Pennsylvania State University will lose $13 million in bowl revenue over four years as a result of sanctions imposed by the National Collegiate Athletic Association. That coupled with the $60 million fine it received in the wake of the child sex abuse scandal involving former assistant football coach Jerry Sandusky has “generated interest and concern about the fiscal health of the Penn State Athletics Department,” said a report issued Friday by an external monitor.
The report by former U.S. Sen. George Mitchell, the external athletics integrity monitor overseeing Penn State’s compliance with the NCAA sanctions, was posted on Penn State’s web site Friday afternoon. The university, the NCAA and the Big Ten Conference entered into the agreement in August as part of the consent decree imposed by the NCAA.
In his third quarterly report, Mitchell praised the university for continuing to adhere to the consent decree, making changes in board governance, upgrading training and instituting other changes to improve the university.
“Penn State has continued to press forward in good faith in fulfilling its obligations,” the report said, noting that the university hired an athletics integrity officer and a director of university ethics.
But the report also raised concerns about athletic department finances. The university’s overall operating revenue dropped from 2010-11 to 2011-12, though the university maintained the drop was due to the renewal of a large number of multi-year contracts for club seating and suites at Beaver Stadium.
“Examination of the past three years’ financial reports, however, reveals a significant reduction in the surplus generated by the Athletics Department,” the report said. “Nonetheless, Penn State remains one of the few Division I schools with a financially self-sufficient intercollegiate athletics program.”
The fiscal report for 2012-13, the year during which the loss in bowl revenue kicked in, was not addressed in the report. Penn State faces a four-year bowl ban as part of the sanctions leveled by the NCAA.