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  • 1. PRESENTATION INDEX OVERVIEW MACAU FUTURE OUTLOOK ATTRACTIVE MARKET QUALITATIVE BUSINESS MODEL FULL ATTRACTIVE MARKET STATISTICS BUSINESS MODEL MAP DEAL STRUCTURE WYNN MACAU PARTNERSHIP ISSUES WYNN MACAU MARKETING NEW MARKET ENTRY FINANCIAL GAIN CURRENT STRATEGY IMPLEMENTATION ALEGRIA TIMELINE BUSINESS MODEL SHIFT SUMMARY TOUR LOCATIONS DATES TOUR LOCATIONS MAP FINANCIAL GAINS FRANCE ATTRACTIVE MARKET DISNEY ATTRACTIVE MARKET QUOTES ATTRACTIVE MARKET ATTENDANCE DEAL STRUCTURE DISNEYLAND MARKETING FINANCIAL GAIN
  • 2. THE TRAPEZE STRATEGY
  • 3. CIRQUE DU SOLEIL Diversifying Show Production & Geographic Expansion Dark Horse Consulting Fahad | Miata | Sascha | Derek Team 7 – Simon Fraser University
  • 4. STRATEGIC PATHWAY “The TRAPEZE Strategy” Overview Issues Implementation
  • 5. STRATEGIC PATHWAY “The TRAPEZE Strategy” Alegria Overview Issues France Implementation Macau
  • 6. FUTURE OUTLOOK NPV OF INCREMENTAL PROFIT UNTIL 2022 $ $167 M MACAU $114 M FRANCE $26 M ALEGRIA $27 M STATIC OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION FUTURE OUTLOOK BUSINESS MODEL
  • 7. BUSINESS MODEL 2008 CIRQUE DU SOLEIL 7 RESIDENTS 2 ARENA 6 BIG-TOP MYSTERE LOVE SALTIMBANCO KOOZA DRALION O LA NOUBA DELIRIUM CORTEO QURDAM ZUMANITY WINTUK VAREKAI ALEGRIA KA OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION FUTURE OUTLOOK BUSINESS MODEL
  • 8. BUSINESS MODEL 2010 CIRQUE DU SOLEIL 13 RESIDENTS 1 ARENA 8 BIG-TOP MYSTERE LOVE SALTIMBANCO KOOZA DRALION O LA NOUBA CORTEO QURDAM ZUMANITY WINTUK VAREKAI ALEGRIA KA ELVIS 2009 2010 CHRIS ANGEL DUBAI MACAO #1 MACAO #2 TOKYO OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION FUTURE OUTLOOK BUSINESS MODEL
  • 9. BUSINESS MODEL 2010 CIRQUE DU SOLEIL RESIDENTS ARENA BIG-TOP MYSTERE LOVE SALTIMBANCO KOOZA DRALION O LA NOUBA CORTEO QURDAM ZUMANITY WINTUK VAREKAI ALEGRIA KA ELVIS 2009 2010 CHRIS ANGEL DUBAI MACAO #1 MACAO #2 TOKYO OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION FUTURE OUTLOOK BUSINESS MODEL
  • 10. BUSINESS MODEL 2010 CIRQUE DU SOLEIL RESIDENCE ARENA BIG-TOP MYSTERE LOVE SALTIMBANCO KOOZA DRALION O 1 LA NOUBA CORTEO QURDAM 7 1 1 ZUMANITY WINTUK 1 VAREKAI 2 ALEGRIA KA ELVIS 2009 2010 CHRIS ANGEL DUBAI = Resident shows MACAO #1 MACAO #2 TOKYO OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION FUTURE OUTLOOK BUSINESS MODEL
  • 11. BUSINESS MODEL 2010 CIRQUE DU SOLEIL RESIDENCE ARENA Berlin BIG-TOP New York London MYSTERE LOVE SALTIMBANCO Paris KOOZA DRALION O 1 LA NOUBA CORTEO QURDAM 7 1 1 ZUMANITY WINTUK 1 VAREKAI 2 ALEGRIA KA ELVIS 2009 Sydney 2010 CHRIS ANGEL DUBAI MACAO #1 MACAO #2 TOKYO OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION FUTURE OUTLOOK BUSINESS MODEL
  • 12. BUSINESS MODEL 2010 CIRQUE DU SOLEIL RESIDENCE ARENA Berlin BIG-TOP London MYSTERE LOVE SALTIMBANCO FranceKOOZA DRALION O FUTURE UNCERTAINTY 1 LA NOUBA 1 CORTEO QURDAM ZUMANITY 7 1 WINTUK VAREKAI 2 ALEGRIA KA ELVIS 1 2009 Australia 2010 CHRIS ANGEL DUBAI MACAO #1 MACAO #2 TOKYO OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION FUTURE OUTLOOK BUSINESS MODEL
  • 13. ISSUES Today Future FUTURE UNCERTAINTY OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION NEW MARKET ENTRY CURRENT STRATEGY
  • 14. NEW MARKET ENTRY Today Future Successful Partnership Duplication with New Projects in Correct Markets Successful Partner MGM Casino Market Resident Shows OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION NEW MARKET ENTRY CURRENT STRATEGY
