April 20, 2010 was the day the Deepwater Horizon exploded. I remember it well. I had packed up my Audi wagon to the brim with my belongings and headed out from Georgia, returning to California. There was one small space left open in the car … Continue reading With Dog as my copilot
I In November 2019, I interviewed David Rosenberg of the Monterey Bay Aquarium. At the time, he was the outgoing Chair of the International Association of Amusement Parks and Attractions (IAAPA) and was about to hand the gavel or sword or whatever IAAPA Chairs hand … Continue reading Monterey Bay Aquarium and the folks I want in my engagement photos
On the afternoon of August 24, 2020, I proposed to my now fiancé on a secluded beach along the rocky Northern California shore. Although I was successful, this was far from my original plans, which were altered at the last minute due to a natural disaster and a public health crisis.
Gone were the plans to propose at Diagon Alley. We were uncomfortable with flying to Florida at this point. A plan to propose on a cruise to Mexico was voided when the US cruise industry came to a standstill. And a proposal at Universal Studios Hollywood or Disneyland were also off the table – it was obvious they wouldn’t be open in time.
The final strategy involved a weekend getaway for her birthday at the Ritz Carlton hotel in Half Moon Bay, about a half hour drive south of San Francisco. The proposal would have taken place on the cliffs behind the hotel, overlooking the ocean.
Two days before our trip, the San Mateo County Sheriff began evacuating the small town of Pescadero, only twenty minutes south of the Ritz Carlton, due to an approaching wildfire. We canceled our reservation and, at the the last minute, rescheduled our trip to Fort Bragg, two hundred miles to the north of Half Moon Bay.
During the summer, Fort Bragg’s economy is highly dependent on tourism. As such, and to protect its resident population, the town took strict precautions to prevent introduction of the coronavirus into the community. Dr. William Miller, the Chief of Staff at Mendocino Coast District Hospital wrote that it wasn’t until the first week of June that “Fort Bragg had its first local resident to be diagnosed with COVID-19. This person had traveled outside the community and became ill shortly after returning home.”
During our visit, unlike in our hometown, the safeguards were evident everywhere. Everyone wore face masks and all were conscientious about social distancing. Our hotel, the charming Beach House Inn, abided diligently to guidance established by the CDC, the state and county, and the California Hotel & Lodging Association. Everything in the room was sterilized prior to our arrival and no hotel staff, including housekeeping, entered the room once we had checked in. Continental breakfasts were discontinued, which was fine for us as grocery stores and coffee houses were a five minute drive away.
Fort Bragg is the second largest city in Mendocino County and the county’s largest tourist destination. More than 7,000 are employed in the county’s tourism industry, which brings in close to $500 million per year. Though the peak tourism season lasts through Labor Day weekend, it was obvious that this year it had ended months earlier. The town’s biggest tourism attraction – the Skunk Train – was operating on a limited schedule with capped attendance. To fill the gap, the scenic railroad operator began offering a new eco-tourism option – railbikes.
During our stay, two weeks before the Labor Day holiday, the hotels were packed. They weren’t packed with tourists, but rather those escaping the flames and smoke of huge wildfires that had erupted in Marin, Santa Clara, San Mateo, and Santa Cruz Counties to the South and Lake County to the East. We decided during our stay to eat locally, but it became obvious that, even though local lodging was filled, the damage to the dining industry from state COVID guidance was already having a heavy negative impact.
A state mandate prohibiting indoor dining meant that if we wanted to eat at a restaurant, it would have to be outdoors or we’d have to pickup the food and eat it at our hotel or at a park. Most restaurants that would normally operate throughout the week had reduced the operating schedule to Thursday through Sunday. Because of the ban on indoor dining, restaurants had scrambled for available outdoor space, and in that space, tables had to be separated six feet from each other. As one manager told me, “I’m lucky we’re open and I can keep my current staff working. Even with our outdoor seating, we’re only about a quarter of our usual capacity. With payroll protection ending, I’m going to have to lay off just over half my staff.”
This is the story of one small town.
CONVENTIONS AND TRADE SHOWS
Imagine a much larger tourism city like Orlando, Anaheim, or Las Vegas – cities with limited interstate and international tourism during the COVID-19 pandemic, where attractions are either opened with limited operations or closed completetly.
Now imagine that a major part of that city’s tourism comes from the convention business. The local economic impact from conventions at the Anaheim Convention Center was close to $2 billion last year. The Orange County Convention Center in Orlando has an annual impact on the local economy of $3 billion. Economic impact from the Las Vegas Convention Center is estimated at more than $2 bllion per year. When it comes to the entire Las Vegas area, where almost all casino resorts have their own convention facilities, the total economic impact from all convention venues is closer to $10.5 billion.
When large conventions cancel, a domino effect takes place. Hotel rooms aren’t filled, restaurants aren’t patronized, hourly employment is reduced, and residents dependent on convention business have less to spend within the local community.
Throughout the attractions sector, conventions and conferences started cancelling beginning in March 2020. Among them, the American Alliance of Museums (AAM), Association of Zoos & Aquariums (AZA), World Waterpark Association (WWA). Comic-Con San Diego, and the country’s largest AV trade shows and conferences – including Infocomm and the Consumer Electronics Show (CES).
Some show cancellations were due to the inability to cater to international or interstate attendees as a result of transportation logistics or quarantine requirements. Many convention organizers also took into consideration a stipulation that most insurance companies added to convention policies during the SARS outbreak of 2003 – an exemption of coverage for anything related to communicable disease.
