SeaWorld’s Hubris

This Washington Post story does an excellent job of running through the timeline of SeaWorld’s public and private actions in response to Blackfish. And, yes, they shamelessly (and maybe illegally, it turns out) tied themselves in knots to reject or downplay any Blackfish effect, even while insiders sold shares:

In reality, the company was waging a serious campaign — and leveraging considerable money — against the “’Blackfish’ effect.”

The complaint accused the company of feeding employees lines to use regarding the film and instructing them to “dissuade family and friends” from watching. SeaWorld executives also hired a public relations firm to handle the criticism, and one executive reached out to ultimately 50 major film reviewers to discredit “Blackfish.”

In 2014, the company provided the funding for a website that also aimed to discredit the movie, and SeaWorld would also eventually task employees with infiltrating PETA and other animal rights groups.

But following the IPO, the company maintained the film was no cause for alarm and had not sparked backlash against the brand. On Aug. 29, 2013, a company executive told the Los Angeles Times “’Blackfish’ has had no attendance impact.” The same executive told Bloomberg SeaWorld “can attribute no attendance impact at all to the movie.”

To me, this sort of baldfaced denial is a powerful reminder of just how arrogant SeaWorld was (both its corporate culture and its leadership) following decades of profits and unthinking adulation. The old guard running the place really didn’t believe anything could touch them. And now they may be called to account.

SeaWorld Had Problems Beyond Blackfish

Theme Park Insider publishes an excellent breakdown and analysis of SeaWorld’s attendance numbers since 2009. Here are the numbers for SEAS four largest parks:

SeaWorld Orlando
2009: 5.8 million
2010: 5.1 million
2011: 5.2 million
2012: 5.3 million
2013: 5.0 million

SeaWorld San Diego
2009: 4.2 million
2010: 3.8 million
2011: 4.2 million
2012: 4.4 million
2013: 4.3 million

Busch Gardens Tampa
2009: 4.1 million
2010: 4.2 million
2011: 4.2 million
2012: 4.3 million
2013: 4.0 million

Busch Gardens Williamsburg
2009: 2.9 million
2010: 2.8 million
2011: 2.7 million
2012: 2.8 million
2013: 2.7 million

You can see that the SeaWorld parks suffered their biggest attendance declines 2009-2010, before Blackfish. My guess is that the numbers reflect a combination of families feeling the pinch of the Great Recession plus the negative publicity that followed Dawn Brancheau’s death in February 2010. And attendance never really recovered, and then declined again in 2013 when Blackfish starts to hit the public consciousness (and attendance was off another 4.7 percent for the first nine months of 2014).

So why did SeaWorld’s numbers never make a recovery from 2010? Bad management, and a failure to come up with attractions that could compete with what other parks were rolling out, according to Theme Park Insider:

While other theme park companies have moved aggressively to develop new attractions and intellectual property in the wake of the Great Recession, the SeaWorld/Busch Gardens parks have stumbled through one challenge after another. The debuts of the two Manta roller coasters, in Orlando in 2009 and San Diego in 2012, provide the few bright spots during this period. Otherwise, the parks have suffered through construction delays on multiple new attractions, including missed projected open dates for major new drop towers in Williamsburg and Tampa.

Looking back through our Theme Park Insider reader ratings, I can’t find a single example of a new show debuting during this time period at any of these four parks that scored a higher reader rating than the show it replaced. In 2013, SeaWorld Orlando made what it called the largest capital investment in its history in opening Antarctica: Empire of the Penguin. An effort to compete with the engaging and immersive environment of Universal Orlando’s Harry Potter land, SeaWorld chose to go with depicting what might be the most inhospitable environment on Earth: Antarctica. Sure, people love penguins, but SeaWorld’s technically innovative Antarctica ride left visitors spending too much time spinning around in low-light caverns with there were no penguins in sight, rather than spending time with cute new penguin character SeaWorld had created for the attraction. At the end of the ride, SeaWorld crafted a new, open display environment for its penguins, but doing show required keeping the guest areas in the exhibit so cold that few visitors could stand spending more than a moment or two looking at the pavilion’s most compelling attraction — the live penguins themselves.

