Sphere Entertainment Faces Bankruptcy Risk Amid Declining Revenues

LAS VEGAS, March 3, 2025 — Sphere Entertainment reported a 2% decline in revenue for the quarter ending December 31, totaling $308 million, along with a net loss of $126 million. The company, which operates both the Sphere venue in Las Vegas and MSG Networks, emphasizes that it may consider bankruptcy if it fails to refinance its debt, which was due on October 11.

As the company transitions from a June to a December fiscal year-end, the financial results reflect significant pressures. Sphere’s revenue drop raised concerns among investors, particularly regarding its regional sports network, MSG Networks. “If MSG Networks is not successful in negotiating a refinancing or workout of its indebtedness, it is probable that MSG Networks and/or its subsidiaries would seek bankruptcy protection,” Sphere stated in its quarterly report.

MSG Networks experienced a revenue drop of 5% during the quarter, totaling $139 million, with a notable decline of 11.5% in subscribers. Although advertising revenue saw a slight uptick, distribution revenue fell by $7.1 million. LightShed Partners analyst Brandon Ross noted that some investors view bankruptcy as a potential resolution, highlighting, “We believe MSGN was contributing $300–$400 million of negative equity value.”

Sphere reported an operating loss of $107.9 million for the quarter. The Sphere segment itself saw revenue slightly increase by 1% to $169 million, with a decrease in revenue for Sphere Experience dropping by 7%. The company acknowledged struggles with average per-show revenues, despite hosting 190 performances of ‘Postcard from Earth’ and ‘V-U2 An Immersive Concert Film’.

Another financial element impacting the company is its outstanding debt, which now totals $804 million after a $25 million principal repayment on February 4. Sphere aims to persuade debt holders to accept a lower amount than is owed, a situation complicated due to MSG Networks’ debt structure that isolates it from Sphere’s corporate liabilities.

Jim Dolan, CEO of Sphere Entertainment, discussed optimizing operations during an earnings call, stating, “I think there’s opportunity to take the big costs out. We are becoming more efficient… really across the board.” The company is exploring various measures to reduce expenses amid these financial challenges.

In addition to its financial struggles, notable movements in ownership were reported. New York Mets owner, Steve Cohen, increased his stake in Sphere Entertainment to 7.3% through his point72 Asset Management hedge fund, reflecting a growing interest. Last year, Point72 acquired a 5.5% stake and continued to invest.

Following the financial report, Sphere shares fell by over 13.6%, closing at $37.69, indicating investor concern about the company’s outlook and operational stability.