Q4 2024 Sphere Entertainment Co Earnings Call
Operator: [inaudible] Benjamin Swinburne, Paul Golding, Paul Golding, Paul Golding, Paul Golding, Paul Golding, Paul Golding, Good morning. Thank you for standing by and welcome to the Sphere Entertainment fiscal 2024 fourth quarter and year-end earnings conference call. At this time, all participants are in listen only mode. After the speaker's remarks, there will be a question and answer session. I would now like to turn the call over to Ari Danes, investor relations. Please go ahead.
Unknown Executive: Thank you for standing by, and welcome to the Sphere Entertainment fiscal 2024 fourth quarter and year-end earnings conference call. At this time, all participants are in listen-only mode. After the speaker's remarks, there will be a question-and-answer session.
Speaker Change: Good morning. Thank you for standing by and welcome to the Sphere Entertainment Fiscal 2024 Fourth Quarter and Year-End Earnings Conference Call. At this time, all participants are in listen-only mode.
Ari Danes: I would now like to turn the call over to Ari Danes Investor Relations. Please go ahead.
Speaker Change: After the speaker's remarks, there will be a question and answer session. I would now like to turn the call over to Ari Danes, Investor Relations. Please go ahead.
Ari Danes: Thank you. Good morning and welcome to Sphere Entertainment fiscal 2024 fourth quarter and year-end earnings conference call. Today's call will begin with our Executive Chairman and CEO Jim Dolan, who will provide an update on Sphere.
Ari Danes: Thank you very much. Thank you. Good morning, and welcome to Sphere Entertainment's fiscal 2024 fourth quarter and year-end earnings conference call. Today's call will begin with our Executive Chairman and CEO, Jim Dolan, who will provide an update on Sphere. Dave Byrnes, our Executive Vice President, Chief Financial Officer, and Treasurer, will then review our financial results for the period.
Ari Danes: Thank you.
Speaker Change: Good morning and welcome to Sphere Entertainment's fiscal 2024 fourth quarter and year-end earnings conference call.
Speaker Change: Today's call will begin with our Executive Chairman and CEO, Jim Dolan, who will provide an update on SPHERE. Dave Byrnes, our Executive Vice President, Chief Financial Officer, and Treasurer, will then review our financial results for the period.
Ari Danes: Dave Byrnes, our executive vice president, chief financial officer, and treasurer, will then review our financial results for the period. After our prepared remarks, we will open up the call for questions.
Ari Danes: After our prepared remarks, we will open the call for questions. If you do not have a copy of today's earnings release, it is available in the Investor section of our corporate web site. Please take note of the following. Today's discussion may contain four forward-looking statements within the meaning of the private security litigation or form act of 1995. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statement.
Speaker Change: After our prepared remarks, we will open up the call for questions.
Ari Danes: If you do not have a copy of today's earnings release, it is available in the investor section of our corporate website. Please take note of the following. Today's discussion may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Please refer to the company's filings with the SEC for discussion of risks and uncertainties. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call on pages five and six of today's earnings release.
Speaker Change: If you do not have a copy of today's earnings release, it is available in the investor section of our corporate website.
Speaker Change: Please take note of the following.
Speaker Change: Today's discussion may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Speaker Change: Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.
Ari Danes: Please refer to the company's filings with the SEC for a discussion of risks and uncertainties. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call. On pages five and six of today's earnings release, we provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income, or AI, a non-gap financial measure. And with that, I'll now turn the call over to Jim. Thank you, Ari, and good morning, everyone.
Speaker Change: Please refer to the company's filings with the SEC for a discussion of risks and uncertainties.
Speaker Change: The company disclaims any obligation to update any forward-looking statements that may be discussed during this call.
Jim Dolan: As we said from the start, we believe Sphere is a new medium that has the potential to change the entertainment landscape for artists, guests, and partners. We're fully realizing that vision will take time, but we are learning every day how to optimize Sphere's operating model. And with the close of fiscal 2024, we are pleased to look back and see real progress across multiple fronts.
Ari Danes: We provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income or AI, a non-GAAP financial measure.
Speaker Change: On pages 5 and 6 of today's earnings release, we provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income or AOI, a non-GAAP financial measure.
Jim Dolan: And with that, I'll now turn the call over to Jim. Thank you, Ari, and good morning, everyone. As we said from the start, we believe Sphere is a new medium that has the potential to change the entertainment landscape for artists, guests, and partners. Pulling realizing that vision will take time, but we are learning every day how to optimize spheres' operating model. And with the close at fiscal 2024, we are pleased to look back and see real progress across multiple fronts. Since fear opened last September, we have welcomed millions of guests, hosted artists and blue chip companies, and featured numerous brands on the exosphere.
Speaker Change: And with that, I'll now turn the call over to Jim. Thank you Ari and good morning everyone. As we've said from the start we believe Sphere is a new medium that has the potential to change the entertainment landscape for artists, guests and partners. Thank you very much.
Jim: Fully realizing that vision will take time, but we are learning every day how to optimize SPHERES operating model. And with the close of fiscal 2024, we are pleased to look back and see real progress across multiple fronts.
Jim Dolan: Since Sphere opened last September, we have welcomed millions of guests, hosted artists at blue chip companies, and featured numerous brands on the Exosphere. Sphere has also become part of the global conversation with worldwide recognition and an extensive presence on social media. Our plan for Sphere is to create widespread demand for our offerings and drive utilization, bar, and revenue of traditional venues. Our core component of that strategy is our content category, the Sphere Experience, which currently features postcards from Earth. This category, again, generated more than $1 million in average daily ticket sales in our fourth quarter.
Speaker Change: Since F.E.A.R. opened last September, we have welcomed millions of guests, hosted artists at blue-chip companies, and featured numerous brands on the Exosphere.
Jim Dolan: The sphere has also become part of the global conversation with worldwide recognition and extensive presence social media coverage. Our plan for a sphere is to create widespread demand for our offerings and drive utilization, bar and excess of traditional venues. Our core component of that strategy is our content category. The Sphere experience, which currently features postcards from Earth. This category again generated more than $1 million in average daily ticket sales in our fourth quarter. Since premiering in October, the Sphere experience has generated over $300 million in high-margin revenue. These results reinforce our confidence and original content as a key economic engine for Sphere.
Speaker Change: This fair has also become part of the global conversation with worldwide recognition and extensive press and social media coverage.
Speaker Change: Our plan for SPHERE is to create widespread demand for our offerings and drive utilization far in excess of traditional venues.
Speaker Change: Our core component of that strategy is our content category.
Speaker Change: The Spear Experience, which currently features postcards from Perth.
Speaker Change: This category again generated more than one million dollars in average daily ticket sales in our fourth quarter.
Jim Dolan: Since premiering in October, the Sphere experience has generated over $300 million in high-margin weather. These results reinforce our confidence in original content as a key economic engine for Sphere. We are actively developing new cinematic experiences and expect to launch our next attraction in the coming weeks. We believe this expanding content library will benefit our Las Vegas business and strengthen our value proposition to new mark. On the concert front, artists continue to benefit from the drawing power of Sphere. Deadly Company just completed their 30-show run on Saturday night. The Eagles kick off their residency next month with a 20-show run through January.
Speaker Change: Since premiering in October, the Sphere experience has generated over $300 million in high margin revenue.
Speaker Change: These results reinforce our confidence in original content as a key economic engine for Sphere.
Jim Dolan: We are actively developing new cinematic experiences and expect to launch our next attraction in the coming week. We believe this expanding content library will benefit our Las Vegas business and strengthen our value of proposition to new markets. On the concert front, artists continue to benefit from the drawing power of Sphere. We'll be our first EDM act with a multi-night run around New Year's. Both the Eagles and Anima have been extended multiple times due to demand. And next month, in another purse, Sphere will host the UFC, which will be the first live sports event in the venue.
Speaker Change: We are actively developing new cinematic experiences and expect to launch our next attraction in the coming weeks.
Speaker Change: We believe this expanding content library will benefit our Las Vegas business and strengthen our value proposition to new markets.
Speaker Change: On the concert front, artists continue to benefit from the drawing power of Sphere. Deadman Company just completed their 30-show run on Saturday night. The Eagles kick off their residency next month with a 20-show run through January .
Jim Dolan: And we recently announced that Anima will be our first EDM act with a multi-night run around New York. Both the Eagles and Anima have been extended multiple times due to demand. And next month in another purse, Sphere will host the UFC, which will be the first live sports event in the venue. We are also making progress towards our goal of hosting multiple event types on the same day. Sphere Experience ran on the same day as select Dead and Cold concerts in July and August.
Speaker Change: and we recently announced...
Speaker Change: that ANIMA will be our first EDM act with a multi-night run around New Year's.
Speaker Change: Both the Eagles and Anima have been extended multiple times due to demand. And next month, in another purse, Sphere will host the UFC, which will be the first live sports event in the venue.
Jim Dolan: We are also making progress towards our goal of hosting multiple event types on the same day. The Sphere experience ran on the same day as Selected and Co. concerts in July and August. And we believe that this had a positive impact on attendance for Postcards from Earth on those days. We also expect a similar schedule during the Eagles' round and our upcoming EDM shows. In addition, we are not standing still in terms of innovation.
Speaker Change: We are also making progress towards our goal of hosting multiple event types on the same day.
Jim Dolan: And we believe that this had a positive impact on attendance for Postcard from Earth on those days. We also expect a similar schedule during the Eagles round and our upcoming EDM show. In addition, we are not standing still in terms of innovation. On July 4th, we marked the one-year anniversary of ExoSphere by launching two new features: an official live stream called ExoStream, which is available 24-7 on our website, and ExoAudio, custom audio synced to ExoSphere content that is available both on-site and online via the live stream.
