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PRESENTATION INDEX OVERVIEW FUTURE OUTLOOK BUSINESS MODEL FULL BUSINESS MODEL MAP ISSUES NEW MARKET ENTRY CURRENT STRATEGY ALEGRIA BUSINESS MODEL SHIFT TOUR LOCATIONS DATES TOUR LOCATIONS MAP FINANCIAL GAINS FRANCE ATTRACTIVE MARKET DISNEY ATTRACTIVE MARKET QUOTES ATTRACTIVE MARKET ATTENDANCE DEAL STRUCTURE DISNEYLAND MARKETING FINANCIAL GAIN MACAU ATTRACTIVE MARKET QUALITATIVE ATTRACTIVE MARKET STATISTICS DEAL STRUCTURE WYNN MACAU PARTNERSHIP WYNN MACAU MARKETING FINANCIAL GAIN IMPLEMENTATION TIMELINE SUMMARY

MMICC 2010 - SFU

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Page 1: MMICC 2010 - SFU

PRESENTATION INDEX OVERVIEW

FUTURE OUTLOOKBUSINESS MODEL FULLBUSINESS MODEL MAP

ISSUES

NEW MARKET ENTRYCURRENT STRATEGY

ALEGRIA

BUSINESS MODEL SHIFTTOUR LOCATIONS DATESTOUR LOCATIONS MAPFINANCIAL GAINS

FRANCE

ATTRACTIVE MARKET DISNEYATTRACTIVE MARKET QUOTES

ATTRACTIVE MARKET ATTENDANCEDEAL STRUCTUREDISNEYLAND MARKETINGFINANCIAL GAIN

MACAUATTRACTIVE MARKET QUALITATIVEATTRACTIVE MARKET STATISTICSDEAL STRUCTUREWYNN MACAU PARTNERSHIPWYNN MACAU MARKETINGFINANCIAL GAIN

IMPLEMENTATION

TIMELINESUMMARY

Page 2: MMICC 2010 - SFU

THE TRAPEZE STRATEGY

Page 3: MMICC 2010 - SFU

CIRQUE DU SOLEILDiversifying Show Production & Geographic Expansion

Dark Horse ConsultingFahad | Miata | Sascha | Derek

Team 7 – Simon Fraser University

Page 4: MMICC 2010 - SFU

STRATEGIC PATHWAY

Issues Implementation

“The TRAPEZE Strategy”

Overview

Page 5: MMICC 2010 - SFU

Issues

Alegria

France

Macau

Implementation

“The TRAPEZE Strategy”

