The Las Vegas Sphere experienced a revenue drop last quarter, yet leaders assert that the venue is on the right track.

During a call regarding earnings on Tuesday, Sphere Entertainment Co. disclosed that revenue in its segment fell to $127.1 million for the quarter ending September 30. This was a decrease from approximately $151.2 million and $170.4 million in the two preceding quarters.

Revenue from events amounted to about $40.9 million, a decrease from $58.4 million in the prior quarter. Nevertheless, CEO James Dolan mentioned that there is no shortage of events and they are “struggling to accommodate everyone this fall.”

With revenues generated from advertising and suite licenses on its 580,000-square-foot exterior, the company took in $8.5 million, down from $15.9 million. Dolan indicated that there are “structural issues” related to advertising that the company is currently addressing and making progress with.

“That’s just a part of launching something new. I wish we could have known exactly how to manage and market it from day one,” Dolan expressed to investors. “But that isn’t the reality.”

The venue celebrated its first anniversary in September, having hosted numerous concerts and immersive events throughout the year. In September, it also hosted UFC 306, its inaugural live sports event that became its highest-grossing single event, along with welcoming the Eagles for their residency.

CEO highlights the importance of unique experiences

The Sphere’s immersive offerings, such as “Postcard from Earth” and the new “V-U2: An Immersive Concert Film,” generated $71.5 million, a decrease from $74.5 million and $100.5 million in the last two quarters.

Dolan emphasized the company’s focus on providing unique original content while indicating that executives are working on the most effective ways to promote and schedule it.

“I believe our product holds significant value and has lasting appeal. You won’t be able to see Bono live 20 years from now,” he remarked. “I mean, it would be fantastic to experience a Beatles concert if we could turn back time to 1965. I think everyone would love that.”

New Sphere in Abu Dhabi marks the beginning

After announcing a second Sphere arena will be built in the capital of the United Arab Emirates, Abu Dhabi, executives highlighted that they intend to develop several Spheres worldwide.

“We’ve established an organization capable of concurrently handling the construction of multiple spheres,” stated Dolan.

The Sphere in Abu Dhabi is expected to match the size of the original venue in Las Vegas, with accommodation for 20,000 attendees.

Executive Vice President David Granville-Smith expressed confidence that Sphere events will significantly contribute to revenue in Abu Dhabi as well. However, executives did not provide details on the construction timeline or opening date for the new Sphere.

“We designed this company to not just operate one venue in Las Vegas,” Dolan remarked. “The more Spheres we build, the better we can leverage the investments we’ve made into this company.”