Papa John’s owner blames sagging sales on NFL anthem protests and league leadership

The following article by Cindy Boren and Des Bieler was posted on the Washington Post website November 1, 2017:

If you ask the CEO of Papa John’s, there’s a straight line from his pizza company’s sagging third-quarter earnings through the NFL’s national anthem demonstrations to what he says is “poor leadership” at the top in the NFL.

“This should have been nipped in the bud a year and a half ago,” John Schnatter said in prepared remarks (via Chris Otts of WDRB.com). “Like many sponsors, we are in contact with the NFL and once the issue is resolved between the players and the owners, we are optimistic that the NFL’s best years are ahead. But good or bad, leadership starts at the top, and this is an example of poor leadership.”

Although he did not name Commissioner Roger Goodell by name, Schnatter said that the practice of players kneeling during the anthem to raise awareness of police brutality and social injustice could have been stopped back when Colin Kaepernick began doing it during preseason games in the summer of 2016. Instead, players continued to do so in response to violence across the country and President Trump ramped up the conversation, calling for NFL owners to fire any “son of a bitch” who did not stand for the anthem.

Stock for the Louisville-based company, which is one of the NFL’s biggest TV advertisers, was down about 12 percent in trading Wednesday after it cut expectations for earnings and sales growth for the full year. Although the league’s TV ratings were down a year ago, Papa John’s sales grew. According to WDRB, executives said the company’s sales are expected to grow this year and in 2018, but company shares are down about 23 percent.

“You need to look at exactly how the ratings are going backwards. Last year the ratings for the NFL went backwards because of the elections. This year the ratings are going backwards because of the controversy,” Schnatter, who donated $1,000 to Trump’s campaign, said, “and so the controversy is polarizing the customer, polarizing the country.”

Papa John’s president and chief operating officer Steve Ritchie said Wednesday (via ESPN) that his company has been the most recognized NFL sponsor for the past two years, suggesting that its success is linked to that of the league. He said that he expects the earnings decline for Papa John’s “to persist” until “a solution is put in place” by the NFL for its player protests.

As Awful Announcing pointed out, this is not the first time Schnatter, a Republican Party donor, has weighed in on a political issue in the context of his company’s performance. In 2012, he warned that Papa John’s might have to raise prices on its pizza by 11 to 14 cents per pie to offset penalties he claimed would be imposed under the Affordable Care Act.

The company has a deal with the NFL as well as with 23 individual teams and the league has not responded to a request for comment. On social media, most replied that Papa John’s problem lies in its product.