What’s the cost, and what’s the result?
Clearly, getting Shaq in tow was an important move for Papa John’s marketing department. And here’s how it’s going to play out, per the Monday filing.
Papa John’s is going to pay him $4.125 million over three years in three payments, the first of which will be for $1,250,000. It will then up to $1,375,000 and $1,500,000 in years two and three, respectively. Shaq is also receiving 87,136 shares of stock that vest between 2020–2022.
Papa John’s was trading for about $51 Monday, which brings the current vale of the shares up to $4.4 million or so. Of course that could change dramatically over time for a variety of reasons.
In total, though, Shaq’s contract is running roughly $8.5 million as it stands today.
The filing revealed some other details as well:
One or more co-branded products will be coming.
Per the agreement, Shaq will make at least eight “service days.” This includes, but is not limited two, production days (up to four, eight hours each) with Papa John’s creative agency.
Shaq will spend, at least, one day engaging with franchisees and employees at company-wide events; one day visiting Papa John’s stores (data and locations to be agreed up); and one day at a community event.
Papa John’s expects Shaq to get social, too. He’s required to post to his Instagram, Twitter, and Facebook page at least once per month promoting Papa John’s products. Papa John’s will create the posts and Shaq’s team will approve.
For the affiliation announcement between Shaq and Papa John’s, Shaq will provide business and consumer PR interviews, including two broadcast TV and three print or online media interviews in New York City; two approved photos for release (one at a Papa John’s restaurant and one making pizza with Ritchie); a social media post; quote for press release; business headshot; and business bio.
Throughout the agreement, Shaq will be made available for 60 total minutes of interview time promoting Papa John’s. He will be trained ahead of time for each talk.
As for the co-branded products, the filing said the parties would “collaborate in good faith” to develop one or more.
Naturally, all of this could evolve over time. And being on the board, as well as an investor, means Shaq is working toward his own interests. Ritchie said Papa John’s saw consumer sentiment improve directly after the initial announcement. Additionally, it was “unanimously supported” by the National Marketing Fund board that’s made up of Papa John’s franchise partners and corporate employees.
Can Shaq’s personality get Papa John’s back on the path to profitability, back to a company that experienced 14 consecutive years of flat to positive sales growth?
Only time will tell, but this appears to be a super-sized start.