Less Is More For Cirque

After years of making its bones with lavish productions around the world, Cirque’s current single biggest growth area is in its ticketing venture, according to the Wall Street Journal. Other new areas that Cirque is reportedly venturing into include small cabaret shows at hotels, children’s television programs and theme parks. Revenues dropped to $850 million in 2013 from $1 billion in 2012 yet the company netted a profit again due to the cost controls, according to the paper.

But the company suffered a series of setbacks in recent years, underscored by a bleak consultancy report, a spate of poorly received new shows and the death last year of a performer in its Las Vegas “Ka” show. Cirque CEO Daniel Lamarre told the Journal the recent struggles “certainly brought a lot of humility to the organization.” Founder and 90 percent owner Guy Laliberté told the paper he has begun looking for investors to “buy a significant portion” of Montreal-based Cirque du Soleil and plans to review proposals before the end of the year. From humble beginnings as a Montreal street troupe, Cirque had 22 shows by the end of 2011, seven of them in Las Vegas.

Revenues approached a peak in 2008 when Laliberté agreed to sell 20 percent of the company to Dubai government-owned real estate companies for $545 million, a source familiar with the deal told the WSJ. The transaction reportedly valued Cirque at $2.7 billion. But five years later, when Laliberté took back a portion of Dubai’s stake, the price suggested its value had declined about 20 percent.

But the company continued an aggressive expansion, even as the recession cut into demand. Cirque premiered 20 shows between 1984 and 2006, closing none but the first few. But in the next six years, it opened 14 more and was forced to close five that “flopped” and closed early, according to the Journal. One show, “Zarkana,” failed to cover its production costs in 6,000-seat Radio City Music Hall in New York City.

Another show, “Iris,” closed quickly at the Dolby Theatre in Los Angeles. Bain & Co., contracted for a consultancy by Cirque, told the company at the end of 2011 that it had hit market saturation and suggested it try its hand in new markets such as movies, sources familiar with the report told the paper. And, for the first time in its recent history, Cirque reportedly didn’t turn a profit in 2012. Executives planned a downsizing, beginning layoffs and other cuts that continued through 2013 and resulted in savings of about $100 million.

Laliberté and his execs also planned a restructuring to try to beef up the non-circus part of the Cirque business. New Cirque efforts include a musical-theater production arm based in New York City and a special-events producer that is beginning to operate under the name 45Degrees Events. Laliberté reportedly seeks to sell 20 percent to 30 percent of the company to outside investors by emphasizing the “more disciplined” company structure and growth plan, and hopes to take Cirque into new markets including China and India. He told the Journal he hopes for an investment that would value the company at between $1.5 billion and $2.5 billion. “We’ll be more about intelligent analysis of each project,” Laliberté told the paper. “That is where we got confused.”