  • 15. CURRENT STRATEGY Today Future Under-utilization of Arena Segment to Display Successful Strategy Creativity Strategy Theatricality Experience OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION NEW MARKET ENTRY CURRENT STRATEGY
  • 16. BUSINESS MODEL SHIFT 1 ARENA 8 BIG-TOP SALTIMBANCO KOOZA DRALION -Set to retires Big Top tour in 2008 CORTEO QURDAM -Delirium retired April 18th 2008 VAREKAI ALEGRIA -Transition Alegria into arena tour 2009 2010 immediately -Begin tour in Europe OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION BUSINESS MODEL SHIFT TOUR LOCATIONS FINANCIAL GAIN
  • 17. BUSINESS MODEL SHIFT 2 ARENA 7 BIG-TOP SALTIMBANCO KOOZA DRALION -Set to retires Big Top tour in 2008 ALEGRIA CORTEO QURDAM -Delirium retired April 18th 2008 VAREKAI -Transition Alegria into arena tour 2009 2010 immediately -Begin tour in Europe OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION BUSINESS MODEL SHIFT TOUR LOCATIONS FINANCIAL GAIN
  • 18. TOUR LOCATIONS Paris, FR - From 15 March 2010 to 17 April 2010 Birmingham, UK - From 24 February 2010 to 13 March 2010 Manchester, UK - From 6 January 2010 to 27 January 2010 Lille, FR - From 25 November 2010 to 26 December 2010 Rome, IT - From 7 October 2010 to 31 October 2010 Frankfurt, DE - From 20 August 2010 to 25 September 2010 Gijon, ES - From 25 June 2010 to 31 July 2010 Milan, IT - From 29 April 2010 to 6 June 2010 Lyon, FR - From 5 March 2010 to 18 April 2010 Seville, ES - From 16 January 2010 to 22 February 2010 Valencia, ES - From 28 November 2009 to 21 December 2009 Zurich, CH - From 19 September 2009 to 26 October 2009 Oostende, CH - From 24 July 2009 to 17 August 2009 Cologne, DE - From 5 June 2009 to 29 June 2009 Geneva, CH - From 18 April 2009 to 25 May 2009 Bilbao, ES - From 26 February 2009 to 6 April 2009 London, UK - From 7 January 2009 to 6 February 2009 Madrid, ES - From 31 October 2009 to 26 December 2009 Brussels, BE - From 4 September 2009 to 19 October 2009 Vienna, AT - From 10 July 2009 to 4 August 2009 Barcelona, ES - From 26 April 2009 to 26 May 2009 OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION BUSINESS MODEL SHIFT TOUR LOCATIONS FINANCIAL GAIN
  • 19. TOUR LOCATIONS Paris, FR - From 15 March 2010 to 17 April 2010 Birmingham, UK - From 24 February 2010 to 13 March 2010 Manchester, UK - From 6 January 2010 to 27 January 2010 Lille, FR - From 25 November 2010 to 26 December 2010 Rome, IT - From 7 October 2010 to 31 October 2010 Frankfurt, DE - From 20 August 2010 to 25 September 2010 Gijon, ES - From 25 June 2010 to 31 July 2010 Milan, IT - From 29 April 2010 to 6 June 2010 Lyon, FR - From 5 March 2010 to 18 April 2010 Seville, ES - From 16 January 2010 to 22 February 2010 Valencia, ES - From 28 November 2009 to 21 December 2009 Zurich, CH - From 19 September 2009 to 26 October 2009 Oostende, CH - From 24 July 2009 to 17 August 2009 Cologne, DE - From 5 June 2009 to 29 June 2009 Geneva, CH - From 18 April 2009 to 25 May 2009 Bilbao, ES - From 26 February 2009 to 6 April 2009 London, UK - From 7 January 2009 to 6 February 2009 Madrid, ES - From 31 October 2009 to 26 December 2009 Brussels, BE - From 4 September 2009 to 19 October 2009 Vienna, AT - From 10 July 2009 to 4 August 2009 Barcelona, ES - From 26 April 2009 to 26 May 2009 OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION BUSINESS MODEL SHIFT TOUR LOCATIONS FINANCIAL GAIN
