Concerts, sports, legit build events empire

MEXICO CITY — CIE may be as yet-unknown to U.S. auds but Alejandro Soberon is betting it won’t be that way for long.

The chairman-CEO of Corporacion Interamericana de Entretenimiento (CIE) struck a deal just last month with Latin artist concert promoter Ralph Hauser formally to enter the U.S. market, thus adding the last major piece to his American empire of live entertainment.

“Of the people who live in Latin America, we have 160 million potential customers,” Soberon says. “And there is another country within the U.S. with 35 million Spanish speakers.”

With those numbers in mind, CIE aims to provide one-stop shopping for concert and theatrical productions, and related businesses like sponsorships throughout the Americas and Spain.

Humble beginnings

CIE traces its origins to concert promotion in Mexico under the Ocesa name, with a staff of less than 10, among them chief operating officer Rodrigo Gonzalez Calvillo and content director Federico Gonzalez Compean.

From there, Soberon created a vertically integrated operation that today encompasses venue ownership and management, ticketing via accords with TicketMaster, legit productions, sponsorships and advertising sales, merchandising, an Internet site and amusement parks.

Soberon restructured his interests in 1995 as holding company CIE, which managed to go public on the Mexican stock exchange during the country’s worst recession in 60 years. That economic crisis prompted CIE to broaden its product offering — adding family shows and productions like “Stomp” and “Riverdance” — and to expand to Argentina, Brazil Colombia and Spain.

“The most difficult thing was to establish the (international) platform and now we are developing from there,” Soberon says. “The strategies are identical.”

CIE’s revenue doubled from 1995-97, then jumped 91% to $168 million in 1998, with 28% coming from outside Mexico.

Revenue rose another 44% in 1999, and climbed 35% last year to nearly 4 billion pesos, or about Merrill Lynch analyst Whitney Johnson projects a 25%-plus increase in 2001.

Marking CIE’s 10th anniversary this year, Soberon is looking to expand the international sphere, emphasizing Brazil, the U.S. and Spain while continuing to exploit new opportunities in Mexico. It has earmarked $70 million to $80 million in capital expenditures this year.

At home and abroad

Two years ago, Soberon boldly predicted that by 2000 as much as 50% of revenue would be derived abroad. In fact, CIE remains highly dependent on Mexico, which accounted for 78% of revenue last year, followed by Argentina (11%), Brazil (7%), Spain (3%), and the U.S. and Colombia combined (1%). He acknowledges that Mexico will have a similar share this year.

In his defense, Mexico has been Latin America’s best-performing economy of late, and CIE has branched out considerably at home. Diversification included putting on a Christmas parade for Disney in December that drew more than 7 million spectators in Mexico City (CIE has the rights to Disney musicals and shows such as “Disney on Ice” throughout the region). It also has beefed up its amusement park portfolio; the sites are priced for lower-income households but draw high volumes.

Last March, CIE reopened the refurbished Mexico City racetrack, the Hipodromo, which drew 750,000 visitors in its first year. Visitors can spend for high-end dining or pay just 10 pesos (a little over $1) to see the races.

It has now shifted its focus to developing a $350 million hotel-convention-entertainment-shopping center adjacent to the track, for which CIE and partner Mexican financial conglom Inbursa will pony up $130 million.

It has expanded its convention and expo business, which complements the vagaries of the live entertainment biz, providing steady cash flow, according to COO Gonzalez Calvillo.

Indeed, though CIE will break Mexican concert records in the first quarter, the credit is largely due to the likes of Jon Bon Jovi, Sting, the BackStreet Boys and Christina Aguilera, as last year saw few big international tours.

And, in a major step towards redefining its mission of providing entertainment outside the home, vs. live events, CIE teamed with Inbursa to form a film subsid, which produced three hit pics last year: “Amores Perros” (Love’s a Bitch), “Todo el Poder” (Gimme Power) and “Por la Libre” (By the Free Road).

Synergy across mediums

The film operations complement the theatrical, enabling CIE to employ a stable of actors working in various genres. Gonzalez Compean is acquiring rights to plays that will appeal to cosmopolitan urban auds in Madrid, Mexico City and Sao Paolo.

Musicals are still key (and CIE has invested in institutes and academies to nurture talent). Yet CIE has staged edgier fare, such as “The Vagina Monologues”, which ran for several months in Mexico City.

It is putting its mark on “Jesus Christ Superstar”, licensed from Andrew Lloyd Weber’s London-based Really Useful. Bowing March DAY, the new “Jesus” features original staging and choreography, and a look that suggests Baz Luhrmann’s “Romeo + Juliet” more than the ’70s hippie classic.

Gonzalez Compean foresees two big productions, plus four to six smaller ones, in Spain and Mexico each year, while bringing one big show and two to three smaller productions to Argentina and Brazil. It’s a theatrical strategy that mimics that of concert promotion.

“For the rights sellers, we can give them the four major markets in one fell swoop,” while providing a touring structure for actors and production economies of scale, says Gonzalez Compean, who is weighing the possibility of entering the U.S. market with his Spanish-lingo productions.

The likely first candidate is “Man of La Mancha,” perhaps as soon as year end 2002.

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