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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
|
27-0624498
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
þ
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Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Class A Common Stock par value $0.01 per share
|
—
|
61,145,088
|
Class B Common Stock par value $0.01 per share
|
—
|
13,588,555
|
|
|
|
Page
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September 30,
2015 |
|
June 30,
2015 |
||||
ASSETS
|
|
|
|
|
||||
Current Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
213,357
|
|
|
$
|
203,768
|
|
Restricted cash
|
|
—
|
|
|
9,003
|
|
||
Accounts receivable, net
|
|
77,032
|
|
|
85,610
|
|
||
Net related party receivables
|
|
26,034
|
|
|
27,324
|
|
||
Prepaid expenses
|
|
12,073
|
|
|
43,238
|
|
||
Other current assets
|
|
2,278
|
|
|
3,514
|
|
||
Current assets of discontinued operations
|
|
—
|
|
|
125,896
|
|
||
Total current assets
|
|
330,774
|
|
|
498,353
|
|
||
Property and equipment, net
|
|
17,845
|
|
|
19,514
|
|
||
Amortizable intangible assets, net
|
|
46,718
|
|
|
47,583
|
|
||
Goodwill
|
|
424,508
|
|
|
424,508
|
|
||
Other assets
|
|
43,289
|
|
|
46,274
|
|
||
Non-current assets of discontinued operations
|
|
—
|
|
|
1,983,597
|
|
||
Total assets
|
|
$
|
863,134
|
|
|
$
|
3,019,829
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
6,558
|
|
|
$
|
11,359
|
|
Net related party payables
|
|
35,036
|
|
|
420
|
|
||
Current portion of long-term debt
|
|
69,914
|
|
|
—
|
|
||
Income taxes payable
|
|
101,694
|
|
|
—
|
|
||
Accrued liabilities:
|
|
|
|
|
||||
Employee related costs
|
|
5,312
|
|
|
19,504
|
|
||
Other accrued liabilities
|
|
27,822
|
|
|
18,101
|
|
||
Deferred revenue
|
|
5,637
|
|
|
4,971
|
|
||
Current liabilities of discontinued operations
|
|
—
|
|
|
520,179
|
|
||
Total current liabilities
|
|
251,973
|
|
|
574,534
|
|
||
Long-term debt, net of current portion
|
|
1,467,156
|
|
|
—
|
|
||
Defined benefit and other postretirement obligations
|
|
28,416
|
|
|
28,476
|
|
||
Other employee related costs
|
|
4,390
|
|
|
5,318
|
|
||
Related party payable
|
|
1,652
|
|
|
—
|
|
||
Other liabilities
|
|
4,253
|
|
|
5,951
|
|
||
Deferred tax liability
|
|
351,631
|
|
|
351,734
|
|
||
Non-current liabilities of discontinued operations
|
|
—
|
|
|
330,294
|
|
||
Total liabilities
|
|
2,109,471
|
|
|
1,296,307
|
|
||
Commitments and contingencies (see Note 9)
|
|
|
|
|
||||
Stockholders' Equity (Deficiency):
|
|
|
|
|
||||
Class A Common stock, par value $0.01, 360,000 shares authorized; 61,141 and 62,207 shares outstanding as of
September 30, 2015 and June 30, 2015, respectively
|
|
643
|
|
|
643
|
|
||
Class B Common stock, par value $0.01, 90,000 shares authorized; 13,589 shares outstanding as of September 30,
2015 and June 30, 2015
|
|
136
|
|
|
136
|
|
||
Preferred stock, par value $0.01, 45,000 shares authorized; none outstanding
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
—
|
|
|
1,084,002
|
|
||
Treasury stock, at cost, 3,118 and 2,052 shares as of September 30, 2015 and June 30, 2015, respectively
|
|
(223,915
|
)
|
|
(143,250
|
)
|
||
Retained earnings (accumulated deficit)
|
|
(1,017,312
|
)
|
|
807,563
|
|
||
Accumulated other comprehensive loss
|
|
(5,889
|
)
|
|
(25,572
|
)
|
||
Total stockholders' equity (deficiency)
|
|
(1,246,337
|
)
|
|
1,723,522
|
|
||
Total liabilities and stockholders' equity (deficiency)
|
|
$
|
863,134
|
|
|
$
|
3,019,829
|
|
|
|
Three Months Ended
|
||||||
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September 30,
