In Las Vegas, a city known for casinos, Elvis impersonators and Cirque du Soleil performances, developers are betting a giant ball that can be transformed into a blinking eyeball, a replica of the moon or any sort of living architecture is just the new entertainment venue the city needs.

Standing 366 feet tall, 516 feet wide and completely wrapped in video screens, the ball-shaped Sphere is an attention-grabber, even in the context of the visual overload of the Las Vegas Strip.

Set to open Friday with a show by rock band U2, the Sphere at the Venetian, the structure’s official name, is designed to provide an ultra-premium concert and entertainment experience. The $2.3 billion Sphere’s interior is equipped with the world’s newest and most advanced audio and video technology.

It's going to need all the bells and whistles it can find to succeed in a crowded marketplace. Las Vegas is packed with big concert halls and sports arenas that have hosted some of the world's biggest acts, from ABBA to ZZ Top.

But the Sphere's backers expect it will be a cash-generating machine, leveraging its role as the world's largest round billboard and limiting its hosting of sports events to focus instead on the choicest entertainment shows. If successful, the Sphere's mastermind — Madison Square Garden CEO James Dolan — wants to build others, possibly in London and New York.

It's an open question whether Dolan's gambit will work. Architects who have designed arenas and stadiums but aren’t involved in the Sphere's development say it will be difficult to consistently book shows at the Sphere where tickets are expected to always be sold at super-premium prices, including up to $1,400 for each seat at U2's upcoming concerts. And the venue is already $1.1 billion over budget and two years behind schedule.

But David Karnovsky, an equities analyst at JPMorgan Chase, expects the Sphere venue will be profitable by July 2024. That's based on early indications of demand from consumers for shows and corporations for advertising and partnerships, according to an investor note earlier this month.

The combination of revenue streams will set the Sphere apart from competing venues like Dolby Live at Park MGM and T-Mobile Arena, Guy Barnett, senior vice president of brand strategy at Sphere Entertainment, said in a statement promoting the venue.

The exterior of the Sphere “is more than a screen or a billboard — it is living architecture, and unlike anything that exists anywhere in the world,” Barnett said.

It’s probably safe to say that nothing else exists like the Sphere. For one, it’s a ball covered in 1.2 million LED bulbs where the images are constantly in motion and always changing.

That lets the Sphere function as the world’s largest round billboard, and it’s already been leased for that purpose. On Sept. 1, the Sphere began displaying ads for YouTube’s NFL Sunday Ticket package of pro football games. The video-screen exterior has also been turned into a giant eyeball, the moon, the Earth and a large basketball.

“It’s truly breathtaking,” Glenn Nowak, an architecture professor at the University of Nevada, Las Vegas, told CoStar News. “When you have that many LED displays, it immediately grabs your attention.”

Financial terms of the advertising deal haven’t been disclosed.

The interior is designed in much the same way, with the Sphere’s walls covered from top to bottom and side to side with video screens. It’s not just any video system, but proprietary camera technology called Big Sky, which the company describes as providing the world’s highest resolution images and video.

The interior video screens are perforated with thousands of slits to allow sound to flow through the screens from the speakers installed behind them, enhancing the experience for concertgoers.

These aren’t just any speakers. The Sphere’s developers hired German acoustics company Holoplot to design and install the Sphere’s sound system. Its features include speakers installed in the headrest of every seat, along with motors that deliver vibrations in sync with the audio and video displays.

The acoustic setup “uses intelligent software algorithms to create unique, highly controlled, and more efficient sound waves than conventional speakers, ensuring that levels and quality remain consistent from point of origin to destination,” according to Sphere Entertainment.

The Edge, the moniker for U2 guitarist and 47-year band member David Evans, recently told the Associated Press that the Sphere’s acoustics are some of the best he’s ever experienced. Most architects of sports arenas rarely consider sound qualities; the biggest music acts tend to play in stadiums or large arenas to sell more tickets.

“That’s way, way down on their list of priorities,” Evans said. “In this venue, it’s one of the first things they thought about.”

It was a curious decision by Dolan to restrict sporting events at the Sphere, said Matt Rossetti, CEO at Detroit-based architecture firm Rossetti. Though company executives have said they could host boxing or mixed martial arts competitions, the big money is in pro sports like football and basketball, he said.

“To me, the big question is whether it really makes sense to not allow sporting events in this building,” Rossetti said. “That’s a big gamble and it will be an interesting test case to watch.”

Andy Fixmer, a spokesman for Sphere Entertainment, declined to comment.

Sphere Entertainment may have had little choice in the crowded Las Vegas sports market. The city already has two venues for professional sports — Allegiant Stadium for the Las Vegas Raiders football team and T-Mobile Arena for the Vegas Golden Knights of the National Hockey League.

Populous, the Kansas City-based architecture firm that designed the Sphere, did not respond to requests to comment from CoStar News. Populous designed the new Yankee Stadium in New York, T-Mobile Arena in Las Vegas and Tottenham Hotspur Stadium, a 62,850-seat Premier League facility in London.

Designing and installing what may be one of the world’s best audio and video systems is part of the business model, according to executives at Sphere Entertainment, the company formed through a recent spinoff of Madison Square Garden Entertainment Co. It allows the Sphere to have three revenue streams.

