NEW YORK (CelebrityAccess) — Following a successful spin-off from Madison Square Garden Entertainment in April, Sphere Entertainment Co. announced that despite modest gains in revenue, they are still operating in the red during the third fiscal quarter of 2023.
According to the company’s financial filing, Sphere’s businesses generated revenue of $363.3 million for the quarter, up by 4% from the same period in 2022. The majority of the revenue came from Sphere’s entertainment operations, which accounted for $201.9 million during the quarter, up by 4% from 2022.
The company attributed the revenue gains to arena license agreements with the Knicks and Rangers and a $10.1 million increase in revenues from higher food, beverage and merchandise sales and higher suite license fees revenues at Knicks and Rangers games.
The company’s Christmas Spectacular production also added $3.5 million to the revenue pool this year after hosting no performances in 2022 due to COVID.
Despite the modest revenue gains, Sphere Entertainment posted operating income losses of $81.1 million during the quarter, up by 81% year-over-year, and an adjusted operating loss of $39.3 million for the quarter.
“With the completion of the spin-off of our traditional live entertainment business and the sale of our interest in Tao Group Hospitality, our Company has enhanced flexibility to execute its business strategy. As we approach the opening of Sphere in Las Vegas, we remain confident that this next chapter for our Company will drive long-term shareholder value,” stated the company’s Executive Chairman and CEO James L. Dolan.
As part of their quarterly earnings release, Sphere Entertainment also revealed some new details on the progress of The Sphere in Las Vegas, the company’s new high-tech entertainment venue, which is set to open this fall, amid spiraling costs.
According to Sphere Entertainment, the company has upped its construction cost estimate, inclusive of core technology and soft costs, to approximately $2.3 billion, up from the previous estimate of $2.175 billion. According to Sphere Entertainment, the increased costs reflect the overall complexity of the project.
Actual construction costs paid through May 9, 2023, were approximately $2.08 billion, which includes $65 million received from The Venetian Resort, the company said.