What's going on with Papa John Schnatter? On Tuesday, August 26th, the embattled pizza man unloaded another $30 million in shares. It wasn't all that long ago that Schnatter was excited about the idea of getting a hedge fund to invest in the fast food pizza chain he founded. He was still trying to get past that nasty scandal where he dropped the "n" word during a conference call. As recently as February, Schnatter was still considering returning to the CEO office of the company he founded. But something happened.
Since May, Schnatter has been selling off his stake in the company. On May 21, he sold 3.5 million shares to UBS for $157.5 million. This week, he sold off 250,000 shares over two days. He currently owns about 5.25 million shares — roughly half of the total he owned in May. This latest selling off of shares is a year after the news broke about his use of a racial slur. The resulting scandal saw him resign as CEO and step down from his role as chairman. In March he left the board of directors.
It all started to go bad for Schnatter back in November 2017 when he stepped down as CEO after a string of public relations messes and falling sales. Schnatter wasn't shy about his opinion of NFL players who took a knee during the National Anthem. In fact, on a recent investor call he blamed the controversy for the chain's slumping sales.
Schnatter's comments were criticized by people who argue the players are exercising free speech. Late night TV hosts mocked Schnatter. And then, to make matters worse, the white supremacist website, Daily Stormer, declared Papa John's Pizza the official pizza of the alt-right. That move forced the company to issue a statement saying they condemned racism in all forms.
Things got worse for Schnatter in July 2018. He resigned as chairman of the board, when a scandal broke out over his use of a racial slur when trying to minimize the controversy over his NFL national anthem comments by alleging that Colonel Harland Sanders had used the slur and it had not affected his popularity. During the call, which was a role-playing exercise to help train Schnatter to avoid saying things that could cause public controversy and damage the company's reputation, he said that people in Indiana where he was from, used to drag African Americans from trucks until they died. Needless to say, the marketing agency handling the call with him found that incredibly offensive.
Schnatter famously built Papa John's from the ground up. He graduated from Ball State University in 1983 and went to work at his father's tavern, which was on the verge of bankruptcy. Schnatter sold his car to pay off the tavern's debts and to buy pizza equipment, which he put in the bar's broom closet. Schnatter's pizzas became famous locally, saved the tavern, and led to him opening the first Papa John's in Jeffersonville, Indiana in 1985. By 1991, his company had 100 locations. Today, Papa John's has more than 5,300 pizza places in 45 countries.