The Tribune Democrat, Johnstown, PA

Local Sports

April 11, 2013

Fewer seating fees blamed for PSU financial losses

STATE COLLEGE — About 90 percent of the $7.8 million decline in revenue for Penn State’s athletic department was due to a loss of one-time fees related to football club seat and suite renewals that were not budgeted for in 2012.

The department Thursday released a statement offering explanations on the financial report released earlier this week. The report showed athletics revenue at nearly $108.3 million for the fiscal year that ended in June 2012, down almost 7 percent or $7.8 million, from the $116.1 million in revenues the previous year.

Penn State in 2010-11 rolled out new season-ticket pricing guidelines that in large part tied giving levels to seat renewals.

The updated figures are part of a filing required by the U.S. Department of Education of athletic departments. As is typical for Penn State, the athletic department reported no revenues from tuition, student fees or state appropriations.

It was the first such filing by Penn State following the child sex abuse scandal involving former assistant coach Jerry Sandusky, who was arrested in November 2011. The filing had been delayed because the school brought in a third-party auditor to also review the report, a university spokeswoman said earlier this week.

The athletic department noted Thursday that a decrease in reserve funds was primarily due to charitable donations in support of child sex abuse education and prevention, as well severance agreements for the previous football staff.

Bill O’Brien took over as coach in January 2012, two months after predecessor Joe Paterno was fired days following Sandusky’s arrest. The latest report showed about $956,000 in severance payments in 2012 for football.

Athletic department officials have said it was unclear how much – if any – impact the scandal may have had on attendance. But the “Seat Transfer and Equity Plan” that brought about season-ticket changes several years ago did leave some fans unhappy.

The roughly 60 luxury box suites at the stadium did sell out last year, as did the 21,000-seat student section. Still, Penn State, with an average attendance of about 96,700, was at about 91-percent capacity in 2012, down from the usual

97-98 percent.

Last year’s average would be a welcome and robust figure for most other schools. But those nearly 10,000 empty seats leave noticeable gaps in massive Beaver Stadium, which has a capacity of 106,572. It’s second only to the 109,901 capacity of Michigan Stadium.

“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 athletic department said in its statement. “As one-time, upfront payments associated with those renewals in 2010-11, that revenue was not realized – or budgeted – for 2011-12.”

Contributions were down to athletics overall from $34.2 million to $25.5 million, the report showed, though football-related contributions grew nearly five-fold during to nearly $9.7 million in 2012.

According to the school, that was due to a reallocation of how suite and club seat revenues were categorized and recorded, so that it was more accurately reflected as football donation revenue.

The athletic department is self-supporting, and football revenue primarily helps pay for the school’s 31 varsity teams.

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