Wildlife museum looks to board in shaky times

The future of Wonders of Wildlife appears about as clear as Missouri mud. Whether it's the absence of a permanent director or doubts whether next year's bond payments can be met, questions are swirling around Campbell and Sunshine.

Although the final day for Executive Director Fred Marty has been pushed back to May 16, his exit after 19 months could signal what lies ahead for the museum. All eyes are shifting to the board for help.

Fresh off naming an interim director board member Max Peterson Board Chairperson John Moore and the WOW board have created a search committee to select Marty's permanent replacement and are considering ways to better market the $52 million attraction.

The basis for the turmoil is financial: the museum has $36 million in total debt service on outstanding bonds, and had a $1.97 million net operating deficit from January through March of this year, including a $1.2 million bond repayment March 1.

The museum had projected a $289,523 budget shortfall for the first quarter. General admission revenues were projected to be $742,765 for the quarter, but actual revenues were $420,604. The museum also expected $1.45 million in contributions during the quarter but received only $8,831.

Other areas falling below revenue projections were memberships, museum shop and concessions, and group sales. Education program revenues were $10,654 above budget, totalling $20,073.

And with the financial problems, come the what ifs: What if the museum can't turn attendance figures around, the projections don't materialize and bond payments aren't met?

"I assume that the bond trustee would take it over," said Moore, considering the worst-case scenario. It's not a situation he has given much thought though insisting that things will get better before then.

"That's not what we contemplate or what we're planning. We're working to see that we can keep the future secure."

But losing the museum is a scenario worthy of consideration. In March, the $93 million Ocean Journey Aquarium in Denver sold for $13.6 million in bankruptcy court. Landry's Restaurants Inc., which plans to operate the aquarium as a private seafood restaurant, outbid Ripley Entertainment in a public auction held in U.S. Bankruptcy Court for the Colorado District. The aquarium filed Chapter 11 bankruptcy in April 2002, facing $62.5 million in debt and lower-than-expected ticket sales.

It's a familiar situation.

"We've got a tremendous debt load, and that's one of the things that's really of concern to us," Moore said.

Moore vows that all efforts and resources are being put in place to make sure payments are met. The immediate future spells staff cuts, a better marketing strategy and possibly restructuring the museum's debt service, he said. Specifics, though, are unknown at this time.

One thing museum officials do know is that debt service is secure this year. A second $1.2 million interest and principal payment is due Sept. 1. The first $1.2 million was paid March 1. Uncertainty over next year's payments which double to $2.4 million in September 2004 has heightened attention on the revenue crunch.

"We just realized that our debt service is a big component of our expenses," said CFO Peggy Smith. "We need to try to minimize that as best we can."

The $1.2 million bond payment is 44 percent of the first quarter's total expenses.

One option under consideration is to seek lower interest rates. "When we went into this project, interest rates were much higher. There are more favorable rates out in the marketplace right now," Smith said.

The rates on the bonds vary by maturity date and range from 5.5 percent to 7 percent, Smith said.

However, if revenues can't meet the bond payment, the museum does have a rainy-day fund. Cash reserves of 10 percent of the bond issuance amount are on hand for emergency situations, Smith said.

"If we were unable to make a payment, we could draw on those funds," Smith said.

The plan

Restructuring the debt is just one aspect of Moore's plan.

"Number one, we're going to tighten up our belt several notches (and) restructure our staffing to accommodate the lower number of visitors," he said. "Number two, we've got a committee in place within our board looking at ways to promote attendance and marketing. We're going to look at ways that we intercept people in the store next door, who are going to Branson, people who are hunters and fishermen and members of some of our conservation partner organizations."

While WOW wants more visitors, it is spending less to attract those visitors through marketing. During March, the museum spent $11,094 of a $65,859 marketing budget. For the year, it has spent $134,697 less than what was budgeted, according to a museum income statement. Since investing nearly $1 million in 2001, marketing expenditures have dropped each year.

Smith said it's partly because the funds aren't there and partly because the marketing department, led by Lee Daniels, is devising a new plan. A proposed budget of $720,370 for 2003 was scrapped, Smith said, and the department is developing a new marketing budget. All marketing is performed in house.

Director No. 3

Moore, who is coordinating the hiring efforts for the new executive director, said there is no candidate wish list at this time.

"We want somebody who is a champion marketer and promoter, a financial wizard and who walks on water," he said in jest.

No matter who it is, that person will be the museum's third leader in three years. Why has it been difficult retaining a director?

"I think it's been a combination of things," Moore said, calling the marriage between the museum and its first director Jack Payne "a mismatch."

Marty was a good fit, Moore said and he regrets seeing Marty leave.

Marty has said he is leaving for personal reasons. In a prepared statement, Marty said, "I am proud to have served the institution during this initial period in its history and step aside to allow the board an opportunity to select a new leader for the challenges that lie ahead."

Moore hopes to have a permanent director named by August.