Papa John’s CEO Schnatter Steps Down Amid Controversy

Papa John’s CEO Schnatter Steps Down Amid Controversy

Papa John’s CEO John Schnatter will step down from his position Jan. 1 next year.

Schnatter built the pizza chain from its humble beginnings to its status as an official sponsor of the NFL. This status led him to his resignation.

In a conference call between executives on Nov. 1, Schnatter made inflammatory comments blaming the NFL for hurting sales. The same day, Papa John’s stock was down 8.5 percent, according to ESPN.

Blame Game Consequences

“The NFL has hurt us,” Schnatter said in the call. “We are disappointed the NFL and its leadership did not resolve this.”

Schnatter “blamed NFL players’ mass move to drop to one knee during the playing of the national anthem as affecting his company’s sales,” according to USA Today.

The company apologized Nov. 14: “The statements made on our earnings call were describing the factors that impact our business and we sincerely apologize to anyone that thought they were divisive,” USA Today reported.

Steve Ritchie, president and chief operating officer, said Papa John’s performance is directly tied to the league’s because the company has been heavily associated as a sponsor for two years.

Papa John’s addressed the problem of NFL affiliation in the face of controversy, in part, by removing the NFL official sponsor shield from the commercials played on NFL television advertising, according to ESPN. The NFL gave the company additional future ad spots.

Schnatter’s resignation could be a solution to the recent unfavorable media coverage in response to his comments– some accusing both the CEO and company of racism after white supremacists suggested making Papa John’s the official pizza of the alt-right.

Papa John’s responded in a statement: We condemn racism in all forms and any and all hate groups that support it. … We do not want these individuals or groups to buy our pizza,” NPR reported.

Context

Schnatter commented within in the context of stakeholders– people affected by the company which is in turn affected by the choices of the NFL. Because the NFL suffered a decline in approval, Papa John’s (among other related parties) was affected.

There are also stakeholders of the NFL that Schnatter didn’t consider in his comments, like the position of the protesters and their cause.

Stakeholder webs are often complicated. No group exists in a vacuum. If the perspective is rivalry, the result will be win-lose at best and lose-lose at worst.

ESPN reached out to other official NFL sponsors to gauge their situation. Three responded with new comments.

Verizon spokesperson Jim Gerace wrote, “our discussions with any partner are between us and while we haven’t done anything different, we don’t discuss future plans. … We are not going to critique their performance in public just as I wouldn’t expect them to critique ours.”

A Hyundai spokesperson said, “Hyundai participated in constant dialogue with the league to discuss all aspects of our partnership, including national anthem protests. We’ve been pleased with the frequency and openness of those conversations.”

A Dannon spokesperson said, “We continue to monitor the situation carefully and have not made changes to our advertising or related plans.”

The three responses show a fair bit of integrity. They were also prepared as careful statements in response to the situation and political climate.

Schnatter will remain a chairman of the board. The chief operating officer Steve Ritchie will replace him.



A happy realist, I like debating and finding new ways to tackle age-old processes. I've learned many things. For one, cheese curls are best eaten with a fork to avoid a cheesy keyboard. In my spare time, I’m perfecting the argument that proper neutrality is not passive.


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