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SeaWorld Is Looking to Counter a Recent Tide of Criticism

SeaWorld Entertainment Inc. plans to spend several hundred million dollars to overhaul its performing-whale enclosures, including a near doubling of its orca environment in San Diego, amid other moves to bolster its investments in marine research.

But it’s too soon to tell whether those plans will bring the Orlando-based company relief from continued fallout from last year’s documentary “Blackfish,” including flattening nationwide visitor numbers and a sagging stock price.

Animal rights advocates, including People for the Ethical Treatment of Animals, immediately criticized the company’s new Blue World Project, announced recently by SeaWorld Entertainment CEO Jim Atchison.

“This is a desperate drop-in-the-bucket move to try to turn back the hands of time, at a time when people understand the suffering of captive orcas, and it will not save the company,” said Jared Goodman, director of animal law at PETA Foundation.

Other experts are taking a wait-and-see approach. Bey-Ling Sha, a San Diego State University journalism professor who has studied corporate public relations and crisis management, said SeaWorld was wise to move beyond the war of words with critics and set forth concrete corrective measures, though it may not see immediate benefits from the strategy.

“At some point, a company needs to show that it will stand up for something that it says it believes in, by taking action,” said Sha, interim director of SDSU’s School of Journalism and Media Studies. “This is a small step for SeaWorld, but a step in the right direction.”

Because it is in the theme park business, where consumer spending is entirely discretionary, Sha said SeaWorld could face a steeper and longer climb to PR recovery than other large companies that have recently dealt with high-profile crises, such as BP plc, Toyota Motor Corp. and General Motors.

Making the Compromises

She said addressing the whale-treatment controversy is not as clear-cut as cleaning up an oil spill or fixing an auto safety problem. But SeaWorld is able to show it takes the public concerns seriously, and critics can claim at least partial success in altering the company’s policies.

“Compromise is part of life; that is how you work out differences,” Sha said.

SeaWorld San Diego opened in 1964 — followed by SeaWorld Orlando in 1973 and SeaWorld San Antonio in 1988 — but current parent company SeaWorld Entertainment became publicly traded just last year.

Former majority owner Blackstone Group LP, which remains its largest stockholder with around 25 percent of shares, took SeaWorld public in April 2013 in an initial public offering of stock that raised $702 million.

On Aug. 20, shares of Seaworld Entertainment (NYSE: SEAS) closed at $18.94. That was well below the stock’s IPO price of $27 and its past-year high of $35.30.

PETA announced Aug. 19 that it has begun buying shares of SeaWorld, with the goal of obtaining an investment level sufficient “to propose shareholder resolutions and submit formal shareholder questions,” though it said its current stake is very small.

According to Zacks Investment

Research, PETA would need to obtain 4.3 million shares, worth $82 million, to have any stockholder impact on SeaWorld decision-making. That dollar figure is well above PETA’s total 2013 revenue of $35 million.

Two days after announcing a 1 percent drop from a year ago in SeaWorld Entertainment’s second-quarter revenue, to $405.2 million, CEO Atchison on Aug. 15 unveiled the company’s Blue World Project.

A Better Environment

Set for a late 2015 construction start and 2018 opening, SeaWorld San Diego’s orca environment will get new interactive features and views exceeding 40 feet in height, providing visitors with “the world’s largest underwater viewing experience of killer whales,” officials said.

The environment will support whales’ broad range of behaviors, challenging orcas physically and mentally, and there will be a “fast water current” allowing whales to swim against moving water. At completion, the SeaWorld San Diego facility will have a total water volume of 10 million gallons, nearly double that of the existing enclosure, with a maximum depth of 50 feet and a surface area of nearly 1.5 acres.

Similar enhancements will follow at the Orlando and San Antonio parks. Atchison said the company has also pledged $10 million in matching funds for killer whale research, and will embark on a partnership with prominent research organizations focused on ocean health.

Local SeaWorld officials said the coming enhancements will reinforce the Mission Bay park’s longtime marine conservation mission.

“By having animals in our care, hundreds of millions of people have come here to appreciate killer whales, dolphins and many other animals, and leave inspired to go and make a difference for animals in the wild,” said John Reilly, park president of SeaWorld San Diego, in an email.

SeaWorld San Diego ranked as the 11th most-visited theme park in North America and 22nd globally in 2013, with its 4.3 million visitors down 3 percent from the prior year, according to a report from the Themed Entertainment Association and consulting firm AECOM.

SeaWorld Entertainment operates 11 theme parks nationwide, which also include the Aquatica water park in Chula Vista.

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