Penn State's long road to recovery

Originally Published: November 14, 2011
By Mark Schlabach | ESPN.com

How does Penn State begin to move on?

The Nittany Lions' return to the field Saturday marked the end of the worst week in the history of the university. As the shock of the news that former defensive coordinator Jerry Sandusky is alleged to have abused eight boys over 15 years -- and that Penn State officials knew about the allegations and did nothing -- begins to subside, Penn State's faculty, students, alumni and fans must begin to pick up the pieces.

[+] EnlargeRodney Erickson
AP Photo/Gene J. PuskarInterim president Rodney Erickson has the task of guiding Penn State through rough waters.

Penn State's image is bruised and battered, and the stunning fallout has left the school without a university president, athletic director and football coach. The university finds itself in a challenging and unprecedented position.

"It all begins and ends with empathy," said former White House press secretary Ari Fleischer, who advises professional sports leagues and teams on crisis management and communications. "A lot of children have been abused, and that's what people have to keep in mind and remember as Penn State begins its recovery. Everything has to be about not what is best for Penn State alone but also reflecting on what's good for those children who have been harmed."

More than anything else, school leaders must focus on doing what's right.

"I think in any situation, I think you just have to do the right thing, no matter how painful it might be," said USC athletic director Pat Haden. "Whether it's relieving a coach or making decisions that might be unpopular, you do the right thing. In the case of Penn State, you do what's right for those children. What I'm hearing about is more and more about the institution and the coaching staff. Personally, what I'm hearing is not enough about the children."

Penn State has already announced the appointment of provost Rodney Erickson to interim university president, and the board of trustees has launched an investigation into the university's handling of the case.

"I know we can do this," Erickson said Friday. "We are resilient; we are a university that will rebuild the trust and confidence that so many people have had in us for so many years."

How does Penn State begin to pick up the pieces? It won't be easy.

Change at the top

As Penn State begins to rebuild its reputation, Fleischer and other crisis management experts said the school needs to be deliberate in its actions while remaining sympathetic to the young victims who were allegedly abused by Sandusky.

Hiring a replacement for former president Graham Spanier, who was relieved of his duties Wednesday, needs to be one of Penn State's top priorities, according to Fleischer.

[+] EnlargeGraham Spanier
AP Photo/Gene J. PuskarGraham Spanier's tenure as president ended last week when news broke of charges against Jerry Sandusky, as well as members of his administration.

"They will not have a better opportunity to send a signal that it's not business as usual than the naming of a new president," Fleischer said. "It's a chance to name someone who is a reformer and someone who will help them turn the corner. That to me is the most important thing they can control.

"[Penn State] needs a spokesperson who has authority, who has responsibility, who is good on their feet, is credible and sympathetic. The face and the image of Penn State in a media climate like this are very important because it will help define how it's going to react."

Jason Maloni, a senior vice president at Levick Strategic Communications in Washington, D.C., who oversees crisis management for its sports and entertainment clients, said Penn State is looking at a long road to recovery.

"Penn State is looking at difficult times ahead," Maloni said. "You don't repair one of the most powerful brands in academia as well as intercollegiate sports overnight. Firing people is good because words do not speak louder than actions. The public does not remember the incident as much as the steps you take to fix it once the facts and details are known."

David Brandon, who worked as chairman and CEO of Domino's Pizza before he was named Michigan's athletic director in 2010, said Penn State is in a difficult position because so many of the people involved aren't at liberty to talk about specifics because of ongoing criminal investigations.

"What people want are transparency and information," Brandon said. "With the speed of the Internet and the way these things are reported in real time, people want accurate information and they want it now. The difficulties in Penn State's situation is that there are so many investigations going on, and I'm sure there are so many attorneys involved who are telling people what they can and cannot say. It makes it difficult to be transparent."

Mike Paul, a crisis management expert and president of MGP & Associates Public Relations in New York, said Penn State officials need to be transparent and accountable as criminal investigations into Sandusky and how school officials initially reacted to allegations of his actions are completed.

"If they were trying to pass the white glove test, they wouldn't pass," Paul said. "They still have pieces swept under the rug and in the corners."

Paul said that Penn State officials cannot afford to wait for local or federal investigators to find more information about what occurred; they must find it first and reveal it to the public. Paul said he would start with the board of trustees and work his way down, firing anyone who had any knowledge of the situation before the indictment.

Penn State officials also must address the damage that has already occurred and ensure the crisis doesn't get worse by making improper decisions.

Maloni recommended establishing a monetary fund for Sandusky's victims, as BP did for victims of the Deepwater Horizon oil spill in the Gulf of Mexico in 2010.

"I would borrow a page from BP and establish a victims' fund with a sizable figure so people know Penn State is serious about identifying the victims and getting them care," Maloni said. "The focus needs to be not on the football program, the institution or the alumni. It needs to be on the children."

Rebuilding the program

Penn State will have to hire a new athletic director and football coach. On Saturday, the Nittany Lions played their first game since 1949 without iconic coach Joe Paterno as part of their coaching staff, losing to then-No. 19 Nebraska 17-14.