  • 20. FINANCIAL GAIN $ $27 M 2009 2010 2011-2022 $114 M 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 $26 M Royalty Net Income - 10,000,000 8,829,000 5,591,700 8,829,000 5,591,700 $27 M NPV $27,018,033.53 Investment $9,090,909.09 Annual ROI 6.55% Return $36,108,942.62 STATIC NPV ROI 297.20% Payback period 3 years OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION BUSINESS MODEL SHIFT TOUR LOCATIONS FINANCIAL GAIN
  • 21. ATTRACTIVE MARKET OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 22. ATTRACTIVE MARKET OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 23. ATTRACTIVE MARKET 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” OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 24. ATTRACTIVE MARKET 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 OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 25. ATTRACTIVE MARKET 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” OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 26. ATTRACTIVE MARKET Cirque du Soleil at Disneyland Paris OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 27. ATTRACTIVE MARKET Cirque du Soleil at Disneyland Paris OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 28. ATTRACTIVE MARKET Cirque du Soleil at Disneyland Paris OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 29. ATTRACTIVE MARKET Cirque du Soleil at Disneyland Paris OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 30. DEAL STRUCTURE -Structured after MGM partnership Investment $43,342,154.83 Return $50,589,127.77 -Disney to build theatre NPV ROI 14.33% Payback Period 5 years -Split initial production costs (50/50) -MGM has experienced average -Split operating profits (50/50) entertainment revenue increase of 23.37% over last five years OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 31. DISNEYLAND Resident Theatre: Florida Tokyo Paris OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 32. DISNEYLAND Resident Theatre: Florida Capacity utilized to model financial gain Tokyo Paris OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 33. FINANCIAL GAIN $ $26 M 2009 2010 2011-2022 Upfront Production Costs - 15,000,000 - 15,000,000 $114 M 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 $26 M Operating Profit - 50% Add: Merchandise Income - 7,500,000 - 7,500,000 - 8,983,800 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 $27 M NPV $25,590,362.02 STATIC Investment $18,223,140.50 Annual ROI 32.47% Return $43,813,502.52 NPV ROI 140.43% Payback period 5 years OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
  • 34. ATTRACTIVE MARKET Increasing Gaming Vegas of the East Established Presence Concessions (6) OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN
  • 35. ATTRACTIVE MARKET Projected Annual Macau Tourists 400,000,000 350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 Annual Macau Increasing Gaming Vegas of the East Established Presence Tourists 100,000,000 Concessions (6) 50,000,000 - OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN
  • 36. DEAL STRUCTURE -Similar results to MGM partnership, experienced Investment $68,109,100.45 average revenue increases over last five years of: Return $124,214,376.21 NPV ROI 45.17% - Casino: 12.92% Payback Period 4 years - Food & Bev.: 23.03% - Entertainment: 23.37% OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN
  • 37. WYNN MACAU Wynn Macau -Owns 1/6 national gaming concessions -Wynn left the newly formed MGM Mirage in 2000 Wynn Encore - Strong pre-existing relationship, Wynn responsible for Cirque du Soleil initial introduction into Las Vegas Steve Wynn OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN
  • 38. WYNN MACAU Tokyo Macau OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN
  • 39. FINANCIAL GAIN $ $114 M 2009 2010 2011 - 2022 Upfront Production Costs - 15,000,000 - 15,000,000 $114 M 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 $26 M Operating Profit - 50% Add: Merchandise Income - 7,500,000 - 7,500,000 22,058,438 - 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 $27 M NPV $113,940,660.16 STATIC Investment $18,223,140.50 Annual ROI 43.09% Return $132,163,800.66 NPV ROI 625.25% Payback period 3 years OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN
  • 40. TIMELINE ALEGRIA End Big Tent tour: Alegria Transition Alegria: Big Top  Arena Alegria Arena Tour: Europe * Alegria Arena Tour: Australia* Alegria Arena Tour New Cycle: N.A. 1 2 3 4 Years *Refer to schedule in presentation OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION TIMELINE SUMMARY
  • 41. TIMELINE FRANCE Negotiate deal with Disney Paris Construct Disney Paris theatre Production: Amant de Rêve Disneyland Paris: Amant de Rêve 1 2 3 4 Years OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION TIMELINE SUMMARY
  • 42. TIMELINE MACAU Negotiate deal with Wynn Resort Ltd Construct Wynn Macau Theatre Production: Rouge Wynn Macau: Rouge 1 2 3 4 Years OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION TIMELINE SUMMARY
  • 43. SUMMARY Today Future FUTURE UNCERTAINTY OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION TIMELINE SUMMARY
  • 44. SUMMARY Today Future ALEGRIA OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION TIMELINE SUMMARY
  • 45. SUMMARY Today Future ALEGRIA FRANCE OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION TIMELINE SUMMARY
  • 46. SUMMARY Today Future ALEGRIA FRANCE MACAU OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION TIMELINE SUMMARY
  • 47. THE TRAPEZE STRATEGY
  • 48. NPV OF INCREMENTAL PROFIT UNTIL 2022 $ $167 M MACAU $114 M FRANCE $26 M ALEGRIA $27 M STATIC Dark Horse Consulting Fahad | Sascha | Miata | Derek THANK-YOU! QUESTIONS?
  • 49. SWOT •Creativity/artistic expression •Creative platform extension failures •Leveraging creative process •Unwilling to compromise their •Ability to successfully manage partnerships creativity/vision •Maintained original vision/values •Untapped market opportunities •Product differentiation •Underutilization of Arena strategy •Large number of possible partnerships •Cannibalization of current Las Vegas •Growth: current markets market •Growth: Untapped markets •Competitors: Dragone
  • 50. KEY SUCCESS FACTORS
  • 51. NEW BUSINESS MODEL CIRQUE DU SOLEIL RESIDENTS ARENA BIG-TOP MYSTERE LOVE SALTIMBANCO KOOZA DRALION O LA NOUBA ALEGRIA CORTEO QURDAM ZUMANITY WINTUK VAREKAI 2010 KA ELVIS 2009 CHRIS ANGEL DUBAI WYNN MACAO #1 MACAO #2 TOKYO FRANCE
  • 52. BIG TOPS NVP COMPARISON $ NPV OF INCREMENTAL PROFIT UNTIL 2022 Two Big Top touring shows are planned for launch in the next two years MACAU ALEGRIA FRANCE BIG TOPS $114 M $22 M $27 M $26 M
  • 53. BIG TOPS FINANCIALS NPV CALCULATION 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 $21,609,122.20
  • 54. BIG TOPS Big Tops Alternative Conservative Assumptions - Macau Discount Rate 10.00% Upfront Production Costs ($ M) 30 Scenic and Transport. Equip. ($ M) 7 Big Top ($ M) 13 Time for production (years) 2 Capacity (people) 2,500 Weekly Performances 9 Weeks 36 Break-even occupancy 65.00% Occupancy 75.00% Merchandise 10.00% Merchandise Margin 30.00% Ticket Price ($) 50.00
