Papa John’s Schnatter Whines: Agency ‘Pushed’ Him to Utter Offensive Remark

July 14, 2018 by Paul Ausick

While Papa John’s International Inc. (NASDAQ: PZZA) tries to distance itself from its founder’s latest misstep, former CEO and now-former chairman John Schnatter shows that he doesn’t plan to go silently.

In an interview with Louisville, Kentucky, radio station WHAS, Schnatter claims he was goaded into using the N-word during a conference call with the restaurant chain’s media agency.

According to a report in the New York Post, Schnatter told the show’s host, Terry Meiners:

The agency was promoting that vocabulary … They pushed me. And it upset me. … It’s caused a lot of grief for my community, for my university. My employees are distraught, they’re crushed, and it’s all because I was sloppy and I wasn’t as sensitive. It’s the same mistake I made on the NFL comments.

In addition to costing him his job as executive chairman of the company, Schnatter has cost the company its promotional deal with Major League Baseball and local sponsorships with at least a dozen MLB teams. His alma mater, the University of Louisville, said it would remove his name from the school’s football stadium and rename the John H. Schnatter Center for Free Enterprise at its business college. The company already has begun removing Schnatter’s image from all its logos, TV ads and other materials. Papa John’s has more than 5,200 global locations.

Marketing experts agree that the company is doing the right thing by putting distance between itself and Schnatter, they may have given him one too many chances. His comments in December related to NFL players who kneel during the playing of the national anthem led to his resignation as Papa John’s CEO.

That incident should have indicated to the firm’s board of directors that it’s only choice was to cut ties with Schnatter immediately. Instead, the board allowed him to stay on as chairman, a decision for which the board, and especially lead independent director Olivia F. Kirtley, have so far failed to take responsibility for.

The company clearly hopes that the incidents will fade away as quickly as possible, and there is plenty of reason for Papa John’s to expect that it will. Marketing consultant Eric Schiffer told the Post, “No one is going to care about this in a month.” Is he right? Does anyone still care about Starbucks?

Papa John’s stock closed Friday at $53.55, down 0.2% for the day after posting a solid gain Thursday following Schnatter’s departure as chairman. The stock’s 52-week range is $47.80 to $81.09.

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