NEW YORK (TheStreet) -- SeaWorld Entertainment (SEAS) saw its shares plummet last Friday on news of California legislation that could hurt the company. A legislator from the Hollywood/Malibu region of California proposed legislation that would forbid orca shows in the state. With SeaWorld San Diego one of 12 destinations owned by the parent company, the effects of this law would directly impact revenue and earnings.
Richard Bloom, of California's 50th district, proposed a bill that would end shows featuring captive marine animals. Destinations like SeaWorld would only be able to keep orcas in captivity for research, rescue and rehabilitation purposes. The bill also forbids these attractions from breeding in captivity or importing/exporting orcas. The orcas held in captivity would have to eventually be released back into the wild.
The bill is merely the latest step in the controversial practice of keeping orcas in captivity. The documentary Blackfish, which I discussed back in December, continues to put pressure on shares of SeaWorld. The movie discusses the dangers of holding whales in captivity and how it led to the death of SeaWorld trainer Dawn Brancheau in 2010. The movie, which gained viewers after being aired on CNN and Netflix ( (NFLX)), also caused musicians to pull out of performances at the SeaWorld parks.
Shares of SeaWorld are up more than 17% in 2014 after reporting strong third quarter and preliminary full year earnings. In the third quarter, the company reported a 3% increase in revenue after seeing per user revenue increase. For the full year, the company sees revenue hitting a company record of $1.46 billion. The company cited strong performance from SeaWorld properties in San Diego and Orlando as key growth drivers.