{"id":286884,"date":"2023-08-25T11:32:27","date_gmt":"2023-08-25T16:32:27","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=286884"},"modified":"2023-08-27T11:40:53","modified_gmt":"2023-08-27T16:40:53","slug":"sphere-entertainment-outlook-unclear-says-analyst","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/sphere-entertainment-outlook-unclear-says-analyst\/","title":{"rendered":"Sphere Entertainment Has \u2018Too Many Unknowns,\u2019 Says Analyst"},"content":{"rendered":"

Sphere Entertainment (NASDAQ: SPHR), the owner of the MSG Sphere on the Las Vegas Strip, may be leaving analysts and investors with more questions than answers.<\/p>\n

\"Sphere
The Sphere illuminated in Las Vegas on July 4, 2023. An analyst is tepid on owner Sphere Entertainment. (Image: YouTube)<\/figcaption><\/figure>\n

That\u2019s the take of Macquarie analyst Paul Golding, who reiterated a \u201cneutral\u201d rating on the stock in a new note to clients, though he did boost his price target to $32 from $25. That implies some downside from the August 24 close at $34.27. Golding observed that beyond the upcoming U2 residency<\/a>, management noted on the company\u2019s recent fiscal fourth-quarter earnings conference call that follow-up acts may not be on the level of U2.<\/p>\n

Management referenced other potential residencies as not necessarily being acts as big as U2 \u2014 this softens our view on venue rental revenues,\u201d wrote the analyst. \u201cOur model continues to suggest that much of the revenue story will ride on original attractions, which we view as a swing factor in the profitability of the entire business given the novel format and higher pricing vs. traditional exhibitors.\u201d<\/p><\/blockquote>\n

Located at 255 Sands Ave., the Sphere illuminated for the first time on July 4, but its official opening date is September 29, the date of U2\u2019s first show there.<\/p>\n

Sphere Entertainment Faces Subscriber Attrition<\/h2>\n

Las Vegas locals and visitors to the Strip are becoming acquainted with the Sphere through its various illuminations, some of which have been dubbed distracting by naysayers.<\/p>\n

\n

However, there\u2019s much more to the business. Sphere Entertainment results from the spin-off Madison Square Entertainment (MSGE). MSGE retained the formerly combined company\u2019s live entertainment business. Still, Sphere maintains ownership of the MSG Networks<\/em><\/a>, the local broadcaster of the NBA\u2019s New York Knicks and the NHL\u2019s New York Rangers. The problem is that subscribers are departing.<\/p>\n<\/div>\n

\u201cWhile Sphere segment ambiguity persists, one thing was clear \u2014 MSGN sub declines were bad, running -11.5% year-over-year after a -10% fiscal third quarter,\u201d added Golding. \u201cDTC may help a bit, but it’s too early to tell how much \u2014 and MSG Sports still needs Networks in our view.\u201d<\/p>\n

\u201cDTC\u201d references MSG Networks\u2019<\/em> direct-to-consumer offering MSG+, which is expected to debut ahead of the upcoming NBA and NHL seasons.<\/p>\n

Sphere in Prove It Mode<\/h2>\n

The Sphere is a widely anticipated project, but one that\u2019s also been beset by cost overruns, with the company recently revealing high inflation boosted the Sphere’s cost by $175 million<\/a> to $2.175 billion.<\/p>\n

To appease investors, the company needs more than U2. It has an agreement with Formula 1<\/a> in advance of the circuit\u2019s upcoming Las Vegas Grand Prix in November 2023, and that\u2019s a start, but more marquee shows and events will be required.<\/strong><\/p>\n

\u201cStill too many unknowns for us on the venue, including the timeline on reaching full potential,\u201d concluded Golding. \u201cThe slate may be cleared up in the near future, but questions around the cost structure for such a novel format will persist in the medium term \u2014 all of this with Networks shedding subs.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Sphere Entertainment (NASDAQ: SPHR), the owner of the MSG Sphere on the Las Vegas Strip, may be leaving analysts and investors with more questions than answers. That\u2019s the take of Macquarie analyst Paul Golding, who reiterated a \u201cneutral\u201d rating on the stock in a new note to clients, though he did boost his price target […]<\/p>\n","protected":false},"author":46,"featured_media":282538,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,81886],"tags":[81903,23],"acf":[],"yoast_head":"\nSphere Entertainment Outlook Unclear, Says Analyst<\/title>\n<meta name=\"description\" content=\"Sphere Entertainment has more ambiguity than clarity, says Macquarie analyst.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/sphere-entertainment-outlook-unclear-says-analyst\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sphere Entertainment Outlook Unclear, Says Analyst\" \/>\n<meta property=\"og:description\" content=\"Sphere Entertainment has more ambiguity than clarity, says Macquarie analyst.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/sphere-entertainment-outlook-unclear-says-analyst\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-08-25T16:32:27+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-27T16:40:53+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/07\/maxresdefault.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-outlook-unclear-says-analyst\/\",\"url\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-outlook-unclear-says-analyst\/\",\"name\":\"Sphere Entertainment Outlook Unclear, Says Analyst\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-outlook-unclear-says-analyst\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-outlook-unclear-says-analyst\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/07\/maxresdefault.jpg\",\"datePublished\":\"2023-08-25T16:32:27+00:00\",\"dateModified\":\"2023-08-27T16:40:53+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Sphere Entertainment has more ambiguity than clarity, says Macquarie analyst.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-outlook-unclear-says-analyst\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/sphere-entertainment-outlook-unclear-says-analyst\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-outlook-unclear-says-analyst\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/07\/maxresdefault.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/07\/maxresdefault.jpg\",\"width\":1200,\"height\":800,\"caption\":\"The Sphere illuminated in Las Vegas on July 4, 2023. 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