Thirty years ago this month, SeaWorld opened it gates for the first time. The question now is how close the aquatic theme park is to closing those gates forever. Indeed, after getting a Wells Notice from the SEC earlier this month, it seems as if the only way things could get worse for SeaWorld is if it were discovered to be a client of Michael Cohen’s.
The Wells Notice, of course, is the SEC’s dreaded way of letting a public company know that civil charges are likely on the way. In this case, SeaWorld is facing action for public statements that it made after the release of “Blackfish,” a 2013 documentary film that raised serious questions about the manner in which the park cared for its orcas. The statements misled shareholders regarding the negative impact of the film on the company’s share price.
As Bloomberg has noted, the PR storm that accompanied the film wreaked significant damage on SeaWorld. “A campaign against the company, fueled by animal activists, prompted entertainers to cancel appearances at SeaWorld parks and corporate sponsors such as Southwest Airlines Co. to drop their association with the business.” Behind the scenes, things quickly got ugly. After Willie Nelson pulled out of an appearance, the VP of corporate communications let loose in a profanity-laced email: “This whole f***ing thing pisses me off,” he said. “What relentless amateurism we’ve shown in booking these f***ing people and managing the whole f***ing … mess.”
Yeah, ouch. But you wouldn’t have known it from the sunny picture that company leadership was still painting. In January 2014, then-CEO Jim Atchison said the company was expecting record revenue for 2013.
Now, such statements are a reminder to investor relations professionals of all kinds of what exactly is at stake in their public representations. In addition to the looming SEC charges, the company is also facing a civil lawsuit by investors as well as a criminal investigation being carried out by the Department of Justice. The civil lawsuit had been slated for trial to begin in July 2019, but a judge just put proposed depositions in that case on hold for coordination with the criminal investigation. And to top it all off, in an 8-K filed just last month, SeaWorld disclosed that its new Chief Marketing Officer was leaving the company after only one year on the job.
SeaWorld maintains that it is cooperating with the SEC investigation. Whether that’s enough to keep its doors open remains to be seen.