It was open for 2 days of the fiscal quarter. The CFO quit after being yelled at by the notoriously combative CEO. The news has been running with this headline because it's drawing clicks but it's not really painting an accurate picture.
Understatement of the year. Dolan successfully destroyed 2 major sports franchises (Knicks and Rangers) he spent millions on acquiring and managing.
He is also using facial recognition to ban all employees of law firms suing MSG (his company) from going to any of their properties, and NY State is considering pulling his liquor license as a result.
The only reason he's solvent is because the Madison Square Garden is basically el dorado (financially speaking) and he inherited a bunch of money from his father (the founder of HBO and Cablevision)
Maybe the funniest and most pathetic thing about Dolan is that his true love would appear to be his band (https://en.wikipedia.org/wiki/JD_%26_The_Straight_Shot). It's basically the best session musicians inherited money can buy backing a frontman whose singing has been described as "karaoke-grade" and "like he's trying not to cough".
And his employees are expected to attend his shows. And he checks on this.
Many feel the opposite. How can you ensure people are working, unless they truly fear you? Make a mistake and you are in deep, deep trouble, buddy. Straight to the pit!
The CEO's job is only to secure the straps on the golden parachute before they start hammering on the engine in mid-flight. Once the parachute is on, screaming at people is actually a pretty good hammer.
This was my confusion seeing the headline, there is no way the people building this did not realize that this was an "investment" and would take time to make money?!?
Even once it's built you have some logistical things to figure out to start making profit day by day before taking into account the investment.
The real story is apparently the asshole CEO, not the loss.
Exactly. It posted millions of revenue from just two nights of U2. I've seen both shows there. It's a neat venue. Everyone agrees and would go back. The sky is the limit. This is a garbage headline.
I gotta be honest, I'm not sure what was expected? They spent $2b building this thing, it's brand new tech, it didn't host many shows last quarter (it was open for 1? full month of the quarter).
I still think The Sphere is super damn cool and I can't wait to go to an event there.
Same reaction here. For such a huge investment wouldn't you expect it to take some time before it becomes profitable?
Live shows are only one piece of the puzzle. I really want to go see the "postcard from earth" short film they made especially for the Sphere. The filming required all kinds of specialized camera gear to take full advantage of the resolution and 3d viewing inside, so it's no wonder there isn't going to be an immediate catalog of titles to choose from for selling more tickets.
They're also basically killing any locals going with the cost of concessions and probably driving a lot of people to just not spend any money there. At $40 for a double shot and $20 for a beer, I'd be drinking before I got to the venue if that were my thing.
That's nearly Ibiza prices.... which is OK if everyone is doing the same thing (well, I say OK, you know what I mean). But if there's any other option, no-one's going there. I've only been once to Vegas, but I don't remember it being pricy.
>They're also basically killing any locals going with the cost of concessions
Local residents are absolutely not the target audience for Vegas casinos and other attractions.
Vegas casinos offers super-cheap food and drink to lure gamblers. Locals take advantage of said low prices, but that's a side effect of the main purpose which is to keep tourists near the card tables and slot machines. The Sphere does not have gambling, thus needs the food and drink to pay their own way.
Not only is it brand new, any prospective performance looking to book there is going to have to essentially create a bespoke show for that single venue only, that will not be able to be played anywhere else what with the big ass spherical screen being the primary differentiator.
In my mind this is like if you were to build the first IMAX theater if IMAX wasn't already a thing. You'd basically be asking Hollywood to create a special version of a movie for your single venue. Like... I'm sure some will take that up, as evident by it hosting a few shows. But it can't possibly be an "open every night" situation, the economics just don't make sense for that.
I saw both the U2 show and Postcard from Earth movie. Both were amazing in their own way, but the movie was a better demonstration of the technology if you have to choose one (and if you're not a big U2 fan).
The Sphere partnered with an immersive sound company Holoplot to design and build the sound system (https://holoplot.com/news/sphere-immersive-sound-powered-by-...) - this was very impressive during the movie and you could locate sound coming from exactly where the objects were on the screen in a way that I've not experienced before.
The experience was similar to wearing a VR headset since the screen covers almost your entire field of view, but the sound system significantly improved the feeling of immersion. During the movie, the system also pushed air onto the audience to simulate wind in a convincing way.
