Madison Square Garden Announces Lease Deal for Las Vegas Sphere Venue
Agreement includes $75 million in funding from Venetian owner
Officials with Madison Square Garden have signed a lease to build a futuristic music arena in Las Vegas. The July 13 deal between MSG and Las Vegas Sands Corp -- which owns the Venetian and the Palazzo casinos -- includes $75 million in funding from Sands Corp and a rent-free rev share deal for the next-generation 18,000-seat arena.
Details of the plan were revealed in a filing with the Securities and Exchange Commission Monday (July 16), which gave the building until 2023 to open, though the company's goal is to have the venue operational by the end of 2020. MSG officials now have 18 months to begin developing the foundation of the project and another three years to complete construction of the project near the Venetian hotel.
Las Vegas Sands Owner Sheldon Adelson has also agreed to kick in $75 million to help finance MSG Chairman and CEO James Dolan's vision for the future of live entertainment and help pay for a pedestrian bridge connecting the casinos with the arena project, "paid in increments based on certain construction milestones," according to the SEC filing.
As part of the agreement, MSG will lease the land near the Sphere for 50 years. The deal doesn't call for a fixed rent payment, but allows Sands to collect 25 percent "of the after-tax cash flow" if "certain return objectives for the MSG Sphere are achieved."
A full copy of the lease will be released as an exhibit to the company's annual report for the fiscal year ending June 30, 2018, due out later this summer.
MSG has also announced plans to develop a similar Sphere venue in London which Dolan said will revolutionize how venues are designed and how audiences interact with concerts, films and live events.
“The environments and the stories told with this new medium will be impactful,” Dolan told an audience at The Copper Box Arena in London’s Queen Elizabeth Olympic Park on March 20. “We’re just beginning to imagine where we’ll take our audiences,” Dolan added, saying that the Sphere is being custom-built for the “finest storytellers, artists and content creators across the globe.”
Update (11:07 a.m.): This story was updated to include further information about the venue's planned opening date.