Speaker Change: The SPHERE experience ran on the same day as Select, Dead & Co concerts in July and August, and we believe that this had a positive impact on attendance for Postcards from Earth on those days.
Speaker Change: We also expect a similar schedule during the Eagles run and our upcoming EDM shows.
Jim Dolan: On July 4th, we marked the one-year anniversary of ExoSphere by launching two new features: an official live stream called ExoStreme, which is available 24/7 on our website. An Exo Audio custom audio synced to ExoSphere content that has developed both on-site and online via the live stream. We also welcome Verizon as the presenting partner of the live stream. And we're pleased that the partners and advertisers continue to recognize the ExoSphere as a high-impact platform for their brands. Finally, we remain focused on executing on our global vision for Sphere. Expansion discussions with international markets continue to progress, and we look forward to sharing more.
Speaker Change: In addition, we are not standing still in terms of innovation. On July 4th, we marked the one-year anniversary of Exosphere by launching two new features.
Speaker Change: an official live stream called ExoStream, which is available 24-7 on our website, and ExoAudio, custom audio synced to ExoSphere content that is available both on-site and online via the live stream.
Jim Dolan: We also welcome Verizon as the presenting partner of the live stream, and we're pleased that partners and advertisers continue to recognize the Exosphere as a high-impact platform for their brand. Finally, we remain focused on executing on our global vision for Sphere. Expansion discussions with international markets continue to progress, and we look forward to sharing more. So, while we know it's still early days, we're positive about what we have achieved with Sphere and remain optimistic about what the future holds for this next-generation medium.
Speaker Change: We also welcome Verizon as the presenting partner of the livestream. We're pleased that the partners and advertisers continue to recognize the Exosphere as a high-impact platform for their brands.
Speaker Change: Finally, we remain focused on executing on our global vision for SPHERE. Expansion discussions with international markets continue to progress and we look forward to sharing more.
Jim Dolan: So, while we know it's still early days, we're positive about what we have achieved with Sphere, and we remain optimistic about what the future holds for this next generation medium.
Speaker Change: So while we know it's still early days, we're positive about what we have achieved with sphere, and we made optimistic about what the future holds for this next generation medium. And with that, I'll now turn the call over to Dave.
Dave Byrnes: And with that, I'll now turn the call over to Dave. Thank you, Jim, and good morning, everyone. For the fiscal 24th quarter, we generated total company revenues of approximately $273 million and adjusted operating income of $25.7 million. Our Sphere segment generated fourth quarter revenues of approximately $151 million as we welcomed over 900,000 guests to more than 230 events, along with an AI loss of $5.5 million. These results were driven by our original content category, the Sphere Experience, featuring Postcard from Earth, which generated approximately $74 million in revenue across 208 shows in the fourth quarter. They also reflected fishes, four-night run in April, and the start of Dead and Co's residency in May with 18 performances during the quarter.
Jim Dolan: And with that, I'll now turn the call over to Dave. Thank you, Jim, and good morning, everyone. For the fiscal 24th quarter, we generated total company revenues of approximately $273 million and adjusted operating income of $25.7 million.
Dave: Thank you, Jim, and good morning, everyone.
Dave: For the fiscal 24 fourth quarter, we generated total company revenues of approximately $273 million and adjusted operating income of $25.7 million.
Dave Byrnes: Our Sphere segment generated 4th quarter revenues of approximately $151 million, and as we welcomed over 900,000 guests to more than 230 events, along with an AOI loss of $5.5 million. These results were driven by our original content category, the Sphere Experience, featuring postcards from Earth, which generated approximately $74 million in revenue across 208 shows in the fourth quarter. They also reflected Fishes, Fortnite, Run, and April, and the start of Dead and Co's Residency in May with 18 performances during the quarter. Fourth quarter results also benefited from Hewlett Packard's corporate keynote event at the NHL draft, as well as advertising campaigns on the Exos. [inaudible] SG&A expenses for the fourth quarter were $102 million.
Dave: Our Sphere segment generated fourth quarter revenues of approximately $151 million as we welcomed over 900,000 guests to more than 230 events, along with an AOI loss of $5.5 million.
Dave: These results were driven by our original content category, the Sphere Experience, featuring Postcard from Earth, which generated approximately $74 million in revenue across 208 shows in the fourth quarter.
Dave: They also reflected Fish's four-night run in April and the start of Dedenco's residency in May with 18 performances during the quarter.
Dave Byrnes: Fourth quarter results also benefited from Hewlett Packard's corporate keynote event and the NHL Draft, as well as advertising campaigns on the exos. S-GNA expenses for the fourth quarter were $102 million. This primarily reflects corporate overhead, as well as expenses related to Sphere Studios, associated content and technology development. Turning to MSG Networks, the segment generated $122 million in revenues and $31.1 million in ALI, which represent a decrease of 5% and an increase of 2%, respectively, as can be compared to the prior year period. The revenue decrease reflects lower distribution revenue, primarily due to a 13% decrease in subscribers, inclusive of the impact of MSG Plus.
Dave: Fourth quarter results also benefited from Hewlett-Packard's corporate keynote event and the NHL draft, as well as advertising campaigns on the exosphere.
Dave Byrnes: This primarily reflects corporate overhead as well as expenses related to sphere studios, associated content, and technology development. Turning to MSG Network, this segment generated $122 million in revenue. $31.1 million in AOI, which represents a decrease of 5% and an increase of 2%, respectively, as compared to the prior year period. The revenue decrease reflects lower distribution revenue, primarily due to a 13% decrease in subscribers.
Dave: SG&A expenses for the fourth quarter were $102 million. This primarily reflects corporate overhead, as well as expenses related to Sphere Studios, associated content and technology development.
Speaker Change: Turning to MSG Networks, the segment generated $122 million in revenues and $31.1 million in AOI, which represent a decrease of 5% and an increase of 2%, respectively, as compared to the prior year period.
Speaker Change: The revenue decrease reflects lower distribution revenue, primarily due to a 13% decrease in subscribers, inclusive of the impact of MSG+.
Dave Byrnes: Inclusive of the impact of MSG+, this was partially offset by higher affiliate rates and an increase in advertising revenue year over year, primarily due to higher per-game advertising sales on the linear networks and advertising revenue related to MSG Plus. The increase in AOI reflects lower SG&A expenses.
Dave Byrnes: This was partially offset by higher affiliate rates and an increase in advertising revenue year over year, primarily due to higher per game advertising sales on the linear networks and advertising revenue related to MSG Plus. The increase in ALI reflects lower S-GNA expenses, partially offset by the decrease in revenues. Turning to our balance sheet, as of June 30th, we had approximately $560 million of unrestricted cash and cash equivalents. Our debt balance was approximately $1.4 billion at quarter end. This reflected $259 million in convertible debt and a $275 million credit facility related to Sphere and Las Vegas.
Speaker Change: This was partially offset by higher affiliate rates and an increase in advertising revenue year-over-year, primarily due to higher per-game advertising sales on the linear networks and advertising revenue related to MSG+.
Dave Byrnes: Partially offset by the decrease in rev- Turning to our balance sheet, as of June 30th, we had approximately $560 million of unrestricted cash and cash equivalents. Our debt balance was approximately $1.4 billion at quarter end. This reflected $259 million in convertible debt and a $275 million credit facility related to Sphere in Las Vegas. It also reflected approximately $850 million outstanding on the MSG Networks term loan, which, as a reminder, is debt that is recourse only to MSG Networks.
Speaker Change: The increase in AOI reflects lower SG&A expenses, partially offset by the decrease in revenues.
Speaker Change: Turning to our balance sheet, as of June 30th we had approximately five hundred and sixty million dollars of unrestricted cash and cash equivalents.
Speaker Change: Our debt balance was approximately $1.4 billion at quarter end.
Speaker Change: This reflected $259 million in convertible debt and a $275 million credit facility related to Sphere in Las Vegas.
Dave Byrnes: It also reflected approximately $850 million outstanding on the MSG Networks' term loan, which, as a reminder, is debt that is recourse only to MSG Networks. As you know, we had been in discussions with our lenders regarding a potential refinancing of the MSG Networks credit facilities. However, we have been unable to reach an agreement with our lenders on a refinancing on a voluntary basis. As a result, MSG Networks have decided to pursue a refinancing through a workout with its existing lenders and its hired advisors to assist it with the process. We will keep you updated as appropriate.
Speaker Change: It also reflected approximately $850 million outstanding on the MSG Networks Term Loan, which, as a reminder, is debt that is recourse only to MSG Networks.
Dave Byrnes: As you know, we have been in discussions with our lenders regarding a potential refinancing of the MSG Network's credit facility. However, we have been unable to reach an agreement with our lenders on a refinancing on a voluntary basis.
Speaker Change: As you know, we had been in discussions with our lenders regarding a potential refinancing of the MSG Network's credit facilities.
Speaker Change: However, we have been unable to reach an agreement with our lenders on a refinancing on a voluntary basis.
Dave Byrnes: As a result, MSG Networks has decided to pursue a refinancing through a workout with its existing lenders and has hired advisors to assist it with the process. We will keep you updated as appropriate. And with that, we'd be happy to take your questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.
Speaker Change: As a result, MSG Networks has decided to pursue a refinancing through a workout with its existing lenders and has hired advisors to assist it with the process. We will keep you updated as appropriate.
Unknown Executive: And with that, we'd be happy to take your questions.
Unknown Executive: Thank you. We will now begin the question and answer session. If you'd like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Your first question comes from a line of Brandon Ross from Lightshed Partners. Your line is open. Thanks for taking the question. I guess MSG Networks has stolen the day-to-day with the workout.
Speaker Change: And with that, we'd be happy to take your questions.
Speaker Change: Thank you. We will now begin the question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. Your first question comes from a line of Brandon Ross from LightShed Partners. Your line is open.
