Question of the Day - 07 September 2025

How is Sphere doing? If you ask the boosterish Las Vegas Review-Journal, the globe is on the road to profitability. If you ask anyone else, it’s not yet out of the woods.

During the first quarter of 2025, Sphere Entertainment posted a decline in revenue and a widened operating loss of $93.8 million. On a positive note, operating income nudged 2% upward to $13.1 million. CEO James Dolan saw nothing but upside, claiming that there was more demand to play at Sphere than there were openings. Dolan couldn’t land Beyoncé (who opted for Allegiant Stadium) or reportedly Taylor Swift, but did bag Kenny Chesney and the Backstreet Boys. The Backstreet Boys, especially, are expected to help lift Sphere's third-quarter numbers.

In the second quarter, Sphere finally swung from a negative return on investment to cash-flow positive, going from $5.5 million in the red to $24.9 million. That’s not the same as profit, but it’s an important step in that direction. Revenue also moved 16% higher, from $151.2 million in the second quarter of 2024 to $175.6 million in 2025. 

Similarly, the operating loss narrowed from $104.5 million (2Q24) to $83.4 million, though that's still a lot of red ink. It didn’t help that advertising and suite-license fees had dimmed a bit. Interest takes a big bite out of the budget, averaging $26 million per quarter, though that's slightly down from 2024. Plus, it's a relatively modest expenditure compared to the cost of marketing and administering the big ball— $131.3 million in the second quarter of this year alone.

Then there's the epic Wizard of Oz project involving Sphere, Warner Bros, Google, more than 2,000 high-tech collaborators, and a massive amount of artificial intelligence. Whatever side of the argument you're on -- critics call it "vandalism" and fodder for technology; proponents claim it's a "new blueprint for ethical AI in film restoration -- there's no denying its potential as a money-maker. CEO Dolan was quoted earlier this month as saying that more than 120,000 tickets had been sold and expected to reach 200,000 (at an average of around $120 per) before the first showing on August 28.

Perhaps the best news is that a bankruptcy of MSG Networks is temporarily off the table. Sphere Entertainment owns MSG Networks; the regional sports network is part of Sphere Entertainment's portfolio of businesses. Both companies are part of the larger entertainment empire controlled by the Dolan family. Earlier this year, MSG executives had warned that Chapter 11 was possible if debt couldn’t be restructured. That gloomy talk has since gone quiet. MSG needs a great deal of fiscal forbearance, lest it drag Sphere down with it and into the hands of creditors.

We wouldn’t like to see that happen. Some analysts believe that Sphere can't become profitable without restructuring its considerable debt. But Wall Street can be surprisingly patient sometimes and if Sphere’s numbers keep moving in a positive direction, as they've been doing, it might be true in this case.