Papa John’s just can’t seem to get out of their own way can they? In this latest episode of “As The Company Crumbles”, Papa John’s founder and chairman John Schnatter is accused of using the n-word during a conference call back in May.
According to Forbes Magazine (@Forbes), the call was reportedly between Papa John’s top brass and an outside marketing agency as they were ironically discussing how to fix their image after the scandal with the NFL. In that scandal, Papa John’s reportedly blamed the NFL’s player protest for their horrible 1st quarter sales. After Schnatter’s comments, the company was cheered and backed by numerous alt-right groups who latch on to racism, or suspected racism, wherever they can find it. Papa John’s was subsequently released from their contract with the NFL, who immediately named Papa John’s #1 competitor, Pizza Hut, the new official pizza of the NFL, leaving Papa J’s to watch the game (and money) from the sidelines with no major sports endorser.
“Colonel Sanders called blacks n*****s”, were a few of the words that came fumbling out of Schnatter’s mouth during the conference call, before he went on to add how African-Americans were dragged by trucks until they died back in his home state of Indiana when he was growing up. Landry Service, the marketing company Papa John’s had hired to clean up their NFL mess, and who were also on the conference call when Schnatter went on his rant, reportedly terminated their contract with Papa John’s immediately.
Of course Papa John’s came out with a statement about how they condemn racism and insensitive language and blah blah blah. But the damage had already been done. Papa John’s stock prices took a hit this morning as the stock dipped down to around $47/share before late afternoon gains that brought the stock back up to around $49. Before this news was released, Papa Johns was trading comfortably above $50. Before the NFL debacle, Papa John’s was trading in the $70’s and $80’s.
Has anybody had a worse year so far than Papa John’s? It started when the pizza company’s former CEO John Schnatter blamed NFL protest for the company’s weak third quarter sales on the NFL players’ protest over police brutality, and now it ends like this. Forbes Magazine (@Forbes) reports, less than 24 hours after Papa John’s benched itself as the NFL’s official pizza sponsor, the NFL cut a deal with Pizza Hut to become the league’s new pizza sponsor.
The NFl and Yumi Brands subsidiary made the announcement this morning. The deal with Pizza Hut will officially begin during this year’s 2018 NFL draft in April. The deal gives Pizza Hut exclusive marketing rights, use of the league’s 32 team logos and any other designation that will connect Pizza Hut with the NFL’s players, events and properties. The deal is big. That means we will no longer be seeing a barrage of corny Papa John’s commercials starring Peyton Manning during this upcoming NFL season. Those will now be replaced by Pizza Hut commercials. Many people on social media have complained that Papa John’s pizza is trash. I’ve never tasted Papa John’s pizza before, but if it’s true that the pizza is trash, and you combine that with a lack of advertisement, my guess is that it won’t be long until Papa John’s goes completely under…unless their pizza stops being called trash and they grab another huge sponsorship with another sports league. It will be hard work to find an audience bigger than the NFL’s though.
So……Papa John’s has finally realized that the minority dollar holds lots of power. Like most big companies, Papa Johns underestimated the value of the minority dollar. Papa Johns was clearly under the impression that minority customers did not make up a huge portion of the company’s profits when they came out a few weeks ago and claimed NFL players protesting police brutality was hurting their sales. Papa Johns obviously felt emboldened enough to make this statement, because they thought that minorities did not make up a huge portion of their sales. What other logical explanation is there for Papa John’s speaking out so forcefully against a non-violent protest of police brutality? Papa John’s decided to go the Trump route and claim that the protest were so disrespectful to everything they stood for. Maybe Papa Johns really believes that, or maybe Papa Johns were trying to play to what they thought were their core base of customers. Either way, Papa Johns must be starting to get a little low in the pockets after their comments, so what do you think Papa Johns did? Took to Twitter in an attempt to walk back their protest comments and hopefully clarify where they stand.
It might be a little too late to try to walk back those statements Papa Johns. Many people were already speaking about how bad your pizza was, and now, after your comments, those that actually liked your pizza seem to not be buying it anymore. That’s what happens when you underestimate the power of the minority dollar. These companies only seem to realize that the fake narrative that “minorities don’t spend lots of money” is false once their businesses start to hurt after offending minorities. Papa Johns is about to learn this lesson the hard way. Those people that were cheering you on for your ridiculous comments about NFL players protesting hurting your business, were not your customers. They said they were, but you can see that they weren’t. Just take a look at your bank account.