Penn State athletics has been straining under the weight of a number of financial burdens.
No revenue share from the Big Ten conference’s bowl appearances, a fine of $60 million by the NCAA and lower attendance figures have all contributed to the financial issues. Not to mention the general cost of operation and the constantly fluctuating streams of revenue and spending that are found with any multi-million dollar business.
The culmination of these issues resulted in Penn State athletics reporting nearly $6 million in losses according to a financial report released by the University this February. While that’s not surprising given the complications and financial hurdles, it was still a noteworthy moment for an athletic department that has generally been one of the more lucrative businesses in college athletics.
But despite the rather gloomy outlook on for Penn State’s books, projections made by the Big Ten for upcoming television contracts could give the athletic department and university at large a much needed financial boost.
According to the Journal & Courier which filed an open records request, 12 of the 14 schools in the Big Ten are projected to receive $44.5 million from the conference’s broadcast distribution plans in 2017-18. That figure is significantly greater than the current distribution of $27 million handed out to schools this past year.
Maryland and Rutgers won’t receive full shares of the revenue. Per conference regulations, a member institution must be a full member for six years after joining the conference before it is granted the full financial benefits of membership. Maryland and Rutgers both officially join the conference on July 1. Nebraska will enter its sixth year in the conference during the 2017-18 season, the first year of the new Big Ten television contract.
So how does this benefit Penn State?
Simply put, money is slated to flow into Big Ten schools at historic levels once the new TV deal is signed. With Penn State out from under the cloud of NCAA and Big Ten sanctions by the time the new deal is made official, the Nittany Lions will be free to collect not only their share of broadcast revenue but also their cut of the Big Ten bowl revenue.
Penn State currently does not receive a share of the conference’s bowl revenue. That’s because of a Big Ten sanction that was imposed in the wake of the Jerry Sandusky scandal. The loss of bowl revenue will continue for a total of four years in tandem with the NCAA sanction which prevents Penn State from competing in bowl games.
As a result, Penn State missed out on nearly $2.3 million in 2013 according to the university. Over the span of four years the roughly $10 million in uncollected bowl revenue is a significant figure, especially when compared to the operation costs of ongoing projects like the $10 million being spent to renovate the Beaver Stadium scoreboards this offseason.
With money coming in from the conference from both bowl and broadcast revenues, it seems unlikely that Penn State’s financial issues are there for the long term. The difference between the revenue share in 2014 and the first year under the new broadcast deal alone is roughly $17.5 million more than Penn State currently gets annually from Big Ten broadcasting rights.
So while Penn State has seen its fair share of choppy waters and will continue to navigate them, it’s safe to say that a massive financial life vest is only a short swim away.