SeaWorld Isn't Paying All Its Bills

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horsesboy

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The fact that RMC and Premier have filed loans concerns me more the the general contractor loans. I have not seen the two of them taking action against other companies which should be in similar boats to Sea which leads me to believe that Sea is taking a different strategy and possibly a more questionable one at least in those companies eyes then other parks out there.
 
Mar 17, 2020
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Cash flow definitely appears to be an issue at SEAS. We had signed up for a couple summer camps that got cancelled in May and we requested refunds, which were being offered to us. This is one of very few things SEAS is allowing refunds on, and the response to the refund request is telling:

"We have submitted your order for a refund request. As you might imagine, given the current environment we are experiencing an unusually high volume of requests. Your request is extremely important to us and will be processed in the order in which it was received."

Perhaps I also need to file a lien?
 

Nicole

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I’m not sure you can reasonably assume the delay is due to a lack of funds. They have a ton of refund and other pass/membership requests that they are having to address with minimal staffing. I would not expect swift responses to any customer service requests, until all of the COVID-related issues are resolved.
 

Mushroom

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On the other hand, if SEAS was obligated to pay their contractors by a specific date regardless of whether the parks were open - as the contractors claim - isn’t this at the very least a lack of business ethics? Deciding on your own terms to delay payment to contractors who did the work you promised to pay for is very ethically questionable in my opinion.
 

horsesboy

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On the other hand, if SEAS was obligated to pay their contractors by a specific date regardless of whether the parks were open - as the contractors claim - isn’t this at the very least a lack of business ethics? Deciding on your own terms to delay payment to contractors who did the work you promised to pay for is very ethically questionable in my opinion.
I think it's a little more complex then that. I am sure that those same contracts have penalties for the projects falling behind schedule which I have no doubt many if not all of them are well behind schedule would it be ethical for the park to hold them to that time table. The answer is of course not. As I said the real question for me is are they behind paying for completed work? If they are paid up on all the work that has been done then I think they have met their ethical obligations even if they may be in breach of the contract legally. I think the real issue is that I doubt that there is anyone out there that envisioned a mandatory quarter of a year shut down and that there are probably zero contracts out there that address the situation precisely leaving many companies in a legal whirlpool that will take time to sort out. I also imagine that moving forward contracts are likely to be more complex.
 

Jonesta6

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Feb 14, 2019
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Or maybe not so complex but include clauses that specifically address mandated extended shutdowns - if it were me I'd like to have the widest set of protections available including being covered for relatively unlikely events such as a global pandemic.

Of course that may mean diddly squat if the other entities don't abide by their contracted agreements.
 
Apr 16, 2017
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As I previously noted elsewhere, Disney has lien as well.

Also, as I previously noted as well, force majeure is a thing. It at the least proves, contracts like these plan for everything.

@Nicole Did @Joe need to have responded to a specific post? He seemed to be introducing a new viewpoint of the situation which was not necessarily in response to anything specific.

@Joe I agree that there may be some pretty shady ethics going on at SEAS, especially in regards to these liens. I think that even though other places like Universal and Disney have liens, the problem doesn't seem to be as widespread within their parks as SEAS.

@horsesboy I think it is pretty obvious that SEAS has not paid for the completed work that has already been performed; otherwise they wouldn't have such a vast array of liens against them. Also, as I previously noted, force majeure is a thing. It shows that contracts take into account any situation even if not specifically stated. Further extending on that point, SEAS could have at the very least addressed the issue with their contractors and attempted to come up with a plan, but instead it seems they choose to just ignore their payments and contractors altogether.
 

Mushroom

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Oops, sorry for not responding to you @Nicole. I was just trying to add a new element to the discussion. The consensus seemed like this isn’t a totally unheard of practice in business, so I thought it would be worth discussing if it’s a good one.
 
Oct 31, 2019
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Out of curiosity, when do we think these will get paid? As soon as possible, or will they wait until the global pandemic is over?
 

Nicole

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Oops, sorry for not responding to you @Nicole. I was just trying to add a new element to the discussion. The consensus seemed like this isn’t a totally unheard of practice in business, so I thought it would be worth discussing if it’s a good one.
I got that, and obviously support it. My question was based on the fact that you led with, “on the other hand,“ immediately following a discussion about why the park was delayed in refunding fees for camps. I was confused about whether you meant to respond to that debate or one from before, since you didn’t quote anything. Your comments didn’t seem directly relevant to camp discussion, so I was looking for clarity.

@VonDerrick: see my response to @Joe above.
 
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Zachary

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Anyone attempting to construct a parallel between SeaWorld’s and Six Flags’ attraction-a-year strategies is immediately suspect to me. SeaWorld was posting fantastic results while Six Flags wasn’t. Both chains may have been targeting an attraction at each park each year, but the actual capex strategies couldn’t be more different beyond that single, surface-level similarity.

Furthermore, this article seems to entirely ignore the numbers SeaWorld was managing to draw before the shutdown—focusing instead on the troubles of the mid-2010s. Lets not forget that SEAS was looking stronger than SIX or FUN going into Coronavirus—Ross’ strategy WAS working.

Lastly, the entire industry is cash-strapped right now. Who on earth would be interested in onboarding a tidal wave of new debt to pick up any of the SEAS parks right now? I’m not saying it’s impossible, but it seems like something this author should have delved into if they were looking to make a credible case.
 
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