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O império do entretenimento e do lazer: como o Cirque du Soleil pode enfrentar o futuro pós-Covid?

Helena Araújo Costa

Gustavo do Prado Afonso

Walkiria Maria Capucho Truss

Graziela Miranda de Azevedo Rodrigues

Ana Vitoria Muniz Bokos


This case aims to present information about Cirque du Soleil history and discuss the context of this entertainment Empire until the sudden decline of the company in 2020, when the company filed for bankruptcy protection in Canada and United States. Three central aspects about the business conduction and environment are identified and analyzed to understand possible reasons why the company found itself in a difficult situation. At the end, questions are posed for discussion wondering about the future of the company in a new and challenging environment of post Covid-19 pandemic that invites the participant to think about strategy and branding.


Este caso tem como objetivo apresentar informações sobre a história do Cirque du Soleil e discutir o contexto desse império do entretenimento até o repentino declínio da empresa em 2020, quando a empresa entrou com pedido de recuperação judicial no Canadá e nos Estados Unidos. Três aspectos centrais sobre o comportamento e o ambiente empresarial são identificados e analisados para compreender os possíveis motivos pelos quais a empresa se encontra em uma situação difícil. Ao final, são feitas perguntas para discussão sobre o futuro da empresa em um novo e desafiador ambiente de pós-pandemia Covid-19 que trazem o participante a refletir sobre estratégia e posicionamento de marca.

1. The Company History: from street performance to the entertainment industry benchmark

In 1984, Guy Laliberté, Daniel Gauthier and Gilles Ste-Croix, former street performers from Baie-Saint-Paul, cofounded the Cirque du Soleil, which would become one of the biggest entertainment companies in the world.

The company started with a show funded by the Canadian government, in 1984, for the 450th anniversary of the country. The production was a huge success and the Cirque got defined as the contemporary circus, because they didn’t use any animals and had a huge emphasis on music, costumes and amazing scenography.

Cirque du Soleil expanded rapidly through the 1990s and 2000s, growing from one show to 19 shows in over 300 cities on every continent in the world. Employing 4.900 people from 50 countries and generating an annual revenue of approximately US$1 billion. With permanent shows in Las Vegas watched by more than 9,000 people a night added to over 100 million people who watches Cirque du Soleil shows worldwide.

Daniel Gauthier and Gilles Ste-Croix left the company in 2000. In the same year Daniel Lamarre was brought to manage the company, and he was made CEO in 2006. In 2015, Laliberté sold 90% of his stake to a U.S. private equity firm named TPG Capital and a Chinese investment group called Fosun, but still kept 10% of the company. The company's creations have received numerous prizes and in February 2020, Laliberté sold his remaining 10% stake in the Company to Quebec pension fund CDPQ.

The Entertainment industry has Cirque du Soleil as a great business case and a bechmark. While competing indirectly to other entertainment sectors such movies, concerts, museums, parks and zoos, the company is positioned at the performing arts industry’s niche, offering live artistic spectacles. This niche is known to reach consumers from a variety of demographic groups (age, income, location), and observe irregular cash flows due to seasonal and fluctuating attendance.

Cirque is worldwide known as a modern circus model, using international sophisticated elements from theaters, combining acrobatics, music and dance in its shows. Even for Broadway musicals have become a strong reference. The final product has demonstrated a strong appeal to higher class audiences. In 2012, Christa Carone from Forbes Magazine described Cirque as a consistently remarkable brand, highlighting its success performing in 2012 Oscars, and the Iris spectacle in the same period, which set the record for ticket prices at Los Angeles’ Kodak Theatre with a $253 ticket.

The company pioneered this marketing strategy and found significant growth while exploring its possibilities without direct rivals. Over time, proven success attracted competitors to launch their own companies based on this concept, attracting attention and being reproduced in some level. As example, former Cirque’s executives Franco Dragone and Normand Latourelle, left the company and launched Franco Dragone Entertainment Group in 2000, and Cavalia, Inc. in 2003, respectively.[1]

2. The empire current challenge: bankruptcy protection in 2020

Coronavirus Pandemic affected several industries in the world since its first appearance in 2020. Tourism, travel, entertainment and big events were hugely affected. Cirque Du Soleil didn’t escape from the situation.

The pandemic had already strongly hit Asia (China, Japan, Korea) and was scaling around the world, affecting Europe, North America and reaching South America by March 2020. On 21st January, the first case of Covid-19 infection was registered in the United States. The first case of death of the disease in the country is considered to happen February 6.

On 3rd March, Cirque du Soleil published a press release announcing the launch and sales opening of Drawn to Life, a spectacle taking place in Walt Disney World Resort, Lake Buena Vista, Florida. However, on 13th March, Cirque published the suspension of touring shows throughout several regions in the world. Two days later, the resident shows of Las Vegas were announced to be suspended. Finally, 17th March, the recently launched Drawn to Life Show in Florida was temporarily suspended.

On 29th June 2020, Despite the seemingly successful brand, Cirque du Soleil has filed for bankruptcy protection under the Companies’ Creditors Arrangement Act (“CCAA”) in Canada and Chapter 15 in the United States. Only three months after canceling dozens of shows worldwide due to the Covid-19 Pandemic which hit strongly the entertainment sector globally the company decided to take this remarkable step.

