In one act of Cirque du Soleil’s touring show Kurios, which recently opened in Toronto, an inverted dinner table clings to the tent ceiling while performers move about upside down, mirroring action on the stage nine metres below.
It wasn’t long ago Cirque itself was struggling to find its feet after COVID-19 upended the Montreal entertainment giant, forcing the closure of all its shows, triggering mass layoffs and toppling the company into insolvency.
This past week marks one year since Cirque announced a bold relaunch plan under the tag line “the intermission is over.” And with a new chief executive officer at the helm, Cirque plans to be fully reopened by the end of this year, even as it grapples with acute labour shortages and uncertainty brought on by the Ukraine war.
“We’ve had to adjust our reopening plans a few times, but we came out of the restructuring with a business that’s leaner, more agile, less siloed and less capital-intensive than it was before,” said Stéphane Lefebvre, Cirque’s former chief financial officer, who took over the top job from long-time Cirque chief Daniel Lamarre last November.
Mr. Lamarre, who steered Cirque through the pandemic crisis and restructuring, is now executive vice-chairman at the company.
To date, all of Cirque’s existing shows in Las Vegas, which accounted for half of the company’s earnings before interest, taxes, depreciation and amortization (EBITDA) prior to the restructuring, have reopened, along with a new show at Walt Disney World Resort in Florida called Drawn to Life.
Of its eight touring shows, five have reopened, with the rest slated to restart in the coming months.
The company said it is seeing pent-up demand for the touring shows, with Cirque having been absent from some cities for up to five years. Kurios is Cirque’s first show in Toronto since 2019.
“We’ve beaten box-office records in Seattle, London, Houston, Barcelona, sometimes multiple times in one day, so we’re seeing really strong performances as we come out of the pandemic,” said Mike Newquist, president of Cirque’s touring show division.
While prices for the most expensive and cheapest tickets aren’t much higher than they were prior to the pandemic, Cirque has introduced several new tiers in between. The additional price options have helped fill seats that might have sat empty in the past.
Cirque has also started to see a return of group ticket purchases, such as businesses treating their employees to an afternoon or evening out. “It’s been fun to watch as that market has come alive as the local businesses have come back to life,” Mr. Newquist said.
If businesses are using Cirque tickets as a way to keep workers happy in a tight labour market, it’s a challenge Cirque itself has faced.
While many of the performers Cirque had prior to COVID-19 have come back as shows reopen, the company is struggling to fill back-office jobs such as IT specialists, accountants and lawyers. Cirque currently has 100 job vacancies at the corporate level.
Finding local workers to staff its touring-show sites, such as security guards, concession workers and ushers, is also proving very difficult, Mr. Newquist said.
The company is watching the resurgence of COVID-19 cases, though Mr. Lefebvre said he doesn’t see another lockdown in the cards.
“I think constantly adapting and changing protocols will just be the way things will work, going forward, and our people expect that,” he said.
Last fall, Cirque had to delay plans for reopening some shows by up to two months because of the rise of the Omicron variant. “Where we used to plan our tours three and four years ahead, now we might plan three and four months ahead,” said Mr. Newquist.
Cirque’s resiliency has been put to the test by Russia’s invasion of Ukraine in late February. Cirque has said it does not intend to take any of its shows back to Russia, once one of the company’s fastest-growing markets, for the foreseeable future. It has also organized a Red Cross fundraiser for victims of the war in Ukraine.
But Cirque still finds itself enmeshed in the conflict because just over 200 of its performers hail from the two warring countries, and on some shows, they account for half of the performers.
In January, as signs of Russia’s aggression were mounting, Cirque worked with employees in Ukraine who were slated to come to Canada for training later in the year, to speed up the process by arranging visas, bank accounts and accommodation so they and their families could come before war erupted.
“Regardless of the conflict, there’s never been any tension between two groups of people that would otherwise be in conflict outside of the Cirque,” said Mr. Lefebvre. “People on shows are part of a family. It’s actually created even more support between the two groups than we’ve seen before.”
The geopolitical turmoil is only the latest shock the company has faced over the past two years. When the pandemic hit, Cirque’s sales collapsed from more than US$1-billion to zero almost overnight. When Cirque filed for bankruptcy protection in June, 2020, it was carrying US$970-million in long-term debt.
Under the restructuring, Cirque’s lenders, including Toronto-based Catalyst Capital Group Inc., seized control of the company. Cirque’s debt was reduced by more than 30 per cent, and the new owners injected US$375-million to relaunch the business.
Last December, the credit-rating agency Moody’s forecast Cirque’s cash balance to be around US$70-million this year, and the company has loan agreements that allow it to tap US$85-million in a revolving credit facility and letters of credit.
Despite that, Moody’s said it considers the company’s liquidity “to be weak relative to execution and pandemic-related risks.” The agency maintained the low Caa1 rating it assigned to Cirque’s debt after the restructuring, and said the outlook for the company remains negative.
After Cirque’s new owners took over, Mr. Lefebvre said there was an “education process,” during which he and Mr. Lamarre spent months with them, analyzing the company’s operations with an eye to making Cirque a leaner organization.
To that end, the company consolidated its resident-show division, which oversees all permanent shows, with subsidiaries it acquired before the pandemic, including Blue Man Group and VStar Entertainment, which produces live touring shows based on kids’ brands such as Paw Patrol and Trolls.
Next month, Cirque’s first new resident show since its restructuring will debut in Las Vegas, with the cabaret-inspired Mad Apple at MGM Resorts International’s New York-New York hotel-casino.
Cirque currently has one other new production under way, though Mr. Lefebvre wouldn’t provide any details.
“We don’t want to spend money before we know the market is there, so we’re being very conservative given the current environment,” he said. “This company will put on new shows, but for now, the pacing is going to be lower than what it was before COVID-19.”
{ SOURCE: The Globe and Mail
