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Las Vegas Sphere Reports $98.4 Million Loss; CFO Quits (lasvegassun.com) 91

Posted by msmash from the closer-look dept.
The Sphere in Las Vegas reported an operating loss of $98.4 million for the fiscal quarter ending Sept. 30, Sphere Entertainment Co. said this morning on an earnings call. From a report: Additionally, the company lost its chief financial officer, as Gautam Ranji has resigned, according to a Securities and Exchange Commission filing. Ranji's exit was "not a result of any disagreement with the company's independent auditors or any member of management on any matter of accounting principles or practices, financial statement disclosure or internal controls," the company said in the filing. The New York Post reported Tuesday that Ranji suddenly quit after a bout of yelling and screaming from CEO James Dolan. Ranji, who had been on the job for 11 months, will be replaced on an interim basis by Greg Brunner, the company's senior vice president, according to the filing.
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Las Vegas Sphere Reports $98.4 Million Loss; CFO Quits More

Las Vegas Sphere Reports $98.4 Million Loss; CFO Quits

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  • The Sphere looks amazing. But if it's running that kind of loss, at some point corners are going to get cut, or it's going to shut down altogether... better try to see it over the next several months if you have any interest.

    • Re:Better go see it soon (Score:5, Funny)

      by Ferocitus ( 4353621 ) on Thursday November 09, 2023 @11:45AM (#63993267)

      The Sphere looks amazing. But if it's running that kind of loss, at some point corners are going to get cut...

      I doubt that even someone with an MBA could do that.

      • punny.

        Seriously, if they're anything like vegas casinos, they'll hire a sphere security force. Which is middle aged men cosplaying as army soldiers getting paid min wage. (Caesars, go to stage door in vegas and see their sweet van, lol). They'll walk around the streets handing out bills when they see people looking at the sphere.

    • The thing cost multiple billions so I doubt MSG financed it themselves out of pocket but in that case I wonder what business plan they sold to investors and banks to finance this thing? What was their plan for expected revenue output versus operating costs and what they will have to presumably pay back.

      I feel like they probably have runway for at least a full year of operations but after than, man, someone like MGM or LiveNation gonna pick this place up for pennies on the dollar I imagine but even still, ca

      • a prominent entertainment reporter on LA television news went to the opening show (U2 concert) and made some interesting comments about the Sphere, he said it was an amazing visual and aural experience, the technology definitely works in a fantastic way, yet he noted that any entertainer who wants to book the Sphere needs to have an extremely creative mind to conceive and plan a show that will utilize the enveloping video and audio so that the audience is enraptured by the product. He couldn't think of many

        • I doubt that there's more than a handful of performers who will create a unique show for just this one venue.

          They need a resident act there, with a really compelling and well-designed show. Change that act every 6-12 months. I bet cirque du soleil could come up with some interesting shows there.

        • That sounds like a service that should be offered to performers by the ball's management. Call it "Creative Envelopment" or something.

          Not to be confused with the service provided to performers by the management of the balls. That's another department.

    • Re:Better go see it soon (Score:5, Funny)

      by Waffle Iron ( 339739 ) on Thursday November 09, 2023 @11:52AM (#63993293)

      But if it's running that kind of loss, at some point corners are going to get cut,

      Unfortunately for them, there are no corners to cut. It's a sphere.

    • Re: (Score:2)

      by mccrew ( 62494 )
      But as a practical matter, how exactly do you cut corners on a sphere?

    • There are many uses for such an auditorium like that. Want to save it? Start using the hell out of it.

      But that's beside the point...Am I the only one who vaguely remembers but one or two events marketed as a demonstration for this place?

      That happened less than 60 days ago. When the place opened the doors.

      The hell are we doing here bitching about a loss already less than a fiscal quarter from opening the damn doors on a multi-billion dollar project? Was the CFO named Noshitz Sherlock? I mean I know we g

      • The hell are we doing here bitching about a loss already less than a fiscal quarter from opening the damn doors on a multi-billion dollar project

        That is a great point, and the next quarter should be pretty good with all of the revenue from the U2 shows this entire time...

