Madison Square Garden Co (Form: 10-Q, Received: 05/06/2011 17:21:06)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-34434

The Madison Square Garden Company

(Exact name of registrant as specified in its charter)

Delaware

27-0624498

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

Two Penn Plaza

New York, NY 10121

(212) 465-6000

(Address, including zip code, and telephone number, including area code, of

registrant’s principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated

Accelerated

Non-accelerated

Smaller reporting

filer

company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock outstanding, as the latest practicable date.


Class of Stock				Shares Outstanding as of April 29, 2011
Class A Common Stock par value $0.01 per share				62,101,376
Class B Common Stock par value $0.01 per share				13,588,555

THE MADISON SQUARE GARDEN COMPANY

INDEX TO FORM 10-Q


		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Statements of Operations for the three months ended March 31, 2011 and 2010 (unaudited)	1

	Consolidated Balance Sheets as of March 31, 2011 (unaudited) and December 31, 2010	2

	Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010 (unaudited)	3

	Consolidated Statements of Equity and Comprehensive Income (Loss) for the three months ended March 31, 2011 and 2010 (unaudited)	4

	Notes to Consolidated Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	30

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 5.	Other Information	32

Item 6.	Exhibits	32

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

THE MADISON SQUARE GARDEN COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


(in thousands, except per share data)	Three Months Ended March 31,
	2011		2010
Revenues (including revenues from Cablevision of $41,475 and $39,597)	$	330,413	$	306,501

Operating expenses:
Direct operating (excluding depreciation and amortization shown below and including expenses from Cablevision of $2,550 and $3,069)		207,610		196,463
Selling, general and administrative (including expenses from Cablevision of $2,554 and $3,828)		71,234		64,846
Depreciation and amortization		21,170		15,061

		300,014		276,370

Operating income		30,399		30,131

Other income (expense):
Interest income (including interest income from Cablevision of $914 for the three months ended March 31, 2010)		631		1,473
Interest expense		(1,690)		(1,591)
Miscellaneous		5,561		2,000

		4,502		1,882

Income from operations before income taxes		34,901		32,013
Income tax expense		(15,814)		(14,632)

Net income	$	19,087	$	17,381


Basic earnings per common share	$	0.26	$	0.24

Diluted earnings per common share	$	0.25	$	0.23

Weighted-average number of common shares outstanding: (Note 3)
Basic		74,193		73,450
Diluted		77,200		76,200

See accompanying notes to consolidated financial statements.

THE MADISON SQUARE GARDEN COMPANY

CONSOLIDATED BALANCE SHEETS


(in thousands, except per share data)	March 31, 2011		December 31, 2010
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	310,817	$	354,498
Restricted cash		7,464		4,215
Accounts receivable, net of allowance for doubtful accounts of $2,375 and $2,410		133,234		127,897
Net receivable due from Cablevision		25,210		22,907
Prepaid expenses		33,741		40,411
Other current assets		24,551		25,638

Total current assets		535,017		575,566
Property and equipment, net of accumulated depreciation and amortization of $425,426 and $408,561		515,438		472,821
Other assets		125,936		118,429
Amortizable intangible assets, net of accumulated amortization of $117,789 and $113,484		126,098		130,403
Indefinite-lived intangible assets		158,096		158,096
Goodwill		742,492		742,492

	$	2,203,077	$	2,197,807

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	14,887	$	8,118
Accrued liabilities:
Employee related costs		56,798		71,859
Other accrued liabilities		142,873		117,509
Deferred revenue		126,650		148,819

Total current liabilities		341,208		346,305
Defined benefit and other postretirement obligations		54,125		55,700
Other employee related costs		36,403		40,079
Other liabilities		62,659		57,272
Deferred tax liability		519,332		527,527

Total liabilities		1,013,727		1,026,883


Commitments and contingencies (Note 8)

Stockholders’ Equity:
Class A Common stock, par value $0.01, 360,000 shares authorized; 62,103 and 62,265 shares outstanding		625		624
Class B Common stock, par value $0.01, 90,000 shares authorized; and 13,589 shares outstanding		136		136
Preferred stock, par value $0.01, 45,000 shares authorized; none outstanding		—		—
Additional paid-in capital		1,038,730		1,032,121
Treasury stock, at cost, 479 and 234 shares		(10,279)		(3,723)
Retained earnings		180,340		161,253
Accumulated other comprehensive loss		(20,202)		(19,487)

Total stockholders’ equity		1,189,350		1,170,924

	$	2,203,077	$	2,197,807

See accompanying notes to consolidated financial statements.

THE MADISON SQUARE GARDEN COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(in thousands)	Three Months Ended March 31,
	2011		2010
Cash flows from operating activities:
Net income	$	19,087	$	17,381
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		21,170		15,061
Amortization of deferred financing costs		545		362
Share-based compensation expense related to equity classified awards		3,268		2,067
Share-based compensation expense prior to the Distribution		—		1,012
Excess tax benefit on share-based awards		(2,666)		(372)
Deemed capital contribution related to income taxes		—		2,712
Gain on exchange of investment		(3,375)		—
Provision for doubtful accounts		199		64
Change in assets and liabilities:
Accounts receivable, net		(5,536)		3,739
Net receivable due from Cablevision		(2,303)		(16,414)
Prepaid expenses and other assets		(1,695)		(7,317)
Accrued and other liabilities		4,231		10,192
Deferred revenue		(22,169)		(33,693)
Deferred income taxes		(7,656)		4,132

Net cash provided by (used in) operating activities		3,100		(1,074)

Cash flows from investing activities:
Capital expenditures		(42,863)		(21,346)
Payments for acquisition of assets		(352)		—

Net cash used in investing activities		(43,215)		(21,346)

Cash flows from financing activities:
Proceeds from promissory note due from a subsidiary of Cablevision		—		190,000
Additions to deferred financing costs		—		(8,322)
Principal payments on capital lease obligations		(352)		(326)
Deemed repurchases of restricted shares		(6,556)		(3,723)
Proceeds from stock option exercises		676		2,250
Excess tax benefit on share-based awards		2,666		372

Net cash provided by (used in) financing activities		(3,566)		180,251

Net increase (decrease) in cash and cash equivalents		(43,681)		157,831
Cash and cash equivalents at beginning of period		354,498		109,716

Cash and cash equivalents at end of period	$	310,817	$	267,547


Non-cash investing and financing activities:
Deemed capital distributions, net primarily related to income taxes and share-based compensation expense prior to the Distribution	$	—	$	26,636
Capital expenditures incurred but not yet paid		22,446		6,701
Asset retirement obligations		18,088		—

See accompanying notes to consolidated financial statements.

THE MADISON SQUARE GARDEN COMPANY

CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)


(in thousands)	Common Stock Issued		Additional Paid-In Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at January 1, 2011	$	760	$	1,032,121	$	(3,723)	$	161,253	$	(19,487)	$	1,170,924
Net income		—		—		—		19,087		—		19,087
Pension and postretirement plan liability adjustments, net of taxes		—		—		—		—		354		354
Unrealized loss on investment, net of taxes		—		—		—		—		(1,069)		(1,069)

Comprehensive income												18,372
Proceeds from exercise of options		1		675		—		—		—		676
Share-based compensation expense		—		3,268		—		—		—		3,268
Treasury stock acquired from acquisition of restricted shares		—		—		(6,556)		—		—		(6,556)
Excess tax benefit on share-based awards		—		2,666		—		—		—		2,666

Balance at March 31, 2011	$	761	$	1,038,730	$	(10,279)	$	180,340	$	(20,202)	$	1,189,350


(in thousands)	Common Stock Issued		Additional Paid-In Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at January 1, 2010	$	—	$	1,042,283	$	—	$	77,873	$	(14,053)	$	1,106,103
Net income		—		—		—		17,381		—		17,381
Pension and postretirement plan liability adjustments, net of taxes		—		—		—		—		284		284

Comprehensive income												17,665
Deemed capital contribution related to share-based compensation expense prior to the Distribution		—		1,012		—		—		—		1,012
Deemed capital contribution related to income taxes		—		2,712		—		—		—		2,712
Adjustments related to the transfer of liabilities from Cablevision in connection with certain pension plans as a result of the Distribution, net of taxes		—		—		—		—		(1,805)		(1,805)
Deemed capital contribution related to the transfer of certain liabilities between the Company and Cablevision, net of taxes		—		5,125		—		—		—		5,125
Reclassification of common stock in connection with the Distribution		755		(755)		—		—		—		—
Distribution date deferred tax assets and liabilities adjustments (Note 14)		—		(35,485)		—		—		—		(35,485)
Proceeds from exercise of options		4		2,246		—		—		—		2,250
Share-based compensation expense		—		2,067		—		—		—		2,067
Treasury stock acquired from acquisition of restricted shares		—		—		(3,723)		—		—		(3,723)
Excess tax benefit on share-based awards		—		372		—		—		—		372

Balance at March 31, 2010	$	759	$	1,019,577	$	(3,723)	$	95,254	$	(15,574)	$	1,096,293

See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

All amounts included in the following Notes to Consolidated Financial Statements are presented in thousands, except per share data or as otherwise noted.

Note 1. Description of Business

The Madison Square Garden Company (together with its subsidiaries, the “Company” or “Madison Square Garden”), formerly named Madison Square Garden, Inc., was incorporated on July 29, 2009 as an indirect, wholly-owned subsidiary of Cablevision Systems Corporation (“Cablevision”). On January 12, 2010, Cablevision’s board of directors approved the distribution of all the outstanding common stock of The Madison Square Garden Company to Cablevision shareholders (the “Distribution”) and the Company thereafter acquired the subsidiaries of Cablevision that owned, directly and indirectly, all of the partnership interests in MSG Holdings, L.P. (“MSG L.P.”), formerly named Madison Square Garden, L.P. MSG L.P. was the indirect, wholly-owned subsidiary of Cablevision through which Cablevision held the Company’s businesses until the Distribution occurred on February 9, 2010. Each holder of record of Cablevision NY Group Class A Common Stock as of close of business on January 25, 2010 (the “Record Date”) received one share of the Company’s Class A Common Stock for every four shares of Cablevision NY Group Class A Common Stock held. Each holder of record of Cablevision NY Group Class B Common Stock as of the Record Date received one share of the Company’s Class B Common Stock for every four shares of Cablevision NY Group Class B Common Stock held. MSG L.P. is now a wholly-owned subsidiary of The Madison Square Garden Company through which the Company conducts substantially all of its business activities.

Madison Square Garden is a fully-integrated sports, entertainment and media business. The Company is comprised of three reportable segments: MSG Media, MSG Entertainment, and MSG Sports. MSG Media produces, develops and acquires content for multiple distribution platforms, including content originating from the Company’s venues. The MSG Media segment includes the MSG Networks (MSG network, MSG Plus, MSG HD and MSG Plus HD), regional sports networks, and the Fuse Networks (Fuse and Fuse HD), a national television network dedicated to music. MSG Entertainment creates, produces and/or presents a variety of live productions, including the Radio City Christmas Spectacular , featuring the Radio City Rockettes (the “Rockettes”). We have also co-produced or presented events by Cirque du Soleil, including Wintuk . MSG Entertainment also presents or hosts other live entertainment events such as concerts, family shows and special events in the Company’s diverse collection of venues. MSG Sports owns and operates sports franchises, including the New York Knicks (the “Knicks”) of the National Basketball Association (the “NBA”), the New York Rangers (the “Rangers”) of the National Hockey League (the “NHL”), the New York Liberty (the “Liberty”) of the Women’s National Basketball Association (the “WNBA”), and the Connecticut Whale of the American Hockey League (the “AHL”), which is the primary player development team for the Rangers. MSG Sports also features other sports properties, including the presentation of a wide variety of live sporting events, including professional boxing, college basketball, track and field and tennis.

The Company conducts a significant portion of its operations at venues that it either owns or operates under long-term leases. The Company owns the Madison Square Garden Arena (“The Garden”) and The Theater at Madison Square Garden in New York City, as well as The Chicago Theatre in Chicago. It leases Radio City Music Hall and the Beacon Theatre in New York City. The Company also has a booking agreement with respect to the Wang Theatre in Boston.

Note 2. Accounting Policies

Unaudited Interim Financial Statements

The accompanying interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X, and should be read in conjunction with the consolidated financial statements and related notes of the Company filed in its 2010 Annual Report on Form 10-K. The financial statements as of March 31, 2011 and for the three months ended March 31, 2011 and 2010 presented in this Quarterly Report on Form 10-Q are unaudited; however, in the opinion of management such financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year. The dependence of our revenues on our professional sports teams and the Radio City Christmas Spectacular generally make our business seasonal with a disproportionate share of our revenues and operating income being derived in the fourth quarter of each calendar year.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of The Madison Square Garden Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of the accompanying interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, goodwill, intangible assets, other long-lived assets, tax accruals and other liabilities. In

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

addition, estimates are used in revenue recognition, income tax expense, performance-based compensation, depreciation and amortization, and the allowance for losses. Management believes its use of estimates in the interim consolidated financial statements to be reasonable.

Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future. We adjust such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on our best judgment at a point in time and as such these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond our control could be material and would be reflected in the Company’s financial statements in future periods.

Note 3. Computation of Earnings per Common Share

Basic earnings per common share (“EPS”) is based upon net income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted shares, restricted stock units and shares restricted on the same basis as underlying Cablevision restricted shares (see Note 12) only in the periods in which such effect would have been dilutive.

The following table presents a reconciliation of weighted-average shares used in the calculation of basic and diluted EPS.


	Three Months Ended March 31,
	2011		2010
Weighted-average shares for basic EPS		74,193		73,450
Dilutive effect of shares issuable under share-based compensation plans and shares restricted on the same basis as underlying Cablevision restricted shares		3,007		2,750

Weighted-average shares for diluted EPS		77,200		76,200

The calculation of diluted EPS for the three months ended March 31, 2011 and 2010 does not include 4 and 40 shares, respectively, because the effect of their inclusion would have been anti-dilutive.

Note 4. Team Personnel Transactions and Insurance Recoveries

Direct operating expenses in the accompanying consolidated statements of operations include net provisions for transactions relating to players on our sports teams for season-ending injuries, waivers and trades (“Team Personnel Transactions”). The Company’s MSG Sports segment recognizes the estimated ultimate costs of these events, including the Company’s estimated future obligation for luxury tax attributable to Knicks player transactions, in the period in which they occur, net of anticipated insurance recoveries. Amounts due to such players are generally paid over their remaining contract terms. Provisions for Team Personnel Transactions amounted to $9,675 and $6,223 for the three months ended March 31, 2011 and 2010, respectively, which were net of insurance recoveries of $0 and $820, respectively.

In addition, during the three months ended March 31, 2011 and 2010, the Company recorded $0 and $7,320, respectively, in insurance recoveries related to non season-ending player injuries.

