MLB Suspends “Papa Slam” Promotion, Stock Spikes +11% Following Papa John’s Resignation
Less than 24 hours after Papa John’s Founder John Schnatter admitted to using a racial epithet (and spewing other offensive comments) during a corporate training exercise, Major League Baseball announced it had indefinitely suspended its league-wide “Papa Slam” promotion with Papa John’s Pizza (PZZA). The suspension will not impact individual team promotions with the national pizza chain, though some (see: Marlins, Royals) have moved to follow the league’s decision. The “Papa Slam” promotion entitles baseball fans to 40% off their next order at Papa John’s for each grand slam (aka Papa Slam) hit; Greg Byrd’s grand slam on Wednesday evening was not acknowledged by MLB as a “Papa Slam”. Schnatter has since stepped down from his role as Chairman, he’s also resigned his seat on the Board of Trustees at the University of Louisville.
Howie Long-Short: This isn’t the first time Schnatter has made headlines for the wrong reasons. He stepped down from his role as CEO last fall after blaming lagging sales on declining NFL viewership and the league’s handling of player protests. PZZA shareholders are clearly relieved he’s no longer running the company because aside from being a liability, North American same store sales (-5.3% YoY) and revenue (-4.9%) declined for the 2nd consecutive quarter in Q1 ‘18. Shares soared +11% on news of his resignation Thursday, closing at $53.67. Even with Thursday’s spike, the stock price is down is down 28% over the last 12 months; Pizza Hut shares are up 31% over the same period. That’s because despite PZZA’s tumultuous year, pizza remains a “strong growth category within the food and beverage industry.”
Fan Marino: Did you know? According to FranchiseOpportunities.com, Papa John’s has the 2nd most locations (14) amongst food chains in U.S. pro sports venues; Dippin Dots has 21 locations. 4 of the 14 venues are NFL stadiums.
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