Overview

STRATEGIC PATHWAY

Page 6: MMICC 2010 - SFU

FUTURE OUTLOOK

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

FUTURE OUTLOOK BUSINESS MODEL

$ NPV OF INCREMENTAL PROFIT UNTIL 2022

$114 M

$27 M

$26 M

MACAU

FRANCE

ALEGRIA

STATIC

$167 M

Page 7: MMICC 2010 - SFU

BUSINESS MODEL 2008

FUTURE OUTLOOK BUSINESS MODEL

CIRQUE DU SOLEIL

ARENA

DELIRIUM

SALTIMBANCO

MYSTERE

O

ZUMANITY

LOVE

LA NOUBA

WINTUK

KA

RESIDENTS

KOOZA

CORTEO

VAREKAI

DRALION

QURDAM

ALEGRIA

BIG-TOP7 2 6

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Page 8: MMICC 2010 - SFU

BUSINESS MODEL 2010

FUTURE OUTLOOK BUSINESS MODEL

CIRQUE DU SOLEIL

ARENA

MYSTERE

O

ZUMANITY

LOVE

LA NOUBA

WINTUK

KA

RESIDENTS

KOOZA

CORTEO

VAREKAI

DRALION

QURDAM

ALEGRIA

BIG-TOP

ELVIS

DUBAICHRIS ANGEL

MACAO #1 TOKYOMACAO #2

2009 2010

SALTIMBANCO

13 1 8

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Page 9: MMICC 2010 - SFU

BUSINESS MODEL 2010

FUTURE OUTLOOK BUSINESS MODEL

CIRQUE DU SOLEIL

ARENA

MYSTERE

O

ZUMANITY

LOVE

LA NOUBA

WINTUK

KA

RESIDENTS

KOOZA

CORTEO

VAREKAI

DRALION

QURDAM

ALEGRIA

BIG-TOP

ELVIS

DUBAICHRIS ANGEL

MACAO #1 TOKYOMACAO #2

2009 2010

SALTIMBANCO

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Page 10: MMICC 2010 - SFU

BUSINESS MODEL 2010

FUTURE OUTLOOK BUSINESS MODEL

CIRQUE DU SOLEIL

ARENA

MYSTERE

O

ZUMANITY

LOVE

LA NOUBA

WINTUK

KA

RESIDENCE

KOOZA

CORTEO

VAREKAI

DRALION

QURDAM

ALEGRIA

BIG-TOP

ELVIS

DUBAICHRIS ANGEL

MACAO #1 TOKYOMACAO #2

2009 2010

SALTIMBANCO

7 11

11 2

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

= Resident shows

Page 11: MMICC 2010 - SFU

BUSINESS MODEL 2010

FUTURE OUTLOOK BUSINESS MODEL

CIRQUE DU SOLEIL

ARENA

MYSTERE

O

ZUMANITY

LOVE

LA NOUBA

WINTUK

KA

RESIDENCE

KOOZA

CORTEO

VAREKAI

DRALION

QURDAM

ALEGRIA

BIG-TOP

ELVIS

DUBAICHRIS ANGEL

MACAO #1 TOKYOMACAO #2

2009 2010

SALTIMBANCO

7 11

11 2

BerlinLondonParis

Sydney

New York

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Page 12: MMICC 2010 - SFU

BUSINESS MODEL 2010

FUTURE OUTLOOK BUSINESS MODEL

CIRQUE DU SOLEIL

ARENA

MYSTERE

O

ZUMANITY

LOVE

LA NOUBA

WINTUK

KA

RESIDENCE

KOOZA

CORTEO

VAREKAI

DRALION

QURDAM

ALEGRIA

BIG-TOP

ELVIS

DUBAICHRIS ANGEL

MACAO #1 TOKYOMACAO #2

2009 2010

SALTIMBANCO

7 11

11 2

BerlinLondonFrance

Australia

FUTURE UNCERTAINTY

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Page 13: MMICC 2010 - SFU

ISSUES

NEW MARKET ENTRY CURRENT STRATEGY

FUTURE UNCERTAINTY

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Today Future

Page 14: MMICC 2010 - SFU

NEW MARKET ENTRY

NEW MARKET ENTRY CURRENT STRATEGY

MGM

Successful PartnerCasino MarketResident Shows

Successful Partnership Duplication with New

Projects in Correct Markets

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Today Future

Page 15: MMICC 2010 - SFU

CURRENT STRATEGY

NEW MARKET ENTRY CURRENT STRATEGY

StrategyCreativityTheatricalityExperience

Under-utilization of Arena Segment to Display Successful Strategy

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Today Future

Page 16: MMICC 2010 - SFU

BUSINESS MODEL SHIFT

BUSINESS MODEL SHIFT TOUR LOCATIONS FINANCIAL GAIN

ARENA

KOOZA

CORTEO

VAREKAI

DRALION

QURDAM

ALEGRIA

BIG-TOP

2009 2010

SALTIMBANCO

1 8

-Set to retires Big Top tour in 2008

-Delirium retired April 18th 2008

-Transition Alegria into arena tour immediately

-Begin tour in EuropeOVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Page 17: MMICC 2010 - SFU

BUSINESS MODEL SHIFT

BUSINESS MODEL SHIFT TOUR LOCATIONS FINANCIAL GAIN

ARENA

KOOZA

CORTEO

VAREKAI

DRALION

QURDAM

BIG-TOP

2009 2010

SALTIMBANCO

2 7

ALEGRIA-Set to retires Big Top tour in 2008

-Delirium retired April 18th 2008

-Transition Alegria into arena tour immediately

-Begin tour in EuropeOVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Page 18: MMICC 2010 - SFU

BUSINESS MODEL SHIFT TOUR LOCATIONS FINANCIAL GAIN

TOUR LOCATIONSParis, FR - From 15 March 2010 to 17 April 2010Birmingham, UK - From 24 February 2010 to 13 March 2010Manchester, UK - From 6 January 2010 to 27 January 2010Lille, FR - From 25 November 2010 to 26 December 2010Rome, IT - From 7 October 2010 to 31 October 2010Frankfurt, DE - From 20 August 2010 to 25 September 2010Gijon, ES - From 25 June 2010 to 31 July 2010Milan, IT - From 29 April 2010 to 6 June 2010Lyon, FR - From 5 March 2010 to 18 April 2010Seville, ES - From 16 January 2010 to 22 February 2010Valencia, ES - From 28 November 2009 to 21 December 2009Zurich, CH - From 19 September 2009 to 26 October 2009Oostende, CH - From 24 July 2009 to 17 August 2009Cologne, DE - From 5 June 2009 to 29 June 2009Geneva, CH - From 18 April 2009 to 25 May 2009Bilbao, ES - From 26 February 2009 to 6 April 2009London, UK - From 7 January 2009 to 6 February 2009Madrid, ES - From 31 October 2009 to 26 December 2009Brussels, BE - From 4 September 2009 to 19 October 2009Vienna, AT - From 10 July 2009 to 4 August 2009Barcelona, ES - From 26 April 2009 to 26 May 2009OVERVIEW ISSUES ALEGRIA FRANCE MACAU

