MSG Sphere design upgrades boost total cost to $1.66B
The cost of the MSG Sphere at The Venetian will rise an estimated 38 percent to $1.66 billion, representatives of The Madison Square Garden Co. said Friday.
The state-of-the-art 17,000-seat entertainment venue being built east of the Sands Expo Center at The Venetian is expected to open in 2021.
Company representatives said during the company’s second-quarter earnings call that the cost increase is a result of design changes that have added enhancements to the building that “will greatly improve the venue, along with the overall guest experience.”
MSG Chief Financial Officer Victoria Mink said the display plane within the venue would be expanded.
The display plane, the largest and highest resolution LED display plane on Earth — roughly the size of three football fields — will wrap up, over and behind the stage and audience.
“Now, we are extending that display plane even further to the floor in certain areas – further enhancing the immersive experience,” Mink said.
The company said the detailed design changes have moved from a schematic design phase to detailed construction drawings, providing a better foundation for estimating costs and adding substantial progress to the project.
“We expect a very robust return on an investment,” MSG President Andy Lustgarten said during the call. “We think this (MSG Sphere) is going to change the entertainment landscape. We’re building a venue that’s never been built before. It will be the most highly utilized venue in our portfolio from an event count perspective.”
Las Vegas Sands Corp. is contributing $75 million toward the additional costs.
Through Dec. 31, MSG spent $248 million on the project, net of $37.5 million received from Las Vegas Sands in September.
“We’ve been working diligently with our design and construction teams over the past six months on the entire project,” Lustgarten said. “As part of that process, we identified significant cost savings relative to our contractor’s initial benchmark estimate, and further developed the venue’s design, making important enhancements.”
The company will take advantage of Las Vegas’ ability to attract 42 million visitors and around 24,000 conventions and trade shows annually. In 2019, Las Vegas had a record 6.6 million convention attendees.
The company plans a strong focus on its attractions business, driving utilization of the building with multiple shows each day. MSG is expected to have corporate events business with its proximity to the Sands Expo Center and it also plans concert residencies.
“Our sponsorship business will be unlike anything else in Las Vegas — between what we can do in the venue and the opportunity we’ll provide companies to reach the type of consumer we expect to show up at our venue,” Lustgarten said.
The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson. The Sphere is a project by Madison Square Garden and Las Vegas Sands Corp.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
