The Jerry Sandusky scandal is going to cost Penn State more than $27.6 million. The child sex abuse atrocities of the Jerry Sandusky scandal are hitting PSU in the pocketbook through lawyer and consultant fees and other costs.
An updated figure from November 2012 was provided this week on a university website. $13 million for board of trustees communications and the internal investigation into the scandal by former FBI Director Louis Freeh.
According to Fox Sports:
Among other Penn State costs, nearly $7.5 million went to university legal services or defense, including the law firm representing the university to facilitate settlements with people who have told the school they suffered damages related to the Sandusky scandal.
About $4 million covered other legal defense fees including those for three school ex-administrators facing criminal charges related to the scandal.
University insurance policies should reimburse some of the fees and costs, but Penn State has said it won’t dip into tuition dollars, state appropriations or donations.
The $27.6 million total doesn’t include the first of five $12 million annual installments, paid by athletics in December, to begin covering the $60 million fine handed down by the NCAA as part of its landmark sanctions.
Back in the summer, Moody’s investor rating service (of course, how much can we even trust them) said that it may have to cut its credit rating on Penn State University as the school deals with the fallout from the Jerry Sandusky scandal, the Joe Paterno cover-up and the NCAA and Big Ten sanctions handed down on the school’s college football team. So the University is bleeding cash now, especially since they won’t be getting any
The agency has an ‘Aa1’ rating on Pennsylvania State University’s credit. That is its second-highest possible rating. The firm said a recent report by former FBI Director Louis Freeh and sanctions levied by the NCAA could hurt student enrollment and fundraising for the university, and the school also faces uncertainty in the form of ongoing federal and state investigations.
Penn State has about $1 billion in debt, Moody’s said. A downgrade could make it more expensive for Penn State to borrow money, which would be another long-term cost in a scandal that has already cost the school immeasurably.
Paul M. Banks is CEO of The Sports Bank.net, an official Google News site generating millions of unique visitors. He’s also a regular contributor to Chicago Now, Fox Sports, MSN, Walter Football and Yardbarker
A Fulbright scholar and MBA, Banks has appeared on live radio all over the world; and he’s a member of the Football Writers Association of America, U.S. Basketball Writers Association, and Society of Professional Journalists. The President of the United States follows him on Twitter (@Paul_M_BanksTSB) You should tooPowered by Sidelines Follow paulmbanks