The University of Louisville has taken the name of Papa John’s off its American football stadium in the wake of the controversy surrounding the pizza restaurant chain’s founder, John Schnatter.

Schnatter was a major donor to the college and a member of its board of trustees until it emerged last week that he used racist language during a conference call with marketing executives. Schnatter subsequently resigned as Papa John’s chairman and has also given up his position on the University’s board of trustees.

University of Louisville president Neeli Bendapudi announced on Friday that Papa John’s Cardinal Stadium will now become Cardinal Stadium. The Louisville Courier Journal newspaper said Schnatter personally donated $14m (£10.6m/€12m) to help fund the stadium’s development, while Papa John’s added a further $6m.

The company holds a naming rights deal with the college that was due to run through to the end of 2040.

Bendapudi said in a statement: “Over the last 24 hours our community has been fractured by the comments made by former UofL trustee John Schnatter. These comments were hurtful and unacceptable, and they do not reflect the values of our university.

“I have decided, with the support of our Board of Trustees, to rename our football stadium ‘Cardinal Stadium’ and to remove John Schnatter’s name from the Center for Free Enterprise at our College of Business effective immediately.

“I have stated since my first day on this job that my commitment to the University of Louisville is to make it a great place to learn, a great place to work, and a great place in which to invest. We can only accomplish this if we truly celebrate diversity, foster equity, and aim to achieve inclusion.”

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