Core Insights - Sphere Entertainment Co. has appointed Glenn Derry as Executive Vice President of MSG Ventures, bringing over 30 years of experience in entertainment technology [1][2] - Derry will oversee technology initiatives aimed at enhancing live entertainment experiences and will work across the organization to deploy innovative technologies [2][3] - Sphere aims to redefine immersive experiences by combining cutting-edge technologies with storytelling, positioning itself at the forefront of the entertainment industry [3][6] Company Overview - Sphere Entertainment Co. operates Sphere, a next-generation entertainment medium that opened its first venue in Las Vegas in September 2023 [6] - The company also includes MSG Networks, which operates regional sports and entertainment networks and a streaming product, MSG+ [6] Glenn Derry's Background - Derry has a notable history in the film and gaming industry, credited with introducing "virtual production" and previously served as President of Production Technology at AGBO [3][4] - He founded Technoprops, a company recognized for its innovations in visual effects, and received an Academy Award for technical achievement [4][5]

Core Points - MSG Networks is involved in a carriage dispute with Altice USA, with Connecticut Attorney General William Tong and New York Attorney General Letitia James urging both parties to reach an agreement to restore MSG Networks' local games to Altice's Optimum service for over 1 million subscribers in the tri-state area [1] - MSG Networks has proposed binding arbitration to resolve the dispute, which Altice USA has dismissed as a publicity stunt, while MSG Networks emphasizes that their intention is not for publicity but to restore access to games for subscribers [2] - MSG Networks operates two regional sports networks and a direct-to-consumer streaming service, providing extensive coverage of local sports teams and establishing itself as a leader in regional sports media [3]

Core Viewpoint - MSG Networks is seeking to resolve its dispute with Altice USA to ensure that Optimum subscribers can continue to watch their favorite sports teams, including the Knicks, Rangers, Devils, and Islanders, while agreeing to a short extension for binding arbitration [1] Company Overview - MSG Networks operates two regional sports and entertainment networks, MSG and MSG Sportsnet, along with MSG+, a direct-to-consumer streaming service, serving the New York DMA and parts of New Jersey, Connecticut, and Pennsylvania [2] - The networks provide exclusive live local games and programming for teams such as the New York Knicks, New York Rangers, New Jersey Devils, and Buffalo Sabres, as well as coverage of the New York Giants and Buffalo Bills [2] - MSG Networks is recognized as a leader in regional sports media and is part of Sphere Entertainment Co. (NYSE: SPHR) [2]

Group 1 - MSG Networks has issued a response to Altice USA, demanding either the same deal provided to YES Networks or a refund of $10 per subscriber for programming deficiencies [1] - The company claims that Altice USA owes subscribers $5 for the lack of programming in the first half of January [1] - MSG Networks operates two regional sports networks and a streaming service, serving the New York DMA and surrounding areas, featuring content from major sports teams [2] Group 2 - MSG Networks is part of Sphere Entertainment Co., which is publicly traded on the NYSE under the ticker SPHR [2]

NEW YORK, Jan. 10, 2025 /PRNewswire/ -- MSG Networks released the following statement about their dispute with Altice USA: "Altice USA has pulled their last proposal and walked away from negotiations to bring MSG Networks back to its Optimum subscribers. They also just dropped WPIX Channel 11 in New York and other local stations around the country. If you have been waiting, like we have, for them to do right by their customers – don't wait any longer. Now is the time to switch to Verizon Fios who has a spec ...

BURBANK, Calif., Jan. 8, 2025 /PRNewswire/ -- Sphere Entertainment Co. (NYSE: SPHR) announced today that Robert Langer, a seasoned financial leader with over 30 years of experience, will join the Company as Executive Vice President, Chief Financial Officer and Treasurer, effective January 13. In this role, Mr. Langer will work closely with Sphere Entertainment's management team to support the long-term direction of the Company. He will provide strategic financial insight on all facets of the business, from ...

