Not a good start
Every so often something comes along that instantly captures the attention of the world.
When the first videos began circulating of the Las Vegas Sphere in operation, many marveled at its ingenuity. Doubling as an event venue and an advertising tool, the world’s biggest spherical structure opened for the first time officially on September 29, with U2 beginning its 36-show residency.
experienced a $98.4m operating loss for the quarter ended September 30
Despite that attention, The Sphere has a long way to go before turning a profit if its most recent quarterly financial results are anything to go by. Sphere Entertainment reported on Tuesday that it experienced a $98.4m operating loss for the quarter ended September 30.
The bulk of the operating loss figure relates to ‘selling, general and administrative expenses,’ with some of the specific costs including higher compensation for employees and the impact of a transition services agreement with Maddison Square Garden Entertainment. Chief Financial Officer Gautam Ranji has also stepped down.
Internal strife
In a filing with the US Securities and Exchange Commission (SEC), Sphere Entertainment said that the resignation of Ranji was not to do with a disagreement with independent auditors or management “on any matter of accounting principles or practices, financial statement disclosure or internal controls.”
Despite that filing, the New York Post published a report on Tuesday suggesting Ranji calmly quit on the spot last week after MSG Entertainment CEO James Dolan allegedly shouted and screamed at him. Senior Vice President Greg Brunner is temporarily stepping into the CFO role. Ranji lasted only 11 months.
An interesting future
With the Sphere only opening during the most recent quarter, it’s not surprising to learn that the event venue revenue for the period reached just $4.1m. This relates to the two sold-out U2 shows, with advertising and suite licensing leading to another $2.6m in revenue.
the company is confident about the future prospects of the project
In the SEC filing, CEO Dolan said that momentum is building and the company is confident about the future prospects of the project.
The final development cost of the Sphere was $2.3bn after it went over budget by more than $1bn. Work began on the project in 2019 before the pandemic led to delays. It can hold up to 20,000 people and host everything from concerts to sporting events, and corporate events.