U2 gets $10M to launch James Dolan’s MSG Sphere in Las Vegas as financial troubles grow: sources

James Dolan’s Madison Square Garden has lined U2 for the launch of its MSG Sphere in Las Vegas, but some insiders fear the deal could help ignite an “unforgettable fire” that is consuming the company’s money.

According to people familiar with the situation, the billionaire owner of the Knicks has quietly agreed to pay the legendary rock band $10 million to put on a spectacular show to open the MSG Sphere, a 17,500-seat ball-shaped arena that claims to be the best in the world. the world. concert hall.

That’s on top of the guaranteed proceeds U2 will receive from concerts, raking in more than 90% of ticket revenue for about 12 shows – the first is scheduled around September 29 and the rest within a few months, according to sources. informed about the negotiations.

The generous package for U2 stoked alarms about the MSG Sphere, which received its first major publicity this weekend in an over-the-top Super Bowl ad that portrayed the still-under-construction arena as a spaceship descending into the Nevada desert. Bono and his bandmates stare at him along with the crowd of fans.

“Without going into too much detail, we’re very confident in the investment we’ve made with U2 as the opening act for Sphere,” a spokesman for Madison Square Garden Entertainment told The Post.

However, as The Post first reported, Dolan reshuffled top management at MSG Sphere Tuesday night, appointing himself president of operations as the company struggles to reopen in September. In an internal memorandum, Dolan said that Lucas Watson, a top manager at MSG Sphere, had made the decision to leave the company immediately. Jenna Wolfensohn, senior business operations manager, is also leaving, according to the memo.

During a conference call last week, MSG Entertainment EVP and CFO David Byrnes acknowledged that the high-tech venue, which has nearly doubled its construction costs to $2.2 billion in the past three years, has yet to find corporate sponsors. This is not good, as the whole idea is that sponsorship money is offsetting losses from deals made with top-tier artists like U2 to produce their expensive shows, according to sources close to the situation.

According to sources, films will become the main source of profit for the Sphere business. On that front, The Post has learned that Dolan has hired independent filmmaker Darren Aronofsky to create the first immersive film for the high-tech venue, which will feature a 160,000-square-foot LED screen the size of three football fields and a state. -Modern sound system that shoots through the floorboards.

Details about Aronofsky’s upcoming film may not be known right away, but he is filming it on high-definition 16K cameras, three people with direct knowledge of the situation said.

However, insiders point out that while Aronofsky, whose credits include Requiem for a Dream, Pi and Black Swan, has received critical acclaim, he has never been a major box-office hit. Aronofsky’s 2022 film The Whale was a surprise hit and its star Brendan Fraser received a Best Actor nomination at the 2023 Academy Awards. But according to Box Office Mojo, its $21.5 million in global ticket sales hardly match those of major Hollywood releases.

After receiving a $275 million loan from JPMorgan in December, MSG predicted that in its first full year, Sphere would present 400 to 500 screenings, attracting 3 to 4 million customers with seats priced up to $50 each. For comparison, Sphere plans to hold 40 to 80 live concerts, according to a source who saw the presentation.

MSG Entertainment said last week that it plans to attract four to six resident headliners a year, without mentioning specific groups. That’s because MSG Sphere is having trouble booking other rock bands and top artists, the sources say. According to a source close to the situation, many artists are ditching the idea of ​​creating spectacular visual spectacles that could overshadow their music.

“They’ve talked to a lot of artists who aren’t interested,” a source told The Post.

Indeed, Dolan partnered to create MSG Sphere with Irving Azoff until the legendary concert promoter left, reportedly worried that touring wouldn’t want to create shows for the Sphere that couldn’t be replicated in most other arenas, the sources said.

Insiders say Dolan is still asking Azoff, whose clients include Harry Styles, John Mayer and The Eagles, to find artists for Sphere. This is despite a potential conflict of interest as Azoff is in the process of building a rival arena in Las Vegas as part of a planned $3 billion entertainment district, the sources said.

“We are very pleased with the level of our conversations with the artists and have come a long way in these discussions and negotiations. We will announce future performers at the appropriate time,” said an MSGE spokesperson.

In a project rife with delays, many caused by the pandemic, insiders say Sphere has yet to negotiate a long-term lease for a parking lot adjacent to the arena, a deal that is usually one of the first steps. in construction, not at the end. A source said Dolan is in talks with Wynn Resorts about a nearby property, and while the deal is expected in the coming days or weeks, it is likely to cost Dolan dearly.

On a key corporate sponsorship issue, Dolan is seeking $50 million for naming rights to MSG Sphere, the sources said. The Sphere Field will instantly become an attraction that tourists can see from the plane when they land in Vegas.

Sponsorships are slow because “the new is scary,” a source close to the project said, adding that MSG seemed confident that deals would be announced closer to the grand opening of MSG Sphere.