SecProbe.io

CORRESP
1
filename1.htm

CORRESP

 March 30, 2020

Justin Dobbie

 Legal Branch Chief

Office of Trade & Services

 Division of Corporation
Finance

 Securities and Exchange Commission

 100 F Street,
N.E.

 Washington, D.C. 20549-9303

Re:
 MSG Entertainment Spinco, Inc.

 Amendment No. 2 to Registration Statement on Form 10

 Filed on March 26, 2020

 File No. 001-39245

Dear Mr. Dobbie:

 We respectfully submit
this letter and the accompanying attachment in supplemental form (the “Disclosure Supplement”), which sets forth the proposed revisions to our disclosure for the Staff of the Securities and Exchange Commission (the “Staff”) in
response to the Staff’s comment letter, dated March 27, 2020, regarding Amendment No. 2 to the Registration Statement on Form 10 (the “Form 10”) of MSG Entertainment Spinco, Inc. (the “Company”) filed by the
Company on March 26, 2020. We currently plan to file Amendment No. 3 to the Form 10 to respond to the comments of the Staff and to incorporate certain other updates, including the remaining information that was left blank in Amendment
No. 2 to the Form 10, on Wednesday, April 1, 2020. We would be happy to discuss with the Staff the proposed revisions in the Disclosure Supplement to the extent helpful to the Staff.

Amendment No. 2 to Registration Statement on Form 10-12B

Exhibit 99.1

 Selected Historical and
Unaudited Pro Forma Combined Financial Data, page 12

1.
 We note your revenues for the pro forma combined six months ended December 31, 2019 and year ended
June 30, 2019 as disclosed here are not consistent with the unaudited pro forma combined statements of operations beginning on page 72 due to separately captioned lease revenue on page 72. Please revise for consistency.

 Company Response: In response to the Staff’s comment, the Company has revised the disclosure on pages 12 to
14 of the Information Statement included as Exhibit 99.1 of the Form 10, as set forth on Annex A to the Disclosure Supplement.

 Unaudited Pro Forma
Combined Financial information

 Notes to Unaudited Pro Forma Combined Financial Statements, page 74

2.
 Please expand footnote (s) to your pro forma financial information to more clearly explain how each
adjustment for the probable disposition of the Forum is calculated including quantifying any components that comprise the adjustment as well as describing any assumptions involved in their calculation. Reference is made to Rule 11-02(b)(6) of Regulation S-X.

 Company
Response: In response to the Staff’s comment, the Company has revised the disclosure on pages 67 to 79 of the Information Statement included as Exhibit 99.1 of the Form 10, as set forth on Annex B to the Disclosure Supplement.

* * * * * *

 Should any member of the Staff have any questions or comments with respect to the enclosed
materials, please do not hesitate to contact Robert W. Downes at (212) 558-4312.

Sincerely,

 /s/ Philip D’Ambrosio

Philip D’Ambrosio

 Interim Chief Financial Officer,

 Treasurer and
Secretary

 (Enclosure)

cc:
 Robert W. Downes, Esq., Sullivan & Cromwell LLP

Robert P. Nardone, KPMG LLP

Tonya K. Aldave, Securities and Exchange Commission

Lyn Shenk, Securities and Exchange Commission

Scott Stringer, Securities and Exchange Commission

 Annex A

SELECTED HISTORICAL AND UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The historical operating and balance sheet data included in the following selected financial data table have been derived from the combined
financial statements as of December 31, 2019 and June 30, 2019 and for the six months ended December 31, 2019 and 2018 and the combined financial statements as of June 30, 2019, 2018 and 2017 and for the three years ended June 30, 2019, 2018 and
2017 of Spinco. The historical financial information presented below does not necessarily reflect what our results of operations and financial position would have been if we had operated as a separate publicly-traded entity during those periods. The
selected historical financial data presented below should be read in conjunction with the combined financial statements included elsewhere in this information statement and with “Management’s Discussion and Analysis of Financial Condition
and Results of Operations.”

 Also set forth below are summary unaudited pro forma combined balance sheet data as of December 31,
2019 and summary unaudited pro forma combined statements of income data for the six months ended December 31, 2019 and the year ended June 30, 2019. See “Unaudited Pro Forma Combined Financial Information” for more information.

 As discussed in note (a) below, our operating results for the year ended June 30, 2018 are not directly comparable with the year ended
June 30, 2017 primarily due to the timing of our acquisition of a controlling interest in Tao Group Hospitality.

