Cirque Du Soleil – the High-Wire Act of Building Sustainable Partnerships

Founded in 1984 in Quebec, the Cirque du Soleil is a traveling circus that mixes circus arts and street theater and features original music, special effects and spectacular costumes but no animal acts. Performed in one ring and exotically titled (e.g., Saltimbanco, Quidam, Varekai ), each Cirque du Soleil production centers around a unique theme and features spectacular theatrical effects by performers that are masters of clowning, stilt-walking, trapeze and other acrobatics, juggling, contortionism, mime, and other traditional circus arts.

Founded by Guy Laliberte, the circus began touring in 1985 and has grown into a multimillion-dollar entertainment empire. In 1993 the company premiered its first Las Vegas show; another show is regularly presented at Walt Disney World in Florida. By the early 21st century, Cirque du Soleil was presenting more than a dozen touring shows simultaneously worldwide.

The nightmare that was presented in the beginning on this case is the biggest threat Daniel Lamarre, Cirque du Soleil's (current) president and CEO, fears. Cirque du Soleil is insecure of its current position because Lamarre feels it's not as creative as it used to be. He fears that MGM Mirage will find a new, better and more creative partner for their new shows; he also fears that he will be the first to produce a bad Cirque du Soleil show.

One of the issues that Cirque du Soleil is worried about is the future of Cirque. Lamarre is looking for opportunity for Cirque du Soleil and has established criteria for all new developments. He is concerned if the partnership can be sustainable in long run, is there is a good return to be made, if there is a creative challenge, and will the partner stick to Cirque's social responsibility parameters? "With creativity as the cornerstone of its success, Cirque still had to ensure that its business model fit its strategy. Could the company support its spurt of new projects? With so many opportunities available, was Cirque truly entering the right markets? And would its new partnerships be as successful as the one with MGM Mirage?" (Cirque du Soleil, 2010)

Cirque had grown increasingly dependent on a few key creative individuals. In 1999, the growth strategy and the multiple productions had left the entire organization exhausted. Another problem that Cirque faced was that creative team members debated on topics such as royalty structures, creative control, and future artistic direction. In 2000, Franco Dragone and a few other creators left Cirque du Soleil. From that time on, laliberte made sure that the heart of Cirque's creative process was its organizations, not a particular group of people. As Cirque grew, they (always) were unwilling to compromise on quality or artistic integrity resulting them not to outsource any activity.

Cirque had rejected many opportunities when it could not maintain full creative control or when a creative challenge was not met. Cirque almost signed a deal with Columbia Pictures but Laliberte didn't stay long at the party for the joint venture because he realized that Columbia Picture just wanted to lock up their story and brand name, and walk around like they owned Cirque du Soleil. "Determined to keep their artistic and commercial independence, both (Laliberte and Gauthier) vowed to always remain a privately held organization and to choose their future business partners wisely and parsimoniously" (Cirque du Soleil, 2010). This is the reason why Cirque du Soleil stands where it belongs; it deserves the reputation and respect it had earned over the years.

Cirque du Soleil's main activities consisted of touring and resident shows. Cirque never abandoned its roots; it always toured from city to city. Its touring operations traveled across four continents and to more than 100 cities. This two-and-a-half hour show was performed an average of seven weeks per city, and depending on the city, top tickers commanded $100 and VIP packages ($200+). On the other hand, resident shows were always partnered with organizations that are willing to invest in the overall production of the show and theater; and these shows were stationed in tourist destinations that attracted tens of millions of tourists annually. Resident shows presented on average 10 performances a week, playing up to 48 weeks a years (versus 35-238 weeks for touring show). The ticket price averaged $150 for resident shows.

Cirque du Soleil's joint venture with MGM Mirage had several advantages for both firms. Cirque is very particular who they partner with, and Steve Wynn, owner of Golden Nugget, was their perfect partner because Lamarre's and Wynn's vision had parallel approach: high-end quality shows or casino/hotels/restaurant/clubs/etc. Cirque changed the circus industry and MGM Mirage changed the casino industry. "Unlike Caesars