Note 5. Investments

The Company had an investment of $37,632 in which it held a non-controlling ownership interest in Front Line Management Group, Inc. (“Front Line”), which was accounted for under the cost method and reported as a component of other assets in the accompanying consolidated balance sheet as of December 31, 2010. During the three months ended March 31, 2011 and 2010, the Company received $2,186 and $2,000, respectively, in dividends representing the distribution of earnings from this investment which was recognized in miscellaneous income in the accompanying consolidated statements of operations.

On February 4, 2011, the Company exchanged its ownership interest in Front Line, valued at approximately $41,000, for approximately 3,913 shares, or 2.16%, of Live Nation Entertainment, Inc. (“Live Nation”) common stock as of that date. As a result of this exchange the Company recorded a pretax gain of $3,375 during the three months ended March 31, 2011, which was recognized in miscellaneous income in the accompanying consolidated statement of operations. This investment is reported in the accompanying consolidated balance sheet as of March 31, 2011 in other assets, and is classified as available-for-sale. Investments in

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

available-for-sale securities are carried at fair market value with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders’ equity. The fair value of the investment in Live Nation common stock as of March 31, 2011 was $39,128.

Note 6. Goodwill and Intangible Assets

The carrying amount of goodwill, by reportable segment, as of March 31, 2011 and December 31, 2010 is as follows:


MSG Media	$	465,326
MSG Entertainment		58,979
MSG Sports		218,187

	$	742,492

During the first quarter of 2011, the Company performed its annual impairment test of goodwill, and there was no impairment of goodwill identified for any of its reportable segments.

The Company’s intangible assets are as follows:


As of March 31, 2011	Gross		Accumulated Amortization		Net
Intangible assets subject to amortization:
Affiliation agreements and affiliate relationships		$120,536		$ (50,554)		$ 69,982
Season ticket holder relationships		75,005		(33,186)		41,819
Suite holder relationships		15,394		(8,394)		7,000
Broadcast rights		15,209		(13,087)		2,122
Other intangibles		17,743		(12,568)		5,175

Total intangible assets subject to amortization		243,887		(117,789)		126,098


Sports franchises (MSG Sports segment)		96,215		—		96,215
Trademarks (MSG Entertainment segment)		61,881		—		61,881

Total indefinite-lived intangible assets		158,096		—		158,096

Total intangible assets		$401,983		$(117,789)		$284,194


As of December 31, 2010	Gross		Accumulated Amortization		Net
Intangible assets subject to amortization:
Affiliation agreements and affiliate relationships		$120,536		$ (48,814)		$ 71,722
Season ticket holder relationships		75,005		(31,824)		43,181
Suite holder relationships		15,394		(8,044)		7,350
Broadcast rights		15,209		(12,706)		2,503
Other intangibles		17,743		(12,096)		5,647

Total intangible assets subject to amortization		243,887		(113,484)		130,403


Sports franchises (MSG Sports segment)		96,215		—		96,215
Trademarks (MSG Entertainment segment)		61,881		—		61,881

Total indefinite-lived intangible assets		158,096		—		158,096

Total intangible assets		$401,983		$(113,484)		$288,499

During the first quarter of 2011, the Company performed its annual impairment test of identifiable indefinite-lived intangible assets, and there was no impairment identified.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Amortization expense was $4,305 and $4,528 for the three months ended March 31, 2011 and 2010, respectively. The Company expects its aggregate annual amortization expense for existing intangible assets subject to amortization for each year from 2011 through 2015 to be as follows:


For the year ended December 31, 2011 (including the three months ended March 31, 2011)	$	17,219
For the year ended December 31, 2012		14,447
For the year ended December 31, 2013		10,575
For the year ended December 31, 2014		10,575
For the year ended December 31, 2015		10,575

Note 7. Property and Equipment

As of March 31, 2011 and December 31, 2010, property and equipment (including equipment under capital leases) consisted of the following assets:


	March 31, 2011		December 31, 2010
Land	$	67,921	$	67,921
Buildings		233,582		209,857
Equipment		247,371		242,847
Aircraft		42,961		42,961
Furniture and fixtures		17,484		17,085
Leasehold improvements		143,908		141,636
Construction in progress		187,637		159,075

		940,864		881,382
Less accumulated depreciation and amortization		(425,426)		(408,561)

	$	515,438	$	472,821

Depreciable and amortizable assets are depreciated or amortized on a straight-line basis over their estimated useful lives.

Depreciation and amortization expense on property and equipment (including equipment under capital leases) amounted to $16,865 and $10,533 for the three months ended March 31, 2011 and 2010, respectively.

Project-to-date, the Company has incurred approximately $222,000 in construction costs associated with the comprehensive transformation of The Garden into a state-of-the-art arena (the “Transformation”) that are primarily recorded in construction in progress. As of March 31, 2011, approximately $23,000 of property and equipment related to the Transformation have been placed in service. Depreciation is being accelerated for The Garden assets that are planned to be removed as a result of the Transformation.

As of March 31, 2011 and December 31, 2010, the gross amount of equipment and related accumulated depreciation recorded under capital leases included in the table above are as follows:


	March 31, 2011		December 31, 2010
Equipment	$	13,296	$	13,304
Less accumulated depreciation		(9,799)		(9,557)

	$	3,497	$	3,747

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

The Company has recorded asset retirement obligations primarily related to the estimated cost associated with the removal of assets as a result of the Transformation. The change in the carrying amount of asset retirement obligations for the three months ended March 31, 2011 is as follows:


Balance as of December 31, 2010	$	27,358
Revisions in estimated liabilities, net		18,091
Payments		(2,392	)

Balance as of March 31, 2011	$	43,057

As of March 31, 2011, $32,972 of the total asset retirement obligations were recorded in other accrued liabilities, with the remaining balance recorded in other liabilities, in the accompanying consolidated balance sheet.

Note 8. Commitments and Contingencies

Commitments

As more fully described in Notes 10 and 11 to the consolidated financial statements of the Company included in the 2010 Annual Report on Form 10-K, the Company’s commitments primarily consist of long-term agreements for exclusive broadcast rights for certain live sporting events, obligations under employment agreements that the Company has with its professional sports teams’ personnel, long-term noncancelable operating lease agreements for entertainment venues and office and storage space, and minimum purchase requirements. These arrangements result from the Company’s normal course of business and represent obligations that may be payable over several years.

Legal Matters

In March 2008, a lawsuit was filed in the United States District Court for the Southern District of New York against MSG L.P. arising out of a January 23, 2007 automobile accident involving an individual who was allegedly drinking at several different establishments prior to the accident, allegedly including an event at The Garden. The plaintiffs filed suit against MSG L.P., the driver, and a New York City bar, asserting claims under the New York Dram Shop Act and seeking unspecified compensatory and punitive damages. On April 13, 2011, the claims against the Company were resolved directly by our insurers and dismissed with prejudice, without any payment by the Company to the plaintiffs.

In addition to the matter discussed above, the Company is a defendant in various lawsuits. Although the outcome of these matters cannot be predicted with certainty, management does not believe that resolution of these lawsuits will have a material adverse effect on the Company.

Note 9. Debt

Total debt of the Company consists of the following:


	March 31, 2011		December 31, 2010
Revolving Credit Facility	$	—	$	—
Capital lease obligations due to a subsidiary of Cablevision ^(a)		4,568		4,920

Total	$	4,568	$	4,920

^(a)

Classified in other liabilities in the accompanying consolidated balance sheets.

On January 28, 2010, MSG L.P. and certain of its subsidiaries entered into a credit agreement with a syndicate of lenders providing for a new senior secured revolving credit facility of up to $375,000 with a term of five years (the “Revolving Credit Facility”). The proceeds of borrowings under the Revolving Credit Facility are available for working capital and capital expenditures, including but not limited to the Transformation, and for general corporate purposes. All borrowings under the Revolving Credit Facility are subject to the satisfaction of customary conditions, including covenant compliance, absence of a default and accuracy of representations and warranties. As of March 31, 2011, there was $6,900 in letters of credit issued under the Revolving Credit Facility. Available borrowing capacity under the Revolving Credit Facility as of March 31, 2011 was $368,100.

The Revolving Credit Facility requires MSG L.P. to comply with the following financial covenants: (i) a maximum total secured leverage ratio of 3.50:1.00 and (ii) a maximum total leverage ratio of 6.00:1.00. In addition, there is a minimum interest coverage

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

ratio of 2.50:1.00 for the Company. As of March 31, 2011, the Company was in compliance with the financial covenants in the Revolving Credit Facility.

In connection with the establishment of this borrowing facility, the Company incurred deferred financing costs of $10,900, which are being amortized to interest expense over the five-year term of the Revolving Credit Facility.

Note 10. Fair Value Measurements

The fair value hierarchy, as outlined in the guidance under Accounting Standards Codification Topic 820, is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels:

•

Level I — Quoted prices for identical instruments in active markets.

•

Level II — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

•

Level III — Instruments whose significant value drivers are unobservable.

The following table presents for each of these hierarchy levels, the Company’s assets that are measured at fair value on a recurring basis:


	Level I		Level II		Level III		Total
March 31, 2011
Assets:
Money market accounts	$	225,541	$	—	$	—	$	225,541
Time deposits		75,093		—		—		75,093
Available-for-sale securities (in Other assets)		39,128		—		—		39,128

Total assets measured at fair value	$	339,762	$	—	$	—	$	339,762


December 31, 2010
Assets:
Money market accounts	$	266,851	$	—	$	—	$	266,851
Time deposits		75,009		—		—		75,009

Total assets measured at fair value	$	341,860	$	—	$	—	$	341,860

Money market accounts and time deposits

Money market accounts and time deposits are classified within Level 1 of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets. The carrying amount of the Company’s money market accounts and time deposits approximates fair value due to their short-term maturities.

Available-for-sale securities (in other assets)

The available-for-sale securities category includes available-for-sale marketable equity securities, whose fair value is determined using quoted market prices. Such items are classified in Level 1 (See Note 5).

Note 11. Pension and Other Postretirement Benefit Plans

The Company sponsors a non-contributory qualified defined benefit pension plan covering its non-union employees hired prior to January 1, 2001 (the “Retirement Plan”). Benefits payable to retirees under the Retirement Plan are based upon years of service and participants’ compensation. The Company also sponsors an unfunded, non-qualified defined benefit pension plan for the benefit of certain employees who participate in the underlying qualified plan (the “Excess Plan”). This plan provides that, upon retirement, a participant will receive a benefit based on a formula which reflects the participant’s years of service and compensation. As of December 31, 2007, both the Retirement Plan and Excess Plan were amended to freeze all benefits earned through December 31, 2007 and eliminate the ability of participants to earn benefits for future service under these plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Prior to the Distribution, certain Company employees participated in the Cablevision Cash Balance Pension Plan, a non-contributory qualified cash balance retirement plan, and the Cablevision Excess Cash Balance Plan, an unfunded non-contributory non-qualified excess cash balance plan. Effective January 1, 2010, employees of the Company ceased participation in the Cablevision Cash Balance Pension Plan and the Cablevision Excess Cash Balance Plan (collectively, the “Cablevision Cash Balance Plans”) and began participation in the Company-sponsored MSG Cash Balance Pension Plan and MSG Excess Cash Balance Plan (collectively, the “MSG Cash Balance Plans”), respectively. Also effective January 1, 2010, the Company assumed the liability to pay benefits to current and former employees of the Company who had previously participated in the Cablevision Cash Balance Plans. On April 4, 2011, plan assets with a fair value of $9,261 were transferred from the Cablevision Cash Balance Pension Plan to the MSG Cash Balance Pension Plan. This amount represents the portion of the assets of the Cablevision Cash Balance Pension Plan attributable to the liability previously transferred from this plan to the MSG Cash Balance Pension Plan.

On March 1, 2011, the Company merged the Retirement Plan into the MSG Cash Balance Pension Plan, effectively combining the plan assets and liabilities of the respective plans. In connection with this merger, the respective benefit formulas of the plans were not amended. As of March 1, 2011, the Retirement Plan no longer exists as a stand-alone plan and is part of the MSG Cash Balance Pension Plan. The Company did not perform a remeasurement of the MSG Cash Balance Pension Plan’s assets, liabilities, and expense as of the merger date as the potential impact was determined to not be material.

In addition, the Company sponsors two non-contributory qualified defined benefit pension plans covering certain of its union employees (“Union Plans”). Benefits payable to retirees under the Union Plans are based upon years of service and, for one plan, participants’ compensation.

The Excess Plan, Union Plans and MSG Cash Balance Plans (which now includes the former Retirement Plan) are collectively referred to as “Pension Plans.”

The Company also sponsors a contributory welfare plan which provides certain postretirement healthcare benefits to certain employees hired prior to January 1, 2001 and their dependents that are eligible for early or normal retirement under the Retirement Plan (or effective March 1, 2011, eligible to commence receipt of such early or normal Retirement Plan benefits under the MSG Cash Balance Pension Plan), as well as certain union employees (“Postretirement Plan”).

Components of net periodic benefit cost for the Company’s Pension Plans and Postretirement Plan for the three months ended March 31, 2011 and 2010 are as follows:


	Pension Plans				Postretirement Plan
	Three Months Ended March 31,
	2011		2010		2011		2010
Service cost	$	1,688	$	1,361	$	64	$	54
Interest cost		1,738		1,628		101		91
Expected return on plan assets		(532)		(331)		—		—
Recognized actuarial loss (gain)		650		530		1		(14)
Amortization of unrecognized prior service cost (credit)		7		8		(33)		(33)

Net periodic benefit cost	$	3,551	$	3,196	$	133	$	98

The Company contributed $4,300 and $192 to the MSG Cash Balance Pension Plan and one of its Union Plans, respectively, during the three months ended March 31, 2011.

In addition, Cablevision sponsors qualified and non-qualified savings plans (the “Cablevision Savings Plans”) in which employees of the Company continued to participate for a period of time after the Distribution (the “Transition Period”) until such time that the Company established its own savings plans. The Company made matching cash contributions on behalf of its employees to the Cablevision Savings Plans in accordance with the terms of those plans. Effective February 1, 2011, the Company established the MSG Holdings, L.P. 401(k) Savings Plan and the MSG Holdings, L.P. Excess Savings Plan (the “Madison Square Garden Savings Plans”). As of February 1, 2011, eligible employees of the Company have ceased participation in the Cablevision Savings Plans and participate in the Madison Square Garden Savings Plans. Expenses related to the Cablevision Savings Plans and Madison Square Garden Savings Plans included in the accompanying consolidated statements of operations were $857 and $643 for the three months ended March 31, 2011 and 2010, respectively.