IMPLEMENTATION

Page 19: MMICC 2010 - SFU

BUSINESS MODEL SHIFT TOUR LOCATIONS FINANCIAL GAIN

TOUR LOCATIONS

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Paris, FR - From 15 March 2010 to 17 April 2010Birmingham, UK - From 24 February 2010 to 13 March 2010Manchester, UK - From 6 January 2010 to 27 January 2010Lille, FR - From 25 November 2010 to 26 December 2010Rome, IT - From 7 October 2010 to 31 October 2010Frankfurt, DE - From 20 August 2010 to 25 September 2010Gijon, ES - From 25 June 2010 to 31 July 2010Milan, IT - From 29 April 2010 to 6 June 2010Lyon, FR - From 5 March 2010 to 18 April 2010Seville, ES - From 16 January 2010 to 22 February 2010Valencia, ES - From 28 November 2009 to 21 December 2009Zurich, CH - From 19 September 2009 to 26 October 2009Oostende, CH - From 24 July 2009 to 17 August 2009Cologne, DE - From 5 June 2009 to 29 June 2009Geneva, CH - From 18 April 2009 to 25 May 2009Bilbao, ES - From 26 February 2009 to 6 April 2009London, UK - From 7 January 2009 to 6 February 2009Madrid, ES - From 31 October 2009 to 26 December 2009Brussels, BE - From 4 September 2009 to 19 October 2009Vienna, AT - From 10 July 2009 to 4 August 2009Barcelona, ES - From 26 April 2009 to 26 May 2009

Page 20: MMICC 2010 - SFU

BUSINESS MODEL SHIFT TOUR LOCATIONS FINANCIAL GAIN

FINANCIAL GAIN

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

$$114 M

$27 M

$26 M

STATIC

$27 M

2009 2010 2011-2022

Upfront Production Costs- 4,000,000

Scenic and Transport Equip.- 6,000,000

Ticket Sales 88,290,000 88,290,000 Additional Merchandise 2,648,700 2,648,700 Operating costs 76,518,000 76,518,000 Royalty 8,829,000 8,829,000 Net Income - 10,000,000 5,591,700 5,591,700

NPV $27,018,033.53Investment $9,090,909.09Return $36,108,942.62NPV ROI 297.20%Payback period 3 years

Annual ROI 6.55%

Page 21: MMICC 2010 - SFU

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

ATTRACTIVE MARKET

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Page 22: MMICC 2010 - SFU

ATTRACTIVE MARKET

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

Page 23: MMICC 2010 - SFU

ATTRACTIVE MARKET

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Cirque du Soleil at Disneyland Paris

“In 2008, Disneyland Paris was the most visited attraction in Europe,

receiving more visitors than the Louvre and the Eiffel

Tower combined”

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

Page 24: MMICC 2010 - SFU

ATTRACTIVE MARKET

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Cirque du Soleil at Disneyland Paris

“From the moment I saw the show in LA until I finally made

a deal with Guy Laliberte, I was obsessed by Cirque du

Soleil”- Michael Eisner, President & CEO of Disney

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

Page 25: MMICC 2010 - SFU

ATTRACTIVE MARKET

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Cirque du Soleil at Disneyland Paris

“The French Institute Alliance Française (FIAF) in New York city will award the Trophée des arts to Cirque du Soleil at a gala awarded each year since 1992 to group beloved

by the French”

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

Page 26: MMICC 2010 - SFU

ATTRACTIVE MARKET

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Cirque du Soleil at Disneyland Paris

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

Page 27: MMICC 2010 - SFU

ATTRACTIVE MARKET

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Cirque du Soleil at Disneyland Paris

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

Page 28: MMICC 2010 - SFU

ATTRACTIVE MARKET

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Cirque du Soleil at Disneyland Paris

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

Page 29: MMICC 2010 - SFU

ATTRACTIVE MARKET

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Cirque du Soleil at Disneyland Paris

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

Page 30: MMICC 2010 - SFU

DEAL STRUCTURE

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

-Structured after MGM partnership

-Disney to build theatre

-Split initial production costs (50/50)

-Split operating profits (50/50)

Investment $43,342,154.83Return $50,589,127.77NPV ROI 14.33%Payback Period 5 years

-MGM has experienced average entertainment revenue increase of 23.37% over last five years

Page 31: MMICC 2010 - SFU

DISNEYLAND

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

Resident Theatre: Florida

Tokyo Paris

Page 32: MMICC 2010 - SFU

DISNEYLAND

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

Resident Theatre: Florida

Tokyo Paris

Capacity utilized to model financial gain

Page 33: MMICC 2010 - SFU

FINANCIAL GAIN

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

$$114 M

$27 M

$26 M

STATIC

$26 M2009 2010 2011-2022

Upfront Production Costs - 15,000,000 - 15,000,000 Ticket Sales 59,892,000 Creative Royalty 7,785,960 Rent 7,187,040 Operating costs 26,951,400 Operating Profit - 100% - 15,000,000 - 15,000,000 17,967,600 Operating Profit - 50% - 7,500,000 - 7,500,000 8,983,800

Add: Merchandise Income - 1,796,760

Less: Costume Salary 3,000,000 3,000,000 3,000,000 Net Income - 10,500,000 - 10,500,000 7,780,560

NPV $25,590,362.02Investment $18,223,140.50Return $43,813,502.52NPV ROI 140.43%Payback period 5 years

