Penn State Faces Nightmarish Costs

 

News items related to the Penn State scandal just keep popping up in the news like some kind of recurring bad dream.

This week there is a report at SI.com that says that at the end of February the Jerry Sandusky scandal and its aftermath had cost the university more than $41 million.

This does not include, of course, any settlement costs in the lawsuits filed by victims of Sandusky’s sexual abuse. The school’s legal representatives have been in serious discussions about settlement with a number of the plaintiffs. Those settlements will eventually cost the university millions of dollars more than what has already been spent.

The Jerry Sandusky child abuse scandal may end up costing Penn State more than $150 million.

The school made its first payment of $12 million to the NCAA in December. This money was the first payment on the $60 million fine imposed by the NCAA when it handed down sanctions to Penn State, which its Board of Trustees and president agreed to back in early 2012. This means that the school still owes the NCAA $48 million.

We also learned this week that the report on the scandal submitted by Louis Freeh and commissioned by the school cost about $8.1 million. Some vocal alumni had called on university leadership to release these itemized costs, in part to promote transparency. Those critics had also asked the university to release the letter of agreement, or “engagement letter” with Freeh, that outlined the scope and responsibilities of the former FBI director in leading the internal investigation into the scandal.

The letter in question was signed by school representatives and Freeh on Dec. 2, 2011.  That report’s most damning conclusion was that there was a conspiracy among high-ranking administrators at the school, including Joe Paterno, to cover up facts for several years about the activities by Sandusky.

The governor of Pennsylvania has filed suit against the NCAA in federal court seeking to overturn the sanctions. On another front, a report commissioned by the Paterno family was released in early February 2013. It concluded Freeh’s report was inaccurate and unfounded, and resulted in a “rush to injustice.”

Anthony Lubrano was named a Penn State Trustee in July 2012. He has been a harsh critic of how the university handled matters related to the scandal. He has called the report inaccurate and incomplete and now has demanded that the school seek a refund of the money paid to Freeh.

The school has said the findings were used to improve Penn State operations, including how the trustees govern, and that it was not within Freeh’s scope to review actions or motives of other entities.

Meanwhile, the football team is preparing for spring practice. The 2013 season will be the first season that significant scholarship reductions will kick in. The team survived a rocky start to the 2012 campaign to finish 8-4. Real questions remain as to whether or not Coach Bill O’Brien can continue to win over the next three or four seasons, as the scholarship penalties take more of a toll on the team roster. The on-field performance may impact attendance and other financial support for the football program.

It now appears likely that the final bill for this mess will run upwards of $150 million.

It will not be so easy to count the intangible costs to the school. The continued efforts of the Paterno family and others to whitewash what school officials did will no doubt have a continued impact on the school. Trials for the former school president and athletics director are now scheduled to take place either in the fall or in the spring of 2014. There is no telling what might come out in what are sure to be very public trials. 

Mothers have told their children for years not to play with matches because they may start a fire. It’s too bad that a number of adults working at Penn State between 1990 and 2012 did not exercise the same caution. The school may never be the same place it was before this firestorm blows over.

Greg Tyler is the Library Director at the United States Sports Academy. He has also taught courses at the Academy in sports law. He worked for years in youth sports as a coach, league administrator and as a soccer referee. He has a law degree and practiced law for a number of years. You can reach him at gtyler@ussa.edu.

 

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