Papa John’s Pizza founder and CEO John Schnatter was forced out of his own company back in 2018 after he reportedly used the N-word on a phone call. Yet in the past few weeks, Schnatter has released the transcript of the phone call in question, and that transcript reveals the true story — it appears Schnatter was set up and the alleged “offense” wasn’t an offense at all. The Papa John’s founder suffered a heinous defamation of character.
Schnatter has sued Laundry Service, the company he hired to help bolster his public image, for many breaches of contract. His lawsuit claims that the company blackmailed him and orchestrated his destruction.
The racism accusations against Schnatter had always been politically motivated and overblown, but the transcript reveals just how duplicitous Laundry Service was and just how deceptive was the story that tanked Schnatter’s career.
Recommended: The Lie That Destroyed Papa John’s Pizza
Schnatter built Papa John’s from nothing. At age 22, his father, Robert Schnatter, invested in a failing bar and John Schnatter — who had worked in pizza joints through high school and college — set up some kitchen equipment in a converted broom closet and set up his own booming pizza business. He sold his beloved Camaro in 1983 for $2,800 and that money helped save his father’s tavern — and allowed Schnatter to build the business that would become Papa John’s.
On the call that would destroy his career, Schnatter laid out the philosophy that made Papa John’s so successful. “When I get the pizza wrong, they don’t eat it. When we get the pizza wrong, they don’t sell it, then our people don’t make their bonus,” he said. “You never forget the fact that you go home with burns on your arms and that you have to make the pizza, you know, cook the pizza, and deliver the pizza because the guy had a crash or had a wreck or didn’t show up.”
Yet, as National Review‘s Dan McLaughlin explained in a lengthy profile, Schnatter became a high-value target in the culture wars.
In 2011, he pulled Papa John’s ads from Wonkette after the site mocked Sarah Palin’s then-toddler son for having Down syndrome. Wonkette’s sister sites in the Gawker Media umbrella, such as Deadspin, launched nasty retaliatory attacks. In 2012, Schnatter caused a stir by attacking Obamacare as bad for his business.
The Papa John’s founder gave millions of dollars to Americans for Prosperity and other free-market initiatives launched by Charles and David Koch. He also endowed free-market scholars at the University of Kentucky and the University of Louisville. Schnatter valued his total donations to Koch-related projects at $53 million.
After a disappointing quarter for Papa John’s in November 2017, Schnatter complained that the NFL had damaged its brand through the “debacle” of national-anthem protests led by Colin Kaepernick. Papa John’s had sponsored the NFL and became the “official pizza of the NFL,” investing about $40 million in the league annually. When NFL viewership declined in 2015 and 2016, it hurt Papa John’s prospects.
In that November 2017 call with shareholders, Schnatter claimed that “NFL leadership has hurt Papa John’s shareholders” by not nipping the anthem protests in the bud. In February 2018, the pizza company dropped its sponsorship of the NFL and Pizza Hut stepped in to replace it.
Early in 2018, Papa John’s hired Laundry Service to manage some of the blowback from Schnatter’s NFL “debacle” comments. On May 22, 2018, Schnatter and other representatives with Papa John’s had a strategy call with Laundry Service — and this call would go down in infamy.
Schnatter reportedly expected that the call would address marketing initiatives, but as the call began, staff told Schnatter that the call would focus on “diversity training,” including “role-playing exercises” on “race and diversity.” The transcript of the call reflects that Schnatter had received a document just before the call, and that he complained he had little time to review it.
During the call, Schnatter discussed the NFL anthem protests and remarked that a course told him “the players don’t care” whether or not the protests would “destroy their future income.”
Schnatter did not focus his criticism on the players but on both NFL Commissioner Roger Goodell and President Donald Trump.
Schnatter said, “I’ve never met a bigger coward” than Goodell, warning that “he’s going to destroy [the players’] future income.”
He blamed Trump for sabotaging his effort to resolve the anthem controversy with the NFL.
“Before all that went down, I tried to get everyone in the room and say, ‘Hey, can we resolve this to everybody’s satisfaction,’” the founder recalled. “I had a bunch of people that I felt like were level-headed and to get this done with the unions and [Vice President Mike] Pence. We were going to meet at the White House on a Friday. And this was 90 percent put together, and Trump shot his mouth off and screwed it up all up. See, once Trump put his hand in the pie, then there was really no way to meet at the White House and get this resolved.”
