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Penn State Fined $60M, Avoids Football Ban

July 23, 2012

Penn State Fined $60 Million, Avoids Football Death Penalty (1)

Penn State football team entering field from tunnel before game vs Michigan State. Photographer: Al Tielemans/Sports Illustrated/Getty Images

Pennsylvania State University was fined $60 million as college sports’ governing body penalized the school for its handling of a child sex-abuse case involving assistant coach Jerry Sandusky. It avoided the stiffest punishment, a shutdown of the football program that was at the center of the scandal.

The school also was stripped of all its wins from 1998 through 2011, barred from postseason games for four years and lost 20 total scholarships annually for four seasons, the National Collegiate Athletic Association said in a statement. The postseason ban matches the longest in NCAA history, according to the NCAA’s database as cited by ESPN.

“One of the grave dangers stemming from our love of sports is that the sports themselves can become too big to fail, indeed, too big to even challenge,” NCAA President Mark Emmert said at a televised news conference. “The result can be an erosion of academic values replaced by the values of hero worship and winning at all costs.”

It may take Penn State’s football program as long as eight years to recover from the sanctions, according to one college football analyst. The discipline avoided the so-called death penalty shutting down the program where Joe Paterno, the coach who won a record 409 games, became a focus of the scandal. Paterno’s resume will lose 111 of those wins, making him no longer the most successful coach in major college football history.

Abuse Education

University President Rodney Erickson said in a statement after the announcement that the school accepted the NCAA’s ruling. He said the $60 million would be paid over five years to a special endowment created to fund programs for the detection, prevention and treatment of child abuse.

“We must create a culture in which people are not afraid to speak up, management is not compartmentalized, all are expected to demonstrate the highest ethical standards, and the operating philosophy is open, collegial and collaborative,” Erickson said.

The Penn State football team will be ineligible to receive its share of the Big Ten’s bowl revenue during the four-year postseason ban, the conference’s Council of Presidents and Chancellors said today in a statement. That money, roughly $13 million according to the statement, will also be donated to charitable organizations dedicated to the protection of children.

Family Response

Paterno’s family said in a statement that the NCAA action and the response of the school added to “an avalanche of vitriol, condemnation and posthumous punishment” of the late coach.

“The sanctions announced by the NCAA today defame the legacy and contributions of a great coach and educator without any input from our family or those who knew him best,” the family said in the statement.

The NCAA acted against the State College, Pennsylvania- based school less than two weeks after an investigation found Paterno, who died of lung cancer in January, and other school officials tried to cover up abuse allegations. The 68-year-old Sandusky, a football assistant coach for 31 years, was convicted last month on 45 criminal counts tied to the abuse of 10 boys over a 15-year period starting in 1994.

“Hopefully we will be able to learn from this,” said Jacob Ross, 18, an incoming freshman from Salisbury Township, Pennsylvania, who stopped at the student union to watch the press conference on TV.

Sports Budget

In the fiscal year ending in 2011, Penn State’s athletic department generated $116.1 million in operating revenue and posted a $14.8 million operating profit, according to school records.

The football team, which was 9-4 last season, had an operating profit of $43.8 million on $58.9 million in revenue. The NCAA has informed Penn State that the $60 million fine cannot come at the expense of other non-revenue sports or other student-athlete scholarships, Emmert said.

Penn State has an endowment of $1.3 billion, the Pittsburgh-Post Gazette reported in March, citing Graham Spanier, who was dismissed as university president in the scandal.

Lewis Katz, who donated $15 million to the university and whose name appears on a campus law building, said the school and its administration succumbed to an “athletics first” mentality.

“So sad you do 1,000 things right and you make one bad decision sometimes in a matter of seconds and lifetime of good is eviscerated,” Katz, a former owner of the National Basketball Association’s New Jersey Nets, said in an e-mail. “These are good people and I know them all.”