Operator: Your first question comes from a line of Brandon Ross from Light Shed Partners. Your line is open. Thanks for taking the question. I guess MSG Networks has stolen the day-to-day with the workout. So, Jim, I wanted to ask you how the new NBA deal and the recent Comcast hearing on RSNs have changed their views on MSG Networks and the broader RSN industry. And I guess related are those affecting the approach that you're taking to this workout. Well, well, [inaudible] I wouldn't say that the NBA deal helped the regionals or MSG network, probably just the opposite.
Brandon Ross: Thanks for taking the question. I guess MSG Networks has stolen the day-to-day with the workout.
Jim Dolan: Jim, I wanted to ask you how the new NBA deal and the recent Comcast hearing of RSNs have changed reviews on MSG Networks and the broader RSN industry. And I guess related are those influencing the approach that you're taking to this workout? Well, I wouldn't say that the NBA deal helped the regionals or MSG Network, probably just the opposite.
Brandon Ross: Jim, I wanted to ask you how the new NBA deal and the recent Comcast hearing of RSN's
Brandon Ross: Have changed their views on MSG networks and the broader RSN industry. And I guess related are those influencing the approach that you're taking to this workout. Thank you very much for joining us today.
Brandon Ross: Well,
Speaker Change: I wouldn't say that the NVA deal helped the regionals or MSG network, probably just the opposite.
Jim Dolan: That's the, um- In terms of the workout, I'm going to let Mr. Byrnes answer the workout questions today. But, yeah, no, I don't think that the, you know, speaking strictly from the network's point of view, losing, you know, content is never good, and that was some very high-profile, mere content, so it did not help our business at all.
Jim Dolan: In terms of the workout, we're going to let Mr. Barnes answer the workout questions today. Yeah, no, I don't think that, speaking strictly from a network's point of view, losing content is never good. And that was some very high profile from your content, so did not help our business at all. And then Brandon, on the workout part of that, you know, we can't speculate today how the process is going to go going forward. We mentioned networks as hired advisors. The advisors are in touch with our lenders. And we're just going to have to see how that plays out and keep you posted as we move forward.
Speaker Change: That's where they, um,
Speaker Change: In terms of the workout, I'm going to let Mr. Byrnes answer the workout questions today.
Mr. Byrnes: Yeah, no, I don't think that's the...
Speedy Strickling: You know, speaking strictly from from that works point of view.
Speaker Change: Losing time. Losing... Losing...
Speaker Change: You know, content is never good.
Speaker Change: and that was some very high-profile, mere content, so did not help our business at all.
Dave Byrnes: And then, Brandon, on the workout part of that, you know, we can't speculate today on how the process is going to go going forward. We mentioned networks as hired advisors. The advisors are in touch with our lenders, and we're just going to have to see how that plays out and keep you posted as we move forward.
Brandon Ross: And then Brandon on the workout part of that, you know, we can't speculate today how the process is going to go going forward. We mentioned networks as hired advisors. The advisors are in touch with our lenders. And we're just going to have to see how that plays out and keep you posted as we move forward.
Jim Dolan: Okay, great. And then on the XSphere advertising, it was a little lower than the building's first couple of quarters. I realize you had Super Bowl last quarter. But what are you seeing overall in terms of the advertiser demand? And how is your approach to selling evolved?
Jim Dolan: Okay, great. And then on the Exosphere advertising, it was a little lower than the building's first couple of quarters. I realize you had the Super Bowl last quarter.
Brandon Ross: Okay, great. And then.
Speaker Change: On the Exosphere advertising, it was a little lower than the building's first couple of quarters.
Speaker Change: I realize you had Superbowl last quarter, but what are you seeing overall in terms of the advertiser demand and how is your approach to selling evolved? How can it improve?
Jim Dolan: How can it improve? Well, it can definitely improve that they, but we're just we're really getting used to the marketplace that they. It's the first year of, you know, this product. And so we're learning more about it. The, I think our approach right now is going in the direction where we're, where we're putting together, you know, conventions, other things going on in the marketplace. Right. Our pitches are much more branded. And we're still, you know, we're looking at the medium as being, you know, something that advertisers used to really introduce products, right? For the brands that are in the pitches have changed in that way.
Jim Dolan: But what are you seeing overall in terms of advertiser demand? And how has your approach to selling evolved? How can it improve? It's a little lower than the building's first couple of quarters.
Jim Dolan: Well, it can definitely improve, but we're really getting used to the marketplace. It's the first year of this product, and so we're learning more about it. I think our approach right now is going in the direction where we're... where we're
Speaker Change: Um, well...
Speaker Change: It can definitely improve, but we're really getting used to the marketplace.
Speaker Change: It's the first year of this product, and so we're learning more about it. I think our approach right now is going...
Jim Dolan: Putting it together. [inaudible] Conventions, other things going on in the marketplace, right; our pitches are much more branded. And we're still, you know, looking at the medium as being, you know, Something that advertisers use to really introduce products, right, for the brand, and the pitches have changed now.
Speaker Change: in the direction where we're, where we're...
Speaker Change: Putting together
Speaker Change: You know, conventions, other things going on in the marketplace, right, our pitches are much more branded, and we're still, you know, we're looking at the medium as being, you know,
Speaker Change: Something that advertisers use to really introduce products right for the brands and the pitches have changed in that way.
Unknown Executive: Got it.
Peter Henderson: Thank you. Your next question comes from a line of Peter Henderson from Bank of America. Your line is open. Yes. Good morning.
Operator: Thank you. Your next question comes from a line Peter Henderson from Bank of America. Your line is open. Yes. Good morning.
Speaker Change: Got it. Thank you.
Speaker Change: Your next question comes from the line of Peter Henderson from Bank of America. Your line is open.
Jim Dolan: Question for Jim. So we've seen the market rumors around your content plans. And to start wondering if your plan or preferred model is to partner with other studios or to go at a loan on content for the shared experience. And then can you just discuss the puts and takes for each of those? Okay. I guess the answer to that is yes. Well, that the, you know, granted content certainly, you know, has its appeal, right? That the, but the thing that probably is most important when we take a look at the content is that we use the medium.
Peter Henderson: Yes, good morning. A question for Jim.
Peter Henderson: So we've seen the market rumors around your content plans and
Peter Henderson: Just sort of wondering if your plan or preferred model is to partner with other studios?
Peter Henderson: or to go it alone on content for the Sphere Experience. And then can you just discuss the puts and takes for each of those?
Jim Dolan: Question for Jim. So we've seen the market rumors around your content plans, and I was wondering if your plan or preferred model is to partner with other studios or to go on a loan on content for the sphere experience. And then can you just discuss the puts and takes for each of your own?
Jim Dolan: Okay. I guess the answer to that is yes. Subscribe. Both.
Speaker Change: Okay, I guess the answer to that is yes.
Jim Dolan: But branded content certainly has its appeal. But the thing that probably is most important when we take a look at content is that we use the medium well, and we continue to explore the medium. And if you can do that via branded content or via original content, the most important thing to me is that it's experiential. That's what we want our customers to have when they come into the building, an experience. So if the brand and content doesn't do that, then we're going to shy away from it. The business equation for branded content is more expensive.
Speaker Change: Bones.
Speaker Change: Let me... Let me... Let me... Let me... Let me... Let me... Let me...
Speaker Change: Brandon's contact certainly has his appeal, but the thing that probably is...
Speaker Change: Most important when we take a look at the content
Jim Dolan: Well, that would continue to explore the media. And if you can do that via branded content or via original content, the most important thing to me is that it's experiential. That's what we want our customers to have when they come into building. That is an experience. So if the branded content does do that, then we're going to shy away from it. The business, the business equation on a branded content is more expensive. And you have to make room for, or the IP owners, in that when you do your own. You know, you don't have that as much.
Speaker Change: Is that we use the medium, well, that we continue to explore the medium. And if you can do that via branded content or via original content, the most important thing is to me, is that it's experiential. [inaudible]
Speaker Change: That's what we want our customers to have when they come into building, is an experience. So, if the branded content doesn't do that, then we're going to shy away from it.
Speaker Change: The business and the business equation our Brandon content is more expensive.
Jim Dolan: And you have to make a room for the IP owners in that. When you do your own, you don't have that as much. You read more of the benefits. But, of course, branded content also has, you know, a pre-instilled appeal to the marketplace, so you weigh one against the other.
Speaker Change: And you have to make room for the IP owners in that when you do your own, you know, you don't have that as much and you reap more of the benefits.
Jim Dolan: You read more of the benefit. But, of course, Brandon Content also has a pre-instilled appeal to the marketplace, so he will wait one against the other.
Brandon Constant: But, of course, branded content also has, you know, a pre-instilled appeal to the marketplace. So you weigh one against the other.
Unknown Executive: Okay, great. Just a quick follow-up.
Jim Dolan: Okay. Great. Just a quick follow-up. Is there another path where you put out immersive concert content based on the residencies you have? Just as a way to sort of extend those residencies and even provide additional. Yeah, there's a reason for that.
Jim Dolan: Is there another path where you put out immersive concert content based on the residencies you have, just as a way to sort of extend those residencies and even provide additional sort of reason for that? Okay, we think there is, but it kind of goes back to my first answer, right? It's all about experience. So, if you look at the concerts that we've had and the events that we've had in the, you know, in the Sphere so far, and you think of them as an experience, right? Then recording them actually in the Sphere itself is probably the most perfect place to make an experiential recording.
Speaker Change: Okay, great. Just a quick follow-up. Is there another path where you put out immersive concert content based on the residencies you have just as a way to sort of extend those residencies and even provide additional?
Jim Dolan: We think there is, but it kind of goes back to my first answer, right? It's all about experience. So if you look at the concerts that we've had and the events that we've had in the sphere so far, and you think of that as an experiment, all right, then recording them actually in the sphere itself is probably the perfect place to make an experiential recording.
