Cirque du Soleil: an economic asset for Montréal

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Added on 2 February 2013 in Viewpoints

Text signed by Michel Leblanc, President and CEO of the Board of Trade of Metropolitan Montreal.

February 2, 2013

Cirque du Soleil: an economic asset for Montréal

For the past 20 years, we have all proudly shared in the Cirque du Soleil’s success. In a way, we have felt that its achievement were our own. So it was only natural to feel a chill in learning that the Cirque had had a difficult year in 2012 and would be laying off employees.

Strong reactions followed. Some played the role of Monday morning quarterback, levelling criticism at management. These criticisms, which were no doubt meant to be constructive, nonetheless tarnished Cirque du Soleil’s image.

Obviously the Cirque is not above criticism, but it seems that certain basic facts bear pointing out.   

First, we should not forget the importance of having a head office the size of Cirque du Soleil’s here in Montréal. Of course, there are all of its employees who pay taxes and make a major contribution to the economic development of the city and surrounding area. But there is more than just that.

Cirque du Soleil is an exemplary and engaged corporate citizen, with promising social action programs such as Cirque du Monde and ONE DROP.

Its international head office is located in the neighbourhood of Saint-Michel, one of the most disadvantaged in the country. Its arrival, followed by the addition of the Cité des Arts du Cirque to the neighbourhood, completely revitalized this part of the city.

And head offices create a ripple effect among a whole host of suppliers, some of which have used the Cirque’s international success as a springboard.  

For instance, ten years ago, Cirque du Soleil became a major client of the Montréal ad agency Sid Lee. In fact, the Cirque was the agency’s first major international account. This experience helped Sid Lee gradually make a name for itself and gain prominence outside of Quebec. Today Sid Lee has a number of international accounts, including Adidas and ABSOLUT VODKA. 

Cirque du Soleil also awarded high-visibility mandates to the Moment Factory team, opening many doors to international markets. Today, Moment Factory receives two or three requests for proposals a day for landmark projects from around the world.

Working in partnership with Cirque du Soleil, entrepreneur Jean-Françoys Brousseau created a ticketing system that is now distributed around the world. The support of Cirque du Soleil and the Bell Centre enabled his company, Outbox Technology, to win five of the ten most important performance venues in the world, including London’s O2 and the STAPLES Center in Los Angeles.

The underlying message: let’s be kind to the flagships of our economy; as the Cirque has demonstrated, they contribute a great deal to our society.

We should also celebrate the fact that the Cirque, like other champions of the Quebec economy, has shown international vision and ambition.

Of course, the difficult economic situation and the Canadian dollar at par present challenges for the Cirque and are forcing it to review its development strategy.

According to available information, every $0.01 gain in the Canadian dollar against the US dollar costs the Cirque $3 million in profits. So it is remarkable that Cirque du Soleil has managed to maintain such good financial health.

Unlike those who suggest that Cirque management was reckless, I believe that the company’s growth and diversification strategy are responsible for its current stability.

We should applaud the determination of Cirque management to implement an action plan immediately to curb the Cirque’s costs in the short term and give it the shot in the arm it needs in anticipation of the economic recovery. Of course, it is always a blow to hear that people are losing their jobs. But it is reassuring to see Guy Laliberté and his team communicating frankly with employees about the company’s future.

As a community, we should encourage the Cirque du Soleil’s management. Their phenomenal success and the ripple effects in the community deserve our respect. In addition to providing significant economic spin-offs, Cirque du Soleil has made a major contribution to Montréal’s brand and reputation.