A TV Channel Lost 15% of Its Subscribers While a Venue Grew Profit 90%: Sphere's Q3 Signal to Broadcasters

Sphere segment revenue up 14% to $198.9 million and adjusted operating income up 90%, while regional sports network MSG Networks saw revenue fall 15% and took a $177.6 million goodwill impairment; The Wizard of Oz ran 241 shows, Rush booked a residency and IMAX posted its best quarter ever

Sphere Entertainment Co., which runs Sphere, the ball-shaped venue in Las Vegas, reported third-quarter results on Thursday, and its TV business and its venue moved in opposite directions. Revenue at regional sports network MSG Networks fell 15% as pay-TV subscribers declined about 15.5%, and the company wrote down $177.6 million of the network's goodwill. Revenue at the Sphere segment rose 14% from a year earlier to $198.9 million, and adjusted operating income climbed 90% to $32.4 million.

The growth came from a show Sphere made itself. The Wizard of Oz at Sphere played 241 times in the quarter, more than the 220 combined showings of three productions a year earlier. The company said the production has sold more than four million tickets and over $500 million in ticket sales since opening in August 2025, and passed its 1,000th showing in early October. It shows that a library of old footage can be sold again in a form other than broadcast.

On the same day, Rush announced five Sphere concerts for May 2027. Billed as "Elevate From the Norm," the shows run May 21, 23, 26, 28 and 30, turning four months of reported talks into confirmed dates.

IMAX also reported the best quarter in its history that day, with revenue up 64% to $175 million. Both companies grew on demand for big-screen experiences that exist only inside a theater or venue. IMAX CEO Rich Gelfond said in the earnings release that scarce events and experiences gain value as AI spreads through everyday life.

Sphere revenue up 14%, adjusted operating income up 90%; nine-month profit 2.7 times last year

The segment's $24.8 million revenue increase came from three areas. Revenue from The Sphere Experience, the venue's in-house immersive productions, rose $13.1 million. Sponsorship, signage and suite license fees rose $6.2 million, mostly from advertising on the Exosphere. Event revenue rose $6.1 million on three more residency concerts.

For January through September, segment revenue rose 36% to $691.2 million and adjusted operating income rose 166% to $146.6 million, 2.7 times the prior-year figure. Even after $81.5 million in depreciation, the segment's operating loss narrowed to $67.0 million from $84.4 million.

Company-wide revenue rose 4% to $274.3 million. The consolidated operating loss widened 47% to $240.6 million from $163.1 million a year earlier. Cash and equivalents stood at $527.3 million. "Our Sphere segment remains on track to deliver substantial growth this calendar year," Executive Chairman and CEO James L. Dolan said.

MSG Networks revenue down 15% and a second straight year of goodwill impairment: TV and venue split inside one company

The TV business drove the larger loss. Third-quarter revenue at MSG Networks, which carries New York-area pro sports, fell 15% to $75.4 million. Distribution revenue from pay-TV operators dropped $12.8 million, which the company attributed to a roughly 15.5% decline in total subscribers. The segment's adjusted operating income fell to $6.8 million from $19.3 million, about a third of the prior level.

The company wrote down $177.6 million of MSG Networks' goodwill. It recorded a $65.4 million impairment in the same quarter a year earlier, making this the second year in a row. A goodwill impairment is the accounting admission that the value booked when a business was acquired can no longer be supported by its expected earnings. The charge pushed MSG Networks to a $173.6 million operating loss. Within one company's results, a channel whose revenue is tied to the number of subscribing households is shrinking, while a venue where audiences come in person and buy tickets is growing.

241 Wizard of Oz shows and 4 million tickets: a film turned into a venue-only production

The Wizard of Oz at Sphere rebuilds the 1939 film for the 16K LED screen inside the venue. Working with Google, Sphere used generative AI to extend the original frames to fill the curved screen and added 4D effects such as wind. A version with expanded 4D effects debuted in late September.

Because the film runs several times a day, it fills the venue on days without concerts, which a residency tied to an artist's calendar cannot do. The 241 showings in the quarter work out to about 2.6 a day. Sphere's next in-house title, The Rocky Horror Picture Show at Sphere, is in production and expected to open by the end of March 2027.

The exterior is now a revenue line of its own. Sphere said most of the third-quarter gain in sponsorship and advertising came from the Exosphere, and it signed a new multiyear sponsorship agreement with Lyft.

