Sphere Revenue Rose as Costs Widened Operating Loss
Revenue reached $313.6 million as growth moderated and operating expenses climbed.
Sphere Entertainment (SPHR), the live-entertainment and media company, swung to a second-quarter operating loss of $61.3 million from operating income of $7.2 million in the preceding quarter. The loss widened 22% from a year earlier, while adjusted operating income fell 17% to $50.9 million and adjusted operating margin contracted to 16.2%.
Revenue rose 11% year over year to $313.6 million, slowing from 38% growth in the first quarter. Revenue fell about 19% sequentially from $386.4 million. For the first half, revenue increased 24% to $700.1 million, the operating loss narrowed 58% to $54.1 million and adjusted operating income rose 65% to $160.9 million.
The Sphere segment remained the main source of growth. Revenue increased 29% to $226.4 million, supported by higher per-show revenue for The Wizard of Oz, though the segment's growth slowed from 69% in the prior quarter. Sphere adjusted operating income rose 60% from a year earlier to $39.9 million and fell about 46% sequentially.
The Sphere Experience held 220 performances, up from 209 in the first quarter and 215 a year earlier. Event-related revenue declined $11.7 million because of two fewer brand events, with six additional concert-residency shows partly offsetting the decrease. Sponsorship, Exosphere advertising and suite-license revenue increased $10.5 million.
Costs absorbed more of the venue's gains. Sphere direct operating expenses rose 15% to $87.7 million as The Wizard of Oz carried higher per-show costs, while segment selling, general and administrative expense increased 30% to $125.6 million on compensation remeasurement, employee costs and merger-related litigation fees.
MSG Networks revenue declined 18% to $87.3 million as a roughly 16.5% subscriber decline reduced distribution revenue and fewer postseason telecasts weighed on advertising. Adjusted operating income dropped 70% to $11.0 million as rights-fee expense increased despite lower revenue.
First-half operating cash flow improved to $102.6 million from negative $52.7 million a year earlier. Sphere also identified Yas Island as the site of its planned Abu Dhabi venue, which is expected to be completed by the end of 2029. The Wizard of Oz surpassed $400 million in ticket sales, while the company announced a Rocky Horror Picture Show experience for 2027 and extended its Formula 1 Las Vegas Grand Prix partnership through 2030.