As compared to commercially operated conventions open to the public, nonprofit trade associations running their own shows have a primary responsibility to their membership – which for many includes not placing their members in risky situations.
One of the final standouts for cancellation was the IAAPA Expo, scheduled to take place in November 2020. Even as IAAPA cancelled its international Expos in Macau and London, it continued with plans to hold its primary show in Orlando. Unsubstantiated rumors state that in order to prevent its largest tenant from cancelling, which might send the wrong signal to other bookers, the Orange County Convention Center (OCCC) was offering substantial discounts to IAAPA, one rumor going so far as to state that OCCC was willing to comp the entire show.
Then pressure started coming from within the membership. On August 6, four attractions industry vendors – Chance Rides, Great Coasters International, Larson International, and Premier Rides, published a well circulated joint open letter to their customers explaining that they had all backed out of participation and attendance at the 2020 IAAPA Expo.
Two days prior, Ancasvi and VDV e.V., trade organizations representing ride and attraction manufacturers in Italy and Germany, published a lesser known open letter to IAAPA management requesting the event be postponed to early 2021, in light of the then public health situation in Florida. Among the ninety members represented by the letter were major IAAPA exhibitors, including Zamperla, Gerstlauer, Huss, Wiegand, Mack Rides, and Maurer.
Most canceled conferences, conventions, and trade shows ended up being adapted into virtual events. Of the six that I’ve attended so far, each has had its own hosting platform and approach. While successful during a global pandemic, this practice is likely a one-off. Moving forward, we’re more likely to see hybrid events, with emphasis on in-person attendance and virtual casting of some, but not all, sessions for those not able to attend.
During the keynote presentation of the Giant Screen Cinema Association (GSCA) virtual 2020 conference, keynoter Bob Cooney briefly interviewed Brent Bushnell, CEO and co-founder of interactive LBE Two Bit Circus. With their downtown Los Angeles location closed, Two Bit began broadcasting its live interactive game shows on the internet. Bushnell discovered something very important – “Elements of the live experience cannot be replicated on a video call.”
The same goes for any live event. I prefer to make personal eye contact with luminaries such as Lonnie Bunch III or Tom Mehrmann at a presentation, rather than watch their eyes skirt across a computer screen. I don’t want to chat via text. I want to have a face to face, where multiple inputs allow us to more robustly react off of each other.
As humans, we are sensorial creatures. An online event limits us to just two senses – vision and hearing. In a live situation, we are all impacted equally by the conditions of our shared room – temperature, air conditioning, decor. When we speak one-on-one, our conversations are impacted by body language – not just the part of the body we see within the computer or phone screen, but the entire body. We are impacted if someone physically touches us, and if we touch them. Our response changes if their breath smells of mint, or if it smells of something far worse.
A side effect of COVID-19 is the acceleration of automated and app-based solutions for a number of needs. In the attractions industry, this includes digital ticketing, virtual queueing, and cashless ordering. But, again, we are sensorial creatures. So it’s near impossible to have customer-service oriented automation without humans present in a supplemental role.
Back at the Beach House Inn in Fort Bragg, I took the dog out shortly after midnight to do his dog business. When we returned to our building, I realized that I had left my keycard inside the room, and I needed that card to enter the building. I couldn’t call up to my fiancé in the room since I had also left my phone. The office to our hotel was closed, but fortunately I had the car keys with me. So I put the dog in the car and we drove half a mile down the shore to our hotel’s sister property. After verifying I was indeed a guest, the desk clerk followed me back to our hotel and personally let me into our building.
I would have been frustrated beyond compare if I had had to use an automated system to get back into my room, especially if that system were not working properly.
In April 2019, we flew on a whim to Las Vegas. We entered the long check-in line for Mandalay Bay, the hotel we were booked at. The line was moving at a decent pace.
Then it stopped.
And it did not move for forty minutes.
Out of the corner of my eye, I noticed a bank of automated check-in terminals. Fortunately, there were humans present to help people through the process – humans who, at that moment, told me that the key system had crashed.
So we checked in our luggage at the bell counter and went off to the casino. We found that most of the slot machines were down. As a representative at the rewards counter told us, the slots were all integrated, just like the key system, with parent company MGM Resorts’ membership program and the program’s software had crashed.
About five hours later, we were checked into our suite and we received a call from the bell captain. The wheels had fallen off of our suitcase. He apologized (even though it was just likely wear and tear) and offered us either a new suitcase or a $250 dining credit. It made a world of difference to go from a system breakdown by a computer server that had no interpersonal skills to receiving an apology and an offer from a live human. That night, we had steak and lobster.
We are sensorial creatures and no matter how much the automation industry argues that programs are adapting to human behavior, the reality is that we, as humans, are having to adapt our behavior to the technology. For many of us, that’s difficult. It’s why there’s a live person overseeing the automated checkout at our local grocery, why McDonald’s maintains manned counters even though a majority of locations have adopted touch screen and app ordering, it’s why on my visit to Six Flags, I went through three checkpoints before entering the park, each manned by one to two people. We need people to guide us through the technology. When the technology doesn’t work, we need people to troubleshoot. We need people to make sure nobody’s using the technology to cheat the system. We need people for human comfort.
Disney knew this in 1982, when restaurant reservations at Epcot’s WorldKey Information kiosks were handled by live customer service representatives over closed circuit video feed, rather than by the pressing of touch screen buttons.
