Sphere Posts Quarterly Loss, Flat Revenue

Sphere Entertainment, the corporate parent of the eponymous Las Vegas venue and MSG’s regional sports network, posted a second quarter loss of $126 million in its earnings report March 3. Quarterly revenues were $308 million, down 2% from the same period in 2023.

Revenues were a slight beat over analyst predictions, but earnings was a major miss. The loss per share of $3.49 was more than a dollar wider than expectations.

The Sphere segment showed a slight gain in revenues year-over-year, coming in at $169 million, up about 1%. As has become standard, more than half that revenue — about $86.5 million — came fromt the Sphere Experiences sector. But even that segment — which includes the films “Postcards from Earth” and the concert film of U2’s venue-opening residency — took a year-over-year hit with lower per-show revenue. The concerts sector brought in $54.5 million, down slightly reflecting a lower show count, which was offset to some degree by Delta’s corporate takeover event during January’s Consumer Electronics Show. Sponsorships — primarily advertising on the Exosphere and suite sales — were up about $2.7 million to $20.3 million.

CEO James Dolan remained bullish looking forward, however, with the growing pains of opening a new venue now subsiding and with the next Sphere — in Abu Dhabi, built with the backing of the UAE government — on the horizon.

“We are becoming more efficient, more efficient with content, we’re more efficient with how we operate the business, how we schedule the shows,” he said in the post-release earnings call. “And so I think that this upcoming year will obviously be our best year yet, but it will reflect a significant change in our efficiency and our results to the bottom line. That’s what we’re expecting.”

Dolan also said a rollout of smaller Spheres could be announced before the end of 2025.

“We’re currently working on the architecture for a smaller sphere, which we think will be deployable to more markets. Somewhere in the 5,000 seat range,” he said. “We’re looking to take advantage of the content we’ve created already and the business we’ve created already and bringing it out to other markets. “

On the non-venue side, Sphere reported that the regional sports network may have to seek bankruptcy protection. The debt for the RSN has been in forbearance since October and that forbearance is set to expire March 26. The debt is not collateralized against the Sphere, so creditors would not have a claim on the 18-month-old building.

Shares of Sphere were down more than $2 to about $41 midday.