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Papa John's blames NFL ‘debacle’ for hurting its pizza sales

November 1, 2017

Papa John’s International Inc. founder John Schnatter is going after NFL Commissioner Roger Goodell, saying weak handling of the league’s national-anthem controversy has hammered sales of his pizza.

“The NFL has hurt us by not resolving the current debacle to the players’ and owners’ satisfaction,” Schnatter, who serves as the pizza chain’s chairman and CEO, said on a conference call. “NFL leadership has hurt Papa John’s shareholders.”

Papa John's has 36 stores in the nine-county area, including 19 in Indianapolis.

The remarks follow a controversy over NFL football players protesting during the national anthem, a movement that started last season. The demonstrations have sparked calls for a boycott and raised concerns among league sponsors. But Schnatter’s comments mark the highest-profile example of an NFL partner publicly blaming the outcry for hurting business.

Goodell, whose contract is up for renewal, has taken flak for not resolving the controversy more quickly. The flap has even drawn tweets from President Donald Trump, who called for owners to fire or bench players who refuse to stand during “The Star-Spangled Banner.”

“Leadership starts at the top, and this is an example of poor leadership,” Schnatter said.

Papa John’s shares saw their biggest decline in almost eight months on Wednesday after third-quarter same-store sales missed analysts’ estimates. The Louisville-based company also trimmed its revenue and profit forecasts for the year.

Papa John’s has been the NFL’s official pizza sponsor since 2010. Schnatter, who founded the company in 1984, donated to Trump’s campaign and has railed against government regulations.

The NFL is a big part of Papa John's marketing strategy. It has sponsorships with 23 individual teams, including the Indianapolis Colts, in addition to its deal with the league.

NFL players began kneeling during the national anthem more than a year ago, starting with a protest against racial inequality and police brutality by Colin Kaepernick, former quarterback for the San Francisco 49ers. The action spread across the NFL and got new life in recent weeks after Trump began criticizing the players.

Against that backdrop, ratings for the NFL are down this year. With fewer Americans watching games, fewer people are presumably ordering pizza, and seeing Papa John’s ads.

“This should have been nipped in the bud a year and a half ago,” Schnatter said on the call. “Like many sponsors, we’re in touch with the NFL. Once the issue is resolved, we’re optimistic the NFL’s best years are ahead.”

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