Sphere Entertainment Reports A Loss For Q2 After Abandoning London Development

LAS VEGAS (CelebrityAccess) — Sphere Entertainment Co., operators of MSG’s already iconic Sphere in Las Vegas, announced the results for the 2nd fiscal quarter, recording substantial revenue increases but still posting a loss.

According to Sphere Entertainment, the company reported revenue of $167.8 million, an increase of $167.2 million, as compared to the prior year quarter, during which the venue was still in construction.

The Sphere Experience generated $92.9 million in revenue from 191 performances during the quarter after debuting on October 6, 2023. Event-related revenues were $55.2 million, which came primarily from concerts along with one major sporting event held at Sphere in Las Vegas during the quarter.

Revenues from sponsorship and signage, including Exosphere advertising and suite license fees were $17.5 million, primarily reflecting advertising campaigns on the venue’s Exosphere and, to a lesser extent, suite license fee revenues.

During the quarter, the company posted operating expenses of $67.3 million, including $27.6 million of expenses associated with The Sphere Experience, as well as $20.4 million of event-related expenses related to concerts and a major sporting event. Operating expenses related to the venue and signage totaled $16.5 million during the quarter, Sphere Entertainment said.

Selling, general and administrative expenses totaled $97.8 million for the second quarter, an increase $23.0 million from the same period in 2022. Sphere Entertainment attributed the expenses to the transition services agreement with MSG Entertainment, higher employee compensation and related benefits, and other cost increases.

In addition, Sphere Entertainment reported $118.2 million in impairments and other losses during the quarter, including a non-cash impairment charge of $116.5 million related to the company’s decision not to pursue the construction of a second Sphere venue in London.

Operating losses for the second quarter totaled $193.9 million which was substantially higher than the same reporting period last year, but which also reflect the one-time impairment.

Adjusted operating income of $14.1 million increased by $75.0 million, as compared to the prior year quarter, primarily reflecting the increase in revenues, partially offset by higher direct operating expenses and selling, general and administrative expenses, Sphere Entertainment said.

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