Schnatter sparked controversy last year by blaming sagging sales on NFL player protestsGETTY IMAGES
Papa John's CMO Brandon Rhoten said that despite ending its sponsorship deal with the NFL, the company still "intends to ties its products to football and its fan base 'but it will just be in a different way,'" according to Grace Schneider of the Louisville COURIER-JOURNAL. During Papa John's Q4 earnings call yesterday, Rhoten said that the company would now "deploy the cash toward the league's 32 teams and certain high-profile players." Papa John's Founder John Schnatter "sparked controversy last November by blaming sagging sales on the NFL's drop in ratings for its handling of player protests during the national anthem." The remarks were "disastrous." Papa John's CEO Steve Ritchie blamed a 3.9% dip in results for North America during the last quarter on the "harmful publicity, which the company expects to put in the rearview" by turning over its creative work to a new company, Wasserman-owned marketing agency Laundry Service, and to a new PR firm, Chicago-based Olson Engage (Louisville COURIER-JOURNAL, 2/28). CNN's Keith Boykin noted, "Papa John's stock lost one-third of its value since last June, which founder and former CEO John Schnatter blamed on NFL protests. Meanwhile, Pizza Hut's parent company stock, Yum!, grew 8% during the same time period" (TWITTER.com, 2/28).
THE BREAK UP: ESPN.com's Darren Rovell noted Papa John's is the "first NFL sponsor to leave in the midst of its deal." The company said that there was "no additional cost for undoing the deal" (ESPN.com, 2/27). USA TODAY's Tom Schad notes Papa John's had been "one of the NFL's most prominent sponsors and advertisers in recent years; An annual survey by SportsBusiness Journal and Turnkey Intelligence last year rated it the league's most recognized sponsor for a second consecutive year" (USA TODAY, 2/28). AD AGE noted Papa John's had been the NFL's "official pizza sponsor" since '10 and had renewed the deal in '16. Before last year, Papa John's and Schnatter himself "embraced the ties to the sport, for example often showcasing Peyton Manning and J.J. Watt in ads." Manning and Schnatter even "embraced on the field" after the Broncos won the Super Bowl in '16 (ADAGE.com, 2/27).
THINGS LOOK GOOD TO ME: ESPN’s Trey Wingo said of Pizza Hut's new deal with the NFL, "More years, more money. Don't tell me the NFL is failing, because every business model tells you it isn't.” ESPN’s Mike Golic asked, “What’s your definition of failure? Are your ratings going down so you're failing, or is it the league is making more money and that's part of what they do, is to make money? I would say there are some owners who may be putting more money in their pockets saying things are going pretty darn well. … Are they down? No doubt about it, it's down. But you're talking down from a high, high mountaintop where nobody else is at that level” (“Golic & Wingo,” ESPN Radio, 2/28).
