The new deal is for more years remaining (four) and for more money than Papa John’s was paying, Sports Business Journal also reported. Pizza Hut’s reach, with 7,200 locations, dwarfs that of Papa John’s.
Pizza Hut’s deal includes collective use of all 32 team marks, although there will continue to be local partnerships between Papa John’s and 22 NFL teams, according to a joint statement by the company and the league.
“While the NFL remains an important channel for us, we have determined that there are better ways to reach and activate this audience,” Papa John’s CEO Steve Ritchie said during a conference call Tuesday to discuss the company’s quarterly earnings.
In addition to a shift toward local partnerships with teams, the company’s statement said it will focus on a “presence in broadcast and digital media and key personalities in the sport.”
Papa John’s became the official pizza of the league in 2010, and until last season that relationship appeared to be a happy one for both sides, with founder John Schnatter and Peyton Manning becoming omnipresent pitchmen during games. But the relationship soured in November, when Schnatter, who has since stepped down as CEO, blamed national anthem demonstrations by NFL players for sagging sales of his product while also pointing to “poor leadership” at the top of the league. The “controversy,” he said, “should have been nipped in the bud a year and a half ago.”
Ritchie, then the company’s president and chief operating officer, added that, as the NFL’s most recognized sponsor, the company’s success was linked to the league’s, and that he expected the sales slump “to persist” until “a solution is put in place” by the NFL for its player demonstrations.
The company’s stock plummeted and Papa John’s apologized less than two weeks after Schnatter’s initial comments, saying they were not intended to be “divisive.” The chain added that, while it believes Americans “should honor the anthem,” it supports “the players’ movement to create a new platform for change.”
Papa John’s also found itself being drawn into the feud between Cowboys owner Jerry Jones feud and NFL Commissioner Roger Goodell and other owners. Jones, who owns 120 Papa John’s franchises, urged that players who did not stand for the anthem should be benched and was supportive of the piemaker.
“John Schnatter is one of the great Americans,” Jones said in November. “He’s the story of America. He started off in his dad’s bar just doing pizza with a little oven or microwave, and he’s built that thing into one of the great businesses.
“Papa John’s was named by all of the people that look at the NFL, Papa John’s was named as the product most associated with the NFL, and it was named that a year ago by a survey of our viewers. So he is quite an American story. He was not cavalier about showing he’s got data. … So when he speaks, I listen.”
Along with outrage and ridicule that Schnatter’s comments brought, Papa John’s found itself being named the official pizza of the alt-right by the Daily Stormer. “We will work with the players and league to find a positive way forward,” Papa John’s tweeted in November. “Open to ideas from all. Except neo-Nazis — [middle-finger emoji] those guys.”
Papa John’s reported during Tuesday’s conference call that North American sales were down 3.9 percent from a year ago. The stock has lost a third of its value since June, according to CNN Money, including a 6 percent drop Tuesday.
Schnatter, who stepped aside from his role leading the company on Jan. 1, had planned to pursue “personal passion for entrepreneurship, leadership development and education,” the company said in December.