How Cirque du Soleil became a billion dollar business

An acrobat trains at Cirque du Soleil's cavernous headquarters in Montreal Cirque du Soleil hires acrobats from more than 25 countries across the globe, 40% of whom are former athletes

At Cirque du Soleil's cavernous headquarters, located on the outskirts of Montreal near a landfill, unassuming office buildings do a good job of masking the, well, circus within.

But walk through the front door and the first piece of advice visitors are given is: "Don't try this at home."

It's hard to isolate just what one shouldn't attempt to do - jump from on the trampoline disguised as a bed, dive from a trapeze into a pit of foam cubes, transform a ballet slipper into a stiletto, or weave more than 150km (93 miles) of fabric into costumes capable of surviving water and fire.

At almost every turn, more than 2,000 of the firm's 5,000 global employees are engaged in the choreography, costume design, and acrobatics that have helped Cirque du Soleil become a global circus phenomenon.

With 19 touring and resident performances around the globe, in places like Las Vegas and Tokyo, the company takes in more than $1bn (£600m) annually.

Cirque du Soleil's Michael Jackson show features several hundred LED lights, some embedded in costumes Cirque du Soleil's Michael Jackson show features several hundred LED lights, some embedded in costumes
woman painting fabric More than 150km of fabric are used to make costumes for the 1,300 performers in Cirque du Soleil's 19 shows
trampoline bed Choreographers use new techniques to surprise audiences - like this bed that doubles as a trampoline
Makeup room at cirque du soleil Cirque du Soleil acrobats are taught how to apply their own make-up, which can take hours each night
Cobbler making shoe Wrestling shoes are favoured by acrobats, although there are several cobblers on hand to make bespoke shoes

But make no mistake: while the clowns might be driving the car, it's canny businessmen who are running the show.

"If you have a very good artistic product it's very well, but you have to have a good business management," says Gilles Ste-Croix, one of the company's co-founders and its current artistic director.

'Cherished kids of Canada'

It all started in 1984, in the tiny Quebec City suburb of Baie-Saint-Paul, when a group of stilt-walkers and street performers formed a performance troupe called the Le Club des Talons Hauts (the High Heels Club).

Gilles Ste Croix in stilts in front of house Mr Ste-Croix walked 56 miles in stilts to raise money

After some local success, the group's founder, Guy Laliberte lobbied to have the group choreograph and perform at a celebration, called "Cirque du Soleil" (circus of the sun) marking the 450th anniversary of the European discovery of Canada by Jacques Cartier in 1534 - who claimed the land for France.

To raise money, Mr Laliberte convinced his partner, Mr Ste-Croix, to walk 56 miles in stilts.

"Every time I go up big hills I remember that night and I think, 'How crazy were you?'" says Mr Ste-Croix, who adds that perhaps his craziest thought was not thinking that this small troupe could end up this far.

After the success of that anniversary show, they decided to rechristen themselves Cirque du Soleil. The troupe quickly found fans eager to pay money to see its blend of acrobatics and art.

One crucial factor that helped it succeed was that Cirque du Soleil did away with the animals normally associated with circuses like Barnum and Bailey's or the Ringling Brothers. Instead, it focused on acrobatics in one big tent.

"Now the merging of acrobatics with the different form of arts is very common, but when we started, we were almost alone out there in our style," says Mr Ste-Croix.

Another crucial decision was to add permanent shows to the company's roster of touring productions.

In 1993, Mr Laliberte partnered with Las Vegas casino magnate Steve Wynn to create a permanent show called Mystere at Mr Wynn's Mirage Resort, and in 1998, the show La Nouba was inaugurated at Disneyworld in Orlando, Florida.

Finally, Canada's lack of a circus culture gave the company room to experiment and explore.

To help build the brand in Europe, the company first went on tour with Switzerland's Circus Knie and staged shows throughout the region. In 1995, it sought to further open the market with a five city tour of its show Saltimbanco under a big white tent.

Under the big top

hair wigs

Each Cirque du Soleil show costs about $25m to develop and takes about two years.

A creator is brought in to think of an inspiration for a show - anything from martial arts to Michael Jackson.

After the show's basic story is created, about 200 extra employees are then hired.

Casts are made of each performer's head using a 3D printer, so costume designers can design bespoke outfits.

Wrestling shoes - the preferred footwear of the company's acrobats - are made in house by cobblers.

