SeaWorld Entertainment (NYSE:SEAS) embraced a new marketing strategy on Monday, and three days later it attracted a new CEO. All that the troubled theme park operator needs is to embrace and attract guests and it will be back in business.
Thursday afternoon's announcement that Joel Manby will be stepping up as CEO come April 7 is the right call. Manby was CEO at Herschend Enterprises, the country's largest family owned theme park operator. It's the company behind Dollywood, Silver Dollar City, and various water parks, attractions, and lodging establishments.
Herschend thrived under Manby's watch. Herschend grew from six properties to 26 since his arrival in 2003, doubling annual EBITDA and net free cash flow along the way.
Manby spent 20 years in the automotive sector before leading the way at Herschend, serving in executive roles at Saturn and Saab. The car industry experience should come in handy: SeaWorld is a bit of a lemon at the moment.
SeaWorld is coming off of back-to-back years of 4% declines in attendance. Things get uglier as we work our way down the chain's income statement. Net income has plunged 33% over the past two years, according to S&P Capital IQ data.
Things were fine when SeaWorld went public at $27 a share 23 months ago. The park's brand began to disintegrate a few months later when the Blackfish documentary slammed the park for its treatment of killer whales. The one-sided skewering wasn't a box office draw at first, but subsequent airings on CNN and streaming availability exposed the anti-SeaWorld message to a broader audience.
It's now cool to hate on SeaWorld, and it comes at a time when the amusement park industry is booming. We saw that on display during the holiday quarter. SeaWorld's revenue slipped 3% relative to the prior year's holiday quarter, just as the four other publicly traded park operators saw revenue climb between 9% and 30% higher. An improving economy and cheap gas are making a day trip out to a regional amusement park a popular choice for anyone that isn't flying the SeaWorld banner.
Ad it up
It's been a busy week for SeaWorld. It debuted a new ad on Monday, starring Leon one of its sea lions. The new ad is part of a "Meet the Animals" campaign that will single out some of the park's marine life in the coming months, making a more personal connection.
Casting SeaWorld's animals in a softer light won't silence the most passionate activists, but it could sway the mainstream of lightweight critics. The more important catalyst will be Manby, bringing an outsider's perspective to a problem that hasn't been able to be tackled effectively from the inside. The pedigree's right. The payoff could be substantial, and not just for shareholders since most of Manby's compensation is coming in the form of performance bonuses.
It's not just Shamu that needs to make a big splash.