The Las Vegas Sphere is losing staggering sums, as company executives admitted they don’t yet know how to make the venue profitable.
From June 30 to September 30, the Sphere reported an operating income loss of $125.1 million.
The towering orb, complete with 1.2 million exterior LEDs that create stunning light displays on the already-bright Vegas strip, is burning money faster than it did this time last year.
However, last year’s quarterly loss of $98.4 million only accounted for two days of operation, since the Sphere officially opened on September 29, 2023, with a performance from U2.
That is no longer an excuse, as 800,000 paying customers visited the Sphere this quarter, said Sphere Entertainment CEO James Dolan on a Tuesday earnings call.
The Sphere has become a unmistakable feature of the Las Vegas Strip. But so far, it hasn’t been profitable for its parent company, Sphere Entertainment
Sphere Entertainment CEO James Dolan, pictured performing with his band JD & The Straight Shot, told investors he doesn’t yet know how to make the Sphere profitable
‘I wish that the day we lit it up that we knew exactly how to run it, exactly how to sell it and exactly how to program it, et cetera, but that’s just not the case,’ Dolan said.
Dolan blamed the poor quarterly performance on ‘seasonal issues,’ claiming that July and August have the lowest attendance numbers.
‘It starts to pick up momentum in September, and we’re starting to see some pretty strong results now. And then going into the beginning of the year, we’re looking pretty good,’ he said. ‘That’s just part and parcel of starting something new.’
Sphere Entertainment owns the venue along with MSG Networks, a regional sports cable channel broadcasting games from New York teams like the Knicks, Rangers and Islanders.
MSG Networks brought in just $7.5 million in profit this quarter – a 74 percent decrease from the year prior – leading the company as a whole to an adjusted operating loss of $10.2 million.
This setback hasn’t fazed executives, who remain committed to building a second Sphere in Abu Dhabi, the capital city of the United Arab Emirates.
A second Sphere in Abu Dhabi, which will have similar dimensions to the original, was announced in mid-October
Kamala Harris ran an ad on the Sphere the day before Election Day. Trump International Hotel is seen in the background
The new Sphere, which will have similar dimensions to the original, was announced in mid-October.
Dolan said the project’s construction will be entirely funded by Abu Dhabi’s Department of Culture and Tourism.
The original Sphere cost $2.3 billion to build and has yet recoup that in ticket sales or in its ability to act as a giant advertising billboard for the entire Vegas strip.
Days before the election, for example, Kamala Harris’ presidential campaign paid to have her face on what the company calls the ‘exosphere’ in an effort to sway Nevada voters.
On the earnings call, Dolan touted a lucrative UFC bout the Sphere hosted in September, making it the first live sporting event at the venue.
UFC 306 brought in over $22 million, making it the highest grossing event in UFC history and the most profitable single event in the Sphere’s history.
Next week, the Sphere will also host events for the Las Vegas Grand Prix, with the cheapest grandstand tickets already going for nearly $1,000 apiece.
Rock band Phish performs during night one of their four-night run at the Sphere on April 18, 2024
Bono, The Edge, Adam Clayton and Bram van den Berg of U2 perform during opening night of U2:UV Achtung Baby Live at Sphere on September 29, 2023
The Sphere also recently announced it will be hosting a New Year’s Eve performance by Anyma.
The Eagles, who have been performing weekends at the venue since September, have since added shows through March 2025.
The company is also trying to cash in for a second time on U2, which performed 40 total shows at the Sphere, by launching an immersive concert film that cuts together many of the band’s recent performances.
V-U2 premiered on September 5 and uses the Sphere’s proprietary ultra-high-resolution camera system to achieve an experience that’s meant to feel like you’re actually at the concert.
Dolan hinted that other concerts will be captured using that technology, opening the door for future artists’ performances to be fashioned into films played on the Sphere’s giant interior screen.
Dolan has plans to expand the virtual concert experience at the Sphere to other artists
He even joked that he wished he could go back to 1965 and capture a Beatles concert.
‘I’m pretty sure you’d all love to see a live Beatles concert like you are really there,’ he said. ‘That’s one we probably can’t do.’
Dolan said the company is ‘creating a library’ of performances, but didn’t reveal which artists are being catalogued.
‘How we market it, how we schedule it, et cetera, that I’m not sure of,’ he said. ‘But I do think that the product is valuable.
‘You’re not going to be able to see Bono 20 years from now live, except this way.’
