MORNING, BIG TWO HOURS AND OUR
TOP STORY THIS HOUR, THE STATE
OF PAPA JOHNS, PIZZA GIANT GOING
THROUGH LEADERSHIP CHANGES AS
COMPANY'S FOUNDER STEPPED DOWN
AS CEO 2 YEARS AGO, JOINING US
PAPA JOHNS FOUNDER JOHN
SCHNATTER, THANK YOU VERY MUCH
VERY JOINING US.
YOU WERE FORCED TO STEP DOWN,
THE COMPANY THAT YOU BUILT AND
THAT YOU FOUNDED, TELL US FIRST
WHAT HAPPENED?
>> I WAS NOT FORCE TODAY STEP
DOWN, WE HAD A SUCCESSIVE PLAN
IN PLACE AND I WAS READY TO
RETIRE, WE HAD A FANTASTIC
9-YEAR RUN, WE TOOK STOCK 640 A
SHARE TO 80 BUCKS, SO GOOD RUN,
GOOD TIME, WE WERE READY TO GO.
MARIA: IN OTHER WORDS, WHAT
YOU'RE SAYING YOU ENRICHED A LOT
OF PEOPLE BY CREATING THIS
BUSINESS, MAKING A PROFITABLE
BUSINESS AND THEN MAKING THE
STOCK GO UP, CAUSING A VERY GOOD
SITUATION FOR A LOT OF PEOPLE
INVOLVED.
YOU WERE READY TO RETIRE BUT YOU
HAD A PROBLEM OBVIOUSLY AND YOU
WERE ON A CONFERENCE CALL AND
RACIAL SLUR WAS USED, CAN YOU
TELL US WHAT WAS BEHIND OF ALL
OF THAT?
>> IF YOU LOOK AT CHRONOLOGICAL
EVENTS, THERE WAS NOTHING RACIAL
ABOUT THAT.
THEY TURNED INTO KNEELING BUT
NOTHING SAID ABOUT KNEELING, THE
CALL YOU'RE REFERRING TO WAS
JULY -- MAY 22ND THAT AIRED JULY
THE 12TH, YES.
MARIA: OKAY, LET'S GO BACK TO
NFL CALL, TELL ME ABOUT THE NFL
AND YOUR RELATIONSHIP WITH THE
NFL AND COMMISSIONER ROGER
GOODELL.
>> RIGHT, VERY GOOD, PAPA JOHNS
WAS THE MOST ASSOCIATED BRAND
WITH THE NFL, MOST RECOGNIZABLE
BRAND WITH THE NFL, ABOUT A
THIRD OF OUR BUDGET WAS SPENT ON
THE NFL AND THEY WERE HAVING
ISSUE WITH KNEELING AND I KIND
OF GOT ON GOODELL HERE TO FIX
THE PROBLEM HERE, LET'S SATISFY
THE PLAYERS AND THE OWNERS BUT
THERE WAS NOTHING IN THERE ABOUT
THE PLAYERS KNEELING OR ANYTHING
THAT WAS ANY WAY RACIAL.
MARIA: SO WHAT WAS MOST
UPSETTING ABOUT THAT CALL?
>> THE WAY IT WAS MISCONSTRUED,
THE COMMENTS WERE BENIGN AND THE
WAY IT WAS TWISTED AND THE
COMPANY'S LACK OF EFFORT TO
CORRECT THE RECORD, THAT WAS
PROBABLY THE MOST FRUSTRATING
THING.
MARIA: YOU'RE SAYING YOU WOULD
HAVE LIKED ROGER GOODELL TO COME
TO YOUR DEFENSE.
>> I HAVE LIKED ROGER GOODELL TO
FIX THE PROBLEM, REMEMBER, THIRD
OF THE BUDGET WAS THE NFL, SO
WHEN THE RATINGS WENT DOWN FROM
20%, SO IT WAS HURTING OUR
BUSINESS, IT WAS HURTING OUR
FRANCHISEES, IT WAS HURTING OUR
SMALL BUSINESS OWNERS.
MARIA: DO YOU THINK HE WAS
BEHIND FORCING YOU TO GIVE UP
THE CHAIRMAN'S TITLE?
