Papa John's Stock Soars After Founder Resigns For Using N-Word

Grant SmithJul 14, 2018

Schnatter originally stepped down as Papa John's CEO in December 2017, after claiming that the NFL's handing of player protests contributed to the company's third-quarter earnings slump. The most heavily aired national TV commercial this year, according to iSpot, "It Starts with Our Ingredients", only has a glimpse of Schnatter's image-difficult to spot-on an apron someone wears. He remains on the board and is the largest shareholder.

Forbes reported Wednesday that Schnatter used the racial slur during a conference call designed as a role-playing exercise to prevent public relations disasters.

When the news of the call broke this week, shares in the pizza chain plummeted by 5.9 per cent, wiping $96.2million off its market value, and Schnatter announced he would resign as chairman.

The slur occurred during a media training conference call in May between top staff at Papa John's and a marketing agency called Laundry Service.

"They have to see this as an opportunity, not a challenge", Harvey said.

Keith Hollingsworth, a professor with Morehouse College's business department, said keeping Schnatter in the marketing and advertising would signal to people that the company does not have a problem with his comments, or that it doesn't think they are a big deal.

The school has not looked into new sponsorship deals to rename the stadium, Bendapudi said.

Hollingsworth pointed to Subway's Jared Fogle as another example of a spokesman becoming a liability.

Schnatter owns almost 30 percent of the company's shares, which fell after the report but rebounded when he said he would depart as chairman.

During the call, he reportedly said "Colonel Sanders called blacks n--" and never faced backlash.

The stadium's name will be changed from Papa John's Cardinal Stadium to simply Cardinal Stadium.

"I said it, and it's wrong", he said.

The incident prompted Papa John's marketing firm to break ties with the company, Forbes said. The pizza chain said there are no plans to change its name. Schnatter had stepped down as CEO previous year after criticizing National Football League protests. Oh, no, it was the "derogatory and insensitive comments" - the fact that he said one particular no-no word. Schnatter subsequently issued a statement acknowledging the use of "inappropriate and hurtful" language.

Friedland, who is white, later repeated the word with human resources staff trying to address the original incident, Netflix said.

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