|
|||||||
|
2015
|
|
2014
|
|||||
Revenues (including related party revenues of $40,449 and $40,215, respectively)
|
|
$
|
148,147
|
|
|
$
|
142,670
|
|
|
|
|
|
|
||||
Direct operating expenses (including related party expenses of $33,654 and $21,141, respectively)
|
|
60,102
|
|
|
45,651
|
|
||
Selling, general and administrative expenses (including related party expenses of $907 and $1,625, respectively)
|
|
41,118
|
|
|
37,793
|
|
||
Depreciation and amortization
|
|
4,679
|
|
|
4,285
|
|
||
Gain on sale of Fuse (see Note 5)
|
|
—
|
|
|
(162,414
|
)
|
||
Operating income
|
|
42,248
|
|
|
217,355
|
|
||
Other income (expense):
|
|
|
|
|
||||
Interest income
|
|
536
|
|
|
485
|
|
||
Interest expense
|
|
(1,857
|
)
|
|
(1,006
|
)
|
||
|
|
(1,321
|
)
|
|
(521
|
)
|
||
Income from continuing operations before income taxes
|
|
40,927
|
|
|
216,834
|
|
||
Income tax benefit (expense)
|
|
404
|
|
|
(96,412
|
)
|
||
Income from continuing operations
|
|
41,331
|
|
|
120,422
|
|
||
Loss from discontinued operations, net of taxes
|
|
(161,017
|
)
|
|
(12,349
|
)
|
||
Net income (loss)
|
|
$
|
(119,686
|
)
|
|
$
|
108,073
|
|
Earnings (loss) per share:
|
|
|
|
|
||||
Basic
|
|
|
|
|
||||
Income from continuing operations
|
|
$
|
0.55
|
|
|
$
|
1.55
|
|
Loss from discontinued operations
|
|
(2.13
|
)
|
|
(0.16
|
)
|
||
Net income (loss)
|
|
$
|
(1.58
|
)
|
|
$
|
1.39
|
|
Diluted
|
|
|
|
|
||||
Income from continuing operations
|
|
$
|
0.54
|
|
|
$
|
1.54
|
|
Loss from discontinued operations
|
|
(2.12
|
)
|
|
(0.16
|
)
|
||
Net income (loss)
|
|
$
|
(1.58
|
)
|
|
$
|
1.38
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
||||
Basic
|
|
75,521
|
|
|
77,496
|
|
||
Diluted
|
|
75,902
|
|
|
78,290
|
|
|
|
Three Months Ended
|
||||||
|
|
September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Net income (loss)
|
|
$
|
(119,686
|
)
|
|
$
|
108,073
|
|
Other comprehensive income (loss), before income taxes:
|
|
|
|
|
||||
Pension plans and postretirement plan:
|
|
|
|
|
||||
Net unamortized losses arising during the period
|
|
$
|
(602
|
)
|
|
$
|
—
|
|
Amounts reclassified from accumulated other comprehensive loss:
|
|
|
|
|
||||
Amortization of net actuarial loss included in net periodic benefit cost
|
|
376
|
|
|
571
|
|
||
Amortization of net prior service credit included in net periodic benefit cost
|
|
(17
|
)
|
|
(29
|
)
|
||
Other comprehensive income (loss) before income taxes
|
|
(243
|
)
|
|
542
|
|
||
Income tax expense related to items of other comprehensive income (loss)
|
|
(480
|
)
|
|
(231
|
)
|
||
Other comprehensive income (loss)
|
|
(723
|
)
|
|
311
|
|
||
Comprehensive income (loss)
|
|
$
|
(120,409
|
)
|
|
$
|
108,384
|
|
|
|
Three Months Ended
|
||||||
|
|
September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Cash flows from operating activities from continuing operations:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
(119,686
|
)
|
|
$
|
108,073
|
|
Loss from discontinued operations, net of taxes
|
|
161,017
|
|
|
12,349
|
|
||
Income from continuing operations
|
|
41,331
|
|
|
120,422
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations:
|
|
|
|
|
||||
Depreciation and amortization
|
|
4,679
|
|
|
4,285
|
|
||
Amortization of deferred financing costs
|
|
981
|
|
|
400
|
|
||
Share-based compensation expense
|
|
4,247
|
|
|
2,376
|
|
||
Excess tax benefit on share-based awards
|
|
(8,586
|
)
|
|
(10,180
|
)
|
||
Gain on sale of Fuse, before income taxes
|
|
—
|
|
|
(162,414
|
)
|
||
Change in income taxes payable and deferred income taxes related to the sale of Fuse
|
|
—
|
|
|
70,770
