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W17614

THE HUMANE SOCIETY AND SEAWORLD: ORCA OBSTACLE

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Tara Ceranic Salinas and Marc Lampe wrote this case solely to provide material for class discussion. The authors do not intend to
illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other
identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the

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permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.

Copyright © 2017, Richard Ivey School of Business Foundation Version: 2015-09-27

Imagine a carnivorous sea mammal the size of a school bus that weighs six tons (5,443 kilograms) and has
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52 teeth. It spends each day socializing with its large family, swimming over 100 miles (160 kilometres),
and diving to depths of 850 feet (259 metres) for food and exercise. Once every three to 10 years, after an
18-month pregnancy, females give birth to babies weighing 265–353 pounds (120–160 kilograms) and
measuring over 8.5 feet (2.6 metres) long. This colossus is not a fictional behemoth; it is an orca whale.
Also known more commonly as killer whales, these magnificent creatures were at the centre of much debate
between two individuals: Wayne Pacelle and Joel Manby. In 2016, each man served as president and chief
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executive officer (CEO) of a large organization embroiled in a dialogue surrounding orcas. Pacelle headed
the non-profit Humane Society of the United States (HSUS), while Manby led SeaWorld Parks &
Entertainment, Inc. (SeaWorld). These men shared a great deal in common: Ivy League educations, hugely
successful careers, and both were authors of popular books. For almost a year they had been negotiating
some very large differences of opinion in a long-standing dispute.

Manby, Pacelle, and their organizations were at a crossroads and each had a lot at stake. SeaWorld was
facing growing negative publicity and a decline in park attendance and revenues. Pacelle had a book about
No

to be released that was a call to business leaders to join the animal protection movement and incorporate its
values into their strategic plans. At the crux of their dispute was SeaWorld’s captive orca program. This
program involved orcas that lived in large tanks at SeaWorld parks, where they performed and were bred,
thereby providing future generations of orcas for SeaWorld. In order to move forward in a way that
benefited them all, Manby and Pacelle needed to work together. Therefore, in March 2016, Pacelle visited
a SeaWorld park for the first time in his life, with Manby as his guide, and the two men started a
conversation to determine how to proceed. 1 Was it possible for these organizations to find common ground,
considering their complicated relationship?
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SEAWORLD HISTORY

SeaWorld was founded on 21 acres along the Mission Bay waterfront in San Diego, California, in 1964 by
Milton C. Shedd, Ken Norris, David DeMott, and George Millay—four graduates of the University of
California, Los Angeles. Initially designed as an underwater restaurant, it developed into a marine

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zoological park featuring dolphins, sea lions, and a saltwater aquarium that drew over 400,000 visitors in

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its inaugural year. 2

With its popularity in San Diego, a second location was opened in Aurora, Ohio, in 1970 and a third in
Orlando, Florida, in 1973. The friends maintained financial control of the parks until 1979, when they sold
them to Harcourt Brace Jovanovich (Harcourt), the largest publisher of medical, educational, and scientific

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textbooks, which was looking to diversify its investments. Harcourt expanded the brand by purchasing
Cypress Gardens as well as the Boardwalk and Baseball theme park in central Florida in 1985, and by
opening a fourth SeaWorld location in San Antonio, Texas, in 1988. Harcourt took on a large debt in 1987,
but even with the newest SeaWorld, it was under too much financial pressure and was forced to sell all of
its theme park holdings to Busch Entertainment Corporation in 1989.

Busch Entertainment Corporation was a subsidiary of Anheuser-Busch InBev, famous for its beer and

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Clydesdale horses. Anheuser-Busch maintained control of the SeaWorld family of parks until October of
2009, when it sold them to the Blackstone Group.3 Blackstone paid US$2.3 billion 4 in cash, along with
$400 million in additional considerations, changing the company’s name to SeaWorld Entertainment, Inc.

