A man and woman walk by the Cirque du Soleil Big Top in Montreal's Old Port, Saturday, March 21, 2020, as COVID-19 cases rise in Canada and around the world. Cirque du Soleil Entertainment Group says it has completed the sale company to a group of its creditors led by Catalyst Capital Group.Graham Hughes/The Canadian Press
Cirque du Soleil Entertainment Group is eyeing a restart of its shows as early as next spring as it tries to rebuild a business shattered by the coronavirus pandemic.
The famed circus troupe confirmed Tuesday that the sale to Catalyst Capital and a group of roughly 15 other senior creditors is complete and that it has emerged from bankruptcy protection. Daniel Lamarre will continue to steer the company as president and chief executive officer under a revamped board of directors, while Cirque’s headquarters will remain in Montreal.
“Depending on how wide the [COVID-19 vaccine] distribution will be, I would hope to open some shows late spring or early summer for Las Vegas and Orlando,” Mr. Lamarre said in an interview, calling those live shows key to short-term profitability. “So 2021 is a year of relaunch. … By 2022 I hope to be back to profitability and back on track.”
Cirque filed for creditor protection on June 30 in Canada and shortly afterward in the United States after revenue fell to nearly zero in the spring. The company, which depends on big crowds paying often big sums to watch its acrobatic live shows, shut down 44 productions and laid off 4,679 employees on March 19 to comply with government-mandated bans on public gatherings.
Five months later, the entertainment giant is controlled by its creditors, who bought Cirque in a transaction valued at about US$1.2-billion, including a US$375-million injection of new money and the elimination of about US$900-million of debt. Quebec’s Economy Minister has called the outcome “sad” and said Catalyst is “not aligned” with the interests of the government, reflecting its unease with how things have turned out for one of the province’s top cultural institutions.
But Mr. Lamarre was upbeat about Cirque’s prospects. He said the new owners believe in the brand and are committed to making it work. A successful revival hinges on two main strategies, the CEO said: building on its Las Vegas presence and launching new digital products that can be monetized.
First, the company is increasing its bet on Las Vegas, where it has permanent shows. Through the coronavirus crisis, Cirque management signed commitments to extend existing performance contracts by another nine years with casino operator MGM Resorts and another 10 years with Phil Ruffin’s Treasure Island hotel and casino, Mr. Lamarre said.
Cirque’s new co-chairman, Jim Murren, is a former CEO of MGM and will play a key role as Cirque deepens its presence and relationships in the city. Before the pandemic, the company counted on its partnership with MGM for about 35 per cent of its US$950-million annual revenue, according to a Moody’s Investors Service estimate.
Second, Cirque will push into a new digital offering, Mr. Lamarre said. Catalyst managing director and partner Gabriel de Alba, Cirque’s other new co-chairman, will bring his knowledge and contacts in the entertainment field to this effort, the CEO said.
Cirque has tested several digital content concepts in recent weeks, including its acrobats giving fitness tips and its artists providing advice on makeup application. “I think it’s limitless in terms of what we can have in terms of content,” Mr. Lamarre said. “But we just have to understand better what consumers are looking for” and what they’re willing to pay.