Speaker Change: We think there is, but it kind of goes back to my first answer, right? It's all about experience. So if you look at the concerts that we've had and the events that we've had in the
Speaker Change: You know, in the sphere so far, and you think of them as an experience.
Speaker Change: Alright, let's leave here. Dan. Thank you very much.
Speaker Change: recording them actually in the sphere itself is probably the most perfect place to make an experiential recording. So that suggests that there's a product there.
Operator: So that suggests that there's a product. Now, we haven't launched anything with that yet, and we're not prepared to announce anything today, but I expect you'll hear from us soon about that kind of content. Great, thank you. Your next question comes from the line of Daniel Duran from Morgan Stanley. Your line is open. Hi, good morning.
Jim Dolan: So, that suggests that there's a product thing.
Jim Dolan: Now, we haven't watched anything with that yet, and we're not prepared to announce anything today, but I expect you'll hear from us soon about that kind of content.
Speaker Change: Now we haven't watched anything with that yet and we're not prepared to announce anything today, but I expect you'll hear from us soon about that kind of content.
Unknown Executive: Great. Thank you.
Daniel Duran: Your next question comes from Lina of Daniel Duran from Morgan Stanley. Your line is open. Hi, good morning. Thank you for taking my question. Jim, I believe that on the last two earnings calls you suggested we might hear soon about plans for an additional or multiple additional spheres. Do you have any update for us today, or when do you think we might now expect to hear on the expansion of the Sphere portfolio to new markets? Thank you. You know, the interesting thing about that question is that topic is sort of, you know, I can't really say exactly when, right?
Speaker Change: Great, thank you.
Speaker Change: Your next question comes from the line of Daniel Duran from Morgan Stanley . Your line is open.
Jim Dolan: Thank you for taking my question. Jim, I believe that on the last two earnings calls you suggested we might hear soon about plans for an additional or multiple additional spheres. Do you have any update for us today?
Daniel Duran: Hi, good morning. Thank you for taking my question. Jim, I believe that on the last two earnings calls you suggested, we might hear soon about plans for an additional or multiple additional spheres.
Jim Dolan: Or when do you think we might now expect to hear about the expansion of the Sphere portfolio to new markets? Thank you. You know, the interesting thing about that question is that topic is sort of, you know... I can't really say exactly when, right, because then I'd be saying exactly when. Then do I anticipate that we're going to have something to say very soon? Yes, I do.
Daniel Duran: Do you have any update for us today or when do you think we might now expect to hear on the expansion of the Sphere portfolio to new markets? Thank you.
Speaker Change: You know, the interesting thing about that question is that topic is sort of...
Speaker Change: You know
Jim Dolan: Because then I'd be saying exactly when. Do I anticipate that we're going to have something to say very soon? Yes, I do, right? And I think that's about all I can say, right, other than you're going to know when it happens. Got it.
Speaker Change: I can't really say exactly when, right, because then I'd be saying exactly when.
Jim Dolan: Right. Then, um, and I think that's about all I can say. Right. Other than that you're going to know when it happens.
Speaker Change: Do I anticipate that we're going to have something to say very soon? Yes, I do, and I think that's about all I can say, other than you're going to know when it happens.
Jim Dolan: Yeah. Got it. Thank you. And just one follow-up. I believe Postcards was about an $85 million investment. Can you give us a sense of how much the other two in-process Sphere experiences compare in cost?
Unknown Executive: Thank you. And just won't follow up.
Speaker Change: i
Unknown Executive: I believe postcards was about an $85 million investment. Can you give us a sense of how much the other two in process sphere experiences comparing cost? Thank you. Yeah, I think they probably won't be much more. They could be much less than they were still figuring out some of those some of those dynamics. We postcards, we call postcards the first pancake, right? You know, it's like to make first pancake. The second pancake is always better; usually, at least. And we won't, we won't spend, you know, we learned a lot about where to spend our money from the first pancake.
Speaker Change: Thanks for watching, and don't forget to like, share, and subscribe to our channel.
Speaker Change: Got it, thank you. And just one follow-up. I believe Postcards was about an 85 million dollar investment. Can you give us a sense of how much the other two in-process sphere experiences compare in cost? Thank you.
Jim Dolan: Thank you. Yeah, I think, look. They probably won't be much more. They could be much less. We're still figuring out some of those dynamics. We postcards, we call postcards the first pancake. Right. You know what it's like to make the first pancake. The second pancake is always better.
Speaker Change: Yeah, I think, look.
Speaker Change: They probably won't be much more. They could be much less.
Speaker Change: that the we're still we're still figuring out some of those Some of those dynamics we postcards we call postcards the first pancake
Speaker Change: You know what it's like to make the first pancake.
Operator: Usually, at least. And we won't we won't spend. You know, we learned a lot about where to spend our money on the first pancake. So, I would say that the next couple of efforts will be better in terms of their appeal and how they use the medium, right, in terms of what we spent to make them. You know, I think we're somewhat comfortable at the number that Postcards was made at.
Speaker Change: The second pancake is always better, usually at least. And we learned a lot about where to spend our money from the first pancake.
Jim Dolan: So I would say that the next couple of efforts will be better. In terms of their appeal and how they use the medium, right? In terms of what we spend to make them. You know, I think we're somewhat comfortable at the number that postcards was made at. I don't think that will make it from much less because what we'll end up doing is we find we have more resources to put into it that will make it even better. So we're likely to stay in and around that range. Got it.
Speaker Change: so
Speaker Change: I would say that the next couple of efforts...
Unknown Executive: Good morning. Thank you for standing by and welcome to the Sphere Entertainment fiscal 2024 fourth quarter and year end earnings conference call. At this time, all participants are in listen only mode.
Speaker Change: will be better in terms of their appeal and how they use the medium, right, in terms of what
Unknown Executive: After the speakers remarks, there will be a question and answer session.
Speaker Change: We spent to make them.
Ari Danes: I would now like to turn the call over to Ari Danes investor relations. Please go ahead. Thank you.
Speaker Change: I think we're somewhat comfortable at the number that Postcards was made at.
Unknown Executive: Good morning and welcome to Sphere Entertainment fiscal 2024 fourth quarter and year end earnings conference call.
Operator: We won't, I don't think that will make it much less because what we'll end up doing is we'll find we have more resources to put into it. They will make it even better. So they were likely to stay in and around that. We'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we'll, we Thank you very much. Your next question comes from the line of David Karnovsky from J.P. Morgan. Your line is open.
Speaker Change: I don't think that we'll make it for much less, because what we'll end up doing is if we find we have more resources to put into it, then we'll make it even better. So, we're likely to stay in and around that range.
James Dolan: Today's call will begin with our executive chairman and CEO Jim Dolan will provide an update on Sphere.
David Byrnes: Dave Byrnes, our executive vice president, chief financial officer and treasurer will then review our financial results for the period.
David Karnovsky: Thank you very much. Your next question comes from a line of David Karnovsky from JP Morgan. Your line is open. Thank you.
Speaker Change: Got it. Thank you very much.
Ari Danes: After our prepared remarks, we will open up the call for questions. If you do not have a copy of today's earnings release, it is available in the investor section of our corporate website. Please take note of the following. Today's discussion may contain forward looking statements within the meaning of the private securities litigation or form act of 1995. Any such forward looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements.
Speaker Change: Your next question comes from the line of David Karnofsky from J.P. Morgan. Your line is open.
Jim Dolan: Following up on the potential international locations, Jim, I wanted to see if you could talk more about what role Sphere, the company, would play for these venues. I assume Sphere Studios would license content.
Jim Dolan: Maybe following up on the potential international locations. Jim wanted to give you a talk more about what role fear the company would play for these venues. I assume Sphere Studios would license content, but what other kind of corporate booking management function do you think the central entity could or will provide? Sure. I actually, I tend to think about this at least once a week, because as we're going out to other marketplaces and then to other potential owners of Sphere, the question of, you know, we obviously bring the expertise of how to build a Sphere. But when you take a look at this last year, we've really gotten much better at operating a Sphere.
David Karnofsky: Thank you. Maybe following up on the potential international locations, Jim, I wanted to see if you could talk more about what role Spear, the company, would play for these venues. I assume Spear Studios would license content, but what other kind of corporate booking management functions do you think the central entity could or will provide?
Ari Danes: Please refer to the company's filings with the SEC for discussion of risks and uncertainties. The company disclaims any obligation to update any forward looking statements that may be discussed during this call on pages five and six of today's earnings release.
Jim Dolan: But what other kind of corporate booking management functions do you think the central entity could or will provide? Sure. I actually do.
Jim Dolan: Yeah. I tend to think about this at least once a week, because as we're going out to other marketplaces and to other potential owners of spheres, the question of we obviously bring the expertise of how to build a sphere, but when you take a look at this last year, we've gotten much better at operating a sphere. By the time we open up another sphere, we'll really have gotten that operation down. When I look at everything that's happened in the last year, I keep thinking to myself, well, the next guy is going to really benefit from the fact that we learned this and we learned that, and we changed this policy and this procedure, and we became efficient at this.
Jim: Sure, um, the, uh, actually.
Jim: I tend to think about this at least once a week.
Jim: um
Jim: Because
Speaker Change: As we're going out to other marketplaces, right, and to other potential owners of spheres, the question of, you know, we obviously bring the expertise of how to build a sphere.
David Byrnes: We provide consolidated statements of operations and a reconciliation of operating income to adjusted operating income or AI, a non gap financial measure.
Speaker Change: Right
Speaker Change: But when you take a look at this last year, we've really gotten much better at operating a sphere.
