Posted on 11/11/2011 8:58:56 PM PST by Colofornian
Moody’s Investors Services announced Friday that is is placing Penn State’s Aa1 revenue bond rating on review for possible downgrade as it assess credit risks stemming from the sexual abuse scandal.
In light of the criminal charges against former assistant football coach Jerry Sandusky and two senior university officials, as well as the dismissal of President Graham Spanier and head Coach Joe Paterno, Moody’s said it will, over the next several months, evaluate the “potential scope of reputational and financial risk arising from these events.”
While it may take years for the full impact of the events of this week to be known, Moody’s said it will also assess the degree of near- and medium-term risks.
“We will monitor possible emerging risks emanating from potential lawsuits/settlements, weaker student demand, declines in philanthropic support, changes in state relationship and significant management or governance changes,” it said in a news release.
The Aa1 rating reflects strong student demand, and Penn State’s status as Pennsylvania’s flagship and land grant university, and the strong national academic brand it has developed. The university, it notes, is one of the largest in the U.S., with enrollment of more than 80,000 students, and operating revenues of $4.6 billion in fiscal year 2011, and financial resources totaling $3.9 million.
This comes as Business Week.com runs an extension breakdown of the potential financial losses -- area by area.
Bloomberg articles cannot be excerpted on FR; therefore you will have to go directly there to read its content: Penn State Shame From Abuse Scandal Threatens College’s Rise
As you read this linked article, you will see major, major financial repercussions bearing down upon Penn State.
It started today with one of the top offensive tackles "decommitting" to Penn State:
Top Colorado recruit decommits from Penn State
I believe MANY more will follow...not just the Class of 2012 and JC transfers, but ensuing seasons ahead.
ping
As a result of the states mis management of this school, the citizens PA followed by the rest of us , will pay out billions over the next ten years.
A caller into RUSH today was a young, just starting our Lawyer , asking him for ways to get business.
He said , “move to PA”, and he prefaced it by saying , “he was not joking.”
PSU is a land grant school, not a state school. Without the state to back them up, this may take down the whole school.
You reap what you sow!
Choices have consequences.
If its all about money, fame ...well, this will end up being about money and fame in reverse.Good.
I think the bigger concern will be civil lawsuits.
Insurance often kicks in for these...but not sure how that will all work out as askings will be higher than initial payout offers
(It still gets about 9% of its funds from the state)
Liars and frauds for profit will always have to face divine providence. Doesn’t matter if the lie is about AGW, SHS or covering up a rape of a child to protect their cash flow and power.
“His judgement cometh...and that right soon.”
-—Gospel of St. Andy of Shawshank
Insurance will not pay for cover-ups.
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