,871 |
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746,437 |
Defined benefit obligations |
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4,333 |
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4,526 |
Other employee related costs |
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48,569 |
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49,070 |
Deferred tax liabilities, net |
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14,894 |
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24,024 |
Deferred revenue, noncurrent |
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1,204 |
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12,666 |
Total liabilities |
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1,682,426 |
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1,652,251 |
Commitments and contingencies |
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Class A Common Stock, par value |
|
204 |
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204 |
Class B Common Stock, par value |
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45 |
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45 |
Preferred stock, par value |
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— |
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— |
Additional paid-in capital |
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18,004 |
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16,846 |
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(170,583) |
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(179,410) |
Accumulated deficit |
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(140,635) |
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(173,910) |
Accumulated other comprehensive loss |
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(990) |
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(1,009) |
Total equity |
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(293,955) |
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(337,234) |
Total liabilities and equity |
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$ 1,388,471 |
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$ 1,315,017 |
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Nine Months Ended |
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|
2024 |
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2023 |
Net cash (used in) provided by operating activities |
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$ (16,220) |
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$ 114,801 |
Net cash used in investing activities |
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(5,689) |
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(10,366) |
Net cash provided by (used in) financing activities |
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26,234 |
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(129,618) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
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4,325 |
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(25,183) |
Cash, cash equivalents and restricted cash at beginning of period |
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40,459 |
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91,018 |
Cash, cash equivalents and restricted cash at end of period |
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$ 44,784 |
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$ 65,835 |
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