The recently opened Sphere arena in Las Vegas has posted revenues of $7.8m (£6.3m/€7.3m) for the first quarter of the 2024 fiscal year, while it has emerged that the chief financial officer of the venue’s parent company, Sphere Entertainment, has stepped down.
Sphere Entertainment, formerly known as Madison Square Garden Entertainment Corp, reported revenues of $118m for the quarter, a decrease of $5.1m compared to the same period last year.
The company reported an operating loss of $69.8m, an increase of $18.7m, and an adjusted operating loss of $57.9m, an increase of $27.1m. These results include both the Sphere arena and MSG Networks, which operates two regional sports and entertainment TV networks.
The arena’s revenues of $7.8m were primarily driven by event-related revenues of $4.1m, reflecting the opening of the 18,600-capacity venue on September 29 with the first of 36 performances from U2.
Despite the strong event-related revenue figures, the Sphere posted a first-quarter operating loss of $98.4m, an increase of $19.4m on the previous year. Sphere Entertainment said this was primarily driven by higher depreciation and amortisation, direct operating expenses, and selling, general and administrative expenses. Adjusted operating loss stood at $83.1m.
The Populous-designed facility has been built at a cost of $2.3bn and has been praised for its eye-catching visuals. The venue’s 580,000-square-foot programmable LED Exosphere exterior is the largest LED screen in the world.
Revenues from sponsorship, signage, Exosphere advertising and suite license fees were $2.6m, primarily reflecting advertising campaigns on the Exosphere. For the first quarter of the 2024 fiscal year, the Sphere segment had direct operating expenses of $7.8m, which primarily included $2.8m of venue operating costs and $2.2m of event-related expenses, both reflecting the opening of the arena.
Direct operating expenses included $2.1m in costs associated with The Sphere Experience, reflecting advertising expenses ahead of the debut of the experience on October 6, featuring Darren Aronofsky’s Postcard from Earth.
Next week, Formula 1 will begin a planned multi-day takeover of the Sphere for the inaugural Las Vegas Grand Prix.
James Dolan, executive chairman and chief executive of Sphere Entertainment, said: “Sphere’s opening in Las Vegas in September represented a significant milestone, generating worldwide attention and marking the beginning of a new chapter for our company. We are building positive momentum across Sphere and remain confident that we are well positioned to drive long-term value for shareholders.”
Before Sphere Entertainment’s financials were announced yesterday (Wednesday), it emerged that Gautam Ranji had stepped down as chief financial officer of the company after just 11 months in the role.
The news was reported by the New York Post and confirmed in a securities filing by Sphere Entertainment. According to the Post, Ranji quit the job after facing a bout of “yelling and screaming” from Dolan, but the company’s filing said that the departure was not a result of any disagreement with independent auditors or any member of management on “any matter of accounting principles or practices, financial statement disclosure or internal controls”.