Financial Data and Key Metrics Changes - For Q1 fiscal 2025, the company generated total revenues of approximately $228 million and reported an adjusted operating loss of $10.2 million [16] - The Sphere segment generated revenues of approximately $127 million with an adjusted operating loss of $26.3 million [16] - SG&A expenses for the first quarter were $105 million, reflecting the infrastructure built to support a global network of Spheres [19] Business Line Data and Key Metrics Changes - The original content category within the Sphere experience generated approximately $71 million in revenue across 207 shows [16] - MSG Networks generated $100.8 million in revenues and $16.1 million in adjusted operating income, representing decreases of 9% and 36% respectively compared to the prior year [20] Market Data and Key Metrics Changes - The Sphere in Las Vegas welcomed over 800,000 guests to 225 events during the quarter [16] - The company is seeing positive momentum in advertising campaigns on the Exosphere, particularly in the last few months of the calendar year [18] Company Strategy and Development Direction - The company aims to redefine the live entertainment experience and is focused on optimizing its operating model to maximize revenue while enhancing guest experience [7][10] - Plans to expand globally include a second Sphere venue in Abu Dhabi, which will be funded by the local government and will utilize the company's intellectual property [8][9] - The company is actively developing future productions and plans to introduce new experiences in 2025 [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledges structural issues in Exosphere advertising but is optimistic about improvements and seasonal strength in the upcoming months [24][25] - The company is confident in the long-term outlook for its next-generation medium and is focused on expanding its global footprint [14] Other Important Information - As of September 30, the company had approximately $540 million in unrestricted cash and cash equivalents, with a debt balance of approximately $1.36 billion [21] - MSG Networks is pursuing a refinancing through a workout with its lenders, with a forbearance agreement in place until November 26 [22] Q&A Session Summary Question: Concerns about Exosphere advertising performance - Management identified structural issues and seasonal factors affecting advertising performance but is making progress in understanding and improving the product [24][25] Question: Performance of the immersive concert VU2 - Management views VU2 as a viable product and is still figuring out the best programming and marketing strategies [27][29] Question: Impact of Abu Dhabi agreement on partner conversations - Management is optimistic that the Abu Dhabi deal will catalyze future Sphere announcements and expansion into other markets [31][32] Question: Revenue opportunities from residencies in Las Vegas - Management focuses on maximizing revenue through side-by-side events rather than a fixed number of residencies [38][40] Question: Revenue structure for the Abu Dhabi Sphere - Revenue streams will include both fixed and variable components, with franchise fees and royalties for IP usage [43] Question: Timing for the next original production - Management is not disclosing specific details but assures that the upcoming production will be significant [47] Question: Update on MSG Networks' debt restructuring - Management confirmed the extension of the forbearance period to negotiate a restructuring agreement [48] Question: Timing for Abu Dhabi Sphere construction and opening - Management has not disclosed specific timelines but is focused on preopening services [51]

Sphere Entertainment (SPHR) came out with a quarterly loss of $2.95 per share versus the Zacks Consensus Estimate of a loss of $3.32. This compares to earnings of $1.90 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 11.14%. A quarter ago, it was expected that this company would post a loss of $2.47 per share when it actually produced a loss of $2, delivering a surprise of 19.03%.Over the last four quarters, the company has su ...