Annual ROI 32.47%

ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN

Page 34: MMICC 2010 - SFU

ATTRACTIVE MARKET

ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Increasing Gaming Concessions (6)

Vegas of the East Established Presence

Page 35: MMICC 2010 - SFU

ATTRACTIVE MARKET

ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

Increasing Gaming Concessions (6)

Vegas of the East Established Presence

20092011

20132015

20172019

2021 -

50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000 400,000,000

Projected Annual Macau Tourists

Annual Macau Tourists

Page 36: MMICC 2010 - SFU

DEAL STRUCTURE

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN

-Similar results to MGM partnership, experienced average revenue increases over last five years of: - Casino: 12.92% - Food & Bev.: 23.03% - Entertainment: 23.37%

Investment $68,109,100.45

Return $124,214,376.21

NPV ROI 45.17%

Payback Period 4 years

Page 37: MMICC 2010 - SFU

WYNN MACAU

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN

-Owns 1/6 national gaming concessions

-Wynn left the newly formed MGM Mirage in 2000

- Strong pre-existing relationship, Wynn responsible for Cirque du Soleil initial introduction into Las Vegas

Steve Wynn

Wynn Macau

Wynn Encore

Page 38: MMICC 2010 - SFU

WYNN MACAU

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN

Tokyo Macau

Page 39: MMICC 2010 - SFU

FINANCIAL GAIN

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

$$114 M

$27 M

$26 M

STATIC

$114 M2009 2010 2011 - 2022

Upfront Production Costs - 15,000,000 - 15,000,000 Ticket Sales 147,056,250 Creative Royalty 19,117,313 Rent 17,646,750 Operating costs 66,175,313 Operating Profit - 100% - 15,000,000 - 15,000,000 44,116,875 Operating Profit - 50% - 7,500,000 - 7,500,000 22,058,438

Add: Merchandise Income - 4,411,688

Less: Costume Salary 3,000,000 3,000,000 3,000,000 Net Income - 10,500,000 - 10,500,000 23,470,125

NPV $113,940,660.16Investment $18,223,140.50Return $132,163,800.66NPV ROI 625.25%Payback period 3 years

Annual ROI 43.09%

ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN

Page 40: MMICC 2010 - SFU

TIMELINE SUMMARY

TIMELINE

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

1 2 3 4

Years

ALEGRIA

End Big Tent tour: AlegriaTransition Alegria: Big Top ArenaAlegria Arena Tour: Europe *Alegria Arena Tour: Australia*

Alegria Arena Tour New Cycle: N.A.

*Refer to schedule in presentation

Page 41: MMICC 2010 - SFU

TIMELINE SUMMARY

TIMELINE

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

1 2 3 4

Years

FRANCE

End Big Top tour: Alegria

Transition Alegria: Big Top ArenaAlegria Arena Tour: Europe *Alegria Arena Tour: Australia*

Alegria Arena Tour new cycle: N.A.Negotiate deal with Disney ParisConstruct Disney Paris theatre

Production: Amant de RêveDisneyland Paris: Amant de Rêve

Page 42: MMICC 2010 - SFU

TIMELINE SUMMARY

TIMELINE

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

1 2 3 4

Years

MACAU

End Big Top tour: Alegria

Transition Alegria: Big Top ArenaAlegria Arena Tour: Europe *Alegria Arena Tour: Australia*

Alegria Arena Tour new cycle: N.A.Negotiate deal with Disney ParisConstruct Disney Paris theatre

Production: Amant de RêveDisneyland Paris: Amant de RêveNegotiate deal with Wynn Resort Ltd

Construct Wynn Macau TheatreProduction: Rouge

Wynn Macau: Rouge

Page 43: MMICC 2010 - SFU

SUMMARY

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

TIMELINE SUMMARY

FUTURE UNCERTAINTY

Today Future

Page 44: MMICC 2010 - SFU

SUMMARY

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

TIMELINE SUMMARY

ALEGRIA

Today Future

Page 45: MMICC 2010 - SFU

SUMMARY

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

TIMELINE SUMMARY

FRANCEALEGRIA

Today Future

Page 46: MMICC 2010 - SFU

SUMMARY

OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION

TIMELINE SUMMARY

MACAUFRANCEALEGRIA

Today Future

Page 47: MMICC 2010 - SFU

THE TRAPEZE STRATEGY

Page 48: MMICC 2010 - SFU

THANK-YOU! QUESTIONS?

