Bankruptcy Looms Large for Beloved Cirque du Soleil

Las Vegas fixture Cirque du Soleil is in a world of financial hurt, and closure of all its shows due to the coronavirus—44 productions in all—is likely to lead to the company filing for bankruptcy protection.

Moody’s credit rating service recently downgraded Cirque du Soleil’s rating to “Ca” (Moody’s second lowest rating) meaning Cirque is already in default on its loans, or soon will be. Moody’s has also said Cirque has “limited prospects for a tenable capital structure” following a stretch of what’s expected to be steep losses in 2020.

Cirque du Soleil is rumored to be more than $900 million in debt.

In late March 2020, the company abruptly laid off 4,679 people, or about 95% of its employees.

Cirque du Soleil

The “Sun Circus” is experiencing a partial eclipse.

The awkward fact is Cirque was in trouble prior to the coronavirus outbreak.

The culprit? Leveraged loans.

A leveraged loan is one given to companies with a lot of existing debt or a poor credit history. Leveraged loans have a higher interest rate than typical loans.

Insiders share Cirque began to lose its way with ownership and leadership changes following the sale of the company in 2015 to three investment groups, including TPG Capital, for $1.5 billion. Those risky leveraged loans made the sale possible.

The company’s founder, Guy Laliberte sold 90% of Cirque in 2015 for $1.5 billion, then sold his remaining stake in Feb. 2020.

The new owners reportedly pivoted Cirque toward being an analytics-driven culture, which is pretty much the best way to suck the souls from creative people. You know, the ones who made Cirque the entertainment juggernaut it had become.

Beyond taking on risky loans, Cirque’s leadership made a number of expensive decisions, leading to a string of massive losses.

The company is rumored to have lost $30 million its touring shows in China, $20 million on its NFL Experience in New York City and a whopping $70 million on the disastrous “R.U.N.” at Luxor in Las Vegas. “R.U.N.” closed on March 8, 2020, after just a few months. Read more.

RUN

We feel just terrible about this graphic. Which apparently didn’t keep us from sharing it. Do you know this blog at all?

In an attempt to cover its losses, Cirque reportedly cut marketing and creative budgets, which hurt attendance. As a result, the company raised ticket prices and feed, which further hurt attendance.

All eyes are on Cirque’s CEO Daniel Lamarre. Lamarre is the one who unceremoniously fired pretty much everyone at Cirque via video in March.

Jumping ship just before the fecal matter hit the fan was the company’s COO, Jonathan Tetrault.

Hear more about Cirque’s financial straights, and leveraged loans, on the Wall Street Journal podcast.

What does this mean for Cirque’s shows in Las Vegas? As with so many things right now, it’s “fluid.”

It seems likely theaters and other venues where crowds gather won’t open until after casinos and hotels do. That’s going to put additional pressure on Cirque du Soleil.

Cirque is no doubt scrutinizing its shows to determine which, if any, might need to go. We’ve talked to Cirque du Soleil insiders and hear the company’s touring shows may not come back, at least in the foreseeable future.

Of its Las Vegas shows, sources say “Zumanity,” “Love” and “Ka” are candidates for the chopping block.

Zumanity 69

We are not making this up.

Cirque du Soleil has become so intertwined with Las Vegas, it’s painful to hear about the company’s financial struggles.

From what we understand, Cirque’s ticket sales are still respectable. The company makes about $120 million a year in Vegas alone, and average occupancy sits at about 70% from what we’re told.

It’s worth noting several of the Cirque productions in Las Vegas are decades old. For example, “Mystere” at TI is nearly 30 years old.

For the sake of its artists and technicians, and the myriad individuals and companies dependent upon Cirque du Soleil, we hope Cirque can find a way to return to its roots, and a stronger financial footing, once again.

Las Vegas wouldn’t be Las Vegas without Cirque du Soleil.

