Cirque du Soleil is Out of the Nightclub Business

Cirque du Soleil is accustomed to staging acrobatics, but this is impressive even for the famed artistic company.

In one fell swoop, Cirque has shed its ownership interest in Light and Daylight at Mandalay Bay, while Hakkasan Group also has ended its management agreement to operate the entertainment venues on the Strip.

Hakkasan, the preeminent nightclub company in Las Vegas, had previously been working in an operations agreement with Cirque at Light and Daylight. No more. The company issued a statement Tuesday afternoon announcing that it was finished running both clubs:

“Hakkasan Group and the ownership group of Light and Daylight at Mandalay Bay have mutually agreed to terminate their management agreement for both venues, as well as end all litigation between the two parties. Both Hakkasan Group and ownership wish each other well in the future.”

In June, the company MB BC Limited, a consortium of investors under the Cirque umbrella, sued Hakkasan. The group claimed that Hakkasan Group and CEO Neil Moffitt had gained a monopoly of Las Vegas nightclubs and had been diverting customers away from Light and Daylight (which, again, it was actually operating) and also had been luring DJs and promoters to work at Hakkasan clubs.

That litigation has now been settled.

Amid all this activity is the role Cirque had been playing as owner of the Mandalay Bay clubs. Word seeped out of the company in late August that Cirque had been bought out of its controlling interest in Light and Daylight by business partner The Yucaipa Companies (which, oddly enough, means that Light and Daylight are now owned by the same company who owns the Fresh & Easy Neighborhood Market chain).

The fallout of the change in operations at Light has already been felt: The chief reason the highly regarded rock musical “For the Record: Baz” moved out of Light was because of the ownership change at the club; “Baz” was staged in Light specifically because it was a Cirque Theatrical production in a Cirque-owned club.

Not anymore.

Why would Cirque shed its nightclub interests? It’s a relatively slim profit margin for the amount of work and organization required to effectively operate a nightclub on the Strip, and it is a highly competitive, often cutthroat business.

TPG Capital, which purchased controlling interest in Cirque in April, is said to have no interest in nightclub ownership. Today, Cirque officially announced that it is out of the nightclub business with a statement issued from its headquarters in Montreal:

“Cirque du Soleil is now completely focused on its existing live entertainment/shows and creating new live shows. We have decided to pull out of all hospitality projects to ensure that we stay focused on that objective. We therefore have no more business and creative links to Light and Daylight.

“We have concluded a very amicable agreement with Yucaipa. … Our priorities and initiatives in Las Vegas are targeted at focusing our marketing initiatives and priorities to reach more specific segments such as Millennials and other groups.”

Expect, then, a major rebranding of Light and Daylight in coming months. What remains unknown is if Cirque’s divestment in nightlife entertainment might stray elsewhere. The company has been a partner in the Rock in Rio USA event, which returns in May 2017.

If the event is to return, as expected, would Cirque still be willing to help stage a festival that lost tens of millions of dollars while trying to gain traction in its first year in the U.S.?

And what of the little musical left without a home? For the Record has been trying to find a venue for “Baz,” but if that theater/showroom/nightclub is not an MGM Resorts property — and the likely scenario is for a non-MGM Resorts home for the show — Cirque will end its partnership.

What remains obvious is that Cirque’s grand designs on operating a cool nightspot with the assistance of the city’s largest nightclub operator have reached last call. The party is over.

{ SOURCE: Las Vegas Sun | http://goo.gl/wYyCIj }