Sports Spin Unlocks Value, Much Already Captured

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1 August 1, :52 AM GMT The Madison Square Garden Company Sports Spin Unlocks Value, Much Already Captured Stock Rating Equal-weight Industry View In-Line Price Target $ The capital-intensive Sphere project may deliver a transformative experience to consumers, but it also increases uncertainty for MSG shareholders. The contemplated spin helps alleviate that uncertainty, while at the same time moving to capture more of the value of its iconic sports assets. WHAT'S CHANGED The Madison Square Garden From To Company (MSG.N) Price Target $ $ Spinning two birds with one stone: Our downgrade of MSG shares last year was a result of a significant narrowing of the discount to its sum-of-the-parts (SotP), combined with the shift the company was making in investment priorities towards big bets on venue expansion (see "MSG's Sphere a Long-Duration Bet on Technology & Live Entertainment"). The contemplated spin by MSG's board, not yet finalized but in our view plausible, could accomplish two related goals. First, creating a pure play publicly traded holding company of two marquee sports franchises in the Knicks and Rangers. This has already narrowed the gap between the public equity and the underlying private market value, and likely will continue to. Second, by parking ⅓ of the SportsCo in EntCo, it could move to monetize that stake and establish a valuation mark on those assets while at the same time raising needed capital to help fund and de-risk its Sphere bets. Three key assumptions drive our updated valuation: First, an appropriate discount to fair value for the sports teams to trade at inside SportsCo. Second, the right multiple on the EntCo EBITDA. Finally, tax treatment on the ⅓ stake of SportsCo held by EntCo. There are no perfect comps to either standalone company, but we see Liberty Braves (BATRK) as a reasonable starting point for the SportsCo. We estimate BATRK trades at a roughly 20% discount to its SotP, and its asset value is 65% the Atlanta Braves franchise and the remainder the Stadium and Battery, a surrounding mixed use real estate holding. On EntCo's multiple and post-spin EBITDA, there is clearly a wide range of reasonable assumptions. Live Nation may be the best publicly traded comp, although given the earnings power of Live Nation stems primarily from ticketing, it is imperfect. Finally, we have assumed the ⅓ stake in SportsCo is valued pre-tax inside EntCo. While a cash sale would trigger a taxable gain, we assume MSG will work to minimize or eliminate those taxes by utilizing its existing NOL and benefiting from the annual taxable depreciation of its Sphere project. MORGAN STANLEY & CO. LLC Benjamin Swinburne, CFA EQUITY ANALYST Benjamin.Swinburne@morganstanley.com Cameron Mansson-Perrone RESEARCH ASSOCIATE Cameron.Mansson-Perrone@morganstanley.com Madison Square Garden Co ( MSG.N, MSG US ) Media / United States of America Stock Rating Equal-weight Industry View In-Line Price target $ Shr price, close (Jul 31, 2018) $ Mkt cap, curr (mm) $7, Week Range $ Fiscal Year Ending 06/17 06/18e 06/19e 06/20e ModelWare EPS ($) (1.39) Prior ModelWare EPS ($) P/E NM Consensus EPS ($) (0.77) Div yld (%) Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare framework = Consensus data is provided by Thomson Reuters Estimates e = Morgan Stanley Research estimates QUARTERLY MODELWARE EPS ($) 2018e 2018e 2019e 2019e Quarter 2017 Prior Current Prior Current Q1 (0.14) a - - Q a - - Q a - - Q4 (1.52) (0.24) (0.10) - - e = Morgan Stanley Research estimates, a = Actual Company reported data Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision. For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report. 1