In April 2013, Blackstone took the company public (NYSE: SEAS) 5 and the initial public offering priced
shares at $27, which valued the company at $2.5 billion. 6 As of 2016, SeaWorld Entertainment, Inc. was
the parent company of SeaWorld Parks & Entertainment, located in Orlando, Florida. The organization
operated 11 theme parks and attractions, including SeaWorld, Busch Gardens, Discovery Cove, Aquatica,
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Sesame Place, Adventure Island, and Water Country USA. Its parks and attractions were located across the
United States in Orlando and Tampa, Florida, San Antonio, Texas, San Diego, California, Williamsburg,
Virginia, and Langhorne, Pennsylvania, earning $1.37 billion in revenue in 2015 (see Exhibit 1).

SEAWORLD’S MISSION
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In 2016, SeaWorld described itself as “one of the world’s foremost zoological organizations and a
worldwide leader in animal welfare, training, husbandry and veterinary care.” SeaWorld viewed its culture
as consumer-oriented and an integral part of its success. It was “built upon our mission to deliver personal,
interactive and educational experiences that enable our customers to celebrate, connect with, and care for
the natural world we share.” The parks focused on six major areas: rescue, care, research, education,
communities, and conservation.
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Since the founding of the first SeaWorld, the organization had saved over 28,000 animals. Birds were the
most common rescue, but SeaWorld worked to save seals, sea lions, otters, manatees, turtles, whales,
dolphins, and other mammals. Additionally, the parks were home to over 200 endangered, threatened, or
at-risk animal populations such as lemurs, orangutans, polar bears, and sea otters. 7 The SeaWorld rescue
teams worked with state, local, and federal agencies and were on call around the clock. Their goal was the
rehabilitation of animals and their return to the wild, but in cases where the animals were deemed unable
to be returned, they were given homes at a SeaWorld location or another accredited facility.
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SeaWorld cared for over 86,000 animals, making it home to one of the largest animal collections in North
America. With 8,000 marine and terrestrial animals and 78,000 fish, it was imperative that SeaWorld
offered state-of-the-art medical care and facilities. In order to assure the health of all of its animals,
SeaWorld was a member of both The Association of Zoos and Aquariums and the Alliance of Marine
Mammal Parks and Aquariums, organizations that held members to particular guidelines for animal care.

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SeaWorld also followed the protocols of federal and state regulations, as well as the Animal Welfare Act,

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Endangered Species Act, and Marine Mammal Protection Act.

The research conducted at SeaWorld spanned a variety of topics and was a key priority set by the founders.
Over 300 peer-reviewed articles, books, and book chapters had been published. Recent publications
addressed killer whale lifespans, sustainability for marine ornamental fish, killer whale metabolism, and

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understanding the life history of killer whales. SeaWorld also funded and supported field research and
worked with universities and research organizations to strengthen research efforts.

SeaWorld provided a variety of educational programs through its parks, including school tours, sleepovers,
day camps, and teacher resources. It also created the myActions program, a social media platform that
encouraged individuals to share the daily actions they undertook to protect the environment and challenge
friends and family to do the same. Through the platform, students chose their favourite animal or habitat

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conservation and earned money for the cause through the actions they took and donated the money.

There were a variety of ways SeaWorld engaged with its local communities. It partnered with hospitals,
animal shelters, and organizations that served children with disabilities and provided both monetary
resources and volunteers whenever possible. SeaWorld worked with the animal adoption organization
Happy Tails and provided two free single-day park passes when a dog or cat was adopted. The parks also
adopted neglected and abandoned animals and trained them to be part of their pet shows, ensuring a second
chance for many animals. In 2015, the SeaWorld & Busch Gardens Youth Advisory Council was launched
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in order to garner suggestions for conservation efforts, education, and youth outreach.

Conservation at SeaWorld focused on several pillars. First and foremost was the rescue of orphaned, ill, or
injured animals. Next was the support of research through SeaWorld’s own work as well as offering its
parks as controlled environments for research. It also funded the conservation of wild places and wild
animals and worked with organizations such as the National Wildlife Federation, the World Wildlife Fund,
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and The Nature Conservancy. 8 Finally, SeaWorld educated its guests on the plights of animals through
close-up animal encounters and educational exhibits.