Sphere Venue Operations and Expansion - Sphere segment's first venue in Las Vegas opened in September 2023, accommodating up to 20,000 guests and featuring The Sphere Experience, concerts, residencies, and marquee sports events[149] - Sphere Studios supports production with a 68,000-square-foot development facility and a 28,000-square-foot custom dome for immersive content creation[149] - Sphere's Exosphere features nearly 580,000 square feet of programmable LED paneling, the largest LED screen in the world[149] - Sphere Entertainment plans to open a second Sphere venue in Abu Dhabi, UAE, in collaboration with DCT Abu Dhabi[149] - The Company opened Sphere in Las Vegas in September 2023, expecting it to generate substantial revenue and adjusted operating income on an annual basis over time[201] - The Company and DCT Abu Dhabi announced plans to bring the world's second Sphere to Abu Dhabi in October 2024, with DCT Abu Dhabi funding construction and paying a franchise initiation fee[202] - Sphere's operating results rely on the success of original immersive productions and the ability to attract guests and artists to its venues[154] - The Company anticipates that Sphere in Las Vegas will generate significant revenue from various streams, including immersive productions, advertising, and concert residencies[201] MSG Networks Operations - MSG Networks operates regional sports networks and a DTC streaming product, MSG+, now part of the Gotham Sports streaming joint venture with YES Network[150] - MSG Networks broadcasts exclusive live games of NBA and NHL teams, including the New York Knicks and New York Rangers[150] - MSG Networks revenues decreased by $9.387 million (9%), primarily due to a 13% decrease in total subscribers, partially offset by higher affiliation rates[186] - MSG Networks direct operating expenses increased by $553,000 (1%), driven by higher rights fees expense[187] - MSG Networks made a $20,625 required quarterly amortization payment in September 2024[194] - The interest rate on the MSGN Term Loan Facility as of September 30, 2024 was 9.00%[208] Financial Performance and Expenses - Revenues increased by $109.9 million (93%) to $227.9 million for the three months ended September 30, 2024, compared to the same period in 2023[157] - Direct operating expenses increased by $55.2 million (65%) to $139.7 million, primarily due to higher costs associated with Sphere in Las Vegas[157][158] - Depreciation and amortization increased by $67.7 million, driven by assets related to Sphere in Las Vegas placed in service in Q1 2024[159] - Interest expense increased by $26.9 million due to the discontinuation of interest capitalization and the issuance of 3.50% Convertible Senior Notes in December 2023[163] - Adjusted operating loss improved by $47.7 million (82%) to $10.2 million, reflecting better performance in the Sphere segment[168][169] - Sphere segment revenues increased by $119.3 million, driven by 192 performances of The Sphere Experience and 15 performances of V-U2 An Immersive Concert Film[171][174] - Event-related revenues increased by $36.8 million due to a full quarter of concerts and marquee events at Sphere in Las Vegas[175] - Income tax benefit for Q3 2024 was $33.0 million, reflecting an effective tax rate of 24%, higher than the statutory federal rate due to state and local tax benefits[166] - Restructuring charges decreased by $2.5 million (73%) to $913, primarily due to lower termination benefits compared to the prior year[161] - The Company recognized impairment and other losses of $4.0 million, compared to gains of $1.5 million in the prior year, related to fixed assets at Sphere Las Vegas[160] - Revenues increased due to higher Exosphere advertising revenues and suite license fee revenues, reflecting a full quarter of operations compared to a partial quarter in the prior year[176] - Other revenues increased primarily due to the acquisition of Holoplot GmbH in April 2024[177] - Direct operating expenses increased by $54.644 million, driven by higher venue and event-related expenses, including 192 performances of The Sphere Experience and 15 performances of V-U2[178] - Selling, general, and administrative expenses increased by $20.8 million, primarily due to higher employee compensation and related benefits[179] - Depreciation and amortization increased by $67.461 million, mainly due to assets related to Sphere in Las Vegas placed in service at the end of Q1 2024[180] - Operating loss increased by $26.634 million, driven by higher depreciation, direct operating expenses, and selling, general, and administrative expenses[183] - Adjusted operating income improved by $56.768 million, primarily due to increased revenues, partially offset by higher operating expenses[184] Debt and Liquidity Management - The company's unrestricted cash and cash equivalents balance was $539.630 million as of September 30, 2024, with $158.022 million in advance cash proceeds from ticket sales[192] - The principal balance of the Company's total debt outstanding as of September 30, 2024 was $1,362,875, including $829,125 of debt under the MSG Networks Credit Facilities[194] - The total leverage ratio as of September 30, 2024 was 5.39:1.00, and the interest coverage ratio was 2.05:1.00[209] - The LV Sphere Term Loan Facility has an interest rate of 9.57% as of September 30, 2024 and will mature on December 22, 2027[214][215] - Historical and prospective debt service coverage ratios as of September 30, 2024 were 7.21:1.00 and 8.50:1.00, respectively, exceeding the required minimum of 1.35:1.00[216] - The minimum liquidity level for Sphere Entertainment Group is set at $50,000, with $25,000 required to be held in cash or cash equivalents[216] - The company completed a private offering of $258.75 million in aggregate principal amount of 3.50% Convertible Senior Notes on December 8, 2023[219] - The 3.50% Convertible Senior Notes bear interest at 3.50% per year, payable semi-annually, and mature on December 1, 2028[222] - Cash, cash equivalents, and restricted cash totaled $553.217 million as of September 30, 2024, a decrease of $20.016 million compared to June 30, 2024[232] - Net cash from operating activities for Q3 2024 increased by $128.735 million year-over-year, driven by higher collections from customers and fewer payments to vendors[233] - Net cash from investing activities for Q3 2024 decreased by $86.084 million year-over-year, primarily due to the absence of $256.501 million from the sale of MSGE Retained Interest in the prior year[234] - Net cash from financing activities for Q3 2024 decreased by $86.476 million year-over-year, primarily due to the absence of $65 million from the Delayed Draw Term Loan Facility in the prior year[235] - MSGN L.P. entered into a Forbearance Agreement with lenders, extending the Forbearance Period to November 26, 2024[207] Goodwill and Financial Risk Management - Total goodwill as of September 30, 2024 was $470.152 million, with $45.644 million attributed to Sphere and $424.508 million to MSG Networks[238] - The company elected to perform a qualitative assessment of goodwill impairment for both reporting units during Q3 2024, considering macroeconomic conditions, industry trends, and financial performance[239] - The company's reporting units had sufficient safety margins with fair value exceeding carrying value by more than 10%[240] - A hypothetical 200 basis point increase in floating interest rates would increase the company's interest payments by $22,083[243] - The GBP/USD exchange rate fluctuated by approximately 5.53% during the 12 months ended September 30, 2024[244] - A 10% fluctuation in the GBP/USD exchange rate would result in a change of approximately $3,600 in the company's net asset value[244] - The EUR/USD exchange rate fluctuated by approximately 5.43% during the 12 months ended September 30, 2024[245] - A 10% fluctuation in the EUR/USD exchange rate would result in a change of approximately $250 in the company's net asset value[245] - The company may reduce foreign currency translation risk by entering into foreign currency forward exchange contracts[246] - The company does not plan to enter into derivative financial instrument transactions for speculative purposes[246] Share Repurchase and Strategic Investments - The Company's Board of Directors authorized a share repurchase program of up to $350,000 of Class A Common Stock, with no shares repurchased to date[200] - The Company is exploring opportunities to expand its presence in the entertainment industry, with new investments potentially contributing to long-term success[155]