In addition to concerts and the exterior billboard, the third revenue stream is a film created by Darren Aronofsky, the director of “Black Swan.” His film “Postcard from Earth” will be shown year-round, allowing the Sphere to generate ticket sales even on days when no live shows are scheduled.

“We have designed Sphere to be busy 365 days a year with multiple events per day,” Dolan, Sphere Entertainment's CEO, said in an Aug. 22 conference call with analysts.

Its calling card will be the concert and entertainment experience, and it remains to be seen whether it will live up to the hype, said Dan Meis, founder of the Meis design studio at architecture firm Perkins Eastman.

“The big challenge is delivering the event experience,” Meis told CoStar News. “Will it be that much more compelling to see a concert there compared to other venues?” Meis said. “It’s obviously a lot of expense to create the Sphere. How do you monetize that additional cost?”

Meis, who isn't involved in the Sphere development, designed Staples Center arena in Los Angeles and Paycor Stadium in Cincinnati, among other venues.

The Sphere's development has faced obstacles. Originally scheduled to open in 2021, Sphere Entertainment has said the pandemic pushed back the opening date to this month. The initial cost estimate of $1.2 billion has climbed to $2.3 billion with the company citing the rising costs of labor and building supplies.

The developers are also involved in payment disputes with suppliers and vendors. The project's former general contractor Aecom-Hunt sued Sphere Entertainment in Nevada state court for $19 million, saying it was wrongfully terminated, according to trade publication Engineering News-Record. In two separate lawsuits, a steel supplier sued Sphere Entertainment for $3.25 million for alleged unpaid invoices, and former project manager Rider Levett Bucknall sued for $3 million, also for alleged unpaid invoices.

The Sphere’s developers believe the facility will immediately become a major player in the massive industry for concertgoers. Gross revenue from the top 100 concert tours worldwide hit a record $6.28 billion in 2022, a 13% increase from 2019, the last full year before the pandemic, according to Pollstar. The 2019 figure of $5.6 billion was the previous record.

Pollstar did not provide details for 2021 concerts because the industry was still recovering from the pandemic and the low yearly figures skew comparisons.

Las Vegas was the No. 2 U.S. market for concerts in 2022, after New York, with about $519 million in gross ticket revenue, Pollstar said.

Pop music’s biggest current star, Taylor Swift, this year is likely to become the first artist to gross $1 billion in ticket sales, according to Pollstar, typically generating about $13 million in ticket sales per concert this summer.

While U2 may not be as popular or as lucrative as Taylor Swift, the band is still a major draw with that $1,400 top price, according to the Sphere website. The first four shows of U2’s 20-show run at the Sphere are sold out. The group is scheduled to do 25 shows at the Sphere.

And there are plenty more music artists who can headline a show and bring in huge bucks. Acts like Bad Bunny, Beyonce, BTS and Daddy Yankee have all headlined major stadium and arena shows over the past year, according to Pollstar.

The Sphere’s developers will probably need to book many more shows at U2-level ticket prices to make the Sphere work financially, Rossetti said.

It's unclear exactly how much revenue from ticket sales from live shows that the Sphere will need to produce, Rossetti told CoStar News.

“I could do the math, but it would be a lot of guessing and it would involve a lot of money,” Rossetti said. “My guess is that this is probably a loss-leader.”

Rossetti’s namesake firm, which isn’t involved in the Sphere project, designed most of the stadiums and public spaces at the U.S. Open tennis complex in Flushing, New York, and professional soccer stadiums in Philadelphia, Salt Lake City and northern New Jersey.

Competition will be fierce. Las Vegas counts at least six venues with at least 12,000 seats, the size of a typical arena in other U.S. cities. The newest, Dolby Live at Park MGM, opened in 2016 and has featured shows by Lady Gaga and Bruno Mars.

“They’re going to be competing with all these other arenas in Las Vegas,” Meis said.

The success of the Sphere may hinge on the popularity of the original content that the company develops for the venue, Karnovsky said in his research note. It’s too early to gauge likely consumer demand for the Aronofsky film that will be shown exclusively at the Sphere. But more original productions will be needed, he said.

“The ultimate success of the venue … will hinge largely on original content,” Karnovsky said.

Sphere Entertainment established a content studio in Burbank, California, to create original content for the Sphere venue.

MSG’s Dolan has said that he wants to develop more Spheres across the globe, with London and New York being two early targets.

That may be an overly ambitious goal, considering that it’s still a mystery what the Sphere looks like on the inside and what the concert experience will feel like, Meis said.

It’s also unclear whether any other city in the world besides Las Vegas could support a venue like the Sphere, or if another place would even want one, said UNLV’s Nowak.

“In Las Vegas, we’ve built up this reputation for hospitality and entertainment, so the public has been really welcoming to the Sphere,” Nowak said. “In other cities, proposals for these kinds of giant venues have gotten more pushback.”

“Not everyone wants a giant eyeball in their backyard,” Meis said.

Nicholas Reynolds, senior principal at Populous, is the lead architect for the Sphere. Sphere Entertainment Co. is the general contractor. Aecom-Hunt, the original general contractor, left the project in 2020.