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Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax benefit (expense) attributable to continuing operations is comprised of the following components:
|  | Years Ended June 30,
|  | 2024 |  | 2023 |  | 2022
Current benefit (expense): |  |  |  |  |  |
Federal |  | $ | 8,200 |  |  | $ | 1,389 |  |  | $ | 1,555 |
State and other |  | (5,148) |  |  | (4,672) |  |  | 9,927 |
|  | 3,052 |  |  | (3,283) |  |  | 11,482 |
Deferred benefit (expense): |  |  |  |  |  |
Federal |  | 93,322 |  |  | (59,253) |  |  | 17,665 |
State and other |  | 39,218 |  |  | (40,867) |  |  | 683 |
|  | 132,540 |  |  | (100,120) |  |  | 18,348 |
Income tax benefit (expense) |  | $ | 135,592 |  |  | $ | (103,403) |  |  | $ | 29,830 |
The income tax benefit (expense) attributable to continuing operations differs from the amount derived by applying the statutory federal rate to pre-tax income (loss) principally due to the effect of the following items:
|  | Years Ended June 30,
|  | 2024 |  | 2023 |  | 2022
Federal tax benefit (expense) at statutory federal rate |  | 75,648 |  |  | (57,840) |  |  | 35,213 |
State income taxes, net of federal benefit |  | 13,337 |  |  | (35,656) |  |  | 3,970 |
Change in the estimated applicable tax rate used to determine deferred taxes |  | 60,877 |  |  | (1,286) |  |  | 1,732 |
Change in valuation allowance |  | (29,189) |  |  | 2,053 |  |  | 2,200 |
Nondeductible officers’ compensation |  | (5,554) |  |  | (4,814) |  |  | (12,759) |
Nondeductible expenses |  | (1,564) |  |  | (291) |  |  | (172) |
Nontaxable gain on repayment of Term Loan |  | 13,757 |  |  | — |  |  | — |
Return to provision |  | 4,881 |  |  | (672) |  |  | — |
Excess tax benefit related to share-based payment awards |  | 974 |  |  | (4,678) |  |  | (320) |
Other |  | 2,425 |  |  | (219) |  |  | (34) |
Income tax benefit (expense) |  | $ | 135,592 |  |  | $ | (103,403) |  |  | $ | 29,830 |
The tax effects of temporary differences which give rise to significant portions of the deferred tax assets and liabilities at June 30, 2024 and 2023 are as follows:
| As of
| June 30, 2024 |  | June 30, 2023
Deferred tax asset: |  |  |
Net operating loss (“NOL”) carryforwards | $ | 229,962 |  |  | $ | 26,684 |
Tax credit carryforwards | 631 |  |  | — |
Accrued employee benefits | 27,601 |  |  | 27,349 |
Restricted stock units and stock options | 6,897 |  |  | 9,231 |
Right-of-use lease assets and lease liabilities, net | 10,309 |  |  | 11,040 |
Investments | 7,941 |  |  | — |
Accrued litigation | 4,712 |  |  | 14,991 |
Other | 12,956 |  |  | 3,694 |
Total deferred tax assets | $ | 301,009 |  |  | $ | 92,989 |
Less valuation allowance | (29,219) |  |  | (30) |
Net deferred tax assets | $ | 271,790 |  |  | $ | 92,959 |
Deferred tax liabilities: |  |  |
Intangible and other assets | $ | (232,923) |  |  | $ | (264,800) |
Property and equipment | (235,676) |  |  | (105,405) |
Prepaid expenses | (2,913) |  |  | (5,870) |
Deferred interest | (25,447) |  |  | (12,474) |
Other investments | — |  |  | (83,962) |
Total deferred tax liabilities | $ | (496,959) |  |  | $ | (472,511) |
Deferred tax liabilities, net | $ | (225,169) |  |  | $ | (379,552) |
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s ability to realize its deferred tax assets depends upon the generation of sufficient future taxable income to allow for the utilization of its federal net operating loss carryforward and its future deductible temporary differences. As of June 30, 2024, based on current facts and circumstances, management believes that it is more likely than not that the Company will not realize its deferred tax assets related to foreign NOLs. The Company will continue to assess the realizability of its deferred tax assets on a quarterly basis. The federal NOL carryforward as of June 30, 2024 was approximately $927,000 and is carried forward indefinitely. Prior to the MSGE Distribution, the Company and MSG Entertainment entered into a Tax Disaffiliation Agreement (“TDA”) that governs the parties’ respective rights, responsibilities and obligations with respect to taxes and tax benefits. Under the TDA, the Company will generally be responsible for all U.S. federal, state, local and other applicable income taxes of the Company for any taxable period or portion of such period ending on or before the MSGE Distribution Date. The Company does not have any recorded tax benefit for uncertain tax positions as of June 30, 2024 and 2023. Income tax payments (refunds), net, were $18,649, $7,288 and $(1,014) for Fiscal Years 2024, 2023 and 2022, respectively.

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