"For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization. However, with zero revenues since the forced closure of all of our shows due to COVID-19, management had to act decisively to protect the company's future”[2] said Daniel Lamarre, president and CEO of Cirque. He ends the speech saying “I look forward to rebuilding our operations and coming together to once again create the magical spectacle that is Cirque du Soleil for our millions of fans worldwide.”

At that time, the group had terminated 3,500 employees (95% of its workforce) and had racked up nearly $1 billion in debt.

3. Aspects that leaded the Company to the bankruptcy protection in 2020

This situation happened due to a confluence of factors. Among them, three could be highlighted as possible reasons.

a. The Coronavirus Pandemic

The company blamed its bankruptcy on the forced show closures needed as a response for the Covid-19 pandemic. Their directors are aiming to restructure its debt with assistance from the government and private equity firms.

The filing happened three months after the suspension and the first reason for the bankruptcy situation is the fact that Cirque weren’t receiving any revenue. Because of it the company didn’t have money to keep its ongoing financial obligations.

b. Heavily indebted before pandemic

Even before the pandemic struck, Cirque du Soleil was indebted after some acquisitions aimed at diversifying its business operations beyond the live spectacles it's known for around the world and to accelerate its growth.

These acquisitions helped increase revenues from USD $882 million to USD $1.04 billion at this point. On the other hand, it was estimated that the company owed creditors around $900 million during that period. A report from Ernst & Young showed that the company’s net loss gradually increased from USD $10 million to USD $80 million from 2017 to 2019.

Cirque du Soleil CEO Daniel Lamarre said the company's profits totaled about USD $155 million in 2019, but that amount doesn’t factor in interest, taxes or depreciation. By the end of March 2020, the company’s various debts summed up nearly USD $1.6 billion, according to a document filed with the Superior Court of Quebec.

c. Financial responsibility X lack of understanding about Cirque du Soleil as a corporation

The Cirque consistently tried to keep its humble and creative roots. It was usual to have a clown in business meetings in order to avoid a serious atmosphere. Daniel Lamarre once remarkably said: “If we start thinking like a corporation, we are dead! Our environment needs to stimulate our people”[3].

Although there is an apparently contradiction for a company with 4,000 employees which does not see itself as a corporation. In some sense, this understanding of the business could be on the way of one of its own values, financial responsibility.

Since the early years, when the group was not yet what it is nowadays, the three founders - Guy Laliberté, Daniel Gauthier and Gilles Ste-Croix – faced troubles. The first show they performed, Les Échassiers de Baie-Saint-Paul, was a financial failure. At that moment they learned that a show could not work if it was not profitable. Besides the second one, La fête Foraine, was a mix of workshops and performances, made some financial success in the years that were produced, they should have been prepared for a possible problem in the future.

Despite that, already in 1985, in the first performances outside Quebec, they had a deficit of $750,000. They had no expertise on traveling with the group at that time. Some of the debts were covered by Desjardins Group and another founding by Quebec government, by representations of Daniel Lamarre for free. This allowed the Cirque to keep touring on 1986. In 1987, they made more than $1.5 million in profits on presentations at the Los Angeles Arts Festival.

During 1988 and 1989 they traveled through Canada and the United States, but at the end of that year the company found itself lost again and there were some managing conflicts between its leaders, however, from 1990 to 1999, with a different creative team, the following tour the shows were acclaimed and prosperous.

In the year of 2000 many changes happened, Gilles Ste-Croix and Daniel Gauthier had left the company, and Daniel Lamarre was bought by Laliberté to be the manager. Cirque du Soleil, at this point with almost 2,000 employees, decided to have an expert dealing with the Information Technology and Knowledge Management (IT e WM), but they didn’t consider IT critical to the success of the organization, for them creativity, imagination and inspiration had the main role in the company.

During the following decade, Cirque du Soleil was going to be present in the European, Asian and Pacific markets showing great expansion. So, Cirque du Soleil from the very beginning until their great decade, that was 2000 to 2010, had a rapid growth with glory and failures. For example, they are know for its tailored-made solutions, complex logistics and little documentation about their processes[4]. At the same time, the company was keeping competitive advantages from the competitors and building a renowned brand.

The main worry of Lamarre was the brand’s value, as said in an interview in 2011 “My main concern is remaining a relevant brand because what scares me is that one day, a kid somewhere wakes up with a great idea that will make us look like une chose du passé (a thing of the past). That’s why we are investing a lot of money in research and development so that we remain on the leading edge all the time.”[5]. All this effort is put for keeping its striking feature: taking care of the customer experience, imagination and delight[6].

4. Restructuring the company: investments and commitments

For restructuring the company’s, the current shareholders (TPG Capital, Fosun and the Caisse de depot et placement du Quebec) have agreed in June 2020 to invest USD $300 million and take over Cirque's liabilities, including to ticketholders affected by the shows that were cancellated and provide financial support for 3,500 laid-off workers. While a Quebec government structure will provide USD $200 million in debt financing.

