Posted on: November 12, 2024, 06:55h.
Last updated on: November 12, 2024, 07:18h.
Sphere Entertainment (NYSE: SPHR) boss James Dolan has reportedly ended an agreement with a private equity firm that’s working to bring an NBA team to Las Vegas because he believes that effort could result in a venue rivaling the Sphere.
The New York Post reported earlier today that Dolan wants to toss a September 2023 pact struck between Sphere and private equity firm Oak View Group because the financial company is teaming up with Rio Hotel & Casino on a $10 billion, 20,000-seat NBA arena that could host events that put it into competition with the Sphere.
Last September, Dolan and Oak View announced an agreement called Crown Properties Collection under which the financial company was to seek out a naming rights partner for the Sphere with the hopes of commanding $40 million in annual payments.
While that’s in-line with what corporations pay for their names to be branded on marquee arenas, such as Dolan’s Madison Square Garden in New York City, Sphere is still without a partner, though two unidentified sources told The Post Dolan recently rejected a $30 million bid for Sphere naming rights.
Why Competition Could Irk Dolan
To this point, Dolan has been mum on why the partnership with Oak View Group was dissolved, but it’s easy to understand why he may be concerned about competition for the Sphere.
Las Vegas is already home to a plethora of venues that can host big-name events — the Sphere’s bread-and-butter. More such properties not only elevate competition, but can leader to higher prices paid by owners and promoters to lure top acts.
The Sphere has benefited from hosting U2 and Eagles concerts, among headline events, and the “Postcard From Earth” series has been a solid driver of traffic when the venue isn’t hosting a major one-off event. However, analysts have lamented Sphere’s ability to consistently draw big concerts and other individual events.
Those concerns could be amplified following the company’s tepid third-quarter earnings report, which revealed a wider-than-expected loss, trigging a 6.97% drop in the shares on volume that was more than double the daily average.
ABBA Angles
Speaking of events and potential competitive threats to the Sphere, Dolan could be rankled for another reason. Last month, Oak View CEO Tim Leiweke revealed at the VenuesNow conference that he was in talks with the owners of the ABBA Experience — currently playing in London — about bringing that show to the Las Vegas NBA arena.
Sources told The Post that the tribute to the famed Swedish pop band could easily be altered for the Sphere. Given that and ABBA’s global popularity, it’s possible Leiweke’s comments played a role in Dolan ending Sphere’s partnership with the private equity firm.
The NBA has not officially announced expansion plans and the league hasn’t added new teams in two decades, but it’s widely believed that when the time comes, Las Vegas and Seattle are the frontrunners to land new franchises.
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