Dark Horse ConsultingFahad | Sascha | Miata | Derek

$ NPV OF INCREMENTAL PROFIT UNTIL 2022

$114 M

$27 M

$26 M

MACAU

FRANCE

ALEGRIA

STATIC

$167 M

Page 49: MMICC 2010 - SFU

SWOT •Creativity/artistic expression•Leveraging creative process•Ability to successfully manage partnerships•Maintained original vision/values•Product differentiation

•Creative platform extension failures•Unwilling to compromise their creativity/vision•Untapped market opportunities•Underutilization of Arena strategy

•Large number of possible partnerships•Growth: current markets•Growth: Untapped markets

•Cannibalization of current Las Vegas market•Competitors: Dragone

Strengths

Weaknesses

ThreatsOpportunities

Page 50: MMICC 2010 - SFU

KEY SUCCESS FACTORS

Creative Process

Partnerships

Profitable Business Model

Big Top, Arena,

Resident Model

Page 51: MMICC 2010 - SFU

NEW BUSINESS MODEL CIRQUE DU

SOLEIL

ARENA

MYSTERE

O

ZUMANITY

LOVE

LA NOUBA

WINTUK

KA

RESIDENTS

KOOZA

CORTEO

VAREKAI

DRALION

QURDAMALEGRIA

BIG-TOP

ELVIS

DUBAICHRIS ANGEL

TOKYOMACAO #2

2009

2010

SALTIMBANCO

MACAO #1

WYNN

FRANCE

Page 52: MMICC 2010 - SFU

BIG TOPS NVP COMPARISON$ NPV OF INCREMENTAL PROFIT

UNTIL 2022

$114 M$27 M $26 M

MACAU

FRANCEALEGRIA

$22 M

BIG TOPS

Two Big Top touring shows are planned for launch in the next two years

Page 53: MMICC 2010 - SFU

BIG TOPS FINANCIALS

2009 2010 2011 - 2022

Upfront Production Costs - 15,000,000 - 15,000,000

Scenic and Transport Equip. - 3,500,000 - 3,500,000

Big Top - 6,500,000 - 6,500,000

Ticket Sales 30,375,000

Additional Merchandise 911,250

Operating costs 19,743,750

Net Income - 25,000,000 - 25,000,000 11,542,500

NPV $21,609,122.20

NPV CALCULATION

Page 54: MMICC 2010 - SFU

BIG TOPSBig Tops Alternative

Conservative Assumptions - MacauDiscount Rate 10.00%Upfront Production Costs ($ M) 30Scenic and Transport. Equip. ($ M) 7Big Top ($ M) 13Time for production (years) 2Capacity (people) 2,500Weekly Performances 9Weeks 36Break-even occupancy 65.00%Occupancy 75.00%Merchandise 10.00%Merchandise Margin 30.00%Ticket Price ($) 50.00

Page 55: MMICC 2010 - SFU

WHY NOT BERLIN OR LONDON

France instead of Berlin or London: the country is very close in proximity to

Berlin and London

Based on these factors

Profit Potential

Cirque du Soleil always identifies solid partnerships before entering a market:

entering these new markets without existing relationships could be difficult

Page 56: MMICC 2010 - SFU

WHY NOT LAS VEGAS

Category size: Large; Category growth; Low, Category attractiveness; High

Based on these factors

Mature & Saturated market

Increased number of shows = increased chance of cannibalization

Page 57: MMICC 2010 - SFU

WHY NOT DISNEYLAND LOS ANGELES

Does not achieve the goal of creating a foothold in a new foreign market

Based on these factors

Close in Proximity

Already have one Disney Partnership: Walt Disneyworld Resort, Florida

Page 58: MMICC 2010 - SFU

OVERVIEW ISSUES ALEGRIA MACAU FRANCE IMPLEMENTATION

TIMELINE SUCCESS FACTORS

WHY NOT DUBAI (FURTHER)

Lack of gambling makes replication of current business model difficult

Based on these factors

Number of tourists is not sufficient to justify further expanding in this market

No presence of large scale amusement park to replicate the Disney theme park

successFra

nceDubai

0

20

40

60

80

# Of Tourists

Num

ber o

f Tou

rists

(M

illio

ns)

82

27

5.5

Page 59: MMICC 2010 - SFU

OVERVIEW ISSUES ALEGRIA MACAU FRANCE IMPLEMENTATION

TIMELINE SUCCESS FACTORS

WHY NEW YORK IN THE FUTURE

Success of Zumanity indicator of potential resident show success

Based on these factors

History of long running shows running for extended periods of time

Market Potential: Demographics demonstrates that proportion of upper

middle class individuals and other s have a long standing appreciation of the arts

Page 60: MMICC 2010 - SFU

OVERVIEW ISSUES ALEGRIA MACAU FRANCE IMPLEMENTATION

TIMELINE SUCCESS FACTORS

WHY AUSTRALIA IN THE FUTURE

With touring of Alegria, possibility for market evaluation for resident show

Based on these factors

Strong following of the arts

Partnership opportunity with Sydney Opera House

Page 61: MMICC 2010 - SFU

FINANCIAL ASSUMPTIONS

Arena AlegriaConservative Assumptions - Europe Arena Tour

Discount Rate 10.00%Upfront Production Costs ($ M) 4Time for production (years) 1Scenic and Transport. Equip. ($ M) 6Capacity (people) 10,000Weekly Performances 6Weeks 36Break-even occupancy 65.00%Royalty to Arena 10.00%Occupancy 75.00%Merchandise 10.00%Merchandise Margin 30.00%Ticket Price ($) 54.50

