Madison Square Garden Entertainment Corp. (MSGE) Risk Analysis

Sphere Entertainment retained 17,021,491 shares of our Class A common stock, representing 37.8% of our Class A common stock and 33.0% of our total outstanding shares, following the MSGE Distribution. Sphere Entertainment is required by applicable tax rules to dispose of all retained shares as soon as practicable consistent with the business purposes for the retention, and expects to dispose of such retained shares within one year of the date of the MSGE Distribution, subject to market conditions. On June 27, 2023, Sphere Entertainment completed a secondary offering of 6,037,500 shares of our Class A common stock and sold 840,053 shares of our Class A common stock to us pursuant to a stock purchase agreement. Between the launch and pricing of that offering by Sphere Entertainment, the price of our Class A common stock declined by 22%, from $39.64 per share to $31.00 per share. As of June 30, 2023, Sphere Entertainment owned approximately 23.0% of our Class A common stock. On August 9, 2023, Sphere Entertainment repaid the DDTL Facility with 1,922,750 shares of our Class A common stock, and as a result Sphere Entertainment owned approximately 19.5% of our Class A common stock as of August 9, 2023. Further sales or other dispositions of our Class A common stock retained by Sphere Entertainment or the perception that these sales or other dispositions might occur, could depress the market price of our Class A common stock and could impair our ability to raise capital through the sale of our Class A common stock.

We have two classes of common stock: - Class A common stock, par value $0.01 per share, which is entitled to one vote per share and is entitled collectively to elect 25% of our Board; and - Class B common stock, par value $0.01 per share, which is entitled to 10 votes per share and is entitled collectively to elect the remaining 75% of our Board. As of June 30, 2023, the Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the "Dolan Family Group") collectively owns all of our Class B common stock, approximately 4.3% of our outstanding Class A common stock (inclusive of options exercisable and restricted stock units vesting within 60 days of June 30, 2023) and approximately 62.2% of the total voting power of all our outstanding common stock (in each case, inclusive of exercisable options). The members of the Dolan Family Group holding Class B common stock are parties to a Stockholders Agreement, which has the effect of causing the voting power of the holders of our Class B common stock to be cast as a block with respect to all matters to be voted on by holders of our Class B common stock. Under the Stockholders Agreement, the shares of Class B common stock owned by members of the Dolan Family Group (representing all of the outstanding Class B common stock) are to be voted on all matters in accordance with the determination of the Dolan Family Committee (as defined below), except that the decisions of the Dolan Family Committee are non-binding with respect to the Class B common stock owned by certain Dolan family trusts that collectively own approximately 40.5% of the outstanding Class B common stock ("Excluded Trusts"). The "Dolan Family Committee" consists of Charles F. Dolan and his six children, James L. Dolan, Thomas C. Dolan, Patrick F. Dolan, Kathleen M. Dolan, Marianne Dolan Weber and Deborah A. Dolan-Sweeney. The Dolan Family Committee generally acts by majority vote, except that approval of a going-private transaction must be approved by a two-thirds vote and approval of a change-in-control transaction must be approved by not less than all but one vote. The voting members of the Dolan Family Committee are James L. Dolan, Thomas C. Dolan, Kathleen M. Dolan, Deborah A. Dolan-Sweeney and Marianne Dolan Weber, with each member having one vote other than James L. Dolan, who has two votes. Because James L. Dolan has two votes, he has the ability to block Dolan Family Committee approval of any Company change in control transaction. Shares of Class B common stock owned by Excluded Trusts will on all matters be voted on in accordance with the determination of the Excluded Trusts holding a majority of the Class B common stock held by all Excluded Trusts, except in the case of a vote on a going private transaction or a change in control transaction, in which case a vote of trusts holding two-thirds of the Class B common stock owned by Excluded Trusts is required. The Dolan Family Group is able to prevent a change in control of our Company and no person interested in acquiring us would be able to do so without obtaining the consent of the Dolan Family Group. The Dolan Family Group, by virtue of its stock ownership, has the power to elect all of our directors subject to election by holders of Class B common stock, and is able collectively to control stockholder decisions on matters on which holders of all classes of our common stock vote together as a single class. These matters could include the amendment of some provisions of our certificate of incorporation and the approval of fundamental corporate transactions. In addition, the affirmative vote or consent of the holders of at least 66 2/3% of the outstanding shares of the Class B common stock, voting separately as a class, is required to approve: - 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. As a result, the Dolan Family Group has the power to prevent such issuance or amendment. The Dolan Family Group also controls Sphere Entertainment, MSG Sports and AMC Networks. The members of the Dolan Family Group entered into an agreement with the Company in which they agreed that, during the 12-month period beginning on the MSGE Distribution date, the Dolan Family Group would obtain the prior approval of a majority of the Company's Independent Directors prior to acquiring common stock of the Company through a tender offer that results in members of the Dolan Family Group owning more than 50% of the total number of outstanding shares of common stock of the Company. For purposes of this agreement, the term "Independent Directors" means the directors of the Company who have been determined by our Board to be independent directors for purposes of NYSE corporate governance standards.

