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SeaWorld's state of 'whale'-being


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SeaWorld's state of 'whale'-being

Forthree years, SeaWorldEntertainment Inc. has been trying to rebuild its reputation andwin back consumers. But it remains unclear just how much progress the companyhas made.

Duringthe first quarter, the company saw slight increases in both attendance andrevenue, reporting revenue of $220.2 million and attendance of 3.3 million, upfrom a year ago when the company recorded revenue of $214.6 million andattendance of 3.2 million.  

Theattendance increase was partially due to the opening of a separate gate for theAquatica San Antonio water park, meaning that customers need to buy separate ormultipark tickets to enter the facility.

Excludingthe impact of the separate gate, SeaWorld CFO Peter Crage said during a recentearnings conferencecall that attendance also improved due to an earlier Easter holidayalong with additional operating days for a park in Virginia. In other words, itwas not that more guests were flocking to SeaWorld's parks, rather the companymostly benefited from some favorable shifts in the calendar.

Notably,SeaWorld did not see a sudden spike in admissions or season pass salesfollowing the March 17 announcement that it was ending its orca breedingprogram. Company CEO Joel Manby said it was still "too early" to drawany link between the announcement and the parks' performance.

Nevertheless,he is confident the move will have a very positive impact over time.

"From an announcementstandpoint we felt it went incredibly well — 65% of Americans knew about theannouncement the day after we made it, strictly from earned media, which is anincredibly strong figure," he said. "It got a lot of publicity."

Additionally,the company has seen a high volume of "very positive" social mediaaround the announcement, according to Manby. "We are very confident thatit's cleared the runway, and people are seeing us in a more positive light."

Underthe terms of the plan announced in March, while the company will no longerbreed orcas, the current population, including one orca, Takara, that becamepregnant last year, will live out their lives at the company's park habitats.SeaWorld has said it will phase out its theatrical shows and instead introducemore "natural" orca encounters. In addition, it is partnering withthe Humane Society of the United States to promote the conservation of fish andmarine mammals, as well as their ocean habitats.

Thefact that SeaWorld will keep its nearly 30 orcas was a point highlighted byManby during a March 17 investorcall.

"Thekiller whales will be under our care for decades," Manby said. "Wehave lots of time with technology to pivot — 20, 30, 40, and 50 years."

Whilethe SeaWorld CEO pointed to this as a good thing, as something that providesstability for the company for its foreseeable future, some animal rights activistshave pointed to this as a reason why SeaWorld's announcement does not go farenough.

Specifically,People for the Ethical Treatment of Animals and others have called for SeaWorldto move its 29 orcas to ocean sanctuaries. In a March 17 blogpost, PETA said this would enable "these long-suffering animals to … have some semblance of anatural life outside their prison tank."

InApril, Human Society CEO Wayne Pacelle responded to these arguments, saying heunderstood both points of view.

"Iunderstand the impulse among so many advocates to call upon SeaWorld to remove orcasfrom their enclosures and allow them to live in sea pens. I've long talkedabout that idea, too," he said in an April 1 blogpost. "But I think everyone — on both sides of this divide — agreesit's an issue that comes with tremendous challenges and costs and risks andwarrants more careful study."

Therehave also been calls for SeaWorld to end its breeding programs for other animals.Manby in March called this a "slippery slope," but noted that it ispart of the reason why SeaWorld's new partnership with the Humane Society is sovaluable.

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"Wehave our strongest adversary now coming alongside of us and partnering onhelping animals in the wild," Manby said, noting that SeaWorld serves asthe largest marine animal rescue organization in the world. He said thecompany's adversaries now are actually saying, "You know what, even thoughwe don't love the fact that dolphins are being bred … we do admit we needSeaWorld to be there, otherwise there is no place for these stranded marinemammals to go."

SeaWorld'sdecision to end its orca breeding program comes a little more than three yearsafter the documentary "Blackfish" first debuted at the Sundance FilmFestival in January 2013, earning rave reviews and raising questions about themental and physical health of SeaWorld's whales. In October of 2013, "Blackfish"gained even more attention when it aired on CNN, attracting nearly 21 millionviewers.  

SeaWorld'sreputation, and stock price, has not been the same since the film's release.SeaWorld went public in April 2013 at $27 per share, ending its first day oftrading April 19, 2013, at $33.52. More than three years later, the company'sclosing price on May 9 was $18.36.

"We had to take thisstep," Manby said of ending the breeding program. "I can't tell youhow much this orca issue has clouded us from being able to focus on theday-to-day business."