(SEAWORLD/ANIMAL NEWS) Today, as part of its comprehensive strategy to try and redeem the company’s maligned reputation, SeaWorld unveiled plans to phase out its longstanding orca shows at its San Diego park next year.

In its place, a new orca experience in a more natural setting is set to debut in 2017, described as “informative” and designed to carry a “conservation message inspiring people to act.”

On Friday, California Congressman Adam Schiff also announced plans to introduce the Orca Responsibility and Care Advancement (ORCA) Act which would end breeding captive orcas, ban the capture of wild whales, and put an end to the import and export of the species. If approved, the bill would ensure this is the last generation of orcas to live in captivity.

Read on to learn more about the park’s plans for its $100 million Blue World Project, and share your thoughts on the park’s decision in the comments below. — Global Animal

Orca suffers from a floppy dorsal fin, an abnormality that occurs more often in captivity than it does in the wild. Photo Credit: Cowperthwaite/Magnolia Pictures
SeaWorld’s plan to phase out orca shows came amid criticism from government groups and animal rights activists about the park’s treatment of captive orcas. Photo Credit: Cowperthwaite/Magnolia Pictures

CNBC, Jeff Daniels

Shares of SeaWorld Entertainment rose as much as 3 percent ahead of the company’s investor day event Monday as reports surfaced indicating that the company will move away from its focus on shows with orcas at SeaWorld San Diego — the company’s second-biggest park.

SeaWorld operates 11 parks but recent attention has focused on the California park, where a decline in attendance and negative publicity have hit the business. An orca show is the centerpiece currently of SeaWorld San Diego’s park, but last month’s decision by the California Coastal Commission to curb a planned killer-whale expansion at the location and negative publicity from animal rights groups have hurt the company’s attendance and share price.

SeaWorld is holding its first ever investor day as a public company and was expected to announce a plan to reverse declining attendance at its parks, as well as details about a new attraction in San Diego. The San Diego Union-Tribune reported that the theme park operator will phase out its killer whale show in San Diego.

The investor event comes as SeaWorld battles criticism on several fronts about its signature orca shows and faces ongoing brand and legal challenges, as well as more competition from other theme parks.

“The Blue World environments cost $100 million each, and orca care costs weigh on margins and inject unpredictable intermittent headwinds into attendance. So, we are not convinced that in this environment, continuing to invest behind orcas is the right move.” -Barton Crockett, Analyst, FBR & Co.

Photo Credit: Phelan M. Ebenhack/Associated Press
SeaWorld owns 24 of the 25 orcas currently held captive in the U.S. Photo Credit: Phelan M. Ebenhack/Associated Press

“It is possible that new rides and non-orca focused marine exhibits are a sign of things to come, and we expect to hear more about the long-term plan during the company’s (Monday meeting),” Wedbush Securities analyst James Hardiman said in a research note last week.

SeaWorld’s stock sank 9 percent last week, much of it coming Thursday after the company reported third-quarter results that missed Wall Street consensus estimates and lowered full-year guidance. Adding to SeaWorld’s troubles, Rep. Adam Schiff (D-Calif.) on Friday proposed federal legislation to phase out the captivity of killer whales and a ban on orcas in public shows.

SeaWorld has 24 orcas in three parks in the United States — including 11 of the creatures at its park in San Diego, where the company has proposed a $100 million Blue World project to double the orca space. Last month, the California Coastal Commission put a number of conditions on the Blue World project, but company management has vowed to challenge the state regulator “for its overreaching condition that would ban killer whale breeding at SeaWorld San Diego.”

“The whole point of Blue World was to make the lives of the orca whales better and in doing so help to reverse the hugely negative PR that SeaWorld has gotten in the last two years following the ‘Blackfish’ documentary,” said Hardiman.

Since the state coastal agency’s decision, the original Blue World project has been in limbo pending an outcome of the legal challenge. Analysts say it could take up to a year or more for the litigation around the coastal agency’s jurisdiction to get resolved, but they say the risk of additional negative publicity won’t help with the Orlando, Florida-based company’s initiatives in California.

CEO Joel Manby, who was hired in March to take the helm of SeaWorld, indicated on the earnings conference call last week that the company would reallocate a portion of the $100 million capital intended for Blue World to help fund a new attraction in San Diego.

“It will be much less, but we can do a very effective attendance-driving, return-generating attraction,” he said. “I am excited about the alternatives that we are coming up with, and we’re definitely going to still hit the 2018 window on that.”

“SeaWorld seems intent to stick with the original plan to have San Diego be the first park to build the new natural orca environment, before moving on to Orlando and then San Antonio,” said FBR & Co. analyst Barton Crockett in a research report last week.

Crockett said he thinks SeaWorld will ultimately prevail in its case against the state coastal agency but questioned whether it is a smart strategy “to continue to make the centerpiece of the SeaWorld brand orcas. The Blue World environments cost $100 million each, and orca care costs weigh on margins and inject unpredictable intermittent headwinds into attendance. So, we are not convinced that in this environment, continuing to invest behind orcas is the right move.”

More CNBC: http://www.cnbc.com/2015/11/09/seaworld-to-talk-strategy-as-attendance-declines.html

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