41 thoughts on “Bankruptcy Looms Large for Beloved Cirque du Soleil

  1. FYMYAWF

    Axing Ka and Zumanity i get, but LOVE? I’ve seen it 4 times and it’s always had a good crowd. And wouldn’t there be licencing penalties to walk away from the Beatles business entity? Does that stuff get washed away in bankruptcy? I don’t know all the business ins and outs of it. Sure would suck to see it go.

    Reply
    1. Roy Rendahl

      I didn’t like KA, never saw Zumanity, and loved LOVE but their licensing payments to the Beatles might factor into that decision. (And I also loved O and liked Mystère.)

      Reply
    2. aryes

      LOVE has had some very bad attendance the last year. They have even cancelled shows at the last moment due to them not selling enough tickets. I don’t know when you saw the show last but it looks to have suffered quite a few cutbacks. Of all of Cirques shows here it would be no surprise if it will be the first to go. The royalties are also very high.

      Reply
  2. Randy Clark

    As a retired commercial credit professional, from what you’re reporting, I envision a future Chapter 11 Bankruptcy case filing in the near future. The Chapter 11 filing will allow them to continue to operate under the protection of a federal court order. They could reduce their operations as needed and possibly restructure those high leveraged loans, to lower interest rates, so the lenders might get some return. If the lenders won’t cooperate, then a Chapter 7 Liquidation bankruptcy filing/conversion can’t be far behind.

    Reply
  3. Steve Martini

    Just like “Vegas won’t be Vegas” without Lido de Paris, Follies Bergiere, They’ve Cirqued us to death.

    Reply
  4. Bill

    Look for the person with the perfect timing Guy Laliberte to buy it all back for pennies on the dollar.

    Reply
  5. Roy Biggins

    I don’t know 10 things about business, but here’s my simple-minded analysis of why CdS collapses.

    When a company is built upon a vision or dream, and it succeeds, it may not last forever, but the businessperson who founded it takes pride in it. Sometimes that person’s pride is easily sold out for fat stacks of greenbacks. Sometimes that person’s pride is the guiding force for decades.

    When the company is sold to investment groups, the groups don’t care about the history, the pride or what made it unique. The investment group isn’t happy with simply holding its market share, adapting to changing trends and investing in longevity, when no such longevity is promised. (Did you own a pay phone business in 1985? How did that work out?) Investors want a return on their investment, every year, and they want to know that the value of their investment is growing, and that when they cash out, they have made a ton of money on the investment at the point of sale.

    That’s all great. The problem is that not every business, especially show business, can simply grow its market share at the will of the ownership. And often expenses are cut to ensure that the profit margin grows. The founder of the company may know who the longtime employees are and how much they sacrificed in the tough times to build a successful business. The investors have no clue, and don’t give a damn how hard anyone worked for two or three decades.

    And when it comes time to sell, you trim anything that might be fat, make your company look as lean as healthy as possible and cash out for top dollar. And guess what, the next investment group that comes along has probably been in the game, and knows its smarter than the previous ownership. The new ownership doesn’t buy a company and then look to dump millions or billions of dollars into the company for the long-term viability. Hell no. They’re so smart, they can squeeze more juice out of the same oranges. And the downward spiral is underway.

    I wouldn’t say that selling out CdS automatically doomed the company, but selling a man’s life work to an investment group is a recipe for mediocrity, I’d argue. Investors want to be paid immediately for doing nothing more than tying up their cash. All those people who have made the company a success: Eff ’em.

    And by coincidence CdS has stumbled the past five years, to the point where a major economic disruption quickly cripples the company.

    And yes, there are exceptions to every rule, so I don’t care if you can point to Coca-Cola or a billion other corporations that return cash year after year to the “investors.”

    I’ve watched “investors” wring the last drop of blood out of the turnip factory I have worked at for 20+ years. They weren’t the sole reason the company spiraled down the toilet, but they helped plunge it down.