Not good.

That said, I think the #BlackfishEffect has become a bigger part of the story in 2013-2014. Throw in the investor lawsuits, and ongoing grassroots opposition to killer whale entertainment, and it becomes clear that whoever comes in to replace Jim Atchison as CEO has a very complex puzzle to solve.

WashPost Wonkblog Charts The Blackfish Effect

Sure, sure. Correlation is not causation. But it’s still worth looking at and considering the correlation, so thanks Wonkblog.

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Here’s Wonkblog’s setup:

Jim Atchison, the chief executive of SeaWorld Entertainment, which operates SeaWorld theme parks, resigned Friday morning. Atchison’s departure comes on the heels of what has been a terrible year for the company. In the first nine months of 2014, SeaWorld’s revenue fell by more than seven percent, and its attendance dropped by nearly five percent.

The changing of the guard is likely the result of something that occurred in July 2013: namely, the release of the documentary “Blackfish.”

“Blackfish” was met with both critical praise and public uproar. The documentary depicted cruel treatment of the orca (or killer) whales that SeaWorld holds in captivity and features among its biggest attractions. It was seen widely. And the response has been paralyzing (even despite an effort to discredit the documentary).

Personally, I think that there is more going on with SeaWorld’s drop in attendance and share price crash than Blackfish (though I do think Blackfish and the investor lawsuits at least partly account for it). Consider, also, that SeaWorld has basically been offering the same show for 50 years, and today it is even less thrilling since trainers are no longer leaping off orcas. Throw in a general public sensibility that increasingly questions the exploitation of animals for entertainment (at circuses and zoos, as well as at marine parks), and you can see why Shamu might not have the same drawing power as Harry Potter World.

So, does Atchison’s departure signal that SeaWorld might be ready to make big changes? I did an interview with NPR’s All Things Considered today, to discuss Atchison’s ouster. I said I suspected the most likely change is that SeaWorld will over time start to move its killer whale entertainment business abroad to more willing audiences in Russia, Asia and the Middle East. But one thing I should have mentioned to Greg Allen, the reporter, is that the only certain signal that SeaWorld plans to reinvent itself and evolve away from killer whale entertainment as the core of its business and brand would be a cessation of killer whale breeding. No breeding means that eventually there will be no captive killer whales. Anything else is just spin aimed at somehow perpetuating the Shamu Show, whether here in the US or abroad.

Can SeaWorld Be Saved (cont.)?

A strong argument in the Orlando Sentinel, from Scott Maxwell, that SeaWorld in fact can’t be saved, unless it comes to grips with the fact that its killer whale shows can no longer be its primary attraction.

Money graphs:

SeaWorld’s problem is that its biggest asset and biggest liability are the same thing — whales.

It needs to evolve and expand.

See, one of the main reasons that Disney and Universal continue to thrive is that they continue to evolve.

Ten years ago, Universal was all about superheroes and roller coasters. Today, it is Harry Potter and high-tech simulators.

Disney has grown and adapted as well. It started with fairy tales and an iconic castle. But Disney then reached out to older adults with Epcot, movie lovers with MGM Studios and animal lovers with Animal Kingdom.

Today — four decades after Disney’s first Orlando park opened — Disney is preparing to cash in on the worldwide phenomenon of a movie that didn’t even exist until last year: “Frozen.”

Meanwhile, SeaWorld’s main theme and attraction is the same as it was when the park opened 41 years ago: killer whales.

And the park is doubling down on that. It’s biggest spending plans involve hundreds of millions of dollars to expand and improve the whale habitats.

Other than that, the park has second-tier additions on the horizons — like a revamped Clyde and Seamore sea lion show, which the company described last week as “a hilarious tale, filled with amazing animal behaviors and splashy audience fun.”

Think about that. Universal has a new Harry Potter attraction that’s garnering worldwide attention. SeaWorld has a paid blogger, a bigger whale pool and a revamped sea lion show.

