SEAS Seeks Federal Coronavirus Relief Loan

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warfelg

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Honestly, this reads like a hit piece by a union leader who’s mad that SEAS doesn’t hire union workers. Plus the complaining about a company with no income seeking help to keep its doors open. Feels rather Blackfish-esque

EDIT:
Also the union leader is comparing what SEAS is doing to what Disney is doing? Pardon my French but is this guy a fucking joke? Disney literally has thousands of subsidiaries to help them pay people (ESPN, ABC, Disney+, merchandise sales, among countless other things). SEAS has the parks as it’s about only source of income and it was cut off. And they are still trying to run their rescue efforts and need to ensure all animals are fed despite no income. I’m sorry but I just reread it and saw that. And it’s got me heated. What a joke.
 
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Zachary

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So, looking at the actual Main Street Loan terms sheet...

Eligible Borrowers are businesses with up to 10,000 employees or up to $2.5 billion in 2019 annual revenues. Each Eligible Borrower must be a business that is created or organized in the United States or under the laws of the United States with significant operations in and a majority of its employees based in the United States. Eligible Borrowers that participate in the Facility may not also participate in the MSELF or the Primary Market Corporate Credit Facility.

SEAS definitely falls within that category. That said...

The Eligible Borrower must attest that it requires financing due to the exigent circumstances presented by the coronavirus disease 2019 (“COVID-19”) pandemic, and that, using the proceeds of the Eligible Loan, it will make reasonable efforts to maintain its payroll and retain its employees during the term of the Eligible Loan.

I guess the question is whether or not “reasonable efforts to maintain its payroll and retain its employees” can apply to just the 5% of the staff that is left post-lay-off.

PS: Hampton Roads local news has found out about it too now. Thankfully, Wavy’s reads less like a hit piece.

 

warfelg

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So I thought I would wake up in a better mood about this, but I'm not.

And something that was burning me up about it is the complaint that SEAS furloughed without benefits. Well, continuing to pay benefits isn't a requirement of furlough, and depending on what benefits are like could cost an employee more than what they could get if the company keeps the current setup.

Also, just doing some simple math:
SeaWorld had $1.4 billion in revenue last year and employed 4,300 full-time and 11,000 part-time workers.

Like other theme parks across the U.S., SeaWorld closed the gates to its parks in mid-March in response to the spreading coronavirus. Since closing to the public, SeaWorld is losing on average $25 million a month, according to a filing with the U.S. Securities and Exchange Commission.
Ok so lets start with the employed part:
~ 11,000 part time employees. Part time employees generally don't get health benefits. And not to sound harsh, but some of these people might be better off for a variety of reasons. First off when talking about how to keep them on the payroll, what's deemed "fair"? Pay them based on average hours a week on a certain time period? Just pay everyone a flat rate? What if this person had another part time job that needs them to be working more hours, that doesn't seem right to SEAS to have to pay them anyways. Let's say it's a BGW employee that was part time, if they qualify for unemployment, could be getting $378+600 per week for $978 a week. What's the likelihood they made that anyways.

~ 4,300 full time employees. We do know that animal care staff and upper management was kept. I would imagine some other departments had a few people kept around as well. But again what we don't know the pay structure or anything of the people that were laid off. SEAS could have gone through and targeted people/departments who aren't needed at this time, who would make more filing unemployment than getting their paycheck.

~ So if there's 15,300 employees, that's 14,535 employees laid off. So if we assume that's all 11,000 part time employees (reasonable), that's 3,535 full time employees laid off. Comparatively, Disney furloughed 43,000 of 77,000 employees (about 56% of it's work force), with the union not saying how many were full time or part time. So who knows what theirs look like. Anyways back to the SEAS part of this, that left about 800 people still on payroll with benefits, where this article points to only 200 workers at WDW being deemed "essential workers".

~ I highlighted the other part there. Lets talk about the income part. SEAS doesn't have any other source of income. So right now that's effectively $0 (before someone says they are still collecting on EZ-Pay, I would bet at this point it's such a small amount it doesn't really matter). They aren't bringing any money in, but they would still be spending. So let's just make some assumptions here; $17/hr (about the average for PT work at SEAS) and about 15 hours per week (PT is considered 30 hours or less so this accounts for the 1 shift a week and pushing the 30 hour a week envelope), that's paying an average of $255/wk, $2.8 million a week, and $11.2million in a month (that was their basis of 1 month before Disney furloughed) And if we assume all the full time are salary, $600/wk, is another $2.1 mil a week, that's $8.4 mil for the month. So a company bringing in $0 right now was supposed to spend an additional (guesstimate) $19.6mil on top of the $25mil a month.