Metallica's 24 shows and Rush's five keep the concert calendar full

Residencies continue to fill the concert schedule. Metallica began a 24-show run in October that lasts through March 2027. The Backstreet Boys extended to up to 63 nights and the Eagles to up to 74. Oprah Winfrey and John Mayer have announced residencies for 2027.

For Rush, Sphere extends the band's 50th-anniversary reunion tour, Fifty Something, which has sold more than one million tickets across North America, South America, the U.K. and Europe and wraps its international leg in Helsinki on April 10, 2027. The band will play "2112" and all of Moving Pictures at Sphere, JamBase reported.

Singer and bassist Geddy Lee said that when he first heard about Sphere, he regretted that Rush was no longer touring because the venue seemed made for the visual approach the band has always taken with its shows, KLAS reported Thursday. The artist presale starts Nov. 11 and general sales begin Nov. 13. The band also teamed with Superfan on VIP and travel packages built around the Fontainebleau Las Vegas, Billboard reported.

Residencies and Wizard of Oz screenings start from different places, but audiences open their wallets for the same reason: a screen size and level of immersion that no TV or smartphone at home can deliver. For a broadcaster, that means the same footage can command a higher price once it leaves the living-room screen for a giant one. That demand was not limited to one venue in Las Vegas. IMAX, reporting the same day, put numbers on the same trend in theaters around the world.

IMAX revenue up 64%, box office $712 million as demand shifts to premium screens

IMAX's global box office reached a quarterly record of $712 million. Christopher Nolan's The Odyssey, shot entirely on IMAX film cameras, accounted for $538 million of it. Adjusted EBITDA came to $121 million, a 69% margin, and IMAX has signed more than 100 new system deals so far this year.

The two businesses make money differently. IMAX installs systems in theaters around the world and takes a share of the box office. Sphere runs a single venue and keeps ticket, advertising and suite revenue. What they share is an audience willing to pay more to see a story on a bigger screen with deeper immersion. Gelfond said young people in particular are seeking shared experiences that feel bigger than any one person's screen.

In Korea, 1.7 million IMAX admissions for The Odyssey and premium-format revenue up 56%; Las Vegas K-pop plays at Caesars and Allegiant

Korea shows the same demand. The Odyssey passed 10 million admissions in 33 days after opening there on Aug. 5, and about 1.704 million of them came through IMAX, a record for the format in Korea. In the first half, Korean premium-format screen revenue rose 56.3% to 45.7 billion won ($33.7 million) and IMAX revenue rose 89.7% to 19.5 billion won ($14.4 million), according to the Korean Film Council (영화진흥위원회).

In Las Vegas, K-pop has so far played outside Sphere. BLACKPINK's LISA opens the city's first K-pop residency at the Colosseum at Caesars Palace on Nov. 13, 14, 27 and 28. BTS played three shows at Allegiant Stadium in May. No Korean artist appears among the residencies Sphere has announced.

Sphere's quarter points to three ways Korean broadcasters can earn money outside of broadcast.

The first is rebuilding their video IP into immersive, venue-only productions. The Wizard of Oz sold four million tickets in just over a year from an 87-year-old film. The drama, variety and music-show libraries Korean broadcasters have built up could be reworked the same way, and the generative-AI frame extension done with Google shows how the production can work.

The second is K-pop residencies. LISA's Caesars Palace run is the first test of long-run K-pop demand in Las Vegas. Broadcasters that have produced music shows and awards ceremonies can pitch concert planning and video production as one package.

The third is advertising and sponsorship on the exterior. Exosphere advertising was one of the items behind the segment's third-quarter growth, and it is an area where broadcasters can extend their TV ad sales capabilities to giant outdoor screens.

Sphere's plans for new venues in Abu Dhabi and National Harbor, Maryland, add another factor. Dolan has described the long-term vision as "a global network of venues and a growing slate of original content." More venues would let a single immersive production play in several cities.

Rocky Horror, Rush and Abu Dhabi: the immersive-venue race picks up in 2027

Sphere's fourth quarter includes the holiday season and the Backstreet Boys' return. In 2027, The Rocky Horror Picture Show is due by March, Rush plays in May, and Oprah Winfrey and John Mayer follow. IMAX carries its run into December with Dune: Part Three.

Demand for immersive formats is also growing in Korea. IMAX revenue there nearly doubled in the first half, and CJ 4DPLEX (CJ 4D플렉스) said ScreenX grew 55% at the North American box office in the first half.

For Korean broadcasters, producers and agencies heading to Las Vegas for CES 2027 in January, Sphere is the place to see how an in-house immersive production, residencies and exterior advertising make money under one roof, and why the same company's TV channel has written down goodwill two years in a row.