Being the literal face of a company can be tough on a CEO. You have to take the heat -- and when a quarter flops, investors want an explanation. However, John Schnatter, founder and CEO of Papa John's Pizza, made a big blunder during an earnings call this week and the criticism has been hotter than a pie coming out of an oven.
CEOs like Schnatter can become lightning rods when they discuss controversial topics, like healthcare for workers. Even when things go wrong that aren't his fault, like when some delivery drivers butt-dialed a customer and left a racist voicemail, it's still Schnatter's job to calm the waters. However, the problem this time is even stickier. The chain is the official pizza sponsor of the National Football League and Schnatter essentially blamed the NFL for a lackluster quarter.
North American same-store sales were up only 1 percent, not the 1.4 percent that analysts expected.
During the earnings call that took place on Wednesday morning, Schnatter pointed a finger directly at the NFL, as Yahoo Sports, among others, reported:
"The NFL has hurt us by not resolving the current [protest] debacle to the players' and owners' satisfaction," said John Schnatter, the Papa John's CEO who famously appears on the company's litany of game-day advertisements. "NFL leadership has hurt Papa John's shareholders. ... Leadership starts at the top, and this is an example of poor leadership."
For the NFL, this is a big deal, of course. Papa John's is a large sponsor, which is another word for customer. He also has enough public recognition that the message could get picked up by many in the public, and there are already a lot of people mad at the NFL over players taking a knee.
However, put that to the side for a moment. There's an irony here. On one hand, Schnatter is complaining about the NFL's leadership. But how about leadership at Papa John's? It's one thing to explain the circumstances that causes given results. Blame is something else and hardly a characteristic you'd associate with good leadership.
When you're a leader, you plan in advance. So, when Schnatter says, "This should have been nipped in the bud a year and a half ago," what has Papa John's been doing during all that time? Did Schnatter and his chief marketing officer notice? Were there really no alternative plans? Does this mean that without the NFL, the chain cannot be successful?
Sometimes you have to take responsibility not for what something or someone else did, but for a failure to notice what a long-term situation and find another solution.