- Papa John’s announced on Tuesday it is ending its NFL sponsorship deal.
- The pizza chain faced backlash after Papa John’s founder blamed the NFL’s “poor leadership” and declining ratings following players’ protests on the chain’s subpar sales in November.
- On Tuesday, Papa John’s reported comparable sales dropped 3.9% in North America in the fourth quarter.
Papa John’s is killing its official NFL sponsorship deal.
“We will shift our marketing from the broader NFL sponsorship” to focus on specific teams and players, Papa John’s CEO Steve Ritchie said in a call with investors on Tuesday.
Papa John’s and the NFL said in a statement that they made a “mutual decision” to end the pizza chain’s official league sponsorship deal. In other words, Papa John’s is no longer the official pizza of the NFL.
On Tuesday, Papa John’s reported that system-wide comparable sales dropped 3.9% in North America in the fourth quarter.
Executives said that “negative consumer sentiment” contributed to the sales slump.
Papa John’s sparked controversy in November when founder and then-CEO John Schnatter slammed NFL leadership over players’ kneeling during the national anthem to protest racial injustice and police brutality.
“We are totally disappointed that the NFL and its leadership did not resolve the ongoing situation to the satisfaction of all parties long ago,” Schnatter said at the time. “This should have been nipped in the bud a year and a half ago.”
The former San Francisco 49ers quarterback Colin Kaepernick started kneeling during the anthem in 2016 to protest racial injustice and police brutality. The controversy over the protests was renewed in September 2017 after President Donald Trump said players who did so should be fired.
Schnatter’s statements dragged Papa John’s into the middle of a polarising debate, inspiring backlash on the left and support on the right. The Daily Stormer, a white-supremacist website, even posted an article asking whether Papa John’s was the “official pizza of the alt-right.” The chain responded that it did not want “hate groups” buying its pizza.
In December, Papa John’s announced that Schnatter was stepping down from his role as CEO.
With the end of the NFL deal, Papa John’s is “redirecting investments” towards new technology, as 60% of the chain’s sales are made through digital channels.
Ritchie also said that the chain has been “perceived to be too expensive” and will double down on value going forward. Papa John’s is additionally planning to expand its menu, according to executives.
Papa John’s is planning on emphasising quality in marketing, with “wholesale changes” to better win over customers, including hiring new PR and advertising firms.
“It is not business as usual at Papa John’s,” Ritchie said.
Business Insider Emails & Alerts
Site highlights each day to your inbox.