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SeaWorld to open new attraction in bid to reverse declining attendance

SeaWorld

SeaWorld trainer Ryan Faulkner, left, with killer whale Melia, and Michelle Shoemaker, right, with Kayla work on a routine for a show at the Orlando, Fla., theme park in 2014.

(John Raoux / Associated Press)

SeaWorld is poised to unleash a plan to reverse declining attendance numbers and fight back against animal rights groups who criticize the treatment of killer whales at the company’s parks.

SeaWorld Entertainment Inc. Chief Executive Joel Manby told analysts during a Thursday conference call that the company will invest in a new attraction at the SeaWorld park in San Diego and continue to spend heavily on a multimedia campaign to respond to its critics.

“We can do a very effective attendance-driving, return-generating attraction, and I’m actually very excited about the alternatives we’re already coming up with,” Manby said. He declined to offer details on the new attraction, saying that he will disclose the plan Monday.

The new attraction will be built partly with funding the company had set aside for a $100-million expansion plan for its 11 killer whales, he said.

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“I want you to know there are many, many good things happening here,” said Manby, who took over the executive position in March.

Still, the company continues to struggle in the wake of the 2013 documentary “Blackfish,” which accused SeaWorld of abusing and neglecting its killer whales. Attendance has dropped over the last year but Manby noted that rate of decline has slowed.

In 2014, attendance at SeaWorld’s 11 parks dropped 4.2%. In the latest quarter, attendance fell only 0.4%. The biggest attendance drops came in SeaWorld’s parks in San Antonio and San Diego, which the company attributed to bad weather in Texas and the effects of “Blackfish” in San Diego.

Earnings posted Thursday fell short of analyst estimates for the three-month period that ended Sept. 30. Orlando, Fla.-based SeaWorld reported net income of $98 million, or $1.14 a share, up from $87.2 million, or $1, for the same period last year. Analysts surveyed by FactSet had expected earnings of $1.18 a share in the most recent quarter.

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Third-quarter revenue rose 0.2% to $496.9 million compared with the same period a year earlier. SeaWorld attributed the higher revenue partly to higher spending per park visitor.

In addition, SeaWorld cut its full-year 2015 adjusted earnings guidance to be in the range of $360 million to $370 million. In August, SeaWorld said it expected earnings for 2015 to be flat to up 3% versus the 2014 earnings of $370.1 million.

SeaWorld suffered another blow last month when the California Coastal Commission approved a SeaWorld plan to expand its orca enclosures in San Diego but added the condition that the park must end its killer whale breeding program and halt the transfer of new whales to the park. The conditions would eventually put an end to the park’s most popular attraction.

But SeaWorld said it plans to challenge the commission’s decision in court. The company has retained lawyers for the challenge but has yet to file a lawsuit.

Meanwhile, Manby said, the company will spend some of the $100 million that was set aside for the larger whale enclosure for a new attraction. He said he doesn’t expect the Coastal Commission to object to the new attraction because it won’t involve the park’s whales.

One of SeaWorld’s loudest critics, People for the Ethical Treatment of Animals, said the continued decline in attendance means it is time for the company to end its orca shows and release the mammals to large ocean enclosures.

“It’s as clear as the deep blue sea that SeaWorld’s only chance of competing in the 21st century is to do what PETA has long suggested and deep-six the circus-style orca shows in favor of coastal sanctuaries for orcas,” said Jared Goodman, PETA Foundation director of animal law.

SeaWorld, instead, is fighting back.

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SeaWorld has spent about $15 million on a multimedia campaign — including online videos and television ads showing trainers talking about the care of orcas — to challenge the criticism of animal rights groups. The company said it plans to spend about the same on the campaign in 2016.

Manby said he believes that the campaign has helped stabilize the attendance drop in the parks.

“It does make people more inclined to support us, more inclined to visit us and their overall view of us definitely improves,” he said.

SeaWorld’s shares fell $1.22, or 6.3%, to $18.30.

hugo.martin@latimes.com

Twitter: @hugomartin

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