JOEL MANBY

Manby joined SeaWorld as president, CEO, and director in April 2015. After an extensive search by the
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board of directors, Manby was chosen for his experience with business models similar to SeaWorld’s and
his impressive previous track record. The board pointed to his previous experience as a major reason he
was selected for the position: “Even in the most challenging business environments, Joel has consistently
enhanced the performance of the companies he has led for customers, investors and employees alike. He
has the experience and qualifications to lead our Company into the future.”

From 2003 to 2015, Manby served as CEO of Herschend Family Entertainment (HFE), the largest family-
owned theme park and entertainment company in the United States. HFE operated Dollywood, Silver Dollar
City, and a variety of other popular waterparks, aquariums, and attractions, as well as the Harlem
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Globetrotters. 9 While CEO of HFE, Manby appeared on the television show “Undercover Boss.” His
positive interaction with employees led to the show being seen by over 18 million viewers, its second-
highest-rated episode ever. 10 Viewers were taken with how genuinely Manby seemed to care for his
employees and their well-being, and this positive response led to him write a book entitled Love Works:
Seven Timeless Principles for Effective Leaders.11 Based on the principles he set up as guidelines at HFE

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and a Biblical description of love, Manby wanted to create a leadership style that saw love as a behaviour,

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not an emotion:

Leading with love is too important to be left to chance. It takes effort to lead with the principles of
love—to be patient, kind, trustful, unselfish, truthful, forgiving, and dedicated . . . leading with love
is worth it. On every level it is more difficult, and on every level it is more rewarding, more

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fulfilling, more right than you can imagine. 12

Prior to joining HFE, Manby had spent 20 years in the auto industry as part of General Motors’ Saab and
Saturn divisions. He entered the position at SeaWorld facing many challenges, but his previous experience
had equipped him well for these issues.

SEAWORLD’S PUBLIC RELATIONS

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As with any organization that exhibited animals, SeaWorld faced issues with animal rights organizations
such as People for the Ethical Treatment of Animals (PETA) and the Orca Project. Activists frequently
protested outside of SeaWorld’s parks and many celebrities chastised the organization on social media for
continuing captive breeding programs and performances by animals. 13

In 1993, the HSUS began a campaign specifically to protect captive marine mammals. At SeaWorld’s
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invitation, a group from the HSUS visited and toured SeaWorld’s Orlando park. This visit led to “two
decades of protests, research, and public education by the HSUS to stop SeaWorld from bringing more
killer whales into captivity.” This campaign included the release of the HSUS research paper Killer
Controversy: Why Orcas Should No Longer Be Kept in Captivity. 14

In July 2013, SeaWorld faced a great deal of criticism linked to the release of the documentary Blackfish.
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Blackfish detailed the life of Tilikum, the orca responsible for the deaths of several individuals while in
captivity, most notably Orlando SeaWorld trainer Dawn Brancheau. It also considered the difficulties orcas
faced in confinement and the dangers for both humans and whales. SeaWorld responded to the film with a
post on its site calling it “propaganda” and not a documentary; however, public opinion on the issue had an
impact on SeaWorld’s stock price and attendance figures. Following the release of Blackfish, SeaWorld
was accused of, and later admitted to, infiltrating PETA protests with employees posing as activists in order
to “maintain the safety and security of employees, customers, and animals in the face of credible threats.” 15
No

THE HUMANE SOCIETY OF THE UNITED STATES: HISTORY

The HSUS was a non-profit organization founded in 1954 by journalist Fred Myers along with Helen Jones,
Larry Andrews, and Marcia Glaser as the National Humane Society. Their goal was to address America’s
nationwide issues of animal cruelty and welfare. The organization was an attempt to tackle such issues with
strategies and resources on a scale that was not possible for local groups. The organization was
headquartered in Washington, D. C., and was affiliated with several organizations, including Humane
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Society International and the Fund for Animals. In 2013, the Chronicle of Philanthropy ranked the HSUS
the 136th-largest U.S. charity.

The HSUS did not run local animal shelters such as local humane societies. Instead, it educated the public
on animal overpopulation and promoted best practices for handling animals in shelters, including those
used for euthanizing animals. The HSUS had a long track record of working against cruelty to dogs,

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including activities carried out in puppy mills. In 2016, the organization operated five animal sanctuaries

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in conjunction with the Fund for Animals.

