The latest earnings report is in, and attendance (and profits and revenues) keep dropping:
Shares of SeaWorld Entertainment Inc. (SEAS) are falling by 6.72% to $17.35 in pre-market trading on Wednesday, as lower attendance at the company’s theme parks hurts earnings for the second quarter in a row.
SeaWorld’s net income for the 2014 third quarter declined to $87.2 million, or $1 per diluted share, compared to $120.7 million, or $1.34 per diluted share for the same period in 2013.
The marine mammal entertainment company reported adjusted net income for the 2014 third quarter of $88.6 million, or $1.01 per diluted share, which fell below the expectations of analysts polled by Bloomberg of $1.13 per share.
Revenue for the most recent quarter fell to $495.8 million versus $538.4 million for the 2013 third quarter. Analysts expected $496.4 million in revenue for the quarter.
SeaWorld reported attendance of 8.4 million guests versus 8.9 million from the same quarter last year.
Trying to explain the continued drop in attendance, SeaWorld continues to avoid the elephant, I mean blackfish, in the room: The company believes the decline in attendance was due to negative media attention resulting from a proposed bill in California that would ban the use of orcas in shows, and a “challenging competitive environment, particularly in Florida.”
Yes, the Blackfish bill is an issue, but the media attention on SeaWorld is focused much less on AB2140 than it is on the very essence of SeaWorld’s business: its reliance on keeping killer whales captive for entertainment.
A few more earnings reports like this one and SeaWorld suits will finally have to confront the fact that their business model is being rejected by the American public. That means SeaWorld needs a new business model that doesn’t rely on killer whale captivity (or at least moves killer whale captivity offshore to China, Russia and the Middle East).
It seems likely that SeaWorld is pursuing the latter strategy of developing its franchise in nations that don’t (yet) care as much about the ethics of killer whale captivity. But powerful ideas (like the idea that it’s not right to confine killer whales for profit) have a way of working their way around the globe. And if SeaWorld simply tries to move its failing business model to new countries, instead of reinventing its business model, it could find itself repeating the history it is experiencing here in the United States, and continuing to struggle.
What SeaWorld really needs is not new spin, but new leadership that is not so invested in the idea of killer whale captivity, and can move beyond that business model and SeaWorld’s history to think clearly and creatively about what will attract and entertain the crowds of the future.
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