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Restructuring? Sale? Interest from Merlin...?!

10/19/17 at 09:10am in Restructuring? Sale? Interest from Merlin...?! (Latest Edit: 10/19/17 at 10:34am by Alf33.)
Post: #76
I can certainly see where SeaWorld wants to sell themselves whole and not in two pieces but sometimes breaking up a company can unlock a lot more value than staying whole. That being said I wonder how much money is playing a part in this because as it stands now the company has a Market Cap of $1.13B (per THE STREET but this figure can fluctuate wildly per the stock price) but the company currently has total assets of $2.17B but total liabilities of $1.93B that includes $1.51B of long term debt (thank you Blackstone) per their last quarterly report. This makes you wonder if SEAS is trying to get a price at or above their listed assets to maximize shareholder return even though their Market Cap is $1B less. With this difference I don't know if potential buyers will bite unless the price is closer to the cap figure which would mean a loss to SEAS or whether someone will pay a premium just to get what they want, which SEAS will obviously try for. But yet some analysts have put an estimate purchase price of just the two BG, and the associated water parks, in the range of $750M to $1B. Just throwing this out there.
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Post: #77
This is really the issue I have with companies like SeaWorld, SixFlags, and Cedar Fair being publicly traded (and honestly a large portion of any publicly traded companies). Leadership often makes shareholder gains their top priory over the long-term health of the company.

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10/19/17 at 07:06pm in Restructuring? Sale? Interest from Merlin...?! (Latest Edit: 10/19/17 at 08:18pm by thopping.)
Post: #78
(10/19/17 09:29am)Shane Wrote:  Leadership often makes shareholder gains their top priory over the long-term health of the company.

True, but that is indeed the point to the publicly-traded company: to deliver shareholder value.  That may mean long-term health of the company and translation into stock value growth or dividends, or, like Alf33 (and I, though not as detailed as Alf33's analysis) was pointing out, it may make sense to split up the assets to unlock the their growth potential, or possibly get a better valuation on those assets if they were in-turn bought by another company.  SEAS may find that the sum of the parts exceeds the whole, especially if the Busch brands really are tarnished by SeaWorld, or if another company's interest is based on forecasted operational efficiencies that maybe assume only certain types of properties are acquired.

Thanks as well for the background & link on the controversy.  That's probably why I never bothered to look into it, getting a sense of how Shane described what most people's assessment has been.  Perhaps some facts, but facts chosen to fit a narrative, and thus it's hard without independent research to validate what the true story is.  And I simply haven't had the time or priority to do that, especially since one must really do that with every piece of news from any the news sells stories, stories with facts that fit a narrative, and generate revenue by catering to consumers that agree with that narrative.  They too are are publicly-traded companies looking to return shareholder value...

Nichole's observation is actually why I'm not sure how much brand damage there really is--i.e. is it part of a larger societal view, or limited to an incident that's assumingly isolated.  I don't know...  I do know that most people (admittedly, not extensive or scientific survey) that have mentioned SeaWorld to me have lamented a perceived focus shift away from marine life to a theme park...and not once blacklisted them due to a documentary.
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10/20/17 at 12:45am in Restructuring? Sale? Interest from Merlin...?! (Latest Edit: 10/20/17 at 12:46am by Zachary.)
Post: #79
(10/19/17 07:06pm)thopping Wrote:  I do know that most people (admittedly, not extensive or scientific survey) that have mentioned SeaWorld to me have lamented a perceived focus shift away from marine life to a theme park...and not once blacklisted them due to a documentary.

I think this is part of a major issue that isn't talked about enough when it comes to the health of the SeaWorld-branded parks. Public opinion on SeaWorld is split—and there are plenty of people on boths sides of that split that are willing to skip SeaWorld next time they make a trip to Universal or Disney.

Many people won't get near a SeaWorld park because they think SeaWorld trainers beat orcas until they jump through flaming hoops and over spike-filled barges and then reward them by shoving them into a 10 gallon fish tank behind the stadium with a trash compactor.

