Papa John’s financial struggles started well before the NFL protests

This inflatable slice of Papa John's "pizza" probably tastes as good as the real thing. (Credit: AP Images)

On Wednesday, bad pizza purveyor John Schnatter, CEO of Papa John’s, spent an inordinate amount of time on a corporate earnings conference call criticizing the NFL for allowing athletes to continue their civil rights protests during the playing of the national anthem. According to Schnatter, the protests are responsible for the league’s declining ratings, which are in turn weighing down Papa John’s sales numbers. The company has been one of the NFL’s biggest sponsors for much of the last decade.

Almost immediately, the public called bullshit. For one, there is no evidence that the civil rights protests have had a meaningful impact on the NFL’s ratings. It’s true that fewer people are tuning into games, but that can be almost entirely explained by more and more Americans getting rid of expensive television packages. The ratings decline by the NFL is actually far less severe than the overall ratings collapse happening across television, and other live sports like NASCAR — which has one of the most conservative audiences of all the major professional U.S. sports leagues — have suffered declines twice as large, with no anthem protests to blame.

So fine, let’s give Schnatter the benefit of the doubt and assume he was just ignorant about the reasons for the NFL’s decline. What about his own company’s financial performance? As analysts have rightly pointed out, it makes sense for a company so closely tied to the NFL to see their financial needle move in tune with the league’s performance: fewer people watching games on television means fewer people seeing Papa John’s ads, which means fewer people buying Papa John’s “pizza.”

But the company’s downturn predates this NFL season. Its most recent earnings report reflects the previous three months of business, up until September 24. The NFL season didn’t kick off until September 7, and the wider protests (which were first started in 2016 by then-49ers quarterback Colin Kaepernick) only gained greater visibility when Donald Trump began criticizing them — via Twitter and elsewhere — on September 23.

What’s more, the most recent quarter was not the first time Papa John’s missed its revenue targets. Numbers also fell short of analysts’ expectations in the second quarter of 2017, and the company’s stock price has steadily declined since the beginning of the year, dropping nearly 30 percent on the year to date.

Perhaps that’s why Papa John’s appears to be alone so far in blaming the NFL for its financial difficulties. On Thursday, Pizza Hut responded by pointing to its own numbers that show the company outperforming expectations in the most recent quarter. It too advertises with the NFL.

“We’re not seeing any impact from any of that on our business,” said a company spokesman when asked about the anthem protests during their earnings call on Thursday.

Frozen pizza company DiGiorno couldn’t help but take some potshots at Papa John’s either, casting righteous shade on Twitter Thursday morning.