Sphere Entertainment
Sphere didn’t announce any new acts during its earnings call on Tuesday (Nov. 12), but the Las Vegas venue has enough interest from artists that the venue is “struggling with how to squeeze everybody in through the fall,” said CEO James Dolan.
Having a long line of artists waiting to perform is a good problem to have. Residencies by U2, Phish, Dead & Co. and The Eagles have changed how artists perform live and turned the state-of-the-art Sphere into a must-see for music fans. But running a one-of-a-kind venue presents unique challenges and requires on-the-fly learning.
To keep the venue busy and generate more revenue, last quarter Sphere increased the number of “side by sides,” the company’s term for running multiple events in a single day—a showing of “Postcards from Earth” before a music concert, for example. “A lot of this has to do with logistics, about about setting up the arena for one and taking it down and then setting it up for the other,” said Dolan.
Trending on Billboard
Still, a full year of operational experience didn’t lead to more business last quarter. Total Sphere revenue was $127.1 million in the quarter ended Sept. 30, down from $151.2 million and $170.4 million in the prior two quarters, respectively. Revenue from events such as concerts was $40.9 million, down from $58.4 million in the previous quarter. The Eagles began a residency in September, and the same month Sphere hosted its first live sports event, UFC 306, which become Sphere’s highest grossing single event to date.
The Sphere Experience, which covers showings of Postcard from Earth and V-U2: An Immersive Concert Film, generated $71.5 million, down from $74.5 million and $100.5 million in the previous two quarters.
Exosphere advertising and suite license fees totaled $8.5 million, down from $15.9 million in the previous quarter. Dolan said Sphere was experiencing “structural” issues in securing advertising on the venue’s 580,000 square-foot exterior. “I wish the day we lit it up that we knew exactly how to run it, and exactly how to sell it, and exactly how to program it, etc.,” he admitted. “But that’s just not the case.”
The company is also learning how to program its original content such as “V-U2,” which captures U2’s residency at the venue. “How we market it, how we just, you know, how we we schedule it, etc, that I’m not sure of,” said Dolan. “But I do think that the product is valuable. And I also think that it’s going to be evergreen. You’re not going to be able to see Bono 20 years from now.”
Sphere’s operating loss of $125.1 million improved to $16.1 million after adjustments to remove nearly $80 million of depreciation, $13.2 million of share-based compensation and other non-operational items such as amortization, restructuring charges and merger-related costs. The venue’s selling, general and administrative expenses totaled $105 million while direct operating expenses were $62.5 million.
Sphere shares were down 8.7% to $40.22 in morning trading.
MSG Networks, Sphere Entertainment Co.’s other division, had revenue of $100.8 million, down 9% from the prior-year quarter. MSG Networks owns regional sports networks and the streaming platform MSG+. The impact of a 13% drop in subscribers was partially offset by an increase in affiliation rates.
In October, Sphere Entertainment announced plans to build the next Sphere venue in Abu Dhabi, the capitol city of the United Arab Emirates. Unlike the $2.3-billion Las Vegas venue, which was entirely funded by Sphere Entertainment Co., the Abu Dhabi venue will be entirely funded by the government’s Department of Culture and Tourism and operate under a franchise model. Dolan said Sphere Entertainment will receive a franchise initiation fee that grants Abu Dhabi the right to use the company’s intellectual property.
James Dolan will continue his run as Sphere Entertainment Co.’s executive chairman/CEO for another three years. Sphere Entertainment gave Dolan a three-year contract extension that runs from July 1 to June 30, 2027, according to a July 3 regulatory filing. Sphere Entertainment consists of Sphere, the groundbreaking, $2.3-billion venue in Las Vegas; MSG Networks, which […]
Billionaire hedge fund titan Steve Cohen‘s Point72 Asset Management has acquired a 5.5% stake in Sphere Entertainment Co, the MSG Entertainment spin-off company that owns the state-of-the-art Las Vegas Sphere venue. Point72 disclosed in a regulatory filing on Monday (June 24) that it acquired 1.56 million shares of Sphere Entertainment Co in the second quarter, […]
Jennifer Koester is expanding her role at Sphere Entertainment. The live entertainment executive has been named president/COO of Sphere, effective immediately.
