mmicc 2010 - sfu
DESCRIPTION
TRANSCRIPT
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
THE TRAPEZE STRATEGY
CIRQUE DU SOLEILDiversifying Show Production & Geographic Expansion
Dark Horse ConsultingFahad | Miata | Sascha | Derek
Team 7 – Simon Fraser University
STRATEGIC PATHWAY
Issues Implementation
“The TRAPEZE Strategy”
Overview
Issues
Alegria
France
Macau
Implementation
“The TRAPEZE Strategy”
Overview
STRATEGIC PATHWAY
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
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
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
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
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
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
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
ISSUES
NEW MARKET ENTRY CURRENT STRATEGY
FUTURE UNCERTAINTY
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
Today Future
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
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
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
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
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
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
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%
ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
ATTRACTIVE MARKET
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
ATTRACTIVE MARKET
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
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
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
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
ATTRACTIVE MARKET
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
Cirque du Soleil at Disneyland Paris
ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
ATTRACTIVE MARKET
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
Cirque du Soleil at Disneyland Paris
ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
ATTRACTIVE MARKET
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
Cirque du Soleil at Disneyland Paris
ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
ATTRACTIVE MARKET
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
Cirque du Soleil at Disneyland Paris
ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
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
DISNEYLAND
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
ATTRACTIVE MARKET DEAL STRUCTURE DISNEYLAND FINANCIAL GAIN
Resident Theatre: Florida
Tokyo Paris
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
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
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
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
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
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
WYNN MACAU
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
ATTRACTIVE MARKET DEAL STRUCTURE WYNN MACAU FINANCIAL GAIN
Tokyo Macau
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
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
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
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
SUMMARY
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
TIMELINE SUMMARY
FUTURE UNCERTAINTY
Today Future
SUMMARY
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
TIMELINE SUMMARY
ALEGRIA
Today Future
SUMMARY
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
TIMELINE SUMMARY
FRANCEALEGRIA
Today Future
SUMMARY
OVERVIEW ISSUES ALEGRIA FRANCE MACAU IMPLEMENTATION
TIMELINE SUMMARY
MACAUFRANCEALEGRIA
Today Future
THE TRAPEZE STRATEGY
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
$167 M
SWOT •Creativity/artistic expression•Leveraging creative process•Ability to successfully manage partnerships•Maintained original vision/values•Product differentiation
•Creative platform extension failures•Unwilling to compromise their creativity/vision•Untapped market opportunities•Underutilization of Arena strategy
•Large number of possible partnerships•Growth: current markets•Growth: Untapped markets
•Cannibalization of current Las Vegas market•Competitors: Dragone
Strengths
Weaknesses
ThreatsOpportunities
KEY SUCCESS FACTORS
Creative Process
Partnerships
Profitable Business Model
Big Top, Arena,
Resident Model
NEW BUSINESS MODEL CIRQUE DU
SOLEIL
ARENA
MYSTERE
O
ZUMANITY
LOVE
LA NOUBA
WINTUK
KA
RESIDENTS
KOOZA
CORTEO
VAREKAI
DRALION
QURDAMALEGRIA
BIG-TOP
ELVIS
DUBAICHRIS ANGEL
TOKYOMACAO #2
2009
2010
SALTIMBANCO
MACAO #1
WYNN
FRANCE
BIG TOPS NVP COMPARISON$ 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
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 $21,609,122.20
NPV CALCULATION
BIG TOPSBig Tops Alternative
Conservative Assumptions - MacauDiscount Rate 10.00%Upfront Production Costs ($ 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
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
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
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
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
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
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
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 ($) 54.50
ALEGRIA SENSITIVITY I
Worst Conservative Best 15,000,000.00
20,000,000.00
25,000,000.00
30,000,000.00
35,000,000.00
40,000,000.00
Sensitivity Analysis - Alegria
Prod. CostsScenicCapacityWeeklyWeeksOcc. RateRoyaltyMerch. MarginTicket Price
Scenario
Valu
e ($
)
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$7M 26,108,942.62 Worst
Capacity8000 19,796,245.00 Worst9000 23,407,139.26
10000 27,018,033.53 Cons11000 30,628,927.79 12000 34,239,822.05 Best
Weekly Shows5 20,999,876.42 Worst6 27,018,033.53 Cons7 33,036,190.63 Best
Weeks35 26,015,007.34 Worst36 27,018,033.53 Cons37 28,021,059.71 38 29,024,085.89 Best
Occupancy0.65- 43,679,475.18 Worst
0.7- 8,330,720.83 0.75 27,018,033.53 Cons
0.8 62,366,787.88 0.85 97,715,542.23 Best
ALEGRIA SENSITIVITY III Royalty
0.05 55,525,093.49 Best0.1 27,018,033.53 Cons
0.15- 1,489,026.43 Worst
Merchandise Margin0.2 21,316,621.53 Worst
0.25 24,167,327.53 0.3 27,018,033.53 Cons.
0.35 29,868,739.52 0.4 32,719,445.52 Best
Ticket Price40 17,411,067.14 Worst45 20,723,814.17 50 24,036,561.20
54.5 27,018,033.53 Cons.60 30,662,055.26 Best
FINANCIAL ASSUMPTIONSDisney France
ResidentConservative Assumptions - Disney
Discount Rate 10.00%Upfront Production Costs ($ 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
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 ($
)
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
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 $18,001,992.8680 25,590,362.02 Cons90 33,178,731.19
100 40,767,100.35 Best
Merchandise Margin0.2 22,217,753.51 Worst0.3 25,590,362.02 Cons0.4 28,647,541.83 Best
Costume Staff 1,000,000 40,323,736.94 Best 2,000,000 32,957,049.48 3,000,000 25,590,362.02 Cons 4,000,000 18,223,674.57 5,000,000 10,856,987.11 Worst
FINANCIAL ASSUMPTIONS
Macau Resident AlternativeConservative Assumptions - Macau
Discount Rate 10.00%Upfront Production Costs ($ 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
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 ($
)
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
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
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
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%
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
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
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
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
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%
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