{"id":21658,"date":"2023-09-23T18:54:21","date_gmt":"2023-09-23T18:54:21","guid":{"rendered":"https:\/\/microloannexus.com\/investing\/las-vegas-sphere-will-open-with-a-u2-concert-these-3-stocks-could-get-a-lift\/"},"modified":"2023-09-23T18:54:22","modified_gmt":"2023-09-23T18:54:22","slug":"las-vegas-sphere-will-open-with-a-u2-concert-these-3-stocks-could-get-a-lift","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=21658","title":{"rendered":"Las Vegas Sphere Will Open With a U2 Concert. These 3 Stocks Could Get a Lift."},"content":{"rendered":"
\n

The Sphere, the most anticipated new concert venue in decades, will open on Sept. 29 in Las Vegas with the first of 25 concerts by U2. Its debut is of keen interest not only to fans of the city and the band, but also to shareholders of
\n Sphere Entertainment,<\/span>
\n the arena\u2019s owner.<\/p>\n

Sphere shares (ticker: SPHR) look undervalued, given that the company\u2019s market cap of $1.3 billion is far less than the project\u2019s construction cost of $2.3 billion. Sphere is trading for about $36 a share.<\/p>\n

\n

With a seating capacity of 17,600, the Las Vegas Sphere has a state-of-the-art sound system and a 160,000-square-foot LED screen. \u201cYou\u2019ll feel like you stepped into a sci-fi movie,\u201d says James Dolan, Sphere Entertainment\u2019s CEO.<\/p>\n

If music fans are impressed with the concert experience, the stock could move higher on expectations that the venue will attract other music groups. Success in Las Vegas also would enable the company to license the development of Spheres around the world, starting with London, where Sphere already controls land.<\/p>\n

The opening of the Sphere is one of several potential catalysts that could lift the shares of three companies run by Dolan and controlled by his family. Dolan also heads
\n Madison Square Garden Sports
\n (MSGS), which owns the New York Knicks and Rangers and is the largest public play on professional sports teams in the country. The third company,
\n Madison Square Garden Entertainment
\n (MSGE), owns Manhattan\u2019s Madison Square Garden, home to both teams, and the highest-grossing venue of its size in the world. <\/p>\n

\n

<\/p>\n

\n
\n\n\n\n\n\n\n
Company \/ Ticker<\/th>\nRecent Price <\/th>\nMarket Value (bil)<\/th>\nNet Debt (bil)<\/th>\nKey Assets<\/th>\n<\/thead>\n
Sphere Entertainment \/ SPHR<\/b><\/td>\n$36.32<\/td>\n$1.3<\/td>\n$0.8<\/td>\nVegas Sphere, sports cable network<\/td>\n<\/tr>\n
MSG Entertainment \/ MSGE<\/b><\/td>\n32.85<\/td>\n1.7<\/td>\n0.6<\/td>\nMSG arena in NY, Rockettes Christmas Spectacular<\/td>\n<\/tr>\n
MSG Sports \/ MSGS<\/b><\/td>\n179.48<\/td>\n4.3<\/td>\n0.3<\/td>\nNew York Knicks, Rangers<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Sources: Bloomberg; company reports<\/p>\n<\/div><\/div>\n<\/p><\/div>\n

All three businesses once were housed together, but the Dolans separated and reshuffled them in a series of transactions in recent years. \u201cThe \u2018Dolan discount\u2019 is alive and well,\u201d says Jon Boyar, a principal at the Boyar Value Group, referring to the discounted value of Dolan-controlled companies due to the perception that the family will put control over boosting shareholder value.<\/p>\n

Boyar thinks the Dolans are more shareholder-friendly than they are perceived to be.<\/p>\n

Sphere Entertainment is the most speculative Dolan company. The shares got a boost after the July 4 weekend, when the exterior of the 366-foot-high Sphere was lit up for the first time with dramatic imagery. The display highlighted its advertising potential.<\/p>\n

Sphere Entertainment also owns MSG Networks, the cable TV operator that broadcasts Knicks and Rangers games, and had about $800 million of net debt at the end of June. Barron\u2019s <\/em>assumes that MSG networks is worth that net debt figure. Net debt probably is lower now because the company sold about $500 million of MSG Entertainment stock in the past month.<\/p>\n

Chris Marangi, a portfolio manager at Gabelli Funds, values Sphere at about $47 a share. He says it is capable of generating $200 million of annual cash flow. <\/p>\n

\u201cA future global network of Spheres would allow artists to actually \u2018tour\u2019 the shows they create for Vegas and create further cost leverage for original content,\u201d wrote Brandon Ross, a LightShed Partners analyst who is bullish on the stock.<\/p>\n

Barron\u2019s<\/em> recommended MSG Sports last fall, when the shares fetched $150. They are now around $181, valuing the company at $4.3 billion. The Knicks and Rangers are two of the most valuable franchises in their sports. The Knicks were valued at $6.1 billion and the Rangers at $2.2 billion in the latest annual Forbes tally. The stock trades for a little over half of the teams\u2019 estimated value. <\/p>\n

Dolan told Barron\u2019s<\/em> on Friday that \u201cthere is absolutely no thought of a full sale of the teams\u201d and that MSG Sports is \u201cnot working\u201d on a partial sale, which has been discussed. \u201cThe value of the assets keeps going up every year,\u201d he said. \u201cWhat you sell today may look like a cheap price\u201d later.<\/p>\n

He added, \u201cIf what they mean by a \u2018Dolan discount\u2019 is that we\u2019re not selling, they\u2019re right.\u201d<\/p>\n

MSG Sports stands to benefit from a lucrative new National Basketball Association national TV contract after the 2024-25 season. Marangi values the company at about $300 a share. <\/p>\n

MSG Entertainment, trading around $32, will host Knicks and Rangers games at the Garden through 2055. It also owns the lucrative Christmas Spectacular featuring the Rockettes at Radio City in Manhattan. The company could generate over $100 million in free cash flow in its current fiscal year, says Marangi, who puts a private market value of $44 a share on the company.<\/p>\n

One catalyst could be the sale for over $500 million of the Theater, a smaller space inside the Garden. <\/p>\n

Write to <\/strong>Andrew Bary at andrew.bary@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Sphere, the most anticipated new concert venue in decades, will open on Sept. 29 in Las Vegas with the first of 25 concerts by U2. Its debut is of keen interest not only to fans of the city and the band, but also to shareholders of Sphere Entertainment, the arena\u2019s owner. Sphere shares (ticker:<\/p>\n","protected":false},"author":1,"featured_media":21659,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-21658","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nLas Vegas Sphere Will Open With a U2 Concert. These 3 Stocks Could Get a Lift. | Micro Loan Nexus<\/title>\n<meta name=\"description\" content=\"The Sphere, the most anticipated new concert venue in decades, will open on Sept. 29 in Las Vegas with the first of 25 concerts by U2. 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