A public relations firm hired to promote Papa John instead conspired to destroy its own client because the firm’s “woke” staff did not like his political views and after an executive threatened to “bury” him unless the pizza firm paid the company $6 million, according to a lawsuit and newly disclosed evidence that supports it.
Pizza firm founder John Schnatter was the subject of negative media coverage in 2017 for remarks related to NFL players kneeling for the national anthem. Schnatter said in an earnings call that “by not resolving the current debacle to the player and owners’ satisfaction, NFL leadership has hurt Papa John’s shareholders,” because it had depressed football viewership and the company is a major NFL advertiser. Media coverage portrayed this as being insufficiently supportive of players’ racial cause.
PR firm Laundry Service, which was involved in advertising for Papa John’s and tasked with burnishing Schnatter’s image, held a call on May 22, 2018 which it ambushed him with questions about race and secretly recorded it, according to a lawsuit and documents obtained by The Daily Wire.
During the call, the company appeared to put Schnatter on mute to mock him, with Laundry Service founder Jason Stein saying, “This is what happens when a sociopath spirals,” as a colleague laughed, according to a transcript of the call.
Schnatter eventually expressed frustration and bafflement that NFL remarks — which were aimed at “NFL leadership” and called for “satisfaction” of the players — were portrayed as racist. “What bothers me is Colonel Sanders called blacks n******. I’m like, I’ve never used that word. And they get away with it… Yet we use the word debacle and we get framed in the same genre. It’s crazy,” he said.
After the call ended, the recording continued as Stein said, “I hope he gets f***kin’ sent out to the pasture on this sh**. I really, really f***kin’ do.”
A female, apparently a Laundry Service employee, said he had expressed insufficient support for NFL players. “He’s all about like money and to me the players saying that they’re still going to protest is because they’re saying this is a real issue… It’s like a lack of self-awareness and a lack of curiosity, and a lack of trying to like change his view, or attack it in his life, because if you just want to live in this box, then that is the ingredient to racism.”
On the call, Stein — in his capacity as a PR adviser trying to make Schnatter look good — had told him he “thought it would be smart to do a live interview on Twitter with Darren Rovell.”
But after the call, he seemed to reveal that his was a setup. “Make sure it’s an hour-long conversation, so that he says sh– like he said here. It’s gonna come out,” Stein said, while a colleague added, “I want whatever we recorded to be like the actual interview.”
The transcript suggests that the apparent setup was in the works since before anything Schnatter said on the call. “I told Darren by the end of it, it needs to be viral,” Stein said.
Laundry Service staffers’ indignation seemed to have at least as much to do with politics as it did with race.
Referencing that Schnatter had said he supported the libertarian group Americans for Prosperity, a Laundry Service staffer said, “That’s a f***king super right wing, like crazy.”
“So, he’s BFFs with Pence,” then-Laundry Service employee Tim Polder said, according to the transcript.
Laundry Service has cultivated a “woke” environment, even though, according to its web site, none of its own current leadership team is black. In 2020, Randi White, then vice president of client services, gave an interview about how she believed corporations should be involved in politics.
“Culture is our business, at Laundry Service. It’s how we build relationships with people and inspire action… Brands can engage authentically by making the cause a part of who they are, and ensuring there’s a long-term plan to continue to support the cause,” she said. “I’ve been involved in the Black Lives Matter movement by advising my clients on the core issues, the long-standing history of systemic racism, personal experiences, and the lasting effects of not only overt racism but covert racism and prejudices/microaggressions,” she added.
But this is not always good for business. Laundry Service lost Papa John’s as a client, and on July 9, 2018, 10% of its staff — some 40 to 60 people, including Stein — received notice that they were being laid off by Wasserman, a sports marketing firm that is its its parent company.
Two days after the layoff announcement, a thinly-sourced story appeared in Forbes that said that “John Schnatter—the founder and public face of pizza chain Papa John’s—used the N-word on a conference call in May.” Schnatter resigned as chairman of the company immediately afterward.
But something else had happened before the layoffs, Schnatter’s lawsuit alleged: In June 2018, “Casey Wasserman, the CEO of Laundry Service’s parent company, told Papa John’s then-CEO Steve Ritchie that he would ‘bury the founder’ (i.e., Mr. Schnatter) if Laundry Service was not paid $6 million dollars.” The lawsuit said:
Following this threat to “bury the founder”—and in apparent retaliation for Papa John’s refusing to pay Laundry Service $6 million—Defendants leaked to Forbes magazine excerpts of their May 22, 2018, call with Mr. Schnatter. But rather than provide the true context of what Mr. Schnatter actually said, Defendants provided information out of context, suggesting he had used a racial slur against African Americans. In short, they created an impression that Mr. Schnatter had communicated something opposite to what he said.
Laundry Service has contended money was owed money for services rendered, but Schnatter’s representatives say the amount in dispute was never that large.
The lawsuit said the contract had confidentiality and non-disparagement clauses and that Laundry Service’s “conduct was in bad faith and defeated one of the bargained for benefits of the Service Agreement: the enhancement of Mr. Schnatter’s image and brand.”
Requests for comment to Laundry Service and the Wasserman firm were not immediately returned, but Laundry Service has previously denied leaking the recording.
“Now, almost a year and a half after Schnatter suffered public backlash for his own conduct, he sues defendant Laundry Service, … and defendant Wasserman Media Group … in an effort to blame them, contrary to facts, for allegedly leaking Schnatter’s use of racially explosive language,” Laundry Service said in a court filing.
Laundry Service has worked for firms including Adobe, Amazon, Fox, Hennessy, Major League Baseball, the NBA, Nike, and tic tac, according to its website.
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