  • 55. WHY NOT BERLIN OR LONDON Based on these factors France instead of Berlin or London: the country is very close in proximity to Berlin and London Cirque du Soleil always identifies solid partnerships before entering a market: entering these new markets without existing relationships could be difficult
  • 56. WHY NOT LAS VEGAS Based on these factors Category size: Large; Category growth; Low, Category attractiveness; High Increased number of shows = increased chance of cannibalization
  • 57. WHY NOT DISNEYLAND LOS ANGELES Based on these factors Does not achieve the goal of creating a foothold in a new foreign market Already have one Disney Partnership: Walt Disneyworld Resort, Florida
  • 58. WHY NOT DUBAI (FURTHER) Lack of gambling makes replication of current 100 Number of Tourists 82 business model difficult 80 60 (Millions) 40 France 27 20 5.5 Macau 0 Dubai France Macau Dubai No presence of large scale amusement park to replicate the Disney theme park success OVERVIEW ISSUES ALEGRIA MACAU FRANCE IMPLEMENTATION TIMELINE SUCCESS FACTORS
  • 59. WHY NEW YORK IN THE FUTURE Based on these factors Success of Zumanity indicator of potential resident show success Market Potential: Demographics demonstrates that proportion of upper middle class individuals and other s have a long standing appreciation of the arts OVERVIEW ISSUES ALEGRIA MACAU FRANCE IMPLEMENTATION TIMELINE SUCCESS FACTORS
  • 60. WHY AUSTRALIA IN THE FUTURE With touring of Alegria, possibility for market evaluation for resident show Partnership opportunity with Sydney Opera House OVERVIEW ISSUES ALEGRIA MACAU FRANCE IMPLEMENTATION TIMELINE SUCCESS FACTORS
  • 61. FINANCIAL ASSUMPTIONS Arena Alegria Conservative Assumptions - Europe Arena Tour Discount Rate 10.00% Upfront Production Costs ($ M) 4 Time for production (years) 1 Scenic and Transport. Equip. ($ M) 6 Capacity (people) 10,000 Weekly Performances 6 Weeks 36 Break-even occupancy 65.00% Royalty to Arena 10.00% Occupancy 75.00% Merchandise 10.00% Merchandise Margin 30.00% Ticket Price ($) 54.50
  • 62. ALEGRIA SENSITIVITY I Sensitivity Analysis - Alegria 40,000,000.00 35,000,000.00 Prod. Costs Scenic 30,000,000.00 Capacity Value ($) Weekly 25,000,000.00 Weeks Occ. Rate 20,000,000.00 Royalty Merch. Margin Ticket Price 15,000,000.00 Worst Conservative Best Scenario
  • 63. 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 Weekly Shows $2M 28,836,215.34 Best 5 20,999,876.42 Worst $3M 27,927,124.43 6 27,018,033.53 Cons $4M 27,018,033.53 Cons 7 33,036,190.63 Best $5M 26,108,942.62 Worst Weeks Scenic and Transport. 35 26,015,007.34 Worst $5M 27,927,124.43 Best 36 27,018,033.53 Cons $6M 27,018,033.53 Cons 37 28,021,059.71 $7M 26,108,942.62 Worst 38 29,024,085.89 Best Capacity Occupancy 8000 19,796,245.00 Worst 0.65- 43,679,475.18 Worst 9000 23,407,139.26 0.7- 8,330,720.83 10000 27,018,033.53 Cons 0.75 27,018,033.53 Cons 11000 30,628,927.79 0.8 62,366,787.88 12000 34,239,822.05 Best 0.85 97,715,542.23 Best
  • 64. ALEGRIA SENSITIVITY III Royalty 0.05 55,525,093.49 Best 0.1 27,018,033.53 Cons 0.15- 1,489,026.43 Worst Merchandise Margin 0.2 21,316,621.53 Worst 0.25 24,167,327.53 0.3 27,018,033.53 Cons. 0.35 29,868,739.52 0.4 32,719,445.52 Best Ticket Price 40 17,411,067.14 Worst 45 20,723,814.17 50 24,036,561.20 54.5 27,018,033.53 Cons. 60 30,662,055.26 Best