2 Taking up our SoTP and estimates, raising PT to $315 but staying EW after 15% run over last month: Our revised base, bull, and bear cases are $315, $380, and $230. Our base case assumes the teams trade at a 15% discount to most recent Forbes value (tighter than BATRK due to potential sale of stake), and that the EntCo trades at 14x EV / base case EBITDA (broadly in-line with LYV) with roughly $ mm for excess value not captured in its earnings base. Our bull case assumes zero discount to Forbes, triggered by a hypothetical sale of ⅓ of the teams to a strategic investor, and 18x EV / bull case EBITDA for EntCo. Our bear case assumes the discount widens to 40%, as no sale is consummated for the ⅓ stake and the EntCo trades at 10x EV/bear case EBITDA. MSG shares are up ~15% since the close prior to announcing its spin consideration on June 27. With a fairly balanced risk/reward, we see other options in Media we prefer and will reassess MSG as we learn more about the spin specifics. Process from here: The MSG board must confirm it is moving ahead with the plan to spin off SportsCo, file a Form 10, and then hold a shareholder vote. Using past MSG spin-offs as proxies, the entire process is likely to take months from first announcement - or until April/May of

3 Risk Reward MSG Current Trading Level vs. Base, Bull, and Bear Cases $ 400 Investment Thesis $ (+22%) 350 We estimate that MSG's sports teams and $ $ (+1%) venue assets currently collectively trade at a 300 near 20% discount to private market value, 250 tight historically given expectations for the $ (-26%) 200 spin-off of the Sports business. While we believe upcoming venue investments around 150 Sphere and new launches at TAO create room 100 for value creation from here, they also bring 50 uncertainty and drive a balanced risk/reward, in our view. 0 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Source: Company data, Morgan Stanley Research Price Target (Jul-19) Historical Stock Performance Current Stock Price WARNINGDONOTEDIT_RRS4RL~MSG.N~ Price Target $315 Our FYE19 price target is based on our base case valuation. It is over twice our DCF-driven FMV, reflecting the higher private market value of MSG's sports teams / venue assets. Bull $380 No discount to teams private mkt value, EntCo at 18x EV / fwd EBITDA Successful sale of all or part of proposed Sports Co. closes discount to private market value: MSG announces a sale of 'trophy' assets (Knicks, Rangers, Garden), or other action that market sees paving way to a sale. This fully closes teams discount to estimated private market value. Healthy growth at EntCo drives improved outlook and positivity around Sphere investments and results in 18x fwd. EBITDA multiple in our bull case. Base $315 Teams at ~15% discount to private mkt value, EntCo at 14x EV / fwd EBITDA Sports/Ent. trades at ~15% discount to private market value: Lacking further catalysts to fully close the gap, the spin-off nevertheless tightens the teams' discount to private value to ~15% on higher perceived likelihood of asset monetization and increased simplicity of asset portfolio. The Entertainment company grows adj. EBITDA at an avg. CAGR of ~20% over the next five years, and trades at 14x EV / fwd. EBITDA. Bear $230 Teams at ~40% disc. to private mkt value, Ent at 10x EV / fwd EBITDA No spin-off, discount to private market value widens to ~40%: The proposed spin-off does not occur and teams trade at a ~40% discount to private