Page 62: MMICC 2010 - SFU

ALEGRIA SENSITIVITY I

Worst Conservative Best 15,000,000.00

20,000,000.00

25,000,000.00

30,000,000.00

35,000,000.00

40,000,000.00

Sensitivity Analysis - Alegria

Prod. CostsScenicCapacityWeeklyWeeksOcc. RateRoyaltyMerch. MarginTicket Price

Scenario

Valu

e ($

)

Page 63: MMICC 2010 - SFU

ALEGRIA SENSITIVITY II

Prod. Costs Scenic Capacity Weekly Weeks Occ. Rate Royalty Merch. Margin Ticket Price

Worst 26,108,942.62 26,108,942.62 19,796,245.00 20,999,876.42 26,015,007.34 - 43,679,475.18 - 1,489,026.43 21,316,621.53 17,411,067.14

Conservative 27,018,033.53 27,018,033.53 27,018,033.53 27,018,033.53 27,018,033.53 27,018,033.53 27,018,033.53 27,018,033.53 27,018,033.53

Best 28,836,215.34 27,927,124.43 34,239,822.05 33,036,190.63 29,024,085.89 97,715,542.23 55,525,093.49 32,719,445.52 30,662,055.26

Production Costs$2M 28,836,215.34 Best$3M 27,927,124.43 $4M 27,018,033.53 Cons$5M 26,108,942.62 Worst

Scenic and Transport.$5M 27,927,124.43 Best $6M 27,018,033.53 Cons$7M 26,108,942.62 Worst

Capacity8000 19,796,245.00 Worst9000 23,407,139.26

10000 27,018,033.53 Cons11000 30,628,927.79 12000 34,239,822.05 Best

Weekly Shows5 20,999,876.42 Worst6 27,018,033.53 Cons7 33,036,190.63 Best

Weeks35 26,015,007.34 Worst36 27,018,033.53 Cons37 28,021,059.71 38 29,024,085.89 Best

Occupancy0.65- 43,679,475.18 Worst

0.7- 8,330,720.83 0.75 27,018,033.53 Cons

0.8 62,366,787.88 0.85 97,715,542.23 Best

Page 64: MMICC 2010 - SFU

ALEGRIA SENSITIVITY III Royalty

0.05 55,525,093.49 Best0.1 27,018,033.53 Cons

0.15- 1,489,026.43 Worst

Merchandise Margin0.2 21,316,621.53 Worst

0.25 24,167,327.53 0.3 27,018,033.53 Cons.

0.35 29,868,739.52 0.4 32,719,445.52 Best

Ticket Price40 17,411,067.14 Worst45 20,723,814.17 50 24,036,561.20

54.5 27,018,033.53 Cons.60 30,662,055.26 Best

Page 65: MMICC 2010 - SFU

FINANCIAL ASSUMPTIONSDisney France

ResidentConservative Assumptions - Disney

Discount Rate 10.00%Upfront Production Costs ($ M) 30Time for production (years) 2Capacity (people) 1,750Weekly Performances 10Weeks 46Op. Costs 45.00%Creative Royalty 13.00%Rent 12.00%Occupancy 93.00%Ticket Price 80Merchandise 10.00%Merchandise Margin 30.00%Costume Staff 3,000,000.00

Page 66: MMICC 2010 - SFU

FRANCE SENSITIVITY I

Worst Conservative Best 10,000,000.00

15,000,000.00

20,000,000.00

25,000,000.00

30,000,000.00

35,000,000.00

40,000,000.00

Sensitivity Analysis - France

Time for Prod.CapacityWeekly Perf.WeeksOp. CostsCreative RoyaltyRentOcc.Ticket PriceMerch. MarginCost. Staff

Scenario

Valu

e ($

)

Page 67: MMICC 2010 - SFU

FRANCE SENSITIVITY II Time for Prod. Capacity Weekly Perf. Weeks Op. Costs Creative Royalty Rent Occ. Ticket Price Merch. Margin Cost. Staff

Worst 18,073,036.71

16,917,940.12

13,448,971.36

22,950,929.27

17,158,840.73

22,217,753.51

20,531,449.25

23,632,073.21

10,413,623.69

22,217,753.51

10,856,987.11

Conservative 25,590,362.02

25,590,362.02

25,590,362.02

25,590,362.02

25,590,362.02

25,590,362.02

25,590,362.02

25,590,362.02

25,590,362.02

25,590,362.02

25,590,362.02

Best 33,880,081.03

34,262,783.93

37,731,752.69

28,229,794.78

34,021,883.32

30,649,274.80

28,962,970.54

26,895,887.90

40,767,100.35

28,647,541.83

40,323,736.94

Time for Production1 33,880,081.03 Best2 25,590,362.02 Cons3 18,073,036.71 Worst

Capacity1500 16,917,940.12 Worst1750 25,590,362.02 Cons2000 34,262,783.93 Best

Weekly Performances8 13,448,971.36 Worst9 19,519,666.69

10 25,590,362.02 Cons11 31,661,057.36 12 37,731,752.69 Best

Weeks44 22,950,929.27 Worst45 24,270,645.65 46 25,590,362.02 Cons47 26,910,078.40 48 28,229,794.78 Best

