SeaWorld faces challenging CEO search

  • By Sandra Pedicini Orlando Sentinel
  • Tuesday, February 17, 2015 1:19pm
  • Business

ORLANDO, Fla. – In the midst of searching for a new chief executive officer, SeaWorld Entertainment earlier this month announced a shuffling of top management roles.

SeaWorld gave company veteran Dan Brown oversight of all its theme park operations while moving Terry Prather, president of its Orlando attractions, into a new senior vice president role. Such a management change before bringing in a new CEO is fairly unusual, analysts say, but the company might not have wanted to wait as it faces the challenge of finding a new leader.

“I think what they’ve done, frankly, is to send a signal and say, ‘Hey, we’ve got a deep bench of folks who can keep the business moving along while we’re still trying to take our time and find the best candidate to fill this position,’ “ said Tuna Amobi, an analyst with S&P Capital IQ. “It removes the pressure from the board of potentially naming someone that may not be the best fit. I think this probably buys them a little bit of time to find the right candidate.”

That person will take over the helm of a company that has struggled with the loss of corporate partnerships and a steep decline in stock value amid controversy over its killer whales. Jim Atchison announced his resignation in December and SeaWorld named board chairman David D’Alessandro interim CEO. SeaWorld did not comment for this story.

Much of SeaWorld’s problem, industry watchers say, is the trouble its brand has endured. The 2013 documentary “Blackfish” cast SeaWorld and its treatment of killer whales in a harsh light, and last year the company acknowledged attendance has suffered from the fallout. Meanwhile, rivals Disney and Universal have opened popular new attractions that have helped send their attendance soaring.

“It’s very competitive in Orlando. The brand’s taken a real blow with the documentary. . There’s a lot to really tackle there,” said Barton Crockett, an analyst with FBR Capital Markets &Co. “But you’ve got some very unique assets, and surveys of people who go and say they love it. You have a lot to work with as well.”

The company’s problems could scare off some candidates but could attract others, particularly turnaround artists. What the company needs right now, industry watchers say, is not so much a theme park expert but someone who has expertise in branding, marketing and dealing with Wall Street. SeaWorld became a publicly traded company in 2013.

“I doubt it will be a theme park veteran,” said Duncan Dickson, associate professor at the University of Central Florida’s Rosen College of Hospitality Management.

If the next CEO comes from outside the industry, Dickson said, that could mean less of an internal shakeup.

“If they’re not coming out of a theme park environment, they probably won’t have anybody to bring in, at least from an operations side,” he said. “From a marketing and promotions side, they might. It just depends on the person.”

SeaWorld’s search could stretch into late summer, the crucial season for theme parks. The company said in December it expected a search to take six to nine months. SeaWorld has enlisted the help of a search firm that it hasn’t identified.

Stockholders are paying keen attention.

Christopher Pavese, chief investment officer at SeaWorld investor Broyhill Asset Management, said in an email his company was initially “surprised” and “concerned” that “Atchison was shown the door before the board had identified a stronger replacement. As performance had been deteriorating for several quarters, they’ve had plenty of time to consider alternatives.”

The uncertainty has Pavese wondering whether SeaWorld’s board is considering selling the company. Several analysts say they think that is unlikely – at least until after new CEO is named.

“It could make sense to get someone in there and see what they can do . and see whether it makes sense to keep running it as a separate company or do something somewhat different,” Crockett said.

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