SPHR - Earnings call 1 2024 | Sphere Entertainment Co.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for holding, and welcome everyone to the Sphere Entertainment Company Fiscal 2024 First Quarter Earnings Conference Call. [Operator Instructions]. I will now turn the call over to Ari Danes, Investor Relations. Mr. Danes, please go ahead.

Ari Danes

you. Thank welcome Fiscal and Earnings First Sphere Call. Conference to morning, XXXX Entertainment's Quarter Good begin Executive Sphere. with Jim will call Today's our will an Dolan, Chairman provide update on who CEO, and from This followed of Networks. will President by update MSG be and Andrea an CEO Greenberg, will review our for with financial a period. conclude then results I of the prepared remarks, up After will our the call open we for questions. .

the Private of website. have earnings may statements release, Securities and following. from the forward-looking available Litigation or statements XXXX. in If Please results that Reform discussion future today's it corporate and our note of you those guarantees in Investors a results do actual Any contain materially uncertainties of such copy are performance within the of Act differ of not forward-looking statements. could Today's the of take risks section involve the cause is forward-looking meaning not to

the of operating and X today's obligation a with any during refer operating filings for may turn be and On discussion to this any to disclaims SEC company discussed call call. we earnings risks or with of measure. income, Pages of income to statements financial a over AOI, non-GAAP adjusted Jim. that, a reconciliation I'll consolidated operations And The statements that X and company's release, the forward-looking Please now to update uncertainties. of the provide

James Dolan

Thank everyone. you, Ari, and morning, good

leading Sphere the attention, September. of world's bears with Our present drew Many making, underway the in Vegas significant company's in debut at generating next officially chapter end social years opening Las the of got coverage. the

with per sponsors Guest was response. in new . able the experience are artists, and firsthand very approximately estimated advertisers total $X immediately days In happy potential are reach after we fact, product, to the this now and opening day. billion our

for great some journey realize will is to start. Sphere we're off a And Sphere time just while potential, Our take with full to beginning. it its

venue And sphere The sold XX to the the total of Sphere from we This with of a a Every [ light the conversations its shows. the tank to UX and incredible been midst are only run. run now community adding the we're links. into of response show their increased discussing performances. recently we has with As out. runs opened UXs of venue. across XX having of multishow bands in including genres, ] are artist more artists has you at to play know, UX wide far variety that in announced call And February varying interest demand, so

expect of fees We year to fiscal the half in to host and more X residence look sharing additional forward second detail. this

its our captivating component our as immersive pleased a Aronovsky the As experience to days with claim on have Sphere featuring ] audience postcard from for that core use the to Earth venue's has Earth postcard designed from per as the and reception been from the debuted Sphere which you're aware, of year days. be we the A of XXX [ with multiple Darren day many Nominated October Director, is strategy on events busy critical with Academy X, guests [ incent technologies visuals from very Sphere experience ]. systems. We've well received sensors of and of the engage

$X end each This million October, of have sales ticket day. to in Through has into strong ticket the average translated date. daily sales we over grossed

and welcome content additional first we and Formula and a take fans innovative different millions more new the loss-based to will of grand This of already is Sphere week the the forefront Sphere atrium brief experiences. around to of audiences time experience the at learn both the as of and when excited to the world. includes populating grounds. the introducing will its content be our about showcase keep technology planning X enhancing our free to we As X we'll Sphere We're ways at cinematic signature Formula what that the pause continue we're iterations inaugural with experience. category. exhibits we UX the venue, That watching Sphere next be

of part FX activations. takeover have and will a the including As multi-day agreement, use content compelling Exosphere display brand of of the our sphere, rate-related

was with seen, September, to respect As building Exosphere. we transformed artist our official start Meta, early Exosphere [indiscernible]. welcomed creatively brand brands, and Xbox content I'm by with support This campaigns Coca-Cola sure renowned artistic the NFL NFL our well X-week the campaign from of from helmets of of season. Sunday In teams other the as on Ticket. ahead the and the campaign you've followed momentum the UX advertising of in prominent first PlayStation, quickly UX's all XX as as including

residents As proposition in value the amplifies anticipating this partners. Las platform's enhancing beyond media, advertising significantly ExoSphere being widely are local the and Vegas campaigns for the tourists reach on shared social on millions of the our overall well

a healthy the advertising over pipeline see campaigns months, of constant prominent will the rotation Exosphere have We from and commitments a impactful of many you for coming global brands.

