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SeaWorld's on the hunt for profits

Aug 17 2014, 8:51pm CDT | by , in News | Latest Business News

SeaWorld's eating words since documentary Blackfish's costing dollars after all.

SeaWorld's on the hunt for profits
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SeaWorld's on the hunt for profits

SeaWorld's looking to make back some money after last year's Blackfish documentary cost the company a small fortune in profits in the past two quarters.

Blackfish discussed the negligent and often dangerous actions taken by SeaWorld Entertainment to push for higher profits--actions that ultimately helped to kill trainers. Tilikum killing Dawn Brancheau prompted a deeper look into the treatment of orcas outside of the Free Willy franchise.

When the documentary first aired on television last year, SeaWorld Entertainment said there would be no serious repercussions. And for the last quarter of 2013, there wasn’t a deep reach into shareholder pockets.



But the past two quarters have seen a steep plummet compared to last year, even with a rise in guest attendance. The projected number of $445 million fell short by nearly $40 million at a profit of only $405.2 million.

Someone might have a little herring in their faces now.

And Standard & Poor noticed the slide, reports the Los Angeles Times. SeaWorld entertainment's been lowered to a junk bond status with a BB- corporate rating; in other words, the stock isn't a good investment. Not a good look for a company that'd been so confident in their overall guest experience.

In a press statement, S&P said, "The negative outlook reflects our belief that the company faces significant challenges regarding reputational risk and potential improvements in operating performance beyond 2014."

The problem's been noticed and heard by SeaWorld's corporate headquarters in Orlando, Florida.

Now the company is looking to increase investment potential by building better, larger orca (killer whale) enclosures in its facilities. In a belated press campaign to win back customers and consumer trust, SeaWorld President and CEO Jim Atchison openly admitted that protesting animal right activists are "not who we’re trying to appeal to--that’s not our market."



Atchinson also said that the habitats had been in the works for a while. Why it took so long to admit is a different matter entirely.

And an equity analyst at S&P Capital IQ doesn't seem impressed with the announcement, either. Promised actions will help earn back a wise investment credit rating, but there's no instant gratification for the entertainment company.

“This is not going to have any immediate positive impact,” analyst Tuna Amobi said. “Most investors are kind of going to take a wait-and-see approach.”

Part of the social pressure involves the latest ad campaign by People for the Ethical Treatment of Animals (PETA). In one ad, movie star Kathy Najimy beside the words, “Welcome to San Diego! If you love animals like I do, please avoid SeaWorld."

The Wall Street Journal also noted that actress Jessica Biel submitted a question on when the company would beginto implement "a plan to move the orcas to a sea pen in a natural setting" during the investor day.



"I do appreciate the fact that SeaWorld is willing to admit that something is wrong, for the first time." But Blackfish's director Gabriela Cowperthwaite told Bloomberg, she's not too impressed with the "doubling down" attempt at winning back public trust either.

Because hidden in the middle of all the announcements was the company's desire to expand internationally in India, Russia, and the Middle East. They also signed a letter of agreement with Australia's Village Roadshow, a film and entertainment partook.

Cowperthwaite's been pushing for the idea of "a large sea pen that’s partitioned from the open ocean where the captive whales would live," like a hive. A hive system would allow research without sacrificing orca living space or mental stability.

PETA's spokesperson Jared Goodman said the "desperate move" was too little, too late. The organization doesn't plan on stopping any campaigns until the coastal sanctuary strategy is built. Cowperthwaite agrees with the concept entirely. But how will the new cement park enclosures effect investors’ capital?



Amobi felt that investors should feel some relief at the transparency in the company losing 1% in only 3 months. "I think that overall management understands now more than ever that this is an issue that needs to be addressed head on."

Cowperthwaite believes the increase in containement space within the park "means they need to start breeding more whales." Atchison didn't answer a similar questions posed by a reporter, instead circumventing and saying the pools already have plenty of space for the animals.

Then why the increase of space? That's a very good question, and the non-answer seemingly undermines the attempt at positive press spin.

SeaWorld also announced it was be contributing $10 million in killer whale research and creating a foundation in maintaining ocean health.

The measures are meant to ease the mind of the investors, but the public may hold off in spending money at various parks until the company actually does as promised. After all, SeaWorld Entertainment damaged their brand pretty spectacularly and continued to do so, even with fair warning and instant repercussion.

 

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