Sphere Entertainment reported $98.4 million in losses over its first quarter, mainly because its principal revenue stream—ticket sales for the Las Vegas Sphere—only got up and running at the tail end of the reporting period. The high-tech venue opened just one day before the quarter’s closing on Sep. 30 with a highly successful residency debut by Irish rock band U2.
Despite operating for only a short time, the Sphere generated $7.8 million in revenue. Event-related revenues surrounding the opening accounted for $4.1 million. Advertising on the venue’s exterior screens—known as the Exosphere—and suite license fees added another $2.6 million. The Exosphere launched in September with a campaign for YouTube’s NFL Sunday Ticket.
Before releasing the quarterly results, the company revealed in a filing with the Security Exchange Commission that its Chief Financial Officer (CFO), Gautam Ranji, left his role after only 11 months. During the company’s Q1 earnings call, CEO James Dolan said the departure was by mutual consent. However, the New York Post has suggested that there had been friction between the two men.
Sphere Entertainment executives have come under fire due to the enormous costs of MSG Sphere’s construction, and Ranji isn’t the first high-profile departure from the project. Various setbacks caused construction costs to balloon to $2.3 billion, nearly double the $1.2 billion initial forecast. But despite being in the red through one quarter, Dolan expressed confidence in the venue’s future profitability.
Ranji: Third Executive Departure From Sphere This Year
The circumstances of Ranji’s departure are unknown. A securities filing before releasing the quarterly results shows that it was “not a result of any disagreement with the company’s independent auditors or any member of management on any matter of accounting principles or practices, financial statement disclosure, or internal controls.”
However, the New York Post cited an inside source as saying that Ranji resigned following an angry bout of “yelling and screaming” from the CEO.
Whatever the reasons, the CFO’s departure marks the third high-ranking officer to leave the Sphere this year. In February, Dolan fired two other high-ranking executives—MSG Sphere President Lucas Watson and Senior Manager of Business Operations Jenna Wolfenson—amidst construction setbacks.
Significant recent departures from other non-Sphere portions of Dolan’s empire include Christina Spade, CEO of AMC Networks, and Andrew Lustgarten, CEO of MSG Sports. Spade left in November 2022 after just three months on the job, while Lustgarten’s career with MSG Sports lasted eight years before he left in September 2022.
Dolan Sees Positive Signs in Early Performances
During the Q1 Earnings Call, Dolan highlighted that U2’s residency debut has been hugely successful. As a result, the Sphere added 11 shows in January and February, totaling 36 events.
So far, Dolan said, every concert at the 20,000-person venue has sold out. Additionally, most future dates are also sold out. Tickets for available shows range from $466 for limited-view seats to over $2400 for some tickets on the resale market. According to Dolan, the success of these preliminary shows has piqued broader interest in the entertainment world.
In the current quarter, the company’s revenue includes sales for a second Sphere show. The Darren Aronovsky-directed A Postcard from Earth is billed as “a Sphere Experience.”
That show debuted on Oct. 6, with tickets on most dates starting at $99. Dolan said the Sphere grossed over $1 million each day in October. He also hinted that ticket prices are still too low and that hikes are likely.
Other future revenue streams will include two more residencies in the second half of the fiscal year, which runs from January to June 2024. Before that, the venue will be part of the inaugural F1 race at the end of November. Casinos and resorts expect the event to bring record-breaking revenues, and the Sphere will be center stage for multiple events. Furthermore, Dolan expects more marketing partnerships and record advertising revenue from the upcoming Super Bowl, which will be held in Las Vegas.