we record-setting Super the Exosphere for are week a Bowl expecting in February. Las this around In revenue Vegas fact,

our marketing on sharing active We are also of partnerships number with more and blue-chip in to brands a look progress. potential discussions about forward

Las this are begun venue Sphere's and has and the summary, we and destination a further ability markets. surface we've take can to we scratch but already entertainment excited miniature, to media to in by how seeing landmark inspire the much only wonder, Vegas, new new In are including become all just

globe, right the long-term sponsors full motors, guests So remain away, while artists from you across and confident in should our and outlook for is not momentum to its we the expect Sphere. potential the venue reach with building economic

him call November Financial over Ranji Officer turn for wish and Andrea, the of his his to all announced in at to the during the his last over Chief And I Before that, call his him well position Gautam Treasurer Andrea. that We future turn from Friday endeavors. I'll as thank with effective X. time and company contributions EVP, we resigned

Andrea Greenberg

Jim, good you, and Thank morning.

team, of the regular 'XX Rangers professional Jersey is NBA our X Islanders, we With Sabres. and coverage and underway, with Nick, to XXXX, season sports the and be excited New New Devils are York extensive NHL Buffalo back

programming pleased which We This as our and announce are New Jersey next that full Devils. all season, games other platforms. enables pre- coverage offer the begins related slate and extension, the rights recently Networks we compelling continue with multiyear reached a of post-game of devils to renewal devil's also to well across as MSG to

streaming season, ], June. which linear not home also linear and the network but of through receive This millions allows TV now us And [ launched to their watch fans to traditional do currently only the through service opportunity product through MSPs this our TV. regions in who award-winning package, new direct-to-consumer local our authenticated not have programming in our reach our

for to addition to purchasing subscription In authenticated to of an directly for a $XX the have annual subscribers monthly subscribe MSG+ TV approximately subscription option by or participating operators, approximately fans $XXX.

single social for marketing each, regional the linear, They first-of-its-kind the to any Leading targeted up network. offerings season, interest we our avenue point we channels. transactions, digital And reach we games still offering unique upsell early, for including $XXX wider option also began and a sports entry which per have are offering, through while purchase and for seen with have far initial for the the pleased opportunities. so our a to offers start it's of game

we subscriber streaming about strategies and As even grow we our and enhance our add more subscribers further their learn behavior, more to marketing effectively will sustain base.

base the with On build during the revenue initiatives. season presenting regular strides ELEAD season under front, on NSC which partnership of a across for advertising with [ introduction of growth in ]. our included sales teams multiyear commitments strong the new returning we our record our and have with non-ratings-based started already plan advertising to advertisers success last new Plus' the offerings, including year's DXC and made We've

our landscape are innovation, So we for to uniquely continue while partners, viewers positioned media and with the content alike. commitment premium evolve, to value continues we driving and to advertisers believe

With to Ari. back the call over that, now will I turn

Ari Danes

you, Thank Andrea.

in completed TAO in Group MSG Sphere sale interest aware, spin-off Hospitality of you're majority May. in As and of completed the the its Entertainment Entertainment April

entertainment also fiscal for quarter as sphere a year-over-year prior in MSG incur 'XX discontinued the the spin financials, costs to Tao operations. results fully prior occur reflect the but Hospitality The operations. the comparable on discontinued of date for not quarter and overhead stand-alone first are did fully Our quarter that year inclusion period first that not results basis. include in Entertainment represent periods, while basis certain the on did does Group not note criteria first does corporate expect not results meet future year after I'd therefore, a these and

the the operating 'XX an event-related The of related content revenues million of concerts reflected including Vegas first On well revenues expenses, results. of adjusted Turning venue. segment and revenues well advertising adjusted overhead, quarter $XX.X Sphere of of related for early loss the [ and operating end The million million. an Exiter fiscal $XX.X technology company development to Sphere as September. and operating ] the reflected of costs a operating to adjusted primarily $XXX at Revenues SG&A basis, of in total million launch we our Studios $XX.X corporate Las campaigns loss primarily quarter. as $X.X to as loss as and expenses from associated generated generated million

run, our campaigns to results With of debut advertising the X's on the in additional the featuring our the venue in takeover multimonth financial now open, Formula November. fiscal [indiscernible], quarter, begin Sphere's impact and second ] UX's Exosphere impact [ will of multiday including really experience show

$XXX.X AOI, as affiliate of year increases in and lower the The expenses. fees represent SG&A million in to MSG $XX.X prior Turning which quarter. revenues XX%, rights primarily partially generated [ lower higher Networks. expenses, decrease AOI reflected XX% and segment compared by million to and revenue ] offset in The respectively,

our to balance Turning sheet.

