By Bloomberg News
Joe Paterno sat in his kitchen one morning in March 2002 as a  graduate assistant described a locker-room shower encounter he saw  between a boy and a longtime friend and colleague of Penn State  University's football coach. Paterno slumped in his chair, "shocked and  saddened," according to court testimony.
Mike McQueary's words  couldn't have come at a worse time. Paterno was trying to fix the  Nittany Lions' money-making football program he built on a motto of  "success with honor," after the low point of his coaching career. The  State College, Pa., university was near the end of a $1.4 billion  fundraising campaign, six years removed from the opening of a $55  million basketball arena and had just expanded the football stadium to  the nation's second-biggest.
Paterno, in his 37th year as coach, told McQueary he had done the  right thing describing what he saw involving Jerry Sandusky, a former  Nittany Lions defensive coach. The biggest man on campus then sent the  case to his immediate bosses and did nothing else. That set the stage  for his firing nine years later, 11 days after his record 409th win,  amid a scandal over alleged child-sex abuse and coverup that has echoed  far beyond the Central Pennsylvania region known as Happy Valley.
"The  revenue opportunities are so substantial that the pressure placed upon  the athletic department and coach, specifically, make it ever more  difficult to pursue a school's mission," Warren Zola, 44, assistant dean  of graduate programs at the Carroll School of Management at Boston  College, said in a telephone interview from his Chestnut Hill, Mass.,  office.
Paterno, who turned 85 on Dec. 21, was unable to comment  for this story because of health issues, said Dan McGinn, a spokesman.  Paterno is being treated for lung cancer found after his firing and  broke his pelvis in a fall at his home this month.
The dependence  of universities on sports to help fund everything from money-losing  gymnastics teams to general scholarships has created a system where the  needs of coaches and their programs supersede the educational values of  their institutions, said Robin Harris, executive director of the Ivy  League, whose schools don't give athletic scholarships.
It also  creates an environment where a coach like Paterno, a Brooklyn native  known as "JoePa" whose bronze statue stands outside 107,000-seat Beaver  Stadium, had the power to tell the university's president that he  wouldn't help raise another penny if the school's top disciplinarian  wasn't fired for being too strict with his players.
"There is so  much money tied into big-time college athletics that it forces some  people to make bad decisions," Harris said in a telephone interview.  "They may be people affiliated with a program, or coaches and  administrators who do things purposely wrong, or turn a blind eye,  because they are focused on generating revenue and not necessarily the  integrity of the enterprise."
Paterno and Graham Spanier, 63, Penn  State's president, were fired by the school's trustees on Nov. 9, four  days after Sandusky, 67, was charged with sexually assaulting eight boys  from 1994 to 2009. While neither Paterno nor Spanier was charged in the  case, the trustees said the two leaders should have done more.
Athletic  Director Tim Curley, 57, was placed on administrative leave and Gary  Schultz, 62, a vice president in charge of finance and the campus  police, retired after they were accused of lying to a grand jury about  what McQueary told them about Sandusky's actions. Sandusky, Curley and  Schultz all have denied wrongdoing.
McQueary, 36, testified at a  Dec. 16 preliminary hearing for Curley and Schultz that he went to  Paterno's house the day after the shower incident and told the coach  what he had seen, although he didn't offer explicit details. About 10  days later, McQueary met with Curley and Schultz and told them he had  seen Sandusky and a boy, both naked, in the shower.
"I conveyed to  them that I saw Jerry with a boy in the showers and that it was severe  sexual acts going on and that it was wrong and over the line," McQueary  testified.
Educators said they see plenty wrong with big-time college sports.
Winning  generates money from television, ticket sales, sponsors and alumni,  according to a 2010 report by the Knight Commission on Intercollegiate  Athletics, an independent, non- profit group dedicated to reforming  college sports.
Networks including ESPN and Fox will combine to  pay the top five conferences and the Bowl Championship Series that  determines the national football title about $14 billion in rights fees  through 2032.
ESPN is an investor in the Longhorn Network, which  guarantees the University of Texas an average $15 million annually for  20 years. Texas had a nation-leading operating profit of $70.1 million  last year, according to data compiled by Bloomberg. Penn State football  generated $63.3 million in fiscal 2010, about 60 percent of the athletic  department's revenue.
Coaches like Paterno are the most powerful  people at their universities, including the presidents, said Lewis Katz,  a former owner of the NBA's New Jersey Nets who donated $15 million to  Penn State and whose name appears on a campus law building.
