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Everything about Sphere, the state-of-the-art new live-entertainment venue on the Las Vegas Strip, seems designed to shock and awe.
There’s its size: At 366 feet tall by 516 feet wide, it’s big enough to fit the Statue of Liberty (a fact the executives involved in the project very much like to note), making it the world’s largest spherical structure. Stand outside, and it’s impossible to focus on anything but its skyline-dominating, dynamic LED screen Exosphere; stand inside, on the floor of its main event space, and cower beneath its 160,000-square-foot LED screen that curves and towers to an apex of 240 feet above.
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And then there’s its sheer capability: When it opens Sphere on Sept. 29 with the premiere of its U2:UV Achtung Baby Live at Sphere show, U2 will be playing an eye-popping 25 dates at a 20,000-capacity facility in the Nevada desert. It all seems tailored to elicit the same response: the conviction that, after picking one’s jaw up off the floor, live entertainment will be changed forever.
And it very well might be. As the sands of the concert business shift, Sphere’s model — prioritizing cutting-edge production, embracing an unorthodox residency model and rounding out its calendar with high-margin programming produced itself — provides intriguing paths forward for major touring artists and the arenas and stadiums they play.
But as Sphere prepares to open its doors, significant questions remain about who will play the venue next, how it will continue to draw fans (and enough of them) in the coming years and what it needs to do to become — and remain — financially viable. And with its $2.3 billion price tag, nearly double the $1.2 billion initially estimated when the project was announced in 2018, the legacy of the figure behind the project, James Dolan, executive chairman and CEO of both Sphere Entertainment and the closely related Madison Square Garden Entertainment, feels inextricably linked to Sphere’s success. (Dolan declined an interview for this story.)
For now, though, existential questions about Sphere will have to wait. There’s a U2 residency to launch — no small feat — and, a week after that, the premiere of Postcard From Earth, the Darren Aronofsky-directed nature film that Sphere will screen from one to four times daily on days U2 doesn’t play and that promises to harness even more of the venue’s considerable stable of technological bells and whistles (while also, hopefully, quickly becoming a reliable revenue driver).
“This is essentially a new medium, which we call ‘experiential,’ ” Dolan said on an August earnings call. “Sphere is a brand-new, never-before-seen medium — and we believe it will take the world by storm.”
A month before Sphere’s scheduled opening, David Dibble, CEO of the Sphere Entertainment subsidiary MSG Ventures, is in a jovial mood, sitting on Zoom before a background rendering of the cosmos, the starship Enterprise soaring through space.
He drops references to everything from the ancient Greeks to the Gutenberg press to scenes from Jaws and Animal House — and links all these things to Sphere. The project has dominated Dibble’s life since Dolan first broached the concept to him in his office one evening in late 2015, shortly after the sale of longtime Dolan family asset Cablevision was finalized for $17 billion.
“He leaned back, looked out the window,” recalls Dibble, who was Cablevision’s chief technology officer before joining MSG after the former’s sale. “He says, ‘You know, Dibble, let’s reinvent the live-entertainment industry.’ Those were his exact words. And I said, ‘Oh, OK. Well, thinking small, are we?’”
For “at least three hours,” the two men “brainstormed and argued and laughed.” Dolan was resolute that his new venue should have an iconic shape. After ruling out a pyramid or a cube, he grabbed Dibble’s pad of graph paper, scribbling a circle and a stick figure, and holding it up. “I got it,” he told Dibble. “MSG Globe.” Dibble nixed the name; Dolan asked him why.
“I said, ‘Shakespeare’s got ‘Globe,’ man, come on. You’re good, Dolan, but you’re not going to compete with Shakespeare.’” Dolan paused and recast his concept: MSG Sphere.
According to Sphere executive vp/COO Rich Claffey, who oversaw venue management for MSG Entertainment’s full portfolio before assuming his current role, Dolan began discussing Sphere in specific terms around 2015 — but had interest in a venue that would address similar concerns even earlier.
“We would always talk about how we could make multiple events in a day happen without having huge changeovers and things of that nature,” says Claffey, who joined the MSG family as a stagehand at its flagship arena in 1983. “Ten years ago, we were trying to figure out the best way where we could do major productions, all in the same day, and [what it would look like] if we ever built a building.”
When Dolan conceived Sphere, he didn’t have Vegas specifically in mind and asked his team to prepare a list of candidate locations, according to Dibble. But around this time, he explains, MSG connected with Sheldon Adelson and Rob Goldstein of the Las Vegas Sands, then still owner of The Venetian, who found the idea compelling and “in their view, fit the direction that Las Vegas was going” — away from gaming and toward entertainment.
“Live entertainment defines this town, more so than gaming,” says Kate Wik, chief marketing officer for the Las Vegas Convention and Visitors Authority, the government agency tasked with marketing and promoting southern Nevada. “It has been over a decade that nongaming revenues exceed that of gaming revenues. We are an entertainment destination.”
