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John Schnatter, founder and chief executive of Papa John's Pizza
Reuters/Danny Moloshok
Papa John’s founder John Schnatter didn’t deliver on this one.
STAND AND DELIVER

Papa John’s is being hurt by a leadership failure, but it’s not the NFL’s fumble

By Heather Landy

From our Obsession

Modern Leadership

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If you want a pizza delivered to your home, you might want to look to Papa John’s. If you want a good model for leadership, you’ll probably want to look elsewhere.

Papa John’s founder and CEO John Schnatter made several major missteps when he bashed the NFL and league commissioner Roger Goodell. The occasion? The pizza-delivery company’s third-quarter conference call with analysts and investors. The prompt for the criticism: constraint on pizza demand that held the company’s sales growth to 1% at North American locations open at least a year, versus the 1.4% expected by Wall Street.

Whatever the reasons for it, the punishment was swift—Papa John’s shares fell 8.5% yesterday (Nov. 1), closing at $62.26. The stock is gaining back some of that ground today—the impact to Schnatter’s image as a leader may be longer lasting. Here’s where he went wrong:

He passed the buck

It indeed may be the case that declining NFL viewership is constraining Papa John’s business. When fewer people are glued to the television watching the game, pizza-delivery might take a hit; Schnatter wasn’t crazy to point out these dynamics. But instead of highlighting what, if anything, his team is doing to respond, he focused on pinning blame elsewhere.

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

He got political

The “debacle” to which he refers is the same one Donald Trump has been fixated on in recent weeks: the spread of Colin Kaepernick-style demonstrations during the playing of the national anthem at football games. Goodell, against

the president’s advice

, has thus far declined to force owners to ban the practice of taking a knee in protest. And like the president, Schnatter is getting impatient.

“The NFL has been a long and valued partner over the years, but we are certainly disappointed that the NFL and its leadership did not resolve the ongoing situation to the satisfaction of all parties long ago. This should have been nipped in the bud a year and a half ago,” he said.

Schnatter, who supported Republican presidential candidate Mitt Romney in 2012 and donated $1,000 to Trump in 2016, didn’t directly bring up politics on the call. Still, in offering his opinion that the NFL needs to show clearer leadership on the issue, he waded deep into a discussion about a known political firestorm.

He got personal

“Leadership starts at the top, and this is an example of poor leadership,” Schnatter said in a barely veiled reference to the embattled Goodell.

Now, as questions begin swirling about whether the NFL-induced slump is something Papa John’s can pull out of, whether it even really exists, and whether Dallas Cowboys owner Jerry Jones was somehow behind what Schnatter unleashed, the idea that leadership starts at the top is a sound reminder indeed.