Sphere Entertainment (SPHR) said Friday its subsidiary MSG Networks has agreed to a financial restructuring with lenders and certain changes to media rights with Madison Square Garden Sports' (MSGS) New York Knicks and New York Rangers.

The transaction support agreement would see MSG Networks' existing credit facilities replaced with a new $210 million term loan maturing in December 2029.

The Sphere Entertainment unit is required to make $10 million in quarterly repayments and use 100% of excess cash flow to extinguish parts of the loan until it's fully paid off.

At the time of the closing of the term loan facility, MSG Networks is required to pay at least $80 million in cash to lenders, including the $15 million capital contribution from Sphere Entertainment.

Meanwhile, it also agreed to a 28% reduction in the annual rights fee with the New York Knicks and elimination of the annual rights fee escalator. The contract was extended through the 2028-29 season.

With the New York Rangers, the agreement has the same terms, but only 18% reduction in rights fee.

MSG Networks will also issue warrants to Madison Square Garden Sports for the purchase of up to 19.9% of the business.

Sphere Entertainment expects a deal to be completed by June 27, unless extended.

Sphere Entertainment shares were up over 13% in recent trading.

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