Skift Take

SeaWorld has been trying hard to assure shareholders that it is moving beyond the controversy and financial woes that followed the Blackfish documentary. This investigation — whatever it entails and however it turns out — is a major setback.

For a while after the 2013 release of the documentary “Blackfish,” which excoriated SeaWorld over its treatment of killer whales, the theme park company refused to talk about the film or discounted the idea that it had any impact.

It wasn’t until August 2014 that the company admitted that the negative attention had hurt attendance and earnings.

And now federal authorities are asking questions. In a filing with the U.S. Securities and Exchange Commission late Friday afternoon [see below], SeaWorld Entertainment said it had received a subpoena this month “in connection with an investigation by the U.S. Department of Justice concerning disclosures and public statements made by the company and certain executives and/or individuals on or before August 2014, including those regarding the impact of the ‘Blackfish’ documentary, and trading in the company’s securities.”

In addition to the Department of Justice, the SEC has also sent subpoenas to the company on the same topic, the filing said. The company also revealed that the board of directors had formed a special committee on June 16 “with respect to these inquiries” and had hired legal counsel for advice. Information about the federal inquiries was paired with other news and buried in the middle of the filing under the heading “Other Events.”

A representative for an external strategic communications firm said SeaWorld had nothing to add.

“The filing covers everything the company has to say regarding the government inquiries,” she wrote in an email. “We would note that the filing states, ‘The Company has cooperated with these government inquiries and intends to continue to cooperate with any government requests or inquiries.'”

Reached by email, the SEC and Justice Department declined to comment late Friday.

“Blackfish” centered around Tilikum, an orca that dragged a trainer into its tank at SeaWorld Orlando and killed her; the same whale had been involved in the deaths of two other people.

The documentary was shown in limited release in theaters but got a much wider audience through airings on CNN starting in October 2013. SeaWorld ultimately lost partnerships, attendance, and money, and the tide has been tough to turn. Attendance fell in 2016 to its lowest number since the company went public in 2013.

In the filing where SeaWorld disclosed the investigation, the company also revealed news about a more recent issue.

Earlier this month, shareholders voted not to re-elect chairman David D’Alessandro amid fallout over a controversial bonus payout. As per company bylaws, D’Alessandro — on the board for seven years — offered to resign immediately. The board had 90 days to consider that and decide on a plan.

It only took a week for the board to announce its decision: They want to keep the chairman around — but only until December 31, they said in the late Friday filing. Part of the reason for keeping him around is to help deal with the investigation, the board said.

“…[T]he committee and the board took into account the potential impact of Mr. D’Alessandro’s immediate departure on the board’s and the company’s ability to successfully address certain challenges that the company now faces, including, without limitation, the matters set forth…below,” the filing said, referring to the DOJ and SEC subpoenas.

The federal subpoenas means SeaWorld will continue to be mired in the scandal that arose over the documentary, despite taking steps to distance itself from some of the practices that were the target of the film. The company announced last year it would end its orca breeding program and would transition the killer whale shows to more natural and educational “encounters.”

Tillikum, the whale at the center of the controversy, died in January. The final orca conceived through the breeding program before it was ended was born in April.

SeaWorld’s new leadership — CEO Joel Manby was hired in 2015 —  has been eager to refocus attention on new rides, family friendly attractions, and rescue work by staffers. The company owns 12 theme and water parks in the U.S. under brands including SeaWorld, Busch Gardens, and Sesame Place and has announced plans to expand internationally.

“We made enormous progress last year addressing our challenges with our three major initiatives aimed at redirecting our focus consistent with our mission and our brand: ending orca breeding, transitioning from a Shamu theatrical show to the ‘Orca Encounter,’ and partnering with the Humane Society of the United States on animal welfare and rescue efforts,” Manby told analysts in February. “Creating guest experiences that are fun and meaningful is the cornerstone of attracting guests to our parks.”

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Tags: blackfish, seaworld

Photo credit: The killer whale Tilikum is shown in a scene from the documentary "Blackfish." SeaWorld said it is cooperating with an investigation by federal authorities for statements made about the film's impact. 118039 / 118039

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