XX, approximately term of billion, we debt we MSGE million which cash $XXX quarter, our had shares. received million balance then and $XX unrestricted retained from repaid approximately and the million loan was draw the of with delayed X.X As we During equivalents, proceeds September cash of Entertainment, approximately using MSG $X.X

X.X our position million share received approximately also sale remaining from the million MSGE. We in $XXX in proceeds of approximately

operator, up open that, we the now With for questions. call can

Operator

[Operator from of Ross the with Brandon Instructions] Our first question line comes Partners. Lightshed

Brandon Ross

expectations? things the And may than Jim, what's you since exceeded with And bit you have been us need I'm a in tell your you or different uncharted now. sure some the disappointed Can what opening. little Sphere what completely expected fine-tuning? territory

James Dolan

mostly would thought The media came do that's went received. thing at important social well. globally. us least very It's sort things of point out it's and good. at it look you the And most -- we been that that really the of product we it they my surprised well The was really -- view. But probably well, from

has that the And exceeded of so aspect business it.

concert the all On the say challenges the operational right, had I'd mostly Sphere opening, better. -- it's to like between attraction, ingress, side, the its getting egress, in but time and things seems opposite be turnover our

as now. learning the really marketing on -- sales but an right those said we're there's comments it like finding pretty model to to is We're when my on -- so running, still more But good, are lot -- good and the what in I'd basis as I what we're be, things. we're as doing capacities early, a whole the annual still daily is are and kinds ticket a -- of on not it's much when shows do

]. And So success. opening have I a -- They say numbers good pretty happy but there's -- all, were to improve. I in pretty was expect the to it those [ with all

Brandon Ross

Vegas of should there been venues? of Great. And of what in Since set you've world going first we locations? opened, for negotiations next the has you to additional movement Okay. regions the Las that maybe Spheres. any clear be expect been many And is the

James Dolan

great that look of does today, which and a markets. with will certainly Well, will like say substantive of I I deal a can here is and but be the Sphere -- there None global discuss brand. discussions the interest several reveal it

market. so the than should we rather in And expansion just expect globally U.S.

Brandon Ross

And if could CFO ask, why I share Right. you in. there your could then is to on anything more more I resigned? have just one sneak

James Dolan

question lot. wasn't no issues or reporting in all. just any business. coming. much say started challenging you It's that probably off the new about That's X fit. probably fit. both It's -- has component I That's all [indiscernible] at job don't -- a with, the shape. Look, there's -- thus came years the it's to I think it's we we more a pretty good your There's it there's will -- I But stuff. them. we the of a operational And change a your and didn't think as heavy The I I great a Yes. foresee. the with that -- CFO's conclusion mean, -- that

to on. change. I don't there, much moving expect we're And So

Operator

Ben Swinburne Morgan Stanley. with

Benjamin Swinburne

territory the from Couple of Brandon. questions, with theme unchartered sticking

this business generate think a fiscal about to that against . early maybe the the kind track see at of you we base And we that Or revenue should about duration? need to cost we the think the As we'll quarters, in you year how of think Sphere? we're year? profit seeing do 'XX amount the a need revenue during do longer

James Dolan

Look, is Sphere Ben, profitable. kind already you depends on sure. calculate. the It of Yes, how

Benjamin Swinburne

I'm looking at segment, I guess. the

James Dolan

watching off The to that And I'm but it we company, is, the I'm justify develop enough the it do looking it's the to is is challenged put profitable a got Yes. I of continuing question we how to to mean right? is be be charts, in. right, the Sphere right? watch expense going UX it's to experience will capital if -- hold The think lot to -- be, artists, up, thing that. at the artists match sort right? I the And of just think Our sales doing,