|
|
||
Provision for doubtful accounts
|
|
270
|
|
|
140
|
|
||
Change in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable, net
|
|
8,308
|
|
|
12,094
|
|
||
Net related party receivables
|
|
1,921
|
|
|
127
|
|
||
Prepaid expenses and other assets
|
|
12,006
|
|
|
3,341
|
|
||
Accounts payable
|
|
(4,801
|
)
|
|
(2,081
|
)
|
||
Net related party payables, including payable to MSG
|
|
35,680
|
|
|
461
|
|
||
Income taxes payable, excluding the impact of the change in income taxes payable related to the sale of Fuse
|
|
16,636
|
|
|
(10,210
|
)
|
||
Accrued and other liabilities
|
|
(16,965
|
)
|
|
(19,355
|
)
|
||
Deferred revenue
|
|
666
|
|
|
(509
|
)
|
||
Deferred income taxes, excluding the impact of the change in deferred income taxes related to the sale of Fuse
|
|
(17,524
|
)
|
|
4,205
|
|
||
Net cash provided by operating activities from continuing operations
|
|
78,849
|
|
|
13,872
|
|
||
Cash flows from investing activities from continuing operations:
|
|
|
|
|
||||
Capital expenditures
|
|
(1,450
|
)
|
|
(1,040
|
)
|
||
Proceeds from sale of Fuse, net of transaction costs (see Note 5)
|
|
—
|
|
|
228,556
|
|
||
Net cash provided by (used in) investing activities from continuing operations
|
|
(1,450
|
)
|
|
227,516
|
|
||
Cash flows from financing activities from continuing operations:
|
|
|
|
|
||||
Proceeds from Term Loan Facility (see Note 8)
|
|
1,550,000
|
|
|
—
|
|
||
Cash distributed with MSG
|
|
(1,467,093
|
)
|
|
—
|
|
||
Payments for financing costs
|
|
(9,635
|
)
|
|
(67
|
)
|
||
Proceeds from stock option exercises
|
|
78
|
|
|
270
|
|
||
Repurchases of common stock
|
|
(100,027
|
)
|
|
—
|
|
||
Taxes paid in lieu of shares issued for equity-based compensation
|
|
(11,096
|
)
|
|
(16,416
|
)
|
||
Excess tax benefit on share-based awards
|
|
8,586
|
|
|
10,180
|
|
||
Net cash used in financing activities from continuing operations
|
|
(29,187
|
)
|
|
(6,033
|
)
|
||
Net cash provided by continuing operations
|
|
48,212
|
|
|
235,355
|
|
||
Cash flows of discontinued operations
|
|
|
|
|
||||
Net cash provided by operating activities
|
|
14,870
|
|
|
2,091
|
|
||
Net cash used in investing activities
|
|
(68,410
|
)
|
|
(8,934
|
)
|
||
Net cash used in financing activities
|
|
—
|
|
|
—
|
|
||
Net cash used in discontinued operations
|
|
(53,540
|
)
|
|
(6,843
|
)
|
||
Cash and cash equivalents at beginning of period, including cash in both continuing operations and discontinued operations
|
|
218,685
|
|
|
92,251
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
213,357
|
|
|
$
|
320,763
|
|
Supplemental Data:
|
|
|
|
|
||||
Income taxes paid, net
|
|
$
|
—
|
|
|
$
|
31,567
|
|
Non-cash investing and financing activities:
|
|
|
|
|
||||
Capital expenditures incurred but not yet paid for continuing operations
|
|
$
|
411
|
|
|
$
|
1,597
|
|
Non-cash net assets of MSG transferred in connection with the Distribution
|
|
1,285,658
|
|
|
—
|
|
|
|
Common
Stock
Issued
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings (Accumulated Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
||||||||||||
Balance as of June 30, 2015
|
|
$
|
779
|
|
|
$
|
1,084,002
|
|
|
$
|
(143,250
|
)
|
|
$
|
807,563
|
|
|
$
|
(25,572
|
)
|
|
$
|
1,723,522
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(119,686
|
)
|
|
—
|
|
|
(119,686
|
)
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(723
|
)
|
|
(723
|
)
|
||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
(120,409
|
)
|
|||||||||||
Exercise of stock options
|
|
—
|
|
|
(4,162
|
)
|
|
4,899
|
|
|
—
|
|
|
—
|
|
|
737
|
|
||||||
Share-based compensation
