Penn State could take financial hit

Most anything can turn into a business story - even the horrendous sex abuse scandal involving Joe Paterno. For starters, Moody's has put the school's solid Aa1 bond rating under review for possible downgrade. The ratings agency will assess the potential impact of lawsuits, a drop in applications, and the possible loss of donations. A lower rating could mean the school having to shell out more money to finance its borrowing - not devastating but an additional headache for administrators. Also comes word that a few advertisers have pulled commercials from ESPN's broadcasts of upcoming Penn State games. It's not just commercials - companies with any sort of marketing deal with the school are probably taking a second look. From the WSJ:

Over the past few years, college sports has become a hotbed of marketing activity for companies, which increasingly are littering campuses with signs and hiring student "brand ambassadors" to talk up their products on school grounds. Corporations this year are expected to shell out $640 million on sponsorship deals with college sports--a 25% increase from 2007, according IEG, a Chicago research firm owned by ad-holding company WPP PLC. Pro sports, by comparison, is expected to lure about $2.46 billion in deals this year, IEG says.