>> I DON'T KNOW IF HE WAS BEHIND
IT, I THINK HE WAS A LITTLE BIT
FRUSTRATED WITH MY COMMENTS,
HE'S NOT USED TO BEING
CHALLENGED AND THE NFL IS VERY
POWERFUL AND I WAS STERN, WE
NEED TO FIX THE PROBLEM, YOU'RE
THE LEADER, BE ACCOUNTABLE.
MARIA: THEN WHAT HAPPENED?
>> I RETIRED END OF '17 AND WE
-- WE STARTED TO DETERIORATE A
LITTLE BIT WITH THE PERFORMANCE
AND THEN AS I WAS COMING BACK IN
THE PICTURE WE HAD A DIVERSITY
TRAINING SESSION IN NEW YORK
WITH SERVICE AND FALLING SHORT
OF IT IS THEY PAID, WHICH IS
FINE, I WISH THEY WOULD HAVE
TOLD ME WHO WAS ON THE CALL AND
THEY WERE TAPING IT.
THAT GOT TWISTED.
MARIA: ON THAT CALL YOU WERE
TALKING ABOUT SOMEBODY ELSE AND
YOU MADE A COMMENT THAT WAS A
RACIAL SLUR?
>> NO, THERE WAS NEVER BEEN ANY
RACIAL SLURS, THERE'S NEVER BEEN
ANY USE OF THE WORD, THAT'S
PROBABLY WHAT'S MOST FRUSTRATED,
THAT'S NOT TRUE AT ALL.
WHAT THE CALL WAS 52 MINUTES AND
TOTALLY ANTIRACIST,I SIMPLY
STATED WHAT ANOTHER FOUNDER SAID
AND THE WAY HE WENT ABOUT USING
THE WORD, COLONEL SANDERS CALLS
PEOPLE THE N WORD, I WOULD NEVER
CALL A BLACK PERSON THE N WORD.
MARIA: YOU WERE SAYING WHAT
COLONEL SANDERS SAID?
>> YES, PARAPHRASING.
>> COLONEL SANDERS FAMILY CAME
OUT AND SAID HE'S A LIAR,
COLONEL SANDERS WOULD NEVER
SPEAK LIKE THAT, HE NEVER SAID
THAT, I DON'T KNOW WHAT JOHN
SCHNATTER WAS TALKING ABOUT?
>> I HAVEN'T HEARD THAT.
MARIA: FAMILY CAME OUT AND SAID
IT'S NOT TRUE.
>> THAT COLONEL SANDERS DID NOT
USE THAT LANGUAGE?
>> COLONEL SANDERS --
[LAUGHTER]
MARIA: I'M JUST SAYING BUT YOU
REPEATED SOMETHING THAT YOU SAY
COLONEL SANDERS SAID?
>> IT WAS COMMON KNOWLEDGE THAT
COLONEL SANDERS TALKED ABOUT BUT
LET'S NOT TALK ABOUT THE
COLONEL.
MARIA: OKAY, LET ME ASK YOU
THIS, CAN YOU GIVE US THE SENSE
OF THE CULTURE AS YOU KNOW IT AT
PAPA JOHNS AT THAT TIME, WAS IT
COMMON PLACE FOR PEOPLE TO THROW
AROUND WORDS LIKE THAT, DID YOU
FEEL THAT IT WAS NO BIG DEAL
THAT YOU WERE REPEATING
SOMETHING THAT SOMEBODY ELSE
SAID, TELL ME ABOUT THE CULTURE
AND WHETHER OR NOT THESE KINDS
-- THIS KIND OF LANGUAGE WAS
ACCEPTABLE AT THE TIME?
>> OH, PAPA JOHNS WAS VOTED THE
BEST PLACE TO WORK 5 YEARS IN A
ROW, I WOULD NOT TOLERATE THAT
FOR ONE SECOND.
THE BOARD MEMBERS THAT HAD BEEN
ON THE BOARD FOR AVERAGE OF 10
YEARS, 20, 25 YEARS, NO WAY THAT
CONDUCT WOULD HAVE BEEN
PERMISSIBLE, NO WAY.
WHATMARIA: WHAT HAPPENED AFTER T
WHATMARIA: WHAT HAPPENED AFTER E
CALL AFTER YOU REPEATED
SOMETHING YOU KNEW AND REFERRING
TO HIM WHEN YOU SAID THE WORD?
