John Schnatter, founder and public face of pizza franchise Papa John’s, resigned from his position as chairman of the company’s board after Forbes reported Wednesday that Schnatter used the N-word in a conference call back in May.
The conference call was between Papa John’s executives and marketing agency Laundry Service, and the purpose of the call was to help Schnatter prevent public relations scandals. In a role-playing exercise, Schnatter was asked by the marketing agency how he would distance himself from racist groups on the internet.
Attempting to downplay comments he had made in November 2017, Schatter said, “Colonel Sanders called blacks niggers,” complaining that Sanders hadn’t faced a similar public backlash. He continued to describe how during his childhood in Indiana, people dragged Black people from the backs of trucks until they died.
Although Schnatter ostensibly intended for his comments to demonstrate his opposition to racism, individuals who were on the call found them to be offensive.
Schatter confirmed the incident Wednesday and apologized for his actions in an email statement.
“News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true,” he said. “Regardless of the context, I apologize. Simply stated, racism has no place in our society.”
Papa John’s stocks took a dive Wednesday, falling as much as 5.9 percent, but rebounded after Schnatter’s resignation as chairman Thursday.
Schnatter’s resignation follows his stepping down as CEO in January, after comments he made in November 2017 about the national anthem protests by NFL players, claiming that they were causing Papa John’s to lose advertising revenue from its deal as the “official pizza of the NFL.”
“You need to look at exactly how the ratings are going backward,” Schnatter had argued. “Last year the ratings for the NFL went backward because of the elections. This year the ratings are going backward because of the controversy.”
After the comments, Papa John’s stock fell 11 percent within hours and had fallen 25 percent in total before Wednesday’s report, causing Schnatter’s net worth to fall by $70 million. The NFL and Papa John’s ended their sponsorship deal in February, in what they described as a mutual decision.
In a letter to the Papa John’s board obtained by the Wall Street Journal, Schnatter said that his resignation had been a mistake. “The board asked me to step down as chairman without apparently doing any investigation,” he wrote. “I agreed, though today I believe it was a mistake to do so. I will not allow either my good name or the good name of the company I founded and love to be unfairly tainted.”
Schnatter claimed in an interview with WLKY Sunday that Laundry Service had coerced him into using the N-word, although Schnatter had been against it, and then had attempted to blackmail Papa John’s. “They tried to extort us and we held firm and they took what I said and ran to Forbes. Forbes printed it and it went viral.”
Papa John’s announced that it would be removing Schnatter’s image from promotional material Friday. In a press release issued Saturday, Papa John’s stated that Schnatter no longer had office space at the company’s headquarters in Louisville, Ky., and that he had been requested to cease media appearances.
Schnatter’s name was stripped from the signpost of a gymnasium in his hometown, Jeffersonville, Ind., last week. The University of Louisville also removed Papa John’s name from its football stadium Friday.