Interview With Kenneth Feld

L.G.: So Roy has continued his recovery. Are you no longer associated with them?

K.F.: No, I mean, we're very good friends—there really is no business [relationship] in the entertainment business.

L.G.: Just in a business sense, they were obviously a hugely profitable part of your business, and then it just ended suddenly. Was that the case? You basically lost a profit center in the business?

K.F.: Yeah, it was a stream of revenue [$45 million annually, according to published reports, and Feld had a piece of it]. As great as it was, and as wonderful, our business is quite a bit more significant than any one production or one show. Right now it's pretty extraordinary, and I think most people don't realize 55 percent of our business comes from outside the U.S., 45 percent is in the U.S., and the greatest rate of growth obviously is internationally because there are more people.

L.G.: In what countries, Ken, are you having your highest growth rates?

K.F.: Well, we have a huge growth in China, Russia, India, and in Latin America. It's really worldwide. Last year we had five tours in Europe for the first time, and we'll have the same this year. In China we'll probably have about 34 weeks in 2009.

L.G.: How are you getting around those countries-by truck?

K.F.: Yeah, we operate in containers and trucks and those sorts of things.

L.G.: What's the price of gas done to your bottom line?

K.F.: It's, you know...it's affected everybody.

L.G.: To say nothing about the price of corn and grain, because animal feed is hugely expensive now.

K.F.: It is. For instance, our elephants are typically fed oat hay, which we import. It depends where we are in the U.S., but we bring that in usually from Canada and places like that, where they have high-quality oat hay, which is quite expensive. But for us, the fortunate thing is having the international business that we get the advantage of a weak dollar when we're abroad, and those things cycle around. So the dollar is strengthening now, so that's better for us here.

L.G.: You have to be alert to currency exchanges? Are you constantly keeping your eyes on the currencies and trading them?

K.F.: We are. We're always hedging the different currencies, just as general practice, and as we grow more and more internationally, those are the things that we do keep our eyes on. And with the economies, there are much greater swings. For instance, up until this year, we had not played Indonesia I don't think for 10 or 12 years. We went back to Indonesia this year, and it was huge business and it was a huge ticket price, which was quite surprising. And the other thing is, for instance, in Argentina, where before you couldn't get the average ticket price, now the prices are comparable and in some cases higher than what we get in the States.

L.G.: Is there any reason why you were out of Indonesia for 12 years? Was there some political issue there?

K.F.: There were a lot of security issues, and the economy was much more volatile. There were political things that made it not so stable, so once there was stability that returned, we returned. And there was this huge pent-up demand for the family entertainment that we provide.

L.G.: Now one realm in entertainment that you seem not yet to have cracked, although you've made many forays into it, is Broadway. You haven't done that since 1996 or something like that. Do you intend to go back and try again?

K.F.: I will never say never. It's not so exciting for me.

L.G.: Why not?

K.F.: Well, I'll give you a great statistic. Ringling Bros. and Barnum & Bailey, every year, all of our shows play to more people than all the Broadway shows combined. So it isn't a business in the same way, and you're not in control of the business in the same manner.

L.G.: I assume actors are more difficult to deal with than clowns.

K.F.: No, I wouldn't say that. That really isn't what I meant. It's more the customer base in the audience. I understand families, that's what we specialize in. I'm not sure I really understand the theatrical audience in the same sense.

 
L.G.: Now, I understand you're a privately held business, so you don't have to tell me anything you don't want to, but I am curious: Is the order of magnitude of the business something like a billion dollars a year?
 
K.F.: It's getting up around there. It's large. I'll give you the numbers and then you can do whatever kind of math you want. We play to over 25 million people a year, and currently we have 18 touring productions, and there are more in the pipeline. The ticket prices range anywhere from $25 up to forty-something when we play Japan. The average in Madison Square Garden is probably somewhere in the neighborhood of $29 to $30.

L.G.: I see. By the way, not to dwell on the death-defying aspects, but when I took my kids in 2004, we saw the scarf twirling with Dessi Espana. Then, to my horror, I read some weeks later that she fell and died. I guess that's a pretty rare event?
 
K.F.: That is very rare. That was one of the unfortunate tragedies and, you know, she had been in the circus basically since birth, and I'd known her. And so it was a devastating thing that happened, and it's quite rare and it's quite extraordinary in not only our circus but virtually every circus around the world.
 
L.G.: But just as a marketing guy, the fact that that's a possibility—and not to be morbid about it—but how much of that is part of the draw? That people are facing death daily?