But now in California, Disney doesn’t know when it can take reservations as it fights the state for the right to reopen its parks. It’s the great political game pitting the economy against public health, next time in Part II of “2022: The ThemedReality Report on COVID-19’s Impact on the Attractions Industry”
DISCLAIMER: This report centers around activities primarily in the United States. Conditions will vary in other nations due to differences in cultural behavior, government regulations, and government ownership of private and public entities. Additional disclaimers can be found by clicking on the menu tab in the top right of this page.
For more than twenty years, I worked in attractions and cultural institutions, often in positions with the title Manager or Director, and I’ve been writing professionally and blogging about a number of attractions-related topics for the past fifteen years. I enjoy sharing my knowledge and research, which is why I do not mind being cited or quoted in articles and social media, even if the person quoting me has a different outlook. In fact, I encourage it.
Ken Storey, writing in the Orlando Weekly, has gone beyond this by transmogrifying my writing, beliefs, and even my biography in order to support his theses. In all my years of writing, Mr. Storey is the only person I’ve encountered who has significantly botched both the story of my life and the content of my writing – and on a serial basis.
To understand how, here are a few examples of numerous such instances.
“After years of unsubstantiated rumors, it looks like Six Flags may finally be headed to Orlando” Orlando Weekly, November 12, 2018:
Storey wrote: “Through ThemedReality, Kleiman has fueled the pro-captivity side with massively detailed posts that regularly serve as talking points. On the site, Kleiman has been upfront in his outrage regarding the move by SeaWorld to phase out orca breeding and transition to more educational based animal interactions.”
If you click on them, you’ll notice that neither of the links in this paragraph lead directly to my writing. The first one (“pro-captivity side”) links to a Kings Island fan group chat board, where at the time you could link to an early blog post on ThemedReality. This ThemedReality post was about media and corporate duplicity, not aboutpromoting the “pro-captivity side”. Although not currently available on this blog, and I’ll explain why shortly, this post was ported in 2014 to my other blog, “The Mid-Cap Chronicles”, and it can be read here.
The second (“talking points”) links to the Facebook page “Stand With SeaWorld” and its link to an article on the website “Behind The Thrills”, an article that I had no involvement with. I wasn’t even mentioned in this particular Behind The Thrills article. Of the 80+ comments on the Stand With SeaWorld Facebook post, none of them are from me. Talking points are clearly coming from elsewhere.
It is odd that Mr. Storey would position me as “pro-captivity” at a time I had developed (and still maintain) longstanding relationships with animal activists working on welfare issues in Asia and Eastern Europe. At the time of Mr. Storey’s story, the ThemedReality blog was already nearing 70,000 views, most of them from the animal activist community.
As you can tell from the stats above, Mr. Storey’s stories only contributed to 71 hits for the entire year. Through this and reference monitoring on other Storey stories linked to the ThemedReality blog, it becomes apparent that the vast majority of his readers are not clicking on the links. Instead of reading what I wrote, they are perceiving my work as manipulated by Mr. Storey.
Regarding the statement: “Kleiman has been upfront in his outrage regarding the move by SeaWorld to phase out orca breeding and transition to more educational based animal interactions,” here is text from a 2014 blog post contradicting Mr. Storey’s inaccurate assertion. Although I respect the beliefs of many who disagree, I stand by what I wrote six years ago. I think it was the right decision, even though I don’t believe it was properly implemented.
So I prefer a strategy that would benefit SeaWorld, its visitors, and the animals’ welfare. Many former SeaWorld trainers that I’ve spoken to or listened to advocate this plan, at least in part.
End the captive breeding. The gene pool can only go so far before defects from inbreeding start to show. Eliminate wild capture or the importation of wild caught orcas from international parks or the importation of orca sperm from donors in other parks. Essentially, the current SeaWorld populations will die out within fifty years, but it won’t spell the end of SeaWorld. The chain existed before housing captive orcas, it will exist after.
Eliminate the choreographed shows. Keep the trainers, but instead of having them instruct the orcas to perform behaviors on cue, have them encourage the orcas to perform natural behaviors at their own whim.
In addition to predating Mr. Storey’s story by four years, this post’s appearance on the ThemedReality blog and its Mid-Cap Chronicles port, available to read by clicking here, both appeared online months before the hiring of Joel Manby as SeaWorld CEO, who implemented versions of both strategies.
“SeaWorld’s largest shareholder may be pushing the company into bankruptcy” Orlando Weekly, June 24, 2020
Mr. Storey’s most recent SeaWorld story, the third Storey story in a thirty day period to target the company’s Chairman of the Board, misrepresents one of my most recent blog posts. At one point he states: “Later on in the post, Kleiman explains, ‘I have a strong feeling the company is contemplating filing for bankruptcy.'”
I did indeed state this.
“The claim is especially surprising coming from a reporter who is known for his connections to SeaWorld, which date back to his own time at the company decades ago, along with personal connections to SeaWorld San Diego.”
I believe I understand why he’s stating this in such a fashion. If a person with close personal connections to the company states the company might be contemplating filing for bankruptcy, then it must be news!
That association ended 33 years ago and I have visited the company’s parks a total of three times – once as a tourist and twice as a journalist – in those 33 years. Most of my SeaWorld connections have moved on to other zoos and theme parks, which is why I mostly get my SeaWorld information the old fashioned way – I send questions and requests to the company through the appropriate media relations channels, which I base on extensive research involving court documents and government filings (the kind of research that’s both time consuming and a big financial investment out of my own pocket). That’s why it’s so irritating to put so much effort into seeking and reviewing primary source material only to have those efforts misrepresented in such a manner by someone I barely know.