Op. Costs0.4 34,021,883.32 Best

0.45 25,590,362.02 Cons0.5 17,158,840.73 Worst

Creative Royalty0.1 30,649,274.80 Best

0.11 28,962,970.54 0.12 27,276,666.28 0.13 25,590,362.02 Cons0.14 23,904,057.77 0.15 22,217,753.51 Worst

Page 68: MMICC 2010 - SFU

FRANCE SENSITIVITY III Rent

0.1 28,962,970.54 Best0.11 27,276,666.28 0.12 25,590,362.02 Cons0.13 23,904,057.77 0.14 22,217,753.51 0.15 20,531,449.25 Worst

Occupancy0.9 23,632,073.21 Worst

0.91 24,284,836.15 0.92 24,937,599.09 0.93 25,590,362.02 Cons0.94 26,243,124.96 0.95 26,895,887.90 Best

Ticket Price60 10,413,623.69 Worst70 $18,001,992.8680 25,590,362.02 Cons90 33,178,731.19

100 40,767,100.35 Best

Merchandise Margin0.2 22,217,753.51 Worst0.3 25,590,362.02 Cons0.4 28,647,541.83 Best

Costume Staff 1,000,000 40,323,736.94 Best 2,000,000 32,957,049.48 3,000,000 25,590,362.02 Cons 4,000,000 18,223,674.57 5,000,000 10,856,987.11 Worst

Page 69: MMICC 2010 - SFU

FINANCIAL ASSUMPTIONS

Macau Resident AlternativeConservative Assumptions - Macau

Discount Rate 10.00%Upfront Production Costs ($ M) 30Time for production (years) 2Capacity (people) 2,750Weekly Performances 10Weeks 46Op. Costs 45.00%Creative Royalty 13.00%Rent 12.00%Occupancy 93.00%Ticket Price 125Merchandise 10.00%Merchandise Margin 30.00%Costume Staff 3,000,000.00

Page 70: MMICC 2010 - SFU

MACAU SENSITIVITY I

Worst Conservative Best 60,000,000.00

70,000,000.00

80,000,000.00

90,000,000.00

100,000,000.00

110,000,000.00

120,000,000.00

130,000,000.00

140,000,000.00

150,000,000.00

160,000,000.00

Sensitivity Analysis - Macau

Time for Prod.CapacityWeekly Perf.WeeksOp. CostsCreative RoyaltyRentOcc.Ticket PriceMerch. MarginCost. Staff

Scenario

Valu

e ($

)

Page 71: MMICC 2010 - SFU

MACAU SENSITIVITY II Time for Prod. Capacity Weekly Perf. Weeks Op. Costs Creative Royalty Rent Occ. Ticket Price Merch. Margin Cost. Staff

Worst 94,635,532.44 73,288,682.49 84,129,209.87 107,459,910.10 93,238,264.13 105,659,701.75 101,519,222.54 109,132,361.73 84,129,209.87 105,659,701.75 99,207,285.25 Conservative 113,940,660.16 113,940,660.16 113,940,660.16 113,940,660.16 113,940,660.16 113,940,660.16 113,940,660.16 113,940,660.16 113,940,660.16 113,940,660.16 113,940,660.16 Best 135,196,961.81 154,592,637.83 143,752,110.45 120,421,410.22 134,643,056.20 126,362,097.78 122,221,618.58 117,146,192.45 143,752,110.45 122,221,618.58 128,674,035.07

Time for Production1 135,196,961.81 Best2 113,940,660.16 Cons3 94,635,532.44 Worst

Capacity2000 73,288,682.49 Worst2250 86,839,341.71 2500 100,390,000.94 2750 113,940,660.16 Cons3000 127,491,319.38 3250 141,041,978.61 3500 154,592,637.83 Best

Weekly Performances8 84,129,209.87 Worst9 99,034,935.02

10 113,940,660.16 Cons11 128,846,385.31 12 143,752,110.45 Best

Weeks44 107,459,910.10 Worst45 110,700,285.13 46 113,940,660.16 Cons47 117,181,035.19 48 120,421,410.22 Best

Op. Costs0.4 134,643,056.20 Best

0.45 113,940,660.16 Cons0.5 93,238,264.13 Worst

Creative Royalty0.1 126,362,097.78 Best

0.11 122,221,618.58 0.12 118,081,139.37 0.13 113,940,660.16 Cons0.14 109,800,180.95 0.15 105,659,701.75 Worst

Page 72: MMICC 2010 - SFU

MACAU SENSITIVITY III Rent

0.1 122,221,618.58 Best0.11 118,081,139.37 0.12 113,940,660.16 Cons0.13 109,800,180.95 0.14 105,659,701.75 0.15 101,519,222.54 Worst

Occupancy0.9 109,132,361.73 Worst

0.91 110,735,127.87 0.92 112,337,894.02 0.93 113,940,660.16 Cons0.94 115,543,426.31 0.95 117,146,192.45 Best

