Skift Take
In recent months, the Las Vegas Sphere has been selling over $1 million a day in tickets, on average. But is that enough to recoup its $2.3 billion cost?
Sphere Entertainment Co. is still hoping for a global expansion, even as it grapples with hefty expenses and debt tied to the ambitious entertainment project.
The company is hunting for a location for a second venue after London blocked plans to open one there. The foiled plans in London led to a $116.5 million impairment charge.
The Sphere’s CEO James Dolan said Wednesday that the company is “focused on executing a global vision for Sphere expansion.” Dolan said his team is in talks to build similar venues overseas, but he didn’t provide details.
The Sphere, which opened last September, generated $497 million in revenue for the fiscal year that ended June 30, executives said Wednesday.
That included $268 million from “The Sphere Experience,” the venue’s signature immersive shows, such as a multi-sensory film called Postcard from Earth. The Sphere has also hosted concerts, the NHL Draft, activities related to the Super Bowl, and a Formula One Grand Prix.
Advertising on the Sphere’s exterior curved LED screen, called the Exosphere, is also driving revenue. “We’re starting to see repeat business, which is a really good sign for the medium,” said Dolan, noting that the company plans to add “an audio component” to the outdoor advertising.
Sphere Entertainment faces near-term debt pressures, with $849.8 million coming due in October 2024. The company is pursuing a workout with lenders to refinance the obligations of its MSG Networks subsidiary.
Overall, Sphere Entertainment Co.’s total revenue climbed to $273.4 million, a 112% increase year-over-year.
In the most recent quarter, the company reported an operating loss of $71.4 million. Dave Burns, chief financial officer, attributed some of the losses to lower-than-expected revenue from a direct-to-consumer streaming product called MSG+ that debuted in June 2023.
Sphere Entertainment’s current structure stems from two key spin-offs from Madison Square Garden entities.
The first, in 2020, separated MSG Entertainment from MSG Sports, with a focus on live entertainment. The second, in April 2023, separated Sphere Entertainment from MSG Entertainment, allowing Sphere to concentrate on its Vegas venue and MSG Networks.