Prior to her promotion, Koester served as the company’s president of Sphere Business Operations, which saw her lead the strategy and execution of all business aspects of Sphere, the next-generation entertainment venue in Las Vegas.
In her new role, Koester will continue to work with executive leadership and provide strategic oversight for Sphere Studios, the immersive content studio in Burbank dedicated to developing multi-sensory experiences exclusively for Sphere, including further developing Sphere Studios’ capabilities as a full-service production studio. Koester will also continue to focus on maximizing venue utilization across a range of categories such as original programming, attractions, concerts, residencies, and corporate and marquee events, as well as driving strategic partnerships, delivering the best customer experience and growing Sphere as a premium global brand.
“Since joining our team earlier this year, Jennifer’s contributions have had a significant impact,” said Sphere Entertainment executive chairman/CEO James Dolan in a statement. “We believe we are just scratching the surface of what is possible with Sphere, and her expertise will be essential as we continue to advance on our long-term vision for this next-generation entertainment medium.”
Trending on Billboard
“I welcome the opportunity to take on this expanded role,” added Koester. “Across the Sphere organization we are focused on both bringing unique experiences to life in Las Vegas, and developing new experiences that will keep Sphere at the forefront of immersive entertainment. I look forward to continuing to work with our world-class team to grow our business and deliver on Sphere’s vision for the future of entertainment.”
Koester has 30 years of experience in technology, media and entertainment. She joined Sphere Entertainment in February from Google, where she served as MD, Americas strategic alliances, global partnerships at Google Commercial Operations. Her experience prior to Google includes serving as senior vp of advanced advertising product development, data analytics and ad operations at Cablevision, along with various legal roles.
Koester received a J.D. from St. John’s University School of Law and a B.S. in management information systems from Binghamton University.
Sphere Entertainment announced on Monday that it has acquired all of the remaining shares it did not previously own of Holoplot GmbH, a global leader in 3D audio technology based in Berlin. Explore Explore See latest videos, charts and news See latest videos, charts and news Sphere first invested in Holoplot in 2018 when the […]
In its first full quarter of operation, Sphere, the next-generation music venue in Las Vegas, lost $193.9 million on revenue of $167.8 million, its owner, Sphere Entertainment Co., announced Monday (Feb. 5). The company posted an adjusted operating gain of $14.1 million if “certain corporate overhead expenses” were excluded.
Explore
Explore
See latest videos, charts and news
See latest videos, charts and news
In the quarter ended Dec. 31, nearly half of Sphere’s revenue — $92.9 million — came from The Sphere Experience’s 191 performances. (The Sphere Experience includes a tour of the venue and a viewing of the film Postcard From Earth.) Concerts accounted for nearly all of the $55.2 million of event-related revenues. Advertising on the outside of the venue and suite license fees totaled $17.5 million.
After U2’s residency ends on Mar. 2, the venue will host runs by Phish and Dead & Company. Executive chairman/CEO Jim Dolan didn’t announce any new residencies but said during Monday’s earnings call that “pretty much our calendar is full for this calendar year.” Demand from artists continues to grow, Dolan added, and the company expects 2025 to be “another full year.”
Including MSG Networks, Sphere Entertainment had $314.2 million of revenue and an operating loss of $159.7 million. MSG Networks had revenue of $146.4 million, a 12.5% decline from the prior-year period.
Sphere opened on Sept. 29 and posted $4.1 million from two U2 concerts, and $7.8 million in total revenue, in the previous quarter. The venue has received rave reviews and worldwide attention for its captivating audio-visual experience and presence on the Las Vegas skyline. It featured prominently in Las Vegas’s Formula 1 race in November and will grab more attention this weekend as Las Vegas hosts Super Bowl LVIII on Sunday (Feb 11).
Although Sphere ended its bid to expand into London, the company is having “substantive discussions about expanding to international markets,” said Dolan. The plan is to have a franchise model for additional venues that will generate revenues immediately through construction and development, Dolan added.
Shares of Sphere Entertainment rose as much as 10.4% to $39.11 on Monday and closed at $38.97, up 10.1%.