So that you're the will coming. more make residencies liable components the successful. to And project those see are great

that that I trying this revenue the -- -- was our go to the expansion of the product aggressive think with were expenses, designed itself business justify the justify of have we we'll we more -- so and that now keep there with expense out it's to structure business, on, we lot so are probably as that, expand aggressive more the Spheres get underneath bigger, will that more we're expense get based doesn't economic particularly fine-tuning more for base going expenses Sphere greater, the to way there's the be production equation. we'll a to The support but the will and an say roll course, to have Spheres, room to content And appealing, order et cetera. in make more along that bullish and project. for they

Benjamin Swinburne

helpful. That's

So I the just just make right? segment built more with the your Las Sphere. Spheres. can Vegas hearing I understand, to Am Sphere you profitable sure is expectation not be It's needing that

James Dolan

look, content going a sailor you you're a That's it's the a spend to But correct. mean, it's I to be like little be on going little drunken to going if -- -- difficult.

explore to have and product. want it, You've moderate, but still you a the push got cetera. We be disciplined to still little et great want to medium and

do a there's of is. lot to think company balance. how attention that will And successful have So we're I paying balance it. And that with a lot the to

Operator

JPMorgan. with Karnovsky David

David Karnovsky

Just a few on Sphere.

pandemic looks builds there Assuming to for more costs potentially can construction that compare impact might financed be given the that initial how how are by expense venue lower profile capital your partners, the partners think Sphere the had, return different? you much you may do

James Dolan

Yes. the the always right? pancake I call team mean about So what ] effect, the talks first they a little difficult. first pancakes, [

to cost do second moving expect it our less. we pancake. we're on And So to

improvements We too. the in also think product, we can make

David Karnovsky

how And what running? content. following show? start ballpark expense about if figure your like you for do what the interested, I just up point look And some kind a production for a should you replacing I'm long of think Plus Card at of originals. you know And then do show don't envision Okay. that original like can on to

James Dolan

-- year seen a want we but which cetera. if point the you show, about marketplace obviously that a Spheres, it we're old obsolete post run that et in talk do, to guards, cetera, as the out just we the now, new look, thinking haven't current will especially will doesn't about the those new show Right I et show put

And versions very Las expect viable less will the annual is, there. market I So the feather and on guards a for the exhibitions in way of it probably post mean, content. we will an new Vegas as of to but be I number that still years come, new basis less

So what question? your part was the of other

David Karnovsky

and ballpark whether could you would production incremental? expense be the if No, that

James Dolan

to the that that costs, exploration produce of more that's definitely medium, production shows. these will do pancake takes of be expect Darren, it also able the I kind again, be to with -- thing -- but another think So we first sort one to reduce I the we'll able the again, of like what

Operator

with Joyce David Research Partners. Seaport

David Joyce

for please, A questions Jim. you, few

learnings post the follow-ups. are terms are in First, And what of the early from card some variables the pricing, what your of you on have in the then fine-tune might number of I capacity? earth that terms events, seating

James Dolan

margin those the experience expanding David, think look, with the starting to a conservative. But that you've I cost all is number is the low. actual already the running obviously, off, very shows, about Sphere pretty building, of is creation because high content, in the Well, -- explore, in we you've capacity, content, the invested started the cetera, on the the thing et invested the it really, factors, experience we're very, really already of of

we're number think think so -- off But maximize flexibility to I start out that. the is What I with we the So low -- marketing there's also of come right? that pricing come just ever priced perfect were of to in. to they we're customers is trying regenerating it -- it an some -- the that. learning obviously in market through for probably every has Las XX year. -- we're marketplace up mean customers, to really open Vegas still it wasn't The like us that they're a because market about million market I people So

still our and sell our And those ticket people reach that ability in products, -- interest the refining. we're so the to and right,

I and per number et are all shows, ticket, heavily we're price things So now, improvement. Those cetera. I per price think show, expect those the marketing, to parameters, see of there's upside in studying both that

David Joyce

as naming but is there opportunities [ at asset? That's already the other naming rights. Venetian surrounding the are And the Great. Sphere second the to question on referred Okay. ],

James Dolan

I pretty going -- so Sphere don't consistent we're about are so of to we The have want profile with sort kind that -- -- right, they that. look, to has that's would rights of any that already naming the There -- so a and think the careful of something -- lose has be be global to that strategy.

