Sphere Entertainment Co. (NYSE: SPHR) reported a revenue decline and widened operating losses in its fiscal first quarter, even as it saw increased activity at its flagship venue in Las Vegas, including a growing roster of live events and new partnerships.
The company posted revenues of $280.6 million for the quarter ending March 31, 2025, down $40.8 million from the same period last year. Sphere also reported an operating loss of $78.6 million, marking a $38.2 million increase year-over-year, while adjusted operating income dropped to $36.0 million from $61.6 million.
Despite the financial setbacks, Executive Chairman and CEO James L. Dolan remained optimistic, highlighting momentum in the Sphere business.
“Our Sphere segment generated positive adjusted operating income in the first quarter as we make progress on our strategic priorities,” Dolan said in a press release. “We remain confident in the opportunities ahead for Sphere and our ability to drive growth this calendar year.”
Sphere Segment Sees Mixed Results
The Sphere venue in Las Vegas generated $157.5 million in revenue during the quarter, an 8% year-over-year drop. That decline was largely attributed to a reduced number of performances of Postcard from Earth and V-U2: An Immersive Concert Film, which had a combined 200 showings in the quarter, down from 257 a year prior.
Sponsorship, signage, and advertising revenues also fell by $15.8 million, impacted by the absence of Super Bowl-related campaigns on the venue’s LED Exosphere display, which boosted figures last year. However, Sphere saw a $25.6 million increase in event-related revenues thanks to 10 additional concerts and a large-scale corporate takeover event.
Operating expenses at the venue rose to $70.5 million, up 13% from the same period in 2024, driven by expanded concert programming and staffing costs.
New event announcements point to a busy year ahead for the Las Vegas venue. Electronic music event Unity, a collaboration between Insomniac and Tomorrowland, is set for nine shows between late August and October. Meanwhile, Dead & Company are in the middle of an 18-show residency, following a 30-show run last year. Future residencies will feature Kenny Chesney, the Backstreet Boys, and the Eagles, who are set to return this fall.
Sphere has also secured new multi-year marketing partnerships with Pepsi and Google and is preparing to host repeat corporate events such as Hewlett Packard Enterprise’s annual gathering.
MSG Networks Drag Down Performance
Sphere Entertainment’s MSG Networks segment reported revenues of $123.0 million, down 19% year-over-year. The decline was primarily due to a two-month carriage blackout by Altice, which dropped MSG’s networks after their distribution agreement expired at the end of 2024. A new multi-year deal was signed in February, but the disruption caused a $29.9 million drop in distribution revenue.
Advertising revenue rose modestly by $1.9 million due to a higher number of live sports broadcasts, though average per-game ad sales were lower.
Despite cutting direct operating costs by $4 million, MSG Networks’ operating income fell to $15.2 million, and adjusted operating income dropped to $22.8 million, down from $48.6 million the previous year.
Debt Restructuring Underway
Sphere is also moving to restructure MSG Networks’ debt, which matured in October 2024. A newly announced Transaction Support Agreement outlines plans to replace an $804 million term loan with a $210 million facility. The deal includes an $80 million cash payment to lenders—$65 million from MSG Networks and $15 million from Sphere—as well as revised media rights deals with the New York Knicks and Rangers. Those contracts will see reduced annual fees and escalators removed, but will now run through the 2028-29 seasons.
The restructuring deal is expected to close by the end of June.
Looking Ahead
While Sphere’s Las Vegas venue continues to anchor the company’s growth strategy with expanded residencies and corporate bookings, the financial challenges from declining legacy media revenues and one-time advertising lapses have created headwinds.
Plans for international expansion—including the development of a second Sphere in Abu Dhabi—are contributing modestly to revenue but represent a longer-term growth horizon.
Despite the quarter’s losses, Sphere’s leadership is betting that a robust event lineup and continued brand partnerships will steer the company toward profitability in the coming quarters.