Jim Dolan: And by the time we open up another sphere, we'll really have gotten that operation down. But when I look at everything that's happened in the last year, I keep thinking to myself, well, the next guy is going to really benefit from the fact that we learn this, so we learn that and we change this policy and this procedure; we became efficient at this. I mean, one of the things that we talked about in the script was what we call side by sides. That's where we have more than one event in the sphere on the same day.
James Dolan: And with that, I'll now turn the call over to Jim. Thank you Ari and good morning everyone. As we said from the start, we believe sphere is a new medium that has the potential to change the entertainment landscape for artists, guests and partners. Pulling realizing that vision will take time, but we are learning every day how to optimize spheres operating model. And with the close at fiscal 2024, we are pleased to look back and see real progress across multiple fronts.
Speaker Change: Right, and by the time we open up another sphere, right, we'll have, we'll really have gotten that, that operation down, and that the...
Speaker Change: But when I look at everything that that's happened in the last year, I keep thinking to myself Well, the next guy is going to really benefit from the fact that we
Speaker Change: you know that we learned this so we learned that and we changed this policy and this procedure right we became efficient at this I mean one of the things that that uh that we talked about in the uh in the script right was what we call side-by-sides
Jim Dolan: One of the things that we talked about in the script was what we call side-by-sides. That's where we have more than one event in the sphere on the same day. The next sphere will automatically know how to do that because of what happened at the sphere in Las Vegas, how to set up, how to change out, how to move from one piece of content to another piece of content and effectively bring in an audience for one, and then bring in an audience for another one and have them exit and do the experience, etc. The utilization of the building, that's a big piece of what the economic formula was for Sphere, was to build a building that you could utilize 365 days a year and multiple times a day.
James Dolan: Since fear opened last September, we have welcomed millions of guests, hosted artists and blue chip companies and featured numerous brands on the exosphere. The sphere has also become part of the global conversation with worldwide recognition and extensive presence social media coverage. Our plan for a sphere is to create widespread demand for our offerings and drive utilization, bar and excess of traditional venues. Our core component of that strategy is our content category.
Speaker Change: Right the that's where we have more than one event right in the in the sphere on the same day
Jim Dolan: The next Sphere will automatically know how to do that because of what happened in the Sphere in Las Vegas. How to change, how to set up, how to change out, how to move from one piece of content to another piece of content, right, and effectively bring in an audience for one, right, and then bring in an audience for another one, and have them exit and do the experience, et cetera, the utilization of the building. That's a big piece of what the economic formula was for Sphere was to build a building that you could utilize 365 days a year and multiple times a day.
Speaker Change: The um...
Speaker Change: The next sphere.
Speaker Change: We'll automatically know how to do that because of what happened in the sphere.
Speaker Change: It's in Los Vegas.
Speaker Change: How to set up, how to change out, how to move from one piece of content to another piece of content, right, and effectively bring in an audience for one, right, and then bring in an audience for another one and have them exit and do the experience, etc.
James Dolan: The sphere experience, which currently features postcards from earth. This category again, generated more than $1 million in average daily ticket sales in our fourth quarter. Since premiering in October, the sphere experience has generated over $300 million in high margin revenue. These results reinforce our confidence and original content as a key economic engine for sphere. We are actively developing new cinematic experiences and expect to launch our next attraction in the coming week.
Speaker Change: You know, utilization of the building, that's, you know, that's a big piece.
Speaker Change: of what the economic formula was for Sphere, was to build a building that you could utilize 365 days a year and multiple times a day.
Jim Dolan: So we've learned a lot this year. The next person to build one to use us will be us who build it, obviously. We'll benefit from what we've learned this year, particularly with things like side-by-side. And then, regarding some of the non-music events like the NHL or the upcoming UFC fight, I'm interested to know what type of interest you're seeing for this type of show at Sphere.
Jim Dolan: So we've learned a lot this year. The next person, the build one to use us, will be us who builds it obviously, will benefit from what we've learned in this year, particularly with things like side by side.
Speaker Change: We've learned a lot this year. The next person to build one to use us will be us who builds it, obviously. We'll benefit from what we've learned in this year, particularly with things like side-by-sides.
Jim Dolan: And then regarding some of the non-music events like NHL or the upcoming UFC fight, interested to know what type of interest you're seeing to this type of show at the Sphere. And then can you maybe also speak to corporate demand to fall in the two-package event you did?
James Dolan: We believe this expanding content library will benefit our Las Vegas business and strengthen our value of proposition to new markets. On the concert front, artists continue to benefit from the drawing power of Sphere. We'll be our first EDM act with a multi-night run around New Year's. Both the Eagles and Anima have been extended multiple times due to demand. And next month in another purse, Sphere will host the UFC, which will be the first live sports event in the venue.
Speaker Change: Got it. And then regarding some of the non-music events like the NHL or the upcoming UFC fight, I'm interested to know what type of interest you're seeing for this type of show at the Sphere. And then can you maybe also speak to corporate demand just following the Hewlett-Packard event you did? Thanks.
Jim Dolan: And then, can you maybe also speak to corporate demand just following the Hewlett-Packard event you did? Okay, I'm going to answer that in a slightly different way than you asked. Um, the reason is that, as I was just talking about, the sphere is, you know, what are we programming on a day-to-day basis in the sphere? Our anchor programming, right, is our content, at the moment, Postcards from Earth. We can run Postcards from Earth 365 days a year. And Ron, nothing else.
Jim Dolan: Okay, I'm going to answer that in a slightly different way than you asked it. Because the strategy, as I was just talking about, was that the Sphere is, you know, what are we programming on a day-to-day basis in the Sphere? Our anchor programming, right, is our contact at the moment: Postcards from Earth. We can run postcards from Earth 365 days a year and run nothing else. We could do that. And that will generate X amount of revenue per day. So if you're sitting there and you're booking the venue, you would probably not booked anything in there that made less than what you can do with your face contact, right?
Speaker Change: Okay, I'm going to answer that in a slightly different way than you asked it.
Speaker Change: Um, the, uh, because. [inaudible]
Speaker Change: The strategy, as I was just talking about, was that the sphere is, you know, what are we programming on a day-to-day basis in the sphere? Our anchor programming, right, is our content at the moment, Postcards from Earth.
Speaker Change: Let's relate to the uh...
James Dolan: We are also making progress towards our goal hosting multiple event types on the same day. The Sphere experience ran on the same day as Selected and Co concerts in July and August. And we believe that this had a positive impact on attendance for postcards from Earth on those days. We also expect a similar schedule during the Eagles round and our upcoming EDM shows. In addition, we are not standing still in terms of innovation.
Speaker Change: We can run postcards for Perth 365 days a year.
Ron: and Ron, nothing else.
Ron: We could do that, that the and that
Jim Dolan: We could do that, and it will generate x amount of revenue per day. So, if you're sitting there and you're booking the venue, you would probably not book anything in there that is less profitable than what you can do with your base content, right? Now, your question is, how many corporates do we have? How many of, you know, residencies, et cetera? That's the formula, right?
Ron: We'll generate X amount of revenue per day.
Ron: The Armed Shot!
Speaker Change: If you're sitting there and you're booking the venue, you would probably not book anything in there that made less than what you can do with your base content.
Jim Dolan: Now, your question is, how many corporates do we have, how many of, you know, residences, et cetera? That's the formula, right? So corporates, we've actually had quite a bit of interest in corporates, right? But I will tell you that so. Some of them have been a little shocked with the price tag because they're actually competing with postcards from Earth for utilization of the building. And so, that we basically say to them, sure, we'd love to rent you the building and have you do this. What we got to make, at least as much money as postcards, right?
James Dolan: On July 4th, we marked the one-year anniversary of ExoSphere by launching two new features, an official live stream called ExoStreme, which is available 24-7 on our website. An Exo Audio custom audio synced to ExoSphere content that has developed both on-site and online via the live stream. We also welcome the Verizon as the presenting partner of the live stream. And we're pleased that the partners and advertisers continue to recognize the ExoSphere as a high impact platform for their brands.
Speaker Change: Right. Now, your question is, how many corporates do we have? How many, you know, residencies, etc.?
Speaker Change: That's the formula, right? So, corporates, we've actually had quite a bit of interest in corporates, right? But I will tell you that some of them have
Jim Dolan: So, corporates, we've actually had quite a bit of interest in corporates, right? But I will tell you that some of them have been a little shocked by the price. Because they're actually competing with postcards from Earth for utilization of the building, and so we basically say to them, And so that's what we're going to do. Sure, we'd love to rent you the building and have you do this.
Speaker Change: I've been a little shocked with the price tech.
Speaker Change: because they're actually competing with postcards from earth for utilization of the building and so we basically say to them
James Dolan: Finally, we remain focused on executing on our global vision for Sphere. Expansion discussions with international markets continue to progress and we look forward to sharing more. So while we know it's still early days, we're positive about what we have achieved with Sphere and we remain optimistic about what the future holds for this next generation medium.
Speaker Change: Sure, we'd love to we'd love to rent you the building and have you do this, but we got to make at least as much money as postcards.
Jim Dolan: Well, we have to make at least as much money as possible, right? And that, you know, can be somewhat expensive for corporate clients. Still, the ones with a lot of imagination, foresight, et cetera, are not haunted by those numbers because they see what they can do with the building.
Jim Dolan: And that, you know, can be somewhat expensive for a corporate client. Still, the ones with a lot of imagination and foresight, et cetera, are not daunted by those numbers because they see what they can do with the building; they see how they can display their, you know, their information that they, and they think it's really cool to be in the sphere. So, that's sort of how it plays out.
Speaker Change: Right, and that, you know, can be.
Speaker Change: Somewhat expensive.
Speaker Change: for Corporate Clients still.
Speaker Change: The ones with a lot of...
Jim Dolan: They see how they can display their, you know, their information that they have, and they think it's really cool to be in the picture. Now, um, so. That's sort of how it plays out. Did that answer your question? That's us.
