In a move that was probably long overdue, SeaWorld Entertainment (SEAS) is making a change at the top. CEO Jim Atchison will step down next month. The board’s chairman will be taking the helm, but only until the marine-life theme park operator finds a new leader.
He’s not the only one moving on. Reports indicate that roughly 300 of its employees were given pink slips on Friday. If SeaWorld’s battling the negative publicity stemming from the company’s portrayal in the “Blackfish” documentary, it’s not going to fare any better after letting hundreds of its workers go just days ahead of the holidays. The layoffs also contrast Atchison’s treatment: He will be getting a severance package worth millions.
The change at the top isn’t a surprise. SeaWorld has been a disaster since going public at $27 last year, and the stock has fallen all the way down to the mid-teens. Something’s not right at SeaWorld, but it’s something that may require more than simply a new chieftain.
Black and Blue Fish
Folks just aren’t trekking out to SeaWorld these days. The parent company of SeaWorld, Busch Gardens and Aquatica experienced a 4.1 percent decline in attendance last year, and turnstile clicks are off by another 4.7 percent through the first three quarters of 2014.
It’s not just an attendance problem. SeaWorld posted an 8 percent year-over-year decline in revenue for its latest quarter as a 5 percent slide in attendance was exacerbated by a 3 percent dip in revenue per guest. In other words, it’s not just a matter of customers not showing up: When they do come, they’re not spending as much as they used to for a day at the park.
SeaWorld doesn’t like to talk about “Blackfish,” but it’s clearly playing a role in keeping potential patrons away. The documentary takes jabs at SeaWorld for keeping killer whales in captivity and performing for guests, and it wouldn’t be a surprise if the slip in revenue per guest has something to do with visitors ashamed to buy SeaWorld merchandise.
This is the biggest problem at SeaWorld right now. A new CEO with fresh ideas could help, but the fading park operator simply needs to acknowledge that activists are only getting louder. SeaWorld’s eventual response to “Blackfish” was to set up a page on its site explaining how the park’s rescue efforts are saving animals. It also put out print ads in a couple of regional newspapers. It clearly hasn’t been enough.
Activists managed to get music acts to bow out of a SeaWorld music festival earlier this year, and they’re not showing any signs of letting up. This isn’t some transitory cause that fizzles out, along the lines of Kony 2012 or Occupy Wall Street, once activists hop on a new movement. There are now more than 356,000 “Blackfish” fans on Facebook (FB), and SeaWorld hasn’t done enough to win them over.
Tank You for Being a Friend
SeaWorld’s recent announcement that it would be dramatically expanding its orca tanks should have been a well-received move, but instead of aligning itself with activist leaders to position this as a compromise, it just pushed out the news of the change that will take several years to be incorporated across all three SeaWorld parks. SeaWorld could have partnered with zoos — a platform that is less controversial — to sing the praises of kinder animal habitats.
There has also been the untimely emphasis on cutting costs. Beyond the hundreds of employees it displaced over the weekend, skimping on dough means that it’s not adding the non-marine-life attractions that have been so effective at growing attendance at rival theme parks.
This should be a great time to be running an amusement park. The economy’s on the rise. Gasoline is cheap. Hopefully SeaWorld’s next CEO will recognize the opportunity to make a more public compromise with the right parties and invest in less controversial ways to make the parks more magnetic.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.