The HSUS was involved in numerous campaigns over the years that led to successful improvements in the
treatment of animals. Its efforts in public education for example, led to consumers voting with their
“pocketbooks” and at the ballot box for a change in animal treatment. It also lobbied government at all

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levels to pass laws that improved the lives of animals and took actions to ensure that such laws were being
enforced. For example, the HSUS worked with the federal government to regulate experimentation on
animals and, in 1958, it played an important role in the passage of The Humane Slaughter Act. 16

In 2008, the HSUS fought successfully to pass Proposition 2 in California, a ballot initiative that ended
tight confinement of hens, pigs, and calves, affecting 20 million animals on factory farms. Businesses
desiring to continue the practice spent nearly $10 million to oppose the passage of the measure. This HSUS

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campaign against factory farming continued, eventually leading to food providers, such as McDonald’s and
Costco, ending their use of factory farm products. The HSUS along with its affiliate, Humane Society
International, worked to protect sea life by tackling issues such as whaling, shark finning, and a declining
ocean population resulting from overfishing. The HSUS played an important part in Ringling Bros. Circus
retiring elephants from its travelling circus acts.17

The HSUS claimed to be America’s largest and most effective animal rights organization. Along with its
affiliates, it provided care and services to well over 100,000 animals annually. According to its 2015 annual
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report, net assets were over $232,366,766 and its total support and revenue for 2015 were $191,138,740.
Seventy-nine per cent of its operating expenses went to animal protection.

THE HUMANE SOCIETY OF THE UNITED STATES’S MISSION

The mission of the HSUS was to provide direct care to animals through the provision of sanctuaries,
veterinary care, emergency shelters, and rescue programs. It addressed national and international animal
issues such as the protection of marine animals, the wildlife trade (e.g., elephant poaching), and factory
farming, along with its affiliate, Humane Society International. Its most important goal was “to prevent
animals from getting into situations of distress in the first place,” and it used a variety of tools to drive
“transformational change.” The HSUS’s position on zoos and aquariums was detailed as follows:
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Wild animals should ideally be permitted to exist undisturbed in their natural environments. Zoos
and aquariums are, however, a currently established part of our society. Additionally, some of them
provide benefits for animals such as financially supporting conservation programs, preserving and
restoring threatened and endangered species, and promoting public education regarding the needs
of wild animals and their roles in the ecosystem.

Zoos and other facilities that house captive wildlife must not be set up solely for profit or for
entertainment. Such facilities must be organized around a core mission that educates the public
about the needs of wild animals and the threats to which they are exposed, and that supports humane
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conservation programs. In addition, such zoos must maintain animals in conditions simulating their
natural habitats as closely as possible and must treat them with the highest degree of humaneness,
care, and professionalism. Achieving these requirements is imperative to improving the welfare of
the animals. These requirements would also stop inhumane or inappropriate conditions from being
seen by an impressionable public, who might otherwise think that these facilities condone
indifference or cruelty towards animals.

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The HSUS pledges to work with those zoological parks and other zoos and aquariums desiring to
improve and having the capability to do so. At the same time, we are committed to the elimination
of those institutions that will not, or cannot, improve and meet these standards. The HSUS urges
zoos to act as sanctuaries for non-domesticated animals, providing facilities for animals in need,
rather than breeding them for exhibition purposes or acquiring them from the wild or from exotic

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animal dealers.

More specifically with respect to marine mammals, the HSUS was opposed to “the chase, capture, and
confinement of wild marine mammals in marine parks and aquariums because such activities result in
considerable animal suffering.” Furthermore, the HSUS supported measures that sought “an end to the
capture of wild marine mammals for the purpose of public display in the United States and abroad.”

