UNIVERSITY PARK, Pa. -- The Penn State athletic department's first annual financial report since the Jerry Sandusky scandal revealed that overall revenue and overall donations decreased significantly from the previous year, but football-specific donations nearly quintupled.
Penn State sent this information to the NCAA in January and publicly released the data Monday on its website.
For the fiscal year beginning in July 2011 and ending in June 2012, Penn State's athletic department totaled $108.3 million in revenue, down from $116.1 million from the previous fiscal year. Expenses for this latest year were $107.3 million, so the athletic department still had a surplus as it has in the past.
Overall donations fell to $25.5 million from $34.2 million. But football-specific giving went way up. Contributions totaled nearly $9.7 million, compared to about $2.1 million the previous year.
Future reports will reveal much more. This report didn't encompass numbers from the second half of 2012, meaning no data from the 2012 football season or the hit from the first fine installment paid to the NCAA.
Secondly, the drop in overall donations could cause a problem.
An earlier Post-Gazette article looked into the finances of Penn State, identifying the possible setbacks the athletic department could face. Athletic director Dave Joyner said the department wouldn't reduce spending for the football team and, per NCAA rules, is not supposed to reduce non-revenue sports.
Joyner said necessary cuts would be made by postponing capital maintenance projects and new capital projects, such as delaying a new football stadium scoreboard. But he also said the athletic department, particularly pertaining to improving and building facilities for athletic teams, would rely heavily on donations, which sizably decreased -- except for those directed to the football team.
As for the fine, the athletic department is paying the $12 million installments to the NCAA through a loan from the university. The athletic department will pay back the loan over 30 years at a 4 percent interest rate. This first $12 million installment of the $60 million fine will cost the athletic department about $687,000 per year. Should the terms stay the same for the next four installments, the athletic department will lose $3.4 million per year starting in 2017.
As a rule, sports economists say, athletic department budgets are alienable, meaning expenses and revenue can be allocated in such a way that actual cuts or increases could be difficult to notice. The general consensus of Penn State's athletic department by sports economists is that it should continue to succeed financially as long as the football program continues to thrive.