This misrepresentation is no more apparent than in another of Mr. Storey’s statements: “Kleiman’s conclusion is built around what Scott Ross, chairman of the board and founder partner at Hill Path Capital – SeaWorld’s largest shareholder – is willing to do to finally move beyond SeaWorld.”
When I wrote this post, I was examining what was taking place at the time with companies big and small across multiple business sectors – not just attractions and theme parks. When companies started closing due to the COVID pandemic, vendors, especially smaller, family-owned ones started worrying if they’d survive if they weren’t paid. To ensure they got payment, they started placing liens on projects. SeaWorld was the recipient of a higher than normal number of liens.
Was SeaWorld considering bankruptcy? It certainly was an option and the post presents clues on how the company, along with its largest shareholder, was taking preemptive measures to offer early bonuses, protect assets, and sell some surplus animals to get some quick cash (a well trained dolphin can garner a quarter million dollars).
In the ThemedReality post Mr. Storey is referring to, I never wrote nor even thought while writing that the company’s lead owner and Chairman of the Board was attempting to drive the company into bankruptcy so he could “move beyond SeaWorld.” Bankruptcy was apparently contemplated by the company, as it has been by many companies during the COVID-related closures, but I did not find, and still can not find, any evidence that bankruptcy was advocated by the ownership. Instead, actions taken by Hill Path and SeaWorld throughout June, July, and into the present, indicate a desire to avoid any kind of insolvency whatsoever. In my next blog post (which was originally slated for this slot), I’ll present evidence, some of it well published, some of it not, but in the public record, of why the company will remain solvent for the next few years.
A few days after Storey’s bankruptcy story ran, the theme park website BehindTheThrills.com ran an article that, in it’s first half, highlighted inconsistencies in Mr. Storey’s story. The second half of the Behind The Thrills article was about PETA encouraging SeaWorld to replace its dolphins with robotic ones. It was included because Mr. Storey’s bankruptcy story was cited by PETA in an open letter to SeaWorld Chairman Scott Ross:
June 26, 2020
Founder and Managing Partner
Hill Path Capital LP
Dear Mr. Ross,
I’m writing on behalf of PETA following the Orlando Weekly‘s recent article suggesting that SeaWorld is considering filing for bankruptcy and may be looking to “offload” some or all of the animals in its parks in order to reduce animal care costs and make the park more appealing to potential buyers. If either or both of these points are true, SeaWorld must stop breeding more dolphins and whales. As you are the chair of the company’s board and the founder of its largest shareholder, Hill Path Capital LP, we look to you to take that step.
Instead of producing generations of animals to suffer in cramped tanks at its parks—something the public has shown it doesn’t support—SeaWorld could easily install cutting-edge forms of entertainment that allow ticket-holders to feel that they’re interacting with real animals when they’re not. This move would save you significant money, as there would be no animal care expenses, and it would win back visitors who now shun the parks. Animatronic dolphins look, feel, and act just like real dolphins, and interactive digital aquariums have been called the way of the future.
As COVID-19 continues to threaten SeaWorld, a marine park in Australia is proposing to move the dolphins it has to a seaside sanctuary. The National Aquarium has also chosen to send dolphins to a sanctuary, and The Whale Sanctuary Project plans to build the first refuge for whales in North America. PETA’s offer still stands to donate a significant sum toward building a seaside sanctuary if SeaWorld will agree to stop breeding dolphins and whales and release them into it.
May we hear from you?
Very truly yours,
Ingrid E. Newkirk
Perhaps Mr. Storey was unaware of this letter when he wrote in a tweetstorm:
In the same rant (his words), he also wrote:
Another thing Mr. Storey may not be aware of is that for the past few years, I’ve been an occasional contributor to Behind The Thrills. They were kind enough to contact me in advance of publication and asked me to check the accuracy of the portion of their article that pertained to my blog post and Mr. Storey’s representation of it. With a minor correction, it went online with my consent and full blessing.
To the contrary, Mr. Storey and the editors of Orlando Weekly have never bothered to contact me to vet Mr. Storey’s stories. Nor have they had the courtesy to notify me of their pending publication.
I found out about the November 2018 article via an email from a well known animal activist, who told me, “I don’t get it. I’ve known you for five years and this isn’t you.”
I found out about the June 2020 article when a SeaWorld contractor called me, yelling into the phone, “What do you mean they’re getting rid of all the animals?”
Remember folks, if it’s in a Ken Storey story and it’s not a direct quote, it’s not me talking.
The next step
These are just a few of many points where Mr. Storey misrepresents me through malice, negligence, or omission. Regardless of how much he writes about me, he continues to show an incomprehension about who I am, what I write, and why I write it. As he has himself expressed concern that he was maligned by the national media for his own writing, I would have expected otherwise.
That said, this is not the blog piece I intended on posting today, but the situation has gotten out of hand and I want to share what I’m doing about it.
It is my belief that Mr. Storey’s continued misrepresentation of my writing, my beliefs, and my biography have negatively impacted my professional reputation and affected my ability to gain new clients for my work as an independent contractor. As a result, a few days after Mr. Storey’s bankruptcy story went to print, my legal team advised me to remove and archive all posts from this blog in order to mitigate further malfeasance.
At the same time I removed the posts, my legal team began an extensive investigation into Mr. Storey’s articles, social media posts, comments on websites, and even the brief period he and I direct messaged each other. This investigation looked at content going back to 2011, the year I launched the ThemedReality blog.