Longtime defensive coordinator Tom Bradley, who replaced Sandusky in 1999, is serving as interim coach and will lead Penn State into its last two regular-season games, at Ohio State on Saturday and at No. 17 Wisconsin on Nov. 26. The Nittany Lions have a one-game lead over Wisconsin in the Big Ten Leaders Division standings and a chance to play in the inaugural Big Ten championship game as well as a postseason bowl game.

[+] EnlargeJoe Paterno
Greg Ashman/Icon SMIReplacing a legendary coach like Joe Paterno is never easy.

Coaches and athletic directors who have helped schools recover from scandals in the past said Penn State needs to hire a university president and athletic director before it names Paterno's replacement. An athletic director at a prominent BCS school told ESPN.com that hiring a coach first would be a "recipe for disaster."

Penn State officials need to focus their search for the next athletic director on a "corporate type of guy with a squeaky-clean image, who is very credible and strong," one FBS athletic director said.

Replacing Paterno wasn't going to be easy even before the shocking scandal. Paterno, 84, had coached at Penn State since 1950 and worked as its head coach since 1966 before his firing Wednesday. He is major college football's winningest coach and guided the Nittany Lions to two national championships. Replacing a legendary coach is an arduous task for any school, even more so at Penn State after such a salacious scandal.

"I definitely think it's still a good job, but it's not the same job," a prominent FBS football coach told ESPN.com. "It's going to take awhile for Penn State to recover. People make a place. They correct the people who were involved and hopefully it will still be a great place. But it's not going to be easy."

Georgia State coach Bill Curry, who in 1987 became the second man to coach Alabama after Paul "Bear" Bryant retired, said Penn State's next coach will have to have pretty thick skin because the comparisons to Paterno are going to be inevitable.

"As long as you accept the fact that you're not going to replace him and honor that figure in every way you can, that's all you can do," Curry said. "The expectations will never be normal."

Penn State officials might face a difficult decision in deciding on a replacement for Paterno. Hiring one of his former players or assistants -- such as Miami's Al Golden or Rutgers' Greg Schiano -- might galvanize the fan base because the new coach would be one of their own. Or Penn State officials might decide to distance themselves from the Paterno era by hiring someone without ties to the school.

"You could argue it either way," Haden said. "There are lots of great Penn State alumns who are in the profession of coaching, and a guy like that might make people feel better. You could argue a clean break or fresh start would be appropriate for them. That's for them to decide. I don't think it will happen quickly."

Brandon said Penn State just needs to hire the right football coach, regardless of the candidate's connection to the school.

"The connection thing to me is not as relevant as the importance of hiring someone who is a credible leader and can embrace the values of Penn State and everything that is good about its athletics and institution," Brandon said. "Knowing the situation they're in, they need to bring in someone who has tremendous credibility and will be perceived as someone who is a great leader and very open communicator."

Baylor basketball coach Scott Drew, who took over the Bears in 2003 after a scandal involving the murder of a player by another player and a cover-up by their coach, said Penn State will have to be unified if the school is going to move forward.

"When we came to Baylor, the people who knew what Baylor was about knew it was an isolated incident," Drew said. "For the people who didn't know Baylor, they just knew there was an incident here. For recruits that don't know much about your program, it takes time to build trust."

Financial costs of a scandal

Experts say it's impossible to know how much the scandal will harm Penn State in the end. The financial costs might be staggering. Dan Shallman, a partner at O'Melveny & Myers LLP in Los Angeles, estimates that costs associated with the scandal could reach $100 million.

[+] EnlargeBeaver Stadium
James Lang/US PresswireExperts predict that support for Penn State could wane, depending on how the school handles the fallout from the scandal.

Shallman said Penn State could easily spend $500,000 or more per criminal defendant (the school has said it will cover the legal expenses for former athletic director Tim Curley and university administrator Gary Schultz) unless a plea agreement or other pretrial dispositions of cases occur. Although Penn State might be obligated to cover legal fees because Curley and Schultz are charged with crimes related to their duties as Penn State employees, Shallman said the university likely has reserved the right to cut off fees or recoup its advances if the defendants are found guilty.

A committee has been formed by Penn State's board of trustees to investigate the matter, and the university will have to hire an outside law firm and a team of forensic examiners to interview witnesses and examine what is likely to be thousands of emails, phone records and other documents. Shallman estimates that the price tag for those legal fees could top $5 million.

But the bulk of Penn State's legal costs likely would come from defending civil lawsuits against the university -- up to $20 million -- and possible damages that would have to be paid, approaching $100 million, Shallman said.

Forbes, which in 2009 estimated the Penn State's football program's economic value at $99 million (behind only Texas and Notre Dame among FBS programs) predicted that the scandal could have an immediate $10 million impact in lost sponsorships and donations.

Companies such as Chevrolet, PNC Financial, John Deere, the American Red Cross and health care company Highmark, which have sponsored Penn State athletics, told ABC News last week that they are not jumping ship yet. The company logo of Sherwