SeaWorld May Have Another Blackfish on Its Hands

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Source: SeaWorld

SeaWorld Entertainment is starting to regain its sea legs. A new outsider CEO is set to take the helm in less than two weeks, and the stock has risen by 28% since bottoming out three months ago.

However, a new book -- written by former SeaWorld trainer and Blackfishdocumentary star John Hargrove -- will make it harder for the theme park operator to reclaim its tarnished brand. Beneath the Surface: Killer Whales, SeaWorld, and the Truth Beyond Blackfishwas published on Tuesday, and Hargrove is on a publicity tour to promote the book that skewers SeaWorld's treatment of killer whales.

Hargrove appeared on The Daily Show on Thursday night, following interviews earlier in the week on NPR and Blackfishdistributor CNN.

It's the publicity and not necessarily the book that SeaWorld needs to worry about, just as withBlackfish. The original documentary was a box office dud, grossing only $2 million in ticket sales and seen by just hundreds of thousands of people in 2013. It wasn't until CNN aired the documentary later that year and streaming services began offering the film that it was exposed to millions of potential activists.

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It's no coincidence that as Blackfish gained mainstream momentum that turnstiles began to click slower at SeaWorld. Attendance slipped 4% in 2013, then another 4% in 2014. This wouldn't seem like such a big deal if the rest of the industry wasn't blowing the cover off the ball. Every other publicly traded theme park or regional amusement park operator is posting healthy attendance growth these days. SeaWorld is the exception to the rule, at a time when low gas prices and an improving economy should be pushing park goers down its gullet.

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SeaWorld blew it with its reaction to Blackfish. It was too late to respond to the allegations,and it didn't do it loudly enough. It can't let that happen with Hargrove's book. It can't let the publicity tour broadcast allegations that go publicly unchecked by the struggling theme park operator.

For starters, during Hargrove's segment on Thursday's night The Daily Show, Jon Stewart chimed in with observations about seeing the killer whale tank during a trip to SeaWorld.

"Geez that's a pretty good-sized swimming pool ... but not for a whale," he said.

It's probably no surprise that Stewart or Hargrove did not point out that the existing tanks are going to be replaced. SeaWorld last summer announced the Blue World Projectthat will expand the killer whale environments substantially. Starting with the original SeaWorld in San Diego, the new 10 million gallon tank will cover 1.5 acres of surface area, go as deep as 50 feet, and include dynamic play features.

Activists will counter that this is still not as much freedom as releasing killer whales into the wild, but it remains to be seen if many of the orcas' psychological issues highlighted by Hargrove following his nearly two decades as a SeaWorld trainer will be curbed with the new environments. Each side accuses the other of a "cult-like mentality," but SeaWorld needs to better position itself as the flexible party in this debate.

Right now, SeaWorld is easy prey. It just rolled out a new ad campaign, and Conan fired back with a parody ad on Wednesday. Activists can threaten boycotts of bands playing at SeaWorld music festivals, but SeaWorld doesn't have a similar play in its arsenal. Even zoos have been reluctant to show SeaWorld some support, fearing they will no longer get a free pass from public opinion on keeping animals in captivity if they align themselves with the marine life park.

All of this should weigh heavy on Joel Manby, who will step up as CEO on April 7. He comes from the largely controversy-free parent of Dollywood and Silver Dollar City, but now he's diving into a volatile situation with the only major park operator that is not growing in popularity. If SeaWorld has its side of the story to tell, it better start telling it better.

The article SeaWorld May Have Another Blackfish on Its Hands originally appeared on Fool.com.

Rick Munarriz owns shares of SeaWorld Entertainment. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.