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November 2, 2017

Papa John’s Unappetizing Ingredient: The NFL

The political theater on display by football athletes has repercussions beyond the field.

The proliferation of national anthem protests in the NFL has culminated in falling television ratings and a shrunken fan base. But the political theater on display by athletes has repercussions beyond the field. For seven years, Papa John’s has branded itself around being recognized as the NFL’s official pizza sponsor. That was obviously a boon for business. At least until now.

Papa John’s CEO John Schnatter has revealed that business is sluggish due to fallout over his company’s ties to the NFL. He minced no words, either, reportedly complaining, “The NFL has hurt us by not resolving the current debacle to the players’ and owners’ satisfaction. NFL leadership has hurt Papa John’s shareholders.” He added, “Leadership starts at the top, and this is an example of poor leadership.” From Schnatter’s standpoint, “This should have been nipped in the bud a year and a half ago.”

According to Bloomberg, “Back in 2014, when Papa John’s posted a nearly 10 percent gain in North American same-store sales, the company credited its close relationship with the NFL and [Peyton] Manning for driving its business in the U.S. On Wednesday, the tone was quite different. Papa John’s post-earnings conference call was dominated by negative talk of the NFL. The league’s name came up 44 times during the discussion, compared with 12 mentions in the year-earlier call.”

The NFL fallout affects Papa John’s in terms of less exposure (not as many eyeballs are seeing ads). And a dwindling base translates into fewer orders. One also could assume that some fans are so fed up with the politics of the NFL that they are boycotting the companies associated with it as well. Of course, Papa John’s is free to take sponsorships elsewhere, and it may come to that. But its lackluster sales are yet more proof that the NFL opened a can of worms when it neglected to quickly and effectively diffuse the situation.

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