Papa Johns: NFL’s Bad Leadership Is Damaging Our Bottom Line

One major NFL sponsor has started to get crusty about the impact of the national-anthem controversy on their business, delivering a piping-hot shot at the league’s big cheese. John Schnatter, familiar to fans as Peyton Manning’s foil in Papa John’s commercials, blamed disappointing third-quarter results on NFL commissioner Roger Goodell in an investor call. Shares in the pizza maker fell 13 percent at one point today, and Papa ain’t happy:

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 chief executive officer, said on a conference call. “NFL leadership has hurt Papa John’s shareholders.”

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.

Schnatter brought up the NFL as an issue more than the number of pepperoni slices on a large pizza — 44 times, Bloomberg reports. He told investors that the chain will start to move some of its advertising resources away from the league, at least under current leadership, or at least until the fan outrage gets properly addressed. “This should have been nipped in the bud a year and a half ago,” the Papa John’s founder declared — a sentiment echoed by many NFL fans.

Schnatter didn’t get too specific about the overall impact, but ESPN reports that they did reveal that game-day purchases have fallen, and that they expect that to continue. They have responded by backing away from the league already:

Executives said the company has pulled much of its NFL television advertising and that the NFL has responded by giving the company additional future spots. …

In revising sales estimates for the next quarter, Papa John’s president and chief operating officer Steve Ritchie said on the call that the NFL deal was the primary suspect behind the decline and that “we expect it to persist unless a solution is put in place.”

Ritchie said that research has found that Papa John’s has been the most recognized sponsor associated with the NFL for two years running, which he said means the company’s performance can track with that of the league.

 

It’s a direct hit on Goodell and his leadership team, and it comes at a bad time. The owners are working on a five-year contract extension for the commissioner on the basis of his negotiating prowess in TV contracts and collective bargaining agreements. Jerry Jones is spearheading an effort among owners to stop the extension, ESPN reported over the weekend, and not just over the national anthem protests. They’re unhappy about Goodell’s performance on team relocations and domestic-violence incidents, especially the Ray Rice scandal. This might be the cherry on the top of a very unpalatable sundae. “You don’t get to have this many messes over the years like Roger has had and survive it,” ESPN reported one owner as saying on a conference call.

CBS Sports reported that the rebellion may have been misunderstood, even by the owners on the call:

Numerous sources reiterate that Roger Goodell’s new contract is done as a practical matter and that Jerry Jones’ effort to “hijack” the process in a conference call among some owners on Thursday is not feasible. Sources also believe the Ezekiel Elliott suspension is a significant factor in Jones’ ongoing battle with the league office and doubt he he has anything close to 16 other owners in his corner.

Some of the owners participating in the call on Thursday were unaware it was going to be centered on Goodell and many of them support making big changes to the league office. We have reported extensively on concerns about people like Jeff Pash, Troy Vincent, and the overall payroll being spent on Park Ave. — but in no way support an idea of changing commissioners now, especially with a labor negotiation looming in 2021.

“That article leaves the inference that 17 want Roger out but I know most on the call may want some changes at the league staff but NOT Roger,” communicated one ownership source. “Meaning they want Roger to stay but want some guys out and want more talented people brought in” at the league office.

There have been differing accounts of Roger Goodell’s contract extension in the media, but the reality is the language on the commissioner’s extension with the NFL is finalized. “The deal is done,” according to a source with direct knowledge of the situation, and no owner is delaying the matter.

Bloomberg’s Felix Gillette says Goodell may be safer than people think on his five-year contract extension. He’s only answering to the owners, not fans or even sponsors like Papa John’s. As long as he delivers on big network contracts and jollies along the players to avoid a work stoppage, they’re likely to stick with him. But if the ratings continue to drop, well … it might be time to drop back and punt, or to order Little Caesar’s.

Source : https://hotair.com/archives/2017/11/01/papa-johns-nfls-bad-leadership-damaging-bottom-line/

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