Note 12. Share-based Compensation

In connection with the Distribution, the Company adopted the Company’s 2010 Employee Stock Plan (the “Employee Stock Plan”) and the Company’s 2010 Stock Plan for Non-Employee Directors (the “Non-Employee Director Plan”).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Under the Employee Stock Plan, the Company is authorized to grant incentive stock options, non-qualified stock options, restricted shares, restricted stock units, stock appreciation rights and other equity-based awards. The Company may grant awards for up to 7,000 shares of the Company’s Class A Common Stock (subject to certain adjustments). 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 one 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 be based upon performance criteria.

Under the Non-Employee Director Plan, the Company is authorized to grant non-qualified stock options, restricted stock units and other equity-based awards. The Company may grant awards for up to 300 shares of the Company’s Class A Common Stock (subject to certain adjustments). 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, and restricted stock units granted under this plan will be fully vested, upon the date of grant.

Prior to the Distribution certain Company employees and employees and non-employee directors of Cablevision (some of whom are employees or directors of the Company) participated in Cablevision’s equity award programs. See Note 15 to the consolidated financial statements of the Company included in the 2010 Annual Report on Form 10-K for more information regarding the treatment after the Distribution of share-based payment awards initially granted under Cablevision equity award programs.

Share-based Payment Award Activity

The following table summarizes activity for the three months ended March 31, 2011 relating to holders (including both Company and Cablevision employees) of the Company’s stock options:


	Number of				Weighted- Average Exercise Price Per Share	Weighted- Average Remaining Contractual Term (in years)
	Time Vesting Options		Performance Vesting Options ^(a)		Weighted- Average Exercise Price Per Share	Weighted- Average Remaining Contractual Term (in years)
Balance, January 1, 2011		1,883		120	$ 9.29	4.16
Exercised		(84)		—	8.06
Forfeited/Expired		(1)		—	9.38

Balance, March 31, 2011		1,798		120	$ 9.34	3.93

Options exercisable at March 31, 2011		1,339		120	$ 9.44	3.87

Options expected to vest in future		459		—	$ 9.04	5.15

^(a)

The Cablevision performance objective with respect to these awards has been achieved.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

The following table summarizes activity for the three months ended March 31, 2011 relating to holders (including both Company and Cablevision employees) of the Company’s Class A Common Stock restricted on the same basis as the underlying Cablevision restricted stock, as well as restricted shares issued under the Employee Stock Plan:


	Restricted Shares			Weighted-Average Fair Value Per Share at Date of Grant
Unvested award balance, January 1, 2011		1,852		$11.28
Vested		(557	)	17.49
Forfeited		(24	)	9.87

Unvested award balance, March 31, 2011		1,271		$ 8.56

During the three months ended March 31, 2011, 557 shares of the Company’s Class A Common Stock restricted on the same basis as the underlying Cablevision restricted shares vested. To fulfill the employees’ statutory minimum tax withholding obligations for the applicable income and other employment taxes, 221 of these shares, with an aggregate value of $6,556, were surrendered to the Company. These acquired shares have been classified as treasury stock.

Of the total unvested award balance as of March 31, 2011, 945 shares of the Company’s Class A Common Stock restricted on the same basis as the underlying Cablevision restricted shares were held by Cablevision employees (including shares of the Company granted to Company’s Executive Chairman and President and Chief Executive Officer, as employees of Cablevision).

The following table summarizes activity for the three months ended March 31, 2011 relating to holders of the Company’s Restricted Stock Units (“RSUs”):


	Number of						Weighted- Average Fair Value Per Share at Date of Grant
	Time Vesting RSUs			Performance Vesting RSUs *^(c)*
Unvested award balance, January 1, 2011		454			301		$21.21
Granted		442	^( a)(b)		169	^(a)	27.48
Vested		(22	) ^(b )		—		27.48
Forfeited		(22	)		—		22.17

Unvested award balance, March 31, 2011		852			470		$23.99

^(a)

Primarily represents a grant made by the Company to its employees under the Employee Stock Plan, on March 10, 2011, of 589 RSUs, of which 169 are subject to the attainment of certain performance criteria. These awards are subject to three-year cliff vesting. The RSUs will settle in stock, or, at the option of the Compensation Committee, in cash.

^(b)

On March 10, 2011 the Company granted its non-employee directors, under the Non-Employee Director Plan, 22 RSUs which immediately vested. The awards will be settled in stock, or, at the option of the Compensation Committee, in cash, on the first business day ninety days after the director’s service on the Board of Directors ceases.

^(c)

The Company’s performance objective with respect to the performance vesting RSUs granted in 2010 has been achieved.

Share-based Compensation Expense

Share-based compensation expense, recognized as selling, general and administrative expense, for the three months ended March 31, 2011 and 2010 was $3,299 and $3,311, respectively.

Note 13. Related Party Transactions

The Dolan family, including trusts for the benefit of the Dolan family, collectively owns all of the Company’s outstanding Class B Common Stock and owns approximately 3.6% of the Company’s outstanding Class A Common Stock. Such shares of the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

Company’s Class A Common Stock and Class B Common Stock, collectively, represent approximately 70% of the aggregate voting power of the Company’s outstanding common stock. The Dolan family is also the controlling stockholder of Cablevision.

In connection with the Distribution, the Company entered into various agreements with Cablevision, such as a distribution agreement, a tax disaffiliation agreement, a transition services agreement, an employee matters agreement and certain related party arrangements. These agreements govern certain of the Company’s relationships with Cablevision subsequent to the Distribution and provide for the allocation of employee benefits, taxes and certain other liabilities and obligations attributable to periods prior to the Distribution. These agreements also include arrangements with respect to transition services and a number of on-going commercial relationships. The distribution agreement includes an agreement that the Company and Cablevision agree to provide each other with indemnities with respect to liabilities arising out of the businesses Cablevision transferred to the Company.

The following table summarizes the composition and amounts of the significant transactions with Cablevision that are reflected in revenues and operating expenses in the accompanying consolidated statements of operations for the three months ended March 31, 2011 and 2010:


	Three Months Ended March 31,
	2011			2010
Revenues	$	41,475		$	39,597

Operating expenses:
Corporate general and administrative	$	(994	)	$	(3,309	)
Origination, master control and post production services		(2,435	)		(2,254	)
Risk management and general insurance		—			(713	)
Rent expense		(137	)		(135	)
Other expenses		(1,538	)		(486	)

Revenues

The Company recognizes revenue from the distribution of programming services to subsidiaries of Cablevision. Cablevision pays the Company for advertising in connection with signage at events, sponsorships and media advertisements.

Corporate General and Administrative

Primarily represents amounts charged to the Company by Cablevision pursuant to the transition services agreement. From January 1, 2010 through the Distribution date, the Company received allocations from Cablevision generally consistent with the transition services agreement, with certain adjustments.

Origination, Master Control and Post Production Services

Cablevision provides certain origination, master control and post production services to the Company.

Risk Management and General Insurance

Cablevision provided the Company with risk management and general insurance related services through the date of the Distribution. For a period after the Distribution, Cablevision provided risk management services through the transition services agreement (these amounts are reflected in the “Corporate general and administrative expenses” line in the table above).

Rent expense

Cablevision leases certain facilities under long-term lease agreements. The Company pays its share of monthly lease payments for the portion of the premises utilized.

Other expenses

The Company and Cablevision routinely enter into transactions with each other in the ordinary course of business.

Advances to Cablevision

On March 23, 2010, a subsidiary of Cablevision repaid to the Company the entire principal balance of a $190,000 non-amortizing promissory note due June 30, 2010 along with $914 of interest, that accrued at the rate of 3.25% per annum, and without prepayment penalty. The promissory note was executed on January 28, 2010 to replace the non-interest bearing advance owed to the Company by the same subsidiary of Cablevision that was outstanding as of December 31, 2009.

Other

See Note 9 for information on the Company’s capital lease obligations due to a subsidiary of Cablevision.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

See Note 11 for discussion of the participation of Company employees in Cablevision sponsored retirement benefit plans.

Note 14. Income Taxes

Income tax expense for the three months ended March 31, 2011 of $15,814 differs from the income tax expense derived from applying the statutory federal rate to pretax income due principally to state income taxes and the impact of nondeductible expenses (mainly nondeductible player disability and life insurance premiums), partially offset by the domestic production activities deduction.

Income tax expense for the three months ended March 31, 2010 of $14,632 differs from the income tax expense derived from applying the statutory federal rate to pretax income due principally to state income taxes and the impact of nondeductible expenses.

For all periods prior to the Distribution, deferred tax assets and liabilities were measured using the estimated applicable corporate tax rates historically used by Cablevision. Due to the Company’s significant presence in the City of New York, the estimated applicable corporate tax rate used to measure deferred taxes is higher for the Company as a stand-alone entity. As such, as of the Distribution date, an increase in the deferred tax liability of $31,353 to reflect use of the higher stand-alone estimated applicable corporate tax rate was recorded as an adjustment to paid-in capital. In addition, as of the Distribution date, the deferred tax asset for share-based awards was reduced by $4,092 through an adjustment to paid-in capital to eliminate the portion of the deferred tax asset relating to the share-based compensation expense attributable to Cablevision employees that was allocated to the Company prior to the Distribution.

For all periods prior to the Distribution, allocable current income tax liabilities calculated on a stand-alone company basis that the Company did not pay directly have been reflected as deemed capital contributions to the Company from Cablevision. Such contributions amounted to $2,712 for the three months ended March 31, 2010.

Note 15. Segment Information

The Company classifies its business interests into three reportable segments, which are MSG Media, MSG Entertainment and MSG Sports. The Company allocates certain corporate costs to all of its reportable segments. In addition, the Company allocates its venue operating expenses to its MSG Entertainment and MSG Sports segments. Venue operating expenses include the non-event related costs of operating the Company’s venues, and includes such costs as rent, real estate taxes, insurance, utilities, repairs and maintenance and labor related to the overall management of the venues. Depreciation expense related to The Garden and The Theater at Madison Square Garden is not allocated to the reportable segments and is recognized in “All other.”

The Company conducts a significant portion of its operations at venues that it either owns or operates under long-term leases. The Company owns The Garden and The Theater at Madison Square Garden in New York City, as well as The Chicago Theatre in Chicago. It leases Radio City Music Hall and the Beacon Theatre in New York City. The Company also has a booking agreement with respect to the Wang Theatre in Boston.

The Company evaluates segment performance based on several factors, of which the key financial measure is their operating income (loss) before depreciation and amortization, share-based compensation expense or benefit and restructuring charges or credits, which is referred to as adjusted operating cash flow (“AOCF”), a non-GAAP measure. The Company has presented the components that reconcile AOCF to operating income (loss), a GAAP measure. Information as to the operations of the Company’s reportable segments is set forth below.


	Three Months Ended March 31,
	2011		2010
Revenues
MSG Media	$	147,564	$	139,505
MSG Entertainment		42,805		41,473
MSG Sports		157,739		142,663
Inter-segment eliminations ^(a)		(17,695)		(17,140)

	$	330,413	$	306,501

^(a)	Primarily represents local media rights recognized by the Company’s MSG Sports segment from the licensing of team related programming to the Company’s MSG Media segment which are eliminated in consolidation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



	Three Months Ended March 31,
	2011		2010
Inter-segment revenues
MSG Media	$	—	$	—
MSG Entertainment		(26)		(26)
MSG Sports		(17,669)		(17,114)

	$	(17,695)	$	(17,140)

Reconciliation (by Segment and in Total) of AOCF to Operating Income (Loss)


	Three Months Ended March 31,
	2011		2010
AOCF
MSG Media	$	62,577	$	61,779
MSG Entertainment		(6,782)		(12,713)
MSG Sports		3,540		3,407
All other ^(a)		(4,467)		(3,970)

	$	54,868	$	48,503


	Three Months Ended March 31,
	2011		2010
Depreciation and amortization
MSG Media	$	5,551	$	4,798
MSG Entertainment		2,314		2,331
MSG Sports		2,650		2,607
All other ^(b)		10,655		5,325

	$	21,170	$	15,061


	Three Months Ended March 31,
	2011		2010
Share-based compensation expense
MSG Media	$	862	$	1,204
MSG Entertainment		902		1,241
MSG Sports		761		866
All other		774		—

	$	3,299	$	3,311


	Three Months Ended March 31,
	2011		2010
Operating income (loss)
MSG Media	$	56,164	$	55,777
MSG Entertainment		(9,998)		(16,285)
MSG Sports		129		(66)
All other		(15,896)		(9,295)

	$	30,399	$	30,131

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

A reconciliation of reportable segment operating income to the Company’s consolidated income from operations before income taxes is as follows:


	Three Months Ended March 31,
	2011		2010
Total operating income for reportable segments	$	46,295	$	39,426
Other operating loss		(15,896)		(9,295)

Operating income		30,399		30,131
Items excluded from operating income:
Interest income		631		1,473
Interest expense		(1,690)		(1,591)
Miscellaneous income		5,561		2,000

Income from operations before income taxes	$	34,901	$	32,013


	Three Months Ended March 31,
	2011		2010
Capital expenditures
MSG Media	$	2,771	$	7,699
MSG Entertainment		1,048		1,262
MSG Sports		115		59
All other ^(c)		38,929		12,326

	$	42,863	$	21,346

^(a)

Consists principally of unallocated corporate general and administrative costs.

^(b)

Principally includes depreciation and amortization expense on The Garden and the Theater at Madison Square Garden and certain corporate property, equipment and leasehold improvement assets not allocated to the Company’s reportable segments.

^(c)

Principally includes capital expenditures associated with the ongoing Transformation.

Substantially all revenues and assets of the Company’s reportable segments are attributed to or located in the United States and are primarily concentrated in the New York metropolitan area.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this MD&A, there are statements concerning our future operating and future financial performance, including: the timing and anticipated benefits of, and the inclusion of a reserve for, the comprehensive Transformation; and the ability to renew affiliation agreements. Words such as “expects”, “anticipates”, “believes”, “estimates”, “may”, “will”, “should”, “could”, “potential”, “continue”, “intends”, “plans”, and similar words and terms used in the discussion of future operating and future financial performance identify forward-looking statements. Investors are cautioned that such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties and that actual results or developments may differ materially from the forward-looking statements as a result of various factors. Factors that may cause such differences to occur include, but are not limited to:

•

the level of our revenues, which depends in part on the popularity and competitiveness of our sports teams and the level and popularity of the Radio City Christmas Spectacular and other entertainment events which are presented in our venues;

•

costs associated with player injuries, and waivers or terminations of players and other team personnel;

•

changes in professional sports teams’ compensation, including the impact of signing of free agents, subject to league salary caps;

•

the level and timing of our capital expenditures, including the comprehensive Transformation of The Garden;

•

the impact of the comprehensive Transformation of The Garden on our operations;

•

the demand for our programming among cable television systems, satellite, telephone and other multichannel distributors (which we refer to as “Distributors”), and our ability to renew affiliation agreements with them;

•

general economic conditions especially in the New York metropolitan area where we conduct the majority of our operations;

•

the demand for advertising time and viewer ratings for our programming;

•

competition, for example, from other regional sports networks, other teams and other entertainment options;

•

changes in laws, NBA or NHL rules, regulations, guidelines, bulletins, directives, policies and agreements (including the leagues’ respective collective bargaining agreements with their players’ associations, salary caps, NBA luxury tax thresholds and revenue sharing) or other regulations under which we operate;

•

any NBA or NHL work stoppage;

•

our ability to maintain, obtain or produce content for our MSG Media segment, together with the cost of such content;

•

future acquisitions and dispositions of assets;

•

the costs associated with, and the outcome of, litigation and other proceedings to the extent uninsured;

•

financial community and rating agency perceptions of our business, operations, financial condition and the industry in which we operate;

•

our ownership of professional sports franchises in the NBA and NHL and certain transfer restrictions on our common stocks; and

•

the factors described under “Risk Factors” in our 2010 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 4, 2011.

