'Blackfish' backlash: SeaWorld faces twin federal probes

24 June 2017

SeaWorld Entertainment Inc revealed in a public filing Friday that two federal agencies are investigating the company for matters related to CNN's Blackfish documentary that caused a public backlash about the treatment of orcas or 'killer whales'.

The company said it's the subject of separate probes - one from the Justice Department and another by the Securities and Exchange Commission.

The investigations are looking into "disclosures and public statements" made by executives of the Orlando, Florida theme park in August 2014 or earlier "regarding the impact of the 'Blackfish' documentary" and SeaWorld's stock, according to the public filing.

SeaWorld said it's cooperating with the probe, and its board organised a special committee of independent directors, with their own legal counsel, to deal with the matter.

SeaWorld shares fell 33 per cent on a single day in August 2014, when the theme-park operator reported earnings that missed analysts' estimates and blamed the scrutiny of its treatment of animals in the wake of CNN's 'Blackfish', which was released in 2013. Activists say the large animals were inhumanely treated by keeping them in small tanks, when they should be kept at sea in pens.

'Blackfish' details alleged mistreatment of orca whales by SeaWorld workers, and it led to massive amounts of backlash. The water park operator responded to the film by calling it false, misleading and "emotionally manipulative" propaganda.

Animal rights organization PETA launched a campaign against SeaWorld. PETA claims SeaWorld's animals live shorter lives in captivity than they would in the wild.

SeaWorld has since made plans to change its practices, ending its orca-breeding programme and redesigning its shows to depict the animals in natural habitats instead of having them perform tricks.

In recent years, the company has taken numerous steps to boost its image with a series of ads that feature SeaWorld employees discussing the care that animals receive at its parks. The company has said in the past that PETA has been spreading lies. Last year, SeaWorld announced that the killer whales currently in its care will be the last generation of the mammals enclosed at the water parks.

The federal probes compound the troubles for SeaWorld, whose chairman, David D'Alessandro, failed to win re-election in a shareholder vote earlier this month amid a separate controversy over incentive payments. The chairman offered to resign immediately after the meeting, but the board decided to keep D'Alessandro through the end of the year, when he'll step down, the company said in Friday's filing.

Additional details about the investigations were not immediately available. The Justice Department and SeaWorld declined to comment, and the SEC did not immediately respond to inquiries from the media.

The stock fell 1 per cent to $15.65 Friday, having lost 17 per cent this year

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