CIE moves quickly in Brazil play

Big possibilities since last year's incursion

RIO DE JANEIRO — Having established a firm foothold in the Southern Cone, CIE has turned its South American focus to Brazil.

“The value of the Sao Paolo market is bigger than Mexico City, so you can imagine the potential,” says Gabriel Lecumberri, director of CIE’s international division.

And the Mexico experience has enabled it to move even more quickly in Brazil, according to chief operating officer Rodrigo Gonzalez, who notes that CIE has been able to accomplish in two years what took six in Mexico.

The company first entered Brazil in April 2000 with the purchase of 30% of local promoter Stage Empreendimentos, founded by Fernando Alterio. The Mexican group upped its stake in two steps, buying up the last remaining shares only last month, and converting Stage into a wholly owned subsidiary. Alterio has stayed on as vice president of CIE Brazil. Additional acquisitions in that country are likely this year, Lecumberri says.

Today, CIE Brazil owns and operates theaters (among them Sao Paulo’s 7,500-seat Credicard Hall) has management contracts for other venues, runs ticketing operation MegaIngresso (under its accord with TicketMaster), sells advertising and sponsorships, and operates the Portuguese-lingo version of entertainment Web site El Foco.

Last year, Brazil accounted for 7% of CIE’s overall revenue. Events included the Red Hot Chili Peppers, Lou Reed, and Brazilian Gilberto Gil, as well as “The Lord of the Dance” and “The King and I.” Eric Clapton, Hanson and Brazil’s Milton Nascimento are skedded for this year.

Demand is certainly there: Megafest Rock in Rio, organized by ad agency Art Plan, attracted 1.2 million attendees in January over seven()-days of concerts by Brazilian and international performers including Britney Spears, Sting and Neil Young.

“It was a great event, but that’s not the core business of Art Plan,” Alterio explains. “They organized three editions of Rock in Rio in 18 years. We do not consider them our competitors.”

The vertical structure has enabled CIE to forge its position as market leader in live entertainment, he says. “Theaters in Brazil are traditionally owned by local entrepreneurs and not part of networks. The large (media) groups are also not present in the entertainment events sector.”

Today, most of CIE’s Brazilian venues are in Sao Paulo, where it is renovating the historic 1929 Teatro Paramount to accommodate major musical productions. The 3,200-seat theater will reopen April 22/27() as DirecTV Music Hall with the preem of “Les Miserables,” slated for a 12-month run.

CIE plans to extend its theatrical network to Brazil’s state capitals. In an initial step, late last year it acquired ATL Hall, the top venue in Rio de Janeiro. Located in the fashionable Barra neighborhood, ATL will reopen under CIE management in April.

Radio waves

CIE Brazil is also keen to enter the local radio business. However, the constitution limits ownership of both radio and TV stations to Brazilian individuals, though lawmakers are debating an amendment that would allow foreign corporations to have as much as a 30% share in broadcasting operations (which would be consistent with CIE’s partnership approach).

Alterio is also eyeing possibilities for opening theme or amusement parks, a sector in its early stages in Brazil.

“It would be a natural expansion of the company’s activities in Brazil,” says Alterio, “but so far we have not made any commitments.”

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