Sphere Entertainment Co. reported on Tuesday (Nov. 4) that the success of The Wizard of Oz and the Backstreet Boys residency at its state-of-the-art Las Vegas venue boosted revenue and operating income — though those gains couldn’t offset a nearly $130 million operating loss in the third quarter.
Sphere Entertainment generated revenue of $262.5 million, up 15% or $34.6 million, for the quarter ending Sept. 30, compared to the same period last year. Adjusted operating income, an indicator of how much of a company’s revenue will eventually become profit, rose to $36.4 million from negative $10.2 million a year ago. The company also reported an operating loss of $129.7 million, up $12.1 million from a year ago.
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Since opening in 2023, Sphere has become a destination for artist residencies, hosting acts including U2, Phish, the Eagles, electronic act Anyma and now the Backstreet Boys, who recently extended their Into the Millennium residency into February 2026. Upcoming acts include the DJ/producer Illenium, who’s slated for a residency in March and April, and No Doubt, which will play the venue beginning in May.
When Sphere isn’t occupied by a concert, the mega-venue also shows movies, including the U2 immersive concert film recording of its U2:UV Achtung Baby Live residency and The Wizard of Oz at Sphere. The company’s executive chairman and CEO, James Dolan, has said that recording, licensing and adapting these films costs significantly less than live performances and presents meaningful upside revenue.
The Wizard of Oz at Sphere — an immersive adaptation of the classic 1939 movie — has sold more than 1 million tickets and generated more than $130 million in sales since its Aug. 28 premiere, the company reported late last month.
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In a statement, Dolan called The Wizard of Oz “the best example to-date of experiential storytelling in this new medium.”
He added that the film “has been met with strong consumer demand. Looking ahead, we believe our Company is well positioned for long-term growth as we continue to execute on our global vision for Sphere.”
Quarterly revenue generated by the company’s Sphere segment rose 37% overall to $174.1 million in revenue over the same period last year, boosted by $28.3 million more in revenue coming from the venue’s film screenings, collectively known as The Sphere Experience.
The Sphere Experience posted higher per-show revenue from its 220 showings (up from 207 last year) of three movies: Postcard from Earth, the immersive U2 concert film and The Wizard of Oz at Sphere. An additional 16 concert residency shows compared to the prior year quarter also helped boost event-related revenue by $15 million, though that was offset by “lower average per-concert revenue due to the mix of concerts” and the absence of big sporting and corporate events in the quarter. Sponsorship and advertising on the outside of Sphere, along with suite licensing fees, rose $2.7 million from a year ago.
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But more movies and shows mean more expenses, and those associated with The Sphere Experience rose by about $10 million. Meanwhile, event expenses primarily from residency shows rose by nearly $4 million, contributing to an overall 26% increase in the Sphere segment’s operating expenses, which totaled $78.7 million for the third quarter.
Overall, the Sphere segment posted an operating loss of $84.4 million — a $40.6 million improvement from last year — and adjusted operating income of $17.1 million.
Elsewhere, MSG Networks revenue fell 12% to $88.4 million on a more than 13% decline in subscribers and a $12.7 million decrease in distribution revenue.