The Billboard Global Music Index — a diverse collection of 20 publicly traded music companies — finished 2023 up 31.3% as Spotify’s share price alone climbed 138% thanks to cost-cutting and focus on margins. Spotify is the single-largest component of the float-adjusted index and has one of the largest market capitalizations of any music company.
The music index was outperformed by the tech-heavy Nasdaq composite, which gained 43.4% with the help of triple-digit gains from chipmaker Nvidia Corp (+239%) and Meta Platforms (+194%). But the Billboard Global Music Index exceeded some other major indexes: the S&P 500 gained 24.2%, South Korea’s KOSPI composite index grew 18.7% and the FTSE 100 improved 3.8%.
Other than Spotify, a handful of major companies had double-digit gains in 2023 that drove the index’s improvement. Universal Music Group finished the year up 14.7%. Concert promoter Live Nation rode a string of record-setting quarters to a 34.2% gain. HYBE, the increasingly diversified K-pop company, rose 34.6%. SM Entertainment, in which HYBE acquired a minority stake in March, gained 20.1%.
A handful of smaller companies also finished the year with big gains. LiveOne gained 117.4%. Reservoir Media improved 19.4%. Chinese music streamer Cloud Music improved 15.8%.
The biggest loser on the Billboard Global Music Index in 2023 was radio broadcaster iHeartMedia, which fell 56.4%. Abu Dhabi-based music streamer Anghami finished 2023 down 34.8%. After a series of large fluctuations in recent months, Anghami ended the year 69% below its high mark for 2023. Hipgnosis Songs Fund, currently undergoing a strategic review after shareholders voted against continuation in October, finished the year down 16.6%.
Sphere Entertainment Co., which split from MSG Entertainment’s live entertainment business back in April, ended 2023 down 24.4%. Most of that decline came before the company opened its flagship venue, Sphere, in Las Vegas on September 29, however. Since U2 opened the venue to widespread acclaim and earned Sphere global media coverage, the stock dropped only 8.5%.
For the week, the index rose 1.1% to 1,534.07. Fourteen of the index’s 20 stocks posted gains this week, four dropped in price and one was unchanged.
LiveOne shares rose 15.7% to $1.40 after the company announced on Friday (Dec. 29) it added 63,000 new paid memberships in December and surpassed 3.5 million total memberships, an increase of 29% year over year. iHeartMedia shares climbed 14.6% to $2.67. Anghami continued its ping-pong trajectory by finishing the week up 16.9%.
Sphere Entertainment provided the first inside glimpse at the finances of James Dolan‘s $2 billion Sphere project in Las Vegas in a new Securities and Exchange Commission filing on Tuesday (Dec. 5).
Spun off from Madison Square Garden Entertainment in April and now trading on the NYSE as SPHR, the company is expected to report positive adjusted income this quarter thanks to the opening of the venue and a successful run of shows including U2:UV’s Achtung Baby Live At Sphere.
According to Billboard Boxscore, U2‘s 17-show run beginning in September at Sphere generated nearly $110 million in ticket sales. The SEC filing notes that those shows generated a total of $30.7 million in revenue for Sphere Entertainment through Nov. 30. Meanwhile, Sphere Entertainment’s own content offering, Darren Aronofsky’s Postcard from Earth, has generated approximately $44.5 million in total revenue from ticket sales from 111 showings.
U2 played its first show at Sphere on Sept. 29, 2023, kicking off a multi-month run at the venue. Due to the strong demand, 15 more shows have been added in January, February and March 2024, bringing the band’s planned number of performances to 40.
Also in the SEC filing, the company announced plans to raise money through the sale of $225 million in convertible senior notes that are due to mature in 2028, as well as the option for purchasers to buy an additional $33.75 million in notes.
Sphere Entertainment plans to use a portion of the proceeds from the notes sale to fund capped call transactions designed to reduce the potential dilution of its common stock from the conversion of debt into equity. The remainder of the net proceeds will be used for general corporate purposes, including capital for Sphere-related growth initiatives, according to a release announcing the offering. The initial conversion rate, interest rate and certain other terms of the notes will be negotiated between Sphere Entertainment and the initial purchasers.
