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NFL Protests 2017: Is Pizza Hut Losing Money From The Controversies?

05 November 2017

Pizza Hut's remarks come after Papa John's has stated that the protests have "hurt" their sales and have forced the company to rethink their advertisements.

Papa John's Chief Executive Officer John Schnatter railed against the National Football League earlier this week, criticizing its leadership for mishandling the recent controversy.

"The NFL has hurt us, more importantly, by not resolving the current debacle to the players' and owners' satisfaction", John Schnatter, Papa John's founder and CEO, said in a press call Wednesday.

DiGiorno Pizza took a direct shot at Papa John's, tweeting: "Better Pizza".

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Schnatter, whose pizza chain is located in Louisville, claims the NFL's "take a knee" controversy cost his chain $70 million.

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".

Former quarterback with the San Francisco 49ers Colin Kaepernick beginning knelling during the playing of the national anthem last season to protest police brutality and racial injustice.

"This should have been nipped in the bud a year and a half ago", Schnatter added of the protests. The first to seize on the comments were competitors Yum Brand's Pizza Hut unit and Dominoes.

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Commissioner Roger Goodell and several owners said at the league's fall meetings last month that they did not discuss altering the anthem policy language from "should stand" to "must stand".

McDonald's Corp., for example, expects to expand delivery of its burgers, nuggets and fries from 5,000 of its almost 14,000 USA locations by the end of the year. For Pizza Hut, however, they don't appear to have been any problem at all. Brands, the umbrella corporation for Pizza Hut, as well as chains such as Taco Bell and KFC. During the same period in the previous year, the company earned $0.57 EPS. Regarding the protests, he said Thursday (via CNBC), "We're not seeing any impact from any of that on our business". Zacks Investment Research upgraded Papa John's worldwide from a hold rating to a buy rating and set a $88.00 price target on the stock in a research note on Friday, August 18th.

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.

"We have to evaluate our reliance on partnerships that are TV-focused, like the NFL", Papa John's Chief Marketing Officer Brandon Rhoten told the Wall Street Journal.

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NFL Protests 2017: Is Pizza Hut Losing Money From The Controversies?