Question of the Day - 24 April 2023

The answer to this wide-open question has less to do with the physical progress of the Sphere, which looks to us like it's on track, and more with behind-the-scenes developments that have come to light about the fallout from the major cost overruns of finishing the project.

James Dolan, the 67-year-old executive chairman and CEO of Madison Square Garden Sports (he owns the New York Knicks and Rangers) and Madison Square Garden Entertainment, and executive chairman of MSG Networks, has been making waves of late for controversial business practices in his companies. Among other high-profile embroilments over the past few months, Dolan fired the two top executives in charge of the Sphere, blaming them for the ballooning costs and construction delays. He was also sued by both sides (separately) of a deal he was in the middle of, accused by investors of “swindling shareholders on both sides of an agreement" to merge MSG Entertainment and MSG Networks, the cable-TV operations, in a cost-saving move. The suit alleged that Dolan misled investors by hushing up the rising costs of the Sphere. Without admitting guilt, Dolan settled with one side for $85 million and the other for $48.5 million.

(Another move Dolan just made last week was selling off the Tao Group Hospitality, of which MSG owned 67%, to Cyprus-based Mohari Hospitality in a deal expected to close next month. MSG will net roughly $300 million in cash, most if not all of which is expected to help defray the cost of the Sphere.) 

He's also accused of firing and spying on employees who “raised alarms” over these and other business practices, such as ordering them to destroy evidence of the double dealing, and he made other headlines by employing the facial-recognition system at Madison Square Garden to have his opponents in these lawsuits barred from the venue and escorted out after getting in.

Of course, this is what’s reported in the news and who knows what’s really going on behind the scenes. But from all the coverage, it appears that the company trying to finish the Sphere is in some turmoil and might be struggling to 1) manage the project and 2) pay for it.

As for the money, the current cost of the Sphere stands at $2.18 billion, up nearly double from the originally announced $1.2 billion (though that was disputed by the contractor and the initial price eventually settled at $1.66 billion). Still, T-Mobile cost $350 million, roughly 15% of the similar-sized arena, while the 65,000-seat Allegiant Stadium cost $1.9 billion. And perhaps in a sign of the profligate spending, it’s been reported that Dolan “quietly” agreed to pay the global rock band U2 $10 million for 12 shows to open the venue and that’s in addition to the “guaranteed proceeds” U2 will reap from the gigs by collecting more than 90% of earnings from ticket sales.

Meanwhile, The New York Post, which has been covering the Dolan story in depth for years, reported that the Sphere is having trouble attracting corporate sponsorships; the Post claims that MSG "hasn't found any."

The Sphere is apparently banking on immersive hour-long films that will be presented on the 160,000-square-foot LED screen. The first film is called Postcard From Earth, produced by filmmaker Darren Aronofsky (Black Swan, Requiem for a Dream, Pi, The Wrestler). According to the Film and Television Industry Alliance (FITA) website, “It’s an immersive and innovative exploration of planet Earth through the eyes of two human beings, Byron and Fang.”

And according to the Las Vegas Review-Journal, "The show will play to 10,000 seated ticket-holders. Pricing will start at $49, not including fees." Tickets are on sale now at thespherevegas.com.

The Post also revealed that MSG will present hundreds of film screenings per year, attracting 3 million to 4 million customers, wbut concerts are in the same boat as sponsorships. "MSG Sphere is having trouble booking other rock bands and top entertainers,” the Post reported. “Many acts are balking at the idea of producing splashy visual spectacles that might overpower their music.”

All that said, as the Sphere comes closer to completion — U2 will reportedly play its first show on September 29 — MSG has already launched its hiring website in a bid to hire 3,000 "ambitious" people to help open the high-tech arena this fall. 

So, behind-the-scenes strife notwithstanding, it looks like the highest-tech entertainment venue on the planet will open for business in the early fall, albeit five years after the start of construction. We certainly hope so. We're greatly looking forward to seeing what this bad boy can do.