Month: March 2018

The Other Side of the News – March 2018

SeaWorld Gets the Deep Blues

Joel Manby’s out as SeaWorld’s CEO, replaced in the interim by long-term company executive John Reilly. The company’s Chief Creative Officer, Anthony Esparza, is also out. At the same time, Mike Denninger, another company veteran, has been promoted to Senior Vice President of Attractions. Is this a case of the old guard regaining control of the company and kicking out the new guard?

Yes and no.

Esparza is quite a talent – just look at his achivements for Herschend Family Entertainment. But his departure is indeed a byproduct of Manby’s resignation, as he was one of the highest profile Manby hires.

On the other hand, rather than replacing Esparza, Denninger’s promotion appears to be a consolidation of job duties within SeaWorld’s Deep Blue Creative design studio, picking up the slack created by the departure of Brian Morrow, who ran the US theme park design division in conjunction with Denninger.

Morrow’s departure to open his own design studio, b morrow productions, which had been months in the planning, had the unfortunate timing to coincide with the departures of Manby and Esparza, making it appear to some that the departures were all related – which they were not.

So, to summarize the current situation at SeaWorld’s Deep Blue Creative design studio:

  • Joel Manby out
  • Anthony Esparza out as a result of Manby’s departure
  • In a long-planned retirement, Brian Morrow leaves to establish own company
  • Mike Denninger promoted to consolidate his duties with Morrow’s.
  • To the best of my knowledge, John Linn, another veteran from the company’s Busch Entertainment Days, continues to run the Global Theme Park Development division.
  • Up in the air remains Steve Iandolo, Vice President of Resort Development, and another Manby hire from Herschend.
  • Nancy Hutson, Corporate Vice President of Events and Entertainment, left the company in December to become a Production Consultant for Norwegian Cruise Lines.
  • In October 2017, Crystal O’Hea, Senior Director of Expedition X, moved to SeaWorld’s marketing department, where as Senior Director, Brand Experiences & Innovation, she is responsible for, among other things, integrating the company’s Park to Planet marketing campaign. Expedition X was the part of Deep Blue Creative that sought to identify trends, innovative technology and unique partners who can boost SeaWorld’s creative firepower.

This leads to a few questions:

  • Has Deep Blue Creative been eliminated with its various divisions rerouted to other company departments?
  • Or has it been downsized to concentrating on attractions and resorts?
  • And with the departure of Esparza as CCO, who’s running the overall design studio?

Is the old guard taking control and the Manby folks parting ways a good thing? Depends on what you consider a good business plan. If you’re against captivity, then any business that holds animals has a bad business plan. If you’re a SeaWorld fan, then you can hope for the best and a return to what made you a fan to begin with. Ironically, one of the biggest questions I receive comes from both animal rights activists and SeaWorld fans: will the company resume the breeding of killer whales?

Stateside, that’s a bit of dilemma. Although breeding is now illegal in California, it is still permissible in Texas and Florida. The company would need to walk a fine line on the public relations front after having voluntarily committed itself to ending its killer whale breeding programs. However, resuming breeding would fill a gap caused by the 2017 transfer of six whales in its care to the Spanish zoo Loro Parque and the deaths of three whales stateside during the same year.

On the international front, if we are to believe, as I do, that SeaWorld’s library of killer whale genetic material was removed from California prior to the implementation of the state’s new law, the company would be able to artificially inseminate whales housed at Chinese facilities, with the offspring finding their way to Zhonghong’s SeaWorld branded parks in China without the whales having ever been on US soil. As I’ve mentioned before, the marine life park industry is booming in mainland China and killer whales are the next big thing (I expect between seven and ten killer whale show facilities in mainland China over the next decade). Since the majority of mainland Chinese who are familiar with the US SeaWorld parks associate the brand with killer whales, for Zhonghong to open its parks without killer whales means they lose a competitive edge in the market.