Pro Forma Combined (f) (h)

Historical

Six Months Ended
December 31,

Year Ended
June 30,

Six Months Ended
December 31,

Years Ended June 30,

2019

2019

2019

2018

2019

2018

2017

(in thousands, except per share information)

 Operating Data (a), (b):

 Revenues

$
 535,719

$
973,828

$
567,177

$
582,366

$
1,048,909

$
988,990

$
711,022

 Lease Revenues

33,421

70,798

—

—

—

—

—

 Operating income (loss)

(2,068
)

(43,387
)

(455
)

31,110

(45,597
)

(31,282
)

(98,406
)

 Net income (loss)

16,970

(35,128
)

22,284

48,811

(30,138
)

1,887

(112,611
)

 Less: Net loss attributable to redeemable noncontrolling interests

(1,404
)

(7,299
)

(1,404
)

(3,655
)

(7,299
)

(628
)

(4,370
)

 Less: Net income (loss) attributable to nonredeemable noncontrolling interests

(157
)

(4,945
)

(157
)

(2,441
)

(4,945
)

(4,383
)

304

 Net income (loss) attributable to the Company

$
 18,531

$
 (22,884
)

$
 23,845

$
 54,907

$
 (17,894
)

$
 6,898

$
(108,545
)

Balance Sheet Data
(a):

 Total assets

$
4,193,049

$
3,579,993

$
3,325,651

$
3,315,759

$
3,287,771

$
3,271,497

 Long-term debt (including current portion), net of deferred financing costs (c)

257,952

35,952

102,846

54,598

105,700

105,433

 Total Company divisional/stockholders’ equity

3,091,127

2,605,885

2,572,299

2,572,048

2,478,113

2,442,418

 Pro forma earnings (loss) per share
(d)

 Basic

$
 0.78

$
 (0.96
)

 Diluted

$
0.77

$
 (0.96
)

 Pro forma weighted-average common shares outstanding (d):

 Basic

23,870

23,767

 Diluted

23,977

23,767

Pro Forma (f) (h)

Six Months
Ended
December 31,

Year Ended
June 30,

2019

2019

(in thousands, except per
share information)

 Other Financial Data:

 Reconciliation of Operating income (loss) to Adjusted operating income (loss) (e)

 Operating income (loss) (f)

$
 (2,068
)

$
(43,387
)

 Share-based compensation

16,025

37,780

 Depreciation and
amortization (g)

50,600

101,828

 Other purchase accounting adjustments

3,396

4,764

 Adjusted operating income

$
67,953

$
100,985

(a)
 Operating and balance sheet data beginning in fiscal year 2017 includes results from the acquisition of Tao
Group Hospitality operating information from February 1, 2017 to March 26, 2017. Operating and balance sheet data beginning in fiscal year 2018 includes results from the acquisition of Obscura Digital (“Obscura”) since the acquisition date
of November 20, 2017. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Overview — Factors Affecting Operating Results.” In addition, see “Combined Financial
Statements as of June 30, 2019 and 2018 and for the Three Years Ended June 30, 2019, 2018 and 2017 — Notes to Combined Financial Statements — Note 2. Summary of Significant Accounting Policies — Business Combinations and
Noncontrolling Interests and Note 17. Acquisitions” for more information on our acquisition of Tao Group Hospitality.

(b)
 The Company’s operating results for the year ended June 30, 2019 were impacted by the adoption of
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606. The Company used the modified retrospective method of adoption. Results for reporting periods beginning after July 1, 2018 are
presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting guidance under ASC Topic 605. See “Combined Financial Statements as of June 30, 2019 and 2018 and
for the Three Years Ended June 30, 2019, 2018 and 2017 — Notes to Combined Financial Statements — Note 2. Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements” for more information.

(c)
 Historical long-term debt presented above is net of debt issuance costs of $935 and $3,144 as of December 31,
2019 and 2018, respectively, and $1,039, $3,613, and $4,567 as of June 30, 2019, 2018 and 2017, respectively. See “Combined Financial Statements as of December 31, 2019 and June 30, 2019 and for the Six Months Ended December 31, 2019 and 2018
— Notes to Combined Financial Statements — Note 10. Credit Facilities” and “Combined Financial Statements as of June 30, 2019 and 2018 and for the Three Years Ended June 30, 2019, 2018 and 2017 — Notes to Combined Financial
Statements — Note 10. Credit Facilities” for more information. See note c) within the Unaudited Pro Forma Combined Financial Information for further information on pro forma long-term debt.

