Guy Laliberté: Cirque du Soleil’s clown turned CEO

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0:40An astronaut floats through the International Space Station. He's tanned, he's bald. He picks up the satellite phone and starts chatting. On the other end of the line is a stadium full of screaming fans and Bono. Did we mention the astronaut is wearing a bright red clown nose? Welcome to Good Bad Billionaire from the BBC. Each episode we pick a billionaire and we find out how they made their money. We take them from zero to their first million and then from a million on to a billion. My name is Zing Singh and I'm a journalist, author and podcaster. And I'm Simon Jack. I'm the BBC's business editor.

1:13And on this episode we've got someone a little bit unusual. This week's billionaire was suggested by listener Keith who emailed us to say I think the founder of Cirque du Soleil would be fascinating. That man is Guy LaLiberte, the fire-breathing, still-walking clown billionaire. A man who reinvented the greatest show on earth. That's right. That would be the circus, by the way, for people who don't know. And I have to confess, Singh, I have never been. I've seen some footage of it, but you have? Yes. So I went when I was a very small child. I think it must have been six or seven. And my mind was blown.

1:48I don't think I've ever recovered from watching 12 topless men dressed as fish trapeze each other off stilts. I don't know. It's just honestly, it is a sensory extravaganza. And he basically reinvented the circus and turned it into, you know, quite an artistic high art concept. Exactly. I mean, the costumes, the makeup, the generous that it's much more like a sophisticated psychedelic Venetian masquerade, as opposed to the circus shows of the past, which were, you know, predicated on animal cruelty and, you know, had that real kind of hokey, sawdust, peaty, Barnum-esque feel. OK, that's a brilliant description, I have to say.

2:27But let's talk about Guy himself, a larger-than-life character. He owes his billion-dollar empire where it started with busking. Yeah, he sleeps between one and six hours a night. He gets by on power naps. He's a high-stakes poker player, literally and in business. And he's also renowned for throwing extravagant parties filled with A-listers and acrobats. Probably why I've never been. He sees himself, as is interesting this, as made up of two halves, a creative and a capitalist. So how did a busker create perhaps what is the biggest show on earth?

3:03Guy LaLiberte was born in 1959 in Quebec City, Canada. He came from a middle class family. His mother was a nurse. She loved playing piano. Guy describes his father as a PR guy, a wheeler dealer, who had a knack for organising parties that would make a client sign the contract. And his father was also someone who, according to Guy, got broke so many times because he was a gambler. They had a big extended family of over 120 people. And every weekend, he remembers them having a 48-hour party, kids asleep on the floor, adults having fun, listening to music, singing, playing cards. And like many of our billionaires, Guy showed a flair for business early.

3:41At five, he was selling baseball cards in the schoolyard. On the creative side, he learnt to play an accordion, important that, which he found in his father's closet. And then, during a trip to the US, he visited the circus. Now, this wasn't any old circus. It was descended from this legendary 19th century show known as The Greatest Show on Earth, which was founded by the legendary showman, Petey Barnum. And Guy was fascinated by what he saw. A few years later, he'd be further inspired reading the biography of P.T. Barnum himself. But at the age of 10, his parents sent Guy to boarding school. It was an incredibly difficult environment that he said killed the soul of some of the kids around him.

4:20His teenage years were then driven by rage. He said, I wasn't able to see the beauty and I was just seeing the darkness. He became a troublemaker. He was kicked out of several schools. He fought with his parents. They wanted him to follow a traditional path, you know, as a doctor, a lawyer, an engineer. and, you know, remember this was the 1970s. Yeah, the generation gap had never felt wider. We just had the summer of love in the late 60s. So at 14, he ran away from home and when he returned 10 days later, he told his parents this. He said, let's make a deal. I will continue my school. You pay for my lunch, my clothes, but I want to have the right to keep my hair long and work to earn my own money.

4:57I like how he drove his parents a hard bargain. So he earned this money by busking on the streets of Quebec playing the accordion. Now, what really drove him was this desire to travel. So at 18, he decided to pack up his accordion and busk his way across Europe. He had enough money to buy open tickets for a year and about$50 in cash in his pocket. He visited fellow musicians that he'd met while busking and friends of friends. And while in London, he slept on a park bench in Hyde Park. Decades later, whenever he'd visit the city, he would pay£3 ,000 a night to stay at a penthouse overlooking Hyde Park just to remind him of how far he'd come.

