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Pension Plans and Other Postretirement Benefit Plan | 12 Months Ended
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Jun. 30, 2024
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] |
Pension Plans and Other Postretirement Benefit Plan | Pension Plans and Other Postretirement Benefit Plan Defined Benefit Pension Plans and Postretirement Benefit Plan Prior to the MSGE Distribution, the Company sponsored (i) a non-contributory, qualified cash balance retirement plan covering its non-union employees (the “Cash Balance Plan”), (ii) an unfunded non-contributory, non-qualified excess cash balance plan covering certain employees who participate in the underlying qualified plan (the “MSGE Excess Cash Balance Plan”), (iii) an unfunded non-contributory, non-qualified excess balance plan covering certain employees who participate in the underlying qualified plan (the “Networks Excess Cash Balance Plan”), (iv) an unfunded non-contributory, non-qualified benefit pension plan for the benefit of certain employees who participated in a frozen non-contributory qualified defined benefit plan, which became part of the Cash Balance Plan on March 1, 2011 (the “MSGE Excess Retirement Plan”), (v) an unfunded non-contributory, non-qualified benefit pension plan for the benefit of certain employees who participated in a frozen non-contributory qualified defined benefit plan, which became part of the Cash Balance Plan on March 1, 2022 (the “Networks Excess Retirement Plan”), (vi) a non-contributory, qualified defined benefit pension plan covering certain of the Company’s union employees (the “Union Plan”), and (vii) a non-contributory, qualified defined benefit pension plan covering certain of its union employees (the “Networks 1212 Plan”). The Cash Balance Plan was amended to freeze participation and future benefit accruals. Therefore, since December 31, 2015, no new participants have been able to participate in the Cash Balance Plan and the Excess Cash Balance Plan and no further annual pay credits will be made for any future year. Existing account balances under the Cash Balance Plan and the Excess Cash Balance Plan will continue to be credited with monthly interest in accordance with the terms of the plans. As of December 31, 2007, the MSGE Excess Retirement Plan was amended to freeze all benefits earned through December 31, 2007, and to eliminate the ability of participants to earn benefits for future service under the MSGE Excess Retirement Plan. The sponsorship of the Cash Balance Plan, the MSGE Excess Cash Balance Plan, the MSGE Excess Retirement Plan and the Union Plan was transferred from the Company to MSG Entertainment in connection with the MSGE Distribution. In addition, certain assets, if any, and liabilities associated with the Cash Balance Plan, the MSGE Excess Cash Balance Plan, the MSGE Excess Retirement plan and the Union Plan were also transferred from the Company to MSG Entertainment in connection with the MSGE Distribution. After the MSGE Distribution, the Company continues to sponsor the Networks 1212 Plan, Networks Excess Cash Balance Plan, and the Networks Excess Retirement Plan (together, the “Networks Plans”). In connection with the MSGE Distribution, the Company established an unfunded non-contributory, non-qualified frozen excess cash balance plan covering certain employees who participated in the Cash Balance Plan (the “Sphere Excess Plan”). The Networks Plans and Sphere Excess Plans are collectively referred to as the “Pension Plans.” Prior to the MSGE Distribution, the Company sponsored two contributory welfare plans which provided certain postretirement healthcare benefits to certain employees hired prior to January 1, 2001. The sponsorship of the postretirement plan covering Networks employees was retained by the Company (the “Postretirement Plan”) while the postretirement plan covering MSGE employees was transferred to MSG Entertainment in connection with MSGE Distribution. In addition, the liabilities associated with the postretirement plan for MSGE employees were transferred from the Company to MSG Entertainment in connection with the MSGE Distribution. The following table summarizes the projected benefit obligations, assets, funded status and the amounts recorded on the Company’s consolidated balance sheets as of June 30, 2024 and 2023, associated with the Pension Plans and Postretirement Plan based upon actuarial valuations as of those measurement dates.
