Updated November 9, 2023 - 12:17 pm
Even though the Sphere lost nearly $100 million in its first quarter of operation, Executive Chairman and CEO James Dolan is optimistic that the new Las Vegas entertainment venue will be profitable as the venue presses ahead with more entertainers wanting to play there, more films in production and more Spheres to be built worldwide.
Dolan also hinted that ticket prices may go up but that Las Vegas was the ideal location to open the first Sphere because of the constantly changing tourist market.
The venue on Wednesday reported a first-quarter operating loss of $98.4 million, primarily due to opening expenses. It generated revenue of $7.8 million with the venue being open just two days of the quarter that ended Sept. 30.
The Sphere opened Sept. 29 with a debut performance by U2. Dolan said every performance so far sold out, prompting the company to add 11 more shows in January and February, extending the band’s run to 36 performances.
In an earnings call with investors, Dolan said U2’s success has spurred interest in the entertainment world.
“The incredible response to U2’s run at Sphere has only increased interest from the artist community to play the venue, and we’re having conversations with artists across a wide variety of genres, including discussing runs of varying lengths,” he said. “We expect to host two additional residencies in the second half of this fiscal year (January through June) and look forward to sharing more details.”
All sales of tickets to the “Sphere Experience” and Darren Aronofsky’s “Postcard from Earth” occurred in the current quarter and weren’t reflected in the quarterly financial results.
Dolan said he expects another film to be released about a year after “Postcard” came out and that it could run concurrently with a new show.
As for new Sphere venues worldwide, Dolan confirmed that more are on the way – but wouldn’t say where.
“There is certainly a great deal of interest, and substantive discussions with several markets, none which I can discuss or reveal today, but I will say that it does look like Sphere will be a global brand, and so we should expect expansion globally rather than just in the U.S. market,” he said.
British media have reported that London Mayor Sadiq Khan is expected to make a decision in the next two weeks whether the Sphere project there will move forward. The controversial proposal at Queen Elizabeth Olympic Park in East London, home of the 2012 Olympic Games, has been criticized by nearby residents who fear the building will be a source of light pollution that will ruin their neighborhoods.
Asked by an analyst what surprised or disappointed Dolan about the Sphere’s new presence in Las Vegas, he said most of the reaction has been positive.
“Mostly it’s been good,” he said. “The product came out and was very well-received and that’s probably the most important thing that you look at with it, at least from my point of view. The social media thing sort of really surprised us. We thought we would do well, but it really went global, and so that aspect of the business has exceeded (expectations).”
Operational challenges were the most concerning.
“Things like ingress, egress and turnover time between the concert and challenges in the opening, but it seems to be getting better,” he said.
But he also said Las Vegas was the ideal place to open the first Sphere venue.
“The Las Vegas market was the perfect market for us to open in because it has an ever-regenerating marketplace of customers, right? Fifty million people come through that market every year. And so our ability to reach those people and sell them a ticket and interest them in our product, that we’re still refining.”
He said while he has been happy with the initial response for tickets, he expects it to be better.
“I think there’s upside in all those parameters, marketing, number of shows, price for show, price for ticket, etc.,” he said. “Those are the things that we’re studying heavily now, and I expect to see improvement.”
An updated version of this story includes correcting a transcription error.