Makes you wonder if that wasn't the plan all along. The original company has a lot of investors who would share a big percentage of the profits if it is successful. Those in charge fix things so that those investors are shed and all the profits are instead funneled to entities they control exclusively.
I can imagine a ton of logistical constraints. They have U2 doing a residence, and I'd guess that residences are going to be the only options. Designing visuals on such a unique and complex display to match a specific artist is at least a few person-months of effort. You have to plan shows very far in advance and spend a lot of money on show production. This likely excludes anyone but the top-tier performers. And the exterior is basically just a giant ad. It's not a revenue-generator since you don't need tickets to see it.
Yes the design of the Sphere means it will never be a successful venue for touring acts. Any entertainer performing there will have to be committed to at least a month of shows, probably more.
That said, it's a unique concert experience even setting the visuals aside. The sound is immersive, coming from all around you rather than the wall of sound typical of most concerts. As such, while still plenty loud, your ears are not completely destroyed by the end of the night should you forget your hearing protection.
It seems the operating loss may have been expected for the quarter and the CFO's departure could be unrelated. Always difficult to tell in these scenarios but the Sphere officially opened on September 29th. I find it hard to believe they expected to be in the black within less than 45 days.
If you think The Sphere is cool from the outside, wait until you see the inside.
The humongous spherical screen in the inside is amazing (16K resolution according to Wikipedia).
U2 is sold out, and the tickets are not cheap (I payed $500 for a partially obstructed view of the screen, others run at $1,500), plus the "Sphere experience" so I think it will pay out.
There is also "The Sphere Experience" movie at $50 a pop.
A Capacity of about 19,000 people.
There are seats in the lower section that sit partially underneath the second level. You will get a great view of the band and stage but lose some of the projections going on all around you.
We sat in the 5th row of the 300 level. The visuals were amazing there but the stage was quite far away. If you can afford it, something towards the front of the 200 section would be the sweet spot between being closer to the stage and positioned to be fully immersed in the lights show.
- Ranji (CFO) suddenly quit after a bout of yelling and screaming from CEO James Dolan.
- Revenue for the quarter included $4.1 million in event revenue — those two sold out U2 shows, $2.6 million from suite licensing and advertising on the Sphere exosphere.
However, it shows that 1 show fetches $2M. 30 shows in 90 days (3 shows in a week) would fetch $60M.Eliminating $98M/Q loss may not be that hard.
The vegas strip is full of real estate stories where a major undertaking flops initially but gets turned around. The stratosphere was built, sold at a huge loss, and then flipped for an enormous profit (I'm sure there's way more to the story that others are aware of). I wouldn't be surprised if the Sphere ends up the same. I'm really excited to see it, it's very cool thinking about the potential for promoting visual art.
It's a mathematical certainty that there will always be real estate that is "self sufficient" without a debt load (or with a lesser one) but can't sustain the current load.
Something tells me there is a tax avoidance scheme whereby these investments are intentionally engineered failures that generate the financial manipulators shockingly high paybacks.
I was thinking the opposite: like it's some strange way to pay the "true cost" of the property, by first paying inflation-saddles prices, going bankrupt in the process and leave the first investors holding the bag.
From what I understand you can't scalp, they scan ID. There are many tik toks of people buying tickets from either 3rd parties online or just scalpers and they are rejected at check in.
Still, the involvement of ticketmaster will scare off a lot of potential customers - that company is more toxic than saying "Brought to you by Comcast and Bank of America".
I'm from (and live in) Norway. Ticketmaster is used for a lot of shows here too, especially the larger venues.
While I wouldn't call them the best thing since sliced bread, overall my experience over the years is that they take my money and give me my tickets.
Today I bought some tickets. I vent to the venue, saw there was a show, clicked on Buy tickets, took me to Ticketmaster, logged on, found ticket, paid via local payment provider[1] (verified on phone, super simple), and I got my tickets on email. All was just a few clicks and over in a couple of minutes.
This is my typical experience. Is US Ticketmaster particularly worse, or am I living in an alternate reality?
Stupid invented fees are what flipped the "never again" switch for me. Every step of the buying process, there'd be a new fee tacked on. You'd get things like "order processing fee, $20, facility fee, $10, service fee, $23, digital copies fee, $10, fee to see what all the fees add up to, $20".
You'd end up spending $120 on a pair of tickets, and $500 on invented fees that any sane person would have a very difficult time justifying.