>> FIRST THING I FOUND OUT THAT
THEY TAPED IT AND THEN SERVICE
WAS LET GO AND THEY ATTEMPTED TO
EXTORT MONEY, OTHERWISE THEY
WERE GOING TO HURT THE COMPANY
AND HURT ME.
MARIA: IN WHAT WAY?
>> THE OWNER WHO OWNS SERVICE,
BASICALLY SAID IF YOU DON'T PAY
ME MILLIONS OF DOLLARS I WILL
BURY THE FOUNDER AND THAT'S WHEN
I SAID, OH, MY GOSH, WE HAVE A
PROBLEM.
MARIA: THEN WHAT HAPPENED, WHEN
DID YOU FIRST REALIZE THIS WAS
GOING VIRAL, THIS WAS GOING TO
BE A PUBLIC SITUATION?
>> THE REPORTER AT FORBES, HE
WROTE ARTICLE ON THE 11TH THAT
WENT VIRAL ON JULY THE 12TH.
MARIA: YEAH, THE INSIDE STORY OF
PAPA JOHN'S TOXIC CULTURE, THE
FORBES STORY WAS THAT A SECOND
STORY?
>> FIRST -- SECOND STORY?
>> I BELIEVE LAUNDRY SERVICE OR
SOMEBODY ELSE MISCOMMUNICATED OR
MISCHARACTERIZED WHAT WAS ON THE
TAPE.
MARIA: WHAT DO YOU WANT PEOPLE
TO KNOW ABOUT YOU KNOWING THAT
THEY HAVE THE STORY, THAT YOU
USED THIS WORD, THIS LANGUAGE
EVEN IF YOU WERE TALKING ABOUT
SOMEONE ELSE SAYING IT, WHAT DO
YOU WANT THE PUBLIC TO
UNDERSTAND ABOUT YOU?
>> WELL, TO PUT IT IN CONTEXT
THE MOST UNFATHOMABLE,
UNBELIEVABLE THING ABOUT THIS
WHOLE SITUATION IS THAT THE OLD
BOARD AND THE OLD EXECUTIVE TEAM
UNDER RICHIE USED THE BLACK
COMMUNITY IN THE MEDIA, STEAL
THE COMPANY, THE STORY OF THE
COMPANY, HURT THE COMPANY VERY
BADLY.
MARIA: IN WHAT WAY, HOW?
>> WELL, STOCK WAS 88, DOWN TO
40.
MARIA: VERY QUICKLY.
>> 88 AND 16, 40 AS OF 2 MONTHS
AGO, IT'S UP TO 50, SO JEFF
SMITH AND NEW BOARD HAVE GOT THE
STOCK UP, WALL STREET IS FINE,
40 BUCKS, 50 BUCKS, GOOD
MOMENTUM BUT WHAT CONCERNS ME IS
MAIN STREET, HOW BUSINESS IS NOT
HEALTHY RIGHT NOW THAT NEEDS TO
BE RECTIFIED RATHER QUICKLY.
MARIA: I I WANT TO TALK TO YOU
ABOUT THAT AND TRY TO FIX THE
SITUATION, YOUR LIFE WAS
COMPLETELY CHANGED, YOUR MADE
THIS REMARK ON A PHONE CALL,
YOUR LIFE CHANGES, CORRECT?
>> NO.
MY LIFE --
MARIA: THERE'S SO MANY STORIES
ABOUT YOU AND THIS PHONE CALL,
THAT'S WHAT I'M SAYING, I'M
SAYING THE PERCEPTION, WHAT
PEOPLE WERE TALKING ABOUT WHAT'S
IMPORTANT TO THEM.
>> WELL, I DON'T LIKE ANY OF
THIS AND IT'S NOT TRUE, IT'S A
FARCE, BUT IN THE 14 MONTHS THIS
HAS BEEN GOING ON I'VE NEVER HAD
A NEGATIVE COMMENT IN PUBLIC,
NOW WHAT I'M WORRIED ABOUT IS MY
EMPLOYEES AND MY FRANCHISEES,
THE SMALL BUSINESS OWNERS THAT
WAKE UP EVERY DAY AND MAKE PAPA
JOHNS GREAT, THOSE ARE THE
PEOPLE THAT KEEP ME UP AT NIGHT