Business Context and Reporting Period
Company: The Madison Square Garden Company (Registrant) / New York Knicks, LLC (Borrower)
Filing Type: Form 8-K (Current Report)
Date of Report: September 30, 2016
Event: Entry into a Material Definitive Agreement (Senior Secured Credit Facility)
Key Financial Metrics and Facility Details
- Facility Type: Senior Secured Revolving Credit Facility
- Maximum Credit Amount: $200,000,000
- Term: Five years
- Drawn Amount at Closing: $0 (Undrawn)
- Interest Rates:
- Base Rate + 0.00% to 0.125% per annum
- LIBOR + 1.00% to 1.125% per annum
- Commitment Fee: 0.20% to 0.25% per annum on unused commitments
- Collateral: First lien on Knicks assets, including NBA membership rights and national broadcast revenues
Material Changes and Covenants
This filing reports the establishment of a new credit facility. No prior comparable period financial metrics (revenue, profit, cash flow) are provided in this specific 8-K filing.
Key Covenants and Restrictions:
- Debt Service Ratio: Must maintain a ratio of 1.5:1.0 over a trailing four-quarter period.
- Mandatory Prepayments: Required if the maximum available amount exceeds 350% of qualified revenues.
- Restrictions: Limits on incurring additional indebtedness, creating liens, making restricted payments during default, sale-leaseback transactions, and mergers.
Outlook and Management Commentary
The facility is intended to fund working capital needs and general corporate purposes for the New York Knicks. The filing does not contain forward-looking guidance, risk factors beyond standard credit agreement defaults, or commentary on unusual items.
Investor Verification Checklist
- Verify the current utilization status of the $200 million facility.
- Confirm the Knicks' compliance with the 1.5:1.0 debt service ratio covenant.
- Review the definition of "qualified revenues" to understand mandatory prepayment triggers.
- Assess the impact of the first lien security interest on future borrowing capacity.