Ticketmaster is a vertical monopoly in the US. They control all major venues in the country, all ticketing, and resale of that ticjeting. They are awful. I assume they have yet to achieve total market dominance in norway.
I despise giving an endorsement to anything Dolan is associated with and can profit from as he is an awful and genuinely petty human, but the Sphere is a technology worth seeing.
I wasn't super impressed with the sphere's screen when I went in there with the thing turned off and saw the very steep stairs to the seats. It initially looked like a bigger movie screen.
But once it's on, with the right shot, it completely envelops your field of view and is quite mesmerizing. I'd love to see some action movies specifically shot for that screen. The way that it wraps around you and can potentially show you a full field of view in front of you and to the sides would be quite exciting for a chase or combat sequence for a movie.
I personally don’t understand how to have a phantom like vendetta because of a person’s behavior, following them around with negativity their whole career.
Like, they made something awesome and need to monetize it. Focus on the awesome thing. The entity is going to pay those involved and they might sell shares for a higher price, thats how our system works. Suddenly caring only because you dont like 1 of those stakeholders? I don’t understand that.
I’m a fan of organizations becoming disconnect and unbeholden to public opinion. Some people try to become judgement proof - uncollectable funds after losing a civil suit - I’m a fan of cancel proof. Companies that dont have to change anything based on a stakeholder’s behavior.
1) I'm not cancelling the Sphere. I'm just telling you I don't like Dolan but still like the Sphere and think it's worth seeing. That point of view is pretty close to the opposite of cancelling somebody.
2) As far as criticizing people, maybe a reasonable rule of thumb is that if you're either in public office or wealthy enough to have "fuck you money", you're a reasonable target of receiving public comments on your behavior?
Companies already are cancel-proof, unless they're dumb enough to alienate their biggest customers. Then they cancel themselves.
The "toxic personality" stuff really does need to die though. Elon Musk is not invited to my birthday party, but I can respect what his companies have done. These parasocial vendettas are on par with cult disfellowshipping behavior. Unless the product is an asshole too, who gives a shit?
Linus, the asshole, brought Linux to fruition. Gentle parenting and oversensitivity only brings us more assholes.
Readit News
Understatement of the year. Dolan successfully destroyed 2 major sports franchises (Knicks and Rangers) he spent millions on acquiring and managing.
He is also using facial recognition to ban all employees of law firms suing MSG (his company) from going to any of their properties, and NY State is considering pulling his liquor license as a result.
The only reason he's solvent is because the Madison Square Garden is basically el dorado (financially speaking) and he inherited a bunch of money from his father (the founder of HBO and Cablevision)
Imagine if GOB Bluth became CEO. That's Dolan.
And his employees are expected to attend his shows. And he checks on this.
The Knicks are a smoking crater, from what I understand, tho.
Come on...
Sources: Yahoo, Tumblr, Twitter, and so on.
Deleted Comment
Even once it's built you have some logistical things to figure out to start making profit day by day before taking into account the investment.
The real story is apparently the asshole CEO, not the loss.
I still think The Sphere is super damn cool and I can't wait to go to an event there.
Live shows are only one piece of the puzzle. I really want to go see the "postcard from earth" short film they made especially for the Sphere. The filming required all kinds of specialized camera gear to take full advantage of the resolution and 3d viewing inside, so it's no wonder there isn't going to be an immediate catalog of titles to choose from for selling more tickets.
https://www.outkick.com/drink-prices-vegas-sphere-beer-liquo...
Local residents are absolutely not the target audience for Vegas casinos and other attractions.
Vegas casinos offers super-cheap food and drink to lure gamblers. Locals take advantage of said low prices, but that's a side effect of the main purpose which is to keep tourists near the card tables and slot machines. The Sphere does not have gambling, thus needs the food and drink to pay their own way.
I don't expect this to end up like Brand-Briesen Airfield, or other massive buildings built and quickly sold at bankruptcy, anytime soon.
In my mind this is like if you were to build the first IMAX theater if IMAX wasn't already a thing. You'd basically be asking Hollywood to create a special version of a movie for your single venue. Like... I'm sure some will take that up, as evident by it hosting a few shows. But it can't possibly be an "open every night" situation, the economics just don't make sense for that.