|
|
—
|
|
|
5,101
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,101
|
|
||||||
Tax withholding associated with shares issued for equity-based compensation
|
|
—
|
|
|
(11,096
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,096
|
)
|
||||||
Excess tax benefit on share-based
awards
|
|
—
|
|
|
8,586
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,586
|
|
||||||
Repurchases of common stock
|
|
—
|
|
|
—
|
|
|
(100,027
|
)
|
|
—
|
|
|
—
|
|
|
(100,027
|
)
|
||||||
Shares issued upon distribution of Restricted Stock Units
|
|
—
|
|
|
(14,463
|
)
|
|
14,463
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Distribution of The Madison Square Garden Company
|
|
—
|
|
|
(1,067,968
|
)
|
|
—
|
|
|
(1,705,189
|
)
|
|
20,406
|
|
|
(2,752,751
|
)
|
||||||
Balance as of September 30, 2015
|
|
$
|
779
|
|
|
$
|
—
|
|
|
$
|
(223,915
|
)
|
|
$
|
(1,017,312
|
)
|
|
$
|
(5,889
|
)
|
|
$
|
(1,246,337
|
)
|
|
|
Common
Stock
Issued
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
||||||||||||
Balance as of June 30, 2014
|
|
$
|
775
|
|
|
$
|
1,081,055
|
|
|
$
|
(7,537
|
)
|
|
$
|
552,862
|
|
|
$
|
(22,711
|
)
|
|
$
|
1,604,444
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
108,073
|
|
|
—
|
|
|
108,073
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
311
|
|
|
311
|
|
||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
108,384
|
|
|||||||||||
Exercise of stock options
|
|
—
|
|
|
249
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249
|
|
||||||
Share-based compensation
|
|
—
|
|
|
3,617
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,617
|
|
||||||
Tax withholding associated with shares issued for equity-based compensation
|
|
—
|
|
|
(16,416
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,416
|
)
|
||||||
Excess tax benefit on share-based
awards
|
|
—
|
|
|
10,180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,180
|
|
||||||
Shares issued upon distribution of Restricted Stock Units
|
|
3
|
|
|
(406
|
)
|
|
403
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance as of September 30, 2014
|
|
$
|
778
|
|
|
$
|
1,078,279
|
|
|
$
|
(7,134
|
)
|
|
$
|
660,935
|
|
|
$
|
(22,400
|
)
|
|
$
|
1,710,458
|
|
|
|
Three Months Ended
|
||||||
|
|
September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Revenues
(1)
|
|
$
|
150,381
|
|
|
$
|
118,916
|
|
Direct operating expenses
|
|
71,320
|
|
|
67,876
|
|
||
Selling, general and administrative expenses
|
|
57,687
|
|
|
37,093
|
|
||
Depreciation and amortization
|
|
23,772
|
|
|
33,316
|
|
||
Operating loss
|
|
(2,398
|
)
|
|
(19,369
|
)
|
||
Equity in earnings (loss) of equity-method investments
|
|
2,679
|
|
|
(2,604
|
)
|
||
Interest income
|
|
635
|
|
|
449
|
|
||
Interest expense
|
|
(540
|
)
|
|
(656
|
)
|
||
Miscellaneous income
|
|
—
|
|
|
80
|
|
||
Income (loss) from discontinued operations before income taxes
|
|
376
|
|
|
(22,100
|
)
|
||
Income tax (expense) benefit
|
|
(161,393
|
)
|
|
9,751
|
|
||
Loss from discontinued operations, net of taxes
|
|
$
|
(161,017
|
)
|
|
$
|
(12,349
|
)
|
(1)
|
Revenues for the three months ended September 30, 2015 and 2014 include
$32,500
and
$19,846
, respectively, of media rights recognized as revenues by MSG from the licensing of team-related programming to the Company. Prior to the Distribution, these amounts were eliminated in consolidation; however, these amounts are now reflected as revenues in the Loss from Discontinued Operations line with the offsetting expense in Direct Operating Expenses, within continuing operations, in the accompanying statements of operations.
