Kelly: Why is Quebec bailing out the majority American-owned Cirque du Soleil?

There is an Alice in Wonderland quality to the Quebec government’s plan to bail out the Cirque du Soleil.

When Quebec Economy Minister Pierre Fitzgibbon announced earlier this week that his government was giving a US$200 million loan to the world-famous Montreal-based circus, he said they were doing this first and foremost because they wanted the troubled Cirque to remain under Quebec control.

“The Cirque is too important for Quebec to let it be bought by a foreign company that will then move the head office out of Quebec,” said Fitzgibbon.

He was banging a nationalist drum that has worked a charm for successive Quebec governments whether they’re Liberal, Parti Québecois or Coalition Avenir Québec (CAQ). It’s the same old song and dance — we have to throw hundreds of millions of dollars at a company to convince them to stay chez nous.

There’s only one problem with this argument when it comes to the Cirque du Soleil. The Cirque is already owned by a foreign company. The main shareholder of the Cirque du Soleil is TPG Capital, previously known as Texas Pacific Group, a San Francisco-based private equity firm controlled by two American billionaires, David Bonderman and James Coulter. TPG owns a 55-per-cent stake in the Cirque. The second-largest shareholder is China’s Fosun Capital Group, which controls 25 per cent of the shares.

The Quebec portion of the ownership comes via the Caisse de dépôt et placement du Québec, the Quebec pension fund, which holds just 20 per cent of the equity.

In other words, the power broker here is TPG, a company that specializes in buyouts of companies around the globe.

So why is our taxpayer’s money going to help out American billionaires? Fitzgibbons and his boss, Premier François Legault, say they’re doing this to keep the Cirque alive and of course most of us would agree that it would be a terrible loss for Quebec — and Canada! — to lose this innovative outfit that re-invented the traditional circus by adding Québécois theatricality, daring high-wire acts and sexy style.

These politicians say the control is here in Quebec because CEO Daniel Lamarre and his creative team are ici. But we all know how business works. If the owner says the clown is going to wear purple shoes, then the clown is going to wear purple shoes.

The bottom line is that ever since the TPG-led consortium bought the Cirque from founder Guy Laliberté in 2015 for a cool US$1 billion, the magic has been lost. The Cirque has spent US$550 million since 2015, buying the Blue Man Group and refreshing its Las Vegas shows, and that’s one of the main reasons it’s currently crippled with around US$1 billion in debt.

At the same time, it’s mostly lost that spark that made it so great in the first place. When the COVID-19 pandemic hit, the company had 44 shows around the world that it had to shutter and that number is a sign it was doing too much. Its most recent Vegas show, R.U.N., was a major flop, with the US$60-million production closing in early March, just months after its première.

Meanwhile at least two Quebec entrepreneurs, Laliberté and Quebecor CEO Pierre Karl Péladeau, have expressed interest in acquiring the Cirque. Now the Quebec government has put a roadblock in the way of Laliberté, Péladeau and any other Quebec business person who wants to acquire the circus by giving the government bucks to the Americans. How does that make sense?

When Laliberté pulled his coup de théâtre Sunday night on Radio-Canada chat show Tout le monde en parle, he said he didn’t want to be part of an organization that was just about money. It was a thinly veiled shot at the American billionaires. Two days later, the Quebec government backed the U.S. money men.

And the timing couldn’t be worse, with so many people wondering why this government isn’t focusing more on funding understaffed seniors’ homes where the COVID-19 pandemic took a terrible toll rather than giving money to foreign companies with deep pockets.

{ SOURCE: The Montreal Gazette }