We disclaim any obligation to update or revise the forward-looking statements contained herein, except as otherwise required by applicable federal securities laws.

All dollar amounts included in the following MD&A are presented in thousands, except as otherwise noted.

Introduction

MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited consolidated financial statements and footnotes thereto included elsewhere herein to help provide an understanding of our financial condition, changes in financial condition and results of our operations. Unless the context otherwise requires, all references to “we”, “us”, “our”, “Madison Square Garden” or the “Company” refer to The Madison Square Garden Company, together with its direct and indirect subsidiaries. “The Madison Square Garden Company” refers to The Madison Square Garden Company individually as a separate entity. The Madison Square Garden Company is a holding company and conducts substantially all of its operations through its subsidiaries. This MD&A should be read in conjunction with our 2010 Annual Report on Form 10-K, and is organized as follows:

Results of Operations. This section provides an analysis of our results of operations for the three months ended March 31, 2011 compared to the three months ended March 31, 2010. Our discussion is presented on both a consolidated and segment basis.

Liquidity and Capital Resources. This section provides a discussion of our financial condition, liquidity and capital resources as of March 31, 2011, as well as an analysis of our cash flows for the three months ended March 31, 2011 compared to the three months ended March 31, 2010.

Critical Accounting Policies. This section discusses our critical accounting policy in respect of goodwill and identifiable indefinite-lived intangible assets in order to provide the results of our annual impairment testing performed during the three months ended March 31, 2011. There is no update to our other significant accounting policies, including our critical accounting policies, which are discussed in our 2010 Annual Report on Form 10-K under Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the notes to the consolidated financial statements of the Company included therein.

The Company classifies its business interests into three reportable segments: MSG Media, MSG Entertainment, and MSG Sports. MSG Media produces, develops and acquires content for multiple distribution platforms, including content originating from our venues. MSG Entertainment creates, produces and/or presents a variety of live productions, including the Radio City Christmas Spectacular , featuring the Radio City Rockettes. MSG Sports owns and operates sports franchises, including the Knicks of the NBA, the Rangers of the NHL, the Liberty of the WNBA, and the Connecticut Whale of the AHL, which is the primary player development team for the Rangers.

The dependence of our revenues on our professional sports teams and the Radio City Christmas Spectacular generally make our business seasonal with a disproportionate share of our revenues and operating income being derived in the fourth quarter of each calendar year.

Change in Fiscal Year

On February 7, 2011, the Board of Directors of The Madison Square Garden Company approved a change in the Company’s fiscal year end from December 31 to June 30, effective June 30, 2011. The Company plans to report our financial results for the six month transition period of January 1, 2011 through June 30, 2011 on a Transition Report on Form 10-K/T and to thereafter file annual reports for each twelve month period ended June 30 of each year beginning with the twelve month period ended June 30, 2012. We believe the change in fiscal year will better align our financial planning and reporting cycles with the seasonality of our business, particularly our MSG Sports and MSG Entertainment segments.

Results of Operations

The table below sets forth, for the periods presented, certain historical financial information and the percentage that those items bear to revenues.

STATEMENT OF OPERATIONS DATA


	Three Months Ended March 31,								Increase
	2011				2010				(Decrease)
	Amount		% of Revenues		Amount		% of Revenues		in Net Income
Revenues	$	330,413		100%	$	306,501		100%	$	23,912
Operating expenses:
Direct operating (excluding depreciation and amortization shown below)		207,610		63%		196,463		64%		(11,147)
Selling, general and administrative		71,234		22%		64,846		21%		(6,388)
Depreciation and amortization		21,170		6%		15,061		5%		(6,109)

Operating income		30,399		9%		30,131		10%		268
Other income (expense):
Interest expense, net		(1,059)		NM		(118)		NM		(941)
Miscellaneous		5,561		2%		2,000		1%		3,561

Income from operations before income taxes		34,901		11%		32,013		10%		2,888
Income tax expense		(15,814)		-5%		(14,632)		-5%		(1,182)

Net income	$	19,087		6%	$	17,381		6%	$	1,706

NM – Percentage is not meaningful

See “Business Segment Results” for a more detailed discussion relating to the operating results of our segments. The business segment results do not reflect inter-segment eliminations.

Consolidated Results of Operations

Revenues

Revenues for the three months ended March 31, 2011 increased $23,912, or 8%, to $330,413 as compared to the comparable period of the prior year. The net increase is attributable to the following:


Increase in MSG Media segment revenues	$	8,059
Increase in MSG Entertainment segment revenues		1,332
Increase in MSG Sports segment revenues		15,076
Inter-segment eliminations		(555)

	$	23,912

Direct operating expenses (excluding depreciation and amortization)

Direct operating expenses (excluding depreciation and amortization) for the three months ended March 31, 2011 increased $11,147, or 6%, to $207,610 as compared to the comparable period of the prior year. The net increase is attributable to the following:


Increase in MSG Media segment expenses	$	5,410
Decrease in MSG Entertainment segment expenses		(4,692)
Increase in MSG Sports segment expenses		10,983
Inter-segment eliminations		(554)

	$	11,147

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended March 31, 2011 increased $6,388, or 10%, to $71,234 as compared to the comparable period of the prior year. The net increase is attributable to the following:


Increase in MSG Media segment expenses	$	1,509
Decrease in MSG Entertainment segment expenses		(246)
Increase in MSG Sports segment expenses		3,855
Increase in other expenses		1,270

	$	6,388

The increase in other expenses discussed above is primarily due to an increase in unallocated share-based compensation as compared to the comparable period of the prior year.

Depreciation and amortization

Depreciation and amortization for the three months ended March 31, 2011 increased $6,109, or 41%, to $21,170 as compared to the comparable period of the prior year. The increase reflects higher depreciation expense primarily associated with certain assets that will be removed as a result of the ongoing Transformation.

Interest expense, net

Interest expense, net for the three months ended March 31, 2011 increased $941, or 797%, to $1,059 as compared to the comparable period of the prior year primarily due to lower interest income attributable to the repayment of the promissory note by a subsidiary of Cablevision in March 2010.

Miscellaneous income

Miscellaneous income for the three months ended March 31, 2011 and 2010 reflects dividends of $2,186 and $2,000, respectively, received from an investment accounted for under the cost method. On February 4, 2011, the Company exchanged this investment for an investment in marketable securities, which is accounted for as available-for-sale. As a result of this exchange the Company recorded a pretax gain of $3,375 during the three months ended March 31, 2011.

Income taxes

Income tax expense for the three months ended March 31, 2011 increased $1,182, or 8%, to $15,814 as compared to the comparable period of the prior year. Income tax expense differs from the income tax expense derived from applying the statutory federal rate to pretax income due principally to state income taxes and the impact of nondeductible expenses (mainly nondeductible player disability and life insurance premiums), partially offset by the domestic production activities deduction. The effective tax rate was 45% for the three months ended March 31, 2011.

Income tax expense of $14,632 for the three months ended March 31, 2010, differs from the income tax expense derived from applying the statutory federal rate to pretax income due principally to state income taxes and the impact of nondeductible expenses. The effective tax rate was 46% for the three months ended March 31, 2010.

AOCF

The Company evaluates segment performance based on several factors, of which the key financial measure is their operating income before depreciation and amortization, share-based compensation expense or benefit and restructuring charges or credits, which is referred to as AOCF, a non-GAAP measure. The Company has presented the components that reconcile AOCF to operating income, a GAAP measure. The following is a reconciliation of operating income to AOCF:


	Three Months Ended March 31,				Increase (Decrease)
	2011		2010		in AOCF
Operating income	$	30,399	$	30,131	$	268
Share-based compensation		3,299		3,311		(12)
Depreciation and amortization		21,170		15,061		6,109

AOCF	$	54,868	$	48,503	$	6,365

AOCF for the three months ended March 31, 2011 increased $6,365, or 13%, to $54,868, as compared to the comparable period of the prior year. The net increase is attributable to the following:


Increase in AOCF of the MSG Media segment	$	798
Reduction in AOCF loss of the MSG Entertainment segment		5,931
Increase in AOCF of the MSG Sports segment		133
Other net decreases		(497)

	$	6,365

Effective July 1, 2010 DISH Network’s (“DISH”) license to carry Fuse expired and Fuse has not been carried by DISH since that date. Effective October 1, 2010, DISH’s license to carry MSG network and MSG Plus expired and these networks have not been carried by DISH since that date. The financial impact of the two events will depend on many factors including if, when and on what terms DISH and the Company reach new carriage agreements to restore DISH’s carriage of any or all of the networks. The loss of the agreements did not have a material impact on the Company’s and MSG Media segment’s financial condition or revenues in the first quarter, but did have a material impact on the Company’s and MSG Media segment’s operating income and AOCF during the quarter. If new carriage agreements are not reached with DISH, the impact on the Company’s and MSG Media segment’s financial condition or revenues will not be material but may continue to be material to the Company’s and MSG Media segment’s operating income or AOCF.

In addition, the stated term of a carriage agreement with a Fuse distributor expired effective January 1, 2011. The Company remains in active negotiations with this distributor for a new multi-year agreement and the distributor continues to carry Fuse. The financial impact will depend on many factors including if, when and on what terms the Company reaches a new carriage agreement. However, the Company has not recognized revenue for such carriage since the expiration of the stated term of the agreement. The Company expects that the fees to be agreed will apply retroactively if and when a new carriage agreement is reached. The failure to recognize such revenue did not have a material impact on the Company’s and MSG Media segment’s financial condition or revenues or on the MSG Media segment’s operating income or AOCF in the first quarter, but did have a material impact on the Company’s operating income and AOCF during the quarter. If a new Fuse carriage agreement is not reached with this distributor, the impact on the Company’s and MSG Media segment’s financial condition or revenues would not be material, but may be material to the Company’s and MSG Media segment’s operating income or AOCF.

On September 16, 2010, DISH filed a complaint with the FCC under the FCC’s program access rules. The complaint alleges, among other things, that the terms and conditions the Company offered DISH for carriage of our networks were discriminatory and unfair. The Company is vigorously defending against the claims made by DISH and believes that such claims are without merit.

Business Segment Results

MSG Media

The table below sets forth, for the periods presented, certain historical financial information and the percentage that those items bear to revenues for the Company’s MSG Media segment.


	Three Months Ended March 31,								Increase
	2011				2010				(Decrease) in
	Amount		% of Revenues		Amount		% of Revenues		Operating Income

Revenues	$	147,564		100%	$	139,505		100%	$	8,059
Direct operating expenses (excluding depreciation and amortization)		62,801		43%		57,391		41%		(5,410)
Selling, general and administrative expenses		23,048		16%		21,539		15%		(1,509)
Depreciation and amortization		5,551		4%		4,798		3%		(753)

Operating income	$	56,164		38%	$	55,777		40%	$	387

The following is a reconciliation of operating income to AOCF:


	Three Months Ended March 31,				Increase (Decrease)
	2011		2010		in AOCF
Operating income	$	56,164	$	55,777	$	387
Share-based compensation		862		1,204		(342)
Depreciation and amortization		5,551		4,798		753

AOCF	$	62,577	$	61,779	$	798

Revenues

Revenues for the three months ended March 31, 2011 increased $8,059, or 6%, to $147,564 as compared to the comparable period of the prior year. The net increase is attributable to the following:


Increase in advertising revenue	$	5,036
Increase in affiliation fee revenue		3,324
Other net decreases		(301)

	$	8,059

The increase in advertising revenue discussed above was primarily driven by higher sales generated from the telecast of professional sports programming and, to a lesser extent, higher ratings at Fuse.

The increase in affiliation fee revenue discussed above was primarily attributable to higher affiliation rates, with the overall increase being substantially offset by the impact of the expiration of certain affiliation agreements, as discussed in the “Results of Operations—Consolidated Results of Operations” section above.

Direct operating expenses (excluding depreciation and amortization)

Direct operating expenses (excluding depreciation and amortization) for the three months ended March 31, 2011 increased $5,410, or 9%, to $62,801 as compared to the comparable period of the prior year. The net increase is attributable to the following:


Increase in non-rights related programming expenses	$	3,878
Increase in rights fees, including revenues reported by the MSG Sports segment from the licensing of team related programming to MSG Media		1,532

	$	5,410

The increase in non-rights related programming expenses was driven by costs associated with new programming that debuted in the second half of 2010, as well as the timing of certain events.

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended March 31, 2011 increased $1,509, or 7%, to $23,048 as compared to the comparable period of the prior year primarily due to an increase in marketing costs associated with our programming.

Depreciation and amortization

Depreciation and amortization for the three months ended March 31, 2011 increased $753, or 16%, to $5,551 as compared to the comparable period of the prior year primarily due to higher depreciation expense associated with assets placed into service during the fourth quarter of 2010.

AOCF

AOCF for the three months ended March 31, 2011 increased $798, or 1%, to $62,577 as compared to the comparable period of the prior year. The change is primarily due to increases in advertising and affiliation fee revenues substantially offset by higher direct operating expenses and, to a lesser extent, an increase in selling, general and administrative expenses, as discussed above.

See “Results of Operations - Consolidated Results of Operations” regarding expiration of certain affiliation agreements.

MSG Entertainment

The table below sets forth, for the periods presented, certain historical financial information and the percentage that those items bear to revenues for the Company’s MSG Entertainment segment.