        I do wonder what kinds of other things they have coming to help bring people into the Sphere on a regular basis. Seems like setting up a show for that space is a lot of custom work.

        • It seems like an absolutely incredible venue if you can get that team of experts together to make the process of developing or converting to present in the venue. Target current planetarium-style films and presentations to convert to that format as perhaps a fast-track offering, and get the ivy league schools to sponsor that educational trip to the Sphere a few times a quarter.

          Offer a solution that allows others to develop music concerts for the Sphere. No such thing as a 'bad' seat if you do it right. G

    • I'll bet that they'll use this as an excuse to start using that giant screen to start showing obnoxious casino and nightclub ads.

  • Did not it open like 2 months ago? Did they expect to make the money after a massive investment in 2 months?

    • The first event at the venue was only a day or two before the quarter ended. Not sure why the financial loss is a big deal. Most people lose money on buildings before they're actually used.

      • Re: (Score:3)

        by xanthos ( 73578 )
        From the article: "Revenue for the quarter included $4.1 million in event revenue — those two sold out U2 shows — and $2.6 million from suite licensing and advertising on the Sphere exosphere." So only losing 98.4 million on a 2.3 billion investment before revenue started flowing doesn't seem to be that bad. And if U2 continues to bring in 2 million per show, then I would expect that the next quarter might look a little better.

        • It might help a little bit if they were planning more events than just a couple of U2 shows.

          There is almost nothing planned. They should have had bookings filled for the first year or two before the grand opening.

          https://seatgeek.com/venues/ms... [seatgeek.com]

          • I was in Vegas recently and looked into it. I saw ticket prices starting at $75 and thought "U2 for $75? What a deal!" Then I saw that it wasn't for U2 of course, it was for a travelogue, "Postcard from Earth". Perhaps it's a worthy show, but back during the hype period The Sphere was described as a "U2 residency". It sounds more like U2 drops by every few months when they're slummin' in the states.

            I too was surprised when I saw that those were the only two things scheduled.

    • They are going to have to do a bunch of shows each month to cover operating costs (much less begin to pay off the development costs) and so far they have done.. one? Of course it is operating at a loss. Most business ventures plan to operate at a loss for the first year or more as they ramp up.

  • What?! (Score:3)

    by EvilSS ( 557649 ) on Thursday November 09, 2023 @11:47AM (#63993281)

    The Sphere in Las Vegas reported an operating loss of $98.4 million for the fiscal quarter ending Sept. 30, Sphere Entertainment Co. said this morning on an earnings call.

    Sphere, the $2.3 billion venue near the Strip that opened Sept. 29

    So was there any expectation that it would, somehow, generate a profit in one day??? They had to know it would be a loss for that quarter. Was it somehow bigger than expected? I can't imagine the figure was a huge shock.

    Or was this a news outlet trying to drum up views?

    • The resignation was not due to the reported loss. If anyone should resign over a large loss, it's the CEO, not the CFO.

      As other have said, the resignation was likely due to the CEO yelling at the CFO. That's completely unprofessional behavior and is sign that working there is not a good idea.

      Some years ago, I witnessed the CEO of my employer yelling at the head lawyer of the company. At the time, the company was engaged in a major lawsuit that eventually resulted in the company effectively disappearing. The

  • It's not as "amazing" as everyone says it is (Score:4, Informative)

    by NewOrder ( 103784 ) on Thursday November 09, 2023 @11:51AM (#63993289) Homepage Journal

    Well, i'm sure Level 200 and most of 300, it's amazing, but not at level 400 for a U2 concert, with the $400 cheap seats.

    I did the "post card" show on level 300 prior to the U2 concert, that was cool, The "immersive" audio was "ok". The technical bits to make it the same for everyone is cool. Objects on the screen correlated with the audio well, despite being off set to the left. The video, lots of ghosting on the sides, felt like I was watching a LCD screen from 15 years ago. In section 300 it did feel like a crappy quality VR setup for the most part.