Financial Performance - For fiscal 2025 first quarter, Sphere Entertainment reported total revenues of $227.9 million, an increase of $109.9 million or 93% compared to the prior year quarter[2]. - The Sphere segment generated revenues of $127.1 million, up $119.3 million from the prior year quarter, primarily due to a full quarter of operations at the Las Vegas venue[5]. - Event-related revenues increased by $36.8 million to $40.9 million, driven by concerts and a marquee sporting event held at Sphere[5]. - Revenues for the three months ended September 30, 2024, increased to $227.9 million from $118.0 million for the same period in 2023, representing a growth of 93.5%[19]. - Interest income increased to $7.0 million for the three months ended September 30, 2024, compared to $4.4 million for the same period in 2023, reflecting a growth of 60.5%[19]. Operating Loss and Adjusted Operating Loss - The adjusted operating loss for the first quarter improved by $56.8 million to $26.3 million compared to the prior year quarter, reflecting increased revenues[7]. - Operating loss for the three months ended September 30, 2024, was $117.6 million, compared to an operating loss of $69.8 million for the same period in 2023, indicating a deterioration of 68.6%[19]. - Adjusted operating loss for the three months ended September 30, 2024, was $10.2 million, an improvement from an adjusted operating loss of $57.9 million in the same period of 2023[22]. Stockholder Equity and Current Assets - Basic loss per share attributable to Sphere Entertainment Co.'s stockholders for continuing operations was $(2.95) for the three months ended September 30, 2024, compared to earnings of $1.92 for the same period in 2023[19]. - Total current assets decreased to $736.1 million as of September 30, 2024, from $865.7 million as of June 30, 2024, a decline of 14.9%[26]. - Total stockholders' equity decreased to $2.3 billion as of September 30, 2024, from $2.4 billion as of June 30, 2024, a decline of 4.2%[26]. Cash Flow - Net cash provided by operating activities for the three months ended September 30, 2024, was $34,094, compared to a net cash used of $94,641 in the same period of 2023[27]. - Net cash used in investing activities was $(19,586) for the current period, a decrease from $66,498 in the previous period[27]. - Net cash used in financing activities was $(35,622), down from $50,854 in the prior year[27]. - The net decrease in cash, cash equivalents, and restricted cash was $(20,016), compared to an increase of $22,628 in the same period last year[27]. - Cash, cash equivalents, and restricted cash at the beginning of the period were $573,233, up from $429,114 at the start of the previous period[27]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $553,217, compared to $451,742 at the end of the previous period[27]. Venue and Events - The Company announced plans for a second Sphere location in Abu Dhabi, marking a significant milestone towards a global network of venues[1]. - Sphere hosted its first live sports event, UFC 306, which became the highest single grossing event at the venue to date[1]. - The Eagles are currently in a 28-show residency at Sphere, which has been extended multiple times due to high demand[1]. MSG Networks Performance - MSG Networks reported total revenues of $100.8 million, a decrease of $9.4 million or 9% compared to the prior year quarter, primarily due to a 13% decline in total subscribers[8]. - MSG Networks is pursuing a refinancing of its credit facilities, with approximately $829.1 million of principal amount outstanding as of September 30, 2024[13].