As profiled in the recent ThemedReality PowerPoint video (above), SeaWorld is undergoing an identity crisis and needs to determine the direction it wants to go – regional theme park company or operator of international destinations. Attendance is down year after year across the board due to a number of factors, including poor weather, increased media saturation by animal rights campaigns, new blockbuster attractions at higher profile competitors Disney and Universal, and increased competition from LEGOLAND and its associated Merlin brands.

One factor that has rarely been mentioned on earnings calls or reports is the negative impact that Manby’s decisions had on the company’s fan base, with SeaWorld finding itself offering substantially discounted tickets and season passes to offset losses caused by instituting the killer whale breeding ban, establishing its controversial partnership with the Humane Society of the United States, and the elimination of theatrical killer whale shows in California, all actions many of the park’s longest fans considered heretical and succumbing to the demands of animal rights activists.

When we look at the 2017 over 2016 revenue changes for the top seven publicly traded companies that operate theme parks in the United States, something is very obvious. All are up, except for one.

Merlin Entertainments up 11.6%

Universal Theme Parks up 10%

Disney Parks up 8%

Six Flags up 3%

Cedar Fair up 3%

Parques Reunidos’ fiscal year runs Oct 1 – Sept 30. Although fiscal year 2017 revenue was barely up 0.1% over 2016, the first quarter of the 2018 fiscal year, which ran from Oct 1 – Dec 31, 2017, was up 7.6% for the same quarter a year earlier.

On the other hand, 2017 revenue for SeaWorld was down 6% over the prior year.

Being the only major publicly traded operator with negative year over year results is a red flag. For the company to turn around, it will not only need to control costs and spending, but it will need to become enticing once again to the dedicated fan base it lost. At the same time, in order to pull in new clientele, it will need to become a value-based secondary park to Disney and Universal. Right now, the company’s competition isn’t the big two. It’s LEGOLAND.

Time will tell  if the old guard, in conjunction with the company’s new primary owners, can make that happen.

Now, there is one little gem hidden in SeaWorld’s annual report. In my 2015 article “SeaWorld’s Future Lies Not With FUR, But With FIR,” which appeared in English at InPark Magazine and in Italian on parksmania, I argued the need for SeaWorld to add hotels integrated with its parks in order to establish fully integrated resorts, a necessary step to successfully compete with other brands in its market, such as Disney, Universal, LEGOLAND, and Knott’s Berry Farm, which already have on-premises hotels and (with the exception of LEGOLAND) entertainment/dining/retail complexes. In January 2018, according to the annual report, SeaWorld Entertainment and Evans Hotels established a limited liability corporation in order to develop and build a hotel on the SeaWorld San Diego property (and contrary to media reports, the hotel location is on the far side of the property from the toxic dump, something I covered in an earlier piece on the now-canceled Blue World Project, and is unaffected by it – you can see the location for the hotel in the FIR article). If all goes according to plan, it could open within five years.

The Day Superman Become a Pedophile

On Sunday, January 6, 1991, CBS aired the television movie “Bump in the Night.” It starred Meredith Baxter-Birney as an alcoholic mother whose young son is abducted, as she reunites with her ex-husband, played by Wings Hauser, to locate him. The network advertised the film as “you’ll see Christopher Reeve as never before.” And they sure were right. Four years after his last foray as Superman, it was difficult for me to take in this role. Here was a childhood hero of mine, playing the abductor of Baxter-Birney’s eight year old son, an atrocious  man who was both a pedophile and a child pornographer.