  • 65. FINANCIAL ASSUMPTIONS Disney France Resident Conservative Assumptions - Disney Discount Rate 10.00% Upfront Production Costs ($ M) 30 Time for production (years) 2 Capacity (people) 1,750 Weekly Performances 10 Weeks 46 Op. Costs 45.00% Creative Royalty 13.00% Rent 12.00% Occupancy 93.00% Ticket Price 80 Merchandise 10.00% Merchandise Margin 30.00% Costume Staff 3,000,000.00
  • 66. FRANCE SENSITIVITY I Sensitivity Analysis - France 40,000,000.00 35,000,000.00 Time for Prod. Capacity 30,000,000.00 Weekly Perf. Weeks Value ($) 25,000,000.00 Op. Costs Creative Royalty 20,000,000.00 Rent Occ. 15,000,000.00 Ticket Price Merch. Margin 10,000,000.00 Cost. Staff Worst Conservative Best Scenario
  • 67. FRANCE SENSITIVITY II Time for Prod. Capacity Weekly Perf. Weeks Op. Costs Creative Royalty Rent Occ. Ticket Price Merch. Margin Cost. Staff Worst 18,073,036.7116,917,940.12 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 25,590,362.0225,590,362.02 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 33,880,081.0334,262,783.93 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 Weeks Time for Production 44 22,950,929.27 Worst 1 33,880,081.03 Best 45 24,270,645.65 2 25,590,362.02 Cons 46 25,590,362.02 Cons 3 18,073,036.71 Worst 47 26,910,078.40 48 28,229,794.78 Best Capacity 1500 16,917,940.12 Worst Op. Costs 1750 25,590,362.02 Cons 0.4 34,021,883.32 Best 0.45 25,590,362.02 Cons 2000 34,262,783.93 Best 0.5 17,158,840.73 Worst Weekly Performances Creative Royalty 8 13,448,971.36 Worst 0.1 30,649,274.80 Best 9 19,519,666.69 0.11 28,962,970.54 10 25,590,362.02 Cons 0.12 27,276,666.28 11 31,661,057.36 0.13 25,590,362.02 Cons 0.14 23,904,057.77 12 37,731,752.69 Best 0.15 22,217,753.51 Worst
  • 68. FRANCE SENSITIVITY III Rent Merchandise Margin 0.1 28,962,970.54 Best 0.2 22,217,753.51 Worst 0.11 27,276,666.28 0.3 25,590,362.02 Cons 0.12 25,590,362.02 Cons 0.4 28,647,541.83 Best 0.13 23,904,057.77 0.14 22,217,753.51 Costume Staff 0.15 20,531,449.25 Worst 1,000,000 40,323,736.94 Best 2,000,000 32,957,049.48 Occupancy 3,000,000 25,590,362.02 Cons 0.9 23,632,073.21 Worst 4,000,000 18,223,674.57 5,000,000 10,856,987.11 Worst 0.91 24,284,836.15 0.92 24,937,599.09 0.93 25,590,362.02 Cons 0.94 26,243,124.96 0.95 26,895,887.90 Best Ticket Price 60 10,413,623.69 Worst 70 $18,001,992.86 80 25,590,362.02 Cons 90 33,178,731.19 100 40,767,100.35 Best
  • 69. FINANCIAL ASSUMPTIONS Macau Resident Alternative Conservative Assumptions - Macau Discount Rate 10.00% Upfront Production Costs ($ M) 30 Time for production (years) 2 Capacity (people) 2,750 Weekly Performances 10 Weeks 46 Op. Costs 45.00% Creative Royalty 13.00% Rent 12.00% Occupancy 93.00% Ticket Price 125 Merchandise 10.00% Merchandise Margin 30.00% Costume Staff 3,000,000.00
  • 70. MACAU SENSITIVITY I Sensitivity Analysis - Macau 160,000,000.00 150,000,000.00 Time for Prod. 140,000,000.00 Capacity 130,000,000.00 Weekly Perf. 120,000,000.00 Weeks Value ($) 110,000,000.00 Op. Costs 100,000,000.00 Creative Royalty 90,000,000.00 Rent Occ. 80,000,000.00 Ticket Price 70,000,000.00 Merch. Margin 60,000,000.00 Cost. Staff Worst Conservative Best Scenario
  • 71. 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 Production Weeks 1 135,196,961.81 Best 44 107,459,910.10 Worst 2 113,940,660.16 Cons 45 110,700,285.13 3 94,635,532.44 Worst 46 113,940,660.16 Cons 47 117,181,035.19 Capacity 48 120,421,410.22 Best 2000 73,288,682.49 Worst 2250 86,839,341.71 Op. Costs 2500 100,390,000.94 0.4 134,643,056.20 Best 2750 113,940,660.16 Cons 0.45 113,940,660.16 Cons 3000 127,491,319.38 0.5 93,238,264.13 Worst 3250 141,041,978.61 3500 154,592,637.83 Best Creative Royalty 0.1 126,362,097.78 Best Weekly Performances 0.11 122,221,618.58 8 84,129,209.87 Worst 0.12 118,081,139.37 9 99,034,935.02 0.13 113,940,660.16 Cons 10 113,940,660.16 Cons 0.14 109,800,180.95 11 128,846,385.31 0.15 105,659,701.75 Worst 12 143,752,110.45 Best
