MSG Entertainment and Sphere Entertainment Name Allen Lo Executive Vice President, Chief Legal Officer Mar 18, 2026 11:00 AM Eastern Daylight Time MSG Entertainment and Sphere Entertainment Name Allen Lo Executive Vice President, Chief Legal Officer Share NEW YORK--(BUSINESS WIRE)--Madison Square Garden Entertainment Corp. (NYSE: MSGE) ("MSG Entertainment†) and Sphere Entertainment Co. (NYSE: SPHR) today announced that Allen Lo, a leader with more than 30 years of broad legal experience in the technology ...

Core Viewpoint - Sphere Entertainment Co. (SPHR) is expected to experience significant gains, driven by strong demand and improving financials, leading to a buy rating initiation [1] Financial Performance - The company has shown improving financials, which supports the positive outlook for its stock performance [1] Market Demand - There is strong demand for Sphere Entertainment Co.'s offerings, contributing to the optimistic projections for the company's growth [1]

Fund Performance - Ariel Fund delivered a +3.22% return in Q4 2025, in line with Russell 2500 Value Index (+3.15%) and Russell 2000 Value Index (+3.26%) [1] - For the trailing one-year period, the Fund advanced 14.15%, outperforming Russell 2500 Value Index (+12.73%) and Russell 2000 Value Index (+12.59%) [1] - The Fund's 5- and 10-year average annual returns were +9.36% and +9.51%, respectively [1] Market Conditions - Performance attributed to resilient corporate earnings, easing inflation, and rising expectations for accommodative monetary policy [1] - Continued enthusiasm around artificial intelligence and cloud infrastructure supported markets, although gains were concentrated in a narrow group of large-cap stocks [1] Outlook - The firm maintains a measured and cautious outlook for 2026, citing geopolitical risks, fiscal constraints, labor market dynamics, and elevated market concentration as potential volatility sources [1] - Management reaffirmed a long-term, bottom-up approach focusing on strong balance sheets, durable fundamentals, and valuation discipline [1] Company Highlight: Sphere Entertainment Co. - Sphere Entertainment Co. (NYSE:SPHR) was highlighted as a top contributor, with a one-month return of 22.51% and a market capitalization of approximately $4.05 billion [2][3] - The company is known for its immersive Sphere venues and large-scale events, with financial results improving due to robust consumer demand for "The Wizard of Oz" [3] - The success of "The Wizard of Oz" is expected to accelerate discussions for future venues, representing a compelling long-term growth opportunity [3]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Sphere Entertainment (SPHR) - Sphere Entertainment currently holds a Momentum Style Score of A, indicating strong potential for momentum investing [3] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for outperformance in the market [4] Performance Metrics - SPHR shares have increased by 4.18% over the past week, outperforming the Zacks Media Conglomerates industry, which rose by 1.33% [6] - Over the past month, SPHR's price change is 17.48%, significantly higher than the industry's 3.45% [6] - In the last quarter, SPHR shares rose by 28.14%, and over the past year, they have surged by 197.23%, while the S&P 500 has shown minimal movement of -0.21% and 17.83% respectively [7] Trading Volume - The average 20-day trading volume for SPHR is 746,328 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Outlook - In the last two months, three earnings estimates for SPHR have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from -$3.67 to -$2.59 [10] - For the next fiscal year, two estimates have also moved upwards with no downward revisions [10] Conclusion - Given the strong performance metrics and positive earnings outlook, SPHR is identified as a promising momentum pick with a Momentum Score of A and a Zacks Rank of 2 (Buy) [12]

Core Insights - Sphere Entertainment Co. (NYSE:SPHR) is recognized as one of the best entertainment stocks to buy according to Wall Street [1] Group 1: Price Target Increases - Morgan Stanley raised its price target on Sphere Entertainment Co. to $135 from $105, maintaining an Overweight rating due to stronger-than-expected results from The Wizard of Oz [2] - Goldman Sachs increased its price target to $126 from $108 while keeping a Buy rating, citing sustained demand for live entertainment and interest in additional Sphere venues [3] - BTIG raised its price target to $127 from $110, maintaining a Buy rating, and noted that The Wizard of Oz exceeded pricing assumptions [3] Group 2: Financial Performance - Sphere reported fourth-quarter revenue of $394.28 million, surpassing the consensus estimate of $377.6 million, validating its business model [4] - CEO James Dolan highlighted plans for global expansion, including projects in Abu Dhabi and National Harbor [4] Group 3: Future Catalysts - Key catalysts identified for 2026 and beyond include the performance of The Wizard of Oz, new residencies, multiyear sponsorships, and future franchise or intellectual property launches [3]

