The Sphere in Las Vegas was so close to turning a profit during its first full quarter in operation. Although the world’s most viral entertainment venue lost money for the second-consecutive quarter, the company considers it a massive win. It reported an adjusted operating income of $14.1 million, which was up $75 million from the venue’s first-ever financial report.
That number would be accurate if not for “certain corporate overhead expenses.”
While the exact meaning of that phrasing is unclear, a large portion of the overall loss was tied to a non-cash expense associated with the decision to kill plans for a new Sphere in London, in addition to depreciation. Had that not happened, Sphere Entertainment would’ve been profitable for the first time!
CEO James Dolan was pumped.
Sphere is a next-generation medium intended to disrupt the traditional venue model. With positive adjusted operating income at the Sphere segment in our first full quarter of operations in Las Vegas, our early results are beginning to prove that thesis, and we remain confident in the global opportunities ahead.
— James Dolan
However, in reality, Q4 of 2023 was actually another loss. Sphere lost $193.9 million on revenue of $167.8 million.
$92.9 million was generated from The Sphere Experience, which includes a tour of the venue and a viewing of Darren Aronovsky’s Postcard From Earth film. It grossed more than $1 million in average daily ticket sales, which is pretty bonkers.
$55.2 million came from events. U2’s residency reflects the majority of that number. It also includes one “marquee sporting event” to a lesser degree. That likely means the Las Vegas Grand Prix.
Advertisings, sponsorship, signage, and suite license fees accounted for the other $17.5 million. Marketing campaigns on the exosphere was the main revenue driver in this area, and this number will likely increase during Q1 of 2024 with Super Bowl week demanding premium prices.
This second financial report was a significant victory for Sphere Entertainment. The major loss during Q3 of 2023 was skewed because the venue was open for less than a week, and Q4 reflects a more accurate picture. It will only continue to improve during this current quarter, knowing that the now-dead London Sphere was responsible for a large portion of the overall loss.