    Reply
    1. John

      I worked for cirque du soleil for 3 years. I come from an original 5 generation circus family in America. I quit one of the touring shows after only months after becoming an assistant head of a department. Someone asked me 1 day how are you doing? I said I am miserable. She said, why? I told her there was no heart in any of this and it feels like a giant machine run by some kind of aliens or robots. I got out and everyone thought I was crazy. I wonder how it would have gone without Corona virus…

      Reply
      1. Anonymous

        I feel exactly the same man. I come from a circus family too and after 3 years I decided not to prolong my contract anymore which would end in march.. all my circus friends can’t understand it, thinking soleil is all that. They can’t imagine how it really is.. right after I decided the coronavirus hit.

        Reply
    2. Mack

      Couldn’t have said it any better. Well written, Roy! This comes from someone who put 20 years of sacrifice into Cirque’s success. Almost one year before COVID-19, the ‘investors’ decided to do the exact trimming you described. You are also quite accurate, in the lack of regard the decision makers have for those who make the shows what they are.

      Reply
    3. Todd

      You just described the fate of many companies. The original people who had vision, passion, and wanted to accomplish something worthwhile are eventually replaced by people who only care about the finances and “maximizing shareholder value”. That’s the beginning of the end.

      Reply
  6. Andrew

    I feel sorry for performers but honestly speaking I’ve always considered any Cirque show like dropping money in a garbage bin. So long,i won’t miss you. Now get rid of those ugly @ss facade billboards that make buildings look like a drive through menu.

    Reply
  7. WILLIAM WINGO

    To Andrew and Steve Martini: I saw most of the “old” shows (Lido, Splash, Folies, etc.) and then exactly one Cirque: the original “Mystere” at TI just after it opened. At the time, it was criticized as “un-Vegasy.” I never had any interest in seeing another. The proliferation of the Cirques is just one more aspect of the overall transition/decline of Las Vegas over the last 30 years.
    And to Roy Biggens: a great analysis, which also applies to other things in Las Vegas–and you didn’t by chance once run an airline in Nantucket, Massachusetts, did you?

    Reply
  8. Funkhouser

    Touring shows, doubt they will be missed. KA I would understand if it got its plug pulled. Zummanity (Poor Zummanity) is an edgy show that fits Vegas, one could argue the artistic entertainment value. I personally like it. Vegas needs more adult themed shows that aren’t XXX Rocks or have XXX in their name. Love is a masterpiece of 60’s pop culture. Yeah it might be getting a little long in the tooth, maybe a retooling needed. but how can you argue with the Beatles music. If all we are left with in Vegas is O, MJ One, and Mystere what a sad day for Vegas.

    Reply
  9. Sheila Michael

    What about upcoming “under the tent” shows scheduled for August in Tysons Corner , Virginia? ??? ABSOLUTELY NO WAY WIII BE TAKING A PLANNED BIRTHDAY GIFT OUTING FOR MY DAUGHTER ,( WHO HAS ALS … )AND HER FAMILY.( HER SON , A FAIRLY RECENT KIDNEY TRANSPLANT RECIPIENT. )….6 TICKETS ALREADY PAID FOR. .. would like a refund ……now !!!!!

    Reply
  10. Sheila Michael

    Would like to cancel tickets and of course get my money back !!! For August …under the tent in tysons corner Virginia. A little premature, i know.But family pre-existing health issues will Not allow it to happen for us ….have any and all medical paperwork to back up this request …anyone know how to steer me in the right direction to resolve this now rather than later? ???

    Reply
    1. alex

      Listen to the Anonymous suggestion and contact Cirque du Soleil. They are the only people with the power to help you. The opinions of people on a Vegas blog don’t matter.

      Just keep in mind that they are under no obligation to refund your tickets. You’re talking about a show four months away. Remember that four months ago, I don’t think anyone anticipated that practically the entire world would be in lockdown. So, we really don’t know what the country will look like in August.

      Reply
    2. JohnB

      Contact your credit card company and ask for the charge to be challenged. They will contact Cirque and if Cirque doesn’t respond, then you will get that amount as a credit.

