Sphere Entertainment, the parent company of the recently opened Sphere arena in Las Vegas, has reported revenues of $314.2m (£250.5m/€292.7m) for the second quarter of the 2024 fiscal year, a year-on-year increase of $154.6m.
The company reported an operating loss of $159.7m, an increase of $109.9m on the previous year, and adjusted operating income of $51.4m, compared to an adjusted operating loss of $13.2m in the prior-year quarter.
The Sphere arena accounted for $167.8m of the $314.2m revenue figure, with MSG Networks making up the remaining $146.4m.
In November, Sphere Entertainment announced that the Vegas arena had posted revenues of $7.8m for the first quarter of the 2024 fiscal year, primarily driven by event-related revenues of $4.1m. The $2.3bn arena only staged its first event in September and the latest results represent the first full-quarter financials since its opening.
Revenues related to The Sphere Experience were $92.9m across 191 performances during the quarter, after it debuted on October 6. Event-related revenues totalled $55.2m, while revenues from sponsorship, signage, Exosphere advertising and suite license fees were $17.5m.
The Sphere Experience, featuring Postcard from Earth, grossed over $1m in average daily ticket sales on the days it took place. U2 has also extended its multi-month run at the arena until March, while Phish and Dead & Co. have each announced upcoming multi-night performances.
The Sphere posted direct operating expenses of $67.3m for the quarter, compared to no direct operating expenses in the prior-year quarter as it was still yet to open. The expenses primarily included $27.6m of expenses associated with The Sphere Experience, as well as $20.4m of event-related expenses related to concerts. The Sphere was also used during Formula 1’s inaugural Las Vegas Grand Prix in November.
The arena’s second-quarter selling, general and administrative expenses increased by $23m to $97.8m, primarily due to Sphere Entertainment’s transition services agreement with MSG Entertainment, higher employee compensation and related benefits and other cost increases.
Sphere Entertainment said this increase was partially offset by the absence of certain corporate expenses that were included in the results of the prior-year quarter but were not included in the results for the current-year quarter. The company noted that while it did not incur these costs after the spin-off from MSG Entertainment in April 2023, they did not meet the criteria for inclusion in discontinued operations in the prior-year quarter.
Second-quarter results for the Sphere included an increase in impairment and other losses, net, of $118.2m, compared to the prior-year quarter. This reflects a non-cash impairment charge of $116.5m in the current-year quarter in connection with Sphere Entertainment’s decision to no longer pursue the development of an arena in London.
The arena’s second-quarter operating loss of $193.9m represented a $111m year-on-year increase. Adjusted operating income of $14.1m increased by $75m.
James Dolan, executive chairman and chief executive of Sphere Entertainment, said: “Sphere is a next-generation medium intended to disrupt the traditional venue model. With positive adjusted operating income at the Sphere segment in our first full-quarter of operations in Las Vegas, our early results are beginning to prove that thesis, and we remain confident in the global opportunities ahead.”