Based on his prior behavior, I would not be surprised if Mr. Storey argues with my points to “prove” his accuracy, becomes combative, portrays himself as victim, or labels me any number of less than desirable terms.
This will be the last time I will offer public comment about Mr. Storey in any internet medium, as this has now become a legal matter. I advise Mr. Storey to reciprocate this action for the same reason.
The person who best understands a life lived is the person who lived it.
The person who best knows what’s written is the person who wrote it.
As a basis for this blog post, I will be using an article I wrote for InPark Magazine. The article took two weeks to develop, compose, and undergo editing. State officials and theme park management were interviewed and everything was vetted.
InPark Magazine. July 13, 2020
That’s reporting and them’s the facts. Now, on to opinion.
This is what I believe:
- California’s theme parks will likely not open in 2020 as “theme parks” – in particular, no rides nor indoor attractions.
- Parks will open under the guise of Stage 2 businesses that they can meet reopening guidance for.
- While Six Flags Discovery Kingdom has reopened as a zoo, under the moniker “Marine World Experience,” I’m highly skeptical that SeaWorld San Diego will open this year. Unlike Discovery Kingdom and the SeaWorld parks in Texas and Florida, the San Diego park operates on land leased from the city. It is currently under a rent deferment due to the situation surrounding COVID-19, as are most businesses on city-leased land surrounding Mission Bay. However, under its lease agreement, SeaWorld is required to make an annual minimum payment to the city of just over $10 million. Once operations recommence, the city also gets a percentage of parking, admissions, food and beverage, and other revenue streams. With competition in the market from the San Diego Zoo, Birch Aquarium, and SEA LIFE Aquarium, and the Summer season pretty much a wash, it looks like the park might actually lose less money by remaining closed for the rest of the year than reopening to a low admission cap and just animal attractions.
- While the Disneyland Resort could extend Downtown Disney by opening the Main Street and Buena Vista Street sections of its theme parks under the guise of a shopping mall, it might be better off by following the Knott’s strategy by opening select areas of its parks for ticketed events with capped attendance. Other parks, depending on location, will likely find opening select sections of their parks under the guise of shopping malls or for limited ticket events to be a profit risk.
- Some parks with go kart tracks, laser tag, and miniature golf could try to open under FEC guidelines. The Santa Cruz Beach Boardwalk has many such participatory activities.
- Having been to the Marine World Experience, and having talked with folks who have been to other Six Flags parks that have opened around the country, I’m comfortable that the theme park industry has their act together. In fact, I felt more comfortable and safe at Six Flags Discovery Kingdom than I do at my own local grocery stores.
- But it’s not up to the parks. It’s up to the individual states. And here in California, the state bases its regulations on the number of confirmed COVID-19 cases , hospitalizations, and deaths reported in each county. As they increase, businesses are forced to re-close or modify operations for a prescribed number of weeks. And each time that happens, the reopening road map gets pushed back and the opening of theme parks gets farther and farther away.
- I consider the Summer season to be over. Schools are about to start up again and most districts have elected to go virtual in the Fall. I don’t expect the state to permit theme parks to open earlier than September, which means they’ve missed out on most weekday family visitation at a time when interstate and international tourism is pretty much nonexistent.
- They could open around Labor Day weekend, which would place them in the perfect position for Halloween events. However, I don’t see how Halloween Horror Nights, Haunts, and Scary Farms can take place under current guidance, unless there are no scare zones with fog machines and guests wander through mazes two or four at a time with monsters and ghouls living on the other side of plexiglass. I anticipate some major cancellation announcements of theme park Halloween events within the next few weeks.
- They could reopen around Thanksgiving for the holidays. It would be a true Christmas miracle. That’s hoping, of course, that the predicted second wave of COVID-19 doesn’t hit around Sept – Nov, pushing state approval of theme park openings back even further.
- My best guess is that, especially with the Rose Parade being cancelled – and that’s almost six months away! – parks won’t reopen until the beginning of 2021. This means that 3/4 of the 2020 fiscal year for California’s parks (1/2 for Disney, which starts its fiscal year in October), would be considered a wash.
So that’s my opinion.
When Tilikum the killer whale attacked his trainer Dawn Brancheau a decade ago, experts from everywhere came forth with explanations of why he committed the act – former trainers fond of SeaWorld, former trainers against SeaWorld, SeaWorld itself, animal rights activists, book authors, theme parks fans, filmmakers – everyone had an explanation and those explanations were as different as pie and cake.
The only one who knew with any certainty why Tilikum did what he did was the whale himself. Anybody else offering an explanation with claimed certainty was simply offering conjecture.
In much the same way, I don’t know Scott Ross, Chairman of SeaWorld Entertainment. I’ve never met him nor spoken to him. So what I write of him is solely conjecture based on documented evidence.
I do this because ThemedReality is a blog. It lacks the editorial oversight of my professional writing. As such, I do a lot of conjecturing here, so what appears on the blog really should be considered solely as opinion. There’s also a difference between aggregation and research. Aggregation, which many bloggers and web writers for the mainstream media now do, involves culling data from other individuals’ articles or social media posts. I do a bit of that when necessary, but I really don’t care for it. I find that aggregation often leads to errors in accuracy. Rather, I like to dig deep into publicly available documentation. It’s a long and arduous process, but I find the work rewarding. For instance, much of my last post on this blog, titled “Journey to ClaimWorld,” came from an extensive examination of county clerk and court records, along with SEC filings. I then took that information and formulated my opinion.
