Papa John’s Takes A Cultural Shot With Shaquille O’Neal

By CultureBanx Team

  • Shaquille O’Neal becomes 1st African American to join Papa John’s Board

  • Papa John’s Q4 same-store sales in North America decreased by 8.1%

Papa John’s (PZZA +1.91%) is going through a major identity crisis and has tapped NBA Hall of Famer Shaquille O’Neal to repair its image. In addition to becoming the pizza chains new frontman, set to appear in TV ads, he also joined the company’s board of directors and will invest in nine of its Atlanta restaurants. Will O’Neal be able to make the public forget about Papa John’s diversity issues and help revive sales?

Photo: Shaquille O’Neal

Photo: Shaquille O’Neal

Why This Matters: The fourth largest pizza chain’s problems all started when its founder John Schnatter got involved in the NFL’s protests against police brutality in November 2017, and then he used a racial slur during a conference call. Schnatter claimed the protests were affecting pizza sales and the company’s shares have been struggling ever since, down nearly 10% in the last year. Bringing on O’Neal, who is a likeable personality and the first African American to join Papa John's board into the fold, may redirect customers attention away from its shortcomings and help sell more pizza.

Bringing on O’Neal, who is a likeable personality and the first African American to join Papa John’s board into the fold, may redirect customers attention away from its shortcomings and help sell more pizza

Papa John’s is really throwing any sauce at the wall to see what culturally sticks and give investors hope especially ahead of the next NFL season. Last month, Schnatter agreed to leave the board, that with the addition of O’Neal now stands at 12 directors.

O’Neal is no stranger to the restaurant game, currently he owns a Krispy Kreme franchise in Atlanta, Big Chicken in Las Vegas and Shaquille’s full service restaurant in Los Angeles. One could argue that his specialty his burgers, since he previously owned 27 Five Guys franchises.

What clearly matters most to the embattled pizza chain are sales more than sentiment. Fourth quarter same-store sales in North America decreased by 8.1%. The company forecasted sales will continue to decline in the region this year, down between 1% and 5%.

What’s Next: O'Neal will secure a $8.25 million bag that’s a mix of cash and stock for his three-year endorsement deal. For the franchises in Atlanta he’ll fork over about $840,000 in financing and own around 30%, while Papa John’s will own the remaining 70%.

CBx Vibe:Notice Me” Migos