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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
 For the transition period from  to
 Commission File
    
    Registrant; State of Incorporation;
    
    IRS EmployerNumber
    
    Address and Telephone Number
    
    Identification No.1-34434
    
    Madison Square Garden, Inc.
    
    27-0624498DelawareTwo Penn PlazaNew York, NY 10121(212) 465-6000
 Securities registered pursuant to Section 12(b) of the Act:
    
    Name of each Exchange on which Registered:Title of each class:Class A Common Stock
    
    The NASDAQ Stock Market LLC
 Yes o No þ
 Yes o No þ
 o þ
 þ o
 þ
  Large accelerated filero
    
    Accelerated filero
    
    Non-accelerated filerþ
    
    Smaller reporting companyo
 o þ
   Class A Common Stock 
    
    
    61,974,860Class B Common Stock 
    
    
    13,588,555
 Documents incorporated by reference




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##### 



TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    24Item 2. Properties
    
    
    38Item 3. Legal Proceedings
    
    
    38PART IIItem 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    39Item 6. Selected Financial Data
    
    
    40Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    41Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    78Item 8. Financial Statements and Supplementary Data.
    
    
    78Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
    
    
    78Item 9A. Controls and Procedures
    
    
    78Item 9B. Other Information
    
    
    78PART IIIItem 10. Directors, Executive Officers and Corporate Governance*
    
    
    79Item 11. Executive Compensation*
    
    
    79Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters*
    
    
    79Item 13. Certain Relationships and Related Transactions, and Director Independence*
    
    
    79Item 14. Principal Accountant Fees and Services*
    
    
    79PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    80Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
  *
    
    These items are omitted because Madison Square Garden, Inc. intends to file with the
Securities and Exchange Commission, not later than 120 days after the close of its fiscal
year, an amendment to this report containing the information required to be disclosed under
Part III of Form 10-K filed under cover of Form 10-K/A.  2




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PART I
 
 Item 1. Business
    General
   3




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##### Table of Contents




    
    MSG Sports.Our sports business consists of owning and operating sports franchises,
including the New York Knicks, a founding member of the National Basketball Association
(NBA) and the New York Rangers, one of the original six franchises of the National
Hockey League (NHL). We also own and operate the New York Liberty of the Womens
National Basketball Association (WNBA), one of the leagues founding franchises, and
the Hartford Wolf Pack of the American Hockey League (AHL), which is the primary
player development team for the Rangers and competitive in its own right in the AHL.
The Knicks, Rangers and Liberty play their home games at The Madison Square Garden
Arena (which we also refer to as The Garden). The Companys sports business also
features other sports properties, including the presentation of a wide variety of
premier live sporting events including professional boxing, college basketball (The Big
East Tournament, Jimmy V Classic, Post-season NIT Finals and, on occasion, Duke
University games), track and field (The Millrose Games) and tennis (The BNP Paribas
Showdown for the Billie Jean King Cup, which features the women winners of the previous
years Grand Slam tennis events).
 
    
    MSG Entertainment.Our entertainment business is one of the countrys leaders in
live entertainment. We create, produce and/or present a variety of live productions,
including the Radio City Christmas Spectacular, featuring the Radio City Rockettes (the
Rockettes), which is the #1 live holiday family
show in America and which was seen in 2009 by approximately 1.8 million people, and the
world-renowned Cirque du Soleils Wintuk. We also present or host other live
entertainment events, such as concerts, including shows by The Police, Eric Clapton,
Jimmy Buffett, Bruce Springsteen, Justin Timberlake and Madonna; family shows, such as
Dora the Explorer, Thomas the Tank Engineand Sesame Street Live; special events such as
the Tony Awards and appearances by the Dalai Lama; and theatrical productions, such as
The Wizard of Ozand Annie, in our diverse collection of venues. These venues include
The Garden, Radio City Music Hall, The Theater at Madison Square Garden, the Beacon
Theatre, The Chicago Theatre and the Wang Theatre. MSG Entertainment increasingly
utilizes the strength of its industry relationships and live event expertise, as well as
the reach of MSG Media, to create performance, promotion and distribution opportunities
for artists and productions that, in turn, provide new programming and promotion for
both our entertainment and our media businesses.
  4




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
    
    MSG Media.Our media business is a leader in production and content development for
multiple distribution platforms, including content originating from our venues. For
all periods presented, this business consists of programming networks and interactive
offerings, including the MSG Networks (MSG network, MSG Plus, MSG HD and MSG Plus HD)
and the Fuse Networks (Fuse and Fuse HD). MSG Networks are home to seven professional
sports teams: the New York Knicks, New York Rangers, New York Liberty, New York
Islanders, New Jersey Devils, Buffalo Sabres and New York Red Bulls, as well as to our
critically acclaimed original and other programming, including Summer of 77, The Mike
DAntoni Showand MSG Originals, highlighted by the New York Emmy-award winning
series The 50 Greatest Moments at MSG, Big 12 and PAC 10 football, and ACC, Big East
and PAC 10 basketball. Since 2008, Fuse has focused on establishing itself as a unique
multi-platform music destination, where artists and fans can interact and build
relationships. Programming on Fuse focuses on music-related programming, including
coverage of premier artists, events and festivals, original content and high profile
concerts. Certain Fuse programming centers around its insider access to MSG
Entertainment and Madison Square Gardens venues, which Fuse uses to create music
programming, while offering a voice and enhanced exposure to artists. Our interactive
businesses include a group of highly targeted websites (including msg.com,
thegarden.com, radiocity.com, nyknicks.com, newyorkrangers.com and fuse.tv) and
wireless, video on demand and digital platforms for all Madison Square Garden
properties. MSG Media allows us to leverage the value of the content created, produced
and/or presented by MSG Sports and MSG Entertainment.
 Our Strengths
 
    
    Owned sports franchises
 
    
    Media assets, including affiliation agreements with distributors and exclusive
sports and entertainment programming rights
 
    
    Iconic venues
 
    
    Diverse collection of marquee brands and content, including the Radio City Christmas
Spectacularand the Rockettes
 
    
    Powerful presence in the New York tri-state area with established core assets and
expertise for strategic expansion
 
    
    Unique ability to provide artists and productions with multiple distribution
platforms to develop and promote their businesses
 
    
    Strong industry relationships that create opportunities for new content and brand
extensions
 
    
    Deep connection with loyal and passionate fan bases that span a wide demographic mix
 
    
    Strong and seasoned management team
 Our Strategy
    5




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Radio City Christmas Spectacular
   
  
    
    We have expanded the programming on MSG network to include additional programming
originating from or relating to our venues, while continuing to deliver award-winning
live sports coverage. MSG networks focus on becoming all things Madison Square
Garden serves as a powerful platform for the distribution of our content and supports
the Companys integrated strategic vision, while differentiating our media offerings in
a diverse and competitive environment.
 
    
    Our media business continues to seek opportunities to collaborate with our
entertainment and sports businesses. For example, in 2009 our media and entertainment
businesses forged a multi-faceted relationship with the Dave Matthews Band, through
which we booked the Beacon Theatre for a sold-out Dave Matthews Band concert and
telecast the concert commercial-free on Fuse. Fuse also aired a week-long series of
complementary Dave Matthews Band programming, leading up to the release of the bands
new album. Similarly, in 2008 our media and sports businesses collaborated on the Pete
Sampras versus Roger Federer exhibition tennis match, an event that represented the
revival of The Gardens historic affiliation with big-event tennis. The sold-out
match, which pitted the #1 ranked Federer against Sampras, who was at that time the
recently retired holder of the most Grand Slam
titles, originated from The Garden and was promoted as the first live sports programming
on the newly rebranded MSG Plus (formerly known as FSN New York).
  6




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
    
    We acquired control of New Yorks Beacon Theatre, purchased The Chicago Theatre, and
entered into a long-term booking agreement in respect of the Wang Theatre in Boston,
extending our geographic footprint and providing new distribution outlets for our live
entertainment content. These transactions diversified the collection of venues we
offer to artists and productions.
 
    
    Building on their initial collaboration, Wintuk, MSG Entertainment and the
world-renowned Cirque du Soleil have expanded their relationship this year with the
debut of a new vaudeville-inspired live entertainment show, Banana Shpeel. The show
began previews in The Chicago Theatre on November 19, 2009, and is expected to premiere
at the Beacon Theatre in the spring of 2010. This plan illustrates our strategy of
developing new live entertainment content that can be utilized through Madison Square
Gardens owned and operated venues.
   MSG Sports
   Our Sports Franchises
    7




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New York Knicks
  New York Rangers
  New York Liberty
  Hartford Wolf Pack
  The Role of the Leagues in Our Operations
    8




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Other Sports Properties
    MSG Entertainment
 The Radio City Christmas Spectacular Wintuk Dora the Explorer, Thomas the
Tank Engine Sesame Street Live; Sex and the City: The
Movie The Wizard of Oz Annie
  9




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Our Productions
 Radio City Christmas Spectacular
 Radio City Christmas Spectacular Radio City Christmas Spectacular
 Radio City Christmas Spectacular Radio City Christmas Spectacular MSG Originals Radio City Christmas Spectacular Radio City Christmas Spectacular
  Radio City Christmas Spectacular Radio
City Christmas Spectacular Radio City Christmas Spectacular
 Radio City Christmas Spectacular Radio City Christmas Spectacular Radio City Christmas Spectacular
  10




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Radio City Christmas Spectacular Radio City Christmas
Spectacular
 Wintuk and Other Cirque du Soleil Productions
 Wintuk Wintuk
 Banana
Shpeel, Banana Shpeel
 Our Bookings and Other Entertainment Business Activities
  MSG Media
 Summer of
77, The Mike DAntoni Show MSG Originals The 50 Greatest Moments at MSG
   11




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Fuse Presents th Radio City Christmas Spectacular Radio City Christmas Spectacular
 MSG Networks
 Summer of 77, The Mike
DAntoni Show MSG Originals The 50
Greatest Moments at MSG
  
    
    The critically acclaimed and New York Emmy award-winning MSG Originalsdocumentary
series, which has featured such titles as The 50 Greatest Moments at MSG, Concert for
New York City Remembered, Mecca of Boxing,and The Restoration of the Beacon Theatre
 
    
    The MSG Concert Series,which features a variety of past and present concerts or
artists playing our venues
 
    
    Road to MSG, a series that brings viewers along as their favorite artists and
athletes prepare to take the stage or hit the floor of the Worlds Most Famous Arena
or one of our other venues
 
    
    Programming relating to the Knicks, Rangers and Liberty, such as MSG Vault, MSG
Profiles, Fans Most Wanted, Hockey Night Live, and dedicated pre- and post-game shows,
all of which allow us to capitalize on the extraordinary enthusiasm of our teams fans
  12




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Best Damn Sports Show The FSN Final Score Sports Science
  Fuse
     13




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
    
    Exclusive television coverage of one of musics biggest annual events, the Rock and
Roll Hall of Fame induction ceremonies. Branded Fuse Hall of Fame, this relationship
also includes a year-long block of specially dedicated Hall of Fame programming that
celebrates the classic and iconic in rock history
 
    
    FuseFest, featuring footage from Bamboozle, Warped Tour, Lollapalooza, Bonnaroo
Music and Arts Festival and the New Orleans-focused Voodoo Experience
 
    
    No. 1 Countdown, Video Yearbookand Loaded, which feature top music videos in rock,
pop, alternative, hip-hop and viewers choice and select documentaries of artists
 
    
    On The Recordis a one-on-one interview series with todays top artists. The series
brings viewers exclusive and revealing in-depth conversations with the biggest and
boldest names in music. Recent artists include John Mayer, Lady Gaga, and 50 Cent
 
    
    Hip Hop Shopis hosted by Fuses newest music insider Toure. The show dives into
the world of hip hop, with up-to-date news, videos, interviews and celebrity guests
including Jay Sean and Ludacris
 
    
    Fuse Presents, a select series of concert specials and dedicated support programming
covering such artists as Dave Matthews Band, Kanye West, Jay-Z, John Mayer, Fall Out
Boy, The Killers, Foo Fighters and The Cure
 
    
    Full Volume Flicks, which features Hollywood movies relating to music
 Other Media Properties  MSG Interactive
   Our Venues
    14




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Madison Square Garden Arena
   st rd
  The Madison Square Garden Arena Renovation
  
    
    Providing a state-of-the-art venue that can attract concerts, as well as other
large, high profile sports, entertainment and other special events which benefit our
customers, as well as the New York City economy
 
    
    Improving the experience of customers in all parts of the venue
 
    
    Increasing our attractiveness to free agents in basketball and hockey
 
    
    Supporting our efforts to retain and grow our season ticket bases for our teams
  15




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
    
    Increasing the breadth of VIP offerings and venue-based opportunities available to
marketing partners
 
    
    Augmenting revenue streams
 
    
    Providing a new point of origination for programming from our MSG Networks studios
  
    
    A dramatically redesigned Seventh Avenue entrance
 
    
    New, more comfortable seats, with better sightlines that put patrons closer to the
action
 
    
    New, wider and more spacious public concourses with spectacular views of the city
 
    
    Unique bridges suspended above each side of The Garden, providing seating for fans
that does not exist in any arena today
 
    
    State-of-the-art lighting, sound and LED video systems in HDTV
 
    
    New food, beverage and bar options
 
    
    A new suite configuration that includes:
 
    
    58 new lower-level suites that are 50 percent larger than our current suites and
half the distance to events
 
    
    20 new event level suites, which include the best seats in the house
 
    
    One super suite, which is the size of 10 traditional suites
 
    
    Improved dressing rooms, locker rooms, star dressing rooms and production offices
for athletes and performers
 
    
    A new upper level with a party deck
 
    
    Additional new restrooms
 
    
    Restoration of The Gardens famous ceiling
   16




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The Theater at Madison Square Garden
  Wintuk Wintuk
 Radio City Music Hall
 Radio City Christmas Spectacular Radio City Christmas Spectacular
 Radio City Christmas Spectacular.
  17




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The Beacon Theatre
 th Madame
Butterfly
   The Chicago Theatre
  Joseph and the Amazing Technicolor Dreamcoat Dreamgirls
   18




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The Wang Theatre
 Chitty Chitty
Bang Bang
  Investment in Front Line Management Group Inc.
  Garden of Dreams Foundation
   Regulation
 Regulation of Our Sports and Entertainment Businesses
    19




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Regulation of Our Media Business
  Closed Captioning and Advertising Restrictions on Childrens Programming
  Indecency and Obscenity Restrictions
  Program Access
     20




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Wholesale A La Carte
  Effect of Must-Carry Requirements
  Satellite Carriage
  Media Ownership Restrictions
  Website Requirements
  Other Regulation
   21




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Competition
 Competition in Our Sports Business
   Competition in Our Entertainment Business
    Competition in Our Media Business
 Distribution of Programming Networks
   22




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Sources of Programming
  Competition for Entertainment Programming Sources
  Competition for Sports Programming Sources
     23




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Competition for Advertising Revenue
  Employees
   
 Item 1A. Risk Factors
 Risks Relating to Our Sports Business
 Our Sports Business Faces Intense and Wide-Ranging Competition.
    24




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Our Basketball and Hockey Decisions, Especially Those Concerning Player Selection and Salaries,
Affect Our Financial Performance.
    The Actions of the Basketball and Hockey Leagues may Have a Material Effect on Our Businesses.
     25




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Injuries to Players on Our Sports Teams Could Hinder Our Success.
    26