Sometimes I get information from third parties, and sometimes third parties from a variety of companies agree with me. Often, those sources ask to remain anonymous because of the positions they hold. This was the case with past blog posts on a now discontinued proposed business arrangement between SeaWorld and Spanish chain Parques Reunidos. Unless I’m able to confirm the information given to me by anonymous sources by having someone else go on the record or finding it through publicly available documentation, I take what I’m told with a grain of salt. And I encourage my readers to do the same. Have for many years. In fact, it’s in the disclaimer accessible through the tab at the top of this page.
The truth about Scott Ian Ross is that unless you’re in his inner circle or working closely with him on something, you really have no idea what he’s thinking or planning. You have conjecture. And that’s the truth.
Yesterday (today being June 25, 2020), a number of people contacted me asking for me to elaborate on my article in the Orlando Weekly.
The thing is – I don’t write for the Orlando Weekly and don’t have a relationship with the paper or its owners. Never have.
The confusion stems from an article written by Ken Storey, the third of his articles published in less than a month about SeaWorld’s Scott Ross. In his article, Storey links to a couple of my blog posts (and my LinkedIn profile, which I’m not sure why. A much more comprehensive listing of my work experience can be found by clicking the “About” tab above) and he quoted the “ClaimWorld” piece a number of times.
I’m completely fine with being cited. I understand as well as anyone that we reporters need source material. The problem I’ve had arises from industry professionals and colleagues seeing my name and my being quoted and thinking that I either wrote the piece or was interviewed for it. Complicating things – those trying to accomplish a quick read often don’t click on links. So, here we are. I neither wrote the Orlando Weekly piece nor was I interviewed for it.
Storey’s article takes a much different approach and a much different claim than mine. I’m going to address two of the main differences here so that I have it on record what my opinion is for those confusing Storey’s writing for my own.
Storey’s article is titled “SeaWorld’s largest shareholder may be pushing the company into bankruptcy.”
I don’t think that’s the case at all.
Here’s what I wrote:
“I have a strong feeling the company is contemplating filing for bankruptcy.”
A strong feeling – an opinion
Contemplating – considering
And the clues certainly are there as laid out in the “ClaimWorld” article.
Storey interprets this sentence a completely different way:
“The claim is especially surprising coming from a reporter who is known for his connections to SeaWorld, which date back to his own time at the company decades ago, along with personal connections to SeaWorld San Diego.
“Kleiman’s conclusion is built around what Scott Ross, chairman of the board and founder partner at Hill Path Capital – SeaWorld’s largest shareholder – is willing to do to finally move beyond SeaWorld.”
But it’s really not that surprising for me to come to MY conclusion (as stated here on the blog, not as it’s stated in the Orlando Weekly article). My opinion is not based upon either my personal or professional relationships with SeaWorld (which aren’t as impressive as Storey makes them out to be) – it’s based on research. My conclusion is also not “built upon what Scott Ross….is willing to do to finally move beyond SeaWorld.” Remember that I have no idea what Scott Ross is thinking. That’s the truth.
I’ll lay out what my “ClaimWorld” blog post is about in a single sentence, all in bold letters:
A LARGE NUMBER OF COMPANIES HAVE CONTEMPLATED BANKRUPTCY DUE TO THE COVID-19 SHUTDOWN AND HAVE TAKEN THE APPROPRIATE PRECAUTIONARY MEASURES AND THAT MAY INCLUDE SEAWORLD.
Towards the end of “ClaimWorld,” I wrote: “…there are whispers within the zoo and aquarium community that SeaWorld is sending out feelers for potential buyers of its collections. Animal sales equals instant cash.”
This was likely my fault by not pointing out that the whispers are about a small number of animals, not the full or even substantial parts of the collections. For instance, SeaWorld has a huge collection of dolphins. A well trained dolphin can net a quarter million dollars in some markets.
Apparently misunderstanding me, Storey writes: “…Kleiman is reporting that SeaWorld may be looking to offload some or all of its animals. This would result in a dramatic decrease in recurring set costs while also making the park’s even more appealing to potential buyers. NBCUniversal was previously rumored to be interested in the Orlando and California parks, but unwilling to involve itself in the hot button orca captivity controversy.
“If Kleiman is correct and if SeaWorld can find a new home for its animal collection, we may see the board move the company into bankruptcy where it could more easily break up the parks to multiple buyers while also helping Hill Path finally see a return on its investment.”
That’s all Storey, because the ClaimWorld post did not mention at all about the parks being sold. But, the confusion being what it is, I received quite a few of calls from various company executives and investment bankers thinking that Storey’s argument was mine (I should also point out here that according to the 2009 loan agreement, if any of the parks are sold, the company has 365 days to repay its outstanding financial obligations in full, which is why I highly doubt the company will “break up the parks to multiple buyers”).
Selling a few animals to bring in some quick cash or offloading “some or all” of its animals – these are two different interpretations and two different opinions.
Ultimately, these two pieces – my blog post and Storey’s Orlando Weekly article – approach the issue from two different directions and come to two very different conclusions. I wrote one thing, Storey interpreted it another way, a third person will do the same, and so on. To quote the author Diana Gabaldon:
If you’re going to have more than one person read your book, they’re going to have totally different opinions and responses. No person – no two people – read the same book.
If you see my name attached to an Orlando Weekly article – it’s my name, reputation, and content being appropriated by someone there, but it’s not directly from me nor is it with my consent. And I know nothing about Scott Ross other than what any other writer can find in the public record on his or her own. And that’s the truth.
