Slime time: In the genteel world of old-money philanthropy, pizza king Schnatter is busting loose

By Jim Hopkins
Boulevard Publisher

When Tom Jurich chases the money John Schnatter gives to charity every year, it’s the ever-prowling cats that pose competition.

No — not those ones. I’m referring to the snow leopard and other big cats at Louisville Zoo, just five miles from Papa John’s Cardinal Stadium, the University of Louisville colossus about to undergo a $55 million renovation that athletics director Jurich wants done in just two years.

Schnatter, 54, loves U of L. He’s donated more than $20 million to the 22,000-student school over the past decade, winning naming rights for his Louisville-based pizza chain for decades to come. (And Schnatter’s a Ball State graduate, to boot.)

Papa John's logoBut he also likes other charities — especially the zoo, according to the most recent IRS tax returns for his John H. Schnatter Family Foundation, which filed its 2015 return only last week. The returns show the foundation gave $111,000 to the zoo in 2012-2015; only one other recipient — U of L — got more, among the dozens of charities Schnatter and his wife Annette support. And that was on top of $1.1 million they donated to the zoo in 2008. To be sure, the zoo was just barely ahead of No. 3 on the foundation’s gift list (keep reading).

The returns offer an inside look at how one of the city’s richest couples — we’re talking $800 million — positions themselves in a pecking order where the right kind of philanthropy is the ticket to top-drawer society. This much is clear: the Schnatters don’t give a flying fig about old-money Louisville. They’re passing on virtually all the usual suspects: the Speed Museum, Actors Theatre, Kentucky Opera, the Fund for the Arts — cultural war horses favored by more established families like the Browns and their 150-year-old whiskey fortune, or the Binghams and their faded media empire from 1918.

Instead, the Schnatters devoted their relatively modest $1.9 million to 86 charities over the four years I examined, focused heavily on helping children and veterans; animal welfare and — crucially, for anxious development officers — advancing John Schnatter’s growing interest in free enterprise and limited government.

But he’s never been old money, anyway.

1980s: bustin’ out

After graduating from Ball State University in 1983, Schnatter started Papa John’s in a broom closet at his father’s tavern, Mike’s Lounge, which he famously saved from ruin with $2,800 he got selling his prized 1972 Camaro. Nearly 32 years and many millions of pies later, he stars in his own TV commercials blanketing the air, proving he’s not above getting dirty to make a sale — literally. In a Sony Pictures marketing tie-in this summer, he played a slimed Ghostbuster pizza delivery guy; that’s a still photo, top of page. (Can you imagine Brown-Forman Chairman George Garvin Brown IV dressed as a dancing mint julep for an Old Forester spot? Neither can I.)

Tom Jurich
Jurich

No matter. Schnatter’s laughing all the way  to the bank. Today, Papa John’s has more than 4,700 restaurants in 38 countries and territories. Its 22,000 employees include 750 in Louisville. And his stake in the $2.8 billion behemoth just soared past $800 million for the first time. That’s a lot of loot that’s arrived relatively fast. On a split-adjusted basis, Papa John’s stock has increased six-fold in the past five years alone. The question over at U of L: How much of that will Jurich wrangle for his $55 million stadium project?

When last we heard, in April, Jurich had raised a total $20 million, which included $5 million from Pepsi and $3 million from Planet Fitness. In a radio interview last week, Jurich didn’t disclose any big new corporate pledges — not least among them, from Schnatter. But it’s hard to imagine the pizza baron skipping a big splashy gift for a project adding 10,000 seats to the existing 55,000, and a dozen more plush corporate suites — even if he already controls naming rights through 2040.

Papa John's Cardinal Stadium
The Papa John’s Cardinal Stadium expansion would boost seating nearly 20%.

U of L scored big last year at the Schnatter foundation. It gave $928,000 to the school for the nascent John H. Schnatter Center for Free Enterprise at the business school, the only non-profit getting more than the zoo, and by a wide margin. It was a down payment on a previously announced $6.3 million donation, given jointly by Schnatter and the Charles Koch Foundation.

The Calipari connection

The Schnatter Foundation is a bare-bones operation. It doesn’t occupy a fancy office tower, sharing an address with Schnatter’s Evergreen Real Estate investment company on Park Road in Anchorage. It doesn’t even have a website, relying instead on charity tracker GuideStar’s profile page. Schnatter, his wife Annette, and Papa John’s senior vice president Tim O’Hern are the three-person board.

The IRS returns show the vast majority of the couple’s favorite charities are in Louisville; here’s a list of all 86. But some of the money does leave town: The Bluegrass Community Foundation in Lexington got $110,000, and University of Kentucky men’s basketball coach John Calipari’s family foundation got $53,000.