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Risks Relating to Our Entertainment Business
 Our Entertainment Business Faces Intense and Wide-Ranging Competition.
 Radio City Christmas Spectacular
 Radio City Christmas Spectacular
 The Success of Our Entertainment Business Depends on the Continued Popularity of Our Live
Productions, Particularly the Radio City Christmas Spectacular.
 Radio City Christmas Spectacular
 Radio City Christmas Spectacular Radio City Christmas Spectacular Radio City Christmas Spectacular
 Our Strategy for Our Entertainment Business Includes the Development of New Live Productions and
the Possible Addition of New Venues, Each of Which Could Require Making Considerable Investments
for Which There Can be No Guarantee of Success.
    27




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Risks Relating to Our Media Business
 Our Media Business Faces Intense and Wide-Ranging Competition.
     The Success of Our Media Business Also Depends on Affiliation Fees, and on the Existence of
Agreements with a Limited Number of Distributors for Our Programming.
    28




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We Derive Substantial Revenues From the Sale of Advertising Time and Those Revenues are Subject to
a Number of Factors, Many of Which are Beyond Our Control.
  Our Rights Agreements with Various Professional Sports Teams that We Do Not Own Have Varying
Durations and Renewal Terms and We may be Unable to Renew Those Agreements on Acceptable Terms.
   Our Programming Business is Subject to Direct and Indirect Government Regulation, in Part as a
Result of Federal Law and Federal Communications Commission (FCC) Regulations Applicable Because
of Cablevisions and Our Common Directors, Officers, and Shareholders.
  General Risks
 Our Business has been Adversely Impacted and may, in the Future, be Materially Adversely Impacted
by the Economic Downturn.
   29




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Our Business Could be Adversely Affected by Terrorist Activity or the Threat of Terrorist Activity
and Other Developments that Discourage Congregation at Prominent Places of Public Assembly.
  Our Businesses are Substantially Dependent on the Continued Popularity and/or Competitive Success
of the New York Knicks and the New York Rangers, Which Cannot be Assured.
  We are Planning an Extensive Renovation of The Garden, the Cost, Timing and Revenue Impact of Which
are Uncertain.
      30




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We Do Not Own all of Our Venues and Our Failure to Renew Our Leases or Booking Agreement on
Economically Attractive Terms Could Have an Adverse Effect on Our Business.
  Our Properties are Subject to, and Benefit from, Certain Easements, the Availability of Which may
Not Continue on Terms Favorable to Us or at All.
  We may Require Third-Party Financing to Fund Our Ongoing Operations and Capital Expenditures,
Including Our Planned Renovation of The Garden, the Availability of Which is Highly Uncertain.
    We have Substantial Credit Exposure to a Subsidiary of Cablevision.
   31




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Our Business is Subject to Seasonal Fluctuations.
 Radio City Christmas Spectacular
 Our Sales of Beverages Entails Certain Legal, Regulatory and Reputational Risks.
   Our Business Benefits from a New York City Real Estate Tax Exemption, Which Could be Changed or
Withdrawn.
  Organized Labor Matters Could Adversely Impact Our Business and Our Results of Operations.
  .
  32




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The Distribution Could Result in Significant Tax Liability.
    We may have a Significant Indemnity Obligation to Cablevision if the Distribution is Treated as a
Taxable Transaction.
  The Tax Rules Applicable to the Distribution may Restrict Us from Engaging in Certain Corporate
Transactions or From Raising Equity Capital Beyond Certain Thresholds for a Period of Time After
the Distribution.
  
    
    entering into any transaction pursuant to which 50% or more of our shares or assets
would be acquired, whether by merger or otherwise, unless certain tests are met;
 
    
    issuing equity securities, if any such issuances would, in the aggregate, constitute
50% or more of the voting power or value of our capital stock;
 
    
    certain repurchases of our common shares;
 
    
    ceasing to actively conduct our business;
  33




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
    
    amendments to our organizational documents (i) affecting the relative voting rights
of our stock or (ii) converting one class of our stock to another;
 
    
    liquidating or partially liquidating; and
 
    
    taking any other action that prevents the Distribution and related transactions from
being tax-free.
  We do not have a Significant Operating History as a Public Company.
  Our Historical Financial Results as a Business Segment of Cablevision may Not be Representative of
Our Results as a Separate, Stand-Alone Company.
  Our Ability to Operate Our Business Effectively may Suffer If We do Not, Quickly and Effectively,
Establish Our Own Financial, Administrative and Other Support Functions in Order to Operate as a
Stand-Alone Company, and We cannot Assure You that the Transition Services Cablevision has Agreed
to Provide Us will be Sufficient for Our Needs.
  We may Incur Material Costs and Expenses as a Result of Our Separation from Cablevision.
   34




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In Connection with the Distribution, We will Rely on Cablevisions Performance Under Various
Agreements.
  If We are Unable to Satisfy the Requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or
Our Internal Control Over Financial Reporting is not Effective, the Reliability of Our Financial
Statements may be Questioned and Our Stock Price may Suffer.
  We are Controlled by the Dolan Family.
  
    
    Class B Common Stock, which is generally entitled to ten votes per share and is
entitled collectively to elect 75% of our Board of Directors, and
 
    
    Class A Common Stock, which is entitled to one vote per share and is entitled
collectively to elect the remaining 25% of our Board of Directors.
   35




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
    
    the authorization or issuance of any additional shares of Class B Common Stock, and
 
    
    any amendment, alteration or repeal of any of the provisions of our certificate of
incorporation that adversely affects the powers, preferences or rights of the Class B
Common Stock.
   We Have Elected to be a controlled company for The NASDAQ Stock Market LLC Purposes Which Allows
Us Not to Comply with all of the Corporate Governance Rules of The NASDAQ Stock Market LLC.
  Future Stock Sales, Including as a Result of the Exercising of Registration Rights by Certain of
our Shareholders, Could Adversely Affect the Trading Price of Our Class A Common Stock.
   36




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Transfers and Ownership of Our Common Stock are Subject to Restrictions Under Rules of the NBA and
the NHL and Our Certificate of Incorporation Provides Us With Remedies Against Holders Who Dont
Comply with Those Restrictions.
  We Share Certain Key Executives and Directors with Cablevision Which Means Those Executives Will
Not Devote Their Full Time and Attention to Our Affairs and the Overlap may Give Rise to Conflicts.
  Our Overlapping Directors and Executive Officers with Cablevision may Result in the Diversion of
Corporate Opportunities and Other Conflicts to Cablevision and Provisions in Our Amended and
Restated Certificate of Incorporation may Provide Us No Remedy in That Circumstance.
   37




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Item 2. Properties
     
 Item 3. Legal Proceedings
     38




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PART II
 
 Item 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
      39




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Item 6. Selected Financial Data
  Years Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in thousands)Operating Data:Revenues, net
    
    $
    1,062,417
    
    
    $
    1,042,958
    
    
    $
    1,002,182
    
    
    $
    905,196
    
    
    $
    847,552Operating expenses:Technical and operating (excluding
depreciation and amortization shown
below)
    
    
    682,337
    
    
    
    724,904
    
    
    
    635,108
    
    
    
    637,090
    
    
    
    543,279Selling, general and administrative
    
    
    273,712
    
    
    
    270,065
    
    
    
    243,196
    
    
    
    222,962
    
    
    
    198,198Gain on curtailment of pension plans(a)
    
    
    
    
    
    
    
    
    
    
    (15,873
    )
    
    
    
    
    
    
    Restructuring expense
    
    
    
    
    
    
    
    
    
    
    221
    
    
    
    143
    
    
    
    367Depreciation and amortization
    
    
    61,336
    
    
    
    66,231
    
    
    
    62,223
    
    
    
    64,995
    
    
    
    68,616Operating income (loss)
    
    
    45,032
    
    
    
    (18,242
    )
    
    
    77,307
    
    
    
    (19,994
    )
    
    
    37,092Other income (expense):Interest income (expense), net
    
    
    (1,117
    )
    
    
    1,919
    
    
    
    11,607
    
    
    
    6,212
    
    
    
    1,582Miscellaneous
    
    
    2,000
    
    
    
    
    
    
    
    (1,000
    )
    
    
    (250
    )
    
    
    (1
    )Income (loss) from operations before
income taxes and cumulative effect of a
change in accounting principle
    
    
    45,915
    
    
    
    (16,323
    )
    
    
    87,914
    
    
    
    (14,032
    )
    
    
    38,673Income tax benefit (expense)
    
    
    (18,266
    )
    
    
    11,387
    
    
    
    (45,031
    )
    
    
    1,173
    
    
    
    (6,900
    )Cumulative effect of a change in
accounting principle, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (238
    )
    
    
    Net income (loss)
    
    $
    27,649
    
    
    $
    (4,936
    )
    
    $
    42,883
    
    
    $
    (13,097
    )
    
    $
    31,773Balance Sheet Data:Advances due from Cablevision(b)
    
    $
    190,000
    
    
    $
    190,000
    
    
    $
    130,000
    
    
    $
    
    
    
    $
    21,000Total assets
    
    
    2,041,499
    
    
    
    2,000,341
    
    
    
    1,969,321
    
    
    
    1,891,282
    
    
    
    1,933,938Capital lease obligations
    
    
    6,235
    
    
    
    7,457
    
    
    
    7,774
    
    
    
    5,050
    
    
    
    5,865Combined group equity
    
    
    1,106,103
    
    
    
    1,072,623
    
    
    
    1,072,316
    
    
    
    999,076
    
    
    
    990,811
 
 (a)
    
    Gain on curtailment of pension plans relates to the amendment to freeze all benefits earned
through December 31, 2007 and eliminate the ability of participants to earn benefits for future service
under a certain Company-sponsored qualified defined benefit pension plan covering certain
non-union employees and Company-sponsored unfunded, non-qualified defined benefit pension plan
covering certain employees who participate in the underlying qualified plan.(b)
    
    Represents outstanding advances to a subsidiary of Cablevision, which were
non-interest bearing for the periods presented. On January 28, 2010, the intercompany
advances were replaced with a promissory note having a principal amount of $190,000. The
note accrues interest at a rate of 3.25% per annum. The note is non-amortizing and has a
maturity date of June 30, 2010 with prepayment without penalty at Cablevisions option.  40




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##### Table of Contents



Item 7. 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
contains forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995. In this Managements Discussion and Analysis of Financial Condition and Results of
Operations, there are statements concerning our future operating and future financial performance,
including our estimate of the costs and timing of the planned renovation of the Madison Square
Garden Arena and the anticipated benefits of the renovation, the potential benefit to our future
operating results from the touring version of the Radio City Christmas Spectacular and the expected
increases in affiliation agreement revenues during 2010 in our MSG Media segment. 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 Spectacularand 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 of our capital expenditures, including the planned renovation of The
Garden;
 
    
    the expected impact of the planned renovation 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 in this discussion 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;
 
    
    our ability to maintain, obtain or produce content for our MSG Media segment,
together with the cost of such content;
 
    
    the level of our expenses, including the anticipated expenditures related to the
expected increase in our corporate expenses as a stand-alone publicly-traded company;
 
    
    future acquisitions and dispositions of assets;
 
    
    the costs associated with, and the outcome of, litigation and other proceedings to
the extent uninsured, including the matters described under Item 3. Legal
Proceedings;
  41




---



##### Table of Contents




    
    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 this Annual Report on Form 10-K.
  All dollar amounts included in the following Managements Discussion and Analysis of Financial
Condition and Results of Operations are presented in thousands, except as otherwise noted.
 Introduction
 .
 Business Overview.
 Combined Results of Operations. .
 Liquidity and Capital Resources. .
 Seasonality of Our Business. .
 Recently Issued Accounting Pronouncements Not Yet Adopted and Critical Accounting
Policies. .
  42




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##### Table of Contents



Business Overview
 . . .
 MSG Media
 . . .
  Revenue Sources
 . .
 Affiliation Fees
 . . . .
 Advertising Revenues
 .
 Expenses
 .
 Programming Acquisition Costs
 . . . . .
  43




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##### Table of Contents



Production Costs
  Marketing and Advertising Costs
  Factors Affecting Operating Results
 .
 . .
 . .
  MSG Entertainment
 . Radio City Christmas Spectacular Wintuk. Dora the Explorer Thomas the Tank Engine Sesame Street Live Sex and the City: The Movie The Wizard of Oz Annie .
  44




---



##### Table of Contents



Revenue Sources
 . .
 Ticket Sales and Suite Licenses
 . .
 . . . . .
 Venue License Fees
 . . .
  Facility and Ticketing Fees
 .
 Concessions
 .
  45




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##### Table of Contents



Merchandise
 . . Radio City Christmas Spectacular .
 Venue Signage and Sponsorship
 .
 .
 Expenses
 . . .
 Performer Payments
 .
 Radio City Christmas Spectacular .
 Staging Costs
 . Radio City Christmas Spectacular. .
 Day-of-event Costs
 .
  46




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##### Table of Contents



Marketing and Advertising Costs
 .
 Touring Expenses
 Radio City Christmas Spectacular
 Factors Affecting Operating Results
 Radio City Christmas Spectacular .
 Radio City Christmas Spectacular
  .
 .
  47




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##### Table of Contents



MSG Sports
  Revenue Sources
 . . . .
 Ticket Sales, Suite Licenses, Venue Licenses, Facility Fees and Charges
 . . . .
 . . . . .
 . . . .
 .
 Telecast Rights
   48




---



##### Table of Contents



. .
 .
 Venue Signage and Sponsorships
 . .
 .
 Concessions
 .
 Merchandise
 .
 Expenses
 . . .
  49




---



##### Table of Contents



Player Salaries and League Payments
 . .
 . .
 . . . . . . .
  . . .
 .
 . . . .
  50




---



##### Table of Contents



Other Expenses
 . . . . . .
 Factors Affecting Operating Results
  . . . . . . . .
  .
  51




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##### Table of Contents



Corporate Expenses
  Impact of Current Economic Conditions
   Combined Results of Operations
  STATEMENT OF OPERATIONS DATA
 Years Ended December 31,
    
    
    Increase2009
    
    
    2008
    
    
    (Decrease)% of Net
    
    
    
    
    
    
    % of Net
    
    
    in NetAmount
    
    
    Revenues
    
    
    Amount
    
    
    Revenues
    
    
    IncomeRevenues, net
    
    $
    1,062,417
    
    
    
    100
    %
    
    $
    1,042,958
    
    
    
    100
    %
    
    $
    19,459Operating expenses:Technical and operating (excluding
depreciation and amortization shown below)
    
    
    682,337
    
    
    
    64
    
    
    
    724,904
    
    
    
    70
    
    
    
    42,567Selling, general and administrative
    
    
    273,712
    
    
    
    26
    
    
    
    270,065
    
    
    
    26
    
    
    
    (3,647
    )Depreciation and amortization
    
    
    61,336
    
    
    
    6
    
    
    
    66,231
    
    
    
    6
    
    
    
    4,895Operating income (loss)
    
    
    45,032
    
    
    
    4
    
    
    
    (18,242
    )
    
    
    (2
    )
    
    
    63,274Other income (expense):Interest income (expense), net
    
    
    (1,117
    )
    
    
    
    
    
    
    1,919
    
    
    
    
    
    
    
    (3,036
    )Miscellaneous
    
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,000Income (loss) from operations before income taxes
    
    
    45,915
    
    
    
    4
    
    
    
    (16,323
    )
    
    
    (2
    )
    
    
    62,238Income tax benefit (expense)
    
    
    (18,266
    )
    
    
    (2
    )
    
    
    11,387
    
    
    
    1
    
    
    
    (29,653
    )Net income (loss)
    
    $
    27,649
    
    
    
    3
    %
    
    $
    (4,936
    )
    
    
    
    %
    
    $
    32,585
  52




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Years Ended December 31,
    
    
    Increase2009
    
    
    2008
    
    
    (Decrease)Amount
    
    
    Amount
    
    
    in AOCFOperating income (loss)
    