value, reflecting reduced optimism for a monetization event in the near-term. Market concern surrounding the company's investment plans at the Entertainment company drive it to trade at 10x EV / fwd. EBITDA. Key Value Drivers Our PT assumes the current NAV discount tightens over the next year. The proposed asset spin would likely be perceived as precursors to tax-efficient asset monetization, which could narrow the discount. NBA / NHL team value estimates will likely be driven by future team sales. While visibility is low, we see potential for healthy growth here, particularly with regard to sponsorship. MSG had a ~$1.1 bn net cash balance at CYE17. A large share of this is slated to be used towards the company's Sphere projects. Success / failure with these projects could create / destroy value. Potential Catalysts Successful execution of MSG Sphere investments. Strong team performance or comparable team sales could lift perceived team values. Corporate actions (spins, sales, etc.) could close the estimated discount to private market value. Risks to Achieving Price Target MSG invests in unsuccessful venues; poor team performance or comparable team sales at lower than expected values; consumer downturn could hurt live entertainment industry, depressing venue values; higher Knicks payroll could drive higher luxury tax penalties, diminishing Sports profitability. 3

4 Sum-of-the-Parts Analysis We are raising our price target from $260 to $315. Driving this increase is a reduction of our assumed discount on the two marquee sports franchises, the Knicks and the Rangers, from 30% to 15% following the announced spin consideration. Summary of Assumptions: (1) Teams: Our estimates for the value of the teams are based on the most recent Forbes estimates. We then assume that the teams trade at a discount of ~15%, modestly tighter than our expectations for Liberty Braves (BATRK), which also owns underlying sports assets. The tighter discount is due to (a) higher expectations for a near-term monetization event and (b) pure-play team assets vs. real estate holdings at Braves. (2) Entertainment multiple: Our base case reflects an estimate of the Entertainment business' EV assuming an EV/fwd. EBITDA mulitple of 14x, broadly consistent with Live Nation (LYV, not covered). Other potential trading comps include Liberty Formula One (FWONK) and Lionsgate (LGFb), which trade at 27x times and 16.5x times EV/fwd. EBITDA, respectively. (3) Sports lease payment: Our EBITDA estimates for the proposed Entertainment business reflect revenue from the fair market lease the Sports company would need to pay the Garden on behalf of the Knicks and Rangers, which we estimate would have been $7 mm in FY18. (4) Excess value of Garden: We include ~20% of the estimated value for the Garden, or $ mm, of excess value related to the company's air rights. (5) MSG Sphere: For the time being, we conservatively value MSG Sphere at cost, reflecting estimated related capital expenditures through FYE19. (6) Cash: We estimate that subsequent to the proposed spin-off the Sports company would be allocated $200 mm of cash, with the remaining balance allocated to the Entertainment business. The company's press release stated that the Entertainment company would hold $1 billion in cash. Our estimate reflects our expectation for the $1.1 bn on the company's balance sheet at FYE18 to be reduced by both ~$480 mm of capex in FY19 as Sphere spending begins in earnest, and $200 mm of share repurchases. To the extent MSG raises additional debt to fund higher cash balance at spin for SportsCo, it is value neutral to MSG shares today. (7) Debt: We estimate no debt at the Sports company at FYE19 and no change to the current ~$100 mm of TAO-related debt at the Entertainment entity. 4