	Three Months Ended March 31,								Decrease in Operating Loss
	2011				2010
	Amount		% of Revenues		Amount		% of Revenues

Revenues	$	42,805		100%	$	41,473		100%	$	1,332
Direct operating expenses (excluding depreciation and amortization)		34,580		81%		39,272		95%		4,692
Selling, general and administrative expenses		15,909		37%		16,155		39%		246
Depreciation and amortization		2,314		5%		2,331		6%		17

Operating loss	$	(9,998)		-23%	$	(16,285)		-39%	$	6,287

The following is a reconciliation of operating loss to AOCF:


	Three Months Ended March 31,				Increase (Decrease) in AOCF
	2011		2010		Increase (Decrease) in AOCF
Operating loss	$	(9,998)	$	(16,285)	$	6,287
Share-based compensation		902		1,241		(339)
Depreciation and amortization		2,314		2,331		(17)

AOCF	$	(6,782)	$	(12,713)	$	5,931

Revenues

Revenues for the three months ended March 31, 2011 increased $1,332, or 3%, to $42,805 as compared to the comparable period of the prior year. The net increase is attributable to the following:


Increase in event-related revenues at the Beacon Theatre	$	3,832
Increase in event-related revenues at The Garden and The Theater at Madison Square Garden, excluding Wintuk , primarily driven by additional events at The Theater at Madison Square Garden		1,072
Decrease in revenues from the presentation of Wintuk , primarily due to the decrease in the number of scheduled performances		(1,130)
Decrease in event-related revenues at Radio City Music Hall, excluding Radio City Christmas Spectacular , primarily due to the decrease in the number of events		(1,537)
Decrease in revenues from the presentation of the Radio City Christmas Spectacular franchise		(2,170)
Other net increases primarily due to higher venue related sponsorship and signage revenues		1,265

	$	1,332

The increase in event-related revenues at the Beacon Theatre reflects more events held at the venue during the three months ended March 31, 2011 as compared to the comparable period of the prior year. The Company utilized the Beacon Theatre during the first quarter of 2010 to rehearse the Banana Shpeel production.

The decrease in revenues from the Radio City Christmas Spectacular franchise, which includes the New York edition of the show as well as shows outside of the New York area, was driven by fewer scheduled performances as there were performances in January 2010, while none took place in January 2011.

Direct operating expenses (excluding depreciation and amortization)

Direct operating expenses (excluding depreciation and amortization) for the three months ended March 31, 2011 decreased $4,692, or 12%, to $34,580 as compared to the comparable period of the prior year. The net decrease is attributable to the following:


Decrease in direct operating expenses related to the presentation of the Radio City Christmas Spectacular franchise	$	(4,672)
Decrease in direct operating expenses associated with the presentation of Wintuk , primarily due to the decrease in the number of performances		(1,449)
Decrease in event-related direct operating expenses at Radio City Music Hall, excluding Radio City Christmas Spectacular , primarily due to the decrease in the number of events		(915)
Increase in event-related expenses at the Beacon Theatre primarily due to an increase in the number of events		2,029
Other net increases		315

	$	(4,692)

The decrease in direct operating expenses related to the Radio City Christmas Spectacular franchise primarily relates to fewer scheduled performances in the first quarter of 2011 as compared to the comparable period of the prior year.

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended March 31, 2011 decreased $246, or 2%, to $15,909 as compared to the comparable period of the prior year.

AOCF

AOCF loss improved for the three months ended March 31, 2011 as compared to the comparable period of the prior year by $5,931, or 47%, to a loss of $6,782 primarily due to a decrease in direct operating expenses, mainly attributable to those associated with 2010 productions, as discussed above.

MSG Sports

The table below sets forth, for the periods presented, certain historical financial information and the percentage that those items bear to revenues for the Company’s MSG Sports segment.


	Three Months Ended March 31,								(Increase)
	2011				2010				Decrease in
	Amount		% of Revenues		Amount		% of Revenues		Operating Loss
Revenues	$	157,739		100%	$	142,663		100%	$	15,076
Direct operating expenses (excluding depreciation and amortization)		127,806		81%		116,823		82%		(10,983)
Selling, general and administrative expenses		27,154		17%		23,299		16%		(3,855)
Depreciation and amortization		2,650		2%		2,607		2%		(43)

Operating income (loss)	$	129		NM	$	(66)		NM	$	195

NM – Percentage is not meaningful

The following is a reconciliation of operating income (loss) to AOCF:


	Three Months Ended March 31,				Increase (Decrease)
	2011		2010		in AOCF
Operating income (loss)	$	129	$	(66)	$	195
Share-based compensation		761		866		(105)
Depreciation and amortization		2,650		2,607		43

AOCF	$	3,540	$	3,407	$	133

Revenues

Revenues for the three months ended March 31, 2011 increased $15,076, or 11%, to 157,739 as compared to the comparable period of the prior year. The net increase is attributable to the following:


Increase in professional sports teams’ food, beverage and merchandise sales	$	3,302
Increase in professional sports teams’ regular season ticket related revenue		3,185
Increase in event-related revenues from other live sporting events		3,031
Increase in professional sports teams’ sponsorship and signage revenues		1,938
Increase in suite rental fee revenue		1,858
Increase in revenues from NHL and NBA distributions		1,245
Other net increases		517

	$	15,076

Event-related revenues from other live sporting events include ticket related revenues, venue license fees we charge to promoters for the use of our venues, single night suite rental fees, and food, beverage and merchandise sales.

Direct operating expenses (excluding depreciation and amortization)

Direct operating expenses (excluding depreciation and amortization) for the three months ended March 31, 2011 increased $10,983, or 9%, to $127,806 as compared to the comparable period of the prior year. The net increase is attributable to the following:


Increase in net provisions for certain team personnel transactions (including the impact of NBA luxury tax)	$	3,452
Increase in team personnel compensation, net of insurance recoveries		2,160
Increase in expenses associated with other live sporting events		1,517
Increase in professional sports teams’ expenses associated with food, beverage and merchandise sales		1,384
Increase due to higher net provision for NBA luxury tax (excluding the impact of certain team personnel transactions) of $1,428, partly offset by lower net provision for NHL revenue sharing (excluding playoffs) of $(171)		1,257
Increase in other team operating expenses		882
Other net increases		331

	$	10,983

Increase in team personnel compensation for the three months ended March 31, 2011, as compared to the comparable period of the prior year, includes the impact of $7,320 in insurance recoveries related to non season-ending player injuries in the first quarter of 2010. There were no insurance recoveries related to non season-ending player injuries in the first quarter of 2011.

Net provisions for certain team personnel transactions (including the impact of NBA luxury tax), NBA luxury tax (excluding the impact of certain team personnel transactions) and NHL revenue sharing (excluding playoffs) were as follows:


	Three Months Ended March 31,
	2011		2010		Increase
Net provisions for certain team personnel transactions (including the impact of NBA luxury tax)	$	9,675	$	6,223	$	3,452
Net provisions for NBA luxury tax (excluding the impact of certain team personnel transactions) and NHL revenue sharing (excluding playoffs)		726		(531)		1,257

Team personnel transactions for the three months ended March 31, 2011 reflect provisions recorded for player trades and a player waiver of $4,393 and $3,096, respectively, and season-ending player injuries of $2,186. Team personnel transactions for the three months ended March 31, 2010 reflect provisions recorded for a player waiver of $4,748 and season-ending player injuries of $1,475, which is net of insurance recoveries of $820. The cost of these transactions are recorded when the transaction occurs, but payments owed are generally paid over the remaining contract terms.

The increase in the net provision for NBA luxury tax (excluding the impact of certain team personnel transactions) for the three months ended March 31, 2011 as compared to the comparable period of the prior year was primarily due to the Knicks recording a modest provision for a league-wide player escrow shortfall in the first quarter of 2011 versus recording a league distribution of player escrowed amounts in the first quarter of 2010. In addition, the gross luxury tax associated with the active rosters declined in the first quarter of 2011 as compared to the comparable period of the prior year as the Company will not be a gross luxury tax payer for the 2010-11 season and expects to receive a share of luxury tax proceeds from tax-paying teams.

The decrease in the net provision for NHL revenue sharing (excluding playoffs) for the three months ended March 31, 2011 as compared to the comparable period of the prior year is based primarily on estimates of the Rangers’ and league-wide revenues at the end of the season.

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended March 31, 2011 increased $3,855, or 17%, to $27,154, as compared to the comparable period of the prior year. The net increase is primarily attributable to the increase in employee compensation and related benefits and marketing related costs.

AOCF

AOCF for the three months ended March 31, 2011 increased $133, or 4%, to $3,540, as compared to the comparable period of the prior year. The increase was primarily due to an increase in revenues offset by higher direct operating expenses and, to a lesser extent, an increase in selling, general and administrative expenses, as discussed above.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash and cash equivalents on hand, cash flows from the operations of our businesses and available borrowing capacity under our $375,000 credit agreement with a syndicate of lenders, that we refer to as the “Credit Agreement,” providing for a senior secured revolving credit facility that we refer to as the “Revolving Credit Facility” (see “Financing Agreements” below.) Our principal uses of cash include capital spending, working capital-related items and investments that we may fund from time to time. The decision of the Company as to the use of its available liquidity will be based upon an ongoing review of the funding needs of the business, the optimal allocation of cash resources, and the timing of cash flow generation.

We are currently pursuing a major renovation of The Garden, which we refer to as the Transformation. In order to most efficiently and effectively complete the Transformation, it will remain a year-round project. Our goal is to minimize disruption to current operations and, to achieve this, we plan for The Garden to remain open for the Knicks’ and Rangers’ regular seasons and playoffs. We have now closed The Garden and The Theater at Madison Square Garden for the off-season following the Knicks’ and Rangers’ playoffs and we plan to close The Garden and The Theater at Madison Square Garden after the conclusion of the Knicks’ and Rangers’ seasons, including any playoffs, in the 2012 and 2013 calendar years. The outcome of the Knicks’ and Rangers’ seasons will determine when the venues will close. Given that we cannot know in advance when those seasons will end, we are generally not booking live entertainment or other sporting events from a period commencing in April and ending in October. We are also currently not planning to host pre-season Rangers’ games in 2011 at The Garden. While we seek to minimize disruptions during the Transformation, including scheduling events at other venues or to other times of the year when The Garden or The Theater at Madison Square Garden will be open, we do not expect to be able to reschedule all events that would otherwise have occurred during the shutdowns. Consequently, we expect to lose revenues as a result of this schedule.

We expect the renovated lower bowl of The Garden to be open for the 2011-12 NBA and NHL regular seasons and the renovated upper bowl to be open for the 2012-13 NBA and NHL regular seasons. In each case, construction on areas such as concourses and certain restrooms, concessions and suites will continue during the seasons and a portion of the upper bowl seating (less than 1,100 seats) will be unavailable during part of the 2011-2012 NBA and NHL seasons.

As we begin the transformation of the lower bowl of The Garden, with the help of our project manager, construction manager and architect, we continue to refine our near-term construction phasing. For example, we accelerated portions of the construction work, previously planned for this off-season, earlier into calendar 2011 while the building was still in use for events. While this initiative increases overall project costs, we believe it was advisable to accelerate work where we could do so, given the complexity of the project and the benefits of reducing some scheduling pressure on our off-season months. We were able to accomplish this effort while minimizing disruption to our customers. In addition to shifting forward portions of the construction work, we have entered into our

first off-season shutdown, after which we will gain important experience and knowledge related to the project. While we have previously provided a range of projected construction costs for the Transformation project, we believe it would be imprudent and premature to provide an estimate at this time. Rather, for planning and liquidity purposes, and to be prudent and cautious, we are factoring in a reserve, which may or may not be entirely necessary, that is 15% above the high-end of the previously provided cost range of $850,000.

The Transformation project remains within our overall expectations. Our schedule for opening the lower and upper bowls, as well as the other elements in the transformed arena, has not changed. Construction costs for the Transformation project incurred through March 31, 2011 were approximately $222,000 of which approximately $51,000 was incurred in 2011. We continue to believe that we will have sufficient liquidity to fund the Transformation project from cash on hand, cash flows from operations and, if necessary, our Revolving Credit Facility.

As with any major renovation project, the Transformation is subject to potential unexpected delays, costs or other problems. Depending upon the severity and timing, such events could materially and negatively affect our business, results of operations and cash flows.

We have assessed the implications of the recent volatility in the capital and credit markets on our ability to meet our net funding and investing requirements over the next twelve months and we believe that the combination of cash and cash equivalents on hand, cash generated from operating activities and borrowing availability under our Revolving Credit Facility should provide us with sufficient liquidity. However, market disruptions could cause broader economic downturns, which may lead to lower demand for our offerings, such as lower levels of attendance or advertising. These economic events could adversely impact our results of operations and our cash flows and might require that we seek alternative sources of funding.

Financing Agreements

Revolving Credit Facility

On January 28, 2010, MSG L.P. and certain of its subsidiaries entered into the Credit Agreement. The proceeds of borrowings under the facility are available for working capital and capital expenditures, including but not limited to the Transformation, and for general corporate purposes. The Credit Agreement and related security agreement contain certain customary representations and warranties, affirmative covenants and events of default. All borrowings under the Revolving Credit Facility are subject to the satisfaction of customary conditions, including covenant compliance, absence of a default and accuracy of representations and warranties. As of March 31, 2011, there was $6,900 in letters of credit issued under the Revolving Credit Facility. Our available borrowing capacity under the Revolving Credit Facility as of March 31, 2011 was $368,100.

Borrowings under the Revolving Credit Facility bear interest at a floating rate which, at the option of MSG L.P., may be either 2.5% over a U.S. Federal Funds Rate or U.S. Prime Rate, or 3.5% over an adjusted LIBOR rate. Accordingly, we will be subject to interest rate risk with respect to any borrowings we may make under that facility. In appropriate circumstances, we may seek to reduce this exposure through the use of interest rate swaps or similar instruments. Upon a payment default in respect of principal, interest or other amounts due and payable under the Credit Agreement or related loan documents, default interest will accrue on all overdue amounts at an additional rate of 2.00% per annum.

The Revolving Credit Facility requires MSG L.P. to pay a commitment fee of 0.75% in respect of the average daily unused commitments thereunder. MSG L.P. is also required to pay customary letter of credit fees, as well as fronting fees, to banks that issue letters of credit pursuant to the Revolving Credit Facility.

The Credit Agreement requires MSG L.P. to comply with the following financial covenants: (i) a maximum total secured leverage ratio of 3.50:1.00 and (ii) a maximum total leverage ratio of 6.00:1.00. In addition, there is a minimum interest coverage ratio of 2.50:1.00 for the Company. As of March 31, 2011, the Company was in compliance with the financial covenants in the Credit Agreement.

Advances to Cablevision

Tax Disaffiliation Agreement

Under the terms of our Tax Disaffiliation Agreement with Cablevision, in order to preserve the tax-free treatment to Cablevision of the Distribution, we are subject to certain restrictions during the two-year period following the Distribution that might affect our ability to raise cash. In particular, we may not issue equity securities if any such issuances would, in the aggregate, constitute 50% or more of the voting power or value of our capital stock, which restriction might limit our financing options. This restriction will be more pronounced if the market price of our stock declines significantly below the value of our stock on the Distribution date, since the restrictions in the Tax Disaffiliation Agreement apply to the number of shares issued, rather than the proceeds we receive upon

issuance. In addition, we are restricted from selling certain of our assets during the two-year period, which might also impede our ability to raise cash through asset sales.