The Sphere partnered with an immersive sound company Holoplot to design and build the sound system (https://holoplot.com/news/sphere-immersive-sound-powered-by-...) - this was very impressive during the movie and you could locate sound coming from exactly where the objects were on the screen in a way that I've not experienced before.
The experience was similar to wearing a VR headset since the screen covers almost your entire field of view, but the sound system significantly improved the feeling of immersion. During the movie, the system also pushed air onto the audience to simulate wind in a convincing way.
U2 played there, but I heard retail on the tickets was nearly $500.
EDIT: See gosub100's comment [1].
(not investing advice, educational purposes only)
[1] https://news.ycombinator.com/item?id=38206727
- Original company builds expensive piece of infrastructure
- Original company fails to make money on expensive piece of infrastructure
- Original company goes bust
- New company buys infrastructure cheap
- New company manages to run a profitable business
See Eurotunnel, Iridium, probably others I've forgotten.
That said, it's a unique concert experience even setting the visuals aside. The sound is immersive, coming from all around you rather than the wall of sound typical of most concerts. As such, while still plenty loud, your ears are not completely destroyed by the end of the night should you forget your hearing protection.
Source: https://nypost.com/2023/11/07/media/sphere-cfo-quit-after-ja...
We sat in the 5th row of the 300 level. The visuals were amazing there but the stage was quite far away. If you can afford it, something towards the front of the 200 section would be the sweet spot between being closer to the stage and positioned to be fully immersed in the lights show.
- Ranji (CFO) suddenly quit after a bout of yelling and screaming from CEO James Dolan.
- Revenue for the quarter included $4.1 million in event revenue — those two sold out U2 shows, $2.6 million from suite licensing and advertising on the Sphere exosphere.
However, it shows that 1 show fetches $2M. 30 shows in 90 days (3 shows in a week) would fetch $60M.Eliminating $98M/Q loss may not be that hard.
If I go to the official website[1] to view all shows, they redirect me to the hellscape that is ticketmaster.
That is literally only friction it takes before I'm out. The scalpers are squatting your 2 billion dollar venue.
[1]: https://www.thespherevegas.com/shows
While I wouldn't call them the best thing since sliced bread, overall my experience over the years is that they take my money and give me my tickets.
Today I bought some tickets. I vent to the venue, saw there was a show, clicked on Buy tickets, took me to Ticketmaster, logged on, found ticket, paid via local payment provider[1] (verified on phone, super simple), and I got my tickets on email. All was just a few clicks and over in a couple of minutes.
This is my typical experience. Is US Ticketmaster particularly worse, or am I living in an alternate reality?
Or are there some other aspects that I'm missing?
[1]: https://www.vipps.no/
Stupid invented fees are what flipped the "never again" switch for me. Every step of the buying process, there'd be a new fee tacked on. You'd get things like "order processing fee, $20, facility fee, $10, service fee, $23, digital copies fee, $10, fee to see what all the fees add up to, $20".
You'd end up spending $120 on a pair of tickets, and $500 on invented fees that any sane person would have a very difficult time justifying.
I wasn't super impressed with the sphere's screen when I went in there with the thing turned off and saw the very steep stairs to the seats. It initially looked like a bigger movie screen.
But once it's on, with the right shot, it completely envelops your field of view and is quite mesmerizing. I'd love to see some action movies specifically shot for that screen. The way that it wraps around you and can potentially show you a full field of view in front of you and to the sides would be quite exciting for a chase or combat sequence for a movie.
Like, they made something awesome and need to monetize it. Focus on the awesome thing. The entity is going to pay those involved and they might sell shares for a higher price, thats how our system works. Suddenly caring only because you dont like 1 of those stakeholders? I don’t understand that.
I’m a fan of organizations becoming disconnect and unbeholden to public opinion. Some people try to become judgement proof - uncollectable funds after losing a civil suit - I’m a fan of cancel proof. Companies that dont have to change anything based on a stakeholder’s behavior.
2) As far as criticizing people, maybe a reasonable rule of thumb is that if you're either in public office or wealthy enough to have "fuck you money", you're a reasonable target of receiving public comments on your behavior?
The "toxic personality" stuff really does need to die though. Elon Musk is not invited to my birthday party, but I can respect what his companies have done. These parasocial vendettas are on par with cult disfellowshipping behavior. Unless the product is an asshole too, who gives a shit?
Linus, the asshole, brought Linux to fruition. Gentle parenting and oversensitivity only brings us more assholes.