5 Exhibit 1: MSG Sum-of-the-Parts Analysis FYE19 MSG Sports Assets MSe Private MV ($M) Methodology New MSe Public MV ($M) Source NY Knicks (NBA) $3, % Discount $3,060.0 Forbes NY Rangers (NHL) 1, % 1,275.0 Forbes NY Liberty (WNBA) / Connecticut Whale (AHL) % 8.5 Forbes Enterprise Value $5, % $4,343.5 Plus: Cash & Equivalents $200.0 MSe allocated $200.0 MSe Less: Debt Less: Minority stake held at Ent. Co. (1,770.0) 14.0x EV/EBITDA (1,514.5) MSe Equity Value $3,540.0 $3,029.0 Dilutive Shares Outstanding SportsCo per Share $153 $131 MSG Entertainment Assets MSe Private MV ($M) Methodology New MSe Public MV ($M) MSG Arena & Complex (O&O) $1, % of Total $319.4 MSe Radio City/Beacon Theater (LT lease) + Rockettes franchise NA 0.0 Reflected in Chicago Theater (O&O) 26.9 NA 0.0 Consolidated L.A. Forum NA 0.0 MSG Sphere Cost MSe Total Venues $2,409.2 $804.5 Consolidated Operations NA 14.0x EV/EBITDA $1,221.7 MSe Plus: 33% Stake in MSG Sports $1,770.0 Pre-Tax Value $1,514.5 MSe Plus: Stakes in TAO & Boston Calling Cost Company data Enterprise Value $4,519.1 $3,880.5 Implied FYE19E fwd. EBITDA multiple 28.0x 24.1x Plus: Cash & unconsolidated assets $680.1 $680.1 Less: Debt ($105.4) ($105.4) Less: Boston Calling (49% minority interest) (131.2) (131.2) Less: TAO Group (37.5% minority interest) (15.2) (15.2) Less: Other Lilabilities (64.9) (64.9) Equity Value $4,882.5 $4,244.0 EntCo Per Share $212 $184 MSG per Share Value $365 $315 MSG Current Market Equity Value MSe Private MV ($M) New MSe Public MV ($M) Equity Value $7,201.0 $7,201.0 Per share $ $ Plus: Debt Less: Cash (665.4) (665.4) Plus: Boston Calling Minority (49%) Plus: TAO Group Minority (37.5%) Less: Other Assets (214.7) (214.7) MSG Current Market-Implied EV, FYE19 $6,572.7 $6,572.7 Implied FYE19E fwd. EBITDA multiple 40.8x 40.8x Implied Sports/Ent. EV Discount to Pvt Mkt Value -17% -3% Source: Company data, Forbes, NYC Department of Finance Assessment, Morgan Stanley Research Our EBITDA estimate for the pro forma Entertainment company assumes that total MSG corporate overhead is split equally between the Sports and Entertainment businesses. Additionally, it reflects the inclusion of lease revenue outlined above, and includes 10% of Sports segment EBITDA to account for a portion of economics that will change to the Entertainment business, per the company's press release. Exhibit 2: Estimated pro forma EBITDA for standalone Entertainment company FY18 FY19 FY20 FY21 FY22 Ent. Co. Segment EBITDA $99.3 $113.7 $115.7 $143.3 $175.1 Consolidated corporate overhead ($91.8) ($98.1) ($101.0) ($104.1) ($107.2) Percentage allocable to Ent. Co. 50% 50% 50% 50% 50% Less: Ent. Co allocable overhead ($45.9) ($49.0) ($50.5) ($52.0) ($53.6) Plus: Lease revenue from Sports Co. $7.0 $7.2 $7.4 $7.6 $7.9 Plus: SportsCo adj. EBITDA now at EntCo Pro forma Ent. Co. EBITDA $73.2 $87.0 $87.3 $114.0 $146.0 PF Growth % 19% 0% 31% 28% Source: Company data, Morgan Stanley Research 5