Cash Flow Discussion

Operating Activities

Net cash provided by operating activities for the three months ended March 31, 2011 increased by $4,174 to $3,100 as compared to the comparable period of the prior year. This increase was driven primarily by an increase of $4,233 resulting from changes in assets and liabilities.

The increase in changes in assets and liabilities was primarily due to increases during the three months ended March 31, 2011 in the net receivable due from Cablevision and prepaid expenses and other assets of $2,303 and $1,695, respectively, as compared to increases of $16,414 and $7,317, respectively, during the comparable period of the prior year, as well as a decrease of $22,169 in deferred revenue during the three months ended March 31, 2011, as compared to a decrease of $33,693 during the comparable period of the prior year.

The changes in assets and liabilities described above were partially offset by increases during the three months ended March 31, 2011 in accounts receivable, net and accrued and other liabilities of $5,536 and $4,231, respectively, as compared to a decrease of $3,739 and an increase of $10,192 during the comparable period of the prior year, as well as a decrease in deferred income taxes of $7,656 during the three months ended March 31, 2011, as compared to an increase of $4,132 during the comparable period of the prior year.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2011 increased by $21,869 to $43,215 as compared to the comparable period of the prior year primarily driven by an increase in capital expenditures associated with the Transformation.

Financing Activities

Net cash used in financing activities for the three months ended March 31, 2011 was $3,566 as compared to $180,251 of net cash provided by financing activities for the three months ended March 31, 2010. The change is primarily driven by the 2010 receipt of the principal balance of a $190,000 promissory note due from a subsidiary of Cablevision.

Critical Accounting Policies

The following critical accounting policy discussion has been included to provide the results of our annual impairment testing of goodwill and identifiable indefinite-lived intangible assets performed during the three months ended March 31, 2011. Accordingly, we have not repeated herein a discussion of the Company’s other critical accounting policies as set forth in our 2010 Annual Report on Form 10-K.

Goodwill

Goodwill is tested annually for impairment during the first quarter and at any time upon the occurrence of certain events or substantive changes in circumstances. The impairment test for goodwill is a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill that would be recognized in a business combination. For the purpose of evaluating goodwill impairment, the Company has three reporting units that are the same as its reportable segments, and all of which recognized goodwill.

The goodwill balance as of March 31, 2011 by reportable segment is as follows:


MSG Media	$	465,326
MSG Entertainment		58,979
MSG Sports		218,187

	$	742,492

During the first quarter of 2011, the Company performed its annual impairment test of goodwill, and there was no impairment of goodwill identified for any of its reportable segments.

Identifiable Indefinite-Lived Intangible Assets

Identifiable indefinite-lived intangible assets are tested annually for impairment during the first quarter and at any time upon the occurrence of certain events or substantive changes in circumstances. The impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The following table sets forth the amount of identifiable indefinite-lived intangible assets reported in the Company’s consolidated balance sheet as of March 31, 2011 by reportable segment:


MSG Entertainment	$	61,881
MSG Sports		96,215

	$	158,096

The Company’s identifiable indefinite-lived intangible assets relate to trademarks and sports franchises. The Company’s indefinite-lived trademark intangible assets relate to the Company’s Radio City related trademarks which include the Radio City Christmas Spectacular and the Rockettes and The Chicago Theatre related trademarks, which were all valued using a relief-from-royalty method in which the expected benefits are valued by discounting hypothetical royalty payments based on projected revenues covered by the trademarks. The Company’s indefinite-lived sports franchises intangibles representing the Company’s NBA and NHL sports franchises were valued using a direct valuation method based on market comparables. Both the Radio City related trademarks and the sports franchises were recorded in April 2005, when Cablevision acquired the remaining 40% interest in a subsidiary of Cablevision which wholly-owned the Company. Significant judgments inherent in a discounted cash flow valuation include the selection of appropriate discount rates, estimating the amount and timing of estimated future cash flows and identification of appropriate continuing growth rate assumptions. The discount rates used in the analysis are intended to reflect the risk inherent in the projected future cash flows generated by the respective intangible assets.

During the first quarter of 2011, the Company performed its annual impairment test of identifiable indefinite-lived intangible assets, and there was no impairment identified.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There were no material changes to the disclosure on this matter made in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Item 4. Controls and Procedures

Based on their evaluation as of the end of the period covered by this report, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures referred to in paragraph 4(c) of their certifications included as exhibits to this report were effective.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a)
Total Number of
Shares (or Units)
Purchased

(b)
Average Price
Paid per Share
(or Unit)

(d)
Maximum Number
(or Approximate
Dollar Value) of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or
Programs

March 3, 2011

220,671

29.71

N/A

In March 2011, certain shares of the Company’s Class A Common Stock that were restricted on the same basis as underlying Cablevision restricted shares and issued to employees of the Company and Cablevision at the Distribution vested. To fulfill the employees’ statutory minimum tax withholding obligations for the applicable income and other employment taxes of approximately $6.6 million, 220,671 of these shares were surrendered to the Company. The 220,671 acquired shares have been classified as treasury stock.

Item 5. Other Information

Effective May 5, 2011, Madison Square Garden, Inc. (the “Company”) changed its name from Madison Square Garden, Inc. to The Madison Square Garden Company. A copy of the Certificate of Ownership and Merger merging The Madison Square Garden Company with and into Madison Square Garden, Inc. changing the Company’s name to The Madison Square Garden Company is attached hereto as Exhibit 3.1. A copy of the Amended By-Laws of the Company reflecting the name change from Madison Square Garden, Inc. to The Madison Square Garden Company is attached as Exhibit 3.2.

Item 6. Exhibits

(a)	Index to Exhibits


EXHIBIT NO.		DESCRIPTION
3.1		Certificate of Ownership and Merger merging The Madison Square Garden Company With and Into Madison Square Garden, Inc.
3.2		Amended By-Laws of The Madison Square Garden Company.
10.1		Amendment No. 1 to the Credit Agreement dated as of April 15, 2011 among Madison Square Garden, L.P., the Guarantors (as defined in the Credit Agreement), the banks, financial institutions and other institutional lenders parties to the Credit Agreement and JPMorgan Chase Bank, National Association, as agent for the Lenders.
31.1		Certification of Hank J. Ratner pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Robert M. Pollichino pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Hank J. Ratner pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Robert M. Pollichino pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 6th day of May, 2011.


The Madison Square Garden Company

By:		/s/ Robert M. Pollichino
Name:		Robert M. Pollichino
Title:		Executive Vice President and Chief Financial Officer

Exhibit 3.1

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING

THE MADISON SQUARE GARDEN COMPANY

WITH AND INTO

MADISON SQUARE GARDEN, INC.

Pursuant to Section 253 of the

General Corporation Law of the State of Delaware

MADISON SQUARE GARDEN, INC., a Delaware corporation (the “Company”), does hereby certify to the following facts relating to the merger of THE MADISON SQUARE GARDEN COMPANY, a Delaware corporation (the “Subsidiary”), with and into the Company, with the Company remaining as the surviving corporation under the name of THE MADISON SQUARE GARDEN COMPANY (the “Merger”).

FIRST: The Company was incorporated pursuant to the General Corporation Law of the State of Delaware (the “DGCL”) on the 29 ^th day of July 2009.

SECOND: The Company owns all of the outstanding shares of each class of capital stock of the Subsidiary, a corporation organized pursuant to the provisions of the DGCL on the 2nd day of May, 2011.

THIRD: The Board of Directors of the Company, by the following resolutions duly adopted on May 5, 2011, determined to merge the Subsidiary with and into the Company pursuant to Section 253 of the DGCL and did adopt the following resolutions:

WHEREAS, the Company desires to change its name to The Madison Square Garden Company pursuant to Section 253(b) of the General Corporation Law (the “Name Change”);

WHEREAS, in order to effect the Name Change, the Company desires to incorporate a corporation named The Madison Square Garden Company (the “Subsidiary”) under the General Corporation Law and to acquire one (1) share of Common Stock, par value of $.01 per share, of the Subsidiary (collectively, the “Incorporation”);

WHEREAS, following the effectiveness of the Incorporation, the Company will own all of the outstanding shares of the capital stock of the Subsidiary; and

WHEREAS, in order to effect the Name Change the Board of Directors of the Company has deemed it advisable that the Subsidiary following the effectiveness of the Incorporation be merged with and into the Company (the “Merger”) pursuant to Section 253 of the General Corporation following the effectiveness of the Incorporation.

NOW, THEREFORE, BE IT AND IT HEREBY IS

RESOLVED, that the Incorporation is hereby authorized and approved in all respects; and it is further

RESOLVED, that following the Incorporation, the Company is hereby authorized to effect the Name Change by merging the Subsidiary with and into the Company pursuant to Section 253 of the General Corporation Law; and it is further

RESOLVED, that by virtue of the Merger and without any action on the part of the holder thereof, each then outstanding share of Common Stock, par value $.01 per share, of the Company (the “Common Stock”) shall remain unchanged and continue to remain outstanding as one share of Common Stock, held by the person who was the holder of such share of Common Stock immediately prior to the Merger; and it is further

RESOLVED, that by virtue of the Merger and without any action on the part of the holder thereof, each then outstanding share of Common Stock, par value $.01 per share, of the Subsidiary shall be cancelled and no consideration shall be issued in respect thereof; and it is further

RESOLVED, that the Amended and Restated Certificate of Incorporation of the Company as in effect immediately prior to the effective time of the Merger shall be the certificate of incorporation of the surviving corporation, except that Article FIRST thereof shall be amended to read in its entirety as follows:

“FIRST. The name of this corporation (hereinafter called the “Corporation”) is The Madison Square Garden Company.”

RESOLVED, that the proper officers of the Company be and they hereby are authorized and directed, following the effectiveness of the Incorporation, to make, execute and acknowledge, in the name and under the corporate seal of the Company, a certificate of ownership and merger for the purpose of consummating the Merger and to file the same in the office of the Secretary of State of the State of Delaware, and to do all other acts and things that may be necessary to carry out and effectuate the purpose and intent of the resolutions relating to the Merger; and its further

RESOLVED, that the proper officers of the Company be and they hereby are authorized and directed to do all acts and things that may be necessary to carry out and effectuate the purpose and intent of the resolutions relating to the Name Change, the Incorporation and the Merger.

FOURTH: The Company shall be the surviving corporation of the Merger.

FIFTH: The certificate of incorporation of the Company as in effect immediately prior to the effective time of the Merger shall be the certificate of incorporation of the surviving corporation, except that Article FIRST thereof shall be amended to read in its entirety as follows:

“FIRST. The name of this corporation (hereinafter called the “Corporation”) is The Madison Square Garden Company.”

IN WITNESS WHEREOF, the Company has caused this Certificate of Ownership and Merger to be executed by its duly authorized officer this 5th day of May, 2011.


MADISON SQUARE GARDEN, INC.

By:	/s/ Lawrence J. Burian
	Name:	Lawrence J. Burian
	Title:	Executive Vice President, General Counsel & Secretary

Exhibit 3.2

AMENDED BY-LAWS

THE MADISON SQUARE GARDEN COMPANY

(A DELAWARE CORPORATION)

AMENDED FEBRUARY 9, 2010

THE MADISON SQUARE GARDEN COMPANY

BY-LAWS

TABLE OF CONTENTS


		Page

Article I Stockholders			1

1.	Certificates; Uncertificated Shares		1
2.	Fractional Share Interests		2
3.	Stock Transfers		2
4.	Record Date for Stockholders		2
5.	Meaning of Certain Terms		3
6.	Stockholder Meetings		3

Article II Directors			6

1.	Functions and Definitions		6
2.	Qualifications and Number		7
3.	Election and Term		7
4.	Meeting		7
5.	Removal of Directors		8
6.	Action in Writing		8
7.	Executive Committee		8
8.	Other Committees		9

Article III Officers			10

1.	Executive Officers		10
2.	Term of Office; Removal		10
3.	Authority and Duties		10
4.	The Chairman		10

Article IV Voting of Stock in Other Companies			10

Article V Corporate Seal and Corporate Books			11

Article VI Fiscal Year			11

Article VII Control over By-Laws			11

Article VIII Indemnification			11

AMENDED BY-LAWS

THE MADISON SQUARE GARDEN COMPANY

(A DELAWARE CORPORATION)

ARTICLE I

STOCKHOLDERS

1. Certificates; Uncertificated Shares . The shares of stock in the corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the corporation’s stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate theretofore issued until such certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board, to the extent, if any, required by applicable law, every holder of stock in the corporation represented by a certificate shall be entitled to have a certificate signed by, or in the name of, the corporation by the Chairman, the Chief Executive Officer or Vice Chairman, if any, or by the President, if any, or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the corporation certifying the number of shares owned by him in the corporation. If such certificate is countersigned by a transfer agent other than the corporation or its employee or by a registrar other than the corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.

Whenever the corporation shall be authorized to issue more than one class of stock or more than one series of any class of stock, and whenever the corporation shall issue any shares of its stock as partly paid stock, the certificates representing shares of any such class or series or of any such partly paid stock shall set forth thereon the statements prescribed by the General Corporation Law. Any restrictions on the transfer or registration of transfer of any shares of stock of any class or series shall be noted conspicuously on the certificate representing such shares. Within a reasonable time after the issuance or transfer of uncertificated stock, the corporation shall send to the registered owner thereof a written notice containing the information required by law to be set forth or stated on certificates or a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

The corporation may issue a new certificate of stock in place of any certificate theretofore issued by it, alleged to have been lost, stolen, or destroyed, and the Board of Directors may require the owner of any lost, stolen, or destroyed certificate, or such owner’s

legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against it on account of the alleged loss, theft, or destruction of any such certificate or the issuance of any such new certificate.

2. Fractional Share Interests . The corporation may, but shall not be required to, issue fractions of a share. In lieu thereof it shall either pay in cash the fair value of fractions of a share, as determined by the Board of Directors, to those entitled thereto or issue scrip or fractional warrants in registered form, either represented by a certificate or uncertificated, or bearer form over the manual or facsimile signature of an officer of the corporation or of its agent, exchangeable as therein provided for full shares, but such scrip or fractional warrants shall not entitle the holder to any rights of a stockholder except as therein provided. Such scrip or fractional warrants may be issued subject to the condition that the same shall become void if not exchanged for certificates representing full shares of stock or uncertificated full shares of stock before a specified date, or subject to the condition that the shares of stock for which such scrip or fractional warrants are exchangeable may be sold by the corporation and the proceeds thereof distributed to the holders of such scrip or fractional warrants, or subject to any other conditions which the Board of Directors may determine.

3. Stock Transfers . Upon compliance with provisions restricting the transfer or registration of transfer of shares of stock, if any, transfers or registration of transfer of shares of stock of the corporation shall be made only on the stock ledger of the corporation by the registered holder thereof, or by such holder’s attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation or with a transfer agent or a registrar, if any, and, in the case of shares represented by certificates, on surrender of the certificate or certificates for such shares of stock properly endorsed and the payment of all taxes due thereon.