      Reply
  11. Boulder Steve

    Feel Sorry for the employees but Vegas was Vegas before Cirque and will be after. Something else will fill the void. Cirque had a good long run. Longer than I expected. Personally I”m looking forward to something new.

    Reply
  12. Davy Lismen

    Daniel Lamarre received the order of Canada (highest civilian honor/status in Canada) for being the president of Cirque du Soleil. Can you believe that none sense?

    Daniel enjoys photo-ops with celebrities and heads of state from all parts of the world. He also collects a huge salary and benefits for running the company into the ground. He has been able to achieve his mastery of deception by keeping the many dedicated, talented and highly specialized artists and employees completely in the dark regarding Cirque du Soleil’s dangerous business practices.

    What was the end goal of the multiple corporate acquisitions, fast-tracked low budget new productions, and corporate demands for financial concessions from show staff and performers? Daniel and his executive management cronies wanted to sell the company and walk away rich just like Guy Laliberté did. Too bad for those hard-working artists and employees who generated the company’s immense revenues. Cirque du Soleil has either bought out or destroyed most of their competition, leaving few options to find work anywhere else.

    Only greedy businessmen are capable of turning the most successful live entertainment company in history into a debt-ridden trash pile. Way to go, Daniel and Cirque du Soleil management! You have managed to crush the hopes, dreams, and livelihoods of thousands of artists who had dedicated themselves to the company for decades.

    Reply
  13. Cirquester

    I have worked at Cirque for years and I am heartbroken to think of my colleagues and the extreme sacrifices they have all made for the company. I had believed that Cirque was different, that they really cared about their people. This virus is the eye opener that I needed to realize that Cirque is now no different from any other large corporation. People working at Cirque are just numbers on a spreadsheet, seen as nothing but disposable revenue generators. Our bosses do not have the decency to update us, or tell us if we will have jobs to go back to or not. They tell us nothing, because we don’t matter. Senior management is responsible for poor business dealings and poor handling of money. But they will be the ones who walk away with pockets full of cash while the rest of us will go home with nothing.

    Reply
  14. Circus boy

    Unfortunately cirque lost what they had of differential , cirque use to respect the artists and they had only the best ones and gave the artists the best conditions .
    Now cirque is just a factory is all about the number and the name .
    When Franco dragone decided to go and do his own company cirque dropped the standards a bit , when guy sold the Company it got really bad .
    Cirque should go back to its roots and instead of having 40 shows focus on doing 5 good ones .
    Is really sad if cirque closes it doors , I can’t imagine all those artists looses their jobs 🙁

    Reply
  15. olwen z

    YES VEGAS would be VEGAS, it was before Cirque, they have not been fair for soooo may reasons in my book, greedy. Maybe Vegas can get back to its own roots instead of French Canadian???? I would love to see a really amazing VEGAS show and back to cool lounge acts in smaller venues.

    Reply
  16. Jeff in OKC

    This is just another business deal that might not work out. Not the end of Cirque, or Las Vegas as we know it. Cirque was a money making business whose ownership decided to sell out, for whatever reason. Smart business investors decided they had a plan to buy it and increase revenue and profit. Their plans for success appear to be failing. Either through new products that were not popular, an unforeseen economic downturn, or some combination thereof.

    I will now engage in business news doublespeak:

    The Cirque company might be forced into BK, and investors would take a haircut of indeterminant length. Rest assured the new company will arise lean and mean, and ready for business!