If Disney needs more than Mickey, SeaWorld has to understand that it needs more than Shamu.

Read the whole thing, and see who you think makes more sense: Atchison in Businessweek? Or Maxwell?

Can SeaWorld Be Saved?

Last week, Karl Taro Greenfeld managed an unusual feat: he was allowed inside SeaWorld’s corporate offices to interview SeaWorld’s leadership and report a Businessweek story called “Saving SeaWorld,” about SeaWorld’s efforts to survive and bounce back from the surprisingly powerful and accelerating #BlackfishEffect (seriously, I think it is fair to say that no one involved with the production fully anticipated the impact that resulted).

Since this is the first real access SeaWorld has given a big-time news organization since Blackfish started cratering SeaWorld’s image, its corporate relationships, and its stock price, it is worth taking a close look at what Greenfeld reported.

First up, Greenfeld gets SeaWorld CEO Jim Atchison to comment on SeaWorld’s PR strategy:

“There is no recipe to follow. There’s very little intuitive about it,” says Atchison. “Do I wish we would have taken a more aggressive action earlier? On an emotional level I do, because I was offended by it personally. … One of the things we had to measure early on was, how do we engage in it? We don’t want to aid the marketing of the film by engaging too openly, too aggressively, too early. We didn’t want to turn it into the film SeaWorld doesn’t want you to see. And the film didn’t really gain any kind of notable momentum until CNN started airing it. Repeatedly.”

I have to admit that I am sympathetic to SeaWorld on this point. SeaWorld had a long history of keeping its head down when bad things happen at its parks, and the bad news always blew away over time and allowed SeaWorld to get back to business. It is completely understandable that SeaWorld did not want to make a big deal out of Blackfish before Blackfish was, indeed, a big deal. Why help the public take notice of a film that will harm your business?

And Atchison is correct, I think, that the CNN airings are what blew Blackfish up into a public phenomenon (an important lesson to all film-makers who want their work to have impact). Following Sundance, and through the film’s theatrical run, there was just not that much public awareness about Blackfish. I have never been in the loop on the theatrical numbers, but I don’t think Blackfish was packing the movie houses. It wasn’t until Blackfish hit cable television, on CNN in late October (along with a pretty good CNN-designed social media plan) that lots and lots of people saw Blackfish and started telling others about it.

Continue reading “Can SeaWorld Be Saved?”

Better PR Will Not Solve SeaWorld’s Problems

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SeaWorld already doubled down on its killer whale captivity model by pledging to invest tens of millions of dollars in bigger tanks. And now it is doubling down on the idea that better PR can defuse growing doubts about using killer whales for entertainment:

SeaWorld is working aggressively on improving its image as it continues to fend off criticism over its whales in captivity.

The company is disputing animal-rights activists online, soliciting fan support and trying to call more attention to its work with animals — such as rescuing underweight orphan manatees.

SeaWorld is making these efforts amid declining attendance and lingering controversy intensified by last year’s anti-captivity “Blackfish” documentary. The company said in an earnings report last week that negative publicity contributed to an overall third-quarter attendance decline.

“I think we’ve just realized we have to do a better job of telling our story, sharing the good work we do,” company spokeswoman Aimee Jeansonne Becka said, reiterating the thoughts expressed by Chief Executive Officer Jim Atchison earlier this year.

“You’re going to see a PR offensive coming here,” Wells Fargo analyst Tim Conder told CNBC last week. “You’re going to see SeaWorld being more open about who they are, educating people [about] who they are, with other organizations.”

Best of luck. Sometimes the apparent problem is an actual problem, and not just a failure to “tell your story.” SeaWorld, in fact, has done a brilliant job over the past 50 years of telling exactly the story it wants to tell. That’s why many viewers found the story told in Blackfish–which was VERY different–so shocking.

Changing the story to emphasize conservation (especially if it is backed up by real investments in conservation, which would be a nice) might help at the margins. But promoting conservation still does not address the fundamental reality that increasing numbers of people find killer whale circus shows anachronistic and cruel. The only way to address that problem is to change the business model and start transitioning away from the product that fewer and fewer people want to buy.