    $
    45,032
    
    
    $
    (18,242
    )
    
    $
    63,274Share-based compensation
    
    
    14,262
    
    
    
    12,732
    
    
    
    1,530Depreciation and amortization
    
    
    61,336
    
    
    
    66,231
    
    
    
    (4,895
    )Adjusted operating cash flow
    
    $
    120,630
    
    
    $
    60,721
    
    
    $
    59,909
 Years Ended December 31,
    
    
    (Increase)2008
    
    
    2007
    
    
    Decrease% of Net
    
    
    
    
    
    
    % of Net
    
    
    in NetAmount
    
    
    Revenues
    
    
    Amount
    
    
    Revenues
    
    
    LossRevenues, net
    
    $
    1,042,958
    
    
    
    100
    %
    
    $
    1,002,182
    
    
    
    100
    %
    
    $
    40,776Operating expenses:Technical and operating (excluding
depreciation and amortization shown below)
    
    
    724,904
    
    
    
    70
    
    
    
    635,108
    
    
    
    63
    
    
    
    (89,796
    )Selling, general and administrative
    
    
    270,065
    
    
    
    26
    
    
    
    243,196
    
    
    
    24
    
    
    
    (26,869
    )Gain on curtailment of pension plans
    
    
    
    
    
    
    
    
    
    
    (15,873
    )
    
    
    2
    
    
    
    (15,873
    )Restructuring expense
    
    
    
    
    
    
    
    
    
    
    221
    
    
    
    
    
    
    
    221Depreciation and amortization
    
    
    66,231
    
    
    
    6
    
    
    
    62,223
    
    
    
    6
    
    
    
    (4,008
    )Operating income (loss)
    
    
    (18,242
    )
    
    
    (2
    )
    
    
    77,307
    
    
    
    8
    
    
    
    (95,549
    )Other income (expense):Interest income, net
    
    
    1,919
    
    
    
    
    
    
    
    11,607
    
    
    
    1
    
    
    
    (9,688
    )Miscellaneous
    
    
    
    
    
    
    
    
    
    
    (1,000
    )
    
    
    
    
    
    
    1,000Income (loss) from operations before income taxes
    
    
    (16,323
    )
    
    
    (2
    )
    
    
    87,914
    
    
    
    9
    
    
    
    (104,237
    )Income tax benefit (expense)
    
    
    11,387
    
    
    
    1
    
    
    
    (45,031
    )
    
    
    (4
    )
    
    
    56,418Net income (loss)
    
    $
    (4,936
    )
    
    
    
    %
    
    $
    42,883
    
    
    
    4
    %
    
    $
    (47,819
    )
  Years Ended December 31,
    
    
    Increase2008
    
    
    2007
    
    
    (Decrease)Amount
    
    
    Amount
    
    
    in AOCFOperating income (loss)
    
    $
    (18,242
    )
    
    $
    77,307
    
    
    $
    (95,549
    )Share-based compensation
    
    
    12,732
    
    
    
    11,715
    
    
    
    1,017Restructuring expense
    
    
    
    
    
    
    221
    
    
    
    (221
    )Depreciation and amortization
    
    
    66,231
    
    
    
    62,223
    
    
    
    4,008Adjusted operating cash flow
    
    $
    60,721
    
    
    $
    151,466
    
    
    $
    (90,745
    )
   53




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##### Table of Contents



Comparison of Combined Year Ended December 31, 2009 Versus Year Ended December 31, 2008
 Combined Results
 Revenues, net
 Increase in MSG Media segment revenues, net
    
    $
    44,135Decrease in MSG Entertainment segment revenues, net
    
    
    (21,273
    )Decrease in MSG Sports segment revenues, net
    
    
    (726
    )Inter-segment eliminations
    
    
    (2,677
    )$
    19,459
 Technical and operating expenses (excluding depreciation and amortization)
 
    
    contractual compensation expense pursuant to employment agreements with the
personnel of our professional sports teams;
 
    
    cost of team personnel transactions for career- and season-ending player injuries,
net of anticipated insurance recoveries, and waivers and termination costs of players
and other team personnel;
 
    
    payments we make to obtain the contractual rights to carry certain live sporting
events on our networks;
 
    
    other programming and production costs of our networks;
 
    
    event costs related to the presentation and production of our entertainment and live
sporting events;
 
    
    venue lease, maintenance and operating expenses; and
 
    
    the cost of concessions and merchandise sold.
 Technical and operating expenses
 Decrease in MSG Media segment expenses
    
    $
    (10,281
    )Increase in MSG Entertainment segment expenses
    
    
    6,135Decrease in MSG Sports segment expenses
    
    
    (35,506
    )Decrease in other expenses
    
    
    (247
    )Inter-segment eliminations
    
    
    (2,668
    )$
    (42,567
    )
  Selling, general and administrative expenses
 Increase in MSG Media segment expenses
    
    $
    820Increase in MSG Entertainment segment expenses
    
    
    6,762Increase in MSG Sports segment expenses
    
    
    20,013Decrease in litigation expense not allocated to segments
    
    
    (24,699
    )Increase in other expenses
    
    
    760Inter-segment eliminations
    
    
    (9
    )$
    3,647
  54




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##### Table of Contents



Depreciation and
amortization
 Adjusted operating cash flow
 Increase in adjusted operating cash flow of the MSG
Media segment
    
    $
    55,241Decrease in adjusted operating cash flow of the MSG
Entertainment segment
    
    
    (32,442
    )Increase in adjusted operating cash flow of the MSG
Sports segment
    
    
    12,924Increase in adjusted operating cash flow due to
lower litigation expense not allocated to
segments
    
    
    24,699Other net decreases
    
    
    (513
    )$
    59,909
 Interest income (expense), net
 Income taxes
      55




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##### Table of Contents



Business Segment Results
 MSG Media
  Years Ended December 31,
    
    
    Increase2009
    
    
    2008
    
    
    (Decrease) in% of Net
    
    
    
    
    
    
    % of Net
    
    
    OperatingAmount
    
    
    Revenues
    
    
    Amount
    
    
    Revenues
    
    
    IncomeRevenues, net
    
    $
    474,139
    
    
    
    100
    %
    
    $
    430,004
    
    
    
    100
    %
    
    $
    44,135Technical and operating expenses (excluding
depreciation and amortization)
    
    
    217,465
    
    
    
    46
    
    
    
    227,746
    
    
    
    53
    
    
    
    10,281Selling, general and administrative expenses
    
    
    95,163
    
    
    
    20
    
    
    
    94,343
    
    
    
    22
    
    
    
    (820
    )Depreciation and amortization
    
    
    19,723
    
    
    
    4
    
    
    
    22,451
    
    
    
    5
    
    
    
    2,728Operating income
    
    $
    141,788
    
    
    
    30
    %
    
    $
    85,464
    
    
    
    20
    %
    
    $
    56,324
  Years Ended December 31,
    
    
    Increase2009
    
    
    2008
    
    
    (Decrease) inAmount
    
    
    Amount
    
    
    AOCFOperating income
    
    $
    141,788
    
    
    $
    85,464
    
    
    $
    56,324Share-based compensation
    
    
    5,847
    
    
    
    4,202
    
    
    
    1,645Depreciation and amortization
    
    
    19,723
    
    
    
    22,451
    
    
    
    (2,728
    )Adjusted operating cash flow
    
    $
    167,358
    
    
    $
    112,117
    
    
    $
    55,241
 Revenues, net
 Increase in affiliation fee revenue, primarily at MSG Networks (see discussion below)
    
    $
    42,134Increase in advertising revenue (see discussion below)
    
    
    1,466Other net increases
    
    
    535$
    44,135
     56




---



##### Table of Contents



Technical and operating expenses (excluding depreciation and amortization)
 Increase in rights fees
    
    $
    3,188Decrease due to lower levels of other production costs, primarily at Fuse
    
    
    (13,469
    )$
    (10,281
    )
  Selling, general and administrative expenses
 Increase due to higher employee salaries
and related benefits
    
    $
    11,370Decrease due to lower marketing costs, primarily at Fuse
    
    
    (9,363
    )Other net decreases
    
    
    (1,187
    )$
    820
  Depreciation and amortization
 Adjusted operating cash flow
 MSG Entertainment
  Years Ended December 31,2009
    
    
    2008
    
    
    Increase in% of Net
    
    
    
    
    
    
    % of Net
    
    
    OperatingAmount
    
    
    Revenues
    
    
    Amount
    
    
    Revenues
    
    
    LossRevenues, net
    
    $
    286,543
    
    
    
    100
    %
    
    $
    307,816
    
    
    
    100
    %
    
    $
    (21,273
    )Technical and operating expenses (excluding
depreciation and amortization)
    
    
    250,068
    
    
    
    87
    
    
    
    243,933
    
    
    
    79
    
    
    
    (6,135
    )Selling, general and administrative expenses
    
    
    63,701
    
    
    
    22
    
    
    
    56,939
    
    
    
    18
    
    
    
    (6,762
    )Depreciation and amortization
    
    
    10,346
    
    
    
    4
    
    
    
    9,407
    
    
    
    3
    
    
    
    (939
    )Operating loss
    
    $
    (37,572
    )
    
    
    (13
    )%
    
    $
    (2,463
    )
    
    
    (1
    )%
    
    $
    (35,109
    )
  57




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##### Table of Contents



Years Ended December 31,
    
    
    Increase2009
    
    
    2008
    
    
    (Decrease) InAmount
    
    
    Amount
    
    
    AOCFOperating loss
    
    $
    (37,572
    )
    
    $
    (2,463
    )
    
    $
    (35,109
    )Share-based compensation
    
    
    5,420
    
    
    
    3,692
    
    
    
    1,728Depreciation and amortization
    
    
    10,346
    
    
    
    9,407
    
    
    
    939Adjusted operating cash flow
    
    $
    (21,806
    )
    
    $
    10,636
    
    
    $
    (32,442
    )
 Revenues, net
 Decrease in revenues at The Garden (see discussion below)
    
    $
    (20,617
    )Decrease in revenues from the winter themed production,
Wintuk, due primarily to lower attendance in 2009 than in
2008
    
    
    (6,305
    )Decrease in revenues from the presentation of the Radio
City Christmas Spectacular(see discussion below)
    
    
    (3,492
    )Increase in revenues at the Beacon Theatre which was shut
down for the last five months of 2008 for its restoration
    
    
    12,573Increase in revenues from the Chicago Theatre, primarily
due to a new production, Banana Shpeel, first presented
in 2009
    
    
    3,437Other net decreases
    
    
    (6,869
    )$
    (21,273
    )
  Radio City Christmas Spectacular
 Technical and operating expenses (excluding depreciation and amortization)
 Increase in event expenses for the Beacon Theatre which was shut down
for the last five months of 2008 for its restoration
    
    $
    7,326Increase in show costs for the Chicago Theatre almost entirely
related to event costs associated with the new production, Banana
Shpeel
    
    
    5,189Increase in venue operating costs, including the impact of a new
venue booking agreement for the Wang Theatre
    
    
    4,418Net increase in expenses from the presentation of the Radio City
Christmas Spectacular(see discussion below)
    
    
    1,658Net decrease in event expenses for The Garden
    
    
    (9,497
    )Decrease in show costs related to the winter themed production, Wintuk
    
    
    (3,560
    )Other net increases
    
    
    601$
    6,135
 Radio City Christmas Spectacular
  58




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##### Table of Contents



Selling, general and administrative expenses
 Increase in employee salaries and related benefits
    
    $
    7,719Other net decreases
    
    
    (957
    )$
    6,762
  Adjusted operating cash flow
 MSG Sports
  Years Ended December 31,
    
    
    (Increase)2009
    
    
    2008
    
    
    Decrease in% of Net
    
    
    
    
    
    
    % of Net
    
    
    OperatingAmount
    
    
    Revenues
    
    
    Amount
    
    
    Revenues
    
    
    LossRevenues, net
    
    $
    368,607
    
    
    
    100
    %
    
    $
    369,333
    
    
    
    100
    %
    
    $
    (726
    )Technical and operating expenses (excluding
depreciation and amortization)
    
    
    281,217
    
    
    
    76
    
    
    
    316,723
    
    
    
    86
    
    
    
    35,506Selling, general and administrative expenses
    
    
    108,344
    
    
    
    29
    
    
    
    88,331
    
    
    
    24
    
    
    
    (20,013
    )Depreciation and amortization
    
    
    10,956
    
    
    
    3
    
    
    
    10,706
    
    
    
    3
    
    
    
    (250
    )Operating loss
    
    $
    (31,910
    )
    
    
    (9
    )%
    
    $
    (46,427
    )
    
    
    (13
    )%
    
    $
    14,517
  Years Ended December 31,
    
    
    Increase2009
    
    
    2008
    
    
    (Decrease) inAmount
    
    
    Amount
    
    
    AOCFOperating loss
    
    $
    (31,910
    )
    
    $
    (46,427
    )
    
    $
    14,517Share-based compensation
    
    
    2,995
    
    
    
    4,838
    
    
    
    (1,843
    )Depreciation and amortization
    
    
    10,956
    
    
    
    10,706
    
    
    
    250Adjusted operating cash flow
    
    $
    (17,959
    )
    
    $
    (30,883
    )
    
    $
    12,924
  59




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##### Table of Contents



Revenues, net
 Decrease in sports team playoff related revenues, primarily due to fewer playoff games
    
    $
    (4,003
    )Decrease in revenues from other live sporting events (see discussion below)
    
    
    (3,657
    )Increase in sports team regular season ticket related revenue due primarily to higher
average ticket prices
    
    
    6,416Other net increases, primarily related to an increase in rights fees charged to MSG
Media partly offset by a decrease in suite revenues
    
    
    518$
    (726
    )
  Technical and operating expenses (excluding depreciation and amortization)
 Decrease in net provisions for certain team personnel transactions (including the
impact of NBA luxury tax) (see discussion below)
    
    $
    (16,887
    )Decrease due to lower net provision for NBA luxury tax (excluding the impact of
certain team personnel transactions described above) of $7,948 and lower net
provision for NHL revenue sharing (excluding playoffs) of $3,512 (see discussion
below)
    
    
    (11,460
    )Decrease in expenses associated with other live sporting events (see discussion below)
    
    
    (8,912
    )Decrease in sports team playoff related expenses, including playoff related NHL
revenue sharing
    
    
    (1,577
    )Increase in other team operating costs, including team personnel compensation, net of
insurance recovery (see discussion below)
    
    
    1,207Increase in venue operating costs
    
    
    1,088Other net increases
    
    
    1,035$
    (35,506
    )
  Years Ended December 31,2009
    
    
    2008Amount
    
    
    Amount
    
    
    DecreasesNet provisions for
certain team
personnel
transactions
(including the
impact of NBA luxury
tax)
    
    $
    8,040
    
    
    $
    24,927
    
    
    $
    (16,887
    )Net provisions for
NBA luxury tax
(excluding the
impact of certain
team personnel
transactions) and
NHL revenue sharing
(excluding playoffs)
    
    
    3,488
    
    
    
    14,948
    
    
    
    (11,460
    )
   60




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##### Table of Contents



Selling, general and administrative expenses
 Increase in severance-related costs, primarily
attributable to a separation agreement with a team
executive entered into in 2009
    
    $
    14,779Increase in employee salaries and related benefits
    
    
    4,345Other net increases
    
    
    889$
    20,013
  Adjusted operating cash flow
 Comparison of Combined Year Ended December 31, 2008 Versus Year Ended December 31, 2007
 Combined Results
 Revenues, net
 Increase in MSG Media segment revenues, net
    
