James Dolan pulls out of plan to build Vegas-style Sphere in London

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By Dan Sears

Blimey!

Madison Square Garden Entertainment Corp. CEO James Dolan dramatically pulled out of a plan to build a Sphere in East London similar to the game-changing Las Vegas performance venue after the mayor of London blew a last-minute whistle on it.

MSGE announced its withdrawal last week. Although the shocking veto by mayor Sadiq Khan — a Labour Party member who’s at war with the ruling Tories and Prime Minister Rishi Sunak — could theoretically be reversed by another government official, Dolan wanted no part of a drawn-out struggle.

“It’s a political football,” Dolan told us. “It looked to me like it was going to be a never-ending fight that could go on for years. We’ve been in a never-ending fight in New York [over Madison Square Garden]. We live in New York but we’re not stuck in London.”

“I’m going to be happy when it’s behind us,” he said of the London situation.

Dolan said MSGE would sell the five-acre parcel of land near the Olympic Park in Stratford, about six miles from central London, for which it paid $79 million in 2017, according to an SEC filing.

The proposal for a roughly $2.7 billion, 300-foot-tall Sphere underwent five years of intensive reviews. Madison Square Garden Entertainment

“I just hope we get some of our money back,” Dolan said.

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The proposal for a roughly $2.7 billion, 300-foot-tall Sphere, slightly smaller than in Las Vegas, underwent five years of intensive reviews by local authorities.

“Until a month ago, we saw no real roadblocks,” an exasperated Dolan said.

He attributed the rejection not to New York-style NIMBY-ism  — “few people opposed it” — but entirely to politics.

London has largely been more receptive than New York to privately-backed mega-projects. Madison Square Garden Entertainment

Dolan said that he had responded to community concerns over the years by making a number of “modifications” to the original plan.

Everyone seemed comfortable with the project, including Khan, who in 2018 said, “It’s great to welcome another world-class venue to the capital.” 

But last November, Khan abruptly cited its supposed “unacceptable negative impact on local residents” — such as glare from exterior LED lighting.

Dolan said the mayor “went completely outside the government process and hired his own person to do report.”

MSGE announced its “final” decision to quit in a letter to the government: “After spending millions of pounds acquiring our site . . .  and engaging in a five-year planning process with numerous governmental bodies . . .  we cannot continue to participate in a process that is merely a political football between rival parties.”

James Dolan also blamed Khan’s ambush partly on competing entertainment-venue company AEG, which operates London’s huge O2 performance arena. Evan Agostini/Invision/AP

Dolan acknowledged that there were “definitely a couple of hundred residents” near the Sphere who might have objected to its lighting effects, “but every public project has some detractors, and they must be seen in the context of the economic benefits it would bring to the area.”

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They included, according to an analysis commissioned by MSGE, 4,300 construction jobs and more than 1,000 permanent jobs, at least half of which would be prioritized for local residents.

Besides the political tussle, Dolan also blamed Khan’s ambush partly on competing entertainment-venue company AEG, which operates London’s huge O2 performance arena.

In the past, London has largely been more receptive than New York to privately-backed mega-projects. Among them are mammoth, mixed-use complexes at King’s Cross and the Canada Water site on the River Thames, as well as a residential development around Battersea Power Station, which was adapted into a shopping and dining mall.

London Mayor Sadiq Khan is at odds with the UK’s pro-development Tory government and Prime Minister Rishi Sunak. REUTERS

British real estate journalist Peter Bill wrote in the Times of London that the politics-driven death of the Sphere sent a “chilling message” to companies interested in investing in the UK.

“The British planning system is out to get you, not help you,” he warned.

Publicly traded MSGE, with $851 million in revenue in 2023, owns the Garden, Radio City Music Hall among other premier venues as well as the NBA Knicks, the NHL Rangers and MSG network. The company hopes to replicate the Sphere in other cities. A possible site in South Korea has been rumored but “it’s still in negotiations,” Dolan cautioned.

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What about in New York City?

Dolan chuckled, “I think New York City is not ready for a Sphere. It would be too difficult to get through the processes.

“I wanted to build a Sphere on Pier 76 on the Hudson, next to the Javits Center. It isn’t being used much. But when I looked at what it would take . . . just keeping Madison Square Garden in place and operating has been 20 years of struggle.”

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