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Entries in Penn State (5)

Monday
Nov142011

Penn State Scandal: Second Mile CEO Resigns

Patrick Smith/Getty Images(STATE COLLEGE, Pa.) -- Jack Raykovitz, the CEO of The Second Mile for the past 28 years, has resigned from the charity associated with the Penn State abuse scandal.

"Both Dr. Raykovitz and the Board believe this is in the best interests of the organization," a statement from the charity announced, saying he resigned on Sunday. Responsible for day-to-day operations will be David Woodle, current vice chairman of the board of directors.

Non-profit organizations are hardly immune to improprieties, but charities associated with scandal through its founder are in a deeper predicament, as is the case with The Second Mile, experts say.

The children's charity for troubled youth, founded by Jerry Sandusky, the former Penn State defensive coordinator arrested for alleged sexual abuse against eight boys, is relatively small as charities go, says Stacy Palmer, editor of the Chronicle of Philanthropy.

"Although the allegations against Jerry Sandusky and the alleged incidents occurred outside Second Mile programs and events, this does not change the fact that the alleged sexual abuse involved Second Mile program children, nor does it lessen the terrible impact of sexual abuse on its victims," the charity stated on Monday.

Sandusky, who retired from The Second Mile in September 2010, was the charity's primary fundraiser, according to the grand jury's report, which causes a problem for The Second Mile as it not only deals with an investigation by Pennsylvania Gov. Tom Corbett, but also the possible exodus of its donors.

With revenue of $2.9 million in 2010, according to its annual report, and a staff of about 20, The Second Mile had three offices in Pennsylvania.

Sandusky helped establish the charity in 1977 with proceeds from his book, Developing Linebackers the Penn State Way, according to Sports Illustrated. The organization began as a foster group home and expanded into programs for troubled youth.

The Second Mile didn't return a request for comment.

Copyright 2011 ABC News Radio

Saturday
Nov122011

Moody’s Considers Downgrading Penn State

Scott Eells/Bloomberg via Getty Images(UNIVERSITY PARK, Penn.) -- Moody’s credit rating agency is considering downgrading Penn State University because of the allegations of sexual abuse by former defensive coordinator Jerry Sandusky, related charges against two university officials and the firing of football head coach Joe Paterno, an icon at the school.

Penn State has approximately $1 billion worth of rated debt, according to Moody’s.

“Moody’s Investors Service has placed the Aa1 revenue bond rating of Pennsylvania State University (Penn State) on review for possible downgrade to assess credit risks emanating from the announcement this week by the Pennsylvania Attorney General of the filing of criminal charges involving child sexual abuse against a former assistant football coach, as well as perjury and failure to report charges against two senior university officials, including the CFO of the university,” the agency said in a statement released Friday.

The school reportedly pulled in $4.6 billion in revenue in 2011 and enrolls more than 80,000 students. Universities like Penn State typically incur debt to fund new construction and other capital improvement projects.

The university, like other state institutions, received $333.9 million from the Commonwealth of Pennsylvania in 2011 and faces a potential budget cut of $182 million in a proposal laid out by Pennsylvania’s Republican Gov. Tom Corbett.

Like most states across the country, Pennsylvania is undergoing economic hardship. Approximately 90 miles away from Penn State, the city of Harrisburg recently filed for bankruptcy, making it the sixth U.S. city to do so this year.

Copyright 2011 ABC News Radio

Friday
Nov112011

Penn State Game Sponsor Withdraws

PRNewsFoto/Cars.com, Apple(COLLEGE TOWN, Pa) -- Cars.com has withdrawn its sponsorship of ESPN's Saturday Afternoon College Football for the next two weeks, which includes Penn State games, making it one of the first companies to distance itself after the recent arrest of former defensive football coach Jerry Sandusky.

After a Penn State student riot over coach Joe Paterno's firing, the university may soon see more corporate sponsors rebelling against its brand.

A spokeswoman for Cars.com said that the move was "due to the recent allegations surrounding the Penn State football program."