The Calipari gift points to another Schnatter favorite, charities associated with sports celebrities who help kids. They’ve included men who’ve appeared in Papa John’s TV commercials:

  • The Dan Marino Foundation in Fort Lauderdale, Fla., $80,000. Started by the retired Miami Dolphins quarterback, it helps kids with autism.
  • The PeyBack Foundation in Indianapolis: $25,000. Launched in 1999 by retired Denver Broncos quarterback Peyton Manning, it supports disadvantaged youth.
  • The Jeff Gordon Children’s Foundation, $15,000; it was founded by the retired NASCAR driver to support pediatric research.
  • The Denny Crum Scholarship Fund, $5,050. Named for the former men’s basketball coach, it helps high school students who want to attend U of L.
Now, where’s he headed?

But Schnatter’s also moving toward causes that are less warm-and-fuzzy. The donations are relatively small, yet could presage a shift in how he spends some of that $800 million fortune. They’ve included:

But the biggest, most headline-grabbing is the $928,000 for the U of L free-enterprise institute. It’s now one of three funded with Charles Koch, the conservative multi-billionaire who shares Schnatter’s libertarian outlook. They also pledged $12 million to the University of Kentucky for another Schnatter-branded center, in late December; it doesn’t appear in his foundation’s 2015 IRS return, probably because the first payment won’t come until this year. And in June, the pair donated $3.3 million to Schnatter’s alma mater, Ball State in Muncie, Ind.

Schnatter and Koch
Schnatter and Koch.

In each case, university administrators defended the grants against criticism the Schnatter and Koch contracts, along with remarks by Schnatter himself, suggested two wealthy men would demand programs with a one-sided, pro-capitalism ideology — a threat to academic freedom in hiring and curriculum.

The contract UK signed says the institute must support a “diversity of ideas,” according to the Kentucky Center for Investigative Reporting. But it also says the institute is to research aspects of free enterprise that “promote the well-being of society.” What’s more, when the gift was announced, Schnatter said in a statement: “The free-enterprise system is the greatest mechanism mankind has ever created to eliminate poverty, enhance prosperity, and enable the pursuit of happiness.”

That suggests a more narrow scope, hardly surprising for Schnatter and 80-year-old Koch. Both grew wildly wealthy as entrepreneurs at a time when business captains rail against government regulation. Koch Industries is the second-biggest private company in the U.S. (Cargill’s No. 1), with interests ranging from mining to petroleum, ranching and commodities trading, making it a heavily regulated concern. Charles Koch is CEO.

To the manor, newly born

Like Koch, Schnatter’s used his new wealth to advance politicians and parties that share his views. But under IRS rules, that money can’t go through his foundation. So, he and his wife Annette give directly; they led 10 well-heeled Kentuckians who donated $10,000 a piece to the state Republican Party last month — the most allowed, and leaving Democrats in the dust.

John Schnatter's house
All it lacks is a moat: Schnatter’s 15-acre Anchorage estate.

Schnatter’s developed a national political profile, although with baggage. In spring 2012, he hosted a fundraiser with former GOP White House nominee Mitt Romney at the Schnatters’ custom-built, 24,000-square foot baronial manor in upmarket Anchorage. Schnatter and Romney are all about entrepreneurship, and the luxe life that follows.

Mitt Romney
Romney

“Don’t you love this country?” Romney told guests that April, in remarks surreptitiously recorded and posted online. “What a home this is, what grounds these are, the pool, the golf course. You know if a Democrat were here, he’d look around and say, ‘No one should live like this.’ Republicans come here and say, ‘Everyone should live like this, all right.’ This is a really tribute to America, to entrepreneurship.'”

In a must-read 2013 interview with The Courier-Journal’s Andrew Wolfson, Schnatter beamed over the estate, one of three homes he and Annette own in Kentucky, Florida and Utah. Besides, Wolfson quoted him saying: “When you have built a $3 billion company out of a broom closet, I think you are entitled to a nice house.”

‘You never want to say never’

Would Schnatter follow other business tycoons into politics, like Gov. Matt Bevin; Jim Gray, the Lexington Democrat trying to unseat GOP Sen. Rand Paul, or New York billionaire Donald Trump? Three years ago, Schnatter was a little coy, telling Wolfson he had no desire to run “right now.” And yet, he added: “You never want to say never.”

But in Kentucky — Republican Kentucky, anyway — that’s where new money meets old. The $20,000 he and Annette gave to the state GOP went to a party now led by a very establishment figure: J. McCauley “Mac” Brown, an heir to, yes, the Brown-Forman fortune started in 1870.

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