|
|
|
Three Months Ended
|
||||
|
|
September 30,
|
||||
|
|
2015
|
|
2014
|
||
Weighted-average number of shares for basic EPS
|
|
75,521
|
|
|
77,496
|
|
Dilutive effect of shares issuable under share-based compensation plans
|
|
381
|
|
|
794
|
|
Weighted-average number of shares for diluted EPS
|
|
75,902
|
|
|
78,290
|
|
Anti-dilutive shares
|
|
—
|
|
|
14
|
|
|
|
September 30, 2015
|
|
June 30,
2015 |
||||
Affiliate relationships
|
|
$
|
83,044
|
|
|
$
|
83,044
|
|
Less accumulated amortization
|
|
(36,326
|
)
|
|
(35,461
|
)
|
||
|
|
$
|
46,718
|
|
|
$
|
47,583
|
|
|
|
September 30,
2015 |
|
June 30,
2015 |
||||
Equipment
|
|
$
|
46,494
|
|
|
$
|
43,277
|
|
Furniture and fixtures
|
|
1,740
|
|
|
1,723
|
|
||
Leasehold improvements
|
|
19,644
|
|
|
19,645
|
|
||
Construction in progress
|
|
544
|
|
|
3,103
|
|
||
|
|
68,422
|
|
|
67,748
|
|
||
Less accumulated depreciation and amortization
|
|
(50,577
|
)
|
|
(48,234
|
)
|
||
|
|
$
|
17,845
|
|
|
$
|
19,514
|
|
Year 1
|
|
$
|
72,500
|
|
Year 2
|
|
75,000
|
|
|
Year 3
|
|
75,000
|
|
|
Year 4
|
|
75,000
|
|
|
Year 5
|
|
1,252,500
|
|
|
|
|
$
|
1,550,000
|
|
Reported in
|
|
Term Loan Facility
|
|
Deferred Financing Costs
|
|
Total
|
||||||
Other current assets
|
|
$
|
—
|
|
|
$
|
417
|
|
|
$
|
417
|
|
Other assets
|
|
—
|
|
|
1,668
|
|
|
1,668
|
|
|||
Current portion of long-term debt
(1)
|
|
72,500
|
|
|
2,586
|
|
|
69,914
|
|
|||
Long-term debt, net of current portion
(1)
|
|
1,477,500
|
|
|
10,344
|
|
|
1,467,156
|
|
|||
Total
|
|
$
|
1,550,000
|
|
|
$
|
15,016
|
|
|
$
|
1,539,155
|
|
|
Total
|
|
Remainder of the current fiscal year
|
|
Fiscal years 2-3
|
|
Fiscal years 4-5
|
|
Thereafter
|
||||||||||
Contractual Obligations
|
$
|
4,699,810
|
|
|
$
|
199,304
|
|
|
$
|
416,633
|
|
|
$
|
432,999
|
|
|
$
|
3,650,874
|
|
•
|
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.
|
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||
September 30, 2015
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Money market accounts
|
|
$
|
100,082
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100,082
|
|
Time deposits
|
|
113,275
|
|
|
—
|
|
|
—
|
|
|
113,275
|
|
||||
Total assets measured at fair value
|
|
$
|
213,357
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
213,357
|
|
June 30, 2015
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Money market accounts
|
|
$
|
89,062
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
89,062
|
|
Time deposits
|
|
113,227
|
|
|
—
|
|
|
—
|
|
|
113,227
|
|
||||
Total assets measured at fair value
|
|
$
|
202,289
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
202,289
|
|
|
|
Pension Plans
|
|
Postretirement Plan
|
||||||||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Service cost
|
|
$
|
1,621
|
|
|
$
|
1,738
|
|
|
$
|
50
|
|
|
$
|
61
|
|
Interest cost
|
|
2,125
|
|
|
1,979
|
|
|
91
|
|
|
93
|
|
||||
Expected return on plan assets
|
|
(850
|
)
|
|
(916
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
(a)
|
|
376
|
|
|
565
|
|
|
—
|
|
|
6
|
|
||||
Amortization of unrecognized prior service cost (credit)
(a)
|
|
14
|
|
|
6
|
|
|
(31
|
)
|
|
(35
|
)
|
||||
Net periodic benefit cost
|
|
$
|
3,286
|
|
|
$
|
3,372
|
|
|
$
|
110
|
|
|
$
|
125
|
|
|
Number of
|
|
Weighted-
Average
Exercise
Price Per
Share
(1)
|
|
Weighted-
Average
Remaining
Contractual
Term (In Years)
|
|
Aggregate Intrinsic
Value
|
||||||||
|
Nonperformance
Based
Vesting
Options |
|
Performance
Based
Vesting
Options |
|
|||||||||||
Balance as of June 30, 2015
|
128
|
|
|
17
|
|
|
$
|
12.44
|
|
|
0.64
|
|
$
|
10,293
|
|
Exercised
|
(51
|
)
|
|
(17
|
)
|
|
10.78
|
|
|
|
|
|
|||
Balance as of September 30, 2015
|
77
|
|
|
—
|
|
|
$
|
13.93
|
|
|
0.64
|
|
$
|
4,463
|
|
(1)
|
Weighted-average exercise price per share is prior to any adjustments associated with the Distribution.