Many other people read the news that SeaWorld is ending orca and dolphin shows and think "Ok, so why on earth would I visit SeaWorld...? It's a park with a bunch of stadiums where I can learn about majestic animals I'd not know existed if it weren't for SeaWorld. That's what made SeaWorld worth visiting!"

Tragically, SeaWorld is stuck in the middle. Because cultural trends say that animal performances are quickly moving out of style, they have to respond to public pressure and follow that trend (preferably, be ahead of it, in fact). That said, changing the entire direction of a very high-profile brand like SeaWorld is like trying to redirect an oil tanker with a cue stick as you try to kayak alongside it. Oh, also, because the kayak has passed through a few hands over the last couple years and no one has taken care of it particularly well, it has some leaks—so you're trying to bail out the water while trying to redirect your oil tanker of a brand.

It's a really bad situation all around. SeaWorld Orlando could have a future as the budget-friendly, "themed amusement park," option people can add onto their Florida vacations, but that requires a ton more attraction investment—which requires money the chain doesn't have. To catch that niche, SeaWorld would have to find a way to fund a bunch of new attractions AND lower prices. That seems impossible. Alternatively, the park could pick up a bunch of valuable IP... But that requires a ton of capital for rights AND the attractions to use said IPs. That doesn't seem doable right now either.

And that is just for SeaWorld Orlando, probably the least at-risk of the SeaWorld parks right now. Poor SeaWorld San Diego...

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10/22/17 at 10:44am in Restructuring? Sale? Interest from Merlin...?! (Latest Edit: 10/22/17 at 04:16pm by thopping.)
Post: #80
(10/20/17 12:45am)Zachary Wrote:  Public opinion on SeaWorld is split...Tragically, SeaWorld is stuck in the middle.....To catch that niche, SeaWorld would have to find a way to fund a bunch of new attractions...

Well, I think you nailed it. SeaWorld's real problem is that it is niche. Putting aside the animal issues for a minute, where you do have one camp that wants to confer human rights to animals and another that sees places like SeaWorld as providing valuable education and exposure to animals, that had they not existed for the past many decades, would have made it much harder to raise awareness about animal issues in the first place--as for most people they would be "out of sight, out of mind." (i.e. Ironically, we may not be having such a debate had SeaWorld, zoos, etc. not existed).

The thing that always struck me about SeaWorld, once they started adding major attractions like multi-million dollar B&M coasters, is that's a hard balance to pull off.

The demographic that appreciates Kraken may not be the same that wants to see a dolphin show. I personally found SeaWorld to be a good family mix, but there are probably many that veer towards one type of attraction versus another. You also don't see many aquaria or zoos that try to pull that off, Columbus Zoo and some few excepted.

Versus trying, and perhaps failing, to compete with the myriad of theme parks or change to more of a passive aquarium, SeaWorld should try to embrace their niche and offer something truly unique. (Which I think is actually their strategy). Whether that market it big enough to be economically sound... I don't know. (I do think if they could transform to a budget-friendly theme park...they're toast. Their success lies in being unique, not commodity).

Caveat: this whole post is really biased towards SeaWorld Orlando, which is the only one I've been to, and I agree, would have the biggest chance of success to carve out a differentiated piece of a very large vacation market. I'm not really familiar with poor San Diego or the others...

PS: There's reason to hope they can pull it off though, at least in Orlando... Arguably parks like Animal Kingdom and Epcot also try to have a dual focus and differentiate themselves from straight theme parks. Granted, Epcot's challenges are well documented...but they're not entirely due to trying to balance within that niche. I personally think Epcot is one of the best conceived parks ever; I just wish the Mouse would invest in it more. (which is also why I like BGW's hamlets so much and cringe at anything that further dilutes their small amount of authenticity)
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Post: #81
from a business perspective I think the Seaworld brand is and more specifically the name is tainted and not doing anyone any good. I think (again just my opinion) if big brains at Seas Marketing could have cleaned off the dirt and scum they would have by now. I just don't see Blackfish going away.

At this point I truly think Seas needs to re-brand from the mothership down to the aquatic animals. In the process a corporate restructure may make sense. It might be a help to the smaller brands that do not have stink on them have only invisible invisible links up the line to corporate or at the very least invisible links to SeaWorld

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