    $
    38,482Decrease in MSG Entertainment segment revenues, net
    
    
    (8,476
    )Increase in MSG Sports segment revenues, net
    
    
    13,535Inter-segment eliminations
    
    
    (2,765
    )$
    40,776
  61




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Technical and operating expenses (excluding depreciation and amortization)
 Increase in MSG Media segment expenses
    
    $
    26,634Increase in MSG Entertainment segment expenses
    
    
    22,515Increase in MSG Sports segment expenses
    
    
    43,156Increase in other expenses
    
    
    247Inter-segment eliminations
    
    
    (2,756
    )$
    89,796
  Selling, general and administrative expenses
 Increase in MSG Media segment expenses
    
    $
    7,774Increase in MSG Entertainment segment expenses
    
    
    8,788Increase in MSG Sports segment expenses
    
    
    8,904Increase in litigation expense and settlements not allocated to segments
    
    
    7,911Decrease in other expenses
    
    
    (6,508
    )$
    26,869
   Gain on curtailment of pension plans
 Depreciation and amortization
 Adjusted operating cash flow
 Increase in adjusted operating cash flow of the
MSG Media segment
    
    $
    3,709Decrease in adjusted operating cash flow of the
MSG Entertainment segment
    
    
    (39,181
    )Decrease in adjusted operating cash flow of the
MSG Sports segment
    
    
    (37,741
    )Decrease in adjusted operating cash flow due to
higher litigation expense not allocated to
segments
    
    
    (7,911
    )Gain on
curtailment of pension plans recorded in 2007
    
    
    (15,873
    )Other net increases
    
    
    6,252$
    (90,745
    )
  62




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##### Table of Contents



Interest income, net
 Income tax benefit
 Income tax expense
 Business Segment Results
 MSG Media
  Years Ended December 31,
    
    
    Increase2008
    
    
    2007
    
    
    (Decrease) in% of Net
    
    
    
    
    
    
    % of Net
    
    
    OperatingAmount
    
    
    Revenues
    
    
    Amount
    
    
    Revenues
    
    
    IncomeRevenues, net
    
    $
    430,004
    
    
    
    100
    %
    
    $
    391,522
    
    
    
    100
    %
    
    $
    38,482Technical and operating expenses (excluding
depreciation and amortization)
    
    
    227,746
    
    
    
    53
    
    
    
    201,112
    
    
    
    51
    
    
    
    (26,634
    )Selling, general and administrative expenses
    
    
    94,343
    
    
    
    22
    
    
    
    86,569
    
    
    
    22
    
    
    
    (7,774
    )Restructuring expense
    
    
    
    
    
    
    
    
    
    
    221
    
    
    
    
    
    
    
    221Depreciation and amortization
    
    
    22,451
    
    
    
    5
    
    
    
    21,067
    
    
    
    5
    
    
    
    (1,384
    )Operating income
    
    $
    85,464
    
    
    
    20
    %
    
    $
    82,553
    
    
    
    21
    %
    
    $
    2,911
  Years Ended December 31,
    
    
    Increase2008
    
    
    2007
    
    
    (Decrease) inAmount
    
    
    Amount
    
    
    AOCFOperating income
    
    $
    85,464
    
    
    $
    82,553
    
    
    $
    2,911Share-based compensation
    
    
    4,202
    
    
    
    4,567
    
    
    
    (365
    )Restructuring expense
    
    
    
    
    
    
    221
    
    
    
    (221
    )Depreciation and amortization
    
    
    22,451
    
    
    
    21,067
    
    
    
    1,384Adjusted operating cash flow
    
    $
    112,117
    
    
    $
    108,408
    
    
    $
    3,709
  63




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Revenues, net
 Increase in affiliation fee revenue (see discussion below)
    
    $
    43,667Decrease in advertising revenue (see discussion below)
    
    
    (7,471
    )Other net increases
    
    
    2,286$
    38,482
   Technical and operating expenses (excluding depreciation and amortization)
 Increase in level of MSG Media rights fee expense due primarily to MSG Networks annual
sports rights increases
    
    $
    10,901Increase in levels of other production costs due primarily to Fuse (see discussion below)
    
    
    15,733$
    26,634
   Selling, general and administrative expenses
 Increase in marketing costs, primarily at Fuse (see discussion below)
    
    $
    10,960Other net decreases, primarily lower rent
    
    
    (3,186
    )$
    7,774
   Depreciation and amortization
  64




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Adjusted operating cash flow
 MSG Entertainment
  Years Ended December 31,2008
    
    
    2007
    
    
    Increase in% of Net
    
    
    
    
    
    
    % of Net
    
    
    OperatingAmount
    
    
    Revenues
    
    
    Amount
    
    
    Revenues
    
    
    LossRevenues, net
    
    $
    307,816
    
    
    
    100
    %
    
    $
    316,292
    
    
    
    100
    %
    
    $
    (8,476
    )Technical and operating expenses (excluding
depreciation and amortization)
    
    
    243,933
    
    
    
    79
    
    
    
    221,418
    
    
    
    70
    
    
    
    (22,515
    )Selling, general and administrative expenses
    
    
    56,939
    
    
    
    18
    
    
    
    48,151
    
    
    
    15
    
    
    
    (8,788
    )Depreciation and amortization
    
    
    9,407
    
    
    
    3
    
    
    
    8,718
    
    
    
    3
    
    
    
    (689
    )Operating income (loss)
    
    $
    (2,463
    )
    
    
    (1
    )%
    
    $
    38,005
    
    
    
    12
    %
    
    $
    (40,468
    )
  Years Ended December 31,
    
    
    Increase2008
    
    
    2007
    
    
    (Decrease) inAmount
    
    
    Amount
    
    
    AOCFOperating income (loss)
    
    $
    (2,463
    )
    
    $
    38,005
    
    
    $
    (40,468
    )Share-based compensation
    
    
    3,692
    
    
    
    3,094
    
    
    
    598Depreciation and amortization
    
    
    9,407
    
    
    
    8,718
    
    
    
    689Adjusted operating cash flow
    
    $
    10,636
    
    
    $
    49,817
    
    
    $
    (39,181
    )
 Revenues, net
 Decrease in revenues from the presentation of the
Radio City Christmas Spectacular(see discussion
below)
    
    $
    (8,023
    )Net decrease in revenues for the Beacon Theatre,
primarily due to a five month shutdown in 2008 for
its restoration
    
    
    (7,805
    )Decrease in revenues from the winter themed
production, Wintuk, due primarily to lower attendance
    
    
    (7,414
    )Increase due to impact of new venues, primarily The
Chicago Theatre acquired in the fourth quarter of
2007
    
    
    8,126Net increase in revenues from the presentation of
other live entertainment events (see discussion
below)
    
    
    3,494Other net increases
    
    
    3,146$
    (8,476
    )
 Radio City Christmas Spectacular
  65




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Technical and operating expenses (excluding depreciation and amortization)
 Net increase in expenses from the presentation of the Radio City
Christmas Spectacular(see discussion below)
    
    $
    16,258Increase in venue operating costs including the impact of a new venue
booking agreement for the Wang Theatre
    
    
    4,623Increase in expenses for entertainment events at The Chicago Theatre,
which was acquired in the fourth quarter of 2007
    
    
    4,538Net increase in expenses associated with the higher revenues from other
live entertainment events discussed above
    
    
    689Net decrease in show costs related to the winter themed production, Wintuk
    
    
    (3,162
    )Net decrease in event expenses for the Beacon Theatre, primarily due to a
five-month shutdown in 2008 for its restoration
    
    
    (3,015
    )Other net increases
    
    
    2,584$
    22,515
 Radio City Christmas Spectacular
  Selling, general and administrative expenses
 Net increase in legal and other professional fees
    
    $
    2,837Increase in employee salaries and related benefits
    
    
    2,159Other net increases, primarily higher rent
    
    
    3,792$
    8,788
  Depreciation and amortization
 Adjusted operating cash flow
  66




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##### Table of Contents



MSG Sports
  Years Ended December 31,
    
    
    (Increase)2008
    
    
    2007
    
    
    Decrease in% of Net
    
    
    
    
    
    
    % of Net
    
    
    OperatingAmount
    
    
    Revenues
    
    
    Amount
    
    
    Revenues
    
    
    LossRevenues, net
    
    $
    369,333
    
    
    
    100
    %
    
    $
    355,798
    
    
    
    100
    %
    
    $
    13,535Technical and operating expenses (excluding
depreciation and amortization)
    
    
    316,723
    
    
    
    86
    
    
    
    273,567
    
    
    
    77
    
    
    
    (43,156
    )Selling, general and administrative expenses
    
    
    88,331
    
    
    
    24
    
    
    
    79,427
    
    
    
    22
    
    
    
    (8,904
    )Depreciation and amortization
    
    
    10,706
    
    
    
    3
    
    
    
    11,783
    
    
    
    3
    
    
    
    1,077Operating loss
    
    $
    (46,427
    )
    
    
    (13
    )%
    
    $
    (8,979
    )
    
    
    (3
    )%
    
    $
    (37,448
    )
  Years Ended December 31,
    
    
    Increase2008
    
    
    2007
    
    
    (Decrease) inAmount
    
    
    Amount
    
    
    AOCFOperating loss
    
    $
    (46,427
    )
    
    $
    (8,979
    )
    
    $
    (37,448
    )Share-based compensation
    
    
    4,838
    
    
    
    4,054
    
    
    
    784Depreciation and amortization
    
    
    10,706
    
    
    
    11,783
    
    
    
    (1,077
    )Adjusted operating cash flow
    
    $
    (30,883
    )
    
    $
    6,858
    
    
    $
    (37,741
    )
 Revenues, net
 Increase in revenues from other live sporting events (see discussion below)
    
    $
    8,842Increase in primarily non-recurring NBA and NHL distributions
    
    
    6,461Increase in sports teams regular season ticket related revenue due
primarily to higher average ticket prices
    
    
    5,843Decrease due to termination of the operating agreements for two
Connecticut venues effective July 1, 2007
    
    
    (6,925
    )Other net decreases
    
    
    (686
    )$
    13,535
   67




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##### Table of Contents



Technical and operating expenses (excluding depreciation and amortization)
 Increase in team personnel compensation
    
    $
    13,214Increase in expenses associated with other live sporting events (see discussion below)
    
    
    12,769Increase in net provisions for certain team personnel transactions (including the
impact of NBA luxury tax) (see discussion below)
    
    
    18,090Increase due to higher net provision for NHL revenue sharing (excluding playoffs) of
$1,307 partly offset by lower net provision for NBA luxury tax (excluding the impact
of certain team personnel transactions described above) of $213 (see discussion
below)
    
    
    1,094Increase in other team operating expenses
    
    
    2,047Decrease due to termination of the operating agreements for two Connecticut venues
effective July 1, 2007
    
    
    (6,263
    )Other net increases
    
    
    2,205$
    43,156
  Years Ended December 31,2008
    
    
    2007Amount
    
    
    Amount
    
    
    IncreasesNet provisions for
NBA luxury tax
(excluding the
impact of certain
team personnel
transactions
described below) and
NHL revenue sharing
(excluding playoffs)
    
    $
    14,948
    
    
    $
    13,854
    
    
    $
    1,094Net provisions for
certain team
personnel
transactions,
including the impact
of NBA luxury tax
    
    
    24,927
    
    
    
    6,837
    
    
    
    18,090
      68




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##### Table of Contents



Selling, general and administrative expenses
 Increase in employee salaries and related benefits
    
    $
    6,298Increase in legal and other professional fees
    
    
    868Decrease due to termination of the operating
agreements for two Connecticut venues effective
July 1, 2007
    
    
    (2,723
    )Other net increases, primarily higher rent
    
    
    4,461$
    8,904
  Depreciation and amortization
 Adjusted operating cash flow
 Liquidity and Capital Resources
 Overview
       69




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##### Table of Contents



Financing Agreements
 Credit Facility
  Interest Rates and Fees
   Guarantees and Security
  Prepayments
   70




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##### Table of Contents



Certain Covenants and Events of Default
    Intercompany Advances
  Tax Disaffiliation Agreement
  Cash Flow Discussion
 Operating Activities
   71




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##### Table of Contents



Investing Activities
   Financing Activities
   Contractual Obligations and Off Balance Sheet Arrangements
  Payments Due by PeriodYear
    
    
    Years
    
    
    Years
    
    
    More ThanTotal
    
    
    1
    
    
    2-3
    
    
    4-5
    
    
    5 YearsOff balance sheet arrangements:Contractual obligations(a)
    
    $
    1,319,595
    
    
    $
    202,731
    
    
    $
    214,715
    
    
    $
    141,731
    
    
    $
    760,418Operating lease obligations(b)
    
    
    425,288
    
    
    
    33,437
    
    
    
    73,759
    
    
    
    73,246
    
    
    
    244,846Letters of credit(c)
    
    
    2,400
    
    
    
    2,400
    
    
    
    
    
    
    
    
    
    
    
    1,747,283
    
    
    
    238,568
    
    
    
    288,474
    
    
    
    214,977
    
    
    
    1,005,264Contractual obligations reflected on the balance sheet:Capital lease obligations(d)
    
    
    8,808
    
    
    
    1,822
    
    
    
    2,444
    
    
    
    1,244
    
    
    
    3,298Contractual obligations(e)
    
    
    66,292
    
    
    
    34,508
    
    
    
    6,093
    
    
    
    5,863
    
    
    
    19,82875,100
    
    
    
    36,330
    
    
    
    8,537
    
    
    
    7,107
    
    
    
    23,126Total
    
    $
    1,822,383
    
    
    $
    274,898
    
    
    $
    297,011
    
    
    $
    222,084
    
    
    $
    1,028,390
 
 (a)
    
    Contractual obligations not reflected on the balance sheet consist primarily of (i) long-term
rights agreements which provide the Company with exclusive broadcast rights to certain live
sporting events in exchange for minimum
contractual payments in the MSG Media segment, (ii) obligations under employment agreements
that the Company has to its professional sports teams personnel in the MSG Sports segment
that are generally guaranteed regardless of employee injury or termination, and
(iii) minimum purchase requirements incurred in the normal course of the Companys
operations.  72




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##### Table of Contents



(b)
    
    Operating lease obligations primarily represent future minimum rental payments on various
long-term, noncancelable leases for office and storage space, and lease commitments for Radio
City Music Hall and the Beacon Theatre.(c)
    
    Consists primarily of a letter of credit obtained by the Company under a certain lease
agreement.(d)
    
    Reflects the face amount of capital lease obligations, including related interest.(e)
    
    Consists principally of amounts earned under employment agreements that the Company has with
certain of its professional sports teams personnel in the MSG Sports segment.  Seasonality of Our Business
  Recently Issued Accounting Pronouncements Not Yet Adopted and Critical Accounting Policies
 To be Adopted by the Fourth Quarter of 2010
 .
 To be Adopted by the First Quarter of 2011
   73




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##### Table of Contents



Critical Accounting Policies
  Impairment of Long-Lived and Indefinite-Lived Assets
      Reporting
UnitMSG Media
    
    $
    465,326MSG Entertainment
    
    
    58,979MSG Sports
    
    
    218,187$
    742,492
  74




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##### Table of Contents



Radio City Christmas Spectacular
   75




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##### Table of Contents



Useful Lives of Finite-Lived Intangible Assets
  Net CarryingValue at
    
    EstimatedDecember 31, 2009
    
    Useful LivesAffiliation agreements and affiliate relationships
    
    $
    78,861
    
    
    10 to 24 yearsSeason ticket holder relationships
    
    
    48,628
    
    
    10 to 15 yearsSuite holder relationships
    
    
    8,749
    
    
    11 yearsBroadcast rights
    
    
    4,027
    
    
    10 yearsOther amortizable intangibles
    
    
    7,763
    
    
    5 to 15 years
    Defined Benefit Pension and Other Postretirement Benefit Plans
   76




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##### Table of Contents



Net Periodic BenefitCost
    
    Benefit ObligationHealthcare cost trend rate assumed for next year
    
    
    9.00
    %
    
    
    8.00
    %Rate to which the cost trend rate is assumed to
decline (the ultimate trend rate)
    
    
    5.00
    %
    
    
    5.00
    %Year that the rate reaches the ultimate trend rate
    
    
    2014
    
    
    
    2014
  Increase (Decrease) onTotal of Service andInterest Cost
    
    Increase (Decrease) onComponents
    
    Benefit ObligationOne percentage point increase
    
    $
    75
    
    
    $
    703One percentage point decrease
    
    $
    (66
    )
    
    $
    (612
    )
  77




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##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk
   
 Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9A. Controls and Procedures
   
 Item 9B. Other Information
   78




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##### Table of Contents



PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
  
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  
 Item 14. Principal Accountant Fees and Services
   79




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
  1.
    
