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State Farm pulls Penn State sponsorship

Penn State Abuse AP

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.

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22 Responses to “State Farm pulls Penn State sponsorship”
  1. Deb says: Jul 24, 2012 12:36 PM

    When this started, I said the financial ramifications would leave PSU lucky to still have a football program. And here they are. How many times in history have people covered up a scandal only to wind up losing everything in the end? You’d think someone would learn from the mistakes of others.

  2. stoutfiles says: Jul 24, 2012 12:44 PM

    Penn State costs around 30k a year, and that’s just for in-state students. How in the hell are they 1 BILLION dollars in debt? What are they wasting their money on?

  3. psunick says: Jul 24, 2012 12:48 PM

    State Farm cancels sponsorships?

    Is this really worth a news story? Or, is it piling on, as usual?

  4. ebrownwareagle says: Jul 24, 2012 12:53 PM

    Que the JoePologist!

  5. righton989 says: Jul 24, 2012 12:53 PM

    PSU paid out big bucks to the estate of JVP and Jerry Showers before the Freeh Report. PSU is still paying Spanier and Hero McCleary. But they offset the payoffs with a record $220 Million treasure haul from alumni.

  6. billobrienschindimple says: Jul 24, 2012 12:58 PM

    The debt is a result of the one and only Graham Spanier. As soon as he took the job he started construction on every square inch of space possible. We are talking 20 years of non stop construction and renovations.

    One of many reasons I disliked him prior to this scandal.

  7. dannythebisforbeast says: Jul 24, 2012 1:00 PM

    It’s all about the $$. Convenient that amount was $60 mil equal to about one year football revenue. Penn state said well play this year for free. As a fan I would rathe have a 1 year Death penalty. Kind of like a moment of silence. I know I will not enjoy getting ready to watch a PSU game this fall.
    I wish alum would withhold money until real change is in effect not just the idea of change that has been sold and swallowed up by the public.

  8. dannythebisforbeast says: Jul 24, 2012 1:04 PM

    State farm pulls oenn state sponsorship…….9 months ago

    Breaking news. What else can you recycle to put the name Penn State in the headline.

  9. brianjoates says: Jul 24, 2012 1:21 PM

    It is a news story, because its the first of many that will stop doing business with PSU because their company doesn’t want to be associated with PSU at this time. When national companies start leaving it usually opens a temporary flood gate inwhich it is almost applauded that companies stop doing business with them ,because PSU hurt companies by not being a good business partner. PSU has alot of work to do.

    Outside of PA when Penn State is mentioned it makes you think of what took place, and its not good. The national sponsors and companies will come back ,eventually, but for now when deciding where to spend dollars out of your ad budget, PSU is not a place that you want your company linked to.

  10. dannythebisforbeast says: Jul 24, 2012 1:38 PM

    It was a new story when it originally happened 8-9 months ago.

    Joe paterno is dead…that is more recent news for comparison.

  11. overratedgators says: Jul 24, 2012 1:52 PM

    In a related story, Allstate will be removing it’s “you’re in good hands” tag line from all PSU game day TV spots.

  12. rickrock6661982 says: Jul 24, 2012 2:58 PM

    Queue the Penn State student with her mouth wide open

    OMG Poor Joe Pa!!!???!!

  13. dannythebisforbeast says: Jul 24, 2012 3:13 PM

    Overrated gators pretty good

    Rickock keep trying you’ll get there

  14. kiopta1 says: Jul 24, 2012 3:21 PM

    The muppets also pulled away from Chick-fil-a.

  15. mungman69 says: Jul 24, 2012 3:27 PM

    Come on, Penn. Staters, wake up.

  16. ukeone says: Jul 24, 2012 3:28 PM

    Only HICKS eat at Chick-fil-a. Regular people eat ‘real food!’

  17. xpensivewinos says: Jul 24, 2012 3:52 PM

    I’m waiting on the edge of my seat to hear what the Paterno family has to say about this one.

    I’m sure it will be objective and brilliant…..

  18. psunick says: Jul 24, 2012 3:56 PM

    Exactly, danny.

    This story could just as easily have been titled “Pepsi intends to continue its advertising campaign with Penn State football.”

    Which is exactly what was announced today.

  19. tweeter75 says: Jul 24, 2012 6:38 PM

    And the Paterno family wants an explanation.

  20. dannythebisforbeast says: Jul 24, 2012 6:38 PM

    Pnc bank also that ones for you Pittsburgh. If you want to protest take your $12.50 out and hide it under your girlfriends mattress. And by mattress I mean the hay in the barn

  21. drunkenagitator says: Jul 24, 2012 8:36 PM

    Perhaps if one of “Uncle Jerry’s” victims had closed their eyes and said, “like a good neighbor, State Farm is there” someone would have intervened. Lord knows no one on “Joe Pa’s” staff had the guts to do so.

  22. brianbosworthisstonecold says: Jul 25, 2012 4:03 AM

    psunick | Jul 24, 2012, 12:56 PM PDT
    Exactly, danny.

    This story could just as easily have been titled “Pepsi intends to continue its advertising campaign with Penn State football.”

    Which is exactly what was announced today.

    ____________________

    And that is why people need to boycott Pepsi!

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