5:32God, I wonder if he deliberately picked the highest floor just so he could look all the way down and think, that used to be me. So on one of these European adventures, he fell in with groups of circus performers and they taught him how to juggle, how to stilt walk, the art of fire breathing. You know, these are all kind of skills the average hitchhiker doesn't learn, I think. I've done a bit of fire breathing. Have you? It's actually not as hard as it looks. What's the secret? You just take a big mouthful of flammable liquid and spit it out of a flame. That's pretty much all there is to it. Dare I ask, how did you learn?

6:02Why did you learn to fire breathe? There was some guy doing it at some kind of event. And I just said, can I have a go? Alcohol may have been involved.

6:13Anyway, so he said, yeah, you just take a good, don't swallow it and spit it all out. You've got to blow really hard. So you get rid of it all. You don't want some left in your mouth. Otherwise, that'll sort of catch fire. Obviously, don't try fire breathing at home without an expert on hand. And even then, think twice. But there we go. You know, I didn't pursue it. Right. There's a world in which Simon was the UK's greatest fire breather. But sadly, he works for the BBC now and for us instead. I mean, Guy eventually returned to Canada in the late 1970s. He had all these skills in his pocket. But back to Worth with something of a bump in a way, because his dad gets him a job at a factory.

6:51And he's starting to make a bit of money playing poker, backgammon. And he said, a little bit of everything. I love competition. Then he gets a new job at an electrical dam, but just three days in, there's a union strike. So while he waits for the strike to end, he heads to the small city of Bay St Paul in Quebec because he heard there was a cool youth hostel there. And when he arrives, he sees an old school friend, Daniel Gaultier. Now, Daniel will go on to be the co-founder of Cirque du Soleil. There's another person who Guy meets at the hostel, a man called Gilles Saint-Croix. Now, Gilles had been part of the Bread and Puppet Theatre in Vermont, politically radical puppet show formed during the anti-war protest to the Vietnam War.

7:29Gilles starts a stilt-walking theatre group and Guy joins and he quickly rises up the ranks to become one of the group's leaders who's responsible for organising the shows and fundraising. But Guy was not a fan of the Canadian winter, notoriously cold. So in between summers, working in Basin Port, he travelled to warmer climes. He visited Hawaii for the first time in 1979 and while watching the sunset, he came up with the name Cirque du Soleil. It is a good name. It is a very good name. I think, you know, it's one of those ones where getting the name right, I think, really mattered. Circus of the Sun.

8:01So we're in 1982 now and Guy, Daniel and Gilles organise a street festival called La Fête Foraine. Think free love, circus performers and apparently acid dealing clowns. Not sure how much I want to see a clown on acid, I have to say. Yes, exactly. I mean, they're quite scary as they are. You know, if you throw LSD into that and it's an altogether more sinister proposition. Anyway, this festival gave them the ambition to create their own circus off the street under a big top. But it would be a new kind of circus with artistic integrity and, very important, no performing animals. And they got their big break in 1984 when the Canadian government were looking to spend money on cultural events to celebrate Canada's 450th anniversary.

8:42So Guy pitches the idea of a travelling circus. The government are convinced and they give him a$1 million contract. So they take the best of the circus, jugglers, acrobats, clowns, etc. and combine it with the sets, the sounds, the costumes of musical theatre. And so the first Cirque du Soleil is born. Guy at this time is just 25 years old. To begin with, the show comprised of 10 acts under a blue and yellow big top that seated 800 people. And Guy was actually doing the fire breathing himself. He describes himself as one of the best fire breathers in the world at this time. That's quite the claim.

9:16and they started out with a 15-city tour in Quebec and Guy said that his show made his mum realise that this was a serious thing that they were doing. With my father, it took like two more years. I'm sure it's nobody's middle-class dad's dream of seeing your son set up a circus act. In fact, running off to the circus is actually a kind of meme. It's like I'm going to pack it all in and run off and join the circus. It's a threat. It wasn't plain sailing though. Guy said it was only with the courage and arrogance of youth that we survived. The big top tent even fell down on the first day. They had trouble getting people into the shows.

