Building a state-of-the-art Sphere venue is “not like building a McDonalds,” Sphere Entertainment Co. chairman and CEO James Dolan said during the company’s earnings call on Friday. “It’s complicated. It’s a very expensive project.”
The lone Sphere venue in Las Vegas, which cost $2.3 billion to build through delays and cost overruns during the COVID-19 pandemic, generated revenue of $170.4 million in its fiscal third quarter ended March 31, the parent company, Sphere Entertainment Co, reported Friday. Revenue was slightly better than the $167.8 million in the prior quarter. Adjusted operating income was $12.9 million, slightly down from the prior quarter’s AOI of $14.1 million.
Dolan wants to build more Spheres and insists a second venue will materialize. The company is “in discussions with several markets” and has encountered “plenty of interest all around the world,” he said, “but not until we launched the product in September did people really get to see what it was and began to see how it could perform.”
Sphere will reach an agreement with “at least one of those markets soon,” Dolan added. “How soon I’m not going to predict.”
Sphere, which wowed music fans through residencies by U2 and Phish, attracted nearly one million guests to more than 270 events in the quarter, said Dolan. In addition to concerts, Sphere offers a motion picture, Postcards from Earth, that CFO David Byrnes said generated $100 million in revenue in the quarter. In June, Sphere will host its first corporate event, a keynote address by Hewlett Packard Enterprise president and CEO Antonio Neri, and its first televised event, the NHL draft.
Demand from artists to perform at Sphere is “stronger than we can even accommodate at this point,” Dolan claimed. The company wants to have “a varied number of kinds of acts, not just legacy rock acts,” and “acts that have the biggest draws,” he added.
Dead & Co. begins its 24-date residency on May 16. A residency by the Eagles has not been officially announced but Dolan suggested during the earnings call the band will indeed perform at Sphere.
“Even if you’re not a Deadhead, you’re gonna love that show,” said Dolan when discussing the need to create “compelling” visuals to complement bands’ musical performances. “And I think the same will be true for The Eagles and for the next acts that we bring up.”
Sphere Entertainment Co. had an operating loss of $40.4 million on revenue of $321.3 million. The company’s other segment, MSG Networks, had AOI of $48.6 million, down 17%, on revenue of $151 million, down 6% from the prior-year quarter. The company explained that those figures decreased from the prior-year quarter “primarily due to a 12.5% decrease in subscribers inclusive of the impact of MSG+,” the network’s streaming platform.