SeaWorld’s earnings are still floundering, and that could have an impact in San Diego.
The company reported Wednesday that earnings were down 28 percent in the third quarter, sinking company stock prices.
The Orlando-based theme park said attendance drops at its namesake parks in San Diego and Florida drove the revenue plunge – and it suggested negative media attention in California partly inspired the decline.
The news follows months of criticism of SeaWorld’s treatment of killer whales, driven by the 2013 movie “Blackfish” and a tabled state Assembly bill that would’ve upended the company’s business model.
Animal welfare concerns aside, San Diegans have a unique interest in SeaWorld’s performance:
City taxpayers have a unique stake in SeaWorld’s success. SeaWorld San Diego is in city-owned Mission Bay Park, so the company pays rent to the city and its monthly checks are based on money coming into SeaWorld. The payments are calculated based on 19 SeaWorld revenue streams — everything from ticket sales to parking — so if more visitors come to SeaWorld and buy things, the city gets more cash.
Last year, the theme park paid the city about $14 million in rent. It’s required to fork over at least $10.4 million this year.
That’s not to mention the more than 2,000 San Diegans who work at SeaWorld, and the other local taxes the company pays.
The news comes months after SeaWorld’s decision to double down on its ties to its trademark killer whales.
The company announced in August it would invest hundreds of millions of dollars into larger orca habitats and research focused on threats to wild killer whales.
SeaWorld CEO Jim Atchison claimed the massive investment in upgraded killer whale habitats wasn’t a reaction to “Blackfish” – though it followed the company’s first admission that fallout from the movie was affecting its bottom line. It also seemed as if Atchison aimed to address critics’ concerns with the current orca tanks and what opponents see as insufficient research aiding killer whales in the wild.
SeaWorld, which owns 11 theme parks, predicts an overall 6 to 7 percent drop in revenue for the year. The drop appears likely to be more dramatic at SeaWorld San Diego.
Still, the company seems convinced the financial hits are temporary. Atchison said the company’s retooling its marketing and advertising campaigns to try to address concerns after extensive research at the San Diego park.
“We’re kind of modifying our advertising campaigns, our messaging and kind of how we position the park to reflect the inputs that we’ve learned through that process,” Atchison said, according to a transcript posted on Seeking Alpha. “What we’ve learned and seen is that we have beloved brands that are 50 years old and have great experience and a great positioning in kind of the American vacation and theme park landscape.”
Some SeaWorld visitors may have a rosy view of the parks but the dramatic revenue and attendance drops the company’s seen this year sharply contradict Atchison’s argument. The company has weathered months of bad news and it’ll likely require more than a glossy new ad campaign to overcome it.
For more on SeaWorld’s business model and its unique relationship with San Diego, check out our recent quest on what SeaWorld and “Blackfish” mean for the region.