9:48All sorts of problems. So their first year was also plagued with financial troubles. The money from the government took time to come in, so they needed to cover the gap with loans. But Guy found convincing a bank much more difficult. He went to see every banker in a 100-mile radius, but was told, no, the bankers explained, we need collateral. We just don't know what we'll do with a trapeze, with a tent or a hot dog stand if you fail. Collateral, of course, is that thing, the security that the bank has that if you can't pay me back, I can seize the assets which you've used my money to buy. And they normally prefer, say, property, not 20 clowns.

10:23Eventually, a small community bank, which mainly financed unions, did give him a loan. But to survive, they needed to make more money. Now, because of the cold weather, they could only really perform for half the year in Canada. So Guy realised they had to head south. Their first attempt outside of Canada was Niagara Falls. With millions of tourists visiting these famous waterfalls every month, surely this would be perfect. No. They hadn't done any market research to understand that the average visitor at Niagara Falls is there for less than 45 minutes. They go there, get the gram these days, and they're off.

10:56So the first night they sold just 10 tickets, the second night 65. Remember, Guy had 75 people on the payroll, so they had to shut the show. At this point, there was$750 ,000 in deficit. But somehow Guy had managed to convince the bank to go over their credit line by hundreds of thousands of dollars. And he convinced his suppliers to postpone repayment by months. And when Guy was asked why he thought they did this, he reasoned they loved us. They trusted us. I think they believed in us. I think I hope that Guy gives some credit to that banker who allowed him to go over his credit line. Because a bank can shut you down at any time when they decide, actually, you know what, we're foreclosing on your loan.

11:33and for them to keep going with a circus is just not something that's usually in a bank's DNA. It must have been a banker's kind of, you know, secret love of the circus, who knows? But that trust proved well placed because fortunately Cirque du Soleil proved incredibly popular. It was unlike anything the public had seen before. To me, it looks more like a kind of a very lurid film with lots of colour and lighting and whatever, like the Baz Luhrmann film Moulin Rouge. That's kind of what I picture Cirque du Soleil looking like. I think in spirit, maybe what it's closest to, at least in my impression of having watched it, is a movie like Fantasia, where things don't necessarily make sense.

12:12And there is a kind of overarching narrative, but there's also a lot of very weird stuff thrown in and it's all incredibly visually captivating. And also, obviously, there's loads of stunts and incredible performance feats in it. You know, we're talking stilt walkers, people balancing themselves upside down on people's faces. You know, it's a real feast of the senses. It's not like... It's all original music as well. So the soundtracks are a really big deal. But I do think that one of the things about Cirque du Soleil is that it is almost entirely non-verbal. So you don't need the characters. As far as I remember, nobody speaks actual English in the show.

12:51It's all kind of acted or mimed or just expressed through the power of dance. So it's very universal. That's really interesting. So you could do this anywhere. There's no kind of translation problem. In 1986, they got a lucrative tour in Vancouver and finally they were able to pay everyone back who'd backed them. And then they got their big shot to make it outside of Canada. Guy managed to book Cirque du Soleil as the opening act for the 1987 Los Angeles Festival and he invests the entire savings into getting there. He said, I bet everything on that one night, if we failed, there was no cash for gas to come home.

13:26And he packed the show with celebrities. So Sylvester Stallone and Arnold Schwarzenegger, who we also covered on Good Bad Billionaire, were there. They were executives from film studios. This was their big moment. It's incredible that because he's clearly a very skilful promoter and that takes real charm, bravery, courage, got to be a gambler. But it pays off. It's a big hit. Hollywood falls in love with it. Michael Jackson apparently came every month in disguise. And Guy makes a deal with Columbia Pictures, a movie about some of the Cirque du Soleil characters. but on the day before they were due to sign this deal with Columbia, Columbia throw a party but see Guy and Daniel in a corner out of the sight of celebs and he says they just wanted to lock up our story and our brand name and walk around like they own Cirque du Soleil.