I feel the same conflict with Gary Goddard, who spearheaded some of my favorite theme park projects from Monster Plantation to Star Trek: The Experience, and with John Lasseter, who helped turn Pixar into an animation powerhouse and later helped turn around Walt Disney Animation.  Plenty has been written about the accusations against both in the mainstream press, so I won’t discuss them here, other than to say that I refuse to take the Donald Trump route, where he considers those accused of sexual misconduct or physical abuse of a spouse to be innocent only because they say they’re innocent. Rather, I’ll simply state that I’ve heard enough stories from enough credible sources over the years to keep an open mind and accept that there just might be some credence to the current claims

Throughout the corporate world, there has been a continued practice of silence and shaming when it comes to workplace sexual harassment and sexual abuse. As the cases of Goddard and Lasseter show, the issue exists within the creative design community as much as anywhere else, and it’s much more extensive than just the allegations surrounding these two individuals. The problem is also very extensive on the operational end of attractions, theme parks, waterparks, and museums, where just within the past few months, a major waterpark executive was asked to resign over allegations, among other things, of an inappropriate sexual relationship with a subordinate.

Why the silence? Among many, there’s an idolization of the individual for his or her accomplishments. Some of us begin to doubt the accusations because they don’t coincide with how we envision the accused. Some of us don’t want to be “that guy” who speaks up and destroys a legendary career. Somewhere within, there is a fear that, by accepting the truth, we destroy the person’s legacy, and with it a major legacy within our industry. Many times for the victim, there is fear of retribution, of a smear on their reputation.

Sexual harassment is a crime. Sexual assault is a crime. It does not matter the sex (I speak here of biological sex rather than gender, which has many more more options than just A or B), both can be committed by anyone on anyone – male on female, female on male, or same-sex. One of the biggest problems with claims is that, unless there is physical evidence, it becomes a case of the accuser saying one thing and the accused another.

And sometimes there is valid doubt as to when a claim has merit or when it’s true intent is retribution or grandstanding. When allegations arose about possible sexual assault perpetrated by the comedian Aziz Ansari upon a young photographer, a very staunch feminist friend of mine, a victim of sexual assault herself, shared her thoughts. “This young girl’s trying to take advantage of the #metoo bandwagon and get herself some press. She wasn’t sexually assaulted. She had a REALLY bad date.”

The issue of proof is compounded by outdated laws in the United States. Since the 1986 Supreme Court Decision in Meritor Savings Bank v. Vinson, federal sexual harassment policy has primarily fallen under Title VII of the Civil Rights Act of 1964. However, Title VII limits federal complaints to companies with fifteen or more employers and it does not allow the victim to sue the alleged harasser, only the company. What this has resulted in is a corporate culture where sexual harassment policy is centered around the company’s liability, rather than the best interests of the staff. And worse yet, Title VII does not even address the criminal aspects of the act.

Workplace sexual harassment and sexual assault are part of a larger picture – they are tied in with religious rights, gender identification and preference rights, ethnic rights, skin tone rights, immigrant rights, you name it. Pretty much anything that’s not the traditional white male heterosexual (primarily Christian) stereotype of corporate America, where intimidation and subjugation are utilized to maintain the status quo. This is part of a bigger conversation on equality and inclusion in an America that’s becoming increasingly divisive and isolationist. The big picture includes issues ranging from wage disparity to hate killings.

The issue of workplace sexual harassment can be fixed, but it must be fixed in three distinct areas.

First, on the federal government level, Title VII must be strengthened. The fifteen or higher employee rule must be abolished, penalties must be strengthened, and additional penalties and jail time must be added in, especially to deal with those instances where sexual harassment develops into sexual assault.

Second, companies must redefine their policies not to protect themselves, but to support their employees’ needs.

Finally, there must be many discussions within the community between employers and employees on the issues surrounding workplace sexual harassment and sexual assault. Industry trade organizations need to take a leading role in fostering such discourse.

One such discussion will take place on April 5, when a session on gender inclusion takes place during the Themed Entertainment Association’s annual Summit at the Disneyland Hotel.

It’s a start. Eventually, we’ll get to the place where when someone’s accused of sexual misconduct, instead of the ones who know something staying silent to avoid being “that guy,” they’ll join others in raising their hands and say #metoo.

PHOTO FROM: “Arms and the Man: A Sampling from Among the 48 Hugs Administered by Pixar Chief John Lasseter During WSJ’s Daylong Adventure With Him.” Wall Street Journal. May 26, 2011.