- Air Force cadets ‘revolt’ after officials remove biblical verse from whiteboard
- Rep. Lee: Paul Ryan out of touch with urban Americans
- House votes down resolution to force Issa to apologize
- Kremlin blocks opposition websites; Kasparov fears Putin plans ‘something drastic’
- Saving trees? EPA wastes $1.5 million storing unneeded pamphlets in warehouse
- Scott Brown Senate bid in New Hampshire may launch soon
- Jeffrey Corzine, son of ex-N.J. governor, dead at 31
- Australian surfing magazine sorry for calling indigenous surfer ‘apeish’
- Records: Man in Fla. theater shooting also was texting
- The Putin problem: U.S. needs Russian rockets for spy satellites
For big-budget Penn St, fine not as big as seems
NEW YORK (AP) - The $60 million fine levied on Penn State by the NCAA doesn’t look so big next to the scale of the athletic department’s finances.
Penn State plans to pay the fine, part of sanctions announced Monday over the child sexual abuse scandal, in five annual installments of $12 million.
The Penn State athletic department had more than $116 million in revenue to more than $84 million in expenses for the 2010-11 school year, according to data reported by the school to the U.S. Department of Education. The expenses don’t include debt service or capital expenditures.
Penn State won’t be able to save money by making cuts in other sports. The NCAA specifically prohibited that as part of the punishment.
Instead of simply cutting costs, the athletic department can make up for any shortfalls in another way: raising money.
Major college athletic departments receive significant financial support from booster clubs. The Nittany Lion Club took in more than $82 million for the 2011 fiscal year, according to its annual report. That includes $34 million in special gifts for facilities. Its annual fund brought in $17 million, and donations for suites and club seats at Beaver Stadium totaled $12 million.
There were 50 contributors who gave at least $20,000 each.
Bob Harrison, Class of 1962, has donated more than $250,000 to Penn State in his life. Frustrated that the NCAA based its sanctions on what he considers a deeply flawed Freeh report, Harrison’s support for the school and the athletic department has not wavered. And he believes he’s not the only booster who feels that way.
“I would say a high percentage supporting the athletic program will continue to,” said Harrison, who worked for Goldman Sachs for 28 years.
Pennsylvania Gov. Tom Corbett demanded assurances from the university that taxpayer money would not be used. Penn State said it would cover it with its athletics reserve fund and capital maintenance budget and, if necessary, borrow money.
The reduction in football scholarships handed down by the NCAA will save the athletic program some. The accompanying bowl ban could also reduce costs, because schools often lose money on lower-level bowls.
The NCAA said the $60 million represented the average annual gross revenue of the football program. The money will go toward outside programs devoted to preventing child sexual abuse or assisting victims.
The Big Ten also announced that Penn State would not be allowed to share in the conference’s bowl revenue during the postseason ban, an estimated loss of about $13 million.
At Penn State, the men’s basketball team had profits of nearly $5 million in 2010-11, according to the Department of Education report. Teams other than football and men’s basketball had about $23 million in expenses, and the athletic department spent another $36.5 million on expenses not allocated to a particular sport. Football cost $19.5 million.
Of course, football revenue could lag if the team struggles badly on the field as a result of the sanctions, and ticket sales decrease.
- USS Kidd sent to Indian Ocean after 'indication' of Malaysian jet crash
- F-35 secrets now showing up in Chinas stealth fighter
- MILLER: Law enforcement realizes good people with guns deter crime
- FBI blocked in corruption probe involving Sens. Reid, Lee
- Oil rig worker says he saw missing plane go down: report
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- Tracy Porter, Jason Hatcher, Darryl Sharpton set to join Redskins
- NFL free agency: Revis, Sproles have new homes while Smith, Harrison are looking
- Senators reach deal on unemployment benefits
- EDITORIAL: Obama's 'Funny or Die' gig is beneath dignity of presidency
Chaos as Manhattan building explodes
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014
Winter storm hits states — again