    U2 - dead center, level 400, row 20/seat 13/14. Video wise, looked like a giant imax bowl. to far back and you can see the sides of the screen, etc. Audio wise, HORRIBLE. Super compressed at this level. Zero base, zero highs and stupid loud. My Watch was showing 105db sustained and 114db peaks. Who would of thought you needed ear plugs at the very back row? They had a DJ for an opener, imagine the BeeGee at 105db, No one needs to hear the beegees', never mind at 105db. 160,000 speakers and it literally sound like crap from our seats. I'm told by folks 3rd hand that section 200 sounds more like a normal concert, but we did not get anywhere near that in 400. U2's "immersive" concernt, I think 3 songs used some form of surround sound. Mostly pointless for them.

    Over all, Sphere is a 7 of 10. I can't see this model lasting unless they fix the audio for all.

    • Interesting. I used to be a soundman at an arena/large theater/small theater/expo hall complex, and I appreciate your more technical description of the venue.

      Our large theater had excellent sound, once we replaced the originally installed Bose system with JBLs. The arena was, of course, an arena--not designed for a sublime audio experience. One time Rush came to play. They had their own sound, so I wasn't working it, but came to see the show. I had a chance to walk around and hear and compare for myself whe

    • Interesting. I just saw the Postcard show there earlier this week and it was mind-blowingly immersive. I've never seen anything like it. Our seats were in the 200 section, but I can imagine what you are talking about with the 400 section because none of it would really be 'around' you. I think the resolution is something crazy like 18k.

      I noticed the scenes with structures in them (like the cathedral or the church spires) were warped as they followed the curve of the sphere and was wondering what they'd look

    • It's an overgrown planetarium. I am not entirely sure what the big deal is either.
  • What is "Las Vegas Sphere" and why should I care?

    • Re: (Score:1)

      by Anonymous Coward

      it took more clicks to write this comment than just opening the one link in the summary

      we get it, you're unplugged and have to let everyone know. you don't have to care but it is a giant piece of unique tech that has never really been tried before so some people around here might care

      • Re: (Score:2)

        by dbialac ( 320955 )
        Or you could answer it and say, "Hey, this is a really cool structure because of XYZ." My brief search I'd already done on Google just resulted in what looked like a giant sphere and didn't seem impressive in any way.

  • $19 for bud light so no one is buying anything at the bar

    • Boxed wine is the best value for sneaking in. Ditch the cardboard box and you're left with a flexible plastic bag and a spout with a valve, which can easily be 'worn'. The goal of the group is to protect the contraband and mule using distraction, whatever.

    • $45 for a mixed drink.

  • The Sphere turns out to be a financial black hole...

  • Too gaudy (Score:3)

    by smooth wombat ( 796938 ) on Thursday November 09, 2023 @12:27PM (#63993415) Journal

    To me, the Sphere is simply too gaudy for Vegas. I know that sounds improbable, but it seems completely out of place compared to the rest of The Strip. Every picture I've seen of it shows it looming over everything like the bald head of some monster appearing from the ground.

    While Vegas has always been known for its showiness, there is a difference between 24 hour lights and showgirls and a giant monolithic sphere watching over the city. It's akin to someone trying too hard to show off,.

    • I think that's a bit of marketing perspective, when I was out in LV earlier this year when it was still under construction I was expecting it to be larger. May have been my expectations but I was expecting to dominate the space in real life a bit more than it did. Very cool still.

      You can notice a lot of the photos of it are shot with the strip in the background and not many from strip itself in it's direction.

    • 100 million? That must have been the electricity bill.

  • No One Here Knows Who James Dolan Is?! (Score:5, Informative)

    by mrmaster ( 535266 ) on Thursday November 09, 2023 @12:31PM (#63993429) Homepage
    He isn't the greatest person to work for. Ask the NY Knicks. https://sports.yahoo.com/many-... [yahoo.com]

  • The Sphere opened on September 29th, 1 day before the quarter ended:

    The Sphere in Las Vegas reported an operating loss of $98.4 million for the fiscal quarter ending Sept. 30 ...
    opened Sept. 29 with the start of U2’s multimonth residency

    So I doubt the loss for the quarter means much; just that it lost money completing construction before opening.

