SeaWorld Entertainment, Inc. (NASDAQ: SEAS)
“may need a decade to recover from the image problem
caused by the documentary “Blackfish,””
–The New York Post, August 2016.
Safirstein Metcalf LLP is investigating whether certain officers and directors of SeaWorld Entertainment, Inc. (“SeaWorld”) (NASDAQ: SEAS) breached their fiduciary duties to shareholders.
Embattled SeaWorld announced on September 19, 2016 that it will suspend its quarterly dividend after paying out a final, lowered installment to shareholders on Oct. 7.The theme-park operator, which has battled animal-rights activists over the treatment of killer whales, also known as orcas, and has said it will eventually phase the signature animals out of its parks, said the money saved on dividend payments will be instead used to repurchase shares.SeaWorld stock fell 9.4% after hours on the 19th to $11.50. Over the past 12 months, shares of the company have fallen 28%.Earlier this year, SeaWorld said it would stop breeding killer whales and cease its theatrical shows featuring them, as heavy public scrutiny in recent years hurt attendance. Still, the company owns many of the whales, which usually live around 50 years. SeaWorld has navigated turbulent waters, which included the release of “Blackfish,” a 2013 documentary that claims killer whales suffer in captivity. Attendance at SeaWorld’s theme parks slid 7.9% from 2012 to 2015.
SeaWorld Entertainment may need a decade to recover from the image problem caused by the documentary “Blackfish,” a top theme park consultant told The New York Post in August.
Dennis Speigel, president of International Theme Park Services, said that while SeaWorld executives blame poor second quarter attendance on a drop in tourism in Florida, where it runs five of its 11 parks, it is likely it is also still feeling the impact from the 2013 documentary.
“The imagery issues have not had enough time to go away,” Speigel said. “This is a ten-year turnaround.”
Speigel made his comments hours after SeaWorld reported attendance was off 7.6 percent in the quarter, to 5.98 million, resulting in a 5.2 percent drop in revenue. The drop-off sparked a 13.2 percent decline in SeaWorld shares, to $12.88. Earlier in the day, the stock hit a 52-week low.
Chief Executive Joel Manby said an “overall downturn” in the Orlando market — home to its biggest park — hit in the second half of June just as the critical summer season got underway. Management in March announced it was ending orca breeding and orca shows. At the time, SeaWorld’s shares enjoyed a spike to more than $20 a share.
“I think that was a short-term stepping stone to a long-range plan,” Speigel said. “The perception of SeaWorld among the public hasn’t gone away, but it’s not at the [poor] level it was 18 months ago,” Speigel said.
SeaWorld’s second quarter attendance has fallen from 7.2 million in 2012 to 6.6 million in 2014 to its present 5.98 million.
“They have to continue to diversify the brand in the public’s eye,” Speigel said.
If you are a current shareholder of SeaWorld and would like more information about this investigation, please fill out the form to the left, or contact Sheila Feerick at 1-800-221-0015, or email info@SafirsteinMetcalf.com. Safirstein Metcalf LLP represents individual and institutional clients in a wide variety of litigation, with an emphasis on class, derivative, and other complex actions on behalf of investors and consumers. The firm handles matters on a contingency fee basis.