    Reply
  17. Anonymous

    Been a technician on a Vegas Cirque show for 15 years.
    It was great early on. Back when the company actually cared about performers and staff. They did their best to try to make it actually feel like a family. There were maybe 10 shows max at the time, that they focused on and really paid attention to quality and morale. That’s how the company made billions of dollars.
    The company started expanding, getting into various industries that had nothing to do with the shows. Or doing shows that didn’t really fit with what Cirque was known for and good at. Those experiments failed and the company suffered. Every year when upper management would go around to all the shows, we would hear an assurance that the company was going to go back to focusing on the shows. And then it didn’t happen. Again and again. Pay for technicians fell more and more behind market rate. It didn’t even keep up with inflation.
    Then Guy sold off Cirque to investment companies. Everything started nose-diving. Budgets for the top-selling shows were cut by 20%, 40%, 60%. We did our best to keep up the shows, but quality went down. Performers were cut. Technicians were cut. Safety was cut. It’s amazing that no equipment had major failures, seriously I nursing anyone from the budget cuts. (The accidents you may have heard about were all simply accidents, not equipment failures from safety cuts)
    I was already so done with the company, I was looking for a new job before everything shut down.
    Any performer who does come back after the closures, please stay safe and don’t let the company try to force you to do anything that you don’t feel is safe. Technicians who return, don’t let management tell you to do something that you know is wrong or unsafe. It’s really not worth it.

    Reply
    1. Afraidtosay

      I’m an “old school” Cirque tech too. Very well said. I’m so disappointed to see this once wonderful company tanking. I can still see that idiot Lamarre standing onstage swearing that Cirque was not going corporate. What a load of crap! I’ve worked with some awesome people over the years. I still hold out hope of some kind of job when we come out of this, but my brain is telling me no. I’ve seen a bit in the news that Guy may come back on some level. That would be the best possible outcome.

      Reply
  18. Acro

    I am acrobat on a Cirque touring show. I work for 14 years with Cirque du Soleil but I also see the quality of shows going down in last few years. Also artists keep getting worse and worse pay and tour conditions. One year ago they tell us to accept less money for my work and also to stay in cheaper hotels and take cheaper food. I not surprised that they nearly go bankrupt. I will never believe a word Daniel Lamarre says again. Did he give up his pay? After layoff of all artists/staff with no pay? Ok Daniel now you must announce that you will stop being paid during coronavirus time. Stop to waste and steal company money NOW.

    Reply
  19. Ricky

    Of course now Daniel Lamarre and other “super” Cirque officials will blame Covid19, but Cirque had problems long before that. Financial problems is caused by incompetence of company management.
    This is not about regular artists or technicians or few professionals who wasn’t wiped out of the company, but more about how company evolved – “friends”, “girlfriends”, “boyfriends”, “relatives” taking positions they are incompetent in.
    Lowest position at Cirque du Soleil is artist, yes this is true, also if you are an artist you can’t build career there, you will be squeezed like a lemon and thrown away with all your experience and years at the company and you are lucky enough if you leave company healthy and uninjured. Schools for kids on tour was cancelled long ago, artistic expenses and salaries was cut as much as possible, artists “motivated” to rehears and perform two/three acts, which lead to more injuries and acts quality issues and even death.
    Artists have no rights, you can’t complain and you should always be positive and happy.
    Also, nothing about gay people, but you can’t become artistic director if you aren’t gay, as simply as that.
    Incompetence everywhere, from terrible artistic management to headquarters semi-gods. Incompetence of head management, reluctance to hear alternative opinions, greed, led the company to collapse. I’ve been working there for over 10 years and it is very sad.
    R.I.P Cirque du Soleil.

    Reply
  20. Johnb

    Vegas will be Vegas without Cirque? Are you kidding me? Cirque du Soleil has been on the strip for almost 28 years. That is 1.5 generations of people who saw a Cirque show. No other shows have come close to what Cirque shows offered. Cirque du Soleil brought respect and prestige to Vegas shows. Nothing will come close to replacing Cirque.

    Hopefully bankruptcy will bring sense back to the company. Maybe Guy LaLiberte will come back. Because the current management team has no clue in what they are doing

    Reply
    1. Scott Roeben Post author

      One more try: “Las Vegas wouldn’t be Las Vegas without Cirque du Soleil.” Please read thoroughly before commenting, thanks.

      Reply

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