| Pension Plans |  | Postretirement Plan
| June 30, |  | June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Change in benefit obligation: |  |  |  |  |  |  |
Benefit obligation at beginning of period | $ | 38,136 |  |  | $ | 39,683 |  |  | $ | 1,799 |  |  | $ | 1,598 |
Service cost | 243 |  |  | 245 |  |  | 18 |  |  | 20 |
Interest cost | 1,995 |  |  | 1,755 |  |  | 89 |  |  | 68 |
Actuarial (gain) loss (a) | (262) |  |  | (1,485) |  |  | 60 |  |  | 292 |
Benefits paid | (2,347) |  |  | (2,153) |  |  | (240) |  |  | (179) |
Acquisitions | — |  |  | 141 |  |  | — |  |  | — |
Plan settlements paid | — |  |  | (50) |  |  | — |  |  | — |
Benefit obligation at end of period | 37,765 |  |  | 38,136 |  |  | 1,726 |  |  | 1,799 |
Change in plan assets: |  |  |  |  |  |  |
Fair value of plan assets at beginning of period | 17,976 |  |  | 18,756 |  |  | — |  |  | — |
Actual return on plan assets | 351 |  |  | (312) |  |  | — |  |  | — |
Employer contributions | 500 |  |  | 500 |  |  | — |  |  | — |
Benefits paid | (1,159) |  |  | (968) |  |  | — |  |  | — |
Fair value of plan assets at end of period | 17,668 |  |  | 17,976 |  |  | — |  |  | — |
Funded status at end of period | $ | (20,097) |  |  | $ | (20,160) |  |  | $ | (1,726) |  |  | $ | (1,799) |
_________________ (a) In Fiscal Years 2024 and 2023, the actuarial gains on the benefit obligations were primarily due to a net increase in discount and interest crediting rates. Amounts recognized in the consolidated balance sheets as of June 30, 2024 and 2023 consist of:
| Pension Plans |  | Postretirement Plan
| June 30, |  | June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Current liabilities (included in Accounts payable, accrued, and other current liabilities) | $ | (1,414) |  |  | $ | (1,355) |  |  | $ | (205) |  |  | $ | (157) |
Non-current liabilities (included in Other non-current liabilities) | (18,683) |  |  | (18,805) |  |  | (1,521) |  |  | (1,642) |
| $ | (20,097) |  |  | $ | (20,160) |  |  | $ | (1,726) |  |  | $ | (1,799) |
Accumulated other comprehensive loss, before income tax, as of June 30, 2024 and 2023 consists of the following amounts that have not yet been recognized in net periodic benefit cost:
| Pension Plans |  | Postretirement Plan
| June 30, |  | June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Actuarial (loss) gain | $ | (7,376) |  |  | $ | (7,249) |  |  | $ | 120 |  |  | $ | 203 |
The following table presents components of net periodic benefit cost for the Pension Plans and Postretirement Plan included in the accompanying consolidated statements of operations for Fiscal Years 2024, 2023 and 2022. Service cost is recognized in Direct operating expenses and Selling, general and administrative expenses. All other components of net periodic benefit cost are reported in Other income (expense), net.
