Sphere Pitches Nevada Incorporation, Eyeing Delaware Departure

Posted on: April 9, 2025, 02:15h. 

Last updated on: April 9, 2025, 09:56h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Sphere Entertainment wants investors to vote on Nevada incorporation
  • List of companies leaving Delaware increasing

Sphere Entertainment’s (NYSE: SPHR) marquee venue is located in Las Vegas and its corporate headquarters are in New York, but as is the case with so many American companies, the firm is incorporated in Delaware. That might not be the case much longer.

The Las Vegas Sphere’s emoji Orbi as seen on February 25. Sphere Entertainment is attempting to incorporate in Nevada. (Image: Sphere Entertainment)

In a recent Schedule 14A filing with the Securities and Exchange Commission (SEC), Sphere said its board of directors has been studying potential redomestication to Nevada from Delaware, citing the possibility of reduced “risk of opportunistic litigation against the Company, and its directors and officers, which can be time-consuming, burdensome and expensive” as one reason for mulling the move.

A redomestication from Delaware to Nevada would align our legal incorporation with the location of a significant portion of our operations, including a majority of our revenue and would result in expected savings from not having to pay a franchise tax in Delaware,” according to the filing.

The board recommended the move to Sphere shareholders who now have the opportunity to vote on the matter. Should investors sign off on the change, Sphere’s home base will remain in New York, but its state of incorporation will become Nevada, meaning it’s a move on paper only.

Sphere Joining Increasing List of Firms Dropping Delaware

For decades, companies incorporated in Delaware due to the state’s friendly tax climate — it doesn’t levy corporate taxes — and a strong legal network, including the Delaware General Corporation Law and the Delaware Court of Chancery.

Some of the state’s corporate shine waned last year when a Chancery Court judge ruled that Tesla’s (NASDAQ: TSLA) $55.8 billion pay package to CEO Elon Musk – one approved by that company’s board of directors — was invalid because Musk improperly controlled the board when the agreement was struck in 2018. That prompted Musk to shift Tesla’s incorporation to Texas where it had previously moved its physical headquarters from California.

The Delaware ruling against Musk raised eyebrows in corporate America, prompting other companies to leave the state and others, such as Facebook parent Meta, Walmart, and Bill Ackman’s Pershing Square Capital to consider similar moves.

DropBox, Meta, and TripAdvisor are among the firms that have or are mulling Delaware departures in favor of Nevada.

Dolan’s Other Firms Looking to Move, Too

James Dolan leads Sphere Entertainment, which also includes the MSG Networks regional sports networks (RSNs). He controls two other companies — Madison Square Garden Entertainment Corp. and Madison Square Garden Sports Corp. — both of which are also looking to incorporate in Nevada from Delaware. Sphere was spun out of Madison Square Garden Entertainment Corp. (NYSE: MSGE) in April 2023.  For its part, Sphere has credible reasons for incorporating in Nevada.

“Approximately 90% of our property, plant, and equipment is comprised of the Sphere in Las Vegas,” according to the SEC document. “The majority of our revenues for the six-month period ended December 31, 2024 were generated by our Sphere segment; and the majority of our employees are based in Nevada.”