Company bets $500 million on multi-city bows

MONTREAL — Nobody’s getting much sleep at Cirque du Soleil these days.

Over a five-week period this fall, Cirque will be opening a productions in Macau, Las Vegas and Tokyo, at an estimated total cost of close to $500 million. That’s a giant leap forward for an organization that began by mounting one new show every two years.

  • First up on Aug. 28 is “Zaia,” Cirque’s Asian production bowing at the Venetian Macao Hotel. Theater/film director Gilles Maheu oversees this journey of a young woman through space.

  • “Criss Angel Believe” opens Sept. 12 at the Luxor in Vegas. It represents a rare instance of Cirque uniting with a solo performing artist, in this case, illusionist Angel.

  • On Oct. 1, “Zed” arrives at the Tokyo Disney resort, with filmmaker Francois Girard creating a show based on Tarot card characters.

By the start of November, there will be 17 different Cirque du Soleil productions performing around the world; by the end of 2010 that number will rise to 23.

There’s a lot of money and a lot of artistic reputations on the line and — with the global economy proving unpredictable these days — there’s literally no margin for error.

A situation like the delays and budget overruns that plagued Robert Lepage’s production of “KA” in 2005 — which opened nearly six months behind schedule and a rumored $40 million above the planned cost — would be disastrous on Cirque’s current frenetic schedule, not to mention in today’s economic climate.

On the other hand, Cirque has proven reliable, against the odds. At a time when Las Vegas is feeling the economic pinch and gambling is down 3%, Cirque’s five resident Sin City productions (with a collective gross potential of $10 million a week) are running 8% ahead of 2007.

A tight-knit executive triumvirate is key to the company’s strategy.

“There are only three people who are involved with every show we do,” says Daniel Lamarre, prexy-CEO of Cirque du Soleil. “Guy Laliberte, Gilles St. Croix and myself. Management here has stayed very tight and very stable.” Laliberte founded the company, while St. Croix serves as VP of creation.

The individual creative teams for each show work independently, reporting only to the troika at the top. There are currently 250 creators (not counting cast and technicians) working on nine shows.

“It takes three years from conception to opening to bring a Cirque show together,” Lamarre explains. “Each creative team is built like a little cell, and no one can interfere with what they do. Creators need freedom.”

But it’s not a case of maverick personalities running their own shows. “Guy gives every director a clear mandate based on where the show is opening and what he expects it to accomplish,” says Lamarre. “He gives them financial perimeters and artistic perimeters and then allows them the freedom to create.”

Because each show has a fresh creative team, a different central theme and varies the lineup of acts, the Cirque toppers appear untroubled by the threat of over-saturation or public fatigue with the omnipresent and much-imitated brand.

And while Vegas has proven to be a difficult market for narrative-based Broadway musicals, the Cirque model remains a perfect fit for an audience for which the theater component is merely one part of an intensive leisure package.

From being a destitute street performer in 1984 when he founded Cirque, Laliberte’s fortunes have soared with the organization’s, especially after he bought out virtually every other partner and now owns 95% of the company. Last year, Forbes estimated his personal worth at $1.5 billion.

Recently mounted permanent shows have been pricey, with “KA” coming in at $220 million, “The Beatles Love” at $175 million and only the smaller-scale, X-rated “Zumanity” hovering just under $100 million.

But all of the shows have recouped “within a year or two,” says Lamarre, “except for ‘KA,’ which took a little longer.” After recoupment, he continues, all shows are budgeted to break even at 50% of capacity.

It means that on weeks when “O” or “Love” is selling out (as they still frequently do) more than a million dollars of profit from each show could come back to Cirque. Take “Mystere,” which has been running since 1993. When Lamarre says, “It’s having its best year ever,” it begs the question of how many times over the show has repaid its original $20 million cost.

Cirque has also reconfigured some of its older tent-style touring shows to play in giant arenas that more frequently host rock superstars.

The company’s initial venture into that market, “Delirium,” was No. 6 on Billboard’s top-grossing tours for both 2006 and 2007, pulling in $138 million over 24 months.

The North American tour of “Saltimbanco” that began this year “has opened 100 new markets on North America to us,” according to Lamarre. “Financially, it’s a very good business model.” That show opens in Europe in 2009, where Lamarre predicts it will generate a further 100 new markets.

The bottom line is that Cirque’s gross revenues have climbed from $550 million in 2005 to $630 million in 2007. Unsurprisingly, the company has been the subject of numerous takeover rumors, including an investment consortium from Dubai that supposedly put $2 billion on the table in recent weeks.

“I hear these reports every day,” sighs Lamarre. “The simple fact is Guy doesn’t want to sell. One day we may have a strategic alliance, but not yet.”

Plans for the next two years are as ambitious as 2008’s have been. In 2009, a new touring show will open in Montreal, a second resident show (this one variety-based) will open in Macau and an Elvis Presley project will be the opening attraction at the new Las Vegas City Center.

The following year will bring a movie-themed show at the Kodak Theater in Hollywood, one at the Palm Resort in Dubai and a touring version of the Elvis show to play Europe.

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