Papa John’s Out as NFL’s Official Pizza Sponsor
The NFL and Papa John’s (PZZA) have agreed to mutually terminate a partnership that made PZZA the league’s Official Pizza Sponsor. Papa John’s CEO Steve Ritchie (replaced founder John Schnatter on Jan. 1) said the company will reallocate marketing dollars towards the league’s star players and its 22 partner teams. The announcement comes less than 6 months after former PZZA CEO John Schnatter criticized the NFL’s handling of player protests; blaming the company’s poor 3rd quarter on the failure of NFL leadership to resolve the controversy. The league expects to have a new Official Pizza Sponsor before the ’18 season kicks off.
Howie Long-Short: The announcement comes along with Papa John’s release of Q4 ’17 financials. Earnings declined 12.5% YOY (to $28.5 million) as North American same-store sales dropped 3.9% YOY; with negative consumer sentiment to blame. The company is projecting 2018 North American comparable sales to be flat to -3%. Following the less than stellar news, PZZA shares declined 7.59% in after-hours trading on Tuesday. The stock is down more than 17% (to $56.36) since Schnatter made his initial comments critical of the league.
Fan Marino: Many believe Jerry Jones, who owns stake in more than 100 Papa John’s stores, was behind Schnatter’s comments critical of Commissioner Goodell. It’s certainly no secret that like Schnatter, Jones believes players should stand for the national anthem. While Jones won’t be pleased about PZZA’s Q4 ‘17 performance, he’s likely far more annoyed with the $2 million the league wants reimbursed for legal expenses; related to his challenges of the proposed contract extension for Commissioner Goodell and the 6-game suspension issued to Ezekiel Elliot. He’s has already requested a meeting with the Commissioner to appeal the penalty.
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