James Dolan’s plan to build orb-like amphitheaters under fire
James Dolanās planš to build futuristic is comiš³ng under attack.
Dolan, who owns the New York Knicks, saw support for his ambitious new project start to fizzle Tuesday after executives of his š„entertainment company, MadišÆson Square Garden, said the first high-tech orb could cost half a billion dollars more than forecast.
Thź§at, combined with disappointing MSG earnings, sent shares of the Radio City Music Hall owner into their worst decline iną¼ the stockās four-year history.
One investoš·r was so livid, he told The Post he wašnts Dolan to just walk away from the costly construction project.
āWe think they should scrap the sphere arenas,ā a leading MSG investor told The Posź§tš.
The problems started when executišves of Madison Square Garden told analysts in an earnings call Tuesday that the cost to build the first sphere in Las Vegas by 2021 ballooned to $1.7 billion, or $500 million over budget. A similar project has been proposed for London.
Analysts pushed back by asking MSG execs to give them a sense of the Las Vegas sphereās expected returns. But they never answered the question, according to sources and a transcript of the callš.
āWeāre going to šbe taking people places where theyāve never gone before, both experiencing it visually as well as feeling it, smelling it aānd hearing it,ā MSG president Andrew Lustgarten said in response to a pointed question about returns.
Sources say Wall Street wź¦as š¶āupsetā over the lack of answers and that concerns werenāt alleviated when MSG officials said they planned to negotiate the price down.
āWe are reviewing and challenging our contractorsā estimates and assumptions. We believe as a result of this pź¦rocess that we š§will be successful in achieving significant cost reductions,ā Victoria Mink, chief financial officer at MSG, told analysts.
MSG shares plunged as much as 9.7 percent before settling down 8.8 percent Tuesday, at $267.33 ā māarking MSGās sharpest drop since its split from MSG Networks four years ago.
Also dragging on MSGās shš ares was a wider-than-expected fiscal fourth-quarter loss of $3.08 a share ā 43 cents lower than analysts surveyed byš§ø Bloomberg predicted.
Iį£nvestors were also disappointed to learn that the companyās plans to spin off its Knicks and Rangers franchises ąµ²are ātaking longer than expected,ā according to Lustgarten.
š§MSG declined to comment, but pointed to comments from the call, including Lustgarten telling investors that the new high-tech spheres, which will include vibrating seats and video everywhere, will be more popular than Mš¦SG or Radio City Music Hall.