Cirque du Soleil’s next act, the Wall Street Journal reports, will be rebalancing the business:
Cirque du Soleil grew out of Montreal’s street performer scene in the 1980s, helped by early government funding as banks were reluctant to support the band of fire eaters, stilt walkers and clowns. The company’s reinvention of the traditional North American circus — creating theatrical spectacles drawing on Russian and Chinese influences and commedia dell’arte — proved popular on foreign tours. Revenues skyrocketed after a particularly favorable Las Vegas casino deal.
By the end of 2011, Cirque had 22 shows — seven of them in Las Vegas. It had built a 388,000 square foot headquarters in Montreal, much of the building taken up by the costume department that outfits performers in fantastical hand-painted clothes.
Near the peak of the company’s revenues, in August 2008, Mr. Laliberté agreed to sell 20% of the company to Dubai government-owned real estate companies for $545 million, pocketing around $275 million at the time, according to a person familiar with the matter.
But the rapid expansion masked deeper troubles at Cirque. The 2008 transaction valued Cirque at $2.7 billion; five years later, Mr. Laliberté took back a portion of Dubai’s stake at a price that suggested Cirque’s value had declined around 20% to $2.2 billion.
Cirque continued to expand even as the recession cut into demand.
Cirque premiered 20 shows in the 23 years from 1984 through 2006, none of which closed during that time other than its first few. Over the next six years it opened 14 more shows, five of which flopped and closed early.