Penn State Athletics Clarifies Revenue Drop
When Penn State athletics released its annual NCAA financial report earlier this week, it showed an uncharacteristic decrease in revenue that most fans attributed to the aftermath of the Jerry Sandusky scandal. Between a $7.9 million dip in overall revenue and an overall contribution drop of $8.8 million, many fans wondered if Penn State would need to cut anything to make up for the loss.
In response, the Penn State athletic department released a statement attempting to clarify why such a dramatic drop occurred.
“Approximately 90 percent of the documented overall revenue decrease of $7.8 million is attributable to club seat and suite renewal revenue collected in the 2010-11 fiscal year,” the statement read. “As one-time, upfront payments associated with those renewals in 2010-11, that revenue was not realized — or budgeted — for 2011-12.”
The report also showed that football-specific donations had quadrupled — from $2.1 million to $9.7 million. Penn State said that the increase resulted from a change in how the athletic department recorded suite and club seat renewals from year to year.
“The appearance of a dramatic revenue increase specific to football donations…is due to a reallocation of how suite and club seat revenues are now categorized and recorded,” the statement said. “Prior to 2011-12, suite and club revenues were deposited and categorized as non-sport-specific donation revenue. Those revenues are now more accurately shown as football donation revenue. As a result, this reclassification shows a corresponding reduction in that non-sport-specific category.”
Additionally, the drop in revenue resulted from some unexpected expenses relating to the scandal and coaching turnover.
“The significant athletic reserve decrease shown in FY 2011-12 results primarily from charitable contributions in support of child sexual abuse education and prevention and severance agreements for the prior football staff,” the statement read.
All things considered, it might not have been such a terrible year for the athletic department financially.