Sphere Entertainment touts mini venue concept

Sphere Entertainment executive chairman and CEO, James Dolan, has revealed the company is working on broadening its venue concept to include smaller spheres in the 5,000-seat range.

Following the opening of the landmark 20,000-capacity venue in Las Vegas in September 2023, Sphere Entertainment in October announced plans for its second Sphere arena in Abu Dhabi through a partnership with the city’s Department of Culture and Tourism.

Speaking during an earnings call for the company’s financial results for the three and six months ending December 31, 2024, Dolan shed light on a potential new avenue of development. “As far as expansion goes beyond Abu Dhabi, we’re currently working on the architecture for a smaller sphere, which we think will be deployable to more markets somewhere in the 5,000-seat range,” he said.

“But we’re looking to take advantage of the content we’ve created already and the business we’ve created already and bringing it out to other markets. So, I anticipate by year-end, we’ll have more to say about that. But right now, we’re in the planning and design phase.”

Sphere Entertainment, which incorporates the Sphere business as well as US regional broadcaster MSG Networks, reported quarterly revenue for Sphere of $169m (£131.6m/€157.8m). This was up slightly year-on-year from $167.8m, while for the final six months of 2024 a significant rise to $296.1m from $175.6m was recorded.

The Sphere business’ operating loss also improved – $107.9m versus $193.9m for the quarter, and $233m versus $292.4m for the six-month period. Adjusted operating loss stood at $800,000 for the quarter, versus $14.1m in the prior year, and $27.1m versus $69m for the final six months of 2024.

Dolan said: “As we enter a new fiscal year, we see significant opportunities to drive our Sphere business forward in Las Vegas and beyond. We believe we are on a path toward realising our vision for this next-generation medium and generating long-term shareholder value.”

In October’s announcement, Sphere Entertainment and DCT Abu Dhabi said the new venue will be located in a prime spot in the city and “redefine” entertainment in the region. No timescale was set for the project. Although no capacity has been confirmed, Sphere Entertainment said the Abu Dhabi venue would echo the scale of the Las Vegas facility, which was built at a cost of $2.3bn.

DCT Abu Dhabi will pay Sphere Entertainment a franchise initiation fee for the right to build the venue using the latter’s proprietary designs, technology and intellectual property. Construction will be funded by DCT Abu Dhabi, with Sphere Entertainment’s team of experts providing services relating to development, construction and pre-opening.

With Dolan stating Sphere Entertainment is in “discussions with other markets” as the company pursues its vision for a global network of spheres, plans are moving forward in Abu Dhabi. Robert Langer, executive vice-president, chief financial officer and treasurer, said: “With respect to Abu Dhabi, we’re working very closely with DCT Abu Dhabi, our partner, on venue design and preconstruction planning.

“We expect to share more details including site location… and an estimated opening timing once DCT has finalised plans, so we’re not prepared to do that yet and we need to do that in conjunction with them. In terms of construction costs, we continue to work with DCT to finalise those plans.

“We’ve learned — and Jim has mentioned this before, we learned a lot during the construction of the Sphere in Las Vegas, and we’ll apply that obviously to Abu Dhabi. Most important, as a reminder, our partner in Abu Dhabi is fully funding the construction project.”

Revenues from sponsorship, signage, Exosphere advertising and suite license fees of $20.3m increased $2.7m as compared to the prior year quarter, primarily reflecting an increase in sponsorship revenues and revenues from advertising campaigns on the venue’s Exosphere, as well as higher suite license fee revenues.

Regarding future marketing potential, Sphere Entertainment has downplayed any thought that it may pursue naming rights deals for its venues. Jennifer Koester, president and chief operating officer of Sphere, said: “We’ve announced a number of deals already, Verizon, Ticketmaster, Experience Abu Dhabi. There’s a lot of opportunity.

“And in terms of ongoing discussions, the Exosphere is always going to be a big draw when we have those conversations, as well as other premium inventory opportunities like entitlements and integration when we think about the various spaces within that beautiful venue.

“And Sphere is a premium global brand. So, we’re going to continue to be protective of that brand and thoughtful in terms of who we partner with from a sponsorship standpoint. Naming rates and the potential there still remains, but I think that’s going to be a pretty high bar if we move forward there.”

Dolan added: “I don’t really think, to be honest, that you’re going to ever see a name in front of The Sphere. You may see… a name after the Sphere, but I don’t think that you’ll ever see a name in front of it, just like there’s no name in front of Madison Square Garden. The value of the brand equity is too high to sacrifice that to a naming opportunity.”