The fallout from the historic sanctions levied on Penn State football continues as expected this morning, with a long-time sponsor of the football program confirming it had severed its ties with the university.
A State Farm spokesperson confirmed to the Chicago Tribune that a decision to pull its sponsorship in the middle of last season will continue on into the 2012 season. The paper writes that “State Farm no longer will have signs in Beaver Stadium and it will not run commercials on radio broadcasts of home games.”
The official would not divulge how much the company spent on advertising with the school.
“It’s a result of all the information that has been going on with Penn State over the last year,” spokeswoman Arlene Lester said in explaining State Farm’s decision. “The decision was based on our business needs at this time.”
In addition to the punitive measures that directly impact the football program, the university was also fined $60 million by the NCAA — paid out over a five-year period — and will have approximately $13 million in Big Ten bowl revenue withheld from them over the next four years.
Additionally, the Associated Press is reporting that Moody’s Investors Service is considering downgrading the university’s credit rating. From the AP:
The agency has an ‘Aa1′ rating on Pennsylvania State University’s credit. That is its second-highest possible rating. The firm said a recent report by former FBI Director Louis Freeh and sanctions levied by the NCAA could hurt student enrollment and fundraising for the university, and the school also faces uncertainty in the form of ongoing federal and state investigations.
Penn State has about $1 billion in debt, Moody’s said. A downgrade could make it more expensive for Penn State to borrow money, which would be another long-term cost in a scandal that has already cost the school immeasurably.
The university and its sizable endowment are also bracing for the onslaught of civil lawsuits that will certainly be in the offing in the not-too-distant future.