On Monday it was reported that SeaWorld Parks and Entertainment has hired a second advisor to help bring the company around. Evercore Partners is a firm that specializes in mergers, acquisitions and restructuring of various companies. While it's no secret that SeaWorld stock is in turmoil, and the company is still losing money, the new company could help bring SeaWorld back online in a big way, and bring profits back to the park.
How is that going to happen though? And just exactly what could Evercore bring to the table?
Here's some speculation on the direction that things could go, based on past business dealings, and just looking at what the precedent for the two companies are.
- Take it Private-With the purchase of a large portion of control by company Zhonghong, and a large presence on the board of directors, this seems like only a matter of time before this happens. SeaWorld could stop offering public stock options and be privately funded once again. This will give the company more creative control of the parks and could lead to a lot of new ideas without scrutiny from shareholders.
- Restructure the park system-The way the parks operate could change. Parks that are year round, could go seasonal in an effort to save work costs. Then again, you could see more year round offerings from some of the more traditionally seasonal parks. You could also probably see attractions go the way of old school Disney and have more sponsorships, where a company pays money every year to have their name and product in the parks. That's always been good synergy, but it's something a lot of parks have been getting away from lately, unless of course you're Six Flags.
- New Management team-CEO Joel Manby has not made many friends in SeaWorld fans with his controversial decisions and business choices. With partnerships like the Humane Society of the United States, and the decision to end all Orca breeding and change to educational shows, he seems to have taken the motto of "if you can't beat em, join em". It hasn't worked. The message has been confusing at best, and has upset many of the long time fans to the point that they've cancelled passes. One of the first moves will likely be to purge the company of all management under Manby and replace him with someone who has a track record of working with a proven business model without shaking up the core fans. Former Six Flags CEO John M. Duffey has just stepped down after just 17 months of working the job, and being rather successful. Could he be grooming for a position at SeaWorld. Again, keep in mind we aren't advocating for the removal of the current team, but it simply seems like one of the biggest options at this point.
- Close or sell off underperforming parks- There are parks within the company that are consistently doing well, like Busch Gardens and SeaWorld Orlando. Then there are parks within the company that just seems to be breeding cash, like SeaWorld San Diego. While it seems like a horrible idea to close or sell off an iconic piece of the park chain, sometimes there's just no other option. If you get rid of the problem park, the others prosper.
- Sell off Busch Gardens-This one is an interesting idea. If SeaWorld wants to reinvent itself as a park with a mix of everything for the entire family, they may sell off the Busch Gardens Brand. After all, SeaWorld was brought into the fold after Anheuser-Busch bought the Harcourt Brace Jovanovich theme park division in 1989. Selling off the Busch brand would bring in some much needed cash into the SeaWorld brand and would cut operation costs. It's actually been a rumor that Busch has been eyed by Herschend Family Entertainment, the company behind Dollywood. Six Flags has also been rumored to want the Florida park.
- Expand over seas- The biggest thing to expect would be a huge expansion into Asia. There are less animal based regulations, so you could see trainers in the water again as well as more animal breeding. It would only make senses to see it happen, especially with Zhonghong calling a lot of the shots in the company.
Keep in mind that this is all just speculation based on what Evercore has done in the past with other companies and what we've seen with other theme parks. This is not guaranteed to happen or even rumored. However, what we do know is that some huge changes are on the horizon for SeaWorld. We just don't know exactly what. For anyone thinking that this will make the company "go back to its roots", there really is no going back. It's not really about going back, but how you move forward. There are many huge changes coming to the theme park industry, so SeaWorld does have to make changes in order to survive, but it also has to make the right changes.
We'll see how this plays out in the next few months.
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