  • 72. MACAU SENSITIVITY III Rent Merchandise Margin 0.1 122,221,618.58 Best 0.2 105,659,701.75 Worst 0.11 118,081,139.37 0.12 113,940,660.16 Cons 0.3 113,940,660.16 Cons 0.13 109,800,180.95 0.4 122,221,618.58 Best 0.14 105,659,701.75 0.15 101,519,222.54 Worst Costume Staff Occupancy 1,000,000 128,674,035.07 Best 0.9 109,132,361.73 Worst 2,000,000 121,307,347.62 0.91 110,735,127.87 0.92 112,337,894.02 3,000,000 113,940,660.16 Cons 0.93 113,940,660.16 Cons 4,000,000 106,573,972.70 0.94 115,543,426.31 5,000,000 99,207,285.25 Worst 0.95 117,146,192.45 Best Ticket Price 100 84,129,209.87 Worst 110 96,053,789.99 120 107,978,370.10 125 113,940,660.16 Cons 130 119,902,950.22 140 131,827,530.34 150 143,752,110.45 Best
  • 73. AUSTRALIA TOUR DATES Sydney, AU - From 7 January 2011 Perth, AU - From 9 September 2010 Adelaide, AU - From 21 July 2010 Brisbane, AU - From 28 May 2010 Melbourne, AU - From 2 April 2010
  • 74. 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%
  • 75. 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
  • 76. TICKET PRICE CALCULATION Saltimbanco Tour Plan Spring/Summer 2008 (Assume all prices in USD) Low High Level 3-2 40 60 Level 1-0 70 90 Number of Shows 118 Price Breakdown Level Amount Percent Allocation 0 90 10% 9 1 70 15% 10.5 2 60 25% 15 3 40 50% 20 $ 54.50
  • 77. MACAU TOURIST CALCULATION Tourism Data Tourism Projection Jan - April 2008 Average 3 Year Growth 0.1887 12 mos. Tourists 9 995 006 29985018 2009 2010 2011 2012 Incr. Over last year 16.28 Tourists 35,642,361 42,367,087 50,360,583 59,862,231 Jan - Dec 2007 2013 2014 2015 2016 2017 71,156,576 84,581,852 100,540,105 119,509,239 142,057,323 Tourists 27 003 370 Incr. Over last year 22.75 2018 2019 2020 2021 2022 168,859,606 200,718,738 238,588,806 283,603,907 337,112,112 Jan - Dec 2006 Tourists 21 998 122 Incr. Over last year 17.57
  • 78. RISK AND MITIGATION Risk Mitigation LV Sands partnership -Not an exclusive partnership problems with LV Sands, still providing top quality show Disney refuses to build -Locate new Parisian partner, exclusive theatre to be determined Wynn refuses to build -Enter Macau with exclusive exclusive theatre MGM Grand deal Alegria cannot transition into -Develop new arena show, arena format delay timeline as necessary OVERVIEW ISSUES ALEGRIA MACAU FRANCE IMPLEMENTATION TIMELINE SUCCESS FACTORS
  • 79. SUCCESS INDICATORS Success Indicators Payback period for each project achieved, as indicated Break-even for each recommendation after April 2009 NPV ROI ≥ 0.00% OVERVIEW ISSUES ALEGRIA MACAU FRANCE IMPLEMENTATION TIMELINE SUCCESS FACTORS
  • 80. BACK-UP INDEX ANALYSIS FRANCE SWOT FINANCIAL ASSSUMPTIONS KEY SUCCESS FACTORS SENSITIVITY ANALYSIS BUSINESS MODEL MACAU ALTERNATIVES FINANCIAL ASSUMPTIONS BIG TOPS NPV COMPARISON SENSITIVITY ANALYSIS BIG TOPS NPV CALCULATION BIG TOPS ASSUMPTIONS MISCELLANEOUS AUSTRALIA TOUR DATES BERLIN OR LONDON MGM BENEFITS LAS VEGAS THEATRE CONSTRUCTION DISNEYLAND LOS ANGELAS TICKET PRICE CALCULATION DUBAI MACAU TOURIST CALUCLATION RISK & MITIGATIONS FUTURE OUTLOOK SUCCESS INDICATORS NEW YORK AUSTRALIA ALEGRIA FINANCIAL ASSUMPTIONS SENSITIVITY ANALYSIS

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