RESOLVING THE LEDGER
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Sphere Entertainment reported Thursday (July 30) that second-quarter revenue rose 11% to $313.6 million, as the company’s flagship Las Vegas venue added more viewings of its popular adaptation of The Wizard of Oz .
However, the company recorded an overall $61.3 million operating loss, $11.1 million more than the year-ago quarter, due in part to a 30% increase in the Sphere segment’s selling, general and administrative expenses, which totaled $125.6 million for the second quarter ending June 30.
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Sphere Entertainment had an adjusted operating income of $50.9 million, down 17% from a year ago. Notably, this figure was adjusted to strip out the impact of share-based compensation, depreciation and amortization costs related to a merger with MSG Networks and other costs the company says are not related to its fundamental business operations.
The Sphere segment, which generates revenue from Sphere Experience film showings, brand events, concert residencies and sponsorship and suite licensing fees, generated revenue of $226.4 million, up 29% compared to the year-ago quarter, mainly on more “per-performance” revenue from The Wizard of Oz at Sphere .
“We’re not shy of demand from artists to come play the Sphere, and we have some great artists coming up,” executive chairman and CEO James Dolan said when asked during an earnings presentation about Oz and where additional growth will come from. “But the whole business strategy behind the creation of Sphere is utilization of the venue, and that’s where we look at the growth to come.”
From its opening last August to mid-June, The Wizard of Oz at Sphere has sold more than three million tickets and generated over $400 million in ticket sales. The company said 220 “performances” of Oz in the second quarter exceeded the 215 showings of Postcard from Earth and V-U2 An Immersive Concert Film in the year-ago quarter. That translated to Sphere Experience-related revenue growing by $53.8 million in the second quarter from a year ago.
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The company announced earlier this quarter that it is working on the production of a new Sphere Experience — The Rocky Horror Picture Show at Sphere — which is expected to open in 2027. Dolan said earlier this year that the company also expects to debut From The Edge , a film about extreme sports, later in 2026.
Sphere event-related revenue fell $11.7 million due to two fewer brand events compared to the year-ago quarter, but that was partially offset by higher revenue from concerts, according to the company. While there were six more concerts held in the second quarter at Sphere this year compared to a year ago, the concerts held in April, May and June had lower per-concert revenue compared to the same period last year.
The company did not disclose an overall event-related revenue figure in its initial second-quarter financials, making it difficult to determine the share of revenue contributed by The Sphere Experience and concerts. However, the company said it generated $150 million in ticketing and venue licensing fees from Sphere in Q2 overall.
Dolan compared Sphere’s ability to capitalize on concerts to Madison Square Garden, which he also owns.
“The Garden does approximately 200 or something events a year, and it is hamstrung by the fact that you have to load in, you have to load out,” Dolan said. “When we created Sphere, it was all about increasing utilization through our own IP and our own content. I don’t think that we have refined the model to the point where we’ve maximized the revenue potential there, and I think we have new products, some of which we haven’t talked about.”
The Sphere segment generated a nearly $70 million operating loss. That’s around $14 million less than the loss notched in the year-ago quarter thanks to higher revenue.
The company continues to develop plans for additional Sphere venues, and Dolan said the company will likely announce plans for a new Sphere later this year. Construction on the Sphere on Yas Island in Abu Dhabi is expected to be completed in 2029, with the company saying in a statement that “plans to bring Sphere to National Harbor also continue to move forward.”
MSG Networks generated revenue of $87.3 million, down 18% from the year-ago quarter, primarily due to distribution revenue falling $13.7 million on a 16.5% decline in total subscribers.
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