6 Prior vs. Current Exhibit 3: MSG Prior vs. Current Madison Square Garden In millions except per share FY4Q18 FY2018E FY2019E FY2020E Prior Current Change Prior Current Change Prior Current Change Prior Current Change MSG Entertainment Revenue $151 $ $735 $ $767 $ $789 $ % Growth 96% 100% +474bp 45% 48% +300bp 4% 4% (15)bp 3% 2% (56)bp Adj. EBITDA (2) Margin 0.6% 2.1% +151bp 15.2% 15.0% (21)bp 16.6% 16.3% (27)bp 16.7% 16.2% (51)bp MSG Sports Revenue $139 $138 (1) $787 $784 (3) $834 $832 (3) $866 $864 (3) % Growth -55% -55% (38)bp -3% -3% (32)bp 6% 6% +1bp 4% 4% +0bp Adj. EBITDA Margin 2.3% 3.1% +86bp 16.9% 18.3% +148bp 20.1% 20.1% +8bp 18.9% 18.9% +7bp Corporate, Eliminations and Other Revenue $0 $0 +0 ($0) ($0) (0) $0 $0 +0 $0 $0 +0 Adj. EBITDA ($20) ($19) +1 ($74) ($71) +2 ($78) ($76) +2 ($80) ($78) +2 MSG Consolidated Revenue $291 $ $1,522 $1, $1,601 $1, $1,656 $1, % Growth -5% -4% +82bp 15% 16% +95bp 5% 5% (7)bp 3% 3% (28)bp Adj. EBITDA (16) (11) Margin -5.5% -3.9% +159bp 11.2% 12.0% +82bp 13.5% 13.6% +8bp 13.0% 13.0% (5)bp % Growth 60% 14% (4,555)bp 30% 41% +1,071bp 27% 19% (809)bp -1% -2% (116)bp Stock-based comp (2) (2) (2) EBITDA (28) (24) Margin -10% -8% +163bp 8% 9% +98bp 10% 10% +23bp 10% 10% +10bp % Growth 36% 15% (2,197)bp 33% 51% +1,777bp 35% 23% (1,238)bp -2% -3% (144)bp D&A (1) (1) EBIT (59) (54) +5 (4) Margin -20% -19% +192bp 0% 1% +111bp 2% 2% +19bp 2% 2% +1bp Interest inc/(exp) (4) (4) +0 (9) (9) (0) Other income (0) (2) (1) Pre-tax income (58) (52) Taxes (2) (3) (10) (11) (1) (7) (7) (0) Net income (38) (34) Net income (minority adj.) (39) (36) CapEx FCF N/A N/A N/A (40) (52) (12) (323) (335) (12) (385) (400) (15) Per share N/A N/A N/A ($1.70) ($2.22) ($0.52) ($13.96) ($14.34) ($0.38) ($17.12) ($17.50) ($0.38) EPS (adj.) ($1.64) ($1.50) +$0.15 $5.81 $6.58 +$0.77 $0.66 $0.76 +$0.11 $0.34 $0.36 +$0.02 Source: Company data, Morgan Stanley Research 6

7 Bull/Bear/Base Case Estimates Exhibit 4: MSG Operating Bull/Bear/Base Estimates MSG Scenarios Base Case Bear Case Bull Case ($ millions) FY18E FY19E FY20E ($ millions) FY18E FY19E FY20E ($ millions) FY18E FY19E FY20E EPS $6.58 $0.76 $0.36 EPS $5.55 ($1.10) ($0.91) EPS $6.64 $1.23 $1.61 Growth % 275.3% -88.4% -52.8% Growth % 216.5% % -17.3% Growth % 278.6% -81.5% 31.4% Revenue 1,534 1,614 1,664 Revenue 1,527 1,581 1,636 Revenue 1,538 1,634 1,692 Growth % 16.4% 5.2% 3.1% Growth % 15.8% 3.5% 3.5% Growth % 16.6% 6.2% 3.6% Operating Expenses ,008 Operating Expenses ,022 Operating Expenses Growth % 13.7% 3.6% 4.6% Growth % 17.4% 3.4% 2.8% Growth % 13.9% 3.9% 2.8% SG&A SG&A SG&A Growth % 13.6% 2.7% 2.2% Growth % 13.6% 2.7% 2.2% Growth % 13.6% 2.7% 2.2% Total Expenses 1,349 1,394 1,448 Total Expenses 1,379 1,424 1,461 Total Expenses 1,351 1,399 1,436 Growth % 13.7% 3.3% 3.9% Growth % 16.2% 3.2% 2.7% Growth % 13.8% 3.6% 2.6% Adj. EBITDA Adj. EBITDA Adj. EBITDA Growth % 40.8% 18.6% -1.7% Growth % 12.5% 6.5% 11.0% Growth % 42.4% 25.7% 9.3% Margin % 12.0% 13.6% 13.0% Margin % 9.7% 9.9% 10.7% Margin % 12.2% 14.4% 15.2% EBITDA EBITDA EBITDA Growth % 50.6% 23.0% -3.4% Growth % 9.3% 6.5% 14.7% Growth % 52.9% 32.4% 11.0% Margin % 8.8% 10.3% 9.7% Margin % 6.4% 6.6% 7.4% Margin % 9.0% 11.2% 12.0% EBIT EBIT (24) (22) (9) EBIT Growth % % 193.7% -19.5% Growth % 37.3% -5.6% -59.4% Growth % % 254.0% 32.4% Margin % 0.9% 2.5% 1.9% Margin % -1.6% -1.4% -0.6% Margin % 1.0% 3.4% 4.3% MSG Entertainment MSG Entertainment MSG Entertainment Total Revenue $750 $782 $800 Total Revenue $743 $749 $772 Total Revenue $754 $802 $829 Growth % 48.1% 4.2% 2.3% Growth % 46.7% 0.9% 3.1% Growth % 48.8% 6.4% 3.3% Adj. EBITDA Adj. EBITDA Adj. EBITDA Adj. EBITDA margin 15.0% 16.3% 16.2% Adj. EBITDA margin 14.6% 13.4% 13.7% Adj. EBITDA margin 15.2% 17.8% 18.2% MSG Sports MSG Sports MSG Sports Total Revenue $784 $832 $864 Total Revenue $784 $832 $864 Total Revenue $784 $832 $864 Growth % -3.4% 6.1% 3.8% Growth % -3.4% 6.1% 3.8% Growth % -3.4% 6.1% 3.8% Adj. EBITDA Adj. EBITDA Adj. EBITDA Adj. EBITDA margin 18.3% 20.1% 18.9% Adj. EBITDA margin 14.1% 15.9% 17.0% Adj. EBITDA margin 18.3% 20.1% 21.3% Other Items Other Items Other Items Capex $184 $496 $550 Capex $184 $495 $549 Capex $185 $496 $551 Gross Debt / Adj. EBITDA 0.6x 0.5x 0.5x Gross Debt / Adj. EBITDA 0.7x 0.7x 0.6x Gross Debt / Adj. EBITDA 0.6x 0.4x 0.4x Net Debt / Adj. EBITDA (5.6)x (2.6)x (0.1)x Net Debt / Adj. EBITDA (6.9x) (3.2x) 0.2x Net Debt / Adj. EBITDA (5.6x) (2.2x) 0.1x Free Cash Flow ($52) ($335) ($400) Free Cash Flow ($83) ($397) ($441) Free Cash Flow ($51) ($320) ($360) FCF/Share ($2.22) ($14.34) ($17.50) FCF/Share ($3.54) ($17.02) ($19.41) FCF/Share ($2.17) ($13.70) ($15.75) Normalized FCF/Share ($3.85) ($16.02) ($19.25) Normalized FCF/Share ($5.17) ($18.70) ($21.17) Normalized FCF/Share ($3.80) ($15.38) ($17.50) SOTP SportsCo Discount -15% -40% 0% SportsCo Equity $3,029.0 $2,177.3 $3,540.0 SportsCo Share Price $131 $95 $153 EntCo Multiple 14.0x 10.0x 18.0x EntCo EBITDA $87.3 $61.4 $110.1 EntCo EV $3,880.5 $2,846.8 $4,895.5 EntCo Equity $4,244.0 $3,158.9 $5,224.3 EntCo Share Price $184 $138 $226 Implies SOTP Target Price $315 $232 $380 Price Target $315 $230 $380 Current Price $312 $312 $312 Upside 1% -26% 22% Source: Company data, Morgan Stanley Research; Note: FYE June 30 7

8 Exhibit 5: MSG Multiples Analysis Current Price Target Price 2018E 2019E 2020E 2018E 2019E 2020E MSG - Stock Price $ $ $ $ $ $ Class A Common Stock - Dilutive Shares Out Class B Common Stock - Dilutive Shares Out Total Market Value $7,392.3 $7,201.0 $7,065.9 $7,462.6 $7,269.5 $7,133.2 Plus: Year End Debt $105.4 $105.4 $105.4 $105.4 $105.4 $105.4 Minority interest - Boston Calling (49%) Minority interest - TAO Group (37.5%) Less: Cash 1, , Unconsolidated/ Other Assets Unconsolidated/ Other Assets Total Other Assets Enterprise Value $6,289.6 $6,572.7 $6,973.8 $6,360.0 $6,641.3 $7,041.0 EBITDA (adj) $135.7 $166.9 $161.3 $135.7 $166.9 $161.3 EV / EBITDA 46.4x 39.4x 43.2x 46.9x 39.8x 43.7x Forward EBITDA (adj) $166.9 $161.3 $190.2 $166.9 $161.3 $190.2 EV / Forward EBITDA 37.7x 40.8x 36.7x 38.1x 41.2x 37.0x Unlevered Free Cash Flow ($94.1) ($372.5) ($435.0) ($94.1) ($372.5) ($435.0) EV / Unlevered FCF NM NM NM NM NM NM Forward Unlevered Free Cash Flow ($372.5) ($435.0) ($418.7) ($372.5) ($435.0) ($418.7) EV / Fwd. Unlevered FCF NM NM NM NM NM NM FCF ($90.8) ($374.6) ($440.1) ($90.8) ($374.6) ($440.1) Adj. P / FCF NM NM NM NM NM NM Forward FCF ($374.6) ($440.1) ($431.7) ($374.6) ($440.1) ($431.7) Adj. P / FCF (Fwd) NM NM NM NM NM NM Adj. EPS $6.58 $0.76 $0.36 $6.58 $0.76 $0.36 Adj. P / E 47.4x 408.2x 865.7x 47.9x 412.1x 874.0x Forward Adj. EPS $0.76 $0.36 $0.15 $0.76 $0.36 $0.15 Adj. P / E (fwd) 408.2x 865.7x 2,093.4x 412.1x 874.0x 2,113.3x Source: Company data, Morgan Stanley Research; Note: FYE June 30 Exhibit 6: MSG Free Cash Flow Analysis (in millions) 2016A 2017A 2018E 2019E 2020E 2021E EBITDA (adj.) $85.7 $90.1 $135.7 $166.9 $161.3 $190.2 Net Interest Income (Expense) (3.5) (8.6) (21.7) Capital Expenditures (71.7) (44.2) (184.5) (495.8) (549.8) (556.4) Cash Taxes (5.5) 0.0 (6.0) Increase in Working Capital (3.0) (3.0) (3.0) (3.0) Free Cash Flow $100.7 $164.4 ($52.3) ($335.4) ($400.1) ($390.9) Avg. Fully Diluted Shares FCF / Share $4.07 $6.89 ($2.22) ($14.34) ($17.50) ($17.46) Growth % 124.5% 69.6% % NM NM NM Normalized FCF / Share $2.57 $5.31 ($3.85) ($16.02) ($19.25) ($19.28) Growth % 164.9% 106.5% % NM NM NM Adj. EPS / Share $0.83 $1.75 $6.58 $0.76 $0.36 $0.15 Growth % NM 110.8% 275.3% -88.4% -52.8% -58.6% Unlevered FCF $97.9 $159.8 ($55.6) ($333.3) ($395.0) ($377.9) Unlevered FCF / Share $3.95 $6.70 ($2.36) ($14.25) ($17.28) ($16.88) % Change 116.5% 69.6% % NM NM NM Normalized Unlevered FCF $60.9 $122.1 ($94.1) ($372.5) ($435.0) ($418.7) Normalized Unlevered FCF / Share $2.46 $5.12 ($3.99) ($15.93) ($19.03) ($18.70) % Change 149.5% 108.3% % NM NM NM Source: Company data, Morgan Stanley Research; Note: FYE June 30 8