|
|
Number of
|
|
|
||||||
|
Nonperformance
Based
Vesting
RSUs
|
|
Performance
Based
Vesting
RSUs
|
|
Weighted-Average
Fair Value Per Share
At Date of Grant
(1)
|
||||
Unvested award balance, June 30, 2015
|
489
|
|
|
98
|
|
|
$
|
56.51
|
|
Granted
|
147
|
|
|
599
|
|
|
77.67
|
|
|
Vested
|
(174
|
)
|
|
(42
|
)
|
|
42.10
|
|
|
Forfeited
|
(4
|
)
|
|
—
|
|
|
64.49
|
|
|
Unvested award balance, September 30, 2015
|
458
|
|
|
655
|
|
|
$
|
73.23
|
|
(1)
|
Weighted-average fair value per share at date of grant is prior to any adjustments associated with the Distribution.
|
|
|
Three Months Ended September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
Revenues
|
|
$
|
40,449
|
|
|
$
|
40,215
|
|
Operating expenses:
|
|
|
|
|
||||
Rights fees
|
|
$
|
32,500
|
|
|
$
|
19,846
|
|
Origination, master control and technical services
|
|
1,417
|
|
|
1,336
|
|
||
Advertising
|
|
1,177
|
|
|
1,594
|
|
||
Other
|
|
(533
|
)
|
|
(10
|
)
|
|
September 30,
2015 |
|
June 30,
2015 |
||
Customer A
|
32
|
%
|
|
29
|
%
|
Customer B
|
28
|
%
|
|
25
|
%
|
Customer C
|
19
|
%
|
|
17
|
%
|
Customer D
|
12
|
%
|
|
11
|
%
|
Reported in
|
September 30, 2015
|
|
June 30,
2015 |
||||
Prepaid expenses
|
$
|
1,000
|
|
|
$
|
1,000
|
|
Other current assets
|
2,000
|
|
|
2,000
|
|
||
Other assets
|
41,000
|
|
|
41,000
|
|
||
|
$
|
44,000
|
|
|
$
|
44,000
|
|
•
|
the demand for our programming among cable television systems and satellite, telephone and other multichannel video programming distributors (“Distributors”) and the subscribers thereto, and our ability to renew affiliation agreements with Distributors, as well as the impact of consolidation among Distributors;
|
•
|
the level of our revenues, which depends in part on the popularity and competitiveness of the sports teams whose games are broadcast on our networks and the popularity of other content aired on our networks;
|
•
|
the ability of Distributors to maintain subscriber levels;
|
•
|
the impact of subscribers downgrading their programming packages to levels that do not include our programming services;
|
•
|
the security of our program signal and electronic data;
|
•
|
general economic conditions especially in the New York City metropolitan area where we conduct the majority of our operations;
|
•
|
the demand for sponsorship arrangements and for advertising and viewer ratings for our programming;
|
•
|
competition, for example, from other regional sports networks;
|
•
|
the relocation or insolvency of professional sports teams with which we have a rights agreement;
|
•
|
our ability to maintain, obtain or produce content, together with the cost of such content;
|
•
|
the acquisition or disposition of assets and/or the impact of, and our ability to, successfully pursue acquisitions or other strategic transactions, and the operating and financial performance thereof (including those that we do not control);
|
•
|
the costs associated with, and the outcome of, litigation and other proceedings to the extent uninsured;
|
•
|
the impact of governmental regulations or laws and changes in such regulations or laws;
|
•
|
the impact of league rules, league regulations and/ or league agreements and changes thereto;
|
•
|
our substantial debt and high leverage;
|
•
|
reduced access to capital markets or significant increases in costs to borrow;
|
•
|
financial community perceptions of our business, operations, financial condition and the industry in which we operate;
|
•
|
the tax-free treatment of the Distribution; and
|
•
|
the factors described under "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended
June 30, 2015
.
