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Discontinued Operations | 12 Months Ended
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Jun. 30, 2024
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations MSG Entertainment On April 20, 2023, the Company completed the MSGE Distribution. T he Company analyzed the quantitative and qualitative factors relevant to the MSGE Distribution and determined that the conditions for discontinued operations presentation were met during the fourth quarter of Fiscal Year 2023. As such, the results of the MSG Entertainment business previously owned and operated by the Company through its MSG Entertainment business segment, as well as transaction costs related to the MSGE Distribution, have been classified in the accompanying consolidated financial statements as discontinued operations for all periods presented. No impairment loss was recognized in connection with the reclassification to discontinued operations and no gain or loss was recognized in connection with the MSGE Distribution. Indirect corporate and administrative costs do not qualify for discontinued operations presentation, and these costs are included in continuing operations for all periods presented through April 20, 2023. After the MSGE Distribution Date, these corporate and administrative services are provided to the Company by MSG Entertainment under a Transition Services Agreement (“MSGE TSA”), with the related costs included in continuing operations from April 21, 2023 through June 30, 2023. As noted above, results from continuing operations, prior to the MSGE Distribution Date, include certain corporate overhead expenses that the Company did not incur in the period after the completion of the MSGE Distribution, and the Company does not expect to incur such expenses in future periods. Tao Group Hospitality On May 3, 2023, the Company completed the Tao Group Hospitality Disposition. The Company analyzed the quantitative and qualitative factors relevant to the Tao Group Hospitality Disposition and determined that the criteria to classify the assets and liabilities of Tao Group Hospitality as held for sale, along with the related operations as a discontinued operation, had been satisfied as of the third quarter of Fiscal Year 2023. As such, the historical financial results of the Tao Group Hospitality segment have been reflected in the accompanying consolidated financial statements as discontinued operations for all periods presented. In connection with the Tao Group Hospitality Disposition, the Company recognized a loss, net of taxes, of $23,984 as a result of a change in estimate and a gain of $212,857, net of taxes of $1,020, for Fiscal Years 2024 and 2023, respectively, which are presented as income from discontinued operations. The tables below sets forth, for the periods presented, the operating results of the disposal groups. Amounts presented below differ from historically reported results for the MSG Entertainment and Tao Group Hospitality business segments in order to reflect discontinued operations presentation.
|  |  |  |  |  |  |  | Year Ended June 30, 2023
|  |  |  |  |  |  | MSG Entertainment |  | Tao Group Hospitality |  | Eliminations (a) |  | Total
Revenues |  |  |  |  |  |  |  | $ | 731,299 |  |  | $ | 447,929 |  |  | $ | (1,761) |  |  | $ | 1,177,467 |
Direct operating expenses |  |  |  |  |  |  |  | (421,440) |  |  | (263,200) |  |  | 1,371 |  |  | (683,269) |
Selling, general, and administrative expenses |  |  |  |  |  |  |  | (119,032) |  |  | (151,271) |  |  | (195) |  |  | (270,498) |
Depreciation and amortization |  |  |  |  |  |  |  | (49,423) |  |  | (23,236) |  |  | — |  |  | (72,659) |
Impairment and other gains, net |  |  |  |  |  |  |  | 4,361 |  |  | 473 |  |  | — |  |  | 4,834 |
Restructuring charges |  |  |  |  |  |  |  | (7,435) |  |  | — |  |  | — |  |  | (7,435) |
Operating income |  |  |  |  |  |  |  | 138,330 |  |  | 10,695 |  |  | (585) |  |  | 148,440 |
Interest income |  |  |  |  |  |  |  | 2,880 |  |  | 149 |  |  | — |  |  | 3,029 |
Interest expense |  |  |  |  |  |  |  | (1,031) |  |  | (2,551) |  |  | — |  |  | (3,582) |
Other income, net |  |  |  |  |  |  |  | 11,456 |  |  | 665 |  |  | — |  |  | 12,121 |
Income from discontinued operations before income taxes |  |  |  |  |  |  |  | 151,635 |  |  | 8,958 |  |  | (585) |  |  | 160,008 |
Income tax expense |  |  |  |  |  |  |  | (5,517) |  |  | (33,695) |  |  | — |  |  | (39,212) |
Income (loss) from discontinued operations, net of taxes |  |  |  |  |  |  |  | 146,118 |  |  | (24,737) |  |  | (585) |  |  | 120,796 |
Gain on disposal before income taxes |  |  |  |  |  |  |  | — |  |  | 213,877 |  |  | — |  |  | 213,877 |
Income tax expense |  |  |  |  |  |  |  | — |  |  | (1,020) |  |  | — |  |  | (1,020) |
