Sphere posts operating losses of more than $500 million in first fiscal year
LAS VEGAS (KTNV) — While the Sphere has become a beloved part of the Las Vegas skyline, it is still facing a financial windfall.
During a company earnings call on Tuesday, officials stated the Sphere segment reported an operating loss of $125.1 million. A press release states that primarily reflects expenses associated with The Sphere Experience, venue operating costs, and event-related expenses.
When you look at the past 12 months, the Sphere segment has lost $507 million.
Sphere Entertainment's Executive Chairman and CEO James L. Dolan told investors the company is still working on the kinks and trying to figure out the best ways to monetize the venue.
"We're focusing on optimizing our operating model to maximize revenue while enhancing the guest experience. To that end, we continue to refine our strategy for the Sphere Experience, including show count and pricing," Dolan said. "I do think there is a structural issue and we've been busy working on it. I think we're making a lot of progress. At the same time, we're also learning about the product itself and how our advertisers can use it best ... Going into the beginning of the year, we're looking pretty good. That's just part and parcel of starting something new. I wish that today, we lit it up, that we knew exactly how to run it and exactly how to sell it and exactly how to program it but that's not the case."
David Byrnes, Executive Vice President, Chief Financial Officer, and Treasurer, also pointed out that early costs were also associated with building out the business so it can handle future growth.
"The infrastructure that we've built out at the Sphere segment, including corporate and Sphere Studios as well as associated content and technology development, is designed to support a global network of Spheres over time," Byrnes told executives.
Part of that technology is developing the Big Sky camera system, which is being used to catalog and film concerts at Sphere.
"The U2 concert, actually, was really kind of an experiment on our part because we didn't know what the product looked like. We shot it. We put it together. I think it's a viable product," Dolan said. "We have some great bands that are coming in over the next year. And so, I think we will continue to capture their concerts using our Big Sky technology. How we then bring it to the public and market it, I think we're still trying to figure out what's the best way ... Creating a library of these kinds of performances, I think, is very valuable."
Dolan said right now, Sphere officials are looking at way to have multiple events at Sphere on the same day so they can maximize their revenue.
"If it's an Eagles show that's on Saturday and starts at eight o'clock, we have a show in the afternoon for Postcards From Earth or V-U2 or the other properties that we're developing and I think that's kind of key," Dolan said. "If we can keep pursuing this side by side, and our hope is that we can get two shows and then a concert all on the same day, that's pretty good use of the capital. It's going to generate a lot of revenue and I'd probably do that all day long until the cows come home."
Negotiations are underway with multiple performers as Sphere officials look to fill out their upcoming lineups.
Just don't expect them to tell you who it is.
"Well, you like the Eagles? You're going to see a lot of the Eagles for awhile. We haven't really announced anything else beyond that but I will tell you, just to whet your appetite more and not give you an answer, we're struggling with how to squeeze everyone in through the fall who has signed up," Dolan told investors. "Right now, we're struggling with 2025, just figuring out how to get to people who want in, the acts that want to get in."