|
|
|
Three Months Ended September 30,
|
|
Increase
(Decrease)
in Net
Income
|
||||||||||||||
|
|
2015
|
|
2014
|
|
|||||||||||||
|
|
Amount
|
|
% of
Revenues
|
|
Amount
|
|
% of
Revenues
|
|
|||||||||
Revenues
|
|
$
|
148,147
|
|
|
100
|
%
|
|
$
|
142,670
|
|
|
100
|
%
|
|
$
|
5,477
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Direct operating expenses
|
|
60,102
|
|
|
41
|
%
|
|
45,651
|
|
|
32
|
%
|
|
(14,451
|
)
|
|||
Selling, general and administrative expenses
|
|
41,118
|
|
|
28
|
%
|
|
37,793
|
|
|
26
|
%
|
|
(3,325
|
)
|
|||
Depreciation and amortization
|
|
4,679
|
|
|
3
|
%
|
|
4,285
|
|
|
3
|
%
|
|
(394
|
)
|
|||
Gain on sale of Fuse
|
|
—
|
|
|
NM
|
|
|
(162,414
|
)
|
|
(114
|
)%
|
|
(162,414
|
)
|
|||
Operating income
|
|
42,248
|
|
|
29
|
%
|
|
217,355
|
|
|
152
|
%
|
|
(175,107
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
|
(1,321
|
)
|
|
(1
|
)%
|
|
(521
|
)
|
|
NM
|
|
|
(800
|
)
|
|||
Income from continuing operations before income taxes
|
|
40,927
|
|
|
28
|
%
|
|
216,834
|
|
|
152
|
%
|
|
(175,907
|
)
|
|||
Income tax benefit (expense)
|
|
404
|
|
|
NM
|
|
|
(96,412
|
)
|
|
(68
|
)%
|
|
96,816
|
|
|||
Income from continuing operations
|
|
41,331
|
|
|
28
|
%
|
|
120,422
|
|
|
84
|
%
|
|
(79,091
|
)
|
|||
Loss from discontinued operations, net of taxes
|
|
(161,017
|
)
|
|
(109
|
)%
|
|
(12,349
|
)
|
|
(9
|
)%
|
|
(148,668
|
)
|
|||
Net income (loss)
|
|
$
|
(119,686
|
)
|
|
(81
|
)%
|
|
$
|
108,073
|
|
|
76
|
%
|
|
$
|
(227,759
|
)
|
Increase in affiliation fee revenue
|
$
|
4,829
|
|
Decrease in advertising revenue
|
(83
|
)
|
|
Other net increases
|
731
|
|
|
|
$
|
5,477
|
|
|
|
Three Months Ended
|
|
Increase (Decrease)
in AOCF
|
||||||||
|
|
September 30,
|
|
|||||||||
|
|
2015
|
|
2014
|
|
|||||||
Operating income
|
|
$
|
42,248
|
|
|
$
|
217,355
|
|
|
$
|
(175,107
|
)
|
Share-based compensation
|
|
4,247
|
|
|
2,376
|
|
|
1,871
|
|
|||
Depreciation and amortization
|
|
4,679
|
|
|
4,285
|
|
|
394
|
|
|||
Gain on sale of Fuse
|
|
—
|
|
|
(162,414
|
)
|
|
162,414
|
|
|||
AOCF
|
|
$
|
51,174
|
|
|
$
|
61,602
|
|
|
$
|
(10,428
|
)
|
|
Total
|
|
Remainder of the current fiscal year
|
|
Fiscal years 2-3
|
|
Fiscal years 4-5
|
|
Thereafter
|
||||||||||
Contractual Obligations
|
$
|
4,699,810
|
|
|
$
|
199,304
|
|
|
$
|
416,633
|
|
|
$
|
432,999
|
|
|
$
|
3,650,874
|
|
•
|
Macroeconomic conditions;
|
•
|
Industry and market considerations;
|
•
|
Cost factors;
|
•
|
Overall financial performance of the reporting unit;
|
•
|
Other relevant company-specific factors such as changes in management, strategy or customers; and
|
•
|
Relevant reporting unit specific events such as changes in the carrying amount of net assets.
