Industry News | November 2, 2017 | By Alex Dixon | QSR Exclusive Brief

Papa John’s: NFL Protests to Blame for Weak Sales

Is the NFL to blame for slow sales at Papa John's? Papa John’s
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Papa John’s is blaming the National Football League, particularly the leadership of Commissioner Roger Goodell, for missing sales estimates in its latest quarter.

The pizza brand, which has advertising deals with not only the league but 23 individual teams, is trimming its revenue and profit forecasts for the year amid NFL players kneeling for the national anthem to protest police brutality and racial inequity.

“The NFL has hurt us by not resolving the current debacle to the players’ and owners’ satisfaction,” Papa John’s chairman and CEO John Schnatter said during a conference call. “NFL leadership has hurt Papa John’s shareholders.”

Papa John’s shares fell as much as 13 percent Wednesday, the most in two years according to Bloomberg News, as same-store sales increased 1 percent during its third quarter compared to a 5.5 percent increase during the same time last year.

The company did not specify the direct impact of the NFL controversy on its latest sales, but says it is shifting money away from league marketing. According to Nielsen data, NFL viewership is down about 5 percent from the same point last year. But, this could be a broader trend for broadcast television as a whole as the four major TV networks’ viewership has declined an average of 8 percent during prime time.

Schnatter often appears in advertisements during NFL games, and has credited its close relationship with the NFL and particularly quarterback Peyton Manning for sales boosts in the past. Manning has more than 30 franchises and is a frequent personality in the chain's ads.

"The NFL has been a long and valued partner over the years but we are certainly disappointed that NFL and its leadership did not resolve the ongoing situation to the satisfaction of all parties; this should have been nipped in the bud a year and a half ago," Schnatter said during the call. "Leadership starts at the top, and this is an example of poor leadership."