Schnatter then complained that Laundry Service had ambushed him with the exercise material. “When you put this in front of me 12 minutes ago, ‘John, you’re a racist,’ well, it’s going to take me a while to get out of my shell because this is brutal if you’re me and you’ve been called a bigot for six and a half months. That’s why I need to study it,” he said.
“I mean, this is like threading three needles at the same time. It’s like I didn’t say anything racist, but you can’t say, ‘I didn’t say anything racist,’” Schnatter explained.
He responded to a question about distancing himself from online racists by pointing out what real racism looks like.
“It’s such a bizarre question. It just was not the way — we had a town outside of Jeffersonville called Utica, and there’s a sign going into Utica in the ‘60s and ‘70s that says if you’re black don’t come into Utica after dark, and that was really frowned on not only in our community but in our family, so we grew up with this bullsh**,” Schnatter recalled.
“You know, they used to drag black people behind a pickup truck until they were dead. I mean, the question’s kind of way out of line just how gruesome these alt-right members are. And I don’t think I want to say that, but anyway, I think you get the gist of how I feel about it,” he explained.
The Papa John’s founder did not use the N-word in the exercise but rather when he spoke with members of his team after the call. The recording and the transcript captured Schnatter’s remarks along with those of Laundry Service personnel who spoke to one another on mute afterward.
“I got to tell you, heaven forbid this company if they’re not going to use me at all. After I’ve looked at this research, I mean, I’m just not seeing how you’re not going to tell the Papa John story and let them – what bothers me is Colonel Sanders called blacks n******. I’m like, I’ve never used that word. And they get away with it,” Schnatter said. “Yet we use the word ‘debacle’ and we get framed in the same genre. It’s crazy. The whole thing’s crazy.”
Schnatter did not use the N-word himself, he did not even defend using the N-word. He complained about the fact that someone else got away with doing something he never would while he faced backlash for something that was not racist at all.
Yet the Laundry Service staff mocked him, apparently unaware they were being recorded. “I think by Sunday John won’t be working… anymore,” Jason Stein, then the CEO of Laundry Service, said as he listened in on Schnatter after the call. “This is what happens when a sociopath spirals. … I hope he gets f****n’ sent out to the pasture on this sh*t.”
A female speaker said Schnatter’s “answers just said a lot about him. They were very revealing.”
“He’s a racist,” Stein claimed. Other staff agreed with him. “He has no problem saying that black people were dragged behind a car, using the N-word just now, but he can’t just f***ing say that.”
Stein and his team even suggested they should set up Schnatter with a hostile interview.
“I just want him to go and speak the truth, and I want him — write down the bullet points, and then go f***ing — just have to make sure it’s an hour-long conversation, so that he says sh** like he said here. It’s gonna come out. He can’t control it,” Stein said.
The Laundry Service team went on to condemn Schnatter for funding American’s for Prosperity, saying, “That’s a f***ing super right wing, like crazy…”
Stein and his team were working for Papa John’s. They were taking paychecks from the company while scheming to destroy the company’s founder.
Naturally, Laundry Service and Papa John’s parted ways in June 2018, after the call. Schnatter claims he fired Laundry Service, and early reporting suggests that is the truth.
Forbes broke the story about Schnatter “using” the N-word on a conference call in July 2018. Schnatter then resigned as the company’s chairman.
The story hit like a ton of bricks. The local NAACP successfully pressured Schnatter to resign as a trustee of the University of Louisville. His wife of 32 years filed for divorce. Same-store sales at Papa John’s fell 7.3 percent in 2018 and it lost big partnerships with Major League Baseball and several sports teams. The company scrubbed Schnatter from promotional materials and the company logo, and the Center for Free Enterprise at the University of Louisville dropped his name.
In his lawsuit, Schnatter alleges that Laundry Service blackmailed Papa John’s, demanding $6 million before the company spilled the beans to Forbes. He also alleges that Steve Ritchie, Papa John’s CEO at the time, “has admitted privately that he launched a false and defamatory campaign against Mr. Schnatter, falsely accusing him of racism, for the sad and simple reason that Mr. Ritchie learned that he was going to lose his job.”
In 2019, Schnatter lamented that the “farce” over one phone call not only cost him his reputation but also “destroyed the company” he built. He claimed the pizza had gone downhill and he predicted, “The day of reckoning will come.”
This transcript brings at least one reckoning closer. The full truth is coming out, and it seems likely to eviscerate the lies about Schnatter’s character. Unfortunately, many conservatives still face false accusations of racism and hate. I wrote a book about one of the Left’s primary smear engines, but woke capitalism’s recent attacks on the Georgia bill show that these smears are surprisingly widespread.