"Penn State Scandal: Financial Fallout From Sex Scandal Could Be
Huge"
http://www.huffingtonpost.com/2011/11/10/penn-state-scandal-
financial-fallout-from-sex-scandal-could-be-
huge_n_1087050.html?ref=business
In the span of less than a week, Penn State lost a legendary
football coach and a university president. And that's before
taking into the account the money.
At stake? Tens of millions of dollars in profits annually. Penn
State raked in $72.7 million in revenue from football last
season, ranking fifth out of all college programs in the
country, according to CNNMoney. In addition, the school's
Athletic Department, took home another $24.1 million in revenue
not designated to a specific team or sport -- a sum that came
mostly from merchandise sales and sponsorships.
And the program is already taking a hit. Ticket resale prices
for Penn State's upcoming home game against the University of
Nebraska had already dropped more than 20 percent by Thursday
morning, less than 24 hours after the school's board of trustees
fired Joe Paterno, Penn State's football coach of 46 years,
according to Bloomberg.
Paterno was fired in the wake of a scandal that rocked the
campus and the nation when the football team's former assistant
coach Jerry Sandusky was charged Saturday with sexually abusing
8 boys over a 15-year period. Paterno and other Penn State
officials -- including the school's president Graham Spanier,
who was also fired Wednesday -- have been roundly criticized for
not doing enough to forward reports of Sandusky's sexual abuse
on to authorities.
Penn State's athletic department is financially independent from
the rest of the university, which means a drop in ticket prices
or t-shirt sales won't affect academic buildings or professor
salaries at the school. Still the scandal will likely dampen
Penn State's fundraising efforts.
The school often trotted out the iconic Paterno at fundraising
events, according the Patriot-News, a central Pennsylvania
newspaper, and he rarely came back empty handed. Rod Kirsch, the
school's senior vice president for development and alumni
relations, said in 2009 that he couldn't put an exact estimate
on how much Paterno brought in for the school, but threw out
guesses like $50, $100 and $500 million, the Patriot-News
reports.
The school raised $170.5 million from individuals in the 2010-11
academic year, the Philadelphia Inquirer reports. The school has
already cancelled fundraising events this week including a pre-
game tailgate Saturday, and while small donors may be more
hesitant to give the school money in the wake of the scandal,
some experts told the Inquirer that large supporters may want to
throw more financial weight to help the school cope with the
crisis.
Still, athletic scandals rarely end well financially for the
athletes or programs involved. After professional golfer Tiger
Woods was found to have cheated on his wife with a slew of
women, the phenom lost millions of dollars in endorsement deals;
in addition, the scandal affected tournament sales and other
financial-generating means from the PGA Tour, according to USA
Today.