The members of the Dolan Family Group have entered into a Stockholders Agreement relating, among other things, to the voting of their shares of our Class B common stock. As a result, we are a "controlled company" under the corporate governance rules of the NYSE. As a controlled company, we have the right to elect not to comply with the corporate governance rules of the NYSE requiring: (i) a majority of independent directors on our Board; (ii) an independent corporate governance and nominating committee; and (iii) an independent compensation committee. Our Board has elected for the Company to be treated as a "controlled company" under NYSE corporate governance rules and not to comply with the NYSE requirement for a majority-independent board of directors and for an independent corporate governance and nominating committee because of our status as a controlled company. Nevertheless, our Board has elected to comply with the NYSE requirement for an independent compensation committee.

All of the shares of our Class A common stock are freely tradable without restriction or further registration under the Securities Act unless the shares are owned by our "affiliates" as that term is defined in the rules under the Securities Act. Shares held by "affiliates" may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144. As described below, certain parties have registration rights covering a portion of our shares of Class A common stock. We have entered into registration rights agreements with Charles F. Dolan, members of his family, and certain Dolan family interests that provide them with "demand" and "piggyback" registration rights with respect to approximately 8.5 million shares of Class A common stock (inclusive of exercisable options), including shares issuable upon conversion of shares of Class B common stock. We have also entered into a Stockholder and Registration Rights Agreement with Sphere Entertainment, pursuant to which we provided Sphere Entertainment with "demand" and "piggyback" registration rights with respect to the 17,021,491 shares of Class A common stock it owned following the MSGE Distribution, inclusive of the shares sold in the secondary offering by Sphere Entertainment on June 27, 2023 and shares repurchased by the Company through Sphere Entertainment's repayment of the DDTL Facility on August 9, 2023. In addition, Sphere Entertainment has agreed to vote the Class A common stock that it owns in proportion to the votes cast by the other holders of the Company's Class A common stock on such matter, to the extent such shares of Class A common stock are entitled to be voted on such matter. The shares of Class A common stock owned by Sphere Entertainment will be present at all stockholder meetings for quorum purposes. Sphere Entertainment has granted the Company an irrevocable proxy to implement these voting agreements. Sphere Entertainment is required by applicable tax rules to dispose of all the retained shares, which represented approximately 19.5% of the outstanding shares of our Class A common stock as of August 9, 2023, as soon as practicable consistent with the business purposes for the retention, and expects to dispose of such retained shares within one year of the date of the MSGE Distribution, subject to market conditions. Sales of a substantial number of shares of Class A common stock, including sales pursuant to these registration rights agreements, could adversely affect the market price of the Class A common stock and could impair our future ability to raise capital through an offering of our Class A common stock. Such adverse effects could be particularly negative during the period between the completion of the MSGE Distribution and the time when Sphere Entertainment completes its disposition of the retained shares.