Operator: Our next question will come from the line of Logan Angress with Wolfe Research. Please go ahead.
Logan Angress: Hi. Thanks for taking my questions. I guess, first, as we’re approaching the end of the fiscal ’24, I’m curious if you can just talk candidly about the main priorities for Sphere in fiscal ’25. And how should we think about regarding the main levers to pull for growth? And then you mentioned the appeal of the Vegas market and part of the genius with your original Sphere in Las Vegas. Curious generally for the future years, how do you think about those three or four Sphere Experiences per day working in those markets, because it seems like those three or four Sphere Experiences per day are sort of optimal for the Vegas market. Thanks.
Ari Danes: Logan, it’s Ari Danes. Can you repeat your first question, please? Just your first question, you were breaking up.
James Dolan: It sounded like it was a good question, just don’t really know what it was.
Logan Angress: Yes. Sorry about that. I hope you can hear me better now. I was just wondering if you can talk about the main priorities for Sphere in fiscal ’25 and how we should think about the main levers to pull for growth in the next fiscal year? And I hope you heard the second question on the Sphere Experiences.
James Dolan: Hang on to your second question.
Ari Danes: Main priorities for Sphere in fiscal ’25 and levers for growth, Logan, that’s what I got. Yes, main priorities.
James Dolan: Oh, main priorities.
Ari Danes: In fiscal ’25 and potential levers for growth next fiscal year.
James Dolan: Okay. Well, I mean there are a bunch of priorities, right? The beginning of the construction of the second Sphere would certainly be a very high priority. Becoming efficient in our operations and being able to schedule multiple events on the same day, very, very high priority for the company. Getting our infrastructure in the right size so that it can execute on the strategy, that’s a very big priority. There are a few others, but I’d say those are the three top, at least, business ones.
Logan Angress: Got it. And then the next question was just around that part of the [Technical Difficulty] of the Vegas Sphere that it’s in Vegas, which seems like an optimal city to host multiple Sphere Experiences per day. How do you think about the extent to which the three or four Sphere Experience per day business model might work in other markets that are different than Vegas?
James Dolan: Okay. I think I got it, right? So every market is different, right, and Las Vegas is a particularly peculiar market because of the transient nature of the people that come through here, right? New York is obviously a much bigger market. There are other markets that are smaller. We also have smaller Spheres, right, that we can adjust to the size of the marketplace. But it is a question of can we — how many people are available, right, to come and see your product in a year, right, assuming that they’re not coming there specifically to see Sphere, right? I mean I do think that, that will happen. That people will do that. But I also think that, for instance, in New York, people come to New York and they catch a show.
They catch a Broadway show. And you want to be in the Broadway show that they catch. And so if you look at each market, if you look at what its potential is, how you’re going to market to that market and you adjust from that. I do think that internationally, there are quite a few markets, right, that can sustain a full-sized Sphere, particularly looking at their home population and the visiting population. There’s plenty enough market, right, to follow the same model that we built in Las Vegas.
Ari Danes: Thanks, Logan. Operator, we’ll take the next question.
Operator: Our next question will come from the line of David Joyce with Seaport Global. Please go ahead.
David Joyce: Thank you. I’ve got two questions, Jim. The first is just wondering how the Exosphere advertising has been trending post Super Bowl and CES. Is it a medium that can maintain price even when special events or particular conventions are not in town? And then I’ve got a follow-up.
James Dolan: Sure. Look, Las Vegas is an international marketplace, right? I was thinking about this earlier. If you go ask a yak herder in Siberia, right, about Las Vegas, he knows what Las Vegas is. And the Sphere has now become sort of the showcase for Las Vegas. And what we put on the Sphere, right, garners attention around the world, not just the advertising but the art and the other things that we do on there. One of the interesting things that happened when we opened up the Exosphere, when we turned it on, is that the casino hotels, right, have a surcharge if you get a room that faces the Sphere. So that doesn’t happen with the billboard, and it gives you sort of an idea of the power that the Exosphere can have. And a lot of it depends, by the way, on the advertiser or the artists themselves.
