Papa John’s sinks over alleged slur

NEW YORK • Papa John’s International’s outspoken chairman John Schnatter is facing another controversy that is battering the shares of the pizza chain he founded.

Just seven months after exiting the CEO role after making critical comments about the NFL’s national-anthem dispute, Schnatter is under fire following a media report he allegedly used a racial slur and graphic descriptions of violence against minorities on a May conference call with a media agency.

Shares fell Wednesday to the lowest intraday level since February 2016. They closed at US$48.33, down 4.84 per cent.

A media agency working with Papa John’s decided to cut ties after Schnatter’s alleged behaviour on the May call, according to Forbes.

Laundry Service, owned by sports agency owner Casey Wasserman, told staff in a May 31 letter it would be ending its work with an unnamed client due to “the regrettable recent events that several employees of Laundry Service witnessed during interactions with a client’s executive,” according to a copy of the letter.

The agency didn’t name either the client or the executive in the letter.

Papa John’s CEO Steve Ritchie sent an internal memo on Wednesday addressing the event, without mentioning Schnatter by name. “You may have read the media reports today tied to our company culture. We want to make it clear to all of you that racism has no place at Papa John’s,” according to the memo.

Forbes reported the incident took place on a call arranged between Papa John’s executives and Laundry Service as a role-playing exercise for Schnatter to prevent future public-relations missteps.

Schnatter stepped down as CEO in January. The decision followed a November controversy when he said that players’ national-anthem protests hurt the chain’s sales. Papa John’s later apologized for the “divisive” comments.

YOU MAY HAVE READ THE MEDIA REPORTS TODAY ... RACISM HAS NO PLACE AT PAPA JOHN’S. — CEO STEVE RITCHIE