Statue Down

The school removed a statue of Paterno outside the football stadium yesterday, 11 days after former Federal Bureau of Investigation Director Louis Freeh issued a report that said Paterno, Spanier and other university officials tried to conceal Sandusky’s abuse of children to protect the school from “bad publicity.” Freeh said his seven-month probe -- commissioned by the university’s board of trustees -- found that the abuse could have been stopped in 1998.

Transfers Allowed

In addition to the penalties against the school and program, Emmert said that the NCAA would allow any entering or returning Nittany Lions football players to transfer to another school and play immediately. In addition, any football player choosing to remain at Penn State will keep his scholarship regardless of whether he continues to play on the team, provided he maintains the academic requirements.

The sanctions will affect the football team long after the ban ends and the fine is paid, said Brandon Huffman, a college football recruiting analyst for Scout.com. The team will struggle to retain players and to recruit, and it may take at least eight years, or until the first class of full scholarships enters its senior season, for the program to resemble the perennial Top 25 team that it became under Paterno.

“The four-year bowl ban only means that it will be four years until they are eligible for a bowl, but they are going to have such a talent depletion that who knows if they are even going to qualify for a bowl in the next 10 years,” Huffman said in an interview.

Rescinded Commitment

Huffman said the Nittany Lions’ 2013 Class probably will suffer immediately. One recruit -- cornerback Ross Douglas from Ohio, rated three out of five stars by scouts -- rescinded his verbal commitment this morning.

Warren Zola, a sports law professor and assistant dean of graduate programs at the Carroll School of Management at Boston College in Massachusetts, said last week that coaches around the country were already thinking about grabbing possible transfers.

“There are a slew of college coaches that are going through the Penn State roster as if they are free agents,” Zola said.

Bill O’Brien, hired in January as the Nittany Lions’ coach, said in a statement that he remains dedicated to the school and program. Acting athletic director David Joyner said in a statement that he agreed that the “culture at Penn State must change.”

The four-year ban on postseason play, including bowl games, matches a ban given to Indiana University in 1960 as the longest in NCAA history, according to the NCAA’s database as cited by ESPN. Emmert said the postseason break will keep the university focused on renewal.

‘Rebuilding Culture’

“For the next several years now, Penn State can focus on the work of rebuilding its athletic culture, not worrying about whether or not it is going to a bowl game,” he said.

The school will vacate 112 wins from 1998 through 2011, all but one of which came with Paterno as head coach. Longtime Florida State coach Bobby Bowden now has the most wins at college football’s top level with 377; Eddie Robinson of Grambling State holds the overall college football record with 408 wins, at a level below the top.

Emmert said the death penalty would have been too harsh to those not directly involved in an “athletic culture that went horribly awry.” The football team brings about $70.2 million to state and local businesses each year, according to an economic impact study commissioned by the university for the 2008-09 school year.

Many Affected

Ellen Staurowsky, a professor of sports management at Drexel University in Philadelphia, said the NCAA was right not to impose the death penalty because it would have financially affected an entire community, and wouldn’t address the multiple accountability failures at the school.

David Ridpath, a sports administration professor at Ohio University in Athens, agreed that the ruling was appropriate.

“It will change PSU athletics but I do not think it will cripple it,” Ridpath said in an e-mail.

Southern Methodist University’s football program was closed in 1987 after it was found that 13 players received $61,000 from a slush fund provided by a booster. The Dallas-based school was unable to field a team in 1988 and had one winning record over the next 20 years after it returned in 1989, before bowl game appearances in 2009, 2010 and last year.

The change at Penn State started yesterday, when a 7-foot- tall statue of Paterno outside the football stadium was draped in a blue tarp and then taken down behind a fenced-off area.

Erickson said the statue, which will be stored in a secure location, had become a “source of division and an obstacle to healing” at the university.

“No price the NCAA can levy will repair the grievous damage inflicted by Jerry Sandusky on his victims,” Emmert said. “However, we can make clear that the culture, actions and inactions that allowed them to be victimized will not be tolerated in collegiate athletics.”

To contact the reporter on this story:

Eben Novy-Williams in New York at enovywilliam@bloomberg.net Erik Matuszewski in New York at matuszewski@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net


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