The involvement of Investissement Québec requires the investors to commit to keep the company's headquarters in Montreal and also under the terms of the deal, the investors are also committing to maintain key company leadership positions in Quebec and rehiring as many Quebec-based workers as possible. The top financial commitments were:

• $15 million in financial help for 3,500 laid-off workers.

• $5 million to settle outstanding contracts (especially Quebec-based contractors).

• Refunds for shows cancelled because of the pandemic.

The company successfully took a stalking horse agreement in July 2020. This purchase agreement usually happens to companies facing bankruptcy process, looking to auction the company. Expecting low price offers from investor, the company choose an investor willing to be the first to offer and negotiate a reasonable base price and conditions for its sale. The company offer better conditions to the first investor, hoping the others would offer better investments in the auction.

Lamarre told Radio-Canada in June 2020 that five other groups have expressed interest in the company. The company's co-founder and former CEO, Guy Laliberté, who sold his controlling stake back in 2015 for $1.5 billion was also interested on the company.

By the end of this bumping year, on November 2020, Cirque du Soleil Entertainment Group confirms closing of sale transaction with its secured lenders and emergence from creditor protection. The transaction provides the Company with a solid foundation for a successful relaunch. The new owners also agreed to maintain Daniel Lamarre as the CEO of Cirque du Soleil Entertainment Group, and its headquarters in Montreal.

They believe Cirque du Soleil is a great brand, as Lamarre always worked for, even with massive debts, it is still perceived as creative, innovative, and able to enchant audiences, able to recover the investments made in it.

6. Questions for debate

a) According to the facts mentioned, share your perspective about which problems have contributed more for the current crisis.

b) Which competitive advantages Cirque du Soleil has built over time?

c) How can Cirque innovate and adapt its business model and products to the pandemic circumstance?

d) Identify and describe one competitor of Cirque du Soleil. Then analyse how the pandemic affected the company and how it has dealed with the circumstances.

e) Suggest two strategies the company should follow to thrive its business for the future and keep a relevant brand.


CIRQUE DU SOLEIL. *Cirque du Soleil entertainment group announces comprehensive plan to restart business.* Disponível em: Acesso em: 24 de nov. 2020.

CIRQUE DU SOLEIL. *Cirque du Soleil entertainment group confirms closing of sale transactions and emerge from creditor protection*. Disponível em: Acesso em: 24 de nov. 2020.

CIRQUE DU SOLEIL. *Cirque du Soleil history*. Disponível em: Acesso em: 24 de nov. 2020.

FORBES. *#1851 Guy Laliberté*. Disponível em: Acesso em: 25 de nov. 2020.

GHAZZAWI, ISSAM & MARTINELLI, TERESA & PALLADINI, M.. (2014). *Cirque du SOLEIL: An innovative culture of entertainment*. Journal of the International Academy for Case Studies. 20. 23-46. Disponível em: Acesso em: 05 de mar. 2021.

JOBIN, Marie Helena & TALBOT, Jean. *Tour Planning at Cirque du Soleil*. The International Journal of Case Studies in Management (HEC Montreal), vol 9, issue 1, 2011.

MONPETIT, Jonathan. *Global circus company Cirque du Soleil files for bankruptcy protection*. Disponível em: Acesso em: 25 de nov. 2020.

OFOLETA, Kalechi C. *A Cirque du Soleil Business Case study Analysis*. Disponível em: Acesso em: 28 de nov. 2020.

RIFKLIN, Glenn. *How Cirque du Soleil’s Daniel Lamarre Sends in the Clowns*. Briefings on talent & leadership, Korn Ferry Institute, USA, Q2, Issue 6, p. 46-57, 2011.

ROJAS, John-Paul Ford. *Coronavirus: Cirque du Soleil axes 3,480 jobs - but plans to rehire most.* Disponível em: Acesso em: 25 de nov. 2020.

AAKER, Jennifer & JOYCE, Sarah. *Cirque du Soleil: Cultivating Creativity and Designing to Delight.* Stanford Business Graduate School, 2013. Disponível em: Acesso em: 24 de nov. 2020.

[1] GHAZZAWI, ISSAM & MARTINELLI, TERESA & PALLADINI, M.. (2014). *Cirque du SOLEIL: An innovative culture of entertainment*. Journal of the International Academy for Case Studies. 20. 23-46. Disponível em: Acesso em: 05 de mar. 2021.

[2] CIRQUE DU SOLEIL. *Cirque du Soleil entertainment group anounces comprehensive plan to restart business*. Disponível em: Acesso em: 24 de nov. 2020

[3] AAKER & JOYCE (2013)

[4] JOBIN & TALBOT (2011)

[5] RIFKLIN (2011)

[6] AAKER & JOYCE (2013)

Este caso foi escrito a partir de informações disponibilizadas pela empresa, disponíveis na mídia e/ou com base em outras referências citadas. Não é intenção dos autores avaliar ou julgar a empresa em questão. Este texto é destinado exclusivamente ao estudo e à discussão acadêmica, sendo vedada a sua utilização ou reprodução em qualquer outra forma. A violação aos direitos autorais sujeitará o infrator às penalidades da Lei Nº 9.610/1998


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