U2 getting $10M to launch James Dolan’s MSG Sphere in Las Vegas as cash concerns mount: sources

James Dolan’s Madison Square Garden has lined up U2 to launch his MSG Sphere arena in Las Vegas — but some insiders fret the deal could help fuel an “unforgettable fire” that’s consuming the company’s cash.

According to sources close to the situation, the billionaire Knicks owner has quietly agreed to pay the legendary rock group $10 million to produce a splashy show to open the MSG Sphere — a 17,500-seat, ball-shaped arena that aspires to become the world’s ultimate concert venue.

That’s on top of the guaranteed proceeds U2 will reap from the gigs, collecting more than 90% of earnings from ticket sales for roughly 12 shows — with the first slated for around Sept. 29 and the rest spread over a few months, according to sources briefed on the talks.

The generous package for U2 is stoking anxiety about the MSG Sphere — which got its first major plug in an over-the-top Super Bowl ad this weekend that depicted the still-under-construction arena as a spaceship descending into the Nevada desert, with Bono and his bandmates gawking at it along with a crowd of fans.

“Without getting into specifics, we are very confident in the investment we made with U2 as the opening performer for the Sphere,” a Madison Square Garden Entertainment spokesperson told The Post.

Nevertheless, as first reported by The Post, Dolan on Tuesday night reshuffled top management at MSG Sphere, naming himself president of the operation as the company scrambles for a September open. In an internal memo, Dolan said Lucas Watson, MSG Sphere’s top executive, had decided to exit effective immediately. Jenna Wolfenson, senior manager of business operations, is also leaving, according to the memo.

On a conference call last week, MSG Entertainment EVP and CFO David Byrnes admitted that the high-tech venue — whose construction tab has nearly doubled during the past three years to $2.2 billion — still hasn’t found any corporate sponsors. That’s not good, as the whole idea is that cash from sponsors will offset losses from deals given to A-list acts like U2 to produce their pricey shows, according to sources close to the situation.

The key source of business profits for the Sphere will be movies, according to sources. On that front, The Post has learned that Dolan has hired indie director Darren Aronofsky to produce the first immersive film for the high-tech venue, which will boast a 160,000-square-foot LED screen that’s the size of three football fields and a state-of-the-art sound system that fires through the floorboards.

Details on Aronofsky’s upcoming movie couldn’t immediately be learned, but he’s shooting it with 16K high-resolution cameras, three sources with direct knowledge of the situation said.

Still, insiders note that while Aronofsky — whose credits include “Requiem for a Dream,” ‘Pi” and “Black Swan” — is critically acclaimed, he has never been a major box-office draw. Aronofsky’s 2022 flick “The Whale” was a surprise hit that saw its star Brendan Fraser win a Best Actor nomination in the 2023 Academy Awards. But its $21.5 million in global ticket sales, according to Box Office Mojo, are hardly comparable with those of major Hollywood releases.

As it raised a $275 million loan from JPMorgan in December, MSG projected that in its first full year, the Sphere would present between 400 and 500 film screenings, attracting 3 million to 4 million customers with seats priced as high as $50 each. By comparison, the Sphere only expects to host between 40 and 80 live concerts, a source who saw the presentation said.

Last week, MSG Entertainment said it plans on between four and six residency headliners a year, without mentioning any specific bands. That’s because the MSG Sphere is having trouble booking other rock bands and top entertainers, sources said. Many acts are balking at the idea of producing splashy visual spectacles that might overpower their music, a source close to the situation said.

“They’ve spoken to a lot of acts who are not interested,” the source told The Post.

Indeed, Dolan had been partnering to build MSG Sphere with Irving Azoff until the legendary concert promoter dropped out, reportedly concerned that touring acts would be reluctant to create shows for the Sphere that wouldn’t be replicable at most other arenas, sources said.

Insiders say Azoff — whose management clients include Harry Styles, John Mayer and the Eagles — is still a Sphere consultant and searching for acts.  That’s despite a potential conflict of interest since Azoff is in the process of building a competing Las Vegas arena as part of a planned $3 billion entertainment district, sources said.

“We are very happy with the level of conversations we are having with artists and are far along in those discussions and negotiations. We will be announcing future performers at the appropriate time,” the MSGE spokesperson said.

In a project riddled with delays, many of them caused by the pandemic, insiders said the Sphere still has yet to negotiate a long-term lease for a parking lot that’s adjacent to the arena — a deal that’s usually secured as one of the first steps in construction rather than at the end. Dolan is in talks with Wynn Resorts for a nearby parcel, and while a deal is expected in the coming days or weeks, it will likely be expensive for Dolan, a source said.

As for the crucial question of a corporate sponsor, Dolan is seeking $50 million for MSG Sphere’s naming rights, sources said. The pitch is the Sphere will become an instant landmark that tourists will be able to see from the airplane as they land in Vegas.

Sponsorships are slow because “new is scary,” a source close to the project said, adding that MSG appears confident that deals will be announced closer to the MSG Sphere’s grand opening.