LAS VEGAS (KTNV) — Strong ticket sales are leading to improved revenue returns for Sphere Enteratinment Co.
During a company earnings call on Tuesday, Robert Langer, Sphere Entertainment Co.'s Executive Vice President, Chief Financial Officer, and Treasurer, told investors their adjusted operating income was $17.1 million for the third quarter.
"[It's] mainly due to the impact of The Wizard of Oz at Sphere. It also reflects the increase in the number of concerts held at Sphere compared to the prior year quarter, which was partly offset by lower other event-related expenses."
Langer added the company is working on becoming more cost-efficient and they've continued to build revenue and see strong demand over the last quarter.
"Our Sphere segment generated revenues of $174.1 million, an increase of 37% against the prior year period. This growth was mainly driven by higher revenues from the Sphere Experience and reflects approximately one month's impact from The Wizard of Oz at Sphere," Langer said.
WATCH | How the Sphere reimagined "The Wizard of Oz" for Las Vegas
"As a result, in mid-October, the production passed 1 million tickets sold and achieved over $130 million in ticket sales already. We also saw revenue growth from concert residencies, extra Sphere advertising and sponsorship, and our efforts to bring the world's second Sphere to Abu Dhabi," Langer said.
Sphere Executive Chairman and CEO James Dolan also said he believes the company is well-positioned for long-term growth.
"We own key technology component providers to Sphere and have a portfolio of over 60 patents in the U.S., spanning across Sphere venue design, audio delivery, video capture and display, 4D technologies, and more," Dolan said "We have also continued to secure international patents to protect our innovations around the world and we are not standing still as we continue to invest in technology and content to extend our leadership positions."
He added the technology is not exclusively used for Sphere.
"This year, we introduced our advanced audio system, Sphere Immersive Sound, at Radio City Music Hall, transforming the audio experience in a nearly 100-year-old venue," Dolan explained. "We are also actively pursuing opportunities to utilize AI tools for content on other distribution platforms ... That is a technological advance that Sphere Studios has that I think we're going to be able to monetize, and I think we'll have some interesting announcements over the next three months on that."
As mentioned earlier, the Wizard of Oz ticket sales are going strong, and Dolan said he anticipates that running for a while.
"We plan on basically running Wizard of Oz until we see demand start to fall off. That could be a lot longer than a year. In addition, we're planning a, what would you call it? We're going to Wizard of Oz 2.0. Right? An enhanced version that we would launch on the anniversary of the premiere," Dolan said. "This is likely going to include some new features to the film, such as we might take you for a ride on a witch's broom during the show. How much more life that will breathe into Wizard of Oz, I'm not really sure, but I think it might be pretty good."
Dolan also compared the show to others on the Strip and says the Sphere is adaptable, which is why it's seeing such strong sales.
"When you look at shows like 'O,' there was a huge capital investment in the beginning, and they're just, they're running it out. I think they did a refresh here and there, but it's basically the same show," Dolan said. "We can change the show. Right? We can do Wizard of Oz right at 1 o'clock in the afternoon and From The Edge at 5 o'clock in the afternoon, and we can add more. The idea of keeping the Sphere filled and in demand, I mean, I think that with the way we've designed the technology, we can keep the Sphere going to keep it filled for a long time to come."
Sphere is also seeing high demand when it comes to performers wanting to take the stage. Dolan confirmed that Sphere residencies are booked up until September 2027.
"The best combination is a concert like the Eagles or Zac Brown or whatever in the evening with at least two to three shows like The Wizard of Oz in the afternoon. That generates the most amount of cash flow in a day. Honestly, the problem that we're having, and it's what my old manager used to call a first-class problem, is that we're trying to find more opportunity to put more into Sphere," Dolan said. "Nothing has slowed down in terms of artists who want to play the Sphere. In fact, that's one of the things that we're juggling is how do we get all these artists in. I've definitely got a lot more demand than I do capacity at this point."