On Sunday, December 22, 2019, Scott Ian Ross was appointed as an independent director of Diamond Eagle Acquisition Corporation. That same day, the company entered into an agreement to acquire and merge with Draft Kings, an online sports betting venture, in a deal valued at $3.3 billion. Upon joining the Diamond Eagle board, Ross was awarded 20,000 shares of the Company’s Class B common stock at $0.002 per share. The next day, when the market opened, the stock was valued at $11.75. By February 14, it had peaked at $21.97.
To put this in “whoa” figures: The 20,000 shares of stock would have cost Ross $40. If he sold all his shares on February 14, he would have made a profit of $439,360.
Such profitably is a far cry from the condition the company he chairs, SeaWorld Entertainment, finds itself in as it comes out from an economic shutdown.
Over the past four months, I’ve been exchanging research with a number of journalists, bloggers, and financial analysts trying to decipher the company’s current situation as it dealt with the shutdown of its theme parks, furlough of its staff, animals that can’t be neglected, and the sudden departure of a newly hired CEO.
I’ll start with liens.
While the index of liens I have is extensive, it is not thorough, and is still being compiled. This is primarily due to discrepancies between state and county databases on how information is searched and what information is available. Because of this, I’ll keep the information more generalized, rather than addressing specific liens. If you’re interested in something more specific, I’ve come across three rather good articles that go into more detail, and I highly recommend all three:
While it’s common for contractors and vendors to place liens on a property for nonpayment, we usually see no more than a dozen at a time. With SeaWorld, I’ve confirmed more than 150 liens across all of the company’s parks filed in the four months between March and June 2020, and the number keeps climbing as additional data becomes available.
There are currently 56 confirmed liens on the Orlando property. This compares to only 9 for the entire year of 2019.
Between March and June, there were 36 confirmed liens on the San Diego parks, 26 on the San Antonio parks, and 30 on the Tampa parks. I was unable to locate any 2019 liens on these properties. There are also liens on the Williamsburg and Lancaster properties. The liens are on either individual rides or attractions or the entire park and the amount owed varies from the millions of dollars to under $500. Every one of the company’s 2020 projects – including water slides and roller coasters, is impacted by a lien. This includes the already opened Texas Stingray in San Antonio.
What do I make of all this?
I have a strong feeling the company is contemplating filing for bankruptcy. Here’s why (and I’ll try to keep it simple since finance is a complicated thing):
On April 21, Moody’s reported “SeaWorld is projected to have over $400 million of cash on the balance sheet, although the $332.5 million revolver is expected to have $313 million drawn with limited availability after outstanding letters of credit.”
Usually, the company pulls from the credit line at the beginning of the year, then repays during the second half. However, with the unexpected prolonged park closures, SeaWorld needed to supplement its credit line. So it sold $227.5 million of secured notes in a private sale.
And this is where things get interesting.
The revolving credit line, which is administered by Bank of America, is contractually listed as the first guaranteed lien holder. With the company’s properties having been placed as collateral for the credit line, should SeaWorld fail to make payments in a timely manner or file for bankruptcy, BofA and its partners have the right to obtain the company’s assets before anyone else.
So let’s say SeaWorld does file for bankruptcy and the credit line bankers get first dibs, pulling just enough to pay off the balance with interest, fees, and fines. Do the rest of the lienholders come next?
Not exactly. There’s that secured note sale. My curiosity was piqued when I noticed that it wasn’t arranged through SeaWorld’s normal avenues. Instead, it was arranged by Paul, Weiss, Rifkind, Wharton & Garrison, which happens to be Hill Path Capital’s law firm.
If you’re not familiar with Hill Path, remember that fellow, Scott Ian Ross – the one who profited from joining the Diamond Eagle board and who’s the chairman of SeaWorld’s board? Hill Path is Ross’s investment firm. He’s the founder. And Hill Path owns more than 34% of SeaWorld stock. So whenever you hear someone complaining that the SeaWorld shareholders should vote him off the board, keep in mind that it takes 66% of the shareholder vote to do so. Ross controls just enough shares to block any such vote. Besides, if they could vote him out, how would that work? David D’Alessandro was voted out as SeaWorld chairman in 2017, and the board overturned shareholder wishes and asked him to stay. This, today, is very much Ross’s board.
I digress. $227.5 million in secured notes was sold to a private party, with the sale finalized April 30. There’s no public record who the note buyer is, but it is likely an individual or company closely associated with Ross and Hill Path. Here’s why I believe this:
As with the credit line, in addition to the company’s parks and other tangible assets, additional agreements were written up guaranteeing the notes with the company’s copyrights, patents, and trademarks (highly valuable, especially overseas). To use the vernacular of the 1800s, SeaWorld offered up the whole kit and caboodle.
Here’s what I think. Keep in mind that I’m not an expert on everything, like an attorney or a whale trainer named John. I’m just a journalist who covers the attractions industry during the day for a trade publication and blogs about it at night. This is strictly my opinion and it’s nothing more nor less. You’ve been warned, in case you want to quote it as indisputable fact.
The credit line and the notes are contractually considered “first obligations.” Once the obligations to the first lien holder have been met, the secondary lien holder then has priority access to the company’s assets. As this secondary lien holder is the note owner, and as I suspect it’s an entity close to Ross and Hill Path, they will likely take all the remaining company assets, preserving them for Hill Path’s future use, and leaving nothing for the company’s contractors and vendors in the process.
Again, I could be wrong on this, but I’m comfortable enough with this concept to share my thoughts and I’ll issue a correction if I’m wrong.
