Saturday, November 4, 2017

Tails you lose

Papa John is blaming $70 million in third quarter losses on the NFL.  He claims the anthem protests have cut into his business, and is now re-evaluating his sponsorship.  This isn't the first time Papa John has used controversial issues to explain quarterly losses.   However, his arguments are usually pretty thin, as Pizza Hut pointed out.

Pizza has become the latest thing to be politicized in the Age of Trump, as Schnatter tries to once again leverage his business capital on a highly divisive issue.  I suppose he thinks he can court more customers from right wing conservatives.  However, this publicity stunt may cost him left wing liberals.  Little Caesars is being pitched as the liberal alternative to Papa Johns, when it was discovered that its owner, Mitch Ilitch, had been quietly paying Rosa Parks rent and supporting a number of other liberal causes all these years.

Pizza is a staple of football games whether fresh or frozen.  DiGiornio has similarly said it has seen no fall off in sales during the protests.  Papa John was quick to retort that frozen pizzas aren't in the same league with his pizza, but that's a pretty flat argument given that Schnatter's pizzas aren't exactly top of the line.  If you want a good pizza you go with your local pizzeria, not some chain pizza.  This is simply about sating hunger during the game.

Most likely, Papa Johns is looking for any leverage to renegotiate its NFL sponsorship to help offset its slumping sales.  Schnatter is worth a reported $880 million.  Maybe if the board cut CEO pay and perks it could balance the ledger sheet?

It is doubtful the NFL will give into Schnatter.  So far, it has seen little reaction from corporate sponsors to the anthem protests.  Now that Trump has tired of his twitter attacks, the NFL appears to have weathered the storm and will ride out the year having suffered little damage.  Their biggest worry at the moment is settling a grievance suit by Colin Kaepernick, as it looks more and more like the owners colluded to freeze him out of the league.

With so many quarterback injuries in the NFL, you would think teams would be interested in Kaepernick.   The latest injury was the highly talented rookie Deshaun Watson, who put on quite a show in Seattle last weekend, only to tear his ACL in practice during the week.  No chance Houston Texans owner will take on Kaepernick, as he was more than willing to unload the vocal Duane Brown to the Seahawks for future draft picks, rather than put up with an unruly all-pro lineman on his team.

I think the protests could be settled quite easily if a) the NFL allowed Kaepernick back into the league and b) addressed the issues the players are raising with their anthem protests in a meaningful way.  As it stands now, the NFL is headed toward a players strike if it doesn't make more of an effort to accommodate the players' concerns.  Then it will really be bad for business all the way around, not just Papa John.

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