|  | Pension Plans |  | Postretirement Plan
|  | Years Ended June 30, |  | Years Ended June 30,
|  | 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Service cost |  | $ | 243 |  |  | $ | 245 |  |  | $ | 371 |  |  | $ | 18 |  |  | $ | 20 |  |  | $ | 27 |
Interest cost |  | 1,995 |  |  | 1,755 |  |  | 1,048 |  |  | 89 |  |  | 68 |  |  | 31 |
Expected return on plan assets |  | (970) |  |  | (853) |  |  | (858) |  |  | — |  |  | — |  |  | — |
Recognized actuarial loss (gain) |  | 335 |  |  | 358 |  |  | 585 |  |  | (23) |  |  | (69) |  |  | (27) |
Settlement gain |  | — |  |  | (12) |  |  | — |  |  | — |  |  | — |  |  | — |
Net periodic benefit cost |  | $ | 1,603 |  |  | $ | 1,493 |  |  | $ | 1,146 |  |  | $ | 84 |  |  | $ | 19 |  |  | $ | 31 |
Other pre-tax changes in plan assets and benefit obligations recognized in other comprehensive (loss) income for Fiscal Years 2024, 2023 and 2022 are as follows:
| Pension Plans |  | Postretirement Plan
| Years Ended June 30, |  | Years Ended June 30,
| 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Actuarial (loss) gain, net | $ | (463) |  |  | $ | 288 |  |  | $ | 3,318 |  |  | $ | (60) |  |  | $ | (292) |  |  | $ | 243 |
Recognized actuarial loss (gain) | 335 |  |  | 358 |  |  | 585 |  |  | (23) |  |  | (69) |  |  | (27) |
Settlement gain | — |  |  | (12) |  |  | — |  |  | — |  |  | — |  |  | — |
Total recognized in other comprehensive (loss) income | $ | (128) |  |  | $ | 634 |  |  | $ | 3,903 |  |  | $ | (83) |  |  | $ | (361) |  |  | $ | 216 |
Funded Status The accumulated benefit obligation for the pension plans aggregated to $37,587 and $37,842 at June 30, 2024 and 2023, respectively. As of June 30, 2024 and 2023, each of the pension plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets. Pension Plans and Postretirement Plan Assumptions Weighted-average assumptions used to determine benefit obligations (made at the end of the period) as of June 30, 2024 and 2023 are as follows:
| Pension Plans |  | Postretirement Plan
| June 30, |  | June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Discount rate | 5.51 | % |  | 5.34 | % |  | 5.40 | % |  | 5.41 | %
Rate of compensation increase | 3.00 | % |  | 3.00 | % |  | n/a |  | n/a
Interest crediting rate | 4.55 | % |  | 3.77 | % |  | n/a |  | n/a
Healthcare cost trend rate assumed for next year | n/a |  | n/a |  | 6.75 | % |  | 7.00 | %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | n/a |  | n/a |  | 5.00 | % |  | 5.00 | %
Year that the rate reaches the ultimate trend rate | n/a |  | n/a |  | 2032 |  | 2032
Weighted-average assumptions used to determine net periodic benefit cost (made at the beginning of the period) for Fiscal Years 2024, 2023 and 2022 are as follows:
| Pension Plans |  | Postretirement Plan
| Years Ended June 30, |  | Years Ended June 30,
| 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Discount rate - projected benefit obligation | 5.33 | % |  | 4.81 | % |  | 1.36 | % |  | 5.41 | % |  | 4.66 | % |  | 2.25 | %
Discount rate - service cost | 5.52 | % |  | 5.06 | % |  | 3.13 | % |  | 5.39 | % |  | 4.89 | % |  | 2.62 | %
Discount rate - interest cost | 5.40 | % |  | 4.55 | % |  | 2.18 | % |  | 5.47 | % |  | 4.38 | % |  | 1.75 | %
Expected long-term return on plan assets | 5.65 | % |  | 5.00 | % |  | 3.96 | % |  | n/a |  | n/a |  | n/a
Rate of compensation increase | 3.00 | % |  | 3.00 | % |  | 3.00 | % |  | n/a |  | n/a |  | n/a
Interest crediting rate | 4.55 | % |  | 3.77 | % |  | 2.76 | % |  | n/a |  | n/a |  | n/a
Healthcare cost trend rate assumed for next year | n/a |  | n/a |  | n/a |  | 7.00 | % |  | 6.00 | % |  | 6.25 | %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | n/a |  | n/a |  | n/a |  | 5.00 | % |  | 5.00 | % |  | 5.00 | %
Year that the rate reaches the ultimate trend rate | n/a |  | n/a |  | n/a |  | 2032 |  | 2027 |  | 2027