9 Exhibit 7: MSG Income Statement, Annual US$ Millions 2016A 2017A 2018E 2019E 2020E 2021E Madison Square Garden: Income Statement Total Revenues 1, , , , , ,876.5 Operating Costs (OpEx + SG&A) 1, , , , , ,630.1 Total adj. EBITDA Share-Based Comp Expense Other Expense: Restructuring, etc Total EBITDA Depreciation and amortization Operating income (loss) (16.8) (17.3) Other income (expense): Interest income (expense), net (3.5) (8.6) (21.7) Miscellaneous (64.9) (71.6) (1.7) Income (loss) from operations before income taxes (77.0) (81.2) Income tax benefit (expense) (0.3) (10.8) (7.0) (5.2) Income Tax Rate 0% 5% -779% 30% 30% 30% Current Taxes (5.5) 0.0 (6.0) Net income (loss) - company level (77.3) (76.8) Minority interest (7.4) (8.1) (8.7) Net income (loss) (77.3) (72.7) Basic EPS ($3.12) ($3.05) $6.46 $0.77 $0.36 $0.15 Diluted EPS ($3.12) ($3.05) $6.45 $0.76 $0.36 $0.15 Less: Non-recurring income (expense) per share ($3.95) ($4.80) ($0.13) $0.00 $0.00 $0.00 Diluted EPS, Adj. for Consensus $0.83 $1.75 $6.58 $0.76 $0.36 $0.15 Plus: Amortization per share $0.27 $0.33 $0.87 $0.87 $0.85 $0.75 Plus: Tax Impact from Amortization per share ($0.11) ($0.13) ($0.30) ($0.26) ($0.25) ($0.23) ModelWare EPS, Diluted $0.99 $1.95 $7.14 $1.37 $0.95 $0.67 MSG Class A Shares (from B/S) MSG Class B Shares (from B/S) Unvested RSUs (0.0) (0.1) 0.0 (0.1) 0.0 (0.0) Period End Basic Shares Out Dilutive Options & RSUs (Treasury Method) Period End Diluted Shares Out Avg Basic Shares Out Avg Fully Diluted Shares Out Source: Company data, Morgan Stanley Research; Note: FYE June 30 9

10 Exhibit 8: MSG Income Statement, Quarterly US$ Millions 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Madison Square Garden: Income Statement Total Revenues Operating Costs (OpEx + SG&A) Total adj. EBITDA (9.9) (11.3) Share-Based Comp Expense Other Expense: Restructuring, etc Total EBITDA (6.7) (20.6) (23.6) Depreciation and amortization Operating income (loss) (32.8) (49.4) - (14.5) (54.3) Other income (expense): Interest income (expense), net Miscellaneous (1.0) 0.2 (26.3) (44.5) (4.0) (1.4) 0.0 Income (loss) from operations before income taxes (31.8) 60.7 (17.4) (92.6) - (10.1) (52.3) Income tax benefit (expense) 2.9 (3.2) (0.4) (0.8) (0.7) 18.3 Income Tax Rate 9.2% 5.4% -2.5% 5.6% -7.5% % 7.7% 35.0% Net income (loss) - company level (28.914) (17.8) (87.5) - (10.9) (34.0) Minority interest (0.2) (1.6) Net income (loss) (28.6) 57.7 (17.5) (84.3) - (11.1) (35.6) Basic EPS ($1.19) $2.41 ($0.74) ($3.58) ($0.47) $8.03 $0.39 ($1.51) Diluted EPS ($1.19) $2.39 ($0.74) ($3.58) ($0.47) $7.96 $0.38 ($1.50) Less: Non-recurring income (expense) per share ($0.07) $0.01 ($1.77) ($3.02) $0.25 ($0.28) ($0.10) $0.00 Diluted EPS, Adj. for Consensus ($1.12) $2.38 $1.03 ($0.55) ($0.72) $8.24 $0.48 ($1.50) Plus: Amortization per share $0.08 $0.08 $0.08 $0.08 $0.08 $0.08 $0.08 $0.08 Plus: Tax Impact from Amortization per share ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ModelWare EPS, Diluted ($1.08) $2.43 $1.08 ($0.50) ($0.67) $8.29 $0.54 ($1.44) MSG Class A Shares (from B/S) MSG Class B Shares (from B/S) Unvested RSUs (0.1) Period End Basic Shares Out Dilutive Options & RSUs (Treasury Method) Period End Diluted Shares Out Avg Basic Shares Out Avg Fully Diluted Shares Out Source: Company data, Morgan Stanley Research; Note: FYE June 30 10

