On the Margin
Papa John’s Ildar Sagdejev

Papa John’s sales sacked by NFL ratings plunge

Blog: Published reports list the pizza chain among NFL sponsors complaining to the league about viewership decline

This post is part of the On the Margin blog.

NFL ratings are down this season. That’s bad news for the league’s sponsors — including Papa John’s International Inc.

These companies are apparently not taking the slide sitting down. The Louisville-based pizza delivery chain was among a number of NFL sponsors to complain to the league about the state of viewership, according to the New York Business Journal.

According to the publication, Papa John’s told the league that pizza sales during NFL games have fallen since Sept. 22. That’s when President Donald Trump criticized players kneeling during the national anthem as a form of protest.

Likewise, ESPN reported today that “nearly all of the league’s longtime sponsors,” including Papa John’s, were “rattled.” 

The company did not respond to a request for comment. But news that NFL ratings would hurt Papa John’s would hardly be surprising.

Indeed, NFL ratings have fallen 5.1 percent through the first seven weeks of the season, according to Sporting News. Ratings fell last year, too. For whatever reason, be it protests or Netflix or too many games, viewers are tuning football out. 

Same-store sales at Buffalo Wild Wings Inc. have seemingly taken a corresponding hit. 

The Minneapolis-based chicken wing chain has long advertised to sports fans, football in particular — to the point that chicken wing prices increase every year during football season. 

Buffalo Wild Wings

Its same-store sales in the quarter ended Sept. 24 declined 2.3 percent at company locations and 3.2 percent at franchised outlets. 

Papa John’s same-store sales increased 3.8 percent in the fourth quarter a year ago, when the company said television ratings for football games declined 8 percent. But executives said at the time that they felt that ratings decline.

“Given the fact that we have a significant investment into the NFL, an 8 percent rating does play a small factor in some of our performance,” company President Steve Ritchie said in February.

So many elements are potentially playing a role in weak industry sales it’s difficult to keep track of all of them. But the NFL problem is specific to the few chains that have chosen to use football as part of their marketing strategy.

Some analysts, including Instinet Analyst Mark Kalinowski and BTIG Analyst Peter Saleh, have already reduced their sales targets for Papa John’s as a result of the ratings weakness. 

As it is, both Papa John’s and Buffalo Wild Wings in recent years have expanded their marketing efforts to other sports. Papa John’s, for instance, has a deal with Major League Baseball.

Buffalo Wild Wings is going even further, expanding into brand new sports. The company has been a pioneering sponsor of esports, or professional gaming. Earlier this month, the company announced the first partnership with an esports team, Team Dignitas. 

Jonathan Maze, Nation’s Restaurant News senior financial editor, does not directly own stock or interest in a restaurant company.

Contact Jonathan Maze at [email protected]

Follow him on Twitter at @jonathanmaze

TAGS: Finance
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