Core Insights - Entertainment stocks are gaining attention as investors shift focus from previously dominant sectors, with an emphasis on digital engagement, streaming, gaming, and media platforms [1] - The communication services sector, which includes many entertainment companies, is expected to perform well, driven by advancements in AI and a shift towards high-margin business models [2] Industry Overview - Communication services stocks are projected to be the best-performing sector in 2025, primarily due to the AI trade, with AI expected to be a key driver in 2026 [2] - The sector is experiencing higher margins, reflecting a structural shift towards more efficient business models driven by innovation, scale, and automation [2] Company Highlights - **Live Nation Entertainment, Inc. (NYSE:LYV)**: - Potential upside of 7.41% with 61 hedge fund holders [7] - Price target lowered to $174 from $176 by Roth Capital, maintaining a Buy rating, citing resilience against AI disruption and renewed investor interest due to reduced antitrust concerns [8] - Announced acquisition of ForumNet Group, expected to enhance fan experience and sustainability initiatives [9][10] - **Sphere Entertainment Co. (NYSE:SPHR)**: - Potential upside of 11.50% with 1 hedge fund holder [11] - Price target raised to $135 from $105 by Morgan Stanley, maintaining an Overweight rating due to strong performance from The Wizard of Oz [11] - Reported fourth-quarter revenue of $394.28 million, exceeding consensus estimates, and plans for global expansion [13]

Core Insights - Sphere Entertainment has demonstrated resilience and strong growth despite challenges in Las Vegas, with management aggressively scheduling multiple shows to enhance daily revenue [1][3] - The company reported significant success with The Wizard of Oz, selling over 2.2 million tickets and generating approximately $290 million in ticket sales, contributing to a revenue increase of over 60% in the Sphere segment [2][6][12] Financial Performance - Total company revenues for the December quarter reached $394.3 million, with adjusted operating income of $128 million [11] - Sphere segment revenues were $274.2 million, up more than 60% year-over-year, driven by higher revenues from The Wizard of Oz and increased performances [12] - Sphere segment adjusted operating income was $89.4 million, a significant improvement from an operating loss of approximately $0.8 million in the prior-year quarter [13] Cost Management and Liquidity - The company maintained disciplined cost management, reducing SG&A by $14.9 million year-over-year, with total SG&A at $104.1 million [15][16] - As of December 31, Sphere had approximately $56 million in net debt and $477 million in unrestricted cash, reflecting a solid liquidity position [4][17] Expansion Plans - Sphere is accelerating its expansion with a new 6,000-seat venue planned for National Harbor, supported by approximately $200 million in incentives, with a potential opening in four years or less [5][7] - The company is in the final stages of pre-construction for a venue in Abu Dhabi and is exploring 5-6 projects concurrently [9][10] Sponsorship and Advertising - Sphere has seen strong sponsorship momentum, with partnerships including Google, Delta, and Lenovo, and is actively expanding its roster of official partners [17] - The company hosted its second CES keynote and introduced an interactive game experience in collaboration with LEGO and Lucasfilm's Star Wars [17] Content Pipeline and Residency Outlook - The next Sphere Experience, From the Edge, is expected to be completed later this year, with potential launch timing in the fourth quarter or early next year [19] - The venue is nearly fully booked for concert residencies through 2026, focusing on long weekends to align with Las Vegas market patterns [21]