|
Period
|
|
Total Number of Shares Purchased
(a)
|
|
Average Price Paid per Share
(b)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
|
||||||
July 1, 2015 - July 31, 2015
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
359,319
|
|
August 1, 2015 - August 31, 2015
|
|
1,336
|
|
|
$
|
74.86
|
|
|
1,336
|
|
|
$
|
259,319
|
|
September 1, 2015 - September 30, 2015
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
|
1,336
|
|
|
$
|
74.86
|
|
|
1,336
|
|
|
|
(a)
|
The Company first announced its stock repurchase program on October 27, 2014 authorized by the Company's Board of Directors for Class A Common Stock repurchases up to $500,000. Under the authorization, shares of Class A Common Stock were able to be purchased from time to time in open market or private transactions, in accordance with applicable insider trading and other securities laws and regulations, with the timing and amount of purchases depending on market conditions and other factors. On September 11, 2015, the Company's Board of Directors terminated its share repurchase program authorization effective as of the Distribution Date. Total number of shares purchased are based on the settlement date of such trades.
|
(b)
|
The amounts do not give effect to any fees, commissions or other costs associated with repurchases of shares.
|
(a)
|
Index to Exhibits
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
10.1
|
|
MSG Networks Inc. Policy Concerning Certain Matters Relating to The Madison Square Garden Company (Formerly MSG Spinco, Inc.) and AMC Networks Inc. Including Responsibilities of Overlapping Directors and Officers.
|
10.2
|
|
Employment Agreement dated September 11, 2015 between The Madison Square Garden Company (to be renamed MSG Networks Inc.) and Dawn Darino-Gorski.
|
31.1
|
|
Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification by the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Certification by the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
|
XBRL Instance Document.
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase.
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
MSG Networks Inc.
|
||
|
|
|
By:
|
/
S
/ B
RET
R
ICHTER
|
|
|
Name:
|
Bret Richter
|
|
Title:
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
A.
|
Certain Acknowledgements; Definitions.
|
B.
|
Duties of Directors and Officers Regarding Potential Business Opportunities; Renunciation of Interest in Potential Business Opportunities.
|
C.
|
Certain Agreements and Transactions Permitted.
|
D.
|
Amendment of this Policy.
|
(1)
|
Severance in an amount to be determined by the Compensation Committee (the “Severance Amount”), but in no event less than the sum of your annual base salary and your annual target bonus, each as in effect at the time your employment terminates. Sixty percent (60%) of the Severance Amount will be payable to you on the six-month anniversary of the date your employment so terminates (the “Termination Date”) and the remaining forty percent (40%) of the Severance Amount will be payable to you on the twelve-month anniversary of the Termination Date; and
|
(2)
|
Any unpaid annual bonus for the Company’s fiscal year prior to the fiscal year which includes your Termination Date, and a
pro rated
bonus based on the amount of your base salary actually earned by you during the Company’s fiscal year through the Termination Date, each of which will be paid to you when such bonuses are generally paid to similarly situated active executives and will be based on your then current annual target bonus as well as Company and your business unit performance for the applicable fiscal year as determined by the Company in its sole discretion, but without adjustment for your individual performance.
|
1.
|
Confidentiality
|
3.
|
Further Cooperation
|
4.
|
No-Hire or Solicit
|
5.
|
Specific Performance; Injunctive Relief
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of MSG Networks Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a.
|
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;
|
b.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
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):
|
a.
|
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
|
b.
|
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.
|
/s/ Andrea Greenberg
|
Andrea Greenberg
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of MSG Networks Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a.
|
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;
|
b.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
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):
|
a.
|
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
|
b.
|
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.
|
/s/ Bret Richter
|
Bret Richter
|
Executive Vice President and Chief Financial Officer
|
/s/ Andrea Greenberg
|
Andrea Greenberg
|
President and Chief Executive Officer
|
/s/ Bret Richter
|
Bret Richter
|
Executive Vice President and Chief Financial Officer
|