Good morning!
With the Super Bowl mere hours away, it seems like all eyes are on Las Vegas. And with the Sphere being one of the most impressive and newest attractions in the city, it seemed like a perfect time to revisit Sphere Entertainment Co.
Since the publication of our Separation Report, in which we analyzed the separation of Madison Square Gardens Entertainment Corp. (MSGE) and Sphere Entertainment Co. (SPHR), the Sphere has successfully opened to widespread critical acclaim, with U2 as the inaugural act (the band’s original scheduled residency of 25 shows has since been increased to 40 due to strong demand).
The response to this opening show? Rolling Stone Magazine stated, “It’s almost painful to imagine going back to a dumpy sports arena for a show after experiencing something like this.”
Other residencies have been announced, including Phish and Dead & Company, and the Sphere began offering advertising on its exosphere in September with YouTube’s NFL Sunday Ticket campaign, followed by campaigns for other notable global brands (PlayStation, Meta, Xbox, Coca-Cola, etc.). The Sphere’s original owned content, Postcards from Earth, has been a success, generating ~$400,000 per showing (it originally cost $85 million to produce).
Shares now are currently selling close to all-time highs. It has not been a straight run up, however. Shares of SPHR declined by nearly 20% in early December, 2023 before retracing a portion of those losses after the Company announced it would be raising $225 million in capital as part of a convertible senior note offering.
Due to the above mentioned favorable events, we have also increased our estimate of intrinsic value for Sphere. To find out more about the Sphere, we have unlocked our initial Separation Report, which you can find below. And purchasers of our Forgotten Forty can find further analysis among the 40 companies profiled.
Other News from the Sports Page:
Jonathan Boyar and Clay Finck recently discussed Madison Square Garden Sports Corp. (MSGS) and “the Dolan Discount” on Clay’s podcast, We Study Billionaires. We’ve included the relevant clip, and also our previous piece on sports team valuations, so that you may more effectively mingle business with pleasure this Super Bowl Sunday.
Excerpt from the We Study Billionaires podcast.
Thank you for subscribing! Have a great Sunday!
—Boyar Research
Important Disclosures. The information herein is provided by Boyar’s Intrinsic Value Research LLC (“Boyar Research”) and: (a) is for general, informational purposes only; (b) is not tailored to the specific investment needs of any specific person or entity; and (c) should not be construed as investment advice. Boyar Research does not offer investment advisory services and is not an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) or any other regulatory body. Any opinions expressed herein represent current opinions of Boyar Research only, and no representation is made with respect to the accuracy, completeness or timeliness of the information herein. Boyar Research assumes no obligation to update or revise such information. In addition, certain information herein has been provided by and/or is based on third party sources, and, although Boyar Research believes this information to be reliable, Boyar Research has not independently verified such information and is not responsible for third-party errors. You should not assume that any investment discussed herein will be profitable or that any investment decisions in the future will be profitable. Investing in securities involves risk, including the possible loss of principal.
Important Information: Performance Information. Past performance does not guarantee future results. The reports in this sample are for informational purposes only and the performance of the stocks selected is not indicative of the performance of all the stocks profiled in Boyar Research. The performance of the stocks selected and the performance of the stocks in Boyar Research may in fact diverge materially. Additional information regarding the performance of other companies featured in Boyar Research is available from Boyar Research upon request. This information is not a recommendation, or an offer to sell, or a solicitation of any offer to buy, an interest in any security, including an interest in any investment vehicle managed or advised by affiliates of Boyar Research. Any information that may be considered advice concerning a federal tax issue is not intended to be used, and cannot be used, for the purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter discussed herein. Clients of an affiliate of Boyar Research and employees of Boyar Research own shares in SPHR, MSGE, and MSGS.