Speaker Change: Imagination at four sides. Thank you.
David Byrnes: And with that, I'll now turn the call over to Dave. Thank you, Jim, and good morning, everyone. For the fiscal 24th quarter, we generated total company revenues of approximately $273 million and adjusted operating income of $25.7 million. Our Sphere segment generated fourth quarter revenues of approximately $151 million as we welcomed over 900,000 guests to more than 230 events along with an AI loss of $5.5 million. These results were driven by our original content category, the Sphere Experience, featuring postcard from Earth, which generated approximately $74 million in revenue across 208 shows in the fourth quarter.
Speaker Change: etc. are not daunted by those numbers, because they see what they can do with the building, they see how they can display their, you know, their information that they
Speaker Change: And they think it's really cool to be in the sphere.
Speaker Change: That's sort of how it plays out.
Jim Dolan: Thank you. Did that answer your question?
Peter Sapino: I thought it'd take a minute. Your next question comes from Alina, Peter Sapino from Wolf Research. Your line is open. Hi. Good morning.
Operator: Thanks, Jim. Your next question comes from the line of Peter Supino from Wolf Research. Your line is open. Hi, good morning.
Speaker Change: Did that answer your question?
Jim: That's us. Thanks, Jim.
Jim: Our next question comes from the line up here, Sabina from Wolf Research. Your line is open.
Jim Dolan: I have a question on the postcards from Earth and the Sphere traffic dynamics, and then another one on the MSG networks refinancing on the ladder. If you could just help us with color on why the prior refinancing process didn't work and why you decided on this new workout strategy. And then on postcards, I wonder if you can share any data or analysis with us on what drives visitors to the sphere.
Dave Byrnes: I have a question on the postcards from Earth and the sphere traffic dynamics and another one on the MSG networks refinancing. On the latter, if you could just help us with color on why the prior refinancing process didn't work and why you decided on this new workout strategy. And then on postcards, I wonder if you can share any data or analysis with us on what drives visitors to the sphere. And what does that mean as you transition from postcards and from year one to whatever comes next and year two when more people will have been there once.
Speaker Change: Hi, good morning. I have a question on the postcards from Earth and the Sphere traffic dynamics and then another one on the MSG networks refinancing.
Sapino: On the latter, if you could just help us with color on why the.
Speaker Change: The prior refinancing process didn't work and
David Byrnes: They also reflected fishes, four night run in April, and the start of Dead and Co's residency in May with 18 performances during the quarter. Fourth quarter results also benefited from Hewlett Packard's corporate keynote event and the NHL draft, as well as advertising campaigns on the exos. S-GNA expenses for the fourth quarter were $102 million. This primarily reflects corporate overhead, as well as expenses related to Sphere Studios, associated content and technology development.
Speaker Change: and why you decided on this new workout strategy and then on postcards.
Speaker Change: I'm wondering if you can share any data or analysis with us on what drives
Speaker Change: And what does that mean as you transition from postcards and from year one to whatever comes next and year two when more people will have been there once? Thank you.
Jim Dolan: Thank you.
Dave Byrnes: Once you do the, Peter, I'll think the first part of that. Last time we spoke, we mentioned that we were in discussions with our entire bank group to amend and extend networks' credit facilities. We had strong support from a number of our larger relationship banks to participate in the refinancing. However, we were just unable to get sufficient overall support from the full lender group to complete the full syndication. And that's what led us to where we are here right now in the workout.
Jim Dolan: And what does that mean as you transition from postcards and from year one to whatever comes next and year two, when more people will have been there once? Thank you. Peter, I think the first part of that. Last time we spoke, we mentioned that we were in discussions with our entire bank group to amend and extend the networks credit facilities. We had strong support from a number of our larger relationship banks to participate in the refinancing.
Peter Henderson: Peter, I'll take the first part of that. Last time we spoke, we mentioned that we were in discussions with our entire bank group to amend and extend Network's credit facilities. We had strong support from a number of our larger relationship banks to participate in the refinancing.
David Byrnes: Turning to MSG networks, the segment generated $122 million in revenues, and $31.1 million in ALI, which represent a decrease of 5% and an increase of 2% respectively, as can be compared to the prior year period. The revenue decrease reflects lower distribution revenue, primarily due to a 13% decrease in subscribers, inclusive of the impact of MSG plus. This was partially offset by higher affiliate rates and an increase in advertising revenue year over year, primarily due to higher per game advertising sales on the linear networks, and advertising revenue related to MSG plus.
Dave Byrnes: Thank you. However, we were just unable to get sufficient overall support from the full lender group to complete the full syndication, and that's what led us to where we are here right now on the work end. Man, on the second part of that, that feels sort of like the chicken and egg question. Is it the egg, or is it the inside of the egg?
Speaker Change: However, we were just unable to get sufficient overall support from the full lender group to complete the full syndication. And that's what led us to where we are here right now on the work app.
Jim Dolan: Man, on the second part of that, that feels sort of like the chicken-and-egg question. Is it the egg, or is it the inside of the egg? Look, I think it's a bit of a combination of both. I mean, it's a very interesting building to see from the outside, and it dominates the landscape. That clearly makes people really wise. But then they ask questions like, well, what's inside? And what does it do? Then you take a look at things like the social media and how this product, only being a year old, you could go almost anywhere in the world and say, Sphere, and people know what it is.
Man: And on the second part of that, that feels sort of like the chicken and egg question.
Man: Is it the egg or is it the inside of the egg?
Jim Dolan: And look, I think it's a bit of a combination of both. I mean, it's a very interesting building to see from the outside, and it dominates the landscape, right? And that clearly makes people really want it. But then they ask questions like, well, what's inside, right, and what does it do, right?
Speaker Change: and look I think it's a it's a bit of a combination of both.
David Byrnes: The increase in ALI reflects lower S-GNA expenses, partially offset by the decrease in revenues. Turning to our balance sheet, as of June 30th, we had approximately $560 million of unrestricted cash and cash equivalence. Our debt balance was approximately $1.4 billion at quarter end. This reflected $259 million in convertible debt and a $275 million credit facility related to Sphere and Las Vegas. It also reflected approximately $850 million outstanding on the MSG networks' term loan, which, as a reminder, is debt that is recourse only to MSG networks.
Speaker Change: I mean, it's a very interesting building to see from the outside and it dominates the landscape, right? And that clearly makes people really want it. But then they ask questions like, well,
Jim Dolan: And then you take a look at things like social media, right, and how this product, only being a year old, right, you could go almost anywhere in the world and say Sphere, and people know what it is, know where it is, right, and many of them know what it does. And every time we do something like Dead & Co., it just, you know, blossoms out again, and a whole new group of people learn all about what the Sphere can do, right?
Speaker Change: What's inside?
Speaker Change: and what does it do, and then you take a look at things like the social media and how this product only being a year old,
Speaker Change: You could go at almost anywhere in the world and say Sphere and people know what it is.
Jim Dolan: Know where it is. And many of them know what it does. And every time we do something like dead and cold, it just blossoms out again. And a whole new group of people learn all about what the sphere can do. So are they there for the building? Are they there for the content? I think it's a combination of both. You did mention that a lot of people have seen it, right? Well, a lot of people see it from the outside, but actually not a lot of people have seen it from the inside. So there's still plenty of marketplace available there.
Speaker Change: know where it is, right, and many of them know what it does.
Speaker Change: And every time we do something like Dead & Co., it just, you know, blossoms out again. And a whole new group of people learn all about what the sphere can do. Right. So, are they there for the building? Are they there for the content? I think it's a combination of both.
David Byrnes: As you know, we had been in discussions with our lenders regarding a potential refinancing of the MSG networks credit facilities. However, we have been unable to reach an agreement with our lenders on a refinancing on a voluntary basis. As a result, MSG networks have decided to pursue a refinancing through a workout with its existing lenders and its hired advisors to assist it with the process.
Jim Dolan: So, are they there for the building? Are they there for the content? I think it's a combination of both. You did mention that a lot of people have seen it, right? Well, a lot of people see it from the outside, but actually, not a lot of people have seen it from the inside.
Speaker Change: You did mention that a lot of people have seen it, right? Well, a lot of people see it from the outside, but actually not a lot of people have seen it from the inside. So there's still plenty of marketplace available there. And then as we keep changing up the content and then we promote it and we do more residencies and
Jim Dolan: So, there's still plenty of market available there. And then as we keep changing up the content, and then we promote it, and we do more residencies, and more events, et cetera, it just continues to add up with that. So, I mean, I don't think you could peg it to being one thing versus the other.
Jim Dolan: And then, as we keep changing up the content, and then we promote it and we do more residencies and more events, etc. It just continues to add off to that. So, I mean, I don't think you could peg it to be one thing versus the other.
Unknown Executive: We will keep you updated as appropriate.
Unknown Executive: And with that, we'd be happy to take your questions. Thank you. We will now begin the question and answer session. If you'd like to ask a question, please press star one in your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again.
Speaker Change: More events, et cetera, just continues to add on to that. So, I mean, I don't think you can peg it to be one thing versus the other.
Unknown Executive: Well, we really look forward to more pancakes. Thank you. There you go. Operator, we'll take prize of that.
Jim Dolan: We look forward to more pancakes. Thank you. Thank you all for having me.
Speaker Change: We look forward to more pancakes. Thank you.
Brandon Ross: Your first question comes from a line of Brandon Ross from Lightshed Partners. Your line is open. Thanks for taking the question. I guess MSG networks has stolen the day-to-day with the workout. Jim, I wanted to ask you how the new NBA deal and the recent Comcast hearing of RSNs have changed reviews on MSG networks and the broader RSN industry. And I guess related are those influencing the approach that you're taking to this workout?
