Madison Square Garden Entertainment and the spun-out Sphere Entertainment expect a strong fiscal year despite a tough start as the companies navigate separate futures.
Both companies reported quarterly earnings for the first time as separate entities Wednesday.
For the quarter ending September 30 MSG Entertainment — which since April’s spin-out includes MSG’s non-Sphere performance venues, the entertainment and sports booking business and “Christmas Spectacular Starring the Radio City Rockettes” — posted revenues of $142.2 million, a decrease of 3 percent from the same quarter last year.
On the bottom line, MSGE reported a net operating loss of $50.7 million.
The company emphasized that the year-over-year comparison isn’t apples-to-apples as the previous year benefited from COVID-rescheduled concerts as well as Harry Styles’ 15-show “Harry’s House” residency. Still, MSG expects gains in concert bookings for the entire fiscal year and said demand for the Rockettes is strong enough that more shows have been added and the final count will top 2022.
“The company continues to see its bookings calendar for the remainder of fiscal 2024 fill up and remains on track to achieve a low double-digit percentage increase in events in its bookings business for the fiscal year,” MSGE said.
MSG didn’t revise its annual revenue predictions.
For the quarter ending September 30, Sphere Entertainment — which consists of Sphere and MSG Networks — reported revenues of $118 million. That was driven largely by MSG Networks. Sphere itself booked $7.8 million.
Sphere did technically book profit — some $66.4 million — but more than $90 million of that is attributable to income tax benefit. Sphere reported an operating loss of $69.8 million, though much of that is one-time spin-out and opening-related costs.
Calendar quirks can take some of the blame for seemingly paltry Sphere revenue number. U2’s residency debuted September 29, so the $4.1 million in event revenue represents just two shows, including the premiere. The $2.6 million in quarterly revenue for advertising on the Exosphere is also expected to increase, particularly during the week leading up to the Super Bowl in Las Vegas.
On an earnings call, CEO James Dolan struck a hopeful note.
“Do not expect Sphere to meet its full potential right away. We remain confident for the long-term outlook,” he said. “It will take some time for Sphere to realize its full potential. … U2’s incredible run has only increased interest among artists across all genres.”
Dolan said plans are in the works for two additional residences in the second half of this fiscal year. Both MSGE and Sphere operate on a July-to-July fiscal calendar.