Sands and MSG inked a ground-lease agreement for a plot directly behind The Venetian, and the project was announced in February 2018. “We had no idea how we were going to do this. I mean, none,” Dibble says with a palpable sense of amazement that Sphere was ultimately built. “All we knew was what we were going to call it and what the shape was going to be.”
Populous — the acclaimed architectural design firm behind facilities including Seattle’s Climate Pledge Arena and Milwaukee’s Fiserv Forum — was attached from the jump, with AECOM added as general contractor in 2019, when construction began; AECOM estimated the venue would cost $1.7 billion. But with the COVID-19 pandemic, inflation and attendant supply chain problems, the project was soon marked by delays and other issues. In late 2020, MSG Entertainment relieved AECOM of its role and took construction in-house. (AECOM remained involved with the project in a support role under a new services agreement.) Some key executives did not see the project through, including Jayne McGivern, MSG Entertainment president of development and construction, and Lucas Watson, MSG Sphere president, who parted ways with the company in 2021 and February 2023, respectively.
There was “a lot of skepticism around this project over the years it was constructed,” says Paul Golding, an equity research analyst at Macquarie Group who tracks several companies across the live sector, including MSG Entertainment and Sphere Entertainment. And some of that skepticism extended beyond challenges in conventional construction to the novelty of the tech that would make the venue much more than just another impressive Vegas edifice. “There was, throughout the construction process — and even starting from the early days — some concern [among the investment community] as to whether some of these characteristics or features would be feasible, and if so, at what cost,” Golding adds.
The team wanted best-in-class audio and visual capabilities — some of which didn’t even exist yet at the project’s inception. For the former, it partnered with Holoplot, a Berlin-based audio startup, to design Sphere Immersive Sound, which uses the German company’s patented 3D Audio-Beamforming technology to ensure that listeners anywhere in the venue hear identical mixes at identical volumes; algorithmic machine learning and environmental data collected in real time by sensors throughout Sphere further refine and standardize the sound attendees hear regardless of where they’re seated. And to ideate the venue’s LED display and 4D technologies, Sphere Studios, a Burbank, Calif.-based interdisciplinary team spanning creative, production, technology and software pros, launched to serve as Sphere’s in-house creative and production unit. Its proudest accomplishment to date is Big Sky, an innovative high-resolution camera system that far outpaces current industry standards and can produce content suited for the venue’s massive screen.
And as much interest as Sphere’s technology has generated, its business model is also challenging conventional wisdom about how buildings should be operated, particularly at the arena level. Traditionally, Dolan explained on the August earnings call, “if you have a team, they’re the first tenants in, but that generally only occupies 40 to 50 nights a year, and the rest of the time you’re renting out and you have a limited revenue stream.” Sphere, by contrast, “will be busy theoretically 365 days a year, because when we’re not bringing in someone like a U2, etc., we’re running our own content, and that business is a high-margin business.”
By all appearances, U2 isn’t playing Sphere because it’s forsaking the road or has a particular affinity for Vegas. Rather, from the multimedia-rich 1992-93 Zoo TV Tour promoting Achtung Baby and Zooropa to the 2009-11 U2 360° Tour, with “The Claw” — its striking, four-legged stage structure plopped on stadium floors around the world — to even Bono and The Edge’s wild, ill-fated Broadway experiment with Spider-Man: Turn Off the Dark, the band has pushed the boundaries of live entertainment for more than three decades. Its Sphere show, described by a press release as “a futuristic Achtung Baby adventure in a unique desert landscape,” is another step in that progression. (U2, creative directors Es Devlin and Willie Williams, and other members of its creative and production teams were unavailable to participate in this story; manager Irving Azoff declined to comment and a representative for longtime Live Nation promoter Arthur Fogel did not respond to requests for comment.)
“U2 is on record publicly saying they wouldn’t have played Vegas if it weren’t for the Sphere,” Dibble says. “I think that that thesis is probably going to lather, rinse, repeat across a pretty broad spectrum of entertainers.”
Given U2’s success selling tickets at Sphere so far — as its residency launches, multiple dates are sold out and several others have extremely limited inventory — and the substantial creative investment made by it and the venue for U2:UV, Sphere could take a page out of the book of other popular Vegas residencies and extend the band’s run. After all, U2 announced only five dates initially, adding 20 more in three waves to meet demand. “I’m pretty sure we could have kept going,” says Josephine Vaccarello, executive vp, live at MSG Entertainment, who oversees booking for all venues across the company’s portfolio and added Sphere to her purview in January. Might that happen? “TBD. I think we’ll see.”
