Papa John's critical of National Football League leadership, pulls some advertising

Cris Carter

Papa John's, the official pizza company of the NFL, has a deal with the league and with 23 teams.

Despite beating Wall Street expectations overall, C-suite executives at Papa John's, including founder John Schnatter, stated that the recent National Football League controversy and declining National Football League ratings forced sales at company-owned stores in the United States to decline.

Much of the anthem demonstrations, which Colin Kaepernick started a year ago as a protest against racial injustice and police brutality, had dwindled earlier this season.

In North America, same-store sales grew 1 percent, falling short of analyst expectations of a 1.4 percent rise, according to Street Account.

"The NFL has hurt us", CEO John Schnatter said in a conference call, according to ESPN.

Papa John's executives said the company is investing in improved technology, store redesigns and a third-party consultant that will make recommendations to improve efficiency. But the country already was polarized; the anthem controversy simply allowed that polarity to invade pro football, via politicians chose to intrude on sports. "The controversy is polarizing the customer, the controversy is polarizing the country", Schnatter said. Numerous president's supporters agreed, canceling NFL TV bundles and burning merchandise.

The company, which reportedly has nixed a bulk of its TV advertising with the NFL, expects declining sales to continue next quarter, and believes its deal with the league is the main reason why. Executives blamed last year's ratings drop - and corresponding Papa John's sales declines - on the election, saying that the company had expected an increase in ratings going into the 2017 season.

"Like Subway in recent years, Papa John's has invested in athletes to market their products", Darren Tristano, a foodservice trend expert, told CNBC via email.

Papa John's stock price has fallen 5 percent since August.



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