Three years ago this month, on July 4th, the 580,000 square feet of LED that is the Exosphere was turned on. On September 29th, the doors opened to the public, with U2’s Achtung Baby live residency.
The Sphere was two years late and over a billion dollars over its $2.3b budget. Construction had shut down for Covid, there were supply chain issues, and inevitable overruns for a groundbreaking technical venue.
By comparison, nearby Allegiant Stadium, opened in 2020 at a cost of $1.9b; SoFi Stadium reportedly cost $5.5-6b. While SoFi is far and away the most expensive venue on the planet so far, as a per-seat cost, Sphere is king at over $130,000 a seat.
By the time we were having tours during InfoComm 2024, it was the end of Sphere’s first full fiscal (they subsequently changed to a calendar fiscal). That first year saw over $500m in revenue. That translated to $28,000 per seat, and MSG posted an operating loss of $341.2 million.
I remember the conversations around that. There was precedent for how a stadium would amortize; there was precedent for a theme park attraction. But what was the precedent for Sphere? Would it be a novelty flash in the pan? Would people go once and never come back? Would people tire of the programming? And of course, how were they going to maintain nearly 170,000 speakers to preserve attendee experience? (And the rest). I wanted it to be the AV triumph of this generation. Surely the build had been one for the books and career-making for some people. But would it become a $2.3 b LED white elephant?
Three years on, if you look at SEC filings and financial reporting for fiscal 2025, MSG is obviously still depreciating that spectacular build cost. But Sphere’s venue and production studio/lab (Sphere Studio, Burbank) reported over $144m in adjusted profit on $781m in revenue, and what’s striking is that Sphere significantly outperformed MSG’s traditional assets on revenue. Sphere is now the dominant revenue engine, even while legacy assets remain more profitable, for now.
There’s further evidence that MSG is bullish on a Sphere future. As we go to press, Sphere Entertainment announced there would be two new Spheres by 2030. Sphere Abu Dhabi on Yas Island will mimic the Las Vegas Sphere, and a 6000-seat mini-Sphere is slated for National Harbor in Maryland. It’s interesting that they’re doing both replication and risking (in my opinion) a mini.
To my mind, the financial story of Sphere is still unfolding and has to be considered still uncertain on some level. It’s the most audacious out-of-home play I’ve seen since I helped Hello Kitty build an indoor theme park in Tokyo for $780m in late 1980s dollars. Sphere made it through the gauntlet to a bold and successful start, both financially and in terms of aesthetic production. We’ll see what comes as this generational AV adventure continues.