11 Exhibit 9: MSG Balance Sheet US$ Millions 2016A 2017A 2018E 2019E 2020E 2021E Current Assets: Cash and cash equivalents 1, , , Restricted cash Accounts receivable Net receivable due from Cablevision Prepaid expenses Other current assets Total current assets 1, , , Advances due from Cablevision Property and equipment, net of accumulated depreciation 1, , , , , ,492.5 Investments in affilliates Other assets Amortizable intangible assets, net of accumulated amortization Indefinite-lived intangible assets Goodwill Total Assets 3, , , , , ,914.3 Current Liabilities: Short-term debt Accounts payable Accrued liabilities: Employee related costs Other expenses Deferred revenue Total current liabilities Long-term debt Defined benefit and other postretirement obligations Other employee related costs Other liabilities Deferred tax liability Total liabilities , , , , ,629.1 Combined Group Equity: Paid-in capital 2, , , , , ,051.1 Retained earnings (75.7) (148.4) Accumulated other comprehensive loss (42.6) (34.1) Combined Group equity 2, , , , , ,285.2 Total Liabilities & Equity 3, , , , , ,914.3 Source: Company data, Morgan Stanley Research; Note: FYE June 30 11

12 Exhibit 10: MSG Cash Flow Statement US$ Millions 2016A 2017A 2018E 2019E 2020E 2021E Cash flows from operating activities: Net income (loss) (77.3) (76.8) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization Share-based compensation expense allocations, net Cumulative effect of a change in accounting, net of tax Gain on sale of operating asset Gain on curtailment of pension plans Amortization of purchase accounting liability Loss on equity investment Deemed capital contribution / Other Provision for doubtful accounts Change in assets and liabilities: Account receivable, net (25.1) (20.4) (15.2) (4.5) (2.1) (14.0) Net receivable due from Cablevision (5.1) Prepaid expenses and other assets (34.4) 1.8 (19.8) (6.2) (3.2) (18.5) Accounts payable Accrued and other liabilities (66.8) (2.2) 39.5 Deferred revenue (81.4) (16.8) Deferred tax liability (139.8) Net cash provided by operating activities Cash flows from investing activities: Capital expenditures (71.7) (44.2) (184.5) (495.8) (549.8) (556.4) Proceeds from sale of fixed assets Restricted cash Payments for acquisition of assets or equity interests (44.0) (220.1) Net cash used in investing activities ($115.7) ($264.3) ($184.5) ($495.8) ($549.8) ($556.4) Cash flows from financing activities: Change In Debt (unfunded) Debt: Repayments Debt: Additional Borrowings Dividends Paid Sale of Common Stock (Repurchase)/ (Distributions) (105.7) (148.0) (31.8) (200.1) (200.0) (200.0) Advances to Cablevision Repayment of advances to Cablevision Principal payments on capital lease obligations Deferred financing costs Capital contributions / Other 1,525.7 (10.6) Net cash provided by (used in) financing activities $1,420.0 ($158.5) ($31.8) ($200.1) ($200.0) $315.2 Net increase (decrease) in cash and cash equivalents 1,430.1 (206.2) (89.7) (483.0) (545.9) (19.5) Cash and cash equivalents at beginning of year , , , Cash and cash equivalents at end of year 1, , , Source: Company data, Morgan Stanley Research; Note: FYE June 30 Exhibit 11: MSG Capital Expenditures US$ Millions 2016A 2017A 2018E 2019E 2020E 2021E Segment-Level Capital Expenditures MSG Entertainment MSG Sports Total Segment-Level CapEx Corporate-Level Capital Expenditures General Corporate Garden Renovations LA Forum / MSG Sphere Total Corporate-Level CapEx Total Capital Expenditures CapEx as % of Revenue MSG Entertainment 1.2% 2.3% 3.3% 2.5% 2.8% 2.8% MSG Sports 0.7% 0.3% 0.5% 0.5% 0.5% 0.5% Source: Company data, Morgan Stanley Research; Note: FYE June 30 12

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