~ Based on SEAS projections they can make it into 2021 without opening. So let's say that's 18 months from now. That's $450 million that SEAS is losing if they are closed that long. If they kept employees on longer, that number can go to $500+ million easily, taking down how long they could survive without opening gates from 18 months to 12 months possibly, meaning those 14,000 jobs won't be temporarily lost, but possibly permanently lost.

Lastly, just because I was curious, I looked up UNITE HERE. First off they had a huge membership hit in 2008 (Great Recession) and are not gaining many members back (they went from 460,000 members in 08 to 235,000 in 2009 and are at about 255,000 now) and are not funding well either (financially they took the hit in mid-09 and are still about 1/3 of their value pre-GR). So they are "struggling" themselves. Second their predominate membership is hotel workers, food service workers, laundry, warehouse, and casino workers. SEAS employs such a small percentage of those industries anyways, especially compared to Disney who owns their resorts and on property restaurants. They have a big presence of this union because of those things. So I feel as though this union bringing up these issues feels like someone from the outside looking in complaining about what happened.
 
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So, looking at the actual Main Street Loan terms sheet...




SEAS definitely falls within that category. That said...




I guess the question is whether or not “reasonable efforts to maintain its payroll and retain its employees” can apply to just the 5% of the staff that is left post-lay-off.

PS: Hampton Roads local news has found out about it too now. Thankfully, Wavy’s reads less like a hit piece.

If SEAS is looking at this program to get their full time staff back to work, that’s a good thing.

The program eligibility may not be looking at seasonal or part time employees regarding loan eligibility for retaining employees - a lot of these programs don’t when considering employee count. If they are reviewing FTE counts that would be more problematic for SEAS.
 

warfelg

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If SEAS is looking at this program to get their full time staff back to work, that’s a good thing.
Based on the program it looks to be more about avoiding additional cuts rather than bringing employees back. For SEAS I imagine this should be going straight to their animal care teams.
 
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Based on the program it looks to be more about avoiding additional cuts rather than bringing employees back. For SEAS I imagine this should be going straight to their animal care teams.
I’m not sure they are allowed to do that. The loans are based on pre-pandemic employment levels, not post-layoffs.
 
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I'm also not sure that would work out... Since many of the staff are likely earning more from unemployment than their seas salary. An unfortunate side effect of this legislation..
 
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GrandpaD

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I'm also not sure that would work out... Since many of the staff are likely earning more from unemployment than their seas salary. An unfortunate side effect of this legislation..
Yes, except some states have already said they'll cut unemployment if the employee doesn't return to work when recalled. They would term the employee as "voluntarily resigned" which doesn't qualify for unemployment.
 
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Yes, except some states have already said they'll cut unemployment if the employee doesn't return to work when recalled. They would term the employee as "voluntarily resigned" which doesn't qualify for unemployment.
Right, but that doesn't stop the workers from being angry with their employer over it.. and angry employees typically correlates to a worse customer experience.
 

warfelg

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Yes, except some states have already said they'll cut unemployment if the employee doesn't return to work when recalled. They would term the employee as "voluntarily resigned" which doesn't qualify for unemployment.
I think that's a great reason not to use this loan to bring staff back too. If they did that and an employee didn't feel comfortable coming back in, it could leave to a mass exit.

I'm also not sure that would work out... Since many of the staff are likely earning more from unemployment than their seas salary. An unfortunate side effect of this legislation..
However, to this point, keep in mind that there is a term limit on how long the extra unemployment benefits last, so there is going to be a time they will almost *have* to go back to work.
 
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First, SEAS is stupid for trying to apply fo this loan simply because the intent of this type of loan is to maintain your staff before inevitably furloughing or laying off anyone during the pandemic. They are clearly trying to stretch the limits of this loan.

Also, someone's comparing remaining employees at Disney, the 200 figure only relates to that 6-union conglomerate, it does not include all the other unions or workforce that is still around. They still have a lot of people working.

Just because benefits are not a requirement of a furlough, it shows the care and concern of the company. SEAS is making every attempt to be cheap and cut any corners they possibly can. Whereas Disney is trying to avoid the worst case for their cast; they kept them paid for as long as they could, and then when it did come time to furlough, they kept all their full benefits. That shows Disney is more invested in it's workforce. SEAS doesn't truly care about their people, which is what causes disgruntled employees in the first place. Morale at SEAS is absolutely pitiful to begin with.
 
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Disney also has $99999999999999999999999999999

Compared to SEAS barely scraping by.


It's like saying that your neighborhood mom and pop store that had to shut down should keep paying workers benefits because khols is.
 
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SEAS liquid assets are a rounding error compared to Disney. Any financial comparison of the two is largely irrelevant. If a major media company decides to buy up SEAS, then they can be compared to Disney.
 
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