Item 1.02 Termination of a Material Definitive Agreement.
As previously disclosed, most recently in its Annual Report on Form 10-K for the
fiscal year ended June 30, 2020, Madison Square Garden Entertainment Corp. (the
"Company") is building MSG Sphere in Las Vegas (the "Project"). On May 31, 2019,
the Company's wholly-owned subsidiary, MSG Las Vegas, LLC, entered into a
construction agreement (the "Construction Agreement") with Hunt Construction
Group Inc. (d/b/a AECOM Hunt) ("AECOM") to engage AECOM to oversee and perform
construction work for the Project on a cost-plus basis. AECOM's responsibilities
under the Construction Agreement included, among other things, the direct
performance of construction work, the engagement and supervision of, and
responsibility for, subcontractors, and the furnishing of construction
materials, supplies and equipment.
On December 11, 2020, the Company and AECOM entered into a Termination
Agreement, effective December 12, 2020, with respect to the Construction
Agreement. The Company (through one of its wholly-owned subsidiaries) is now
serving as construction manager and overseeing the construction process,
including by directly engaging and supervising subcontractors. AECOM will
continue to support the Project through a new services agreement that
facilitates AECOM's ongoing involvement through the Project's completion,
including providing seconded staff and professional services in support of
construction activities. This new structure, together with significant steps
taken by the Company to strengthen its internal construction team, gives the
Company greater transparency and control over the construction process, while
enabling it to continue benefitting from AECOM's expertise.
There were no material early termination penalties incurred as a result of the
Termination Agreement.
The foregoing description of the Construction Agreement is qualified in its
entirety by reference to the full text of the Construction Agreement, a copy of
which is filed as Exhibit 10.23 to the Company's Annual Report on Form 10-K for
the year ended June 30, 2020.
Item 8.01 Other Events.
On December 17, 2020, the Company issued a press release with respect to the
termination of the Construction Agreement and the status of the Project. The
full text of the press release is attached as Exhibit 99.1 to this Current
Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Press Release, dated December 17, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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