14:13I walked right out of the party, called my lawyer and told him to get me out of the deal. Wow. Quite punchy to turn your back on Hollywood in that way. Yeah. And in a way that is a characteristic of some of our billionaires. They just like turn on their heel and say this isn't right for me, this isn't what I want. I would say 95 % of all business people, if they get a big payday, like a deal with Columbia Pictures, say, well, this is better than when we started. But no, it's that ambition saying this isn't perfect. And it paid off because he keeps the circus independent and he books a big US tour.

14:44And by the end of 1987, they made a profit of over one and a half million dollars. Guy and Daniel had a 50-50 partnership, though. So Guy isn't quite a millionaire yet. Over the next few years, Guy kept the circus touring. It grew in popularity. In 1990, they left North America for the first time, touring shows in London, Paris, Japan. Within a year, he hired a second cast, one for North America, one for Europe. But Guy dreamt of a permanent base for the circus and he sets his sights on Las Vegas. Now, at the time, Vegas was not what it was today. So, you know. We used to have people having big residencies there like Adele or Prince or people like that.

15:23Exactly. I mean, it wasn't really kind of seen as the home of entertainment in the way that it is now. Well, back in there, there was a period, wasn't there, when Elvis was around, Frank Sinatra was around. There was that vibe going on, but that was quite a long time ago by this point. But there was one act which, in a way, probably made them and the hotels think it could work, because there was a famous act called Siegfried and Roy. Now, you probably don't remember this. No, I don't remember this. I don't remember. I know of them. I'm finally in the driving seat. Okay, Siegfried and Roy were these high camp magicians and illusionists who would do these very, very high profile stunts.

15:59They would make tigers disappear and all that kind of often pictured with a tiger. A white tiger, am I right? Yes, exactly. You have seen it. You do remember. They were a big deal in the 1980s, I can tell you. They were selling out 1 ,600 seats every night on the Las Vegas Strip. So Guy starts talking with Caesar's Palace and they do a development deal. They each put in$300 ,000 just to create the concept. This new show was dark, it was moody, and for Caesars, it was a little bit too out there, let's put it one way. When Caesars phoned Guy to tell him the deal was off, he raged and screamed for three hours, and he said, I don't think I ever in my life had done so many hours of stepmaster in a row.

16:36I like this image of him on a stepmaster screaming his lungs out. But he gets a call from another Las Vegas mogul, Steve Wynn. Now, Steve Wynn is Las Vegas royalty. He's a billionaire in his own right. and he'd built the Mirage Hotel for$630 million in 1989. At that time, it was the world's most expensive resort and it was in the Mirage that Siegfried and Roy actually performed. Steve was opening a new hotel called Treasure Island and he was looking for a new entertainment act to fill it. So Steve made a deal with Guy. He would build a theatre for£36 million exclusively for Cirque du Soleil. Guy would cover the show's costs, which totaled£12 million that first year.

17:15And they called this show Mystère. The first performance was on Christmas Day 1993 and it was a massive hit. It went gangbusters. Within a year, Cirque du Soleil's revenues were$30 million. Think about costs around$12 million. So profits for the year, somewhere around$18 million. So even if he's giving a bit to Steve, Wynn and Daniel, Guy must be worth several million dollars by this point. So Guy is a millionaire in his mid-30s.

17:53So let's take a moment to find out what's been going on in his personal life. It's around this time that he starts dating Ritzia Moreira, a Brazilian model in her late teens whom he meets on a beach. So Guy is a millionaire and he's in love. So what's next? Well, Cirque du Soleil's growth was outstanding throughout the 1990s. Across the world, they were adding more shows, more tours. in Las Vegas in just two years. Revenue from Mystere jumped from$30 million to$110 million and in a way reflected what was going on in live entertainment at the time. Big shows, big tours. You think about big musicals like Phantom of the Opera, like The Lion King, you know, musicians selling out entire football stadiums.

18:35This is when I think live entertainment became a juggernaut in its own sense. Remember, we'd had Live Aid in 1985, So this idea of these huge kind of global shows, I think we're really taking off. But by 1998, Vegas, Steve Wynn, wanted more. Yeah, that's right. He asked Guy to open another resident show at the brand new Bellagio Hotel. And this show was to be called Oh, and it was water themed. So they built a special theatre with a 25 foot deep, 1.5 million gallon swimming pool, which cost them$100 million. I mean, this is an enormous amount of money. Kind of like Gladiator, you know that in the Gladiator sequel when they filled the amphitheater full of water.