There are some other clues about a potential bankruptcy that I won’t cover here, such as:
- The fact that after the prolonged closure, a park needs to reach 80% capacity to start turning a profit and that in this extended COVID-19 environment, that’s not likely to happen. (Unlike China and Japan, where parks were closed down again after reopening, the most we’ll likely see during a COVID resurgence in the US is a renewed diminished capacity at the parks).
- The fact that just days after furloughing 90% of the staff and reducing executive salaries by 20%, the company awarded $6.8 million in stock bonuses to its executive tier. This early issuance corresponds with the behavior of a number of companies contemplating bankruptcy (most recently CEC, or Chuck E Cheese), as bonuses are not allowed under bankruptcy law.
- The fact that there are whispers within the zoo and aquarium community that SeaWorld is sending out feelers for potential buyers of its collections. Animal sales equals instant cash.
No. I won’t discuss any of these today. Maybe another time.
Here’s what I’ve learned about Covid-19 from my friends, family, and colleagues, all of whom are experts in their own way, but none of whom are epidemiologists.
- We’re overreacting
- We’re underacting
- The virus will never kill as many as the flu
- The virus will eventually kill more than the flu
- The virus came from people eating bats
- The virus came from people eating snakes
- The virus came from people eating human flesh
- The virus was designed as a weapon by the Chinese
- The virus was designed as a weapon by the Americans
- The virus was designed as a weapon by the Israelis
- The Trump Administration and the Republicans are spreading this hoax to discredit the Democrats in retribution for the Mueller Report and the impeachment
- The Democrats are spreading this hoax to undermine the President, following failed attempts with the Mueller Report and the impeachment
- The media is over-hyping the situation
- The media is being denied information by the government
- The Illuminati are behind it
- The NBA team owners knew months in advance
- Bob Iger knew months in advance
- Donald Trump knew months in advance
- Nancy Pelosi knew months in advance
- Just wipe your hands, you don’t need to wash them with soap every time you touch something.
- Washing your hands doesn’t work. You need to bathe in scalding hot water. Yes, a family member actually recommended this
And this is why I’m still going to the World Health Organization for my updates.
2014: Al Weber, who held CEO positions at Paramount Parks, Six Flags, and Palace Entertainment, starts his own company – Apex Parks. The new chain, financed by two investment firms – Broad Sky Partners and Edgewater Funds – starts off by purchasing fourteen family entertainment centers (FECs) and Big Kahuna’s Water Park in Destin, FL from Palace Entertainment. Joining Weber is an experienced management team migrating from Palace, including Doug Honey as CFO, Gregg Borman as SVP Operations, and Ken Kobane as VP Business Development. Together, the four bring more than 100 years experience in FEC and amusement park operations to Apex. Among the new company’s board members – Tim Fisher, at the time CEO of Village Roadshow Theme Parks, who had established a close professional bond with Weber while at Paramount Parks.
2015: Apex Parks purchases the historic Indiana Beach amusement park, ninety minutes north of Indianapolis. Broad Sky’s founders, including Apex Chairman Tyler Zachem, join investment firm Carlyle Group. Broad Sky’s ownership stake in two companies – Apex Parks Group and pet goods label Mana – transitions to Carlyle.
2016: Apex Parks purchases another historic amusement park – Fantasy Island, near Niagara Falls, NY. Weber has grand plans for updating both Indiana Beach and Fantasy Island while honoring each historic parks’ heritages. In early November, Weber dies. How valuable was Weber to the company? According to his key person life insurance policy (when a company takes out a life insurance policy on an executive and is payed upon death), $10 million. This turned out to be a payout Protective Life Insurance Company refused to honor, based on its allegations that key health information on Weber was not included in the application. After an expensive seven day trial, a jury rules in Apex’s favor. At the end of the year and starting into the next, new management joins the Apex team. Fomer Six Flags Great Adventure park president John Fitzgerald is named the park’s new CEO. Brenda Morris, formerly a Finance SVP with clothing chain Torrid, becomes consulting CFO.
2017: Indiana Beach adds Oktoberfest and Halloween festivals.
2018: Indiana Beach adds “Rockin’ the Beach” summer concert series.
2019: Carlyle Group purchases three of Latin America’s largest (primarily mall-based) FEC chains – Peru’s Coney Island Attractions (86 locations), Columbia’s Happy City (50 locations), and Chile’s YuKids (33 locations). Rather than merge the operations with Apex Parks, the two are maintained separately in the Carlyle Group portfolio.
2020: Indiana Beach, Fantasy Island, and two FECs are permanently closed by Apex Parks. Why? Fitzgerald is an experienced attraction operator and he undoubtedly has an understanding of Weber’s vision, having served as General Manager of Paramount’s Terra Mitica in Spain when Weber was CEO of Paramount Parks. But, as we’ve seen with other theme park operators over the past few years, there’s a hierarchy in decision making. Management reports to the Board of Directors and the Board reports to the shareholders. When individual shareholders control the board, executives may not have a say in decision making. Sometimes this leads to differing approaches on how to solve an issue. If an executive believes that an infusion of cash may be necessary to maintain a property operating in the red, the shareholder/Board may find it easier to shutter the property (before the season starts), dismantle it, and sell it off for a quick infusion of cash. I’ve personally seen this happen with one of my former employers. The question then going forward is – where does that cash go? Does it go to Apex to pay off debt, is it invested in other existing properties and new acquisitions, or does it just go back to the shareholders?
APEX: the top or highest part of something. The visionary’s gone and what’s left of his vision has now been swept into an accountant’s ledger.