And then, about six months before opening night, performers come into the headquarters and begin to put it all together.

"It's a pretty big operation to tour a show in a big top - it demands a lot of investment, it's very costly, and you have to have a good following to make it," says Mr Ste-Croix.

"You don't start an operation like this from nothing."

The company also found success early on in Japan in 1992, which gave it a crucial entry into Asian markets.

Today, "we are the cherished kids of Canada," says Mr Ste-Croix, while noting that a majority of the company's revenues are generated outside the country.

Polishing the jewel

But with success has also come some hard lessons.

This year, the company suffered its first tragedy, when an acrobat in one of its Las Vegas shows fell to her death. It was later fined by US regulators for unsafe working conditions.

And, the company's two decade streak of never having a flop ended when chief executive officer Daniel Lamarre announced a plan to triple the company's output from one show a year to three in 2008. This led to what many felt was a decline in quality.

"The idea is to polish each show like a the jewel until it becomes a diamond and lasts forever - we lost some of that in that growth," admits Mr Ste-Croix.

For the first time ever, the company had to cancel shows and earlier this year, Cirque du Soleil announced it would lay off 400 workers.

"We like to think there has to be a 75% satisfaction and below that we don't think it's worth it," says Mr Ste-Croix.

"Of course we can hold on and make the return and the money and everything, but at the end of everything you know we only have our brand."

Cirque du soleil performers in michael jackson show Cirque du Soleil had a recent hit with its show dedicated to the music of Michael Jackson in Las Vegas

Now, the company says it has renewed focus on its core offering - its performances.

It has found a hit in its Michael Jackson Immortal World Tour, which has helped soften some of the financial pressures.

And it has begun focusing on China, an increasingly important market.

"I've seen shows in different places in China and met the artistic director, who has seen all of our shows in Vegas and they are very proud to copy us. They say it's an homage that we pay to you," says Mr Ste-Croix.

"We have to penetrate that market in order to be the original product."

But above all else, he insists the company is still only as good as its last show, whether it's in Montreal or Beijing.

"We must not be too pretentious - we have to be humble," he says.

BBC Business Live

  1.  
    MARKET UPDATE 10:23:
    FTSE 100 chart

    Let's take a quick look at the FTSE. It rose into positive territory, as you might expect, following the GDP announcement. It's currently hovering 0.07% higher at 6826.38. That's as much to do with the fact the news was expected as it is anything else. So a positive reaction from investors but not an overly exuberant one. is still leading the way, up 13.5% to 372.70p, after its surprisingly positive half-year profits announcement earlier today.

     
  2.  
    GDP FIGURES 10:17:
    Table showing GDP growth of the G7

    It's also worth pointing out that the UK was the fastest-growing economy of the G7 in the first quarter (3% year-on-year), as the table above shows. And just look at the US (1.5% year-on-year). When was the last time the UK economy grew at twice the pace of the US economy? Answers on a postcard (or email as its the 21st century) please.

     
  3.  
    GDP FIGURES 10:07:

    Breaking down the GDP figures for the three months to the end of June:

    • Industrial production almost halved to 0.4% quarter-on-quarter
    • Manufacturing output rose just 0.2% quarter-on-quarter.
    • Construction output contracted 0.5% quarter-on-quarter, that's the first drop since the first quarter of 2013.
    • Output in the services sector grew 1% quarter-on-quarter.
     
  4.  
    BSKYB PROFITS 09:56:
    Rupert Murdoch

    BSkyB has also announced it will pay around £4.9bn in cash to Rupert Murdoch's 21st Century Fox to buy out Sky Italia and Sky Deutschland. Under the deal BSkyB will pay £2.45bn for 100% of Sky Italia, part of which will be by handing over a share of National Geographic, and £2.9bn for Fox's 57% stake in Sky Deutschland to create a combined group with nearly 20 million customers.

     
  5.  
  6.  
    GDP FIGURES 09:45:
    chart showing contributions to GDP

    It looks like things are not all rosy in the garden. The UK's dominant services sector has expanded past its previous 2008 peak - that's the green line. It's dragged GDP above the previous peak as a result (don't forget services account for almost 80% of GDP). But everything else - construction, industrial production and manufacturing - remains well below the 2008 peak.

