Penn State Athletics Director David Joyner announced to a Board of Trustees committee Thursday the university may take out a $30 million loan as part of a five-year plan to restore funds to the athletics department.
Board of Trustees member, Anthony Lubrano, says it's no surprise the athletics department is taking a big hit because of the NCAA sanctions against the school.
It's no secret Penn State Athletics is struggling.
"It should come as no surprise," Lubrano said. "That's why we've sued the NCAA, frankly."
Lubrano blames the NCAA.
"If you go to a football game, you notice a decline in attendance, that translates into lost revenues, which translates into a loss for Intercollegiate Athletics," he said.
Last year alone, Penn State lost $6.15 million, thanks to the loss of bowl game revenue, a decline in football attendance and alumni donations.
"I think it's less of something to be shocked about," ICA Assistant Athletic Director, Mark Wharton, said. "We do have a plan in place that it's not going to be painful for the university and it's going to make a huge difference."
$30 million. That's how much Wharton says Penn State needs to compensate for the hit, which includes a $60 million payback to the NCAA for sanctions.
"It's going to be a small investment in the end of the day because we have plans in place to be able to fill those commitments," he said.
Plans that will span over five years. Joyner says the $30 million will be split to help funding. He says $5-10 million will fund operations over three years and $20-25 million will address short term operational needs and strategic projects.
"This is the first such time in my time with the board that we've gotten any information from athletics," Lubrano said. "I'm not sure why it has taken so long, I hope we get updates more frequently."
Penn State says the $30 million should be enough, on top of leftover revenue they collect from ICA games, to keep the department's reserve balance positive.
They say the loan will be paid back by future ICA revenues.
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