Operator: Operator, we'll take fives for that. We'll take one last caller, Operator. Certainly, your final question comes from a line David Joyce from Seaport Research Partners.
Speaker Change: There you go. Operator, we'll take a rise for that.
David Joyce: We'll take one last caller, operator. Certainly, your final question comes from a line of David Joyce from Seaport Research Partners. Your line is open. Thank you. Do you have my first questions on the residency pipeline? I was wondering if you could help provide some more. Color into invisibility into 2025. After the Eagles, what other groups are you talking to? Can you announce or what genres are they? And what's involved with the creative that they put on and the lead time that they need to work with you on that? What was the last last part of that?
Operator: Your line is open. Thank you. My first question is about the residency pipeline.
Speaker Change: We'll take one last caller, operator.
Speaker Change: Certainly, your final question comes from the line of David Joyce from Seaport Research Partners. Your line is open.
James Dolan: Well, I wouldn't say that the NBA deal helped the regionals or MSG network, probably just the opposite. In terms of the workout, we're going to let Mr. Barnes answer the workout questions today. Yeah, no, I don't think that speaking strictly from networks point of view, losing content is never good. And that was some very high profile from your content, so did not help our business at all. And then Brandon on the workout part of that, you know, we can't speculate today how the process is going to go going forward. We mentioned networks as hired advisors. The advisors are in touch with our lenders. And we're just going to have to see how that plays out and keep you posted as we move forward.
Jim Dolan: I was wondering if you could help provide some more color into invisibility into 2025 after the Eagles. What other groups are you talking to? Can you announce them, or what genres are they? And what's involved with the creative that they put on and the kind of lead time that they need to work with you on that. What was the last part of that? About the concept, how much time does it create?
Speaker Change: Thank you. My first question is on the residency pipeline. I was wondering if you could help provide some more color into and visibility into 2025.
Speaker Change: After the Eagles, what other groups are you talking to, and can you announce, or what genres are they, and what's involved with the creative that they put on, and kind of the lead time that they need to work with you on that.
Jim Dolan: About the concept? How much time do you have creative on it? Well, we're obviously not going to make any, you know, announcements today about who's coming. You did ask it in a way that I can see the about categories, right? So you can expect something in the country category coming in 25, right? That will, that will what people's appetite. The look it takes, you know, anywhere from three to six months to get ready to do one of them. It depends on what you're trying to achieve. So, you know, we're about that. We're at least that far out.
Jim Dolan: Oh, how much time do you have to be creative on it? Okay. Well, well, obviously not going to make any, any, you know, announcements today about who's coming. You did ask it in a way that I could think of categories.
Speaker Change: What was the last last part of that?
Speaker Change: About the contact
Speaker Change: How much time do you need to get creative on it? Okay. Well, we're obviously not going to make any, any, you know,
Jim Dolan: Right? So you can expect something in the country category coming in twenty-five. Right. Well, that will whet people's appetites. The look, it's a. You know, anywhere from three to six months to get ready to do one of them. It depends on what you're trying to achieve.
Speaker Change: Announcements today about about who's coming. You did ask it in a way that that I can the about categories, right? So
Speaker Change: You can expect something in the country category coming in 2025, right? That will whet people's appetite. The, uh, look, it takes...
Speaker Change: Go.
Speaker Change: Anywhere from three to six months to get ready to do one of these, right? It depends on what you're trying to achieve.
Jim Dolan: So we're about that, we're at least that far out. I think that you're going to see, I think the Eagles are not going to be satisfied with a 20-show run, and neither will their fans. But we haven't announced anything yet in terms of that. The interesting thing about the Eagles shows, though, if you might have noticed, is that they basically play on for two weeks, and then they go off for two weeks.
Speaker Change: Good to be here.
Jim Dolan: I think that you're going to see; I think the Eagles are not going to be satisfied with the 20-show run, and neither will their fans. But, you know, we haven't announced anything yet in terms of that. The interesting thing about the Eagles show, though, if you might have noticed, is that they basically play on for two weeks, and then they go off for two weeks.
Speaker Change: So, you know, we're about that. We're at least that far out. I think that you're going to see
Speaker Change: I think the eagles are...
James Dolan: Okay, great. And then on the XSphere advertising, it was a little lower than the building's first couple of quarters. I realize you had Super Bowl last quarter. But what are you seeing overall in terms of the advertiser demand? And how is your approach to selling evolved? How can it improve? Well, it can definitely improve that they, but we're just we're really getting used to the marketplace that they it's the first year of, you know, this product.
Speaker Change: are not going to be satisfied with a 20-show run, and neither will their fans.
Speaker Change: But, you know, we haven't announced anything yet in terms of that. The interesting thing about the Eagles show, though, if you might have noticed, is that they basically play on for two weeks and then they go off for two weeks.
Jim Dolan: So when we get to 25, the plan is that we will fill in the two weeks that they're not playing. Right, let's see, with another high-profile premier type act, probably with a woman in it, and that's as much as I'm going to say about that. There's still a lot of demand from artists, by the way. Another question on sponsorship. If you could talk about how talks are progressing with other partners, I know you mentioned earlier that Verizon is sponsoring the live streams, but I'm just wondering how that side of the business is evolving and how does Crown Properties near JV play into that?
Jim Dolan: So, when we get to the 25, likely is that we will fill in the two weeks that they're not playing, right, with another high profile for me or type act, probably with a woman act.
Speaker Change: So, when we get to 25, likely is that we will fill in the two weeks that they're not playing.
Speaker Change: Right, let's see, with another high-profile...
James Dolan: And so we're learning more about it. The, I think our approach right now is going in the direction where we're, where we're putting together, you know, conventions, other things going on in the marketplace. Right. Our pitches are much more branded. And we're still, you know, we're looking at the medium as being, you know, something that advertiser's used to really introduce products right for the brands that are in the pitches have changed in that way.
Speaker Change: Premier types act probably with a woman, and that's as much as I'm going to say about that.
Unknown Executive: Got it.
Jim Dolan: No, and that's as much as I'm going to say about that.
Speaker Change: There's still a tremendous amount of demand from the artists, by the way.
Jim Dolan: Another question on sponsorship. If you could talk about how talks are progressing with other partners. I know you've mentioned earlier Verizon is sponsoring the live streams. But you're just wondering how that's that side of the business is evolving. And how does Crown Properties need a JV play into that? Thank you. So, Crown Properties really started actively working on this. What, six months ago, Dave? Yes, we're at the end of the calendar. Right. So, they're now starting to really get, you know, get into the swing of things. If you know anything about that, that business at all, it takes a while to build up, you know, pitches and client lists and all that.
Speaker Change: Okay, another question on...
Unknown Executive: Thank you.
Speaker Change: If you could talk about how talks are progressing with other partners. I know you mentioned earlier Verizon is sponsoring the live streams, but I'm just wondering how that side of the business is evolving and how does Crown Properties near JV play into that. Thank you.
Jim Dolan: So Kraft Properties really started actively working on this, what, six months ago, Dave? Yeah, towards the end of calendar 23.
Speaker Change: So Kraft Properties.
Speaker Change: Really started.
Speaker Change: actively working on this, what, six months ago, Dave? Yeah, towards the end of calendar 23. Right. So they're now starting to really get, you know, get into the swing of things. If you know anything about that, that business at all, it takes a while to build up, you know,
Peter Henderson: Your next question comes from a line of Peter Henderson from Bank of America. Your line is open. Yes.
Jim Dolan: Right. So they're now starting to really get, you know, get into the swing of things. If you know anything about that business at all, it takes a while to build up, you know, pitches and client lists and all that.
James Dolan: Good morning. Question for Jim. So we've seen the market rumors around your content plans. And to start wondering if your plan or preferred model is to partner with other studios or to go at a loan on content for the shared experience. And then can you just discuss the puts and takes for each of those? Okay. I guess the answer to that is yes. Well, that the, you know, granted content certainly, you know, has its appeal right that the, but the thing that probably is most important when we take a look at the content is that we use the medium.
Jim Dolan: So we're starting to see some interesting new clients. And, you know. I don't know.
Jim Dolan: So, we're starting to see some interesting new clients, right? The, and, you know, I don't know if we just see, we'll see how they do. Have a feeling that they're going to do well. But the, I'm not out there selling; they are.
Jim Dolan: We'll just see. We'll see how they do. I have a feeling that they're going to do well, but I'm not out there selling them. They are.
Speaker Change: you know
Speaker Change #100: I don't know. We'll see how they do. I have a feeling that they're going to do well, but I'm not out there selling. They are.
Unknown Executive: All right. Thank you.
Speaker Change #100: [inaudible]
Ari Danes: And that concludes our question-and-answer session.
Ari Danes: And that concludes our question and answer session. I will now turn the call back over to Mr. Ari Danes for some closing remarks. Thank you all for joining us. We look forward to speaking with you on our next earnings call. Have a good day. This concludes today's conference call. Thank you for your participation. You may now disconnect. Thanks for watching!
Speaker Change #100: All right, thank you.
Unknown Executive: I will now turn the call back over to Mr. Ari Daines for some closing remarks. Thank you all for joining us. We look forward to speaking with you on our next earnings call. Have a good day.
Speaker Change #100: And that concludes our question and answer session. I will now turn the call back over to Mr. Ari Danes for some closing remarks.
James Dolan: Well, that would continue to explore the media. And if you can do that via branded content or via original content, the most important thing is to me that the is that it's experiential. That's what we want our customers to have when they come into building that is an experience. So if the branded content does do that, then we're going to shy away from it. The business, the business equation on a branded content is more expensive.
Ari Danes: Thank you all for joining us. We look forward to speaking with you on our next earnings call. Have a good day.
Unknown Executive: This concludes today's conference call. Thank you for your participation. You may now disconnect. Thank you.