    The financial statements as indicated in the index set forth on page 86.2.
    
    Financial statement schedule:
 Page No.Schedule
supporting combined financial statements:Schedule II  Valuation and Qualifying
Accounts
    
    
    81
  3.
    
    The Index to Exhibits is on page 84.
  80




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##### Table of Contents



MADISON SQUARE GARDEN, INC.
(a combination of certain businesses and assets of Cablevision Systems Corporation)
(Dollars in thousands)
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
 Deductions/Balance at
    
    
    Provision
    
    
    Write-Offs
    
    
    Balance atBeginning
    
    
    for Bad
    
    
    and Other
    
    
    End ofof Period
    
    
    Debt
    
    
    Charges
    
    
    PeriodYear Ended December 31, 2009
Allowance for doubtful accounts
    
    $
    (2,320
    )
    
    $
    (1,013
    )
    
    $
    996
    
    
    $
    (2,337
    )Year Ended December 31, 2008
Allowance for doubtful accounts
    
    $
    (3,164
    )
    
    $
    (2
    )
    
    $
    846
    
    
    $
    (2,320
    )Year Ended December 31, 2007
Allowance for doubtful accounts
    
    $
    (2,701
    )
    
    $
    (1,187
    )
    
    $
    724
    
    
    $
    (3,164
    )
  81




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##### Table of Contents



SIGNATURES
 th
 Madison Square Garden, Inc.By:
    
    /s/ Robert M. PollichinoName:
    
    Robert M. PollichinoTitle:
    
    Executive Vice President and ChiefFinancial Officer
 POWER OF ATTORNEY
   Name
    
    Title
    
    Date/s/ Hank J. Ratner

Hank J. Ratner
    
    President and Chief Executive Officer (Principal
Executive Officer)
    
    March 18, 2010/s/ Robert M. Pollichino

Robert M. Pollichino
    
    Executive Vice President and Chief
Financial Officer (Principal
Financial Officer)
    
    March 18, 2010/s/ Joseph F. Yospe

Joseph F. Yospe
    
    Senior Vice President, Controller and
Principal Accounting Officer
    
    March 18, 2010/s/ James L. Dolan

James L. Dolan
    
    Executive Chairman (Director)
    
    March 18, 2010/s/ Charles F. Dolan

Charles F. Dolan
    
    Director
    
    March 18, 2010/s/ Kristin A. Dolan

Kristin A. Dolan
    
    Director
    
    March 18, 2010/s/ Thomas C. Dolan

Thomas C. Dolan
    
    Director
    
    March 18, 2010/s/ Deborah Dolan-Sweeney

Deborah Dolan-Sweeney
    
    Director
    
    March 18, 2010
  82




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##### Table of Contents



Name
    
    Title
    
    Date/s/ Marianne Dolan Weber

Marianne Dolan Weber
    
    Director
    
    March 18, 2010/s/ Brad Dorsogna

Brad Dorsogna
    
    Director
    
    March 18, 2010/s/ Richard D. Parsons

Richard D. Parsons
    
    Director
    
    March 18, 2010/s/ Alan D. Schwartz

Alan D. Schwartz
    
    Director
    
    March 18, 2010/s/ Brian Sweeney

Brian Sweeney
    
    Director
    
    March 18, 2010/s/ Vincent Tese

Vincent Tese
    
    Director
    
    March 18, 2010
  83




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##### Table of Contents



INDEX TO EXHIBITS
 EXHIBITNO.
    
    DESCRIPTION2.1
    
    
    Distribution Agreement between Cablevision Systems Corporation and Madison Square
Garden, Inc. (incorporated by reference to Exhibit 2.1 to the Companys Amendment No.
7 to Registration Statement on Form 10 filed on January 14, 2010).3.1
    
    
    Amended and Restated Certificate of Incorporation of Madison Square Garden, Inc.
(incorporated by reference to Exhibit 99.1 to the Companys Current Report on Form
8-K filed on February 10, 2010).3.2
    
    
    Amended and Restated By-Laws of Madison Square Garden, Inc. (incorporated by
reference to Exhibit 3.4 to the Companys Amendment No. 6 to Registration Statement
on Form 10 filed on January 8, 2010).4.1
    
    
    Registration Rights Agreement between Madison Square Garden, Inc. and The Charles F.
Dolan Children Trusts (incorporated by reference to Exhibit 3.5 to the Companys
Amendment No. 7 to Registration Statement on Form 10 filed on January 14, 2010).4.2
    
    
    Registration Rights Agreement between Madison Square Garden, Inc. and The Dolan
Family Affiliates (incorporated by reference to Exhibit 3.6 to the Companys
Amendment No. 7 to Registration Statement on Form 10 filed on January 14, 2010).4.3
    
    
    Transfer Consent Agreement with NBA, dated February 9, 2010 (incorporated by
reference to Exhibit 3.7 to the Companys Amendment No. 6 to Registration Statement
on Form 10 filed on January 8, 2010).4.4
    
    
    Transfer Consent Agreement with NHL, dated February 9, 2010 (incorporated by
reference to Exhibit 3.8 to the Companys Amendment No. 6 to Registration Statement
on Form 10 filed on January 8, 2010).10.1
    
    
    Transition Services Agreement between Cablevision Systems Corporation and Madison
Square Garden, Inc., dated January 12, 2010 (incorporated by reference to Exhibit
10.1 to the Companys Amendment No. 6 to Registration Statement on Form 10 filed on
January 8, 2010).10.2
    
    
    Tax Disaffiliation Agreement between Cablevision Systems Corporation and Madison
Square Garden, Inc., dated January 12, 2010 (incorporated by reference to Exhibit
10.2 to the Companys Amendment No. 5 to Registration Statement on Form 10 filed on
December 24, 2009).10.3
    
    
    Employee Matters Agreement between Cablevision Systems Corporation and Madison Square
Garden, Inc., dated January 12, 2010 (incorporated by reference to Exhibit 10.3 to
the Companys Amendment No. 6 to Registration Statement on Form 10 filed on January
8, 2010).10.4
    
    
    Madison Square Garden, Inc. 2010 Employee Stock Plan (incorporated by reference to
Exhibit 10.4 to the Companys Amendment No. 6 to Registration Statement on Form 10
filed on January 8, 2010).10.5
    
    
    Madison Square Garden, Inc. 2010 Cash Incentive Plan (incorporated by reference to
Exhibit 10.5 to the Companys Amendment No. 6 to Registration Statement on Form 10
filed on January 8, 2010).10.6
    
    
    Madison Square Garden, Inc. 2010 Stock Plan for Non-Employee Directors (incorporated
by reference to Exhibit 10.6 to the Companys Amendment No. 6 to Registration
Statement on Form 10 filed on January 8, 2010).10.7
    
    
    Lease Agreement, between RCPI Trust and Radio City Productions LLC, relating to Radio
City Music Hall, dated December 4, 1997 (incorporated by reference to Exhibit 10.7 to
the Companys Amendment No. 4 to Registration Statement on Form 10 filed on November
4, 2009).+10.8
    
    
    First Amendment to Original Lease Agreement, dated December 4, 1997, between RCPI
Trust and Radio City Productions LLC, dated February 19, 1999 (incorporated by
reference to Exhibit 10.8 to the Companys Amendment No. 4 to Registration Statement
on Form 10 filed on November 4, 2009).10.9
    
    
    Second Amendment to Original Lease Agreement, dated December 4, 1997, between RCPI
Landmark Properties, LLC and Radio City Productions LLC, dated November 6, 2002
(incorporated by reference to Exhibit 10.9 to the Companys Amendment No. 4 to
Registration Statement on Form 10 filed on November 4, 2009). +10.10
    
    
    Third Amendment to Original Lease Agreement, dated December 4, 1997, between RCPI
Landmark Properties, LLC and Radio City Productions LLC, dated August 14, 2008
(incorporated by reference to Exhibit 10.10 to the Companys Amendment No. 3 to
Registration Statement on Form 10 filed on October 19, 2009).+10.11
    
    
    Restated Guaranty of Lease between Madison Square Garden, L.P. and RCPI Landmark
Properties, LLC, dated August 14, 2008 (incorporated by reference to Exhibit 10.11 to
the Companys Amendment No. 4 to Registration Statement on Form 10 filed on November
4, 2009).+10.12
    
    
    Affiliation Agreement between CSC Holdings, Inc. and Madison Square Garden, L.P.
(incorporated by reference to Exhibit 10.12 to the Companys Amendment No. 6 to
Registration Statement on Form 10 filed on January 8, 2010).+10.13
    
    
    Form of Madison Square Garden, Inc. Option Agreement in respect of Vested Cablevision
Options granted on and prior to November 8, 2005 (incorporated by reference to
Exhibit 10.13 to the Companys Amendment No. 6 to Registration Statement on Form 10
filed on January 8, 2010).
  84




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EXHIBITNO.
    
    DESCRIPTION10.14
    
    
    Form of Madison Square Garden, Inc. Rights Agreement (incorporated by reference to
Exhibit 10.14 to the Companys Amendment No. 6 to Registration Statement on Form 10
filed on January 8, 2010).10.15
    
    
    Form of Madison Square Garden, Inc. Option Agreement in respect of Vested Cablevision
Options granted on June 5, 2006 and October 19, 2006 (incorporated by reference to
Exhibit 10.15 to the Companys Amendment No. 6 to Registration Statement on Form 10
filed on January 8, 2010).10.16
    
    
    Form of Madison Square Garden, Inc. Option Agreement in respect of Cablevision
Options granted on January 20, 2009 (incorporated by reference to Exhibit 10.16 to
the Companys Amendment No. 6 to Registration Statement on Form 10 filed on January
8, 2010).10.17
    
    
    Form of Madison Square Garden, Inc. Option Agreement in respect of Cablevision
Options granted on March 5, 2009 (incorporated by reference to Exhibit 10.17 to the
Companys Amendment No. 6 to Registration Statement on Form 10 filed on January 8,
2010).10.17.1
    
    
    Form of Madison Square Garden, Inc. Non-Employee Director Award Agreement
(incorporated by reference to Exhibit 10.17.1 to the Companys Amendment No. 6 to
Registration Statement on Form 10 filed on January 8, 2010).10.18
    
    
    Employment Agreement by and between Madison Square Garden, Inc. and James L. Dolan
(incorporated by reference to Exhibit 10.18 to the Companys Amendment No. 5 to
Registration Statement on Form 10 filed on December 24, 2009).10.19
    
    
    Employment Agreement by and between Madison Square Garden, Inc. and Hank J. Ratner
(incorporated by reference to Exhibit 10.19 to the Companys Amendment No. 5 to
Registration Statement on Form 10 filed on December 24, 2009).10.20
    
    
    Employment Agreement by and between Madison Square Garden, Inc. and Robert M.
Pollichino (incorporated by reference to Exhibit 10.20 to the Companys Amendment No.
5 to Registration Statement on Form 10 filed on December 24, 2009).10.21
    
    
    Employment Agreement by and between Madison Square Garden, Inc. and Lawrence J.
Burian (incorporated by reference to Exhibit 10.21 to the Companys Amendment No. 5
to Registration Statement on Form 10 filed on December 24, 2009).10.22
    
    
    Time Sharing Agreement between Dolan Family Office LLC and Madison Square Garden,
Inc. (incorporated by reference to Exhibit 10.22 to the Companys Amendment No. 5 to
Registration Statement on Form 10 filed on December 24, 2009)10.23
    
    
    Standstill Agreement by and among Madison Square Garden, Inc. and The Dolan Family
Group (incorporated by reference to Exhibit 10.23 to the Companys Amendment No. 7 to
Registration Statement on Form 10 filed on January 14, 2010).10.24
    
    
    Employment Agreement by and between Madison Square Garden, Inc. and Joseph F. Yospe
(incorporated by reference to Exhibit 99.1 to the Companys Current Report on Form
8-K filed on February 26, 2010). 10.25
    
    
    Credit Agreement, dated as of January 28, 2010, among Madison Square Garden, L.P.,
certain subsidiaries of Madison Square Garden, L.P., J.P. Morgan Securities Inc., as
sole lead arranger, J.P. Morgan Securities Inc., Barclays Capital, Suntrust Robinson
Humphrey, Inc. and Banc of America Securities, LLC, as bookrunners, Barclays Capital
and Suntrust Robinson Humphrey, Inc., as co-syndication agents, Barclays Bank PLC and
Suntrust Robinson Humphrey, Inc., as co-documentation agents, JPMorgan Chase Bank,
National Association, as administrative agent, collateral agent and letter of credit
issuer, and the lenders parties thereto (incorporated by reference to Exhibit 99.1 to
the Companys Current Report on Form 8-K filed on January 29, 2010).10.26
    
    
    Security Agreement, dated as of January 28, 2010, among Madison Square Garden, L.P.,
certain subsidiaries of Madison Square Garden, L.P., other guarantors referred to
thereto and JPMorgan Chase Bank, National Association, as collateral agent
(incorporated by reference to Exhibit 99.2 to the Companys Current Report on Form
8-K filed on January 29, 2010).21.1
    
    
    Subsidiaries of the Registrant.23.1
    
    
    Consent of KPMG LLP.24.1
    
    

Powers of Attorney (included on the signature page to this Annual Report on Form 10-K).31.1
    
    

Certification of Hank J. Ratner under Rule 13a-14(a).31.2
    
    

Certification of Robert M. Pollichino under Rule 13a-14(a).32.1
    
    

Section 1350 Certification of Hank J. Ratner.32.2
    
    

Section 1350 Certification of Robert M. Pollichino.
 +
    
    Confidential treatment has been granted with respect to certain portions of this exhibit. Omitted portions have been filed
separately with the Securities and Exchange Commission.
    