     
  7.  
    GDP FIGURES 09:38:

    More from the Office of National Statistics (ONS). Economic output was estimated to be 0.2% above the peak recorded in the first quarter of 2008. From peak to trough, which was in 2009, the economy shrank by 7.2%, the ONS adds. We'll bring you reaction as it comes in.

     
  8.  
    GDP FIGURES 09:35:

    GDP was in-line with the 0.8% estimate for the three months to the end of June. As an aside, here is a feature worth a read, asking whether we should be interested in gross domestic product at all. Bobby Kennedy said GDP "does not allow for the health of our children... or the joy of their play."

     
  9.  
    GDP FIGURES 09:30: Breaking News

    It's official. UK economic output was 0.8% in the second quarter of this year. That means the economy has now passed its previous 2008 peak.

     
  10.  
    GDP FIGURES 09:25: BBC Radio 4

    More from Ms Bell on the economy: She says it is typical that output recovers after about four years (following a recession) but this time its taken six "so its been quite a struggle." After Thursday's upgrade to its economic growth forecast for the UK, she adds, the IMF is looking for even stronger growth next year.

     
  11.  
    PEARSON RESULTS 09:19:

    Financial Times owner Pearson Group has reported a pre-tax loss of £36m for the six months to the end of June. That compares with a loss of £16m a year earlier.

     
  12.  
    NO ARGENTINA DEAL 09:06:
    Argentina"s President Cristina Fernandez de Kirchner

    Argentina failed to reach a deal for its debts late on Thursday, with hedge funds demanding full payment on its defaulted bonds, veering closer to what the IMF warned could be a painful new default. There's less than a week to go to either pay up or risk being declared in default. Argentine officials met with the US court-appointed mediator trying to break the impasse, but refused to meet the hedge funds' representatives directly.

     
  13.  
    RBS RESULTS Via Twitter Kamal Ahmed BBC Business editor

    tweets: RBS Ross McEwan says UK recovery "broader than a consumer recovery". Gross lending to businesses up.

     
  14.  
    RBS RESULTS 08:41:

    More market musings on RBS. Chirantan Barua, an analyst at Sanford C. Bernstein, says the reduction in money set aside for bad loans was "extremely strong" compared with City expectations. Sales and capital were better than he expected too, he said. He reckons the shares may be worth 440p apiece.

     
  15.  
    RBS RESULTS Via Twitter Kamal Ahmed BBC Business editor

    tweets: RBS CEO Ross McEwan says there has been a cooling in the mortgage and housing market over the last two months. "That is not a bad thing."

     
  16.  
    MARKET UPDATE 08:24:

    European markets are lower today with investors focused on earnings news and economic data release. The biggest rise on the FTSE 100 is perhaps unsurprisingly RBS - up 10.07% or 33.10p so far to 361.9p after it took everyone by surprise by announcing first-half pre-tax profits of £2.65bn a week early.

    • The FTSE 100 is 0.28% lower at 6806.49
    • The Dax is down 0.22% to 9772.94
    • The Cac-40 has fallen 0.50% at 4138.73
     
  17.  
    RBS RESULTS 08:11:

    Vivek Raja, an analyst at Oriel Securities, is one of the first out of the traps with some insight into what the RBS results mean. "The preannouncement reflects better than expected operating performance on credit performance, in the Bad Bank (RBS Capital Resolution) and on capital ratios," he says. So that means 1) loans are performing better, 2) the worst loans are performing better, and 3) the bank has more capital as a percentage of loans.

     
  18.  
    VODAFONE 07:56:
    People walk past a Vodafone shop

    Vodafone's first quarter trading shows the mobile operator getting no relief from its European market. Group service revenue - that's customers buying handsets and using the Vodafone network to you and me - was £6.4bn in the three months to 30 June, down 7.9% on the same period last year. Competition and regulation "continue to create a challenging operating environment," it says.

     
  19.  
    LLOYDS SETTLEMENT 07:41:
    A general view of a sign for Lloyds Bank

    Lloyds Banking Group has responded to recent stories regarding settlements "with a number of government agencies" regarding rates setting - Libor. It's in "late-stage" discussions, it says.

     
  20.  
     
  21.  
    RBS RESULTS 07:27:
    RBS

    "Asset quality continued to improve in the UK and Ireland," says what was once the world's largest bank. In English, more of their loans are more likely to be repaid in full and on time. The bank has set aside £22.4bn against bad loans, down from £25.2bn in December. Ulster bank posted a modest profit of £55m - that's from a £381m loss a year ago.