"Football trumps everything at Penn State," Katz said. "There's nothing that comes close to second."
JD  Reive is in his second season as the men's gymnastics coach at the  University of Iowa, where the football team accounted for 52.6 percent  of athletic department revenue last year. The gymnastics team lost  almost $600,000 in fiscal year 2010, according to university figures  obtained through open- records laws. Reive said his program might  disappear if the football team falters.
"There isn't a gymnastics  coach in the country that doesn't worry about what happens if the  football team doesn't make a bowl game," Reive, 35, said in a telephone  interview. The Hawkeyes play in the Insight Bowl on Friday against  Oklahoma.
Ohio State University's football program had an  operating profit of about $18.2 million last year. It hired Urban Meyer,  a two-time national title winner at the University of Florida, as coach  last month at $4 million a year, more than triple the $1.3 million paid  in the fiscal year ending June 2010 to Gordon Gee, the Columbus, Ohio,  university's president.
Meyer, 47, succeeded Jim Tressel, who quit  in May in a memorabilia-selling scandal involving top players. Tressel  produced a national championship at Ohio State before the NCAA said he  kept information about rule-breaking from school administrators for more  than nine months. Asked early in the case if he was going to fire  Tressel, Gee, 67, responded, "I hope he doesn't fire me."
Gee,  through a university spokeswoman, declined to comment for this article.  The NCAA on Dec. 20 banned the Buckeye football team from postseason  play next year.
Behind Paterno's Coke-bottle eyeglasses and  grandfatherly exterior was a bully, said Vicky Triponey, Penn State's  former standards and conduct officer who said in a 2005 email to Spanier  that Paterno believed she should have no interest in holding players  accountable to general student standards.
"I do not support the  way this man is running our football program," Triponey, 54, said in  emails first reported by the Wall Street Journal last month. "We  certainly would not tolerate this behavior in our students, so I  struggle with how we tolerate it in our coach."
Triponey also said  she was told by Spanier that the coach had given the president an  ultimatum: Fire her or Paterno would stop raising funds for the  university. Spanier told Triponey that he would pick her, though he  didn't want to have to make that decision.
The content of the  emails was confirmed to Bloomberg News by Triponey's husband, Michael  Meacham, a former Penn State professor. Triponey, through her husband,  declined to comment further.
Raymond Marsh, a spokesman for Penn  State's Office of University Development, wouldn't say how much total  money Paterno had helped to bring in.
"Penn State clearly raised more funds because he was involved," Marsh wrote in an email response to questions.
Spanier  declined to comment through Bill Mahon, a university spokesman. The  former president remains a tenured professor in the College of Health  and Human Development and the College of the Liberal Arts.
Triponey  quit in September 2007, a month before the university limited the  ability of its judicial-review process to end a student's participation  in activities, including sports.
Walter DeShields, a 2004 graduate  of Penn State and head of the Philadelphia chapter of the African  American Alumni Organization, said in a telephone interview it was clear  during his time at the university that football and basketball players  were given more leeway when it came to behavior and punishment.
"But playing on Saturday in a multimillion-dollar business is the only thing that matters," he said in a telephone interview.
John  L. Lahey, president of Quinnipiac University in Hamden, Conn., said the  biggest headaches in college sports seem to come from the more visible  and valuable teams.
"When any part of the university, in this case  athletics, becomes so important to the university, to the university's  brand, image, resources, as certainly is the case with the Penn State  football program, it can cloud the better judgment of people with high  intelligence and integrity," Lahey said at the IMG Intercollegiate  Athletics Forum in New York this month.
Of 53 universities  surveyed by Bloomberg this year, 46 diverted money to sports in their  fiscal years ended in 2010, based on financial reports to the NCAA  obtained from state schools under open-records laws.
Bobby Bowden  took Florida State to 31 bowls in 34 years and won 76 percent of his  games. Toward the end of his tenure, Bowden, who went 33 years without a  losing season, said he began receiving office visits from university  administrators voicing concerns about empty seats on game day. He left  under pressure after the 2009 season with a total of 377 victories.
"At  the end, I didn't win enough," Bowden, 82, said in a telephone  interview from his home in Tallahassee, Fla., where the university is  based. "You can bet your life if you're not winning and filling the  stadium, got to sell those seats. Football pays 90 percent of our bills.  Got to win to get those TV contracts."
With reporting by Curtis Eichelberger, Sophia Pearson, John Lauerman, Aaron Kuriloff and Heather Perlberg.
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Thursday, 29 December 2011
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