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$60-Million Fine For Penn State

By The NonProfit Times - July 23, 2012

A day after Penn State University removed Joe Paterno’s statue from outside Beaver Stadium, the NCAA leveled unprecedented penalties against the football program this morning, including a $60-million fine.

The $60-million — the equivalent to the average gross annual revenue of the football program — will be paid over a five-year period into an endowment for programs preventing child sexual abuse and/or assisting victims of child sexual abuse. Those programs can not be operated by the university. The minimum annual payment will be $12 million until the $60 million is paid but no current sponsored sport may be reduced or eliminated to pay the fine.

Penn State’s football team will be banned from postseason play for four years, starting this season, in addition to losing 10 initial and 20 total scholarships each year during that period, and all wins will be vacated dating to 1998, according to sanctions announced by the NCAA this morning. All sports will be on probation for five years. Current football student-athletes who transfer will not have to sit out a year, as transfer students typically must.

Former head coach Joe Paterno had set a new record for career coaching wins last fall, just weeks before his former defensive coordinator, Jerry Sandusky, was arrested on child sex abuse charges. Sandusky was convicted last month on 45 counts related to child sex abuse.

Penn State released the 267-page Freeh report, a $6.5-million investigation undertaken by the university and headed up by former FBI Director Louis Freeh. Released two weeks ago, the Freeh Report concluded that Paterno and other university officials, including former President Graham Spanier, did not report Sandusky to authorities after a number of incidents involving Sandusky as far back as 1998.

“Penn State’s leadership failed to value and uphold institutional integrity, breaching both the NCAA Constitution and Division I rules,” according to the statement from the NCAA. “Penn State’s sanctions are both punitive – intended to punish – and corrected, intended to remediate the ‘sports is king’ culture that led to failures in leadership.”

At a news conference this morning in Indianapolis, Ind., NCAA President Mark Emmert said the board was impressed by the actions of Penn State’s new chairman and its new president Rodney Erickson. “The Freeh report is part of an amazing and unprecedented degree of openness for any university I’ve ever seen,” he said.


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