Yet Another Value Podcast
Creek Drive Capital's Kevin Mak introduces the business case for Sphere Entertainment $SPHR
Dec 22, 2023
Kevin Mak, Founder of Creek Drive Capital and Teacher at Stanford University, discusses his thesis on Sphere Entertainment. Topics include valuation of Sphere, revenue perspectives, sustainability of movies, customer demand, external revenue streams, corporate governance, and more.
01:12:38
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Quick takeaways
- The Sphere Entertainment Co. generates significant revenue from its immersive movie experience, particularly from the movie 'Postcard', due to high ticket sales and low production costs.
- Concert residencies at the Sphere are also highly profitable, offering better sound quality and operational leverage, attracting both big and indie acts and contributing to the overall revenue.
Deep dives
Postcard movie and concert residencies are key revenue streams
Postcard, the movie shown at the Sphere, is a major revenue stream, with high ticket sales and minimal production costs. Concert residencies are also profitable due to the purpose-built facility, offering better sound quality and operational leverage. While only a limited number of artists can fill the arena, the profitability of concerts is still significant. The Sphere's unique capabilities attract both big and indie acts, providing a variety of performances. Both the movies and concerts contribute to the overall revenue and profitability of the Sphere.
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