Despite the brutal beating SeaWorld is taking in the markets, and the steady decline in paying customers, it doesn’t look like SeaWorld is quite there yet.

SeaWorld IPO: Overseas Expansion?

“I’m so glad you love Shamu. Do you think they’ll love him in Dubai?”

SeaWorld president Jim Atchison visits the NYSE floor and suggests Shamu may be headed to Dubai, or other disant parts. Which could help explain why there seems to be so much orca breeding going on:

In an interview on Friday, Mr. Atchison gave some hints as to what those plans might be. Currently, SeaWorld Entertainment operates 11 theme parks in the United States, including SeaWorld and Busch Gardens, without a presence overseas.

“We could take our Shamu show in Orlando and probably show it in Malaysia or Abu Dhabi or Dubai,” Mr. Atchison said. “There’s a lot of interest in our brands from overseas.”

He cautioned that there is no “imminent announcement” along these lines.

Though building new theme parks requires capital, Mr. Atchison suggested that such projects could be undertaken in partnership with big investors, such as a sovereign wealth fund, which might add hotels or other structures to the development.

“If you look at these development opportunities, they’re often in connection with other real estate plays,” he explained. “A lot of the development opportunities we have are actually capital-light.”

New parks need whales. And that means breeding, and continuing to roll that Kshamenk AI program forward.

What Does SeaWorld President Jim Atchison’s E-mail Say About SeaWorld’s Plans?

SeaWorld Parks And Entertainment President and CEO Jim Atchison

Wow, that was fast. The trainer comment on the OSHA ruling I just posted made mention of an e-mail to employees from SeaWorld Parks & Entertainment President and CEO Jim Atchison. And, poof, someone sent me an e-mail to employees from Jim Atchison.

This is not the original e-mail in response to Judge Welsch’s OSHA ruling, mentioned by the current trainer in the previous post, but apparently a follow-up e-mail Atchison sent employees regarding news coverage of the OSHA ruling. If the tone of the original e-mail was similar, you can see why some employees might have got the impression that the OSHA ruling was favorable to SeaWorld. (Side question: Was Atchison simply counting on them not to read Judge Welsch’s decision, or believe the news coverage because he says different?]

As I wrote at Outside Online, Judge Welsch’s decision could sharply limit SeaWorld’s famed Shamu Show by preventing SeaWorld from returning to its most famous show practice: swimming and performing in the water with its killer whales, or waterwork. The decision also limits drywork contact with Tilikum, who was always subject to a waterwork ban due to his involvement in previous deaths, but was a popular star in side shows, such as the Dine With Shamu show which got Brancheau killed. And it similarly restricts close contact with the rest of SeaWorld Florida’s killer whales, even when trainers are on shallow ledges or at poolside, i.e. “drywork.”

But the language of the OSHA citation, which was issued in August 2010, for some reason references “waterwork” and “drywork” performances, as opposed to simply applying to any and all waterwork and drywork killer whale interactions involving close contact. Non-performance waterwork and drywork that occurs during training, exercise and (to an extent) animal care is virtually identical to that which is performed in the shows. And Atchison’s e-mail to SeaWorld employees suggests that SeaWorld may try to exploit that distinction.

Here is the text of Atchison’s internal e-mail (emphasis added):

To: All SeaWorld Parks & Entertainment Team Members

You may have seen news coverage over the last 24 hours concerning a ruling on OSHA’s citations against SeaWorld. While there has been much discussion of the implications of the decision, we view it as a positive that both the citation and the related fine were reduced substantially.

It is important to note that the judge agreed that caring for these animals requires contact between trainers and whales.  As the judge indicates in his decision, the ruling applies only to show performances, and not to husbandry, exercise, learning, play and relationship activities.

While we view the overall decision as positive for us, we do disagree with some of the judge’s interpretations.  We have every confidence in the safety of our extraordinary killer whale training program. Protecting the safety of our team members is a core commitment for SeaWorld, and our record in this area is exemplary.