    As for the guy quitting, why would a rich person (CFO for a multibillion dollar company, he's rich) work for a shitty boss instead of fucking off to the Baham

    • I would imagine a lot of tickets were pre-sold for U2 but yes, capex + opex costs prior to opening are likely huge (plus hiring/training the staff theyâ(TM)ll need to operate.) I think their bigger issue going forward is that they still donâ(TM)t have a full calendar of performances for 2024. They were lucky to get U2 to extend their engagement. But I imagine a number of artists and performers still havenâ(TM)t figured out how to incorporate the unique multimedia experience into a showâ"

  • Las Vegas (Score:3)

    by CohibaVancouver ( 864662 ) on Thursday November 09, 2023 @02:04PM (#63993693)
    I think part of the problem is people used to think Vegas was an inexpensive holiday - Cheap hotels, cheap buffets, free drinks while playing cheap blackjack or cheap slot machines, cheap magic shows.

    Now, a basic weekend hotel room on the strip is $350, a poolside Michelob is $20 after tip, and Penn and Teller tickets for the family cost $400.

    • I think part of the problem is people used to think Vegas was an inexpensive holiday - Cheap hotels, cheap buffets, free drinks while playing cheap blackjack or cheap slot machines, cheap magic shows. Now, a basic weekend hotel room on the strip is $350, a poolside Michelob is $20 after tip, and Penn and Teller tickets for the family cost $400.

      LV hasn't been cheap since the '80s and has gone down hill since then. They have tried everything from "family friendly" to the current 20s something status showoff. The only thing that seems to work is catering to the gambling addicts/fanatics by making $10 BJ tables the norm. Go to eat at some decent restaurants and see an occasional show, the rest has just become like living in an used car salesman's wet dream.

  • Tougher Business than it looks like it oughta be (Score:4, Insightful)

    by pefisher ( 774697 ) on Thursday November 09, 2023 @05:56PM (#63994323)

    I run a 122 seat digital planetarium in a non-profit science and art museum. Anyone who runs a planetarium has looked at the Las Vegas project with skepticism. For a lot of different reasons, it's very difficult for a planetarium to be profitable. The first planetarium was a subsidized educational facility. The subsidy was viewed as worthwhile because increasing light levels in cities made it harder to teach to children about the sky. This remains true today; they continue to require subsidies. There are what I call zombie planetariums where they open once a week a show the one ten thousand dollar movie they own. The people managing those have just given up. They are just treading water until the facility falls down around them. Roofs leak, seats wear out, HVAC wears out, projection equipment becomes obsolete. A planetarium facility has to be about 1/3 re-capitalized every ten years.

    The Las Vegas folks have set themselves up out beyond the bleeding edge of dome/planetarium tech. They don't mention planetarium shows as being a central part of their strategy. You can take it from me, SPACE is why people go to see things in domes. There are a fair number of full dome movies made every year, but few of them are particularly popular or good. (There are some gems that I use portions of with school groups.)

    The Las Vegas dome has a huge number of pixels, which is cool, but there is no program material with that many pixels. There aren't any production tools that allow a movie maker to film or view that much material in a comprehensive way. (That's a problem today for well financed pros at current resolutions.) The only thing that has led me to believe that LV has a commercial chance is that they claim they will be able to charge hundreds of thousands of dollars per hour for advertising on the outside of the dome. If that's true, they should have just built the outside of the dome, because they will never make a fraction of that inside any time soon. Unless they have planetarium shows. If they do that, they will be able to fill seats. But they may not be able to charge enough per seat to make real money inside. The technology they have inside the dome will require maintenance that will be expensive, even if operated efficiently by experts. And they need marketing (critical and difficult in the planetarium environment for reasons too numerous to list), housekeeping galore, ticket sellers, ticket takers, security, restrooms, inside exhibits. They have set themselves a very difficult task. Even in entertainment oriented Las Vegas.

  • They opened on September 29th and the quarter ended the next day. Even on that short run, they took in $6.7 million, so I suspect next quarter will be better.

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