So financial its in it's terms purely of consideration. not

David Joyce

ads campaigns time advertising also, the curious Or How understanding basically. production and the And Or in producing the be? ad? the could logistics in expense the interested Exosphere are run? to an Understood. ad be many you how about typically I'd and going long finally, what's opportunity involved

James Dolan

the it's I time much don't a can mediums. are they're for different I It's you other right? in it's think peril really really different advertisers -- their but take production medium. it I need X-dimensional. it. So that -- ], than say do right? that to to, The time, will about clients most advertisers But [ It's thoughtful mean you fast that

content to to And has so that. your perform

of good You the real bring on it this can't great to take on that doesn't It And place and and you content they -- benefit and Sphere, screen a extra viral does when advertiser gets piece -- on all do the an on it advertising look that advertiser the that. but flat you're spending lot right, have a you on away. it mean, content value just goes content right? Sphere. that of exposure, comes won't right it, I and a So do

that with rest will So marketplace. really making something some be and they a money are have the advertisers sure that the of spending on -- time the lot

out, there it. The others to but all global them seem that of message of sort be their They wanting quicker. with to to get are push need get a little

done great interesting sort want it's attention paying seeing so it far, don't us I pretty own, our And of advertisers but from talk And I too blowing they're -- they've right, it of of mean really because our We're they're their results some of some on some through to it, they the Sphere did that creative they creating. and much some studios, about and good. away. so

David Joyce

ad requirements are ]? per ads how campaign [ lengths or requirements you hour on many or have And do minimum day any per or for

James Dolan

sales community. kind Well, of to you're this trying do that your we dedicated visiting dedicated to a you're an to community reach your standing so that Vegas that is interesting tale. social the XX% rule other always at or of sponsorship on the answer looking so Las is XX% if -- out the force question, have something and there's exactly media, right, the Again, to to inventory art it the a isn't but even and our with -- global --

going Because to And so that's the will right? But XX-XX product the make -- the law that long more valuable. stick successful. been but to that think far, we're pretty in I I formula, run, think

David Joyce

it. Congratulations. appreciate I

Ari Danes

Dave. Operator, caller. take Thanks, more we'll one

Operator

question final with the comes Our from Golding of Capital. line Paul Macquarie

Paul Golding

OTT of I give across tranches? a different Maybe angle follow-ups. of could product And you on guess, of questions. few attack the Networks, for I the then here. couple a color On a uptake have any subs X pricing the

Andrea Greenberg

initially Well, begun of launched while back June, targeted the season. only beginning efforts marketing our in MSG+ really we've at the

we're it's So But very demand per seeing the say I can seeing game including numbers. interest. our the for -- early initial I We've early response, relatively for pleased we're as mentioned, advertiser robust offering. still with for meaningful

presenting have a brand. [ They're a We new partnership to leads our advertiser ]. with new

all, in to we you while are our business. all to continue expect to be accretive [indiscernible] So

Paul Golding

for renewal, seen upside. to how RSN space the we've remarks, pressure prepared noted Any space in you Devil's on rights seen for shook rights you the in fees? national on the the the could in rights pressure you then deal this give color And we've out the downside,

Andrea Greenberg

pay-TV relationship environment. that and terms. discussions, I active in we're Those long into having season. and both the these the a get renewal with We mindful the had can't but We've pleased we Devil say certainly, Devil. of the can begin with specific are Sure. changing terms

Paul Golding

I here Networks. if in last Great. could on one one And sneak

should that of in Networks' progress 'XX there that date as maturity. keep on mind the we or approaches? anything Any conscious debt, October the Just refinancing

Unknown Executive

loan, respect it to So refinancing early of Networks' with term process. in the the remains the

October. in the As matures you noted, loan

ultimate coming more to potential refi, options in constant contact are the our number respect of in with know and months. the There with are lenders. a we'll We

Operator

I will for to session. the Q&A now the comments. Danes turn call over back closing Ari ends This

Ari Danes

you our next forward call. day. for Thank joining all you with earnings We us. on good a speaking to look Have

Operator

Entertainment XXXX concludes Company Earnings you your for First Call. Fiscal We the Sphere Quarter Conference thank This participation.

now disconnect. may You

Sphere Entertainment (SPHR) 8 Nov 232024 Q1 Earnings call transcript