James Dolan: And you have to make room for or the IP owners in that when you do your own. You know, you don't have that as much. You read more of the benefit. But, of course, Brandon Content also has a pre-instilled appeal to the marketplace, so he will wait one against the other.
Speaker Change #101: This concludes today's conference call. Thank you for your participation. You may now disconnect.
James Dolan: Okay, great. Just a quick follow-up. Is there another path where you put out immersive concert content based on the residencies you have, just as a way to sort of extend those residencies and even provide additional sort of reason for that? Okay, we think there is, but it kind of goes back to my first answer, right? It's all about experience. So, if you look at the concerts that we've had and the events that we've had in the, you know, in the Sphere so far, and you think of them as an experience, right?
James Dolan: Then recording them actually in the Sphere itself is probably the most perfect place to make an experiential recording. So, that suggests that there's a product thing. Now, we haven't watched anything with that yet and we're not prepared to announce anything today, but I expect you'll hear from us soon about that kind of content.
Unknown Executive: Great.
Unknown Executive: Thank you.
Daniel Duran: Your next question comes from Lina of Daniel Duran from Morgan Stanley. Your line is open. Hi, good morning. Thank you for taking my question. Jim, I believe that on the last two earnings calls you suggested we might hear soon about plans for an additional or multiple additional spheres. Do you have any update for us today, or when do you think we might now expect to hear on the expansion of the Sphere portfolio to new markets? Thank you.
James Dolan: You know, the interesting thing about that question is that topic is sort of, you know, I can't really say exactly when, right? Because then I'd be saying exactly when. Do I anticipate that we're going to have something to say very soon? Yes, I do, right? And I think that's about all I can say, right, other than you're going to know when it happens. Got it. Thank you.
James Dolan: And just won't follow up. I believe postcards was about an $85 million investment. Can you give us a sense of how much the other two in process sphere experiences comparing cost? Thank you. Yeah, I think they probably won't be much more. They could be much less that they were still figuring out some of those some of those dynamics. We postcards, we call postcards the first pancake, right? You know, it's like to make first pancake.
James Dolan: The second pancake is always better, usually at least. And we won't we won't spend, you know, we learned a lot about where to spend our money from the first pancake. So I would say that the next couple of efforts will be better. In terms of their appeal and how they use the medium, right? In terms of what we spend to make them. You know, I think we're somewhat comfortable at the number that postcards was made at.
James Dolan: I don't think that will make it from much less because what we'll end up doing is we find we have more resources to put into it that will make it even better. So we're likely to stay in and around that range. Got it. Thank you very much.
David Karnovsky: Your next question comes from a line of David Karnovsky from JP Morgan. Your line is open. Thank you. Maybe following up on the potential international locations. Jim, wanted to give you a talk more about what role fear the company would play for these venues. I assume Sphere Studios would license content, but what other kind of corporate booking management function do you think the central entity could or will provide? Sure. I actually, I tend to think about this at least once a week, because as we're going out to other marketplaces and then to other potential owners of Sphere, the question of, you know, we obviously bring the expertise of how to build a Sphere.
David Karnovsky: But when you take a look at this last year, we're really gotten much better at operating a Sphere. And by the time we open up another Sphere, we'll really have gotten that operation down. But when I look at everything that's happened in the last year, I keep thinking to myself, well, the next guy is going to really benefit from the fact that we learn this, so we learn that and we change this policy and this procedure would became efficient at this.
David Karnovsky: I mean, one of the things that we talked about in the script was what we call side by sides. That's where we have more than one event in the Sphere on the same day. The next Sphere will automatically know how to do that because of what happened in the Sphere in Las Vegas. How to change, how to set up, how to change out, how to move from one piece of content to another piece of content, right, and effectively bring in an audience for one, right, and then bring in an audience for another one, and have them exit and do the experience, et cetera, the utilization of the building.
David Karnovsky: That's a big piece of what the economic formula was for Sphere was to build a building that you could utilize 365 days a year and multiple times a day. So we've learned a lot this year. The next person, the build one to use us, will be us who builds it obviously, will benefit from what we've learned in this year, particularly with things like side by side. And then regarding some of the non music events like NHL or the upcoming UFC fight, interested to know what type of interest you're seeing to this type of show at the Sphere. And then can you maybe also speak to corporate demand to fall in the two-package event you did?
James Dolan: Okay, I'm going to answer that in a slightly different way than you asked it. Because the strategy, as I was just talking about was that the Sphere is, you know, what are we programming on a day-to-day basis in the Sphere? Our anchor programming, right, is our contact at the moment postcards from Earth. We can run postcards from Earth 365 days a year and run nothing else. We could do that. And that will generate X amount of revenue per day.
James Dolan: So if you're sitting there and you're booking the venue, you would probably not booked anything in there that made less than what you can do with your face contact, right? Now, your question is, how many corporates do we have, how many of, you know, residences, et cetera, that's the formula, right? So corporates, we've actually had quite a bit of interest in corporates, right? But I will tell you that so. Some of them have been a little shocked with the price tag, because they're actually competing with postcards from Earth for utilization of the building.
James Dolan: And so, that we basically say to them, sure, we'd love to rent you the building and have you do this. What we got to make, at least as much money as postcards, right? And that, you know, can be somewhat expensive for a corporate client. Still, the ones with a lot of imagination and foresight, et cetera, are not daunted by those numbers because they see what they can do with the building, they see how they can display their, you know, their information that they, and they think it's really cool to be in the sphere. So, that's sort of how it plays out. Thank you. Did that answer your question? I thought it'd take a minute.
Peter Sapino: Your next question comes from Alina, Peter Sapino, from Wolf Research. Your line is open. Hi. Good morning.
David Byrnes: I have a question on the postcards from Earth and the sphere traffic dynamics and another one on the MSG networks refinancing. On the latter, if you could just help us with color on why the prior refinancing process didn't work and why you decided on this new workout strategy. And then on postcards, I wonder if you can share any data or analysis with us on what drives visitors to the sphere. And what does that mean as you transition from postcards and from year one to whatever comes next and year two when more people will have been there once.
David Byrnes: Thank you. Once you do the, Peter, I'll think the first part of that. Last time we spoke, we mentioned that we were in discussions with our entire bank group to amend and extend networks credit facilities. We had strong support from a number of our larger relationship banks to participate in the refinancing. However, we were just unable to get sufficient overall support from the full lender group to complete the full syndication. And that's what led us to where we are here right now in the workout.
David Byrnes: Man on the second part of that, that feels sort of like the chicken and egg question. Is it the egg or is it the inside of the egg? Look, I think it's a bit of a combination of both. I mean, it's a very interesting building to see from the outside and it dominates the landscape. That clearly makes people really wise. But then they ask questions like, well, what's inside? And what does it do?
David Byrnes: Then you take a look at things like the social media and how this product only being a year old, you could go almost anywhere in the world and say, Sphere and people know what it is. Know where it is. And many of them know what it does. And every time we do something like dead and cold, it just blossoms out again. And a whole new group of people learn all about what the sphere can do.
David Byrnes: So are they there for the building? Are they there for the content? I think it's a combination of both. You did mention that a lot of people have seen it, right? Well, a lot of people see it from the outside, but actually not a lot of people have seen it from the inside. So there's still plenty of marketplace available there. And then as we keep changing up the content and then we promote it and we do more residencies and more events, etc.
David Byrnes: It just continues to add off to that. So I mean, I don't think you could peg it to be one thing versus the other. Well, we really forward to more pancakes. Thank you. There you go. Operator, we'll take prize of that. We'll take one last caller operator.
David Joyce: Certainly your final question comes from a line of David Joyce from Seaport Research Partners. Your line is open. Thank you. Do you have my first questions on the residency pipeline? I was wondering if you could help provide some more. Color into invisibility into 2025. After the Eagles, what other groups are you talking to? Can you announce or what genres are they? And what's involved with the creative that they put on and the lead time that they need to work with you on that?
David Joyce: What was the last last part of that? About the concept? How much time do you have creative on it? Well, we're obviously not going to make any, you know, announcements today about who's coming. You did ask it in a way that I can see the about categories, right? So you can expect something in the country category coming in 25, right? That will, that will what people's appetite. The look it takes, you know, anywhere from three to six months to get ready to do one of them.
David Joyce: It depends on what you're trying to achieve. So, you know, we're about that, we're at least that far out. I think that you're going to see, I think the Eagles are not going to be satisfied with the 20 show run and neither will their fans. But, you know, we haven't announced anything yet in terms of that. The interesting thing about the Eagles show, though, if you might have noticed, is that they basically play on for two weeks, and then they go off for two weeks.
James Dolan: So, when we get to the 25 likely is that we will fill in the two weeks that they're not playing, right, with another high profile for me or type act, probably with a woman act. No, and that's as much as I'm going to say about that.
James Dolan: Another question on sponsorship. If you could talk about how talks are progressing with other partners. I know you've mentioned earlier Verizon is sponsoring the live streams. But you're just wondering how that's that side of the business is evolving. And how does Crown Properties need a JV play into that? Thank you. So, Crown Properties really started actively working on this. What, six months ago, Dave? Yes, we're at the end of calendar. Right.
James Dolan: So, they're now starting to really get, you know, get into the swing of things. If you know anything about that, that business at all, it takes a while to build up, you know, pitches and client lists and all that. So, we're starting to see some interesting new clients, right, the, and, you know, I don't know if we just see, we'll see how they do have a feeling that they're going to do well. But the, I'm not out there selling they are. All right. Thank you.
Ari Danes: And that concludes our question and answer session. I will now turn the call back over to Mr. Ari Daines for some closing remarks. Thank you all for joining us. We look forward to speaking with you on our next earnings call. Have a good day. This concludes today's conference call. Thank you for your participation. You may now disconnect. Thank you.