4. Record Date for Stockholders . For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or for the purpose of determining stockholders entitled to receive payment of any dividend or other distribution or the allotment of any rights, or entitled to exercise any rights in respect of any change, conversion, or exchange of stock, or for the purpose of any other lawful action, the directors may fix, in advance, a date as the record date for any such determination of stockholders. Such date shall not be more than sixty days nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If no record date is fixed, the record date for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. When a determination of stockholders of record entitled to notice of or to vote at any meeting of stockholders has been made as provided in this paragraph, such determination shall apply to any adjournment thereof; provided , however , that the Board of Directors may fix a new record date for the adjourned meeting.

5. Meaning of Certain Terms . As used herein in respect of the right to notice of a meeting of stockholders or a waiver thereof or to participate or vote thereat, the term “share” or “shares” or “share of stock” or “shares of stock” or “stockholder” or “stockholders” refers to an outstanding share or shares of stock and to a holder or holders of record of outstanding shares of stock when the corporation is authorized to issue only one class of shares of stock, and said reference is also intended to include any outstanding share or shares of stock and any holder or holders of record of outstanding shares of stock of any class upon which or upon whom the certificate of incorporation confers such rights where there are two or more classes or series of shares of stock or upon which or upon whom the General Corporation Law confers such rights notwithstanding that the certificate of incorporation may provide for more than one class or series of shares of stock, one or more of which are limited or denied such rights thereunder; provided , however , that no such right shall vest in the event of an increase or a decrease in the authorized number of shares of stock of any class or series which is otherwise denied voting rights under the provisions of the certificate of incorporation, including any Preferred Stock which is denied voting rights under the provisions of the resolution or resolutions adopted by the Board of Directors with respect to the issuance thereof.

6. Stockholder Meetings .

Time . The annual meeting shall be held on the date and at the time fixed, from time to time, by the directors. A special meeting shall be held on the date and at the time fixed by the directors.

Place . Annual meetings and special meetings shall be held at such place, within or without the State of Delaware, as the directors may, from time to time, fix. Whenever the directors shall fail to fix such place, the meeting shall be held at the registered office of the corporation in the State of Delaware.

Call . Annual meetings and special meetings may be called by the Board of Directors only.

Notice or Waiver of Notice . Notice of all meetings shall be given, stating the place, date, and hour of the meeting. The notice of an annual meeting shall state that the meeting is called for the election of directors and for the transaction of other business which may properly come before the meeting, and shall (if any other action which could be taken at a special meeting is to be taken at such annual meeting) state such other action or actions as are known at the time of such notice. The notice of a special meeting shall in all instances state the purpose or purposes for which the meeting is called. If any action is proposed to be taken which would, if taken, entitle stockholders to receive payment for their shares of stock, the notice shall include a statement of that purpose and to that effect. Except as otherwise provided by the General Corporation Law, a copy of the notice of any meeting shall be given, personally or by mail or in such other manner as may be permitted by the General Corporation Law, not less than ten days nor more than sixty days before the date of the meeting, unless the lapse of the prescribed period of time shall have been waived, and directed to each stockholder at such stockholder’s record address or at such other address which he may have furnished for such purpose in writing to the Secretary of the corporation. Notice by mail shall be deemed to be given when deposited, with postage thereof prepaid, in the United States mail. If a meeting is adjourned to another time, not

more than thirty days hence, and/or to another place, and if an announcement of the adjourned time and/or place is made at the meeting, it shall not be necessary to give notice of the adjourned meeting unless the directors, after adjournment, fix a new record date for the adjourned meeting. Notice need not be given to any stockholder who submits a written waiver of notice before or after the time stated therein. Attendance of a person at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice.

Stockholder List . There shall be prepared and made, at least ten days before every meeting of stockholders, a complete list of the stockholders, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting either at a place within the city or other municipality or community where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this section or the books of the corporation, or to vote at any meeting of stockholders.

Conduct of Meeting . Meetings of the stockholders shall be presided over by one of the following officers in the order or seniority and if present and acting, the Chairman, if any, the Chief Executive Officer, if any, a Vice Chairman, if any, the President, if any, a Vice President, a chairman for the meeting chosen by the Board of Directors, or, if none of the foregoing is in office and present and acting, by a chairman to be chosen by the stockholders. The Secretary of the corporation, or in his or her absence, an Assistant Secretary, shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present, the chairman for the meeting shall appoint a secretary of the meeting. The presiding officer shall: call the meeting to order; determine when proxies must be filed with the secretary of the meeting; open the polls, establish the time period for which polls remain open and close the polls; decide who may address the meeting and generally determine the order of business and time for adjournment of the meeting. The presiding officer shall also maintain proper and orderly conduct, and shall take all means reasonably necessary to prevent or cease disruptions, personal attacks or inflammatory remarks at the meeting. In addition to the powers and duties specified herein, the presiding officer shall have the authority to make all other determinations necessary for the order and proper conduct of the meeting.

Proxy Representation . Every stockholder may authorize another person or persons to act for such stockholder by proxy in all matters in which a stockholder is entitled to participate, whether by waiving notice of any meeting or voting or participating at a meeting. Such authorization may take any form permitted by the General Corporation Law. No proxy shall be voted or acted upon after three years from its date unless such proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and, if,

and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally.

Inspectors and Judges . The directors, in advance of any meeting, may, but need not, appoint one or more inspectors of election or judges of the vote, as the case may be, to act at the meeting or any adjournment thereof. If an inspector or inspectors or judge or judges are not appointed, the person presiding at the meeting may, but need not, appoint one or more inspectors or judges. In case any person who may be appointed as an inspector or judge fails to appear or act, the vacancy may be filled by appointment made by the person presiding thereat. Each inspector or judge, if any, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector or judge at such meeting with strict impartiality and according to the best of his or her ability. The inspectors or judges, if any, shall determine the number of shares of stock outstanding and the voting power of each, the shares of stock represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes or ballots, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes or ballots, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the person presiding at the meeting, the inspector or inspectors or judge or judges, if any, shall make a report in writing of any challenge, question or matter determined by such inspector(s) and execute a certificate of any fact found by such inspector(s).

Quorum . Except as the General Corporation Law or these by-laws may otherwise provide, the holders of a majority of the votes represented by the outstanding shares of stock entitled to vote shall constitute a quorum at a meeting of stockholders for the transaction of any business; provided , however , that if the certificate of incorporation or the General Corporation Law provides that voting on a particular action is to be by class, a majority of the votes represented by the outstanding shares of stock of such class shall constitute a quorum at a meeting of stockholders for the authorization of such action. The stockholders present may adjourn the meeting despite the absence of a quorum. When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any stockholders.

Voting . Except as otherwise provided in these by-laws, the certificate of incorporation or, with respect to Preferred Stock, the resolution or resolutions of the Board of Directors providing for the issuance thereof, and except as otherwise provided by the General Corporation Law, at every meeting of the stockholders, each stockholder entitled to vote at such meeting shall be entitled to the number of votes as specified, and to the extent provided for, in the certificate of incorporation or, with respect to Preferred Stock, the resolution or resolutions of the Board of Directors providing for the issuance thereof, in person or by proxy, for each share of stock entitled to vote held by such stockholder. In the election of directors, a plurality of the votes cast by each class of stock, voting separately as a class, shall elect the directors that such class is authorized to elect as specified, and to the extent provided for, in the certificate of incorporation. Any other action shall be authorized by a majority of the votes cast except where the certificate of incorporation or the General Corporation Law prescribes a different percentage of votes and/or a different exercise of voting power. Voting by ballot shall not be required for corporate action except as otherwise provided by the General Corporation Law.

Advance Notice of Stockholder Proposals . At any annual or special meeting of stockholders, proposals by stockholders and persons nominated for election as directors by stockholders shall be considered only if advance notice thereof has been timely given as provided herein. Notice of any proposal to be presented by any stockholder or of the name of any person to be nominated by any stockholder for election as a director of the corporation at any meeting of stockholders shall be given to the Secretary of the corporation not less than 60 nor more than 90 days prior to the date of the meeting; provided , however , that if the date of the meeting is publicly announced or disclosed less than 70 days prior to the date of the meeting, such notice shall be given not more than ten days after such date is first so announced or disclosed. No additional public announcement or disclosure of the date of any annual meeting of stockholders need be made if the corporation shall have previously disclosed, in these by-laws or otherwise, that the annual meeting in each year is to be held on a determinable date, unless and until the Board of Directors determines to hold the meeting on a different date. Any stockholder who gives notice of any such proposal shall deliver therewith the text of the proposal to be presented and a brief written statement of the reasons why such stockholder favors the proposal and setting forth such stockholder’s name and address, the number and class of all shares of each class of stock of the corporation beneficially owned by such stockholder and any material interest of such stockholder in the proposal (other than as a stockholder). Any stockholder desiring to nominate any person for election as a director of the corporation shall deliver with such notice a statement in writing setting forth the name of the person to be nominated, the number and class of all shares of each class of stock of the corporation beneficially owned by such person, the information regarding such person required by Item 401 of Regulation S-K adopted by the Securities and Exchange Commission (or the corresponding provisions of any regulation subsequently adopted by the Securities and Exchange Commission applicable to the corporation), such person’s signed consent to serve as a director of the corporation if elected, such stockholder’s name and address and the number and class of all shares of each class of stock of the corporation beneficially owned by such stockholder. As used herein, shares “beneficially owned” shall mean all shares as to which such person, together with such person’s affiliates and associates (as defined in Rule 12b-2 under the Securities Exchange Act of 1934), may be deemed to beneficially own pursuant to Rules 13d-3 and 13d-5 under the Securities and Exchange Act of 1934, as well as all shares as to which such person, together with such person’s affiliates and associates, has the right to become the beneficial owner pursuant to any agreement or understanding, or upon the exercise of warrants, options or rights to convert or exchange (whether such rights are exercisable immediately or only after the passage of time or the occurrence of conditions). The person presiding at the meeting shall determine whether such notice has been duly given and shall direct that proposals and nominees not be considered if such notice has not been given.

ARTICLE II

DIRECTORS

1. Functions and Definitions . The business of the corporation shall be managed by or under the direction of the Board of Directors of the corporation. The use of the phrase “whole Board of Directors” herein refers to the total number of directors which the corporation would have if there were no vacancies.

2. Qualifications and Number . A director need not be a stockholder, a citizen of the United States, or a resident of the State of Delaware. The initial Board of Directors shall consist of 11 persons. Thereafter the number of directors constituting the whole Board of Directors shall be at least three. Subject to the foregoing limitation and except for the first Board of Directors, such number may be fixed from time to time by action of the Board of Directors only, or, if the number is not fixed, the number shall be 11.

3. Election and Term . The first Board of Directors shall be elected by the incorporator and shall hold office until the next election of the class for which such directors have been chosen and until their successors have been elected and qualified or until their earlier resignation or removal. Any director may resign at any time upon written notice to the corporation. Thereafter, directors who are elected at an annual meeting of stockholders, and directors who are elected in the interim to fill vacancies and newly created directorships, shall hold office for the term of the class for which such directors shall have been chosen and until their successors have been elected and qualified or until their earlier resignation or removal. In the interim between annual meetings of stockholders or of special meetings of stockholders called for the election of directors and/or for the removal of one or more directors and for the filling of any vacancies in the Board of Directors, including vacancies resulting from the removal of directors for cause or without cause, any vacancy in the Board of Directors may be filled as provided in the certificate of incorporation.

4. Meeting .

Time . Meetings shall be held at such time as the Board of Directors shall fix.

First Meeting . The first meeting of each newly elected Board of Directors may be held immediately after each annual meeting of the stockholders at the same place at which the annual meeting of stockholders is held, and no notice of such meeting shall be necessary, provided a quorum shall be present. In the event such first meeting is not so held immediately after the annual meeting of the stockholders, it may be held at such time and place as shall be specified in the notice given as hereinafter provided for special meetings of the Board of Directors, or at such time and place as shall be fixed by the consent in writing of all of the directors.

Place . Meetings, both regular and special, shall be held at such place within or without the State of Delaware as shall be fixed by the Board of Directors.

Call . No call shall be required for regular meetings for which the time and place have been fixed. Special meetings may be called by or at the direction of the Chairman, if any, a Vice Chairman, if any, the Chief Executive Officer, or the President, if any, or of a majority of the directors in office.

Notice or Actual or Constructive Waiver . No notice shall be required for regular meetings for which the time and place have been fixed. Written, oral, electronic or any other mode of notice of the time and place shall be given for special meetings in sufficient time for the convenient assembly of the directors thereat. The notice of any meeting need not specify

the purpose of the meeting. Any requirement of furnishing a notice shall be waived by any director who signs a written waiver of such notice before or after the time stated therein.

Attendance of a director at a meeting of the Board of Directors shall constitute a waiver of notice of such meeting, except when the director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

Quorum and Action . A majority of the whole Board of Directors shall constitute a quorum except when a vacancy or vacancies prevents such majority, whereupon a majority of the directors in office shall constitute a quorum; provided, however, that such majority shall constitute at least one-third (1/3) of the whole Board of Directors. Any director may participate in a meeting of the Board of Directors by means of a conference telephone or similar communications equipment by means of which all directors participating in the meeting can hear each other, and such participation in a meeting of the Board of Directors shall constitute presence in person at such meeting. A majority of the directors present, whether or not a quorum is present, may adjourn a meeting to another time and place. Except as herein otherwise provided, and except as otherwise provided by the General Corporation Law or the certificate of incorporation, the act of the Board of Directors shall be the act by vote of a majority of the directors present at a meeting, a quorum being present. The quorum and voting provisions herein stated shall not be construed as conflicting with any provisions of the General Corporation Law and these by-laws which govern a meeting of directors held to fill vacancies and newly created directorships in the Board of Directors.

Chairman of the Meeting . The Chairman, if any and if present and acting, shall preside at all meetings; otherwise, any other director chosen by the Board of Directors shall preside.

5. Removal of Directors . Any or all of the directors may be removed for cause or without cause by the stockholders; provided , however , that so long as the certificate of incorporation provides that each class of stock, voting separately as a class, shall elect a certain percentage of directors, a director may be removed without cause by stockholders only by the vote of the class of stock, voting separately as a class, that either elected such director or elected the predecessor of such director whose position was filled by such director due to the predecessor director’s death, resignation or removal.