    This exhibit is a management contract or a compensatory plan
or arrangement.  85




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##### Table of Contents



INDEX TO COMBINED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-1Combined Balance Sheets as of December 31, 2009 and 2008
    
    
    F-2Combined Statements of Operations for the years ended December 31, 2009, 2008 and 2007
    
    
    F-3Combined Statements of Group Equity and Comprehensive Income (Loss) for the years ended December 31, 2009, 2008 and 2007
    
    
    F-4Combined Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007
    
    
    F-5Notes to Combined Financial Statements
    
    
    F-6
  86




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Report of Independent Registered Public Accounting Firm
 
     
  F-1




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##### Table of Contents



MADISON SQUARE GARDEN, INC.
(a combination of certain businesses and assets of Cablevision Systems Corporation  see Note 19)
 
 COMBINED BALANCE SHEETS
 (Dollars in thousands)
 December 31,2009
    
    
    2008ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    109,716
    
    
    $
    70,726Restricted cash
    
    
    7,139
    
    
    
    5,845Accounts receivable (less allowance for doubtful accounts of $2,337 and $2,320)
    
    
    130,460
    
    
    
    129,509Net receivable due from Cablevision
    
    
    7,845
    
    
    
    8,115Prepaid expenses
    
    
    36,849
    
    
    
    36,088Advances due from Cablevision
    
    
    190,000
    
    
    
    Other current assets
    
    
    37,049
    
    
    
    26,546Total current assets
    
    
    519,058
    
    
    
    276,829Advances due from Cablevision
    
    
    
    
    
    
    190,000Property and equipment, net of accumulated depreciation of $375,223 and $344,778
    
    
    342,005
    
    
    
    324,506Other assets
    
    
    131,820
    
    
    
    140,842Amortizable intangible assets, net of accumulated amortization of $105,351 and $106,009
    
    
    148,028
    
    
    
    167,576Indefinite-lived intangible assets
    
    
    158,096
    
    
    
    158,096Goodwill
    
    
    742,492
    
    
    
    742,492$
    2,041,499
    
    
    $
    2,000,341LIABILITIES AND COMBINED GROUP EQUITYCurrent Liabilities:Accounts payable
    
    $
    7,104
    
    
    $
    7,893Accrued liabilities:Employee related costs
    
    
    71,646
    
    
    
    74,050Other expenses
    
    
    85,815
    
    
    
    112,400Deferred revenue
    
    
    133,584
    
    
    
    122,436Total current liabilities
    
    
    298,149
    
    
    
    316,779Defined benefit and other postretirement obligations
    
    
    45,165
    
    
    
    27,476Other employee related costs
    
    
    44,407
    
    
    
    51,120Other liabilities
    
    
    63,568
    
    
    
    60,496Deferred tax liability
    
    
    484,107
    
    
    
    471,847Total liabilities
    
    
    935,396
    
    
    
    927,718Commitments and contingenciesCombined Group Equity:Paid-in capital
    
    
    1,042,283
    
    
    
    1,027,726Retained earnings
    
    
    77,873
    
    
    
    50,224Accumulated other comprehensive loss
    
    
    (14,053
    )
    
    
    (5,327
    )Combined group equity
    
    
    1,106,103
    
    
    
    1,072,623$
    2,041,499
    
    
    $
    2,000,341
   F-2




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##### Table of Contents



MADISON SQUARE GARDEN, INC.
(a combination of certain businesses and assets of Cablevision Systems Corporation  see Note 19)
 
 COMBINED STATEMENTS OF OPERATIONS

(Dollars in thousands)
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Revenues, net (including revenues, net from Cablevision of $126,694, $121,059
and $105,035)
    
    $
    1,062,417
    
    
    $
    1,042,958
    
    
    $
    1,002,182Operating expenses:Technical and operating (excluding depreciation and amortization shown below and
including expenses from Cablevision of $31,754, $32,517 and $28,674)
    
    
    682,337
    
    
    
    724,904
    
    
    
    635,108Selling, general and administrative (including expenses from Cablevision of
$68,372, $65,417 and $67,536)
    
    
    273,712
    
    
    
    270,065
    
    
    
    243,196Gain on curtailment of pension plans
    
    
    
    
    
    
    
    
    
    
    (15,873
    )Restructuring expense
    
    
    
    
    
    
    
    
    
    
    221Depreciation and amortization
    
    
    61,336
    
    
    
    66,231
    
    
    
    62,2231,017,385
    
    
    
    1,061,200
    
    
    
    924,875Operating income (loss)
    
    
    45,032
    
    
    
    (18,242
    )
    
    
    77,307Other income (expense):Interest income
    
    
    2,759
    
    
    
    5,193
    
    
    
    15,217Interest expense
    
    
    (3,876
    )
    
    
    (3,274
    )
    
    
    (3,610
    )Miscellaneous
    
    
    2,000
    
    
    
    
    
    
    
    (1,000
    )883
    
    
    
    1,919
    
    
    
    10,607Income (loss) from operations before income taxes
    
    
    45,915
    
    
    
    (16,323
    )
    
    
    87,914Income tax benefit (expense)
    
    
    (18,266
    )
    
    
    11,387
    
    
    
    (45,031
    )Net income (loss)
    
    $
    27,649
    
    
    $
    (4,936
    )
    
    $
    42,883
   F-3




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##### Table of Contents



MADISON SQUARE GARDEN, INC.
(a combination of certain businesses and assets of Cablevision Systems Corporation  see Note 19)
 
 COMBINED STATEMENTS OF GROUP EQUITY AND COMPREHENSIVE INCOME (LOSS)
 (Dollars in thousands)
 AccumulatedOtherRetained
    
    
    ComprehensivePaid-In Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    TotalBalance at January 1, 2007
    
    $
    993,806
    
    
    $
    12,277
    
    
    $
    (7,007
    )
    
    $
    999,076Net income
    
    
    
    
    
    
    42,883
    
    
    
    
    
    
    
    42,883Pension and postretirement plan liability adjustments, net of taxes
    
    
    
    
    
    
    
    
    
    
    7,969
    
    
    
    7,969Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,852Deemed capital contribution related to the allocation of
Cablevision share-based compensation expense
    
    
    11,974
    
    
    
    
    
    
    
    
    
    
    
    11,974Deemed capital contribution related to income taxes
    
    
    453
    
    
    
    
    
    
    
    
    
    
    
    453Capital contribution
    
    
    9,961
    
    
    
    
    
    
    
    
    
    
    
    9,961Balance at December 31, 2007
    
    
    1,016,194
    
    
    
    55,160
    
    
    
    962
    
    
    
    1,072,316Net loss
    
    
    
    
    
    
    (4,936
    )
    
    
    
    
    
    
    (4,936
    )Pension and postretirement plan liability adjustments, net of taxes
    
    
    
    
    
    
    
    
    
    
    (6,289
    )
    
    
    (6,289
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,225
    )Deemed capital distribution, net
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    (14
    )Deemed capital contribution related to the allocation of
Cablevision share-based compensation expense
    
    
    12,389
    
    
    
    
    
    
    
    
    
    
    
    12,389Deemed capital distribution related to income taxes
    
    
    (843
    )
    
    
    
    
    
    
    
    
    
    
    (843
    )Balance at December 31, 2008
    
    
    1,027,726
    
    
    
    50,224
    
    
    
    (5,327
    )
    
    
    1,072,623Net income
    
    
    
    
    
    
    27,649
    
    
    
    
    
    
    
    27,649Pension and postretirement plan liability adjustments, net of taxes
    
    
    
    
    
    
    
    
    
    
    (8,726
    )
    
    
    (8,726
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,923Deemed capital contribution related to the allocation of
Cablevision share-based compensation expense
    
    
    14,325
    
    
    
    
    
    
    
    
    
    
    
    14,325Deemed capital contribution related to income taxes
    
    
    84
    
    
    
    
    
    
    
    
    
    
    
    84Capital contribution
    
    
    148
    
    
    
    
    
    
    
    
    
    
    
    148Balance at December 31, 2009
    
    $
    1,042,283
    
    
    $
    77,873
    
    
    $
    (14,053
    )
    
    $
    1,106,103
   F-4




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##### Table of Contents



MADISON SQUARE GARDEN, INC.
(a combination of certain businesses and assets of Cablevision Systems Corporation  see Note 19)
 
 COMBINED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net income (loss)
    
    $
    27,649
    
    
    $
    (4,936
    )
    
    $
    42,883Adjustments to reconcile net income (loss) to net cash provided by operating
activities:Depreciation and amortization
    
    
    61,336
    
    
    
    66,231
    
    
    
    62,223Cablevision share-based compensation expense allocations, net
    
    
    14,325
    
    
    
    12,389
    
    
    
    11,974Gain on curtailment of pension plans
    
    
    
    
    
    
    
    
    
    
    (15,873
    )Amortization of purchase accounting liability related to unfavorable contracts
    
    
    (1,344
    )
    
    
    (2,276
    )
    
    
    (2,471
    )Loss on equity investment
    
    
    
    
    
    
    
    
    
    
    1,000Deemed capital contribution (distribution) related to income taxes
    
    
    84
    
    
    
    (843
    )
    
    
    453Provision for doubtful accounts
    
    
    1,013
    
    
    
    2
    
    
    
    1,187Change in assets and liabilities:Account receivable, net
    
    
    (1,964
    )
    
    
    9,291
    
    
    
    2,437Net receivable due from Cablevision
    
    
    270
    
    
    
    3,051
    
    
    
    (2,184
    )Prepaid expenses and other assets
    
    
    (1,006
    )
    
    
    (29,549
    )
    
    
    (19,252
    )Accounts payable
    
    
    (789
    )
    
    
    (12,717
    )
    
    
    7,479Accrued and other liabilities
    
    
    (27,107
    )
    
    
    58,163
    
    
    
    (49,111
    )Deferred revenue
    
    
    11,148
    
    
    
    (17,973
    )
    
    
    18,609Deferred tax liability
    
    
    18,266
    
    
    
    (11,387
    )
    
    
    43,468Net cash provided by operating activities
    
    
    101,881
    
    
    
    69,446
    
    
    
    102,822Cash flows from investing activities:Capital expenditures
    
    
    (59,361
    )
    
    
    (55,192
    )
    
    
    (30,107
    )Proceeds from sale of fixed assets
    
    
    74
    
    
    
    
    
    
    
    11Payments for acquisition of assets or equity interests
    
    
    
    
    
    
    (37,632
    )
    
    
    (14,425
    )Net cash used in investing activities
    
    
    (59,287
    )
    
    
    (92,824
    )
    
    
    (44,521
    )Cash flows from financing activities:Advances to Cablevision
    
    
    
    
    
    
    (60,000
    )
    
    
    (130,000
    )Principal payments on capital lease obligations
    
    
    (1,222
    )
    
    
    (1,101
    )
    
    
    (906
    )Deferred financing costs
    
    
    (2,530
    )
    
    
    
    
    
    
    Capital contributions from (distributions to) Cablevision
    
    
    148
    
    
    
    (176
    )
    
    
    9,961Net cash used in financing activities
    
    
    (3,604
    )
    
    
    (61,277
    )
    
    
    (120,945
    )Net increase (decrease) in cash and cash equivalents
    
    
    38,990
    
    
    
    (84,655
    )
    
    
    (62,644
    )Cash and cash equivalents at beginning of year
    
    
    70,726
    
    
    
    155,381
    
    
    
    218,025Cash and cash equivalents at end of year
    
    $
    109,716
    
    
    $
    70,726
    
    
    $
    155,381Supplemental Data:Income taxes paid (refunded), net
    
    $
    (7
    )
    
    $
    (5
    )
    
    $
    381Interest paid for capital lease obligations
    
    
    607
    
    
    
    696
    
    
    
    452Non-cash investing and financing activities:Deemed capital contributions, net primarily related to allocation of Cablevision
share-based compensation expense and income taxes
    
    $
    14,409
    
    
    $
    11,532
    
    
    $
    12,427Asset retirement obligations
    
    
    
    
    
    
    9,243
    
    
    
    Leasehold improvements paid by landlord
    
    
    
    
    
    
    1,890
    
    
    
    Capital lease obligation
    
    
    
    
    
    
    640
    
    
    
    3,467
   F-5




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS
 (Dollars in thousands, except per share amounts)
 Note 1. Nature of Operations and Basis of Presentation
  
    
    MSG Media. MSG Media produces and develops content for multiple distribution
platforms, including content originating from the Companys venues. For all periods
presented, this business consists of programming networks and interactive offerings,
including the MSG Networks (MSG network, MSG Plus, MSG HD and MSG Plus HD) and the Fuse
Networks (Fuse and Fuse HD). The MSG Networks are home to seven professional sports
teams: the New York Knicks, New York Rangers, New York Liberty, New York Islanders, New
Jersey Devils, Buffalo Sabres and New York Red Bulls, as well as to the Companys other
programming. Fuse is a multi-platform music network that focuses on music-related
programming. Also included in MSG Media is an interactive business, which includes a
group of targeted websites (including msg.com, thegarden.com, radiocity.com,
nyknicks.com, newyorkrangers.com and fuse.tv) and wireless, video on demand and digital
platforms for all of the Companys properties.
 
    
    MSG Entertainment. MSG Entertainment creates, produces and/or presents a variety of
live productions, including the Radio City Christmas Spectacular, featuring the Radio
City Rockettes, and Cirque du Soleils Wintuk. MSG Entertainment also presents or hosts
other live entertainment events, such as concerts, family shows, special events and
theatrical productions in the Companys venues.
 
    
    MSG Sports. MSG Sports owns and operates sports franchises, including the New York
Knicks of the National Basketball Association (NBA), the New York Rangers of the
National Hockey League (NHL), the New York Liberty of the Womens National Basketball
Association (WNBA), and the Hartford Wolf Pack of the American Hockey League (AHL),
which is the primary player development team for the Rangers. The Knicks, Rangers and
Liberty play their home games at the arena in the Madison Square Garden complex (the
Arena or The Garden). MSG Sports also features other live sporting events.
  Note 2. Summary of Significant Accounting Policies
 Principles of Combination
    F-6




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Reclassifications
  Revenue Recognition
 MSG Media
   MSG Entertainment
    MSG Sports
     F-7




---



##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Multiple  Element Transactions
  Technical and Operating Expenses
  Player Costs and League Assessments
  .
  F-8




---



##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 . .
  Programming Costs for the MSG Media Segment
    Advertising Expenses
  Income Taxes
   F-9




---



##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
  Share-Based Compensation
  Cash and Cash Equivalents
  Restricted Cash
  Long-Lived and Indefinite-Lived Assets
   F-10




---



##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
   Impairment of Long-Lived and Indefinite-Lived Assets
      Reporting UnitMSG Media
    
    $
    465,326MSG Entertainment
    
    
    58,979MSG Sports
    
    
    218,187$
    742,492
  F-11




---



##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
   Radio City Christmas Spectacular
   F-12




---



##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Use of Estimates in Preparation of Financial Statements
  Commitments and Contingencies
  Recently Adopted Accounting Pronouncements
     F-13




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
     Recently Issued Accounting Pronouncements Not Yet Adopted
 To be Adopted by the Fourth Quarter of 2010
 .
  F-14




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 To be Adopted by the First Quarter of 2011
  Note 3. Transactions
 2008 Transactions
  2007 Transactions
  Note 4. Restructuring and Impairment Charges
   Note 5. Significant Team Personnel Provisions
   F-15




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Note 6. Intangible Assets
  December 31,
    
    
    Estimated2009
    
    
    2008
    
    
    Useful LivesGross carrying amount of amortizable intangible assetsAffiliation agreements and affiliate relationships(a)
    
    $
    124,770
    
    
    $
    143,243
    
    
    10 to 24 yearsSeason ticket holder relationships
    
    
    75,005
    
    
    
    75,005
    
    
    10 to 15 yearsSuite holder relationships
    
    
    15,394
    
    
    
    15,394
    
    
    11 yearsBroadcast rights
    
    
    15,209
    
    
    
    15,209
    
    
    10 yearsOther intangibles(b)
    
    
    23,001
    
    
    
    24,734
    
    
    5 to 15 years253,379
    
    
    
    273,585Accumulated amortizationAffiliation agreements and affiliate relationships(a)
    
    
    (45,909
    )
    
    
    (55,833
    )Season ticket holder relationships
    
    
    (26,377
    )
    
    
    (20,927
    )Suite holder relationships
    
    
    (6,645
    )
    
