Why is the Las Vegas Sphere losing money?

A $2.3B venue that packs 17,000 people paying hundreds per ticket — yet lost over $100M in its first year.

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By The Numbers

$2.3B

total construction cost

$100M+

loss in first year

17,000

capacity per show

What They Nailed Early

Created a one-of-a-kind immersive venue concept with massive wraparound screens that no other arena could replicate. Positioned as a destination experience in Vegas, attracting premium acts and audiences willing to pay hundreds to thousands per ticket.

What Changed

COVID and inflation doubled the budget from $1.3B to $2.3B, destroying the economics before doors even opened. The massive AV setup required for the screens means only a handful of bands can do residencies here, giving those acts huge pricing power and limiting the venue to just a few profitable nights per week.

Where it Landed

Generating massive revenue per show but losing over $100M annually. The return on investment math was broken when costs doubled. Tough to see a path to profitability with such limited tenant options and idle capacity.

The Principles

Capital efficiency trumps revenue. You can pack 17,000 people and still lose money if your cost base is too high.

Scarcity cuts both ways. When only a few acts can work your venue, they own the negotiation and capture the value.

Utilization is everything in fixed-cost businesses. Empty Mondays and Tuesdays kill arenas built for $2.3B.

Builder's Takeaway

If you're building high fixed-cost infrastructure, remember:

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Model your ROI at realistic utilization rates, not peak capacity fantasies

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Supplier power matters — if few can use your platform, they'll extract the margin

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Budget overruns don't just delay launch, they can kill unit economics permanently

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