Gain on disposal, net of taxes |  |  |  |  |  |  |  | — |  |  | 212,857 |  |  | — |  |  | 212,857 |
Net income from discontinued operations |  |  |  |  |  |  |  | 146,118 |  |  | 188,120 |  |  | (585) |  |  | 333,653 |
Less: Net income attributable to redeemable noncontrolling interests |  |  |  |  |  |  |  | — |  |  | 3,925 |  |  | — |  |  | 3,925 |
Less: Net loss attributable to nonredeemable noncontrolling interests |  |  |  |  |  |  |  | (553) |  |  | (464) |  |  | — |  |  | (1,017) |
Net income from discontinued operations attributable to Sphere Entertainment Co.’s stockholders |  |  |  |  |  |  |  | $ | 146,671 |  |  | $ | 184,659 |  |  | $ | (585) |  |  | $ | 330,745 |
|  |  |  |  |  |  |  | Year Ended June 30, 2022
|  |  |  |  |  |  | MSG Entertainment |  | Tao Group Hospitality |  | Eliminations (a) |  | Total
Revenues |  |  |  |  |  |  |  | $ | 632,612 |  |  | $ | 484,649 |  |  | $ | (2,698) |  |  | $ | 1,114,563 |
Direct operating expenses |  |  |  |  |  |  |  | (417,108) |  |  | (270,728) |  |  | 2,077 |  |  | (685,759) |
Selling, general, and administrative expenses |  |  |  |  |  |  |  | (110,288) |  |  | (154,923) |  |  | — |  |  | (265,211) |
Depreciation and amortization |  |  |  |  |  |  |  | (69,564) |  |  | (32,503) |  |  | — |  |  | (102,067) |
Impairment and other gains, net |  |  |  |  |  |  |  | — |  |  | 2,800 |  |  | — |  |  | 2,800 |
Restructuring charges |  |  |  |  |  |  |  | (1,286) |  |  | — |  |  | — |  |  | (1,286) |
Operating income |  |  |  |  |  |  |  | 34,366 |  |  | 29,295 |  |  | (621) |  |  | 63,040 |
Interest income |  |  |  |  |  |  |  | 612 |  |  | 23 |  |  | — |  |  | 635 |
Interest expense |  |  |  |  |  |  |  | (25,453) |  |  | (1,702) |  |  | — |  |  | (27,155) |
Other expense, net |  |  |  |  |  |  |  | (84,690) |  |  | (82) |  |  | — |  |  | (84,772) |
(Loss) income from operations before income taxes |  |  |  |  |  |  |  | (75,165) |  |  | 27,534 |  |  | (621) |  |  | (48,252) |
Income tax benefit (expense) |  |  |  |  |  |  |  | 14,069 |  |  | (18,114) |  |  | — |  |  | (4,045) |
Net (loss) income |  |  |  |  |  |  |  | (61,096) |  |  | 9,420 |  |  | (621) |  |  | (52,297) |
Less: Net income attributable to redeemable noncontrolling interests |  |  |  |  |  |  |  | — |  |  | 7,739 |  |  | — |  |  | 7,739 |
Less: Net loss attributable to nonredeemable noncontrolling interests |  |  |  |  |  |  |  | (2,864) |  |  | (627) |  |  | — |  |  | (3,491) |
Net (loss) income from discontinued operations attributable to Sphere Entertainment Co.’s stockholders |  |  |  |  |  |  |  | $ | (58,232) |  |  | $ | 2,308 |  |  | $ | (621) |  |  | $ | (56,545) |
_________________ (a) Prior to the MSGE Distribution and Tao Group Hospitality Disposition, the Company’s consolidated results of operations included a number of intercompany transactions between MSG Entertainment and Tao Group Hospitality which were presented in the Company’s segment reporting disclosures. As such, these transactions are eliminated for purposes of this disclosure as they will not continue in periods subsequent to the MSGE Distribution and Tao Group Hospitality Disposition, respectively. As permitted under ASC Subtopic 205-20-50-5b(2), the Company has elected not to adjust the consolidated statements of cash flows for the years ended June 30, 2024, 2023 and 2022 to exclude cash flows attributable to discontinued operations. The table below sets forth, for the periods presented, significant selected financial information related to discontinued activities included in the accompanying consolidated financial statements:
| 2023 |  | 2022 |  |
| MSG Entertainment |  | Tao Group Hospitality (a) |  | MSG Entertainment |  | Tao Group Hospitality |  |  |  |
Non-cash items included in net income (loss): |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 49,423 |  |  | $ | 23,236 |  |  | $ | 69,564 |  |  | $ | 32,503 |  |  |  |  |
Impairments and other gains, net |  | (4,361) |  |  | (214,350) |  |  | — |  |  | (2,800) |  |  |  |  |
Share-based compensation expense |  | 4,710 |  |  | 7,224 |  |  | 8,480 |  |  | 7,647 |  |  |  |  |
Cash flow from investing activities: |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures, net |  | 12,832 |  |  | 17,488 |  |  | 15,797 |  |  | 23,309 |  |  |  |  |
Non-cash investing activities: |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures incurred but not yet paid |  | 780 |  |  | 817 |  |  | 1,585 |  |  | 119 |  |  |  |  |
Investments and loans to nonconsolidated affiliates |  | — |  |  | 113 |  |  | — |  |  | 791 |  |  |  |  |
_________________ (a) Impairments and other gains, net is inclusive of gain on Tao Disposition.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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