    
    (5,246
    )Broadcast rights
    
    
    (11,182
    )
    
    
    (9,661
    )Other intangibles(b)
    
    
    (15,238
    )
    
    
    (14,342
    )(105,351
    )
    
    
    (106,009
    )Amortizable intangible assets, net of accumulated amortization
    
    
    148,028
    
    
    
    167,576Indefinite-lived intangible assetsSports franchises (MSG Sports segment)(c)
    
    
    96,215
    
    
    
    96,215Trademarks (MSG Entertainment segment)(c)
    
    
    61,881
    
    
    
    61,881Indefinite-lived intangible assets
    
    
    158,096
    
    
    
    158,096Goodwill(c)
    
    
    742,492
    
    
    
    742,492Total intangible assets, net
    
    $
    1,048,616
    
    
    $
    1,068,164
 
 (a)
    
    During the year ended December 31, 2009, the Company wrote-off certain fully amortized
intangible assets related to affiliation agreements which had an estimated useful life of four
years.(b)
    
    During the year ended December 31, 2009, the Company wrote-off fully amortized other
intangible assets.(c)
    
    Refer to Note 2 for the Companys Summary of Significant Accounting Policies.  Estimated Amortization Expense:For the year ended December 31, 2010
    
    $
    17,629For the year ended December 31, 2011
    
    
    17,224For the year ended December 31, 2012
    
    
    14,434For the year ended December 31, 2013
    
    
    10,574For the year ended December 31, 2014
    
    
    10,574
  F-16




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
  December 31,2009
    
    
    2008MSG Media
    
    $
    465,326
    
    
    $
    465,326MSG Entertainment
    
    
    58,979
    
    
    
    58,979MSG Sports
    
    
    218,187
    
    
    
    218,187$
    742,492
    
    
    $
    742,492
  Note 7. Leases
    2010
    
    $
    33,4372011
    
    
    36,7492012
    
    
    37,0102013
    
    
    36,8222014
    
    
    36,424Thereafter
    
    
    244,846$
    425,288
   F-17




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
  2010
    
    $
    1,8222011
    
    
    1,8222012
    
    
    6222013
    
    
    6222014
    
    
    622Thereafter
    
    
    3,298Total minimum lease payments
    
    
    8,808Less amount representing interest
    
    
    (2,573
    )Present value of minimum future capital lease payments
    
    
    6,235Less principal portion of current installments
    
    
    (1,315
    )Long-term portion of obligations under capital leases
    
    $
    4,920
  Note 8. Contractual Obligations and Off Balance Sheet Arrangements
  More ThanTotal
    
    
    Year 1
    
    
    Years 2-3
    
    
    Years 4-5
    
    
    5 YearsOff balance sheet arrangements:Contractual obligations(a)
    
    $
    1,319,595
    
    
    $
    202,731
    
    
    $
    214,715
    
    
    $
    141,731
    
    
    $
    760,418Letters of credit(b)
    
    
    2,400
    
    
    
    2,400
    
    
    
    
    
    
    
    
    
    
    
    1,321,995
    
    
    
    205,131
    
    
    
    214,715
    
    
    
    141,731
    
    
    
    760,418Contractual obligations reflected on
the balance sheet(c)
    
    
    66,292
    
    
    
    34,508
    
    
    
    6,093
    
    
    
    5,863
    
    
    
    19,828Total
    
    $
    1,388,287
    
    
    $
    239,639
    
    
    $
    220,808
    
    
    $
    147,594
    
    
    $
    780,246
 
 (a)
    
    Contractual obligations not reflected on the balance sheet consist primarily of (i) long-term
rights agreements which provide the Company with exclusive broadcast rights to certain live
sporting events in exchange for minimum contractual payments in the MSG Media segment,
(ii) obligations under employment agreements that the Company has to its professional sports
teams personnel in the MSG Sports segment that are generally guaranteed regardless of
employee injury or termination, and (iii) minimum purchase requirements incurred in the normal
course of the Companys operations.(b)
    
    Consists primarily of a letter of credit obtained by the Company under a certain lease
agreement.(c)
    
    Consists principally of amounts earned under employment agreements that the Company has with
certain of its professional sports teams personnel in the MSG Sports segment. Refer to Note 2
for further discussion as to the nature of these contractual obligations.   F-18




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Note 9. Legal Matters
 NHL Litigation
   Litigation Against MSG L.P.
  Other Matters
  Note 10. Fair Value Measurement
   
    
    Level I  Quoted prices for identical instruments in active markets.
  F-19




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 
    
    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
    
    
    TotalAssets:Cash equivalents
    
    $
    109,296
    
    
    $
    
    
    
    $
    
    
    
    $
    109,296
  Note 11. Pension and Other Postretirement Benefit Plans
 Company Sponsored Plans
      F-20




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
  Pension
    
    
    PostretirementPlans
    
    
    Plan2009
    
    
    2008
    
    
    2009
    
    
    2008Change in benefit obligation:Benefit obligation at beginning of year
    
    $
    93,394
    
    
    $
    79,801
    
    
    $
    6,210
    
    
    $
    6,246Service cost
    
    
    391
    
    
    
    334
    
    
    
    234
    
    
    
    251Interest cost
    
    
    5,279
    
    
    
    4,836
    
    
    
    337
    
    
    
    331Actuarial loss (gain)
    
    
    (7,211
    )
    
    
    10,456
    
    
    
    (295
    )
    
    
    (344
    )Benefits paid
    
    
    (2,166
    )
    
    
    (2,033
    )
    
    
    (274
    )
    
    
    (274
    )Benefit obligation at end of year
    
    
    89,687
    
    
    
    93,394
    
    
    
    6,212
    
    
    
    6,210Change in plan assets:Fair value of plan assets at beginning of year
    
    
    71,536
    
    
    
    68,913
    
    
    
    
    
    
    
    Actual return on plan assets
    
    
    (19,954
    )
    
    
    4,127
    
    
    
    
    
    
    
    Employer contributions
    
    
    579
    
    
    
    529
    
    
    
    
    
    
    
    Benefits paid
    
    
    (2,166
    )
    
    
    (2,033
    )
    
    
    
    
    
    
    Fair value of plan assets at end of year
    
    
    49,995
    
    
    
    71,536
    
    
    
    
    
    
    
    Funded status at end of year
    
    $
    (39,692
    )
    
    $
    (21,858
    )
    
    $
    (6,212
    )
    
    $
    (6,210
    )
  Pension
    
    
    PostretirementPlans
    
    
    Plan2009
    
    
    2008
    
    
    2009
    
    
    2008Current liabilities (included in accrued employee related costs)
    
    $
    (504
    )
    
    $
    (366
    )
    
    $
    (235
    )
    
    $
    (226
    )Non-current liabilities (included in defined benefit and other
postretirement obligations)
    
    
    (39,188
    )
    
    
    (21,492
    )
    
    
    (5,977
    )
    
    
    (5,984
    )$
    (39,692
    )
    
    $
    (21,858
    )
    
    $
    (6,212
    )
    
    $
    (6,210
    )
  Pension
    
    
    PostretirementPlans
    
    
    Plan2009
    
    
    2008
    
    
    2009
    
    
    2008Actuarial gain (loss)
    
    $
    (26,113
    )
    
    $
    (11,272
    )
    
    $
    1,095
    
    
    $
    856Prior service credit (cost) and unrecognized transition asset
    
    
    (2
    )
    
    
    (4
    )
    
    
    786
    
    
    
    918$
    (26,115
    )
    
    $
    (11,276
    )
    
    $
    1,881
    
    
    $
    1,774
  Pension
    
    
    PostretirementPlans
    
    
    Plan2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Service cost
    
    $
    391
    
    
    $
    334
    
    
    $
    4,805
    
    
    $
    234
    
    
    $
    251
    
    
    $
    367Interest cost
    
    
    5,279
    
    
    
    4,836
    
    
    
    5,919
    
    
    
    337
    
    
    
    331
    
    
    
    380Expected return on plan assets
    
    
    (2,289
    )
    
    
    (4,509
    )
    
    
    (4,569
    )
    
    
    
    
    
    
    
    
    
    
    Recognized actuarial loss (gain)
    
    
    192
    
    
    
    50
    
    
    
    111
    
    
    
    (56
    )
    
    
    (67
    )
    
    
    (10
    )Amortization of unrecognized
prior service cost (credit) and
transition asset
    
    
    2
    
    
    
    
    
    
    
    22
    
    
    
    (132
    )
    
    
    (132
    )
    
    
    (133
    )Net periodic benefit cost
    
    $
    3,575
    
    
    $
    711
    
    
    $
    6,288
    
    
    $
    383
    
    
    $
    383
    
    
    $
    604Curtailment gain
    
    $
    
    
    
    $
    
    
    
    $
    15,873
    
    
    $
    
    
    
    $
    
    
    
    $
    
  F-21




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
  Pension
    
    
    PostretirementPlans
    
    
    Plan2009
    
    
    2008
    
    
    2009
    
    
    2008Actuarial gain (loss)
    
    $
    (15,033
    )
    
    $
    (10,839
    )
    
    $
    295
    
    
    $
    344Recognized actuarial (gain) loss
    
    
    192
    
    
    
    50
    
    
    
    (56
    )
    
    
    (67
    )Recognized prior service (credit) cost and transition asset
    
    
    2
    
    
    
    
    
    
    
    (132
    )
    
    
    (132
    )Total recognized in other comprehensive income (loss)
    
    $
    (14,839
    )
    
    $
    (10,789
    )
    
    $
    107
    
    
    $
    145
  Funded Status
   Pension Plans and Postretirement Plan Assumptions
  Pension
    
    
    PostretirementPlans
    
    
    Plan2009
    
    
    2008
    
    
    2009
    
    
    2008Discount rate
    
    
    6.24
    %
    
    
    5.81
    %
    
    
    5.90
    %
    
    
    5.80
    %Rate of compensation increase
    
    
    2.00
    %
    
    
    3.00
    %
    
    
    n/a
    
    
    
    n/aHealthcare cost trend rate assumed for next year
    
    
    n/a
    
    
    
    n/a
    
    
    
    8.00
    %
    
    
    9.00
    %Rate to which the cost trend rate is assumed to
decline (the ultimate trend rate)
    
    
    n/a
    
    
    
    n/a
    
    
    
    5.00
    %
    
    
    5.00
    %Year that the rate reaches the ultimate trend rate
    
    
    n/a
    
    
    
    n/a
    
    
    
    2014
    
    
    
    2014
  F-22




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
  Pension
    
    
    PostretirementPlans
    
    
    Plan2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Discount rate
    
    
    5.81
    %
    
    
    6.15
    %
    
    
    6.14
    %
    
    
    5.80
    %
    
    
    6.05
    %
    
    
    6.05
    %Expected long-term return on plan assets
    
    
    4.00
    %
    
    
    7.41
    %
    
    
    8.00
    %
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aRate of compensation increase
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    4.39
    %
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aHealthcare cost trend rate assumed for next year
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    9.00
    %
    
    
    10.00
    %
    
    
    9.00
    %Rate to which the cost trend rate is assumed to
decline (the ultimate trend rate)
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    5.00
    %
    
    
    5.00
    %
    
    
    5.00
    %Year that the rate reaches the ultimate trend rate
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    2014
    
    
    
    2014
    
    
    
    2013
   Increase (Decrease) on Total ofService and Interest Cost
    
    
    Increase (Decrease) on BenefitComponents for the Years
    
    
    Obligation atEnded December 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008One percentage point increase
    
    $
    75
    
    
    $
    80
    
    
    $
    121
    
    
    $
    703
    
    
    $
    742One percentage point decrease
    
    $
    (66
    )
    
    $
    (71
    )
    
    $
    (101
    )
    
    $
    (612
    )
    
    $
    (642
    )
 Plan Assets and Investment Policy
  Asset Category:
    
    2009
    
    
    2008Fixed income securities
    
    
    68
    %
    
    
    75
    %Cash equivalents
    
    
    32
    %
    
    
    25
    %100
    %
    
    
    100
    %
   F-23




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
     Investments at Estimated Fair Value
  Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalFixed income securities(a)
    
    $
    106,705
    
    
    $
    
    
    
    $
    
    
    
    $
    106,705Cash equivalents(b)
    
    
    138,946
    
    
    
    
    
    
    
    
    
    
    
    138,946Total investments measured at fair
value
    
    $
    245,651
    
    
    $
    
    
    
    $
    
    
    
    $
    245,651
 
 (a)
    
    Represents the Master Trusts investment in mutual funds that invest primarily in
long-duration government and non-government securities.(b)
    
    Represents the Master Trusts investment in mutual funds that invest primarily in money
market securities.  F-24




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Contributions for Qualified Defined Benefit Pension Plans
  Estimated Future Benefit Payments
  Pension
    
    
    PostretirementPlans
    
    
    Plan
    
    
    Subsidy2010
    
    $
    3,017
    
    
    $
    264
    
    
    $
    222011
    
    
    3,131
    
    
    
    307
    
    
    
    232012
    
    
    3,209
    
    
    
    328
    
    
    
    232013
    
    
    3,367
    
    
    
    356
    
    
    
    222014
    
    
    3,552
    
    
    
    398
    
    
    
    222015  2019
    
    
    23,164
    
    
    
    2,761
    
    
    
    95
 Cablevision Sponsored Plans
  Multi-employer Plans
  Treatment of Retirement Benefits After the Distribution
   F-25




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Note 12. Equity Plans
  Cablevisions Equity Plans
   1 3
   F-26




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
    Share-based Compensation Expense Related to the Cablevision Stock PlansShare-based CompensationShare-based Compensation
    
    
    Expense Related toExpense Related to
    
    
    Cablevision Corporate EmployeesAwards Granted to Company
    
    
    and
    
    
    Total Share-based CompensationEmployees
    
    
    Directors Allocated to the Company
    
    
    ExpenseYear Ended December 31,
    
    
    Year Ended December 31,
    
    
    Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Stock options
    
    $
    372
    
    
    $
    1,202
    
    
    $
    1,453
    
    
    $
    1,050
    
    
    $
    1,011
    
    
    $
    1,850
    
    
    $
    1,422
    
    
    $
    2,213
    
    
    $
    3,303Stock appreciation
rights
    
    
    699
    
    
    
    (573
    )
    
    
    (19
    )
    
    
    211
    
    
    
    (574
    )
    
    
    (139
    )
    
    
    910
    
    
    
    (1,147
    )
    
    
    (158
    )Restricted shares
    
    
    7,278
    
    
    
    7,334
    
    
    
    4,627
    
    
    
    4,652
    
    
    
    4,332
    
    
    
    3,943
    
    
    
    11,930
    
    
    
    11,666
    
    
    
    8,570Total share-based
compensation
    
    $
    8,349
    
    
    $
    7,963
    
    
    $
    6,061
    
    
    $
    5,913
    
    
    $
    4,769
    
    
    $
    5,654
    
    
    $
    14,262
    
    
    $
    12,732
    
    
    $
    11,715
 Valuation Assumptions  Stock Options and Stock Appreciation Rights
   F-27




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
  December 31,2009
    
    2008
    
    2007Range of risk-free interest rates
    
    0.05% - 1.08%
    
    0.26% - 0.94%
    
    3.12% - 3.45%Weighted average expected life (in years)
    
    0.45
    
    1.13
    
    1.40Dividend yields
    
    1.63%
    
    1.77%
    
    0%Weighted average volatility
    
    33.38%
    
    37.10%
    
    20.04%Weighted average fair value
    
    $15.82
    
    $7.72
    
    $14.27
  Share-Based Payment Award Activity
  WeightedWeighted
    
    
    AverageShares Under Option
    
    
    Average
    
    
    RemainingTime
    
    
    Performance
    
    
    Exercise
    
    
    Contractual
    
    
    AggregateVesting
    
    
    Vesting
    
    
    Price Per
    
    
    Term (In
    
    
    IntrinsicOptions
    
    
    Options
    
    
    Share
    
    
    Years)
    