The more compelling the content they put up there, right, the more they will go social, go worldwide, et cetera. And finally, we think that there’s more to do with the Exosphere. We think that we’ll be able, this year, probably this summer, to be able to add an audio component that goes along with the Exosphere, which will make, of course, the medium even more attractive. So we’re still pretty bullish on the Exosphere.
David Joyce: Okay. Great. And then second, I was wondering what the strategy is for sponsorship and naming rights from here. How often should we expect new sponsors to be announced and come online?
James Dolan: I think we’re still, I mean, I think you’re going to see more for sure. We’re in discussions with a bunch of major sponsors now. Naming rights, I won’t take it off the table, but it will be a big number. And so I don’t know if we’re going to get there or not with it. So, yes, I think you’re going to continue to see it grow. I think advertisers are definitely getting used to the medium, right, understanding what it can do for them. And so we’re starting to see repeat business, which is really a good sign for the medium.
David Joyce: Great. Thank you.
Ari Danes: Operator, we’ll take one last caller.
Operator: Our final question will come from the line of Paul Golding with Macquarie Capital. Please go ahead.
Paul Golding: Thanks so much. I was just wondering if there had been any progress in determining the construction cost savings potentially that a subsequent venue might yield when thinking about franchising opportunity. And then as part of your conversations, any indication that you might be able to share around how much that construction cost figure is driving a decision as to whether to do a venue or where to do it or how large the capacity might be? Thanks so much.
James Dolan: Okay. What was the first part? Oh, the construction cost themselves. So first pancake, right, always rarely is the best pancake. So I do think — I mean, if we were to restart from the beginning, which would be a nightmare for me, in Las Vegas, I think that we could significantly reduce the construction costs. Things like supply chain, COVID, et cetera, those kinds of issues, right, you can’t predict. They’re sort of like injuries with sports teams. But I do think that we can build the same size for less money. I do think we put together a portfolio of Spheres of different sizes going all the way down to 5,000 seats, so we can adjust the project by the size of the marketplace. And it’s really — it’s not a cost thing that we’re seeing with the people that we talk to, right?
It’s what they’re going to do with it. It’s — the marketplaces we’re talking to are looking for — if they build a Sphere, to have a significant impact on the marketplace itself, a lot like back to that sports analogy. If all of a sudden you landed a major sports franchise in your marketplace, what does that do for the marketplace. I think they’re looking at it that same kind of way that that’s what a Sphere would do for the marketplace. And so it’s not really so much a question of price — and by the way, I think that the Sphere is — even at the price that we paid to build Las Vegas, if you take a look at, I won’t name names, certain marketplaces that built their own arenas, right, you’ll find that those arenas which cost — have a similar cost to Sphere, and they obviously can’t do anything like what Sphere does.
Paul Golding: Thanks for that, Jim.
Operator: I will now turn the call back to Ari for closing remarks.
James Dolan: Before we close, right, nobody asked the question about technology. We should — I do want to talk for a minute about a development that happened just this last two weeks. We were able to acquire the controlling interest on basically all of the equity in a company called HOLOPLOT this last two weeks. HOLOPLOT, right, you might know, is the sound system that operates inside of the Sphere. And the technology is unique. It’s patented. And we think that it’s called Beamforming sound. We think that there’s going to be a lot of legs to that company. And you really can’t build a Sphere without a Beamforming component to it. The sound does not work unless you have that technology. And so we’re very happy that we were able to acquire this technology, acquire the company, and we see doing great things for us.
Ari Danes: Thanks, Jim, and thank you all for joining us. We look forward to speaking with you on our year-end call in August. Have a good day.
Operator: That will conclude today’s meeting. Thank you all for joining and you may now disconnect.