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WAYNE PACELLE

Pacelle joined the HSUS in 1994 and became its president and CEO in 2004. His passion for animals began
during his studies at Yale University. Through an internship, he “saw that a destructive attitude toward
animals in the natural world, along with innovations in technology, could produce colossal damage to
animals and ecosystems.” 18 At that time, he started lobbying for animal rights. 19
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Pacelle played a role in the passage of over 25 federal statutes, was associated with 26 successful state
ballot initiatives, and had hundreds of universities and corporations promise that their egg purchases would
be from “cage-free” producers. 20 In respect to his advocacy style, Pacelle stated: “I don’t personalize
conflict. When you’re dealing with issues that have a formidable opposition, you can’t expect reason and
logic alone to carry the day. You have to apply pressure in a careful and determined way to get lawmakers
or corporate chieftains to do the right thing.” 21
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After his arrival at HSUS, Pacelle was described as having “turbo-charged” the farm animal welfare
movement while providing additional respectability. 22 He was also credited as having “retooled a venerable
organization that was seen as a mild-mannered protector of dogs and cats into an aggressive interest group
that was flexing muscle in state legislatures and courtrooms.” 23

HSUS’S PUBLIC RELATIONS

As the country’s largest, richest, and most powerful animal welfare organization, the HSUS was a big target
and was accustomed to criticism. 24 Critics included business groups whose practices the HSUS campaigned
against. Others argued that there had been instances when the HSUS should have advocated for more drastic
action regarding the abolition of eating animals, as they believed that working to improve living conditions
at factory farms just perpetuated the existence of such places.25

The organization that was the most relentless and critical of the HSUS was the Center for Consumer
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Freedom, which ran the website HumaneWatch.org and was funded by food companies, restaurants, and
others who were concerned about HSUS campaigns that could be harmful to them financially. 26 In addition
to the website, it ran advertisements in major newspapers and funded a billboard in New York City’s Times
Square that critical critical of the HSUS. 27

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A MEETING OF THE MINDS?

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Pacelle’s first-ever visit to a SeaWorld park took place in Orlando in early March of 2016. He was
accompanied by Manby and several other top SeaWorld executives. 28 This visit was an attempt by Pacelle
to better understand how SeaWorld operated, and for the two men to discuss their options for working
together; a tricky prospect considering the reluctance from both sides. Manby said that there had been

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hesitation on both sides regarding whether to even meet, adding: “We have been complete adversaries for
at least 25 years, with a completely negative monologue about them from us, and from them about us.” 29
Manby and Pacelle realized they had to figure out where the interests of both of their organizations aligned
in order to move forward together.

How could these two CEOs find common ground that would allow SeaWorld to continue operating in a
way that was financially beneficial for the parks, entertaining to guests, and respectful of the welfare of the

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orca whales in SeaWorld’s care, while meeting the HSUS’s goals of animal protection?
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No
Do

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EXHIBIT 1: SEAWORLD FINANCIALS (INCLUDES ALL HOLDINGS)

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Attendance Net Adjusted Total
Revenue Net cash
Year (number of income net income revenue per
(billion $) (million $)
people, millions) (million $) (million $) capita ($)
2012 24.4 1.50 77.4 77.4 227.9 58.37
2013 23.4 1.46 50.5 101.4 169.8 62.43

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2014 22.4 1.38 49.9 59.4 261.5 61.51
2015 22.5 1.37 49.1 63.9 286.3 61.01

Note: All currency amounts are in U.S. dollars.

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op
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No
Do

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ENDNOTES

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1
Benjamin Wallace, “SeaWorld, Breached,” nymag, May 4, 2016, accessed March 27, 2017,
http://nymag.com/daily/intelligencer/2016/04/seaworld-tilikum-orcas.html.
2
“History,” SeaWorld Parks & Entertainment, accessed March 27, 2017, https://seaworldentertainment.com/en/who-we-
are/history.
3
Robert Niles, “Blackstone Group Buys the SeaWorld and Busch Gardens Theme Park Chain for $2.3 Billion,” Theme Park
Insider, October 7, 2009, accessed March 27, 2017, www.themeparkinsider.com/flume/200910/1455.