6. Action in Writing . Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

7. Executive Committee .

Powers . The Board of Directors may appoint an Executive Committee of the Board of Directors of the corporation of such number of members as shall be determined from time to time by the Board of Directors. The term of office of each member of the Executive

Committee shall be co-extensive with the term of such member’s office as director. Any member of the Executive Committee who shall cease to be a director of the corporation shall ipso facto cease to be a member of the Executive Committee. A majority of the members of the Executive Committee shall constitute a quorum for the valid transaction of business. The Executive Committee may meet at stated times or on two days’ notice by any member of the Executive Committee to all other members, by delivered letter, by mail, by courier service or by email. The provisions of Section 4 of this Article II with respect to waiver of notice of meetings of the Board of Directors and participation at meetings of the Board of Directors by means of a conference telephone or similar communications equipment shall apply to meetings of the Executive Committee. The provisions of Section 6 of this Article II with respect to action taken by a committee of the Board of Directors without a meeting shall apply to action taken by the Executive Committee. The Executive Committee shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, except as limited by the General Corporation Law. The Executive Committee shall have power to make rules and regulations for the conduct of its business. Vacancies in the membership of the Executive Committee shall be filled by the Board of Directors from among the directors at a regular meeting, or at a special meeting held for that purpose.

Chairman and Secretary . The Executive Committee shall elect from its own members a chairman who shall hold office during the term of such person’s office as a member of the Executive Committee. When present, the chairman shall preside over all meetings of the Executive Committee. The Executive Committee shall also elect a secretary of the Executive Committee who shall attend all meetings of the Executive Committee and keep the minutes of its acts and proceedings. Such secretary shall be a member of the Board of Directors and may, but need not, be a member of the Executive Committee.

Minutes . The Executive Committee shall keep minutes of its acts and proceedings which shall be submitted at the next meeting of the Board of Directors, and any action taken by the Board of Directors with respect thereto shall be entered in the minutes of the Board of Directors.

Meetings . The Executive Committee may hold meetings, both regular and special, either within or without the State of Delaware, as shall be set forth in the Notice of the Meeting or in a duly executed Waiver of Notice thereof.

8. Other Committees . The Board of Directors may from time to time, by resolution adopted by affirmative vote of a majority of the whole Board of Directors, appoint other committees of the Board of Directors which shall have such powers and duties as the Board of Directors may properly determine. No such other committee of the Board of Directors shall be composed of fewer than two directors. Meetings of such committees of the Board of Directors may be held at any place, within or without the State of Delaware, from time to time designated by the Board of Directors or the committee in question. Such committees may meet at stated times on two days’ notice by any member of such committee to all other members, by delivered letter, by mail, by courier service or by email. The provisions of Section 4 of this Article II with respect to waiver of notice of meetings of the Board of Directors and participation at meetings of the Board of Directors by means of a conference telephone or similar communications equipment shall apply to meetings of such other committees.

ARTICLE III

OFFICERS

1. Executive Officers . The directors may elect or appoint an Executive Chairman, a Chief Executive Officer, one or more Vice Chairmen, a President, one or more Vice Presidents (one or more of whom may be denominated “Executive Vice President” or “Senior Vice President”), a Secretary, one or more Assistant Secretaries, a Treasurer, one or more Assistant Treasurers, a Controller, one or more Assistant Controllers and such other officers as they may determine. Any number of offices may be held by the same person.

2. Term of Office; Removal . Unless otherwise provided in the resolution of election or appointment, each officer shall hold office until the meeting of the Board of Directors following the next annual meeting of stockholders and until such officer’s successor has been elected and qualified. The Board of Directors may remove any officer for cause or without cause.

3. Authority and Duties . All officers, as between themselves and the corporation, shall have such authority and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by these by-laws, or, to the extent not so provided, by the Board of Directors. The Board of Directors may delegate to the Chairman or to the Chief Executive Officer the power and authority to define the authority and duties of any or all of the other officers of the corporation.

4. The Chairman . The Chairman, if any, shall preside at all meetings of the Board of Directors; otherwise, any other director chosen by the Board of Directors shall preside. The Chairman, if any, shall have such additional duties as the Board of Directors may prescribe. As used in these by-laws, the term “Chairman” means the Executive Chairman if any.

ARTICLE IV

VOTING OF STOCK IN OTHER COMPANIES

Unless otherwise ordered by the Board of Directors, the Chairman, the Chief Executive Officer, a Vice Chairman, the President, a Vice President, the Secretary or the Treasurer shall have full power and authority on behalf of the corporation to attend and to act and vote at any meetings of stockholders of any corporation, or to execute written consents as a stockholder of any corporation, in which the corporation may hold stock and at any such meeting, or in connection with any such consent, shall possess and exercise any and all of the rights and powers incident to the ownership of such stock which as the owner thereof the corporation might have possessed and exercised if present or any of the foregoing officers of the corporation may in his or her discretion give a proxy or proxies in the name of the corporation to any other person or persons, who may vote said stock, execute any written consent, and exercise any and all other rights in regard to it here accorded to the officers. The Board of Directors by resolution from time to time may limit or curtail such power. The officers named above shall have the same powers with respect to entities which are not corporations.

ARTICLE V

CORPORATE SEAL AND CORPORATE BOOKS

The corporate seal shall be in such form as the Board of Directors shall prescribe.

The books of the corporation may be kept within or without the State of Delaware, at such place or places as the Board of Directors may, from time to time, determine.

ARTICLE VI

FISCAL YEAR

The fiscal year of the corporation shall be fixed, and shall be subject to change, by the Board of Directors.

ARTICLE VII

CONTROL OVER BY-LAWS

The power to amend, alter, and repeal these by-laws and to adopt new by-laws shall be vested in both the Board of Directors and the stockholders entitled to vote in the election of directors.

ARTICLE VIII

INDEMNIFICATION

A. The corporation shall indemnify each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in official capacity as a director, officer, employee or agent or alleged action in any other capacity while serving as a director, officer, employee or agent, to the maximum extent authorized by the General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment), against all expense, liability and loss (including attorney’s fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred by such person in connection with such proceeding. Such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators. The right to indemnification conferred in this Article shall be a contract right and shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final

disposition; provided, however, that, if the General Corporation Law so requires, the payment of such expenses incurred by a director or officer in advance of the final disposition of a proceeding shall be made only upon receipt by the corporation of an undertaking by or on behalf of such person to repay all amounts so advanced if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this Article or otherwise.

B. The right to indemnification and advancement of expenses conferred on any person by this Article shall not limit the corporation from providing any other indemnification permitted by law nor shall it be deemed exclusive of any other right which any such person may have or hereafter acquire under any statute, provision of the certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise.

C. The corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law.

Exhibit 10.1

EXECUTION VERSION

AMENDMENT NO. 1 TO THE

CREDIT AGREEMENT

Dated as of April 15, 2011

AMENDMENT NO. 1 TO THE CREDIT AGREEMENT (the “ Amendment ”) among MADISON SQUARE GARDEN, L.P., a Delaware limited partnership (the “ Company ”), the Guarantors (as defined in the Credit Agreement (as defined below)), the banks, financial institutions and other institutional lenders parties to the Credit Agreement referred to below (collectively, the “ Lenders ”) and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as agent (the “ Administrative Agent ”) for the Lenders.

PRELIMINARY STATEMENTS:

(1) The Company, the Guarantors, the Lenders and the Administrative Agent have entered into that certain Credit Agreement dated as of January 28, 2010 (as amended, supplemented or otherwise modified through the date hereof, the “ Credit Agreement ”). Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement.

(2) The Company and the Required Lenders have agreed to amend the Credit Agreement as hereinafter set forth.

SECTION 1. Amendments to Credit Agreement . The Credit Agreement is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2, hereby amended so that Section 7.14(x) thereof is amended in full to read as follows:

“(x) Indebtedness of the Company and its Restricted Subsidiaries in respect of Capitalized Lease Obligations in an aggregate principal amount not to exceed $25,000,000 at any time outstanding.”

SECTION 2. Conditions of Effectiveness . This Amendment shall become effective as of the date first above written when each of the conditions precedent set forth below in this Section 2 shall be satisfied:

(a) the Administrative Agent shall have received counterparts of this Amendment executed by the Company, the Guarantors and the Required Lenders or, as to any of the Lenders, advice satisfactory to the Administrative Agent that such Lender has executed this Amendment, and

(b) (i) as of the date first above written, no Default or Event of Default shall have occurred and be continuing or would result from the Amendment; and (ii) the representations and warranties of the Company and each other Loan Party in Article VI of the Credit Agreement shall be true and correct, in all material respects, on and as of the date first above written with the

MSG Amendment No. 1

same force and effect as if made on and as of the date first above written, except to the extent that such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct, in all material respects, as of such earlier date, and except that the representations and warranties contained in Section 6.04(a) and (b) of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to Section 7.01(a) and (b) of the Credit Agreement, respectively.

SECTION 3. Reference to and Effect on the Credit Agreement and the Loan Documents . (a) On and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the Notes to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended by this Amendment.

(b) The Credit Agreement, as specifically amended by this Amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.

(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement.

SECTION 4. Consent and Affirmation of the Guarantors . Each Guarantor (prior to, and after giving effect to, this Amendment) hereby consents to the amendment of the Credit Agreement effected hereby and confirms and agrees that (a) notwithstanding the effectiveness of this Amendment, the Credit Agreement (including the Guaranty therein) and the other Loan Documents are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, except that, on and after the effectiveness of this Amendment, each reference in the Credit Agreement or any other Loan Document to the “Credit Agreement”, “thereunder”, “thereof” or words of like import shall mean and be a reference to the Credit Agreement, as amended by this Amendment, and (b) the Collateral Documents to which such Guarantor is a party and all of the Collateral described therein do, and shall continue to, secure the payment of all of the Obligations. For greater certainty and without limiting the foregoing, each Guarantor hereby confirms that the existing security interests granted by such Guarantor in favor of the Secured Parties pursuant to the Loan Documents in the Collateral described therein shall continue to secure the obligations of such Guarantor under the Loan Documents

SECTION 5. Costs, Expenses . The Company agrees to pay on demand all reasonable out-of-pocket expenses of the Administrative Agent in connection with the preparation, execution, delivery and administration, modification and amendment of this Amendment and the other instruments and documents to be delivered hereunder (including, without limitation, the reasonable fees and expenses of counsel for the Administrative Agent) in accordance with the terms of Section 10.04 of the Credit Agreement.

SECTION 6. Execution in Counterparts . This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature


		2		MSG Amendment No. 1

page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION 7. Governing Law . This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

[ Signature Pages Follow ]


		3		MSG Amendment No. 1

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.


MADISON SQUARE GARDEN, L.P.

By: MSG EDEN CORPORATION , as its
General Partner

By:		/s/ Bob Lynn
Name:		Bob Lynn
Title:		SVP, Treasury & Investor Relations

FUSE HOLDINGS LLC,
FUSE NETWORKS LLC,
GARDEN PROGRAMMING, L.L.C.,
MADISON SQUARE GARDEN CT, LLC,
MSG BOSTON THEATRICAL, L.L.C.,
MSG CHICAGO LLC,
MSG NATIONAL PROPERTIES LLC,
MSG VAUDEVILLE, LLC,
MSG WINTER PRODUCTIONS, LLC,
RADIO CITY PRODUCTIONS LLC,
SPORTSCHANNEL ASSOCIATES,
THE 31 ^st STREET COMPANY, L.L.C., and
THE GRAND TOUR, LLC, as Guarantors

By: MSG EDEN CORPORATION , as the
General Partner of Madison Square Garden, L.P.

By:		/s/ Bob Lynn
Name:		Bob Lynn
Title:		SVP, Treasury & Investor Relations

FUSE PROGRAMMING, INC., as Guarantor


By:		/s/ Bob Lynn
Name:		Bob Lynn
Title:		SVP, Treasury & Investor Relations

[MSG Amendment No. 1 – Signature Page]


JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Administrative Agent and as a Lender

By		/s/ John Kowalczuk
		Name: John G. Kowalczuk
		Title: Executive Director

[MSG Amendment No. 1 – Signature Page]


Bank of America, N.A., as a Lender

By		/s/ Michael Makaitis
		Name: Michael Makaitis
		Title: Vice President

[MSG Amendment No. 1 – Signature Page]


BARCLAYS BANK PLC, as a Lender

By		/s/ Diane Rolfe
		Name: Diane Rolfe
		Title: Director

[MSG Amendment No. 1 – Signature Page]


Citibank, N.A.

By		/s/ Laura Fogarty
		Name: Laura Fogarty
		Title: Vice President

[MSG Amendment No. 1 – Signature Page]


CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH

By	/s/ Doreen Barr	/s/ Vipul Dhadda
	Name: Doreen Barr	Name: Vipul Dhadda
	Title: Director	Title: Associate

[MSG Amendment No. 1 – Signature Page]


GOLDMAN SACHS BANK USA

By		/s/ Gabriela Giacomin
		Name: Gabriela Giacomin
		Title: Authorized Signatory

[MSG Amendment No. 1 – Signature Page]


Morgan Stanley Bank, N.A., as a Lender

By:		/s/ Sharon Bazbaz
		Name: Sharon Bazbaz
		Title: Authorized Signatory

[MSG Amendment No. 1 – Signature Page]


The Royal Bank of Scotland plc,
as a Lender

By		/s/ Alex Daw
		Name: Alex Daw
		Title: Director

[MSG Amendment No. 1 – Signature Page]


SUNTRUST BANK, as a Lender

By		/s/ Michael Vegh
		Name: Michael Vegh
		Title: Director

[MSG Amendment No. 1 – Signature Page]


UBS Loan Finance LLC, as a Lender

By		/s/ Irja R. Otsa
		Name: Irja R. Otsa
		Title: Associate Director

By		/s/ Mary E. Evans
		Name: Mary E. Evans
		Title: Associate Director

[MSG Amendment No. 1 – Signature Page]


U.S. BANK NATIONAL ASSOCIATION, as a Lender

By		/s/ Gail F. Scannell
		Name: Gail F. Scannell
		Title: Senior Vice President

[MSG Amendment No. 1 – Signature Page]

Exhibit 31.1

Certification

I, Hank J. Ratner, certify that:

I have reviewed this Quarterly Report on Form 10-Q of The Madison Square Garden Company;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 6, 2011		/s/ Hank J. Ratner
		Hank J. Ratner
		President and Chief Executive Officer

Exhibit 31.2

Certification

I, Robert M. Pollichino, certify that:

I have reviewed this Quarterly Report on Form 10-Q of The Madison Square Garden Company;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 6, 2011		/s/ Robert M. Pollichino
		Robert M. Pollichino
		Executive Vice President and Chief Financial Officer

Exhibit 32.1

Certification

Pursuant to 18 U.S.C. §1350, the undersigned officer of The Madison Square Garden Company (the “Company”), hereby certifies, to such officer’s knowledge, that the Company’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 2011 (the “Report”) fully complies with the requirements of §13(a) or §15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: May 6, 2011		/s/ Hank J. Ratner
		Hank J. Ratner
		President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.

Exhibit 32.2

Certification


Date: May 6, 2011		/s/ Robert M. Pollichino
		Robert M. Pollichino
		Executive Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.

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