"As a proud, longtime supporter of ESPN College Football, it's important to us that we're building our brand in a way that celebrates the sport, its fans and the dedication of its student athletes," she said in a statement.

The company said it worked with ESPN to redistribute its commercial ad units during these games.

The university-wide athletics program has dozens of sponsors, like Pepsi and AT&T, who are closely watching the university's next move. The school's football program is considered its crown jewel, bringing in $72 million a year, according to the Philadelphia Inquirer.

Sponsors Chevrolet, PNC Financial, John Deere, State Farm Insurance, the American Red Cross and healthcare company Highmark told ABC News they are not jumping ship yet.

Copyright 2011 ABC News Radio

Friday
Nov112011

Penn State Sponsors Anxiously Watching How Events Unfold

Justin K. Aller/Getty Images(STATE COLLEGE, Pa.) -- Now that it has dealt with students' anger over coach Joe Paterno's firing, Penn State University may soon have to deal with corporate sponsors rebelling against its brand.

The university-wide athletics program has dozens of sponsors, like Pepsi and AT&T, who are closely watching the university's next move.  The school's football program is considered its crown jewel, bringing in $72 million a year, according to the Philadelphia Inquirer.

Sponsors Chevrolet, PNC Financial, John Deere, the American Red Cross and health care company Highmark told ABC News they are not jumping ship yet.

Since former assistant coach Jerry Sandusky was arrested on 40 criminal counts on Saturday for allegedly abusing at least eight boys over 15 years, no sponsor has publicly canceled its contract with Penn State.

The university's board of trustees fired legendary head football coach Joe Paterno on Thursday and university president, Graham Spanier, Wednesday evening.

It is too early to tell whether Penn State's corporate sponsors will bail on the university, said Scott Rosner, professor of legal studies and business ethics at the Wharton School of the University of Pennsylvania.

Though, it is worth noting, the logo of paint company and Penn State sponsor Sherwin Williams was no longer on the press conference backdrop behind interim football coach Tom Bradley on Thursday.  Sherwin Williams did not return a request for comment.

Pepsi has had a major partnership with Penn State, including a $14 million 10-year deal from 1992 that named it the official beverage on campus.  Indra Nooyi, PepsiCo CEO since 2006, gave the Penn State commencement address in August 2010 and was awarded an honorary degree.

Rosner said the school's brand was strengthened by the football program and its reputation had a "halo effect" on not just the athletics department but the rest of the university as well.  Rosner said the most important next move, even more so than the next university president, is who they appoint as permanent head football coach, because of the importance of the football program.

Copyright 2011 ABC News Radio

Wednesday
Jan122011

Study: Best Policy is to Ask First Before Changing Company Logo

Image Courtesy - Getty Images(UNIVERSITY PARK, Pa.) – When companies change their logo, it is most likely to upset customers that are most loyal to the brand, a study conducted at Penn State found. Researchers took a look at how consumers reacted to logo redesigns, and found that poor reaction to a change can lead to bad numbers for a business.

The study, called Do Logo Redesigns Help or Hurt Your Brand? The Role of Brand Commitment, surveyed 632 undergraduate students and had them look at a change in two famous logos on the market—Adidas and New Balance. Researchers had a professional graphic designer create two new logos for those companies, and found that those respondents who were highly loyal to the brand before the change did not like the new logos. However, individuals who were not originally loyal to the brand were receptive to the new designs.

The main finding of the study was that customers feel personal connections to brands, and that when logos change, they feel a sense of betrayal. Take for example, Gap. The company changed its iconic logo in October 2010, only to be bombarded with ridicule on Facebook and Twitter. Just days later, Gap reverted to the original logo.

 "Most companies presume that their most precious customers -- those having strong brand commitment -- will be more accommodating to changes," the study reads. "Our results show this is likely a mistaken assumption -- one that can alienate the core, the most committed of a brand's customers."  

The best way to tackle change, the researchers found, is to ask the most loyal customers first for input. If they feel like they have an inside track to what’s happening, they will be more likely to respond positively when a change does occur.

Copyright 2011 ABC News Radio







ABC News Radio