Punt Papa, Punt
Papa John’s founder puts blitz on NFL, loses $70 million
Like an unblocked linebacker, Papa John’s founder John Schnatter thought he had a clear shot on the National Football League. Instead, he’s the one picking himself up from the turf.
Forbes estimates, Schnatter’s net worth dropped $70 million in the 24 hours after he blamed the fast-food pizza chain’s low sales numbers on NFL players’ protests of racism and discrimination during the playing of the national anthem.
The pizza chain’s marketing strategy is closely tied to professional football. Through a sponsorship, the brand is the “official pizza of the NFL,” and prominently features franchisee and former NFL star Peyton Manning in its advertisements. Schnatter believes fewer people are watching NFL football in response to the players disrespecting the song and the nation’s flag. Therefore, not as many people are seeing the company’s commercials and ordering its products.
“The NFL has hurt us by not resolving the current debacle,” Schnatter reportedly said during a third-quarter financial earnings call released Wednesday.
Papa John’s stock (PZZA) closed at $68.05 per share on Tuesday. It dropped to a low of $59.77 on Wednesday, and has since risen, but was trending downward this morning at $62.66 as of 10 a.m. (CDT). Schnatter owns about 25 percent of the company, and his net worth is estimated to be $801 million.
Competitors are having fun at Papa John’s expense. DiGiorno Pizza tweeted that its sales were up while Papa John’s were down. Greg Creed, CEO of Yum Brands—parent company of Pizza Hut, Taco Bell and fast food chains, said “We’re not seeing impact on any of that on our business.”
Domino’s, one of Papa John’s largest competitors, has stayed out of the fray. Its stock closed Tuesday at $182.99, saw a mid-day slip to $176.20, and has since rebounded to $179.00 by Friday morning. Over the past few years, the company featured an advertising campaign in which it readily admitted it offed a subpar product and revamped its menu offerings.
Schnatter’s outspokenness on political issues has drawn public ire before. When the Affordable Care Act became law, mandating that many employers provide health care for employees or face a government fine, he threatened to increase customer costs 10 to 14 cents per pizza and reduce employees’ working hours to less than 30 hours a week in order to be exempt from the law.
He’s opened his mouth again, trying to blame someone else for his shortcomings. He has come off looking foolish for it, and hurt his company and its investors.
Papa John’s tagline is “Better ingredients. Better Pizza.” Schnatter’s needs to be “Better keep mind of the stockholders and the bottom line.”
Punt the politics, papa. It’s bad for business.