19:14It kind of got that vibe, hasn't it? And if you actually look at the trailer for the show on YouTube, you can see acrobats diving off stadium ramps into the water. Like, you know, choreographed synchronised swimming. It is a real show. So Steve has spent millions betting the house on Guy. He must have had tons of confidence in this guy to deliver. Well, yes, gambling is a bit of a theme in this episode. and this gamble paid off. Within five years, it was the top-grossing show in Las Vegas and accounted for$100 million of Bellagio's$1.1 billion annual revenue. And if you think that's up against gambling, that's quite a big chunk.

19:52I mean, it truly is astounding. And also, arguably, less life-ruining than gambling. Yeah. Now, Guy saw the success of their permanent homes in Vegas and he wanted to replicate it. But instead of Vegas, Sin City, he heads to the most magical place on Earth. That's Disney. In 1996, he made a 12-year deal with Disney CEO Michael Eisner. The La Nuba show opened in Disney World Orlando in a custom-built$50 million theatre. But Guy remained in control. Michael Eisner once said, if I'd been able to buy Cirque du Soleil, I would have bought it. When asked why Guy wouldn't sell to a big company like Disney, he responded, I prefer to reinvest my profit into the business rather than see them disappear into pension funds.

20:32I mean, it's quite a statement. Yeah, you don't turn down the mouse very often. Not many people have turned down the mouse. Yeah, when the house of mouse comes knocking, you tend to open the door. Because Disney, I mean, I've got this cutesy image. They are a, I'm going to say ruthless in the nicest possible way, shareholder focused organisation. And they're all about sort of creating returns for their shareholders. So if you get into bed with the mouse, you know who's in charge. Put it that way. Yeah, it's interesting as well, because even though Guy hasn't really talked about Cirque du Soleil as being part of an IP franchise, in effect, that is essentially what this is.

21:05Yeah, absolutely. It's interesting. You could trademark the name, but you couldn't trademark what people are doing. Right. But he manages to keep that brand intact and keep ownership of it. Yeah, and by the end of the 1990s, Guy was employing 1 ,300 clowns, acrobats and dancers. And payroll alone was$80 million. And because these performers came from 23 different countries, Cirque du Soleil, and I love this kind of fact, used 27 shades of rubber for their masks and artificial bald heads so they could blend in with their performers' skin colours. So truly a kind of united colours of Burnett and approach to the circus.

21:41Yeah, or the way that Rihanna approached her Fenty Beauty range as well. At this point, he was given the opportunity to take Cirque du Soleil public, that means sell shares in the business. But he resisted, explaining to CBS News, the idea of giving quarterly reports is one thing I cannot live with. The second thing is that it will restrain us. And for 15 years, we've been doing things that make no business sense. And that is true. Once you go public, you've got shareholders who expect an update on how the business is doing every three months. It's quite an undertaking. It's quite a commitment.

22:13Yeah, and presumably these are the people who would not be pleased if you say things like, the next show will be themed around water and we're going to build a million dollar swimming pool to make it happen. Yeah, they would want to question every single investment, every artistic direction you were taking. It's not the kind of thing that a creative person wants to have to deal with. Well, in 1999, his co-founder and Cirque's president and CEO, Daniel Gaultier, decided to leave. So Daniel said that he decided to leave the Cirque to raise his family. He said, my choice was made on strictly personal grounds, and I wish these reasons to remain private.

22:44This is a big split because for decades, Guy and Daniel had lived in symbiosis, they say, without even needing to speak to understand each other. And although it was an amicable split, Guy admitted to having bawled. And now Guy had to find the money to buy Daniel out if he wanted to keep the company. Reportedly, he needed$483 million. So he turned to a syndicate of banks. And Daniel, on his part, walked away with, in his own words, more money than I could ever spend, than my children could ever spend, than their children could ever spend. Be careful about that. We've seen in some of our billionaires, you'd be amazed what the kids and the grandkids can get through over time.