The current show already includes many of the safety enhancements noted in the judge’s report. When we introduced the new “One Ocean” killer whale show, we voluntarily incorporated additional safety enhancements, such as barriers and proximity changes, which have now been in place for more than a year.

Our killer whale program is a model for marine zoological facilities around the world, and the additions we have made in the areas of personal safety, facility design and communication have enhanced this program further still.  In addition to these existing safety measures, we also continue to progress on the development of prototypes such as a lifting pool floor.

I am extremely proud of the many men and women throughout our company who have represented and assisted us in this matter. They have demonstrated an unwavering dedication to safety, animal welfare and upholding our company’s long-standing reputation for excellence.

Jim Atchison

Dawn Brancheau and Alexis Martinez

Apart from the oddity of describing the “overall decision,” which was in essence a denial of the key elements of SeaWorld’s appeal, as “positive for us,” what stands out is Atchison’s language regarding the scope of Welsch’s ruling.

Since Brancheau’s death, and during the lengthy process of appealing the OSHA citation, SeaWorld ceased waterwork at all its parks, and also changed how close trainers could get to killer whales, and how they would interact with them, during drywork (the “barriers” and “proximity changes” that Atchison mentions). But as Atchison notes, Welsch’s decision applies only to performances (following the language of the citation). So SeaWorld could in theory resume waterwork and close contact drywork with its killer whales outside of performances, and be in compliance with Judge Welsch’s decision.

If SeaWorld goes this route, which would help SeaWorld maintain its waterwork training even as it continues to hope to find a way to return waterwork to its shows, there will be risks. While Brancheau was killed while performing with Tilikum, Alexis Martinez was killed by a SeaWorld killer whale at Loro Parque two months earlier during a waterwork training session. So the same risks and dangers to trainers apply regardless of whether there is an audience or not. All that really matters is proximity. And the liability exposure if SeaWorld resumed non-performance waterwork and/or close contact drywork, and another trainer was injured or killed by a killer whale, would presumably be very high.

In addition, OSHA would be very unlikely to stand by if SeaWorld resumed the very practices–albeit not during performances–that OSHA deemed dangerous when it cited SeaWorld Florida in the first place. Les Grove, Area Director of OSHA’s Tampa Area Office, which issued the original citation, addressed this potential performance loophole during the hearings before Judge Welsch, when pressed by SeaWorld’s lawyer on whether the citation applied to non-performance waterwork and drywork, or just performances. Grove said that the citation applied only to performances, and added “But as a responsible employer, if you are aware of other interactions, where they’re exposed to the hazard, you should look at that and take action to materially reduce the hazard.”

In other words, if SeaWorld resumed waterwork and close contact drywork in exercise, play, and relationship-buuilding sessions that take place outside of performances, OSHA would view that as a danger to employees, and would almost certainly conduct a follow-up inspection that could result in another round of citations for endangerment of employees. SeaWorld, of course, could appeal those citations as well, which presumably would mean another lengthy legal proceeding.

It will be interesting to see how this all plays out, and how SeaWorld in the end chooses to address Judge Welsch’s decision. Atchison also mentions safety enhancements, including the fast-lifting pool floor that SeaWorld Florida is prototyping (which in theory could be used to beach a killer whale acting aggressively or attacking a trainer). The OSHA citation says that SeaWorld can abate the dangers cited through safety modifications, as long as the modifications “provide the same or a greater level of portection for the trainers” as avoiding close contact or staying out of the water. That is a very high standard, but SeaWorld has invested millions in developing the lifting pool floor, and has also been working on, and practicing with, personal air supply systems that trainers could wear in the pools. Making those investments doesn’t make much sense if SeaWorld doesn’t have plans to try and put trainers back in the water one way or another.

To close, here’s Atchison discussing SeaWorld’s plans, and press coverage, in the immediate aftermath of Dawn Brancheau’s death, just as the OSHA investigation was about to start. Amazing what a long and winding road has been traveled since then:

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