The discount rates were determined (based on the expected duration of the benefit payments for the plans) from the Willis Towers Watson U.S. Rate Link: 40-90 Discount Rate Model as of June 30, 2024 and 2023 to select a rate at which the Company believed the plans’ benefits could be effectively settled. This model was developed by examining the yields on selected highly rated corporate bonds. The expected long-term return on plan assets is based on a periodic review and modeling of the plans’ asset allocation structures over a long-term horizon. Expectations of returns for each asset class are the most important of the assumptions used in the review and modeling and are based on comprehensive reviews of historical data, forward-looking economic outlook, and economic/financial market theory. The expected long-term rate of return was selected from within the reasonable range of rates determined by (i) historical returns for the asset classes covered by the investment policy and (ii) projections of returns over the long-term period during which benefits are payable to plan participants. Plan Assets and Investment Policy The weighted-average asset allocation of the pension plan assets as of June 30, 2024 and 2023 was as follows:
| As of June 30,
Asset Classes (a): | 2024 |  | 2023
Fixed income securities | 72 | % |  | 75 | %
Cash equivalents | 28 | % |  | 25 | %
| 100 | % |  | 100 | %
_________________ (a) The Company’s target allocation for the assets of the Networks 1212 Plan is 100% fixed income securities as of June 30, 2024 and 2023. Investment allocation decisions have been made by the Company’s Investment and Benefits Committee. The Investment and Benefits Committee utilizes the services of an investment manager to actively manage the assets of the pension plans. The Company has established asset allocation targets and investment policies and guidelines with the investment manager. The investment manager takes into account expected long-term risks, returns, correlation, and other prudent investment assumptions when recommending asset classes and investment managers to the Company’s Investment and Benefits Committee. The investment manager also considers each applicable Pension Plans’ liabilities when making investment allocation recommendations. The majority of the Pension Plans’ assets are invested in fixed income securities. Investments at Estimated Fair Value The cumulative fair values of the individual plan assets at June 30, 2024 and 2023 by asset class are as follows:
|  | Fair Value Hierarchy |  | As of June 30,
|  |  | 2024 |  | 2023
Money market fund (a) |  | I |  | $ | 4,924 |  |  | $ | 4,533 |
Common collective trust (b) |  | II |  | 12,744 |  |  | 13,443 |
Total investments measured at fair value |  |  |  | $ | 17,668 |  |  | $ | 17,976 |
_________________ (a) Money market funds are classified within Level I of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets. (b) Common collective trust (CCT) is a non-exchange traded fund, classified within Level II of the fair value hierarchy at its net asset value (NAV) as reported by the Trustee. The NAV is based on the fair value of the underlying investments held by the fund which are based on quoted market prices less its liabilities. The CCT publishes daily NAV and use such value as the basis for current transactions. Contributions for Qualified Defined Benefit Pension Plans During Fiscal Year 2024, the Company contributed $500 to the Networks 1212 Plan. The Company expects to contribute $500 to the Networks 1212 Plan in Fiscal Year 2025. Estimated Future Benefit Payments The following table presents estimated future fiscal year benefit payments for the Pension Plans and Postretirement Plan:
| Pension Plans |  | Postretirement Plan
Fiscal year ending June 30, 2025 | $ | 2,753 |  |  | $ | 211 |
Fiscal year ending June 30, 2026 | $ | 2,980 |  |  | $ | 181 |
Fiscal year ending June 30, 2027 | $ | 3,069 |  |  | $ | 188 |
Fiscal year ending June 30, 2028 | $ | 3,015 |  |  | $ | 183 |
Fiscal year ending June 30, 2029 | $ | 3,127 |  |  | $ | 202 |
Fiscal years ending June 30, 2030 – 2034 | $ | 15,184 |  |  | $ | 915 |
Defined Contribution Plan The Company sponsors the MSGN Holdings, L.P. Excess Savings Plan and the Sphere Entertainment Excess Savings Plan. The Company also participates in the Madison Square Garden 401(k) Savings Plan (the “401(k) Plan”). For Fiscal Years 2024, 2023 and 2022, expenses related to the Savings Plans that are included in the accompanying consolidated statements of operations were $6,376, $7,421 and $5,778, respectively. Multiemployer Plans The Company contributes to a number of multiemployer defined benefit pension plans, multiemployer defined contribution plans, and multiemployer health and welfare plans that provide benefits to retired union-represented employees under the terms of collective bargaining agreements (“CBAs”). Multiemployer Defined Benefit Pension Plans The multiemployer defined benefit pension plans to which the Company contributes generally provide for