Market Expansion and Business Strategy - Sphere network is exploring selective market expansion through joint ventures, equity partnerships, managed venues, franchise models, sale-leaseback arrangements, and debt financing[37]. - The company launched a joint venture, GAME, with YES to enhance streaming services and launched the Gotham Sports streaming product in October 2024[55]. - The company no longer pursues the development of a Sphere in London and sold the land during the three months ended June 30, 2025[526]. Venue Features and Events - Sphere features a 580,000 square foot LED Exosphere, the world's largest LED screen, with approximately 1.2 million LED pucks capable of displaying over 1 billion colors[38]. - The main venue bowl includes a 160,000 square foot 16K x 16K LED screen, providing a fully immersive visual environment[38]. - Sphere Immersive Sound utilizes 167,000 programmable speakers to deliver high-quality audio throughout the venue[40]. - The Wizard of Oz, an immersive production at Sphere, debuted in August 2025 and has received critical acclaim for its technological innovation[40]. - Sphere has hosted major events, including the highest-grossing UFC event ever on September 14, 2024, and the Formula 1 Las Vegas Grand Prix in 2023, 2024, and 2025[43]. Subscriber and Streaming Services - MSG Networks has an average reach of approximately 2.9 million viewing subscribers as of November 2025, including subscribers to the MSG+ streaming service[50]. - MSG+ allows subscribers to access MSG Network and MSG Sportsnet content, with options for monthly, annual, and single game purchases[49]. - The company introduced its direct-to-consumer product, MSG+, in June 2023, providing an alternative for accessing its programming[89]. Competition and Market Challenges - The company faces intense competition in its Sphere business from various entertainment options, particularly in Las Vegas, which is a highly competitive market[83]. - MSG Networks competes for programming distribution against other networks and platforms, impacting its ability to attract subscribers and advertising revenue[85]. - The competitive landscape for sports programming is challenging, with increased availability of national sports programming potentially impacting MSG Networks' viewer base[93]. Employee and Organizational Culture - As of December 31, 2025, MSG Networks had approximately 1,100 full-time and 2,200 part-time employees, with 16% of employees under collective bargaining agreements[96][97]. - The company emphasizes a culture of accountability and continuous learning to support employee growth and development[98]. - MSG Networks offers a range of employee benefits, including medical, dental, vision plans, and a 401k plan with employer match, aimed at supporting employee well-being[99]. Regulatory and Compliance Issues - The California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA) impose new data protection obligations, with most CPRA provisions effective from January 1, 2023[69]. - MSG Networks' international operations are subject to various laws, including the EU's GDPR, which affects data protection and privacy practices[71]. - MSG Networks must comply with FCC regulations regarding accessibility, including closed captioning for video programming and certain quality standards[73]. Financial and Economic Factors - Substantially all revenues and assets of the Company are attributed to or located in the United States, with a concentration in the New York City metropolitan area and Las Vegas[101]. - A hypothetical 200 basis point increase in floating interest rates would increase the Company's interest expense by $11,574[523]. - The EUR/USD exchange rate fluctuated from 1.0247 to 1.1868 during the year ended December 31, 2025, with a 10% fluctuation resulting in a change of $130 in the Company's net asset value[525]. - The GBP/USD exchange rate fluctuated from 1.2181 to 1.3749 during the year ended December 31, 2025, with a 10% fluctuation resulting in a change of $100 in the Company's net asset value[526]. - The weighted-average discount rates for the Company's Pension Plans and Postretirement Plan as of December 31, 2025, were 5.25% and 4.67%, respectively[530]. - A 25 basis point decrease in the assumed discount rates would increase projected benefit obligations for the Company's Pension Plans and Postretirement Plan by $800 and $20, respectively[530]. - The expected long-term rate of return on plan assets for the Company's funded pension plans was 6.36% for the year ended December 31, 2025[532]. - A 25 basis point decrease in the long-term return on pension plan assets assumption would increase net periodic pension benefit cost by $40 for the year ended December 31, 2025[533]. - The Company may enter into foreign currency forward exchange contracts to reduce translation risk from foreign currency fluctuations[527].

