Although State Farm announced yesterday it would drop its sponsorship of Penn State Univ., most business partners said that they are “staying on for now,” according to Charles Thompson of the Harrisburg PATRIOT-NEWS. Nike North America Media Relations Manager KeJuan Wilkins in an e-mail said, “Our relationship with Penn State remains.” Nike holds “major athletic-equipment and co-branding deals with the school.” PNC Bank issued a statement and said it will continue in “support for the students and traditions of Penn State.” Highmark Inc., Pennsylvania’s “largest health insurer,” also said that it “remains a sponsor.” Chicago-based Engage Marketing President & Chief Solutions Officer Kevin Adler said that he would “advise sponsors to pull out of their deals with Penn State now, adding that most contracts have morality clauses giving advertisers an out.” Adler: “I think the public perception is pretty clear and definitive at this point. That brand is damaged beyond the point of short-term repair.” Thompson notes PSU has “traditionally held a strong position nationally on the marketing front.” Collegiate Licensing Co. listed the school 10th in sales for their clients in ‘10-11, and it was still “hanging in at 12th in the third quarter of 2011-12, even after” Jerry Sandusky’s arrest. SportsBusiness Journal’s Michael Smith said, “I would be very surprised if Learfield Communications didn’t redo its deal with Penn State. The Penn State brand today is not what is was a year ago” (Harrisburg PATRIOT-NEWS, 7/25).
MORE FALLOUT EXPECTED: Chicago-based Navigate Marketing President A.J. Maestas said altogether, “probably half a dozen sponsors will step back” from PSU. Maestas said that “‘it’s safe to say' donations to the athletics program will drop by $10 million and, while football ticket sales and attendance might not be affected initially, if they do drop, it could take years to recover” (USA TODAY, 7/25). In N.Y., O’Keeffe & Weiss wrote Moody’s “weighed in, too, saying it may downgrade Penn State’s credit rating, making it more expensive for the university to borrow money for expansion and capital-improvement projects.” Moody’s said that it might “downgrade the school’s credit rating because the Freeh report and the NCAA sanctions announced this week, along with ongoing state and federal investigations, could hinder fund-raising and enrollment” (NYDAILYNEWS.com, 7/24).