retirement and death benefits for eligible union-represented employees based on specific eligibility/participant requirements, vesting periods and benefit formulas. The risks to the Company of participating in these multiemployer defined benefit pension plans are different from single-employer defined benefit pension plans in the following aspects: •Assets contributed to a multiemployer defined benefit pension plan by one employer may be used to provide benefits to employees of other participating employers. •If a participating employer stops contributing to a multiemployer defined benefit pension plan, the unfunded obligations of the plan may be borne by the remaining participating employers. •If the Company chooses to stop participating in some of these multiemployer defined benefit pension plans, the Company may be required to pay those plans an amount based on the Company’s proportion of the underfunded status of the plan, referred to as a withdrawal liability. However, cessation of participation in a multiemployer defined benefit pension plan and subsequent payment of any withdrawal liability is subject to the collective bargaining process. The Company was not listed in any of the multiemployer plans’ 5500’s as providing more than 5% of the total contributions. There were no multiemployer defined benefit pension plans, to which the Company contributes, that were in a redzone (which are plans that are generally less than 65% funded) for the most recent Pension Protection Act zone status available as of June 30, 2024. The Company contributed $1,134, $677 and $389 for Fiscal Years 2024, 2023 and 2022, respectively, for multiemployer defined benefit pension plans. Multiemployer Defined Contribution Plans The Company contributed $250, $142 and $152 for Fiscal Years 2024, 2023 and 2022, respectively, to multiemployer defined contribution plans. Executive Deferred Compensation Plan The Company sponsors the Sphere Entertainment Corp. Executive Deferred Compensation Plan (the “Deferred Compensation Plan”), for the purpose of permitting a select group of highly-compensated employees to defer the employee’s annual base salary and bonus into the Deferred Compensation Plan with returns on such deferrals tracking the performance of certain investments. Following the MSGE Distribution accounts attributable to the Company’s current employees were transferred from a deferred compensation plan sponsored by MSG Entertainment to the Deferred Compensation Plan. Amounts deferred and invested by employees under the Deferred Compensation Plan are placed in an irrevocable trust established by the Company and all assets of the trust are subject to the creditors of the Company in the event of insolvency. In accordance with ASC Topic 710, Compensation – General (“ASC Topic 710”), the assets of the trust are consolidated with the accounts of the Company and are recognized in the Company’s consolidated balance sheets. In accordance with ASC Topic 710, the Company remeasures the deferred compensation liability, with a charge (or credit) to compensation cost in the Company’s consolidated statements of operations, to reflect changes in the fair value of the assets owed to the participants of the Deferred Compensation Plan. The Company remeasures the fair value of the assets held in trust in accordance with ASC Topic 321, Investments – Equity Securities, and recognizes unrealized gains and losses in Other income (expense), net in the Company’s consolidated statements of operations. The Company recorded compensation expense (compensation cost credits) of $307, and $218, for the year ended June 30, 2024 and 2023, respectively, within Selling, general and administrative expenses to reflect the remeasurement of the Deferred Compensation Plan liability. In addition, the Company recorded gains/(losses) of $307, and $218, for the year ended June 30, 2024 and 2023, respectively, within Other income (expense), net to reflect the remeasurement of the fair value of assets under the Deferred Compensation Plan. Amounts recognized in the consolidated balance sheets as of June 30, 2024 and 2023 related to the Deferred Compensation Plan consist of:
| June 30, 2024 |  | June 30, 2023
Non-current assets (included in Investments) | $ | 2,925 |  |  | $ | 1,087 |
Non-current liabilities (included in Other non-current liabilities) | $ | (2,936) |  |  | $ | (1,087) |

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