     
  22.  
    BSKYB PROFITS 07:20:
    British Sky Broadcasting headquarters

    BSkyB has reported a slight slip in annual pre-tax profit to £1,1bn compared with £1,2bn a year earlier. Tax for the year was £249m compared with £295m in 2013, an effective tax rate of 21% as a result of the reduction in the rate of UK corporation tax.

     
  23.  
    RBS RESULTS 07:16:

    Pre-tax profit was £2.65bn, up from £1.37bn as impairments dropped like a stone -- down to £269m from £2.15bn. Those reductions in bad loan costs far outweighed a rise in restructuring costs and a drop in sales. £150m was added to provisions for Payment Protection Insurance (PPI) and £100m to interest rate swap provisions.

     
  24.  
    RBS RESULTS 07:08: Breaking News

    A turn up for the books. Royal Bank of Scotland Group has put out its first-half results early. They were due 1 August, according to the bank. Operating profit rose to £2.6bn from £708m in 2013.

     
  25.  
    BALFOUR MERGER 07:02:
    A Balfour Beatty workman on a construction site

    UK construction firm Balfour Beatty is in talks with rival Carillion about a potential £3.05bn merger, it has emerged. The two companies confirmed what they described as "preliminary discussions." In a joint statement they said they believed a "merger of the two groups has the potential to create a market leading services, investments, and construction business of considerable depth and scale."

     
  26.  
    DISCOUNT STORES 06:51: Radio 5 live

    Look out for Hussein Lalani, co-founder and commercial director of the 99p stores, on 5 live. He says before the recession suppliers would just give them their leftovers. Now many brands are making products just for the discount market.

     
  27.  
    GDP FIGURES 06:40: BBC Radio 4

    Marian Bell, economist and former member of the Bank of England's Monetary Policy Committee has been talking to the Today programme about the UK's economic recovery. She says it is "people are expecting a 0.9% rise in output and that would be sufficient to surpass the 2008 level." But it has taken more time to achieve that economic recovery than in the past. In fact, she says, it has been "the longest that output has been below its previously level for more than 100 years."

     
  28.  
    GDP FIGURES 06:27: Radio 5 live

    Elaine Coverley, head of equity research at Brewin Dolphin is on Wake up to Money. "We need other markets to keep that going," she says of growing UK gross domestic product. Markets like the US aren't doing so well. The IMF slashed its US economic growth estimate on Wednesday to 1.7% for 2014.

     
  29.  
    GDP FIGURES 06:11: Radio 5 live

    "The consumer is doing a lot of the heavy lifting," in the economy, says economist Alan Clarke of Scotiabank on 5 live. How, when wages are stagnant? The housing market, of course. As the value of homes rises, people are prepared to save less and spend more without earning more. House prices won't go up at the current rate forever, though, he says.

     
  30.  
    GDP FIGURES 06:03: Radio 5 live

    CBI director-general, John Cridland is still on 5 live. The recovery is currently investment-led rather than export-led. Sterling's strength isn't helping but isn't wholly choking things off either, he says.

     
  31.  
    GDP FIGURES 06:01: Radio 5 live

    Director-General of the Confederation of British Industry John Cridland expects growth of 0.8% in the second quarter, he tells 5 live. "We are getting some balance in the recovery, like a boxer in the boxing ring finding his feet," he says. Companies are investing, finally, he says, and that's crucial. This is what will add to wages.

     
  32.  
    06:00: Howard Mustoe Business reporter

    Good morning! Please get in touch via email on bizlivepage@bbc.co.uk or via twitter @BBCBusiness

     
  33.  
    06:00: Matthew West Business Reporter

    Good morning. So, let's catch up from last night: Amazon had a tough second quarter, as did General Motors. And the International Monetary Fund downgraded its global economic growth forecast. Here at home it's as good as confirmed that the UK is richer than it has ever been (you literally have never had it so good, you lucky, lucky people). Do you feel richer than you did last year? How about last week? Or yesterday even? We'll find out at 09:30 with second quarter GDP, so stay with us.

     

Features

From BBC Capital

Programmes

  • Leader of Hamas Khaled MeshaalHARDtalk Watch

    BBC exclusive: Hamas leader on the eagerness to end bloodshed in Gaza

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.