Sphere Entertainment facing massive debt payments coming due

The Sphere has “been a hit, at least artistically,” but for parent Sphere Entertainment, the “bigger problem, as ever, is the company’s debt,” according to Bill Cohan of PUCK. The Sphere “opened to great fanfare” in September 2023 but ended up costing some $2.3B, “as much or more than any other construction project in the history of Las Vegas.” According to the Sphere’s public financials, it has “been a rough year,” at least between June 2023 and June 2024. During that time, the Sphere generated nearly $500M in revenue, but also incurred an operating loss of $480M. With the operating losses “growing at the Sphere level, any debt would probably be too much.” But the company has nearly $1.4B of bank debt, with some $829M of that due “pretty much right now.” Since the company “couldn’t pay that amount,” nor another $2.2M in interest due, last week it “cobbled together what is known on Wall Street as a ‘forbearance.'” That gives Sphere Entertainment Exec Chair & CEO James Dolan and his family, as well as their advisers at PJT Partners and Paul Weiss, “time to work out a deal with JPMorgan Chase, the lead bank, and Davis Polk, the Wall Street law firm” (PUCK, 10/16).