Coronavirus pulls the plug on MSG Sphere construction work


The Sphere Las Vegas on the making - April 2020 update Image: MSG

Coronavirus has forced work to stop at MSG Sphere at The Venetian in Nevada, US. The plug has been pulled on construction work as developers say there is faint hope of work finishing next year.

The MSG Sphere Las Vegas is a sphere-shaped music and entertainment arena being built in Paradise, Nevada, near the Las Vegas Strip in US.

The Madison Square Garden Company, owner of ‘The Sphere’, announced recently that it is suspending construction of the $1.66 billion Las Vegas entertainment venue, saying “all work will stop over roughly the next two weeks”. However, the company said it is committed to building a state-of-the-art venue in Las Vegas.

The American sports and entertainment holding company based in New York city – the Madison Square Garden company – which collaborated with casino operator Las Vegas Sands Corporation on the off-Strip project, said it “looks forward to quickly and efficiently resuming construction as soon as practicable”.

As coronavirus continues to ravage the world, United States emerges as the country which is being battered hugely due to the spread of the dangerous respiratory disease.

The Madison Square Garden Company further said in its statement that the global fallout from the new virus has led to “significant impediments to construction,” including disruptions to supply chain, and it no longer can assure that the avant-garde venue will open its doors in 2021 as previously planned. The release did not mention the exact project completion date.

Las Vegas Sands Corporation – an American casino and resort company based in Paradise, Nevada, US – did not comment on the development as regards work coming to a halt due to coronavirus.

Nevada is one among the many States in US where construction workers are being allowed to stay on the job despite the coronavirus pandemic while other businesses, including casinos, have been forced to shutter down to arrest the spread of the virus. However, MSG Sphere is the second major project being built in Las Vegas to shelve construction amid the outbreak, and the first to announce its expected opening date will be delayed due to COVID-19 outbreak. The MSG Sphere owners put their foot down when it came to continuing with construction work and said that it is “beyond the company’s control”.

Drew Las Vegas owner Steve Witkoff’s namesake firm informed two weeks back that it “paused construction crews” from coming on-site at the north Strip hotel-casino – the unfinished former Fontainebleau – and asked corporate employees to set up virtual offices at home.

The Drew Las Vegas is a hotel and casino under construction on the Las Vegas Strip in Winchester, Nevada.

Though construction continues merrily in Nevada despite coronavirus upsurge in US, State officials have released guidance saying Nevada construction sites should ensure workers remain six feet apart, restrict meetings and gatherings to no more than 10 people and conduct daily survey of workers’ health conditions.

Two projects which have invited a lot of attention – the $4.3 billion Resorts World Las Vegas hotel-casino and the $2 billion Allegiant Stadium – have both confirmed that one of their workers tested positive for the fatal respiratory disease.

Their assigned work areas and surrounding vicinities were shut down and sanitized, representatives informed.

Way back in 2018, Madison Square Garden Company and Las Vegas Sands Corporation held a ceremonial groundbreaking for the $1.66bn (£1.34bn/€1.52bn) MSG Sphere. The spherical venue which will be able to accommodate 17,500 spectators – at the corner of Sands Avenue and Koval Lane, just east of the Strip, is expected to be equipped with massive video screens inside and out.

It would be able to have different types of images on the exterior, including a “see-through” mode that would make the building appear invisible.

MSG Sphere London

The MSG Sphere London is a proposed music and entertainment venue to be built in Stratford area of United Kingdom. The MSG Sphere London is also a building proposed by the Madison Square Garden Company and if it gets the stamp of approval, it will be similar to the MSG Sphere coming up at Las Vegas. Both structures have been designed by the famed design practice Populous.

However, due to the worsening coronavirus situation in UK too, which had sent its Prime Minister Boris Johnson to the ICU, the Sphere will join its counterpart in US in suffering delays. Delay in planning process is also to attribute for the Sphere in London not being in a position to go ahead with the planned opening.

In November, the Madison Square Garden Company revealed that its Board of Directors had greenlighted a revised plan for the proposed separation of its sports and entertainment businesses, while adding that its 90m-tall planned MSG Sphere arena in London was expected to open later than initially planned in 2022.

The company further said that while “significant” progress had been made on the Las Vegas project, the London arena – set to be located near the Olympic Park in Stratford – continued to move through the planning application process and as a result it was no longer possible for the latter to open a year after the Vegas Sphere arena.

Spin-off nod

The Madison Square Garden Company has said its Board of Directors has approved the spin-off of its entertainment businesses from its sports businesses, which is expected to be completed in mid-April. Once the spin-off transaction is completed, MSG will be a pure-play sports company and will change its name to Madison Square Garden Sports Corp. (MSG Sports), while the newly-formed entertainment company, under which the Sphere projects will come, will be named Madison Square Garden Entertainment Corp. (MSG Entertainment).

Andrew Lustgarten, presently the President of Madison Square Garden Company, is likely to be named President and the head honcho and will take over the reins of all business operations for MSG Sports.

Following the completion of the spin-off, MSG’s Executive Chairman and top gun James Dolan is expected to serve as Executive Chairman of the sports vertical and as Executive Chairman and Chief Executive Officer (CEO) of the entertainment company. Apart from serving as President and CEO of the sports company, it is anticipated that Lustgarten will serve as President of the entertainment company.

Remarked Dolan, “While our industry is currently going through a difficult period, we are confident in the enduring strength and value of our businesses. Today’s approved spin-off is the result of many months of preparation, and we believe it will set the stage for long-term success for both MSG Sports and MSG Entertainment.”

The latest development comes after Los Angeles Clippers owner Steve Ballmer recently sealed a $400m deal to acquire The Forum, furthering the National Basketball Association (NBA) basketball team’s claims to deliver a new arena and removing the obstacle of legal action from MSG. Through the newly-formed CAPSS LLC, Ballmer and Clippers’ Vice-Chairman Dennis Wong agreed to purchase the Forum from MSG for $400m in cash.

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