Cirque du Soleil's sudden pullout from Hollywood*

iris2.jpgMany questions to sort out after Friday's unexpected announcement that Cirque du Soleil will shut down "Iris" on Jan. 19. Maybe it shouldn't have been so surprising - for months there have been signs that "Iris" was struggling (the discount service Gold Star has had reduced tickets available for some time). Cirque itself said ticket sales were lagging. The Canadian-based entertainment troupe had been taking a chance on committing to a permanent L.A. show, especially in Hollywood where a commercial and cultural renaissance has yet to fully take shape. "Iris," with its high ticket prices, might have been too big a bet. From my 2011 Los Angeles magazine column:

Unlike Vegas, with its almost constant visitor churn, L.A. is not an obvious Cirque target. No show has been permanently based here (Phantom of the Opera had the longest run, at four-and-a-half years). Also, Cirque shows are pricey to mount, requiring a complement of sophisticated lifts, platform stages, and set pieces. The Kodak's limited backstage would need to be significantly revamped in order for Cirque to match its production standards in Vegas, which any Hollywood show would inevitably be compared with.

The most obvious question is what happens with a $30 million loan from the Community Development Department to a partnership set up by the CIM Group, which owns the Dolby Theatre (formerly the Kodak Theatre) and cut a 10-year deal with Cirque. The money came from a little-used loan guarantee program overseen by the Department of Housing and Urban Development, but it was orchestrated by City Councilman Eric Garcetti, who is running for mayor. It's worth noting that City Councilman Dennis Zine had initially questioned whether it was a great idea to put that much money into a single project. An LAT editorial was also skeptical ("too many assertions and too little evidence"). Taxpayer money was not involved in the loan - funding came from private investors who bought federally guaranteed notes - but with the show ending someone presumably is on the hook. From the LAT:

Renee-Claude Menard of Cirque said by phone from Montreal that the company spent $50 million to $55 million to produce the show. She said the cost of renovating the theater, reported to be $40 million, was paid by the CIM Group. "We put a huge effort into marketing and overseas marketing, but nothing would tilt the needle," Menard said. "The L.A. market is not ready for a permanent show." She declined to say how much money the company will lose on "Iris" because Cirque is exploring the possibility of taking the show to other cities. She declined to elaborate further.

*Update: CIM says it will meet the terms of the $30 million loan. From the LAT:

CIM Group spokeswoman Karen Diehl issued a statement saying payments would be made as scheduled on the city loan, which was approved by the City Council and Mayor Antonio Villaraigosa. CIM Group owns both the mall and the theater. "The loan is current, and CIM will repay the entire obligation of the loan in full," the company's statement said. Neither CIM Group nor city officials could describe the payment terms or say when the loan is scheduled to be paid off.

More by Mark Lacter:
American-US Air settlement with DOJ includes small tweak at LAX
Socal housing market going nowhere fast
Amazon keeps pushing for faster L.A. delivery
Another rugged quarter for Tribune Co. papers
How does Stanford compete with the big boys?
Those awful infographics that promise to explain and only distort
Best to low-ball today's employment report
Further fallout from airport shootings
Crazy opening for Twitter*
Should Twitter be valued at $18 billion?
Recent stories:
Letter from Down Under: Welcome to the Homogenocene
One last Florida photo
Signs of Saturday: No refund
'I Am Woman,' hear them roar
Bobcat crossing

New at LA Observed
On the Media Page
Go to Media

On the Politics Page
Go to Politics
Arts and culture

Sign up for daily email from LA Observed

Enter your email address:

Delivered by FeedBurner

Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
LA Observed on Twitter and Facebook