… is the amount Penn State (well, the citizenry of Pennsylvania) has paid out (so far) because of the Sandusky scandal. It’s a figure the University of North Carolina scandal will almost certainly surpass, now that the first of thousands of athletes screwed by that school has sued.
The class action possibilities here make the ongoing class action against Professor Chancellor President Donald Trump of Trump University look paltry by comparison.
[Mike McAdoo is] suing the university in federal court, saying UNC broke its promise to give him an education in return for playing sports. His lawsuit is a class-action suit that the other 3,100 students who enrolled in the fake classes — nearly half of whom are athletes — could easily join.
“From selection of a major to selection of courses, the UNC football program controlled football student-athletes’ academic track, with the sole purpose of ensuring that football student-athletes were eligible to participate in athletics, rather than actually educating them,” says his lawsuit …
“UNC has reaped substantial profits from football student-athletes’ performance for the school, but it has not provided them a legitimate education in return. As such, UNC has breached its contract with Plaintiff and Class members, in violation of North Carolina common law,” wrote his attorney, Jeremi Duru, who is also a professor of law at the Washington College of Law.
November 8th, 2014 at 5:53PM
Penn State only gets about 6% of its income from the state of Pennsylvania. Like most “state” universities, it is essentially private because of the states’ abandonment of higher education funding.
November 8th, 2014 at 7:26PM
anon: Yes. But I had more in mind than the straightforward six percent direct funding from the locals. Penn State gets all kinds of tax breaks, courtesy of Pennsylvania taxpayers and all other taxpayers.
November 8th, 2014 at 8:41PM
Whoever is paying it, it’s $165M that could have been used for advancing the teaching and research mission of a flagship state university. Same with UNC. If “from selection of a major to selection of courses, the UNC football program controlled football student-athletes’ academic track…” can be demonstrated, they can’t argue that the students simply made bad choices.
November 9th, 2014 at 10:47PM
Repetition doesn’t make it less wrong, UD. Payments are coming from football revenue reserves, insurance policies, and interest income from auxiliary enterprises. Now you can draw really convoluted lines from taxpayers to charitable donation deductions to football revenues, but the notion that this is some enormous burden on Pennsylvania or American taxpayers is UD’s version of American media panic over Ebola. Sure, there’s something worth noting, but the hysteria is far out of proportion to reality. And there’s no real impact on the academics either. Football and auxiliary dollars are kept separate from the academic budgets. $165M sounds like a lot. It’s barely 1% of PSU income during that time period.
November 10th, 2014 at 12:15AM
anon: I think the convolution is coming from your side. As Polish Peter notes, this enormous sum represents money that could have been used to educate people – which, let me point out, is the purpose of a university. The money is not there to stage football games; it’s there to perform a surpassingly important social role: the education of a citizenry. Because we all agree that this is a surpassingly important function, we agree to allow amazing tax benefits to accrue to institutions like Penn State.
As to your nice neat picture of a clean separation of academic and athletic budgets — please. I’ve yet to see a budget from a big sports school (or a little one, come to think of it) that has anything resembling transparency.
I really don’t think the best response to this immense national scandal – not just Penn State’s squandering of its reputation, of course, but all the other sports schools in the news just this week (UNC will certainly pay out a great deal more than $165 million in its own scandal; and of course Penn State isn’t yet finished paying up) is there, there, little lady, $165 mill is a drop in the bucket.
November 10th, 2014 at 10:48PM
While I don’t know what the arrangements at Penn State and UNC are, a lot of universities are self-insured, so general funds probably are being tapped eventually for the payouts these messes require. $165M probably is a small part of the Penn State revenue, but PSU needs every dollar it can get. Just to put it in perspective, the PSU endowment is only about $3B, according to Wikipedia. Assuming a typical spending rate of about 5%, that amount only yields about $150M in spendable funds in any given year. The rest has to be made up in tuition, state appropriations, and other revenue. So wherever it comes from, $165M in revenue at a school like Penn State isn’t something that can easily be written off. See http://budget.psu.edu/Openbudget/default.aspx for an illuminating tour through Penn State’s budget.
November 11th, 2014 at 1:20AM
@anon, the debt for athletic buildouts isn’t consigned to the athletic department, it is a taxpayer obligation and the collateral for that debt are the guaranteed income streams from student loan debt. Wall Street money palaces, which administrate and invest in that public debt, aren’t stupid enough to think that ticket revenue is going to be stable enough for the multi-decade terms of those loans. Of course, the athletic department isn’t on the hook if those bonds go bad, the taxpayer ultimately is when USAAmerican finally realize the scam of student loan debt.