But who will play Sphere following the famed Irish rockers? The venue doesn’t have any announced bookings after U2 on Dec. 16 — and its team has been mum about what its calendar will look like in 2024 and beyond. “We expect to announce additional residencies shortly, which are slated to take place later this fiscal year,” Dolan said on August’s earnings call, citing a “real robust interest from the artist community.” But, he noted, “we expect maybe not as high profile as U2, but close, because those are the kinds of artists that have been coming to talk to us.”
“There are tons of conversations happening right now,” Vaccarello says with excitement. “It’s literally — it’s every genre.”
Still, in a report published after August’s earnings call, Macquarie expressed concern about the lack of additional concert announcements and said Dolan’s warning of future bookings being potentially lower profile than U2 “softens our view on venue rental revenues.”
In Claffey’s estimation, artists “probably would have to be able to do six to eight shows to be viable, just to make it worth their while and our while.” And though Vaccarello reiterates that Sphere’s doors are open to one-off touring acts, she’s skeptical that such plays are the best fit for them. “With the technology that exists within Sphere, it doesn’t make sense to come into Sphere if you’re not going to use the media plane [Sphere’s term for its LED screen] and let it do all the things that it can do,” she says. “Otherwise, you would just do your show in an arena.”
Sin City already has multiple such venues, including the relatively new T-Mobile Arena, the MGM Grand Garden Arena and an additional, in-the-works facility being plotted by Oak View Group, not to mention a just-approved baseball stadium and the recently opened Allegiant Stadium.
“There is a lot of competition, so if you’re really just doing a one-off [in Vegas], I could see why you would just go to one of those other venues,” says Jarred Arfa, executive vp/head of global music at the newly formed agency Independent Artist Group. At IAG, Arfa represents a roster that includes Metallica, Neil Young, Def Leppard, The Strokes and Billy Joel — the lattermost will notably conclude his monthly MSG residency after a decade in July 2024 — and he says several clients have expressed interest in playing Sphere. “What I’m curious to see is, does the Sphere help an artist sell tickets?” he wonders. “If we have an artist who’s maybe worth one or two arena plays in Vegas, does the Sphere make it seven?”
Both Sphere executives and Arfa offer a similar refrain: that the venue’s technology, and its capacity to allow artists to create unique shows that can’t play anywhere else, heavily incentivizes extended runs. And while Sphere’s decision to lean into residencies isn’t particularly innovative, the scale at which it plans to do so is. Massive stars with Vegas residencies like Adele and Usher play to far smaller rooms (the 4,300-capacity Colosseum at Caesars Palace and the 5,200-capacity Dolby Live at Park MGM, respectively) than Sphere. As Arfa says: “It’s weird, because it’s an arena size, but it’s the residency model.”
“If a roller coaster only went up, that’s what it’s like,” says Guy Barnett, Sphere Entertainment senior vp, brand strategy and creative development, 10 days before U2 debuts at the venue. “You don’t often get the chance to launch a brand that dabbles with so many entertaining things, from robots to giant screens to Aronofsky.”
Barnett helped Dolan develop an early “pitch reel” for Sphere when Dolan was developing the concept in 2016 and returned to the project in early 2023 to guide the venue as it established its identity. While concerts are an important component of Sphere’s business model, they’re far from its only revenue stream — and possibly not its most critical one. Sphere’s overall commercial success relies on how well it can establish itself as more than just a place for music, but as “a fusion of science and art, and what the outcome of those two things are,” Barnett says. “It has been our mission to fuse those two circles of influence — that we take science and art to create something wonderful.”
To that end, the venue has conceived something called The Sphere Experience, which starts the moment patrons enter the venue. Outside of the bowl-shaped theater, one of five identical, humanoid robots named Aura greets visitors and interacts with them about the venue’s technology. Activations in the atrium “tell the role of technology in humankind,” according to Dibble; he’s particularly excited about mathematical equations printed across the space with QR codes that, when scanned, explain how the formulas were applied in engineering Sphere.
But The Sphere Experience’s centerpiece is exclusive content produced by Sphere Studios to be presented in the bowl — upon its opening, the Aronofsky-directed Postcard From Earth, a narrative-meets-documentary experience that was filmed on every continent. The show flexes the full potential of Sphere’s 4D multisensory technology, including effects like vibration, wind, scent and temperature fluctuations; it will debut with a per-show capacity of 5,000, with the possibility to increase attendance in the future (Sphere has 10,000 seats equipped with haptic capabilities). Across up to four showings, as many as 20,000 people will be able to experience Postcard From Earth on some days this fall, each paying between $49 and $249; as many at Sphere note, far more patrons will initially engage with the venue through Postcard From Earth rather than U2.
“It’s a new medium, and we were really figuring it out as we went along,” Aronofsky tells Billboard. “The joke was often that we were building the plane while learning how to fly it. And so I think now that we have made Postcard From Earth, which uses the form in perhaps its most obvious way, I look forward to seeing what filmmakers in the future do in this medium.”
