Laundry Service internal memo denies John Schnatter’s extortion claims

The media agency accused by Papa John’s founder John Schnatter of extortion fired back in an internal memo sent to employees Tuesday, calling his claims “disparaging and outrageous.”

“As you all know, there’s been a lot of coverage about Laundry Service and Wasserman related to the Papa John’s situation in the past several days,” according to a copy of the memo obtained by CNBC. “The disparaging and outrageous comments about Wasserman and Laundry Service that have been covered are completely false and we have a centralized PR strategy to go on the record and refute them. Until that time we cannot expect the media to know the truth.”

Laundry Service, which is owned by talent management company Wasserman, came under fire by Schnatter after it allegedly leaked to Forbes that the former Papa John’s chairman used a racially charged slur during a May conference call with the agency.

Schnatter accused Laundry Service of trying to extort the pizza chain in an interview with a local Louisville TV station Friday and again in a letter to the board of directors on Saturday.

He told the board that Papa John’s fired Laundry Service the day after the call took place, but still owed the media agency about $1.3 million. Schnatter said that the agency requested $6 million “because they claimed some of their people had been offended by what I had said” and that one of their attorneys threatened “a smear campaign” if Papa John’s didn’t pay up. He said the company ultimately paid Laundry Service $2.5 million.

Wasserman and Laundry Service did not immediately respond to CNBC’s request for comment.

The agency told employees it plans to publicly respond to Schnatter’s comments and asked employees not to speak to journalists, according to the memo.

“All matters pertaining to Laundry Service, Cycle, Wasserman and their clients are strictly confidential and should not be disclosed to anyone outside the company,” the memo said.

On Tuesday, Papa John’s said it retained international law firm Akin Gump Strauss Hauer & Feld to conduct an internal audit and investigation of the pizza chain’s existing policies and systems related to diversity and inclusion, supplier and vendor engagement and Papa John’s culture.

Washington, D.C.-based Akin Gump is one of the most prestigious law firms in the U.S., specializing in complex corporate and white collar criminal cases.

Be the first to comment

Leave a Reply