(d)
 Pro forma earnings per share and pro forma weighted-average basic shares outstanding are based on the number of
shares of MSG Class A Common Stock and MSG Class B Common Stock outstanding of 23.9 million during the six months ended December 31, 2019 and 23.8 million during the year ended June 30, 2019, respectively. Spinco’s weighted average shares
outstanding assumes a distribution ratio of one share of our common stock for each share of MSG Class A Common Stock and MSG Class B Common Stock held on the record date of the Distribution. See note (r) within the Unaudited Pro Forma Combined
Financial Information for further information.

(e)
 The Company defines adjusted operating income (loss), which is a non-U.S. generally accepted accounting
principles (“GAAP”) financial measure, as operating income (loss) before (i) depreciation, amortization and

impairments of property and equipment and intangible assets, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits, (iv) gains or losses on sales
or dispositions of businesses and (v) the impact of purchase accounting adjustments related to business acquisitions. Because it is based upon operating income (loss), adjusted operating income (loss) also excludes interest expense (including
cash interest expense) and other non-operating income and expense items. The Company believes that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the various operating units
of the Company’s business without regard to the settlement of an obligation that is not expected to be made in cash.

The Company believes adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of the Company on a
combined basis. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze the Company’s performance. The Company uses revenues and adjusted operating
income (loss) measures as the most important indicators of its business performance and evaluates management’s effectiveness with specific reference to these indicators.

Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash
flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be
comparable to similar measures with similar titles used by other companies. The Company has presented the components that reconcile operating income (loss), the most directly comparable GAAP financial measure, to adjusted operating income (loss).

(f)
 Included within operating income (loss) is $31,981 and $67,963 of pro forma lease revenue related to the
Company’s Arena License Agreements with MSG for the six months ended December 31, 2019 and the year ended June 30, 2019. Pursuant to GAAP, recognition of pro forma lease revenue is recorded on a straight-line basis over the term of
the lease based upon the value of total future payments under the arrangement. As a result, pro forma lease revenue is comprised of a contractual cash component and a non-cash component for each period presented. Pro forma lease revenue includes
(i) $19,570 and $38,000 of revenue collected in cash and (ii) a non-cash component of $12,411 and $29,963 for the six months ended December 31, 2019 and the year ended June 30, 2019, respectively. See note (l) within the
Unaudited Pro Forma Combined Financial Information for further information.

(g)
 Depreciation and amortization includes purchase accounting adjustments of $5,928 and $15,901 for the six months
ended December 31, 2019 and for the year ended June 30, 2019, respectively.

(h)
 In addition to giving effect to the Distribution, the pro forma results described herein reflect the probable
disposition of the Company’s ownership interest in the Forum in Inglewood, CA. On March 24, 2020, the Company signed a Membership Interest Purchase Agreement contemplating the sale of the Forum and the settlement of related litigation. Pursuant
to the Membership Interest Purchase Agreement, the buyer has agreed to pay the Company total cash consideration of $400,000 for the sale of the Forum and the legal settlement, subject to certain adjustments, and the transaction is estimated to
result in net proceeds to the Company of approximately $255,874 (which amount remains subject to change). The transaction is subject to customary closing conditions and is expected to close during the second calendar quarter of 2020.

 Annex B

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma combined balance sheet as of December 31, 2019 and the unaudited pro forma combined statements of
operations for the six months ended December 31, 2019 and the year ended June 30, 2019 have been derived from the historical annual and interim combined financial statements of MSG Entertainment Spinco, Inc. (“Spinco” or the
“Company”), including the unaudited combined balance sheet as of December 31, 2019, the unaudited combined statement of operations for the six months ended December 31, 2019, and the audited combined statement of operations for
the year ended June 30, 2019, included elsewhere in this information statement. The unaudited pro forma combined financial statements presented below should be read in conjunction with “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and our historical annual and interim combined financial statements and corresponding notes thereto included elsewhere in this information statement. The unaudited pro forma combined financial
statements reflect certain known impacts as a result of the Distribution to separate the Company from MSG, as well as the impact of the probable disposition of the Company’s ownership interest in the Forum a Company-owned venue in Inglewood,
California (the “Forum”). The pro forma adjustments give effect to amounts that are directly attributable to the transactions described below, factually supportable, and with respect to the unaudited pro forma combined statements of
operations, expected to have a continuing impact on the Company. The unaudited pro forma condensed combined balance sheet as of December 31, 2019, and the unaudited pro forma condensed combined statements of operations for the six months ended
December 31, 2019 and the year ended June 30, 2019, respe