— Sphere (@SphereVegas) September 13, 2023
On Sphere’s August earnings call, Dolan called original content like Postcard From Earth “sort of the backbone of the business. That is basically a high-margin business, because you’ve already invested your capital. You’ve made your show, you’ve built your attraction, and now your running costs are basically things like ushers, security, merch, those kinds of things. So the return on that is pretty strong.”
Postcard From Earth is slated to run well into 2024 and possibly beyond; it will likely become the first piece of content in Sphere’s library of nonmusical programming that exists in perpetuity.
“A core component, in our view, of the revenue picture for Sphere will be Postcard From Earth” and future Sphere Experience programming at the venue, Macquarie’s Golding says, though he expresses caution because tickets are “at a price point that is significantly higher, in our view, than what the traditional film exhibitor might charge. We are watching to see whether that demand comes through, given the large amount of supply [number of screenings and available tickets] relative to visitation to Las Vegas.”
In a report published in August, Macquarie outlined a scenario where Sphere runs 710 shows in fiscal year 2025 with 9,000 optimal seats per show — which would come out to a supply of about 6.4 million “optimal seats.” In 2022, 38.8 million people visited Las Vegas, according to the Las Vegas Convention and Visitors Authority, which has a metro area population of 2.9 million.
— Sphere (@SphereVegas) September 2, 2023
But another core facet of Sphere’s business revolves around the people who never even walk through its doors. The 580,000-square-foot Exosphere envelops the structure — and offers creative and financial opportunity. Since coming to life on July Fourth, Exosphere has become an eyeball, a tennis ball, Mars and more.
“Sphere has not opened yet, and it’s already one of the top must-see attractions for this destination,” says Wik of the Las Vegas Convention and Visitors Authority, describing it as “a character in and of itself” that people are already lining up to see.
And its features, of course, aren’t merely aesthetic. “Following our demonstration of the Exosphere’s capabilities, we’ve seen a significant increase in inbound interest from potential advertisers and marketing partners,” Dolan said in August.
On Sept. 1, Sphere launched two Exosphere partnerships that illustrate the primary types of programming it will display. Turkish American artist Refik Anadol became the first creative to make Exosphere his canvas with the debut of Machine Hallucinations: Sphere, an abstract, immersive digital experience he describes as an artificial intelligence “data sculpture.” Meanwhile, YouTube became the first brand to generate a campaign specifically for Exosphere, using it to promote its subscription product, NFL Sunday Ticket. For Sphere, the challenge will be balancing these two purposes — and finding creative ways to fuse them.
In conversations with Dolan, Barnett has sought to “[make] sure that we’re always, within reason, around 50/50,” he says. “We’re leading the way and inspiring a lot of our commercial partners to see what they can do on this. Part of the art is to make sure that we are always surprising and delighting our audiences, and we want our commercial partners to do the same.”
But while Dolan has encouraged patience — “You should not expect the venue to reach its full economic potential right from the start,” he said in August — financial realities may pressure Sphere to behave more aggressively in its business, including when it comes to commercial Exosphere deals. Sphere’s higher-than-expected price tag “puts a greater degree of pressure on management to utilize the capacity of the venue,” from programming and booking to brand partnerships to finding operational efficiencies, Golding says.
While the Vegas Sphere experiment unfolds, its team isn’t stopping there: Though planners have been stymied by government red tape and local opposition, another Sphere has been in the works for London’s Stratford neighborhood since 2018.
“Vegas is the first; by no means is it the last,” Dibble says. “By the way, we’ve got designs that can go from 2,000 to 20,000 people [in capacity], all maintaining the basic geometry of the bowl so that our content is portable.”
Don’t expect them to do it on their own the next time around, though. “We want partners,” Dolan said in August. “We’re looking at more of a franchise-type model. … Going forward, construction of additional Spheres will be, for this company, capital-light.” With construction lessons learned from the Vegas project and the possibility of smaller future Spheres, Dolan anticipates some iterations of the facility could be built in less than two years.
“The company has talked in the past about using this venue as a model for future opportunities to deploy this venue with partners or by licensing the design and the technology and the expertise,” Golding says. “It’ll be interesting to see if its success — if, in fact, it is successful — lends itself to other venue developers and managers seeking to deploy this format in lieu of what might be a more traditional opportunity in their respective geographies.”
Back in Vegas, as Sphere’s opening looms, the venue’s team continues to project confidence — with total sincerity, it seems. “If we’d listened to skeptics, we would have folded our tent years ago,” Dibble says without a hint of worry, citing the dozens of patents Sphere has secured to ward off imitators. “We think it’s going to be the hallmark of what is going to define the next generation of live entertainment.”
Or, as Dolan put it on August’s earnings call: “The proof is in the pudding — and the pudding is about to show up.”
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