Sphere Entertainment Co. Q1 FY2025 earnings call

• Opened Sphere in Las Vegas over a year ago to redefine live entertainment, with plans for global Sphere venues. Announced Abu Dhabi Sphere in October, with Department of Culture and Tourism Abu Dhabi funding construction, franchise initiation fee, and marketing partnership. - Focused on optimizing Sphere's operating model in Vegas, including show count, pricing, and developing future productions. Hosted UFC as highest grossing single event, Eagles residency extended, and welcomed Formula One. - MSG Networks pursuing refinancing through workout with lenders, with forbearance agreement extended.

Sphere segment: First quarter revenues approximately $127 million with an adjusted operating loss of $26.3 million. Original content category generated approximately $71 million in revenue across 207 shows. MSG Networks segment: Generated $100.8 million in revenues and $16.1 million in AOI, representing decreases of 9% and 36% respectively compared to prior year period. Decreases primarily due to lower distribution revenue from approximately 13% decrease in subscribers.

• No specific forward-looking revenue or growth targets detailed beyond continuing to expand global Sphere footprint and refining Sphere's operating model in Vegas. - Mentioned moving forward with Abu Dhabi Sphere and developing future content experiences.

• MSG Networks debt refinancing issues: Debt matured on October 11, with forbearance agreement extended but ongoing workout process. - Exosphere advertising challenges: Structural and seasonal issues noted, with progress being made but learning curve involved.

Q: Exosphere advertising softened in the quarter, any reason and outlook?

A: Jim Dolan mentioned structural issues, learning about the product and advertisers' use, seasonal factors, and progress being made.

Q: Impact of Abu Dhabi agreement on other partner conversations?

A: James Dolan and David Byrnes discussed it as a catalyst, interest in future Sphere announcements, and evaluating international expansion across multiple regions.

Q: Revenue opportunity in Las Vegas residencies?

A: Jim Dolan talked about maximizing revenue through side-by-side events, not fixated on 75 shows specifically, and focus on logistics and act interest.

Q: Revenue opportunities from Abu Dhabi partner content/services?

A: David Granville-Smith stated fixed (franchise fee, pre/post services, marketing) and variable (Sphere Experiences, royalty on IP) revenue streams.

Q: Timing of next original production, MSG term loan extension?

A: Jim Dolan teased next original production, David Byrnes discussed extending forbearance period for MSG Networks debt.

Q: Residencies timing, Abu Dhabi Sphere timing?

A: Jim Dolan mentioned Eagles residencies ongoing but no specific announcements, David Byrnes said Abu Dhabi Sphere timing not disclosed yet, focusing on preopening services.