Sphere Entertainment began the quarter (starting Sept. 30) with $433.5 million in cash on hand, with $123 million coming from advance ticket sales. The principal balance of the company’s total debt at the beginning of the quarter was approximately $1.2 billion, including $932.3 million of debt under the MSGN Credit Facilities. Under the terms of the MSGN deal, $103.1 million in required quarterly amortization payments are due between Sept. 30, 2023, and Oct. 11, 2024.
Shares of Sphere Entertainment dropped nearly 20% in trading after the company announced the debt offering, but bounced back slightly and were down 15.5% to $28.41 at the market’s close.
Sphere, the stunning venue that has transformed the Las Vegas skyline and redefined the concert-going experience, generated $4.1 million from U2’s first two concerts in September, its owner, Sphere Entertainment Co., reported in its quarterly earnings release on Wednesday (Nov. 8).
The $2.3 billion Sphere is a 366-foot tall, 516-foot wide spherical venue with a wrap-around video screen that envelopes a seated audience of 17,600. Sphere’s external skin — called Exosphere — is covered in 580,000 square feet of programmable LED exterior lights that advertises the venue’s technological capabilities.
Sphere also made $2.6 million in additional revenue, primarily from advertising on the Exosphere that began in September.
With only two concerts under its belt through the end of September, Sphere’s earnings release was about the venue’s potential, not its revenue to date. “Our journey with Sphere is just beginning,” said executive chairman/CEO James Dolan during Wednesday’s earnings call. “And while it will take some time for Sphere to realize its full potential, we’re off to a great start.”
U2’s original 25-show residency has been extended by an additional 11 shows that will occur in January and February 2024. The company expects to host two additional residencies in the second half of the fiscal year that ends June 30, 2024, according to Dolan. “We’re having conversations with artists across a wide variety of genres, including discussing runs of varying lengths,” he said.
Sphere had an adjusted operating loss of $83.1 million in the quarter, an increase of $19 million from the prior-year period. It also had $2.8 million of venue operating expenses in the quarter and $2.2 million of event-related expenses. An additional $2.1 million in advertising costs were related to the Oct. 6 launch of The Sphere Experience featuring the film Postcard from Earth by Darren Aronofsky. Selling, general and administrative expenses amounted to $84.2 million.
The Las Vegas venue is the first of what Sphere Entertainment expects to be multiple Sphere venues. Dolan was light on specifics but said there is “a great deal of interest and substantive discussions” in several additional markets. “I will say that it does look like Sphere will be a global brand,” he said, “and so we should expect the expansion globally rather than just in the U.S.”
Sphere Entertainment had total revenue of $118 million in its fiscal first quarter ended September 30, down 4% from the prior-year period. MSG Networks contributed $110.2 million of revenue, down 10% year over year. MSG Networks, which operates two regional sports networks, joined Sphere following a spin-off of MSG Entertainment in April. That same month, Sphere reached an agreement to sell its stake in Tao Group Hospitality to global luxury lifestyle company Mohari Hospitality for about $300 million.
Shares of Sphere Entertainment fell as much as 8.4% to $30.58 on Wednesday morning before recovering to $31.90, down 4.4%, by mid-afternoon. The stock price took a bigger hit on Monday, however, dropping 9.6% following the company’s announcement late on Friday that CFO Gautam Ranji had left the company. Dolan attributed Ranji’s departure to Sphere being a new type of business. “It’s pretty challenging,” he said. “I think we both came to the conclusion that it probably wasn’t a great fit.”
Financial metrics for the first fiscal quarter:
Total revenue of $118 million, down 4% year over year.
Adjusted operating loss of $57.9 million, up 88% year over year.
Net income of $66.4 million, up from a $44 million net loss in the prior-year period.
Sphere revenue of $7.8 million.
Sphere event-related revenue of $4.1 million.
MSG Networks revenue of $110.2 million, down 10% year over year.
Sphere Entertainment Co. shares rose 11.1% to $41.99 on Monday (Oct. 2) — and reached a high of $43.59, up 17.3% from Friday’s closing price — after the world got its first glimpses of the revolutionary concert venue over the weekend. The $2.3 billion venue opened on Friday (Sept. 29) with the first of 25 […]
-
Pages