Ticket Price100 84,129,209.87 Worst110 96,053,789.99 120 107,978,370.10 125 113,940,660.16 Cons130 119,902,950.22 140 131,827,530.34 150 143,752,110.45 Best

Merchandise Margin0.2 105,659,701.75 Worst0.3 113,940,660.16 Cons0.4 122,221,618.58 Best

Costume Staff 1,000,000 128,674,035.07 Best 2,000,000 121,307,347.62 3,000,000 113,940,660.16 Cons 4,000,000 106,573,972.70 5,000,000 99,207,285.25 Worst

Page 73: MMICC 2010 - SFU

AUSTRALIA TOUR DATES

Sydney, AU - From 7 January 2011Perth, AU - From 9 September 2010Adelaide, AU - From 21 July 2010Brisbane, AU - From 28 May 2010Melbourne, AU - From 2 April 2010

Page 74: MMICC 2010 - SFU

MGM BENEFITS

2003 2004 2005 2006 2007 Average

Casino 2.13% 32.86% 13.24% 3.47% 12.92%

Food & Bev. 6.63% 57.49% 16.69% 11.31% 23.03%

Entertainment 4.92% 58.67% 7.81% 22.07% 23.37%

Page 75: MMICC 2010 - SFU

THEATRE CONSTRUCTION Name Location Capacity (seats) Construction costs ($M) Year Cost/Person

Kodak LA 3100 95 2001 30,645.16

Colosseum LV 4100 95 2003 23,170.73

Aqua LV 3000 100 2005 33,333.33

Wynn LV 1200 40 2005 33,333.33

Arts (planned) UCONN 800 65 2005 81,250.00

Phantom LV 1800 40 2006 22,222.22

Average 2,333.33 37,325.80

Average (no UCONN) 2,640.00 28,540.96

Production costs included

Page 76: MMICC 2010 - SFU

TICKET PRICE CALCULATION Saltimbanco Tour Plan Spring/Summer 2008

(Assume all prices in USD)

Low HighLevel 3-2 40 60Level 1-0 70 90

Number of Shows 118

Price BreakdownLevel Amount Percent Allocation

0 90 10% 91 70 15% 10.52 60 25% 153 40 50% 20

$ 54.50

Page 77: MMICC 2010 - SFU

MACAU TOURIST CALCULATION

Tourism Data

Jan - April 200812 mos.

Tourists 9 995 006 29985018Incr. Over last year 16.28

Jan - Dec 2007

Tourists 27 003 370

Incr. Over last year 22.75

Jan - Dec 2006

Tourists 21 998 122

Incr. Over last year 17.57

Tourism ProjectionAverage 3 Year Growth 0.1887

2009 2010 2011 2012Tourists 35,642,361 42,367,087 50,360,583 59,862,231

2013 2014 2015 2016 2017 71,156,576 84,581,852 100,540,105 119,509,239 142,057,323

2018 2019 2020 2021 2022 168,859,606 200,718,738 238,588,806 283,603,907 337,112,112

Page 78: MMICC 2010 - SFU

OVERVIEW ISSUES ALEGRIA MACAU FRANCE IMPLEMENTATION

TIMELINE SUCCESS FACTORS

RISK AND MITIGATION

Risk Mitigation

LV Sands partnership problems

-Not an exclusive partnership with LV Sands, still providing top quality show

Disney refuses to build exclusive theatre

-Locate new Parisian partner, to be determined

Wynn refuses to build exclusive theatre

-Enter Macau with exclusive MGM Grand deal

Alegria cannot transition into arena format

-Develop new arena show, delay timeline as necessary

Page 79: MMICC 2010 - SFU

OVERVIEW ISSUES ALEGRIA MACAU FRANCE IMPLEMENTATION

TIMELINE SUCCESS FACTORS

SUCCESS INDICATORS

Success Indicators

Payback period for each project achieved, as indicated

Break-even for each recommendation after April 2009

NPV ROI ≥ 0.00%

Page 80: MMICC 2010 - SFU

BACK-UP INDEX ANALYSIS

SWOTKEY SUCCESS FACTORSBUSINESS MODEL

ALTERNATIVESBIG TOPS NPV COMPARISONBIG TOPS NPV CALCULATIONBIG TOPS ASSUMPTIONS

BERLIN OR LONDONLAS VEGASDISNEYLAND LOS ANGELASDUBAI

FUTURE OUTLOOKNEW YORKAUSTRALIA

ALEGRIAFINANCIAL ASSUMPTIONSSENSITIVITY ANALYSIS

FRANCEFINANCIAL ASSSUMPTIONSSENSITIVITY ANALYSIS

MACAUFINANCIAL ASSUMPTIONSSENSITIVITY ANALYSIS

MISCELLANEOUSAUSTRALIA TOUR DATESMGM BENEFITSTHEATRE CONSTRUCTIONTICKET PRICE CALCULATIONMACAU TOURIST CALUCLATIONRISK & MITIGATIONSSUCCESS INDICATORS