    
    Value(b)Balance, December 31, 2008(a)
    
    
    796,957
    
    
    
    82,200
    
    
    $
    14.31
    
    
    
    5.84
    
    
    $
    4,249Exercised
    
    
    (274,691
    )
    
    
    
    
    
    $
    8.67Forfeited/Expired
    
    
    (67,800
    )
    
    
    
    
    
    $
    13.38Net transfer(c)
    
    
    1,840
    
    
    
    
    
    
    $
    14.48Balance, December 31, 2009(a)
    
    
    456,306
    
    
    
    82,200
    
    
    $
    15.65
    
    
    
    5.06
    
    
    $
    5,698Options exercisable at December 31,
2009(a)
    
    
    456,306
    
    
    
    82,200
    
    
    $
    15.65
    
    
    
    5.06
    
    
    $
    5,698
 
 (a)
    
    Reflects the reduction in the per share exercise price of options that were vested on
or prior to December 31, 2004
to reflect the amount of the $10.00 special dividend and the dividends declared by Cablevision
in 2008 and 2009
(the Dividends) upon exercise.(b)
    
    The aggregate intrinsic value is calculated as the difference between (i) the exercise price
of the underlying award and (ii) the quoted price of Cablevisions NY Group Class A common
stock on December 31, 2009 and 2008.(c)
    
    Represents the net transfer of stock options for employees who transferred from Cablevision
affiliated entities to the Company and from the Company to Cablevision affiliated entities.   F-28




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
  Weighted AverageRestricted
    
    
    Fair Value Per ShareShares
    
    
    at Date of GrantUnvested award balance, December 31, 2008
    
    
    1,027,732
    
    
    $
    25.33Granted
    
    
    958,080
    
    
    $
    10.67Awards vested
    
    
    (243,258
    )
    
    $
    21.10Forfeited
    
    
    (201,420
    )
    
    $
    21.57Net transfer(a)
    
    
    (25,160
    )
    
    $
    25.04Unvested award balance, December 31, 2009
    
    
    1,515,974
    
    
    $
    17.16
 
 (a)
    
    Represents the net transfer of restricted shares for employees who transferred from
Cablevision affiliated
entities to the Company and from the Company to Cablevision affiliated entities.  Weighted
    
    
    WeightedOutstanding
    
    
    Average
    
    
    AverageVested
    
    
    Exercise Price
    
    
    RemainingStock
    
    
    Per Share at
    
    
    Contractual
    
    
    AggregateAppreciation
    
    
    December 31,
    
    
    Term (In
    
    
    IntrinsicRights
    
    
    2009
    
    
    Years)
    
    
    Value(a)Balance, December 31, 2009
    
    
    90,402
    
    
    $
    12.79
    
    
    
    0.96
    
    
    $
    1,399
 
 (a)
    
    The aggregate intrinsic value is calculated as the difference between (i) the exercise
price of the underlying
award and (ii) the quoted price of Cablevisions NY Group Class A common stock.   Treatment of Share-Based Payment Awards After the Distribution
   F-29




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Note 13. Related Party Transactions
  Years Ended December 31,2009
    
    
    2008
    
    
    2007Revenues, net
    
    $
    126,694
    
    
    $
    121,059
    
    
    $
    105,035Operating expenses:Corporate general and administrative
    
    $
    (25,637
    )
    
    $
    (24,290
    )
    
    $
    (25,627
    )Health and welfare plans
    
    
    (12,682
    )
    
    
    (10,656
    )
    
    
    (8,697
    )Advertising
    
    
    (1,914
    )
    
    
    (1,268
    )
    
    
    (1,148
    )Sales support function
    
    
    (106
    )
    
    
    (100
    )
    
    
    (2,535
    )Studio production services
    
    
    (3,305
    )
    
    
    (4,200
    )
    
    
    (4,831
    )Film library usage
    
    
    (1,303
    )
    
    
    (3,117
    )
    
    
    (878
    )Programming and production services
    
    
    (8,849
    )
    
    
    (8,441
    )
    
    
    (7,612
    )Long-term incentive plan
    
    
    (10,806
    )
    
    
    (13,801
    )
    
    
    (13,972
    )Risk management and general insurance
    
    
    (6,161
    )
    
    
    (6,371
    )
    
    
    (6,768
    )Other
    
    
    (1,284
    )
    
    
    (1,310
    )
    
    
    (4,285
    )
 Revenues, net
  Corporate General and Administrative
   F-30




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Health and Welfare Plans
  Sales Support Function
  Studio Production Services
  Film Library Usage
  Programming and Production Services
  Long-Term Incentive Plan
  Risk Management and General Insurance
  Advances to Cablevision
   F-31




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Treatment of Long-Term Incentive Plans After the Distribution
   Note 14. Property and Equipment
  December 31,
    
    
    Estimated2009
    
    
    2008
    
    
    Useful LivesLand
    
    $
    67,921
    
    
    $
    67,918Buildings
    
    
    185,618
    
    
    
    183,385
    
    
    5 to 45 yearsEquipment
    
    
    222,965
    
    
    
    218,418
    
    
    2 to 20 yearsAircraft
    
    
    38,611
    
    
    
    38,611
    
    
    15 yearsFurniture and fixtures
    
    
    14,330
    
    
    
    14,756
    
    
    3 to 9 yearsLeasehold improvements
    
    
    129,352
    
    
    
    106,238
    
    
    Shorter of term of lease or life of improvementConstruction in progress
    
    
    58,431
    
    
    
    39,958717,228
    
    
    
    669,284Less accumulated depreciation and amortization
    
    
    (375,223
    )
    
    
    (344,778
    )$
    342,005
    
    
    $
    324,506
    December 31,2009
    
    
    2008Equipment
    
    $
    13,351
    
    
    $
    13,351Less accumulated depreciation
    
    
    (8,588
    )
    
    
    (7,621
    )$
    4,763
    
    
    $
    5,730
  F-32




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
   Balance as of January 1, 2008
    
    $
    10,149Additional obligations incurred
    
    
    6,011Revisions in estimated cash flows
    
    
    3,232Accretion expense
    
    
    565Balance as of December 31, 2008
    
    
    19,957Accretion expense
    
    
    593Balance as of December 31, 2009
    
    $
    20,550
 Note 15. Income Taxes
   Years Ended December 31,2009
    
    
    2008
    
    
    2007Current expense:Federal
    
    $
    
    
    
    $
    
    
    
    $
    1,181State & other
    
    
    
    
    
    
    
    
    
    
    382
    
    
    
    
    
    
    
    1,563Deferred expense (benefit):Federal
    
    
    16,724
    
    
    
    (1,259
    )
    
    
    27,397State & other
    
    
    1,542
    
    
    
    (10,128
    )
    
    
    16,07118,266
    
    
    
    (11,387
    )
    
    
    43,468Income tax expense (benefit)
    
    $
    18,266
    
    
    $
    (11,387
    )
    
    $
    45,031
  Years Ended December 31,2009
    
    
    2008
    
    
    2007Federal tax expense (benefit) at statutory federal rate
    
    $
    16,070
    
    
    $
    (5,713
    )
    
    $
    30,770State income taxes, net of federal benefit
    
    
    2,909
    
    
    
    (814
    )
    
    
    6,302Change in the estimated applicable corporate tax rate
used to determine deferred taxes
    
    
    (1,845
    )
    
    
    (5,769
    )
    
    
    4,385Nondeductible disability insurance premiums expense
and (nontaxable) disability insurance recoveries, net
    
    
    (191
    )
    
    
    (1,555
    )
    
    
    2,362Nondeductible expenses
    
    
    1,323
    
    
    
    2,464
    
    
    
    1,212Income tax expense (benefit)
    
    $
    18,266
    
    
    $
    (11,387
    )
    
    $
    45,031
  F-33




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
  December 31,2009
    
    
    2008Deferred Tax Asset (Liability)Investment in MSG L.P.
    
    $
    (504,229
    )
    
    $
    (483,352
    )Net operating loss carry forwards
    
    
    7,092
    
    
    
    3,141Compensation and benefit plans
    
    
    12,942
    
    
    
    8,276Other
    
    
    88
    
    
    
    88Net noncurrent deferred tax liability
    
    $
    (484,107
    )
    
    $
    (471,847
    )
    Note 16. Segment Information
    F-34




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
   Years Ended December 31,2009
    
    
    2008
    
    
    2007Revenues, netMSG Media
    
    $
    474,139
    
    
    $
    430,004
    
    
    $
    391,522MSG Entertainment
    
    
    286,543
    
    
    
    307,816
    
    
    
    316,292MSG Sports
    
    
    368,607
    
    
    
    369,333
    
    
    
    355,798Inter-segment eliminations
    
    
    (66,872
    )
    
    
    (64,195
    )
    
    
    (61,430
    )$
    1,062,417
    
    
    $
    1,042,958
    
    
    $
    1,002,182
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Inter-segment revenuesMSG Media
    
    $
    
    
    
    $
    
    
    
    $
    MSG Entertainment
    
    
    101
    
    
    
    99
    
    
    
    97MSG Sports
    
    
    66,771
    
    
    
    64,096
    
    
    
    61,333$
    66,872
    
    
    $
    64,195
    
    
    $
    61,430
  Reconciliation (by Segment and in Total) of Adjusted Operating Cash Flow to Operating Income (Loss)
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Adjusted operating cash flowMSG Media
    
    $
    167,358
    
    
    $
    112,117
    
    
    $
    108,408MSG Entertainment
    
    
    (21,806
    )
    
    
    10,636
    
    
    
    49,817MSG Sports
    
    
    (17,959
    )
    
    
    (30,883
    )
    
    
    6,858All other(a)
    
    
    (6,963
    )
    
    
    (31,149
    )
    
    
    (13,617
    )$
    120,630
    
    
    $
    60,721
    
    
    $
    151,466
  F-35




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Depreciation and amortizationMSG Media
    
    $
    19,723
    
    
    $
    22,451
    
    
    $
    21,067MSG Entertainment
    
    
    10,346
    
    
    
    9,407
    
    
    
    8,718MSG Sports
    
    
    10,956
    
    
    
    10,706
    
    
    
    11,783All other(b)
    
    
    20,311
    
    
    
    23,667
    
    
    
    20,655$
    61,336
    
    
    $
    66,231
    
    
    $
    62,223
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Share-based compensation expenseMSG Media
    
    $
    5,847
    
    
    $
    4,202
    
    
    $
    4,567MSG Entertainment
    
    
    5,420
    
    
    
    3,692
    
    
    
    3,094MSG Sports
    
    
    2,995
    
    
    
    4,838
    
    
    
    4,054All other
    
    
    
    
    
    
    
    
    
    
    $
    14,262
    
    
    $
    12,732
    
    
    $
    11,715
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Restructuring expenseMSG Media
    
    $
    
    
    
    $
    
    
    
    $
    221MSG Entertainment
    
    
    
    
    
    
    
    
    
    
    MSG Sports
    
    
    
    
    
    
    
    
    
    
    All other
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    221
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Operating income (loss)MSG Media
    
    $
    141,788
    
    
    $
    85,464
    
    
    $
    82,553MSG Entertainment
    
    
    (37,572
    )
    
    
    (2,463
    )
    
    
    38,005MSG Sports
    
    
    (31,910
    )
    
    
    (46,427
    )
    
    
    (8,979
    )All other
    
    
    (27,274
    )
    
    
    (54,816
    )
    
    
    (34,272
    )$
    45,032
    
    
    $
    (18,242
    )
    
    $
    77,307
  Years Ended December 31,2009
    
    
    2008
    
    
    2007Operating income (loss) before income taxesTotal operating income for reportable segments
    
    $
    72,306
    
    
    $
    36,574
    
    
    $
    111,579Other operating loss
    
    
    (27,274
    )
    
    
    (54,816
    )
    
    
    (34,272
    )Operating income (loss)
    
    
    45,032
    
    
    
    (18,242
    )
    
    
    77,307Items excluded from operating income (loss):Interest income
    
    
    2,759
    
    
    
    5,193
    
    
    
    15,217Interest expense
    
    
    (3,876
    )
    
    
    (3,274
    )
    
    
    (3,610
    )Miscellaneous expense
    
    
    2,000
    
    
    
    
    
    
    
    (1,000
    )Income (loss) from operations before income taxes
    
    $
    45,915
    
    
    $
    (16,323
    )
    
    $
    87,914
  F-36




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Capital expendituresMSG Media
    
    $
    6,104
    
    
    $
    11,413
    
    
    $
    9,875MSG Entertainment
    
    
    7,691
    
    
    
    15,234
    
    
    
    6,875MSG Sports
    
    
    366
    
    
    
    860
    
    
    
    593All other
    
    
    45,200
    
    
    
    27,685
    
    
    
    12,764$
    59,361
    
    
    $
    55,192
    
    
    $
    30,107
 
 (a)
    
    Consists of legal fees and litigation settlement costs of $(437), $24,262 and $16,351 in
2009, 2008 and 2007, respectively, as well as unallocated corporate general and administrative
costs of $7,400, $6,887 and $13,139 in 2009, 2008 and 2007, respectively, and a $15,873 gain
on curtailment of Pension Plans for the year ended December 31, 2007.(b)
    
    Principally includes depreciation and amortization expense on The Garden and certain
corporate property, equipment and leasehold improvement assets not allocated to the Companys
reportable segments.  Note 17. Concentrations of Risk
  December 31,2009
    
    
    2008Customer A
    
    
    12
    %
    
    
    12
    %Customer B
    
    
    11
    %
    
    
    10
    %
   F-37




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
 Note 18. Interim Financial Information (Unaudited)
  March 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,
    
    
    Total2009:
    
    2009
    
    
    2009
    
    
    2009
    
    
    2009
    
    
    2009Revenues, net
    
    $
    281,318
    
    
    $
    207,336
    
    
    $
    161,764
    
    
    $
    411,999
    
    
    $
    1,062,417Operating expenses
    
    
    (283,400
    )
    
    
    (216,104
    )
    
    
    (149,863
    )
    
    
    (368,018
    )
    
    
    (1,017,385
    )Operating income (loss)
    
    $
    (2,082
    )
    
    $
    (8,768
    )
    
    $
    11,901
    
    
    $
    43,981
    
    
    $
    45,032Net income (loss)
    
    $
    (1,941
    )
    
    $
    (3,899
    )
    
    $
    10,101
    
    
    $
    23,388
    
    
    $
    27,649
 March 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,
    
    
    Total2008:
    
    2008
    
    
    2008
    
    
    2008
    
    
    2008
    
    
    2008Revenues, net
    
    $
    275,336
    
    
    $
    209,246
    
    
    $
    160,818
    
    
    $
    397,558
    
    
    $
    1,042,958Operating expenses
    
    
    (293,499
    )
    
    
    (206,955
    )
    
    
    (169,814
    )
    
    
    (390,932
    )
    
    
    (1,061,200
    )Operating income (loss)
    
    $
    (18,163
    )
    
    $
    2,291
    
    
    $
    (8,996
    )
    
    $
    6,626
    
    
    $
    (18,242
    )Net income (loss)
    
    $
    (11,519
    )
    
    $
    2,448
    
    
    $
    (7,122
    )
    
    $
    11,257
    
    
    $
    (4,936
    )
 Note 19. Subsequent Events
     F-38




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##### Table of Contents



NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands, except per share amounts)
    F-39