Growth factors are essential for undifferentiated cells to form spheroid, also referred to as organoids, in three-dimensional culture. Phenol red has the biological effect of estrogen,one of the steroid hormone. That is why phenol red free media is frequently used in the culture of undifferentiated cells or induction of organoids.
You have to keep in mind that this is not only the case of the cancer cells. For instance, neural stem cells need EGF ligand to maintain the undifferentiated status, whereas the cocktail of bFGF and BDNF induces the differentiation into astrocytes or mature neurons. Further, Lgr5-expressing intestinal stem cells acquire the formation capacity of “crypt” (quite resembling to the spheroids with the villous structure) in the presence of the following combination of growth factors and cytokines; EGF,Wnt3a, Noggin etc.
Serum is a source of growth factors (among many other things) for cells growing in cell culture. Growth factors are necessary to maintain the proliferation and/or viability of cells and the withdrawal of growth factors from cell culture can cause cell cycle arrest and/or apoptosis (the outcome is cell context-dependent). http://www.sciencedirect.com/science/article/pii/S1097276506001481
In cancer stem cell cultures (growing as tumor spheroids in vitro) serum often induces cell differentiation so it cannot be used to culture these cells, and the growth medium needs to be serum-free. However, necessary growth factors, that would otherwise be supplied with the FBS, need to be added to these serum-free meda for spheroid culture.
Phenol-red is a weak estrogen and may trigger activation of ER when it is not desirable. On the other hand, ER-positive cells cultured consistently in phenol red-containing media were shown to display down-regulation of ER and lower response of cells to exogenous estrogenic stimulation. That is why the weak estrogenic activity of phenol red needs to be taken into consideration in studies that use estrogen-responsive cells.