SeaWorld is sinking - CEO was popular with employees, but that couldn't save him
SeaWorld ($NYSE:SEAS) has been in decline for more than three years, every since the company's reputation was demolished by the 2103 documentary Blackfish. And just this morning, the board of directors announced that CEO Joel Manby was walking the plank.
But it seems the company is on a bit of an upswing: Employee morale is high, and (as evidenced by Thinknum's track of Glassdoor data), Manby is very popular with his employees (despite recently laying off 350 workers).
So why are they throwing him to the sharks now?
What sunk SeaWorld was controversy over its treatment of Orcas, or killer whales, as revealed in the Blackfish documentary. That combined with already sinking numbers and a tourism climate that never fully recovered from the Great Recession created a perfect storm.
Manby was brought in to stem the tide, but he was slow to respond. It wasn't until March of 2016 that he announced SeaWorld would be ending its theatrical Orca shows and replacing them with "new, inspiring natural orca encounters" at its flagship San Diego park (they have a number of parks including SeaWorld Orlando and SeaWorld San Antonio, as well as Busch Gardens). "Today marks a bold and impactful shift for our company," Manby said. "The killer whale issue is a growing reason why many people don’t visit SeaWorld and this is about doing the best thing for our orcas, our guests, our ambassadors and our company."
The idea was to rebrand SeaWorld as a global leader in conservation and wildlife protection. In an op-ed for the Los Angeles Times, Manby amplified on the new course he was charting:
We are proud of contributing to the evolving understanding of one of the world's largest marine mammals. Now we need to respond to the attitudinal change that we helped to create — which is why SeaWorld is announcing several historic changes. This year we will end all orca breeding programs — and because SeaWorld hasn't collected an orca from the wild in almost four decades, this will be the last generation of orcas in SeaWorld's care. We are also phasing out our theatrical orca whale shows.
...By offering our guests enjoyable, memorable and educational experiences, SeaWorld will continue to create the constituency for conservation, just as we helped to inspire the changing attitudes that, in turn, inspired our company's changing policies.
But his PR took a hit when he acknowledged ordering company employees to pretend to be animal rights activists in order to spy on SeaWorld opponents.
Since our data sets don't go back the full three years, it's hard to tell how SeaWorld's current ratings compare with the period prior to Manby taking the helm, but one look at the stock price pretty much tells the tale. There's been a bit of a minor uptick in last couple of months, but otherwise the company has just been treading water for more than three years.
(SeaWorld stock price graph from NASDAQ)
I suppose investors looked at the chart and decided they didn't want to go down for a third time. After receiving the latest round of bad news in the 4th quarter earnings report, they decided it was time to throw Manby overboard.
Some more Seaworld numbers:
- 2017 attendance: 20.8 million visitors (down 5.5%) - lowest since 2010
- Q4 revenue: $265.5 million
- Q4 profit/loss: Loss of $20.4 million (Q42016: -$11.9m)