Financial Data and Key Metrics Changes - For the fourth quarter, the company reported total revenues of $394.3 million and adjusted operating income of $128 million [9] - The Sphere segment generated revenues of $274.2 million, an increase of over 60% compared to the prior year period, driven by higher revenues from the Sphere Experience [9] - Fourth quarter adjusted operating income for the Sphere segment was $89.4 million, compared to an adjusted operating loss of approximately $800,000 in the prior year quarter [10] Business Line Data and Key Metrics Changes - The Sphere Experience saw significant revenue growth due to The Wizard of Oz, with over 2.2 million tickets sold and approximately $290 million in ticket sales [8] - MSG Networks generated $120.1 million in revenues and $38.6 million in adjusted operating income, reflecting a decrease in subscribers and lower affiliate rates [11][12] Market Data and Key Metrics Changes - The company is expanding its presence with a new Sphere venue in National Harbor, Maryland, expected to attract over 15 million annual visitors [5] - The company is in discussions for additional Sphere venues in both domestic and international markets [7] Company Strategy and Development Direction - The company aims to create a global network of Sphere venues powered by proprietary technology and immersive content [5] - Continued investment in immersive technology and experiential content is a priority to maintain leadership in the market [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model, citing strong ticket sales and positive discussions with IP holders for future projects [5][43] - The company anticipates a strong convention season next year, which will influence show scheduling and revenue growth [28] Other Important Information - The company has secured approximately $200 million in state, local, and private incentives for the National Harbor project, with plans to finalize agreements soon [6] - The company refinanced its credit facility related to Sphere in Las Vegas, extending the maturity and improving borrowing rates [12] Q&A Session Summary Question: How many Sphere expansion projects are expected in the next few years? - Management indicated they could handle 5 to 6 projects simultaneously, assuming they are profitable [15][16] Question: How was the location for National Harbor chosen? - The location was selected due to competitive offers from Virginia and Maryland, which expedited the decision-making process [20][21] Question: How are ticket sales for The Wizard of Oz trending? - Despite seasonal headwinds, ticket sales have been strong, and the company is confident in continued growth [26][28] Question: What is the outlook for SG&A expenses in 2026? - Management is focused on cost-saving opportunities while ensuring infrastructure supports growth, with fluctuations expected in SG&A expenses [31][32] Question: What is the status of the residency pipeline through 2027? - The company is nearly fully booked for 2026 and has limited availability for 2027, focusing on long weekends to maximize attendance [46][47] Question: Can you provide an update on the sponsorship strategy? - The company has secured partnerships with brands like Delta and Anheuser-Busch and is actively pursuing additional sponsorship opportunities [52][55]

Financial Data and Key Metrics Changes - For the fourth quarter, the company reported total revenues of $394.3 million and adjusted operating income of $128 million [9] - The Sphere segment generated revenues of $274.2 million, an increase of over 60% compared to the prior year period, driven by higher revenues from the Sphere Experience [9] - Fourth quarter adjusted operating income for the Sphere segment was $89.4 million, compared to an adjusted operating loss of approximately $800,000 in the prior year quarter [10] Business Line Data and Key Metrics Changes - The Sphere Experience saw significant revenue growth due to The Wizard of Oz, with over 2.2 million tickets sold and approximately $290 million in ticket sales [8] - MSG Networks generated $120.1 million in revenues and $38.6 million in adjusted operating income, reflecting a decrease in subscribers and lower affiliate rates [11][12] Market Data and Key Metrics Changes - The company is expanding its Sphere venues, with a new 6,000-seat Sphere planned for National Harbor, Maryland, expected to open in four years or less [5][6] - The company is in discussions for additional Sphere projects in both domestic and international markets [7] Company Strategy and Development Direction - The company aims to create a global network of Sphere venues powered by proprietary technology and immersive content [5] - Continued investment in immersive technology and experiential content is a priority to maintain leadership in the market [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model, citing strong ticket sales and positive discussions with IP holders for future projects [8][44] - The company anticipates a strong convention season next year, which will influence show scheduling and revenue growth [28] Other Important Information - The company has refinanced its credit facility related to Sphere in Las Vegas, extending the maturity for a new five-year term [12] - The company is focused on managing SG&A expenses efficiently while supporting growth initiatives [32] Q&A Session Summary Question: How many sphere expansion projects are expected in the next few years? - Management indicated they could handle 5 to 6 projects simultaneously, assuming they are profitable [15][16] Question: Have elevated construction costs impacted conversations with potential partners? - Management stated that the investment model remains viable despite increased costs, and they are exploring new construction methods to lower expenses [17] Question: Can you provide more details on the National Harbor location selection? - The location was chosen due to competitive offers and a favorable site, which expedited the decision-making process [21] Question: How are ticket sales for The Wizard of Oz trending during the winter? - Management noted strong growth despite seasonal headwinds and is confident in future demand [28] Question: What is the outlook for SG&A expenses in 2026? - Management is focused on cost-saving opportunities while ensuring infrastructure supports growth, with fluctuations expected due to non-recurring expenses [32] Question: What is the status of the residency pipeline through 2027? - The company is nearly fully booked for 2026 and has limited availability in 2027, focusing on long weekends to maximize attendance [48] Question: Can you update on the sponsorship strategy and Exosphere progress? - The company is seeing strong growth in sponsorships and has debuted interactive experiences, with plans for more announcements throughout the year [56][57]