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4
All currency amounts are in U.S. dollars unless otherwise specified.
5
Ben Rooney, “Sea World, Busch Gardens Sold for $2.7 Billion,” CNNMoney, October 7, 2009, accessed March 27, 2017,
http://money.cnn.com/2009/10/07/news/companies/blackstone_anheuser_busch_inbev.
6
William Alden, “Public Offering Values SeaWorld at $2.5 Billion,” The New York Times, April 18, 2013, accessed March 27,
2017, http://dealbook.nytimes.com/2013/04/18/seaworld-prices-i-p-o-at-top-of-range/?_r=0.
7
Jessica Volk, “By Land, Sea and Air, SeaWorld Helps Save Endangered Species,” SeaWorld Parks & Entertainment,
accessed March 27, 2017, www.insideconservation.com/land-sea-and-air-seaworld-helps-save-endangered-species.
8
For a map of where conservation efforts have been focused, see SeaWorld Cares, accessed March 28, 2017,
https://seaworldcares.com/buschgardens-williamsburg/.

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9
“Our Businesses,” Herschend Family Entertainment, accessed March 28, 2017, www.hfecorp.com/our-businesses.
10
“Joel Manby: Love Works,” CBN, September 17, 2013, accessed March 28, 2017, www1.cbn.com/700club/joel-manby-love-
works.
11
Joel Manby, Love Works (Zondervan, 2012).
12
Ibid.
13
“13 Celebrities Speaking Out Against SeaWorld,” SeaWorld of Hurt, accessed March 28, 2017,
www.seaworldofhurt.com/features/13-celebrities-speaking-seaworld.
14
Naomi A. Rose, Killer Controversy: Why Orcas Should No Longer Be Kept in Captivity (Humane Society International and
Humane Society U.S., September 2011), accessed April 1, 2017, www.hsi.org/assets/pdfs/orca_white_paper.pdf.
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15
Rupert Neate, “SeaWorld CEO Admits Employees Were Asked to Pose as Animal Rights Activists,” The Guardian, February
25, 2016, accessed March 27, 2017, https://www.theguardian.com/us-news/2016/feb/25/seaworld-ceo-admits-employees-
infiltrated-peta-animal-rights-activists.
16
“Humane Methods of Slaughter Act,” Animal Welfare Institute, accessed March 27, 2017,
https://awionline.org/content/humane-methods-slaughter-act.
17
Wayne Pacelle, “A Berlin Wall Moment for Animal Protection,” A Humane Nation, March 5, 2015, accessed April 7, 2017,
http://blog.humanesociety.org/wayne/2015/03/ringling-bros-ends-elephant-acts.html.
18
Patricia R. Olsen, “After ‘Wild Kingdom,’” The New York Times, December 24, 2006, accessed March 27, 2017,
www.nytimes.com/2006/12/24/jobs/24boss.html?pagewanted=print&_r=0.
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19
Ibid.
20
Karin Brulliard, “How Eggs Became a Victory for the Animal Welfare Movement,” The Washington Post, August 6, 2016,
accessed March 27, 2017, https://www.washingtonpost.com/news/animalia/wp/2016/08/06/how-eggs-became-a-victory-for-
the-animal-welfare-movement-if-not-necessarily-for-hens/?utm_term=.dffdd4f4876f.
21
Patricia R. Olsen, op. cit.
22
Kim Severson, “Bringing Moos and Oinks into the Food Debate,” The New York Times, July 25, 2007, accessed March 27,
2017, www.nytimes.com/2007/07/25/dining/25sanc.html.
23
Carla Hall, “Wayne Pacelle Works for the Winged, Finned and Furry,” Los Angeles Times, accessed March 27, 2017,
www.latimes.com/local/la-me-pacelle19-2008jul19-story.html.
No

24
“Hounding the Humane Society of the U.S,” Los Angeles Times, June 12, 2011, accessed March 27, 2017,
http://articles.latimes.com/2011/jun/12/opinion/la-ed-humane-20110612.
25
James E. McWilliams, “Vegan Feud,” Slate, September 7, 2012, accessed March 27, 2017, www.slate.com/articles
/life/food/2012/09/hsus_vs_abolitionists_vs_the_meat_industry_why_the_infighting_should_stop_.html
26
“HumaneWatch”, accessed March 27, 2017, https://www.humanewatch.org.
27
“Hounding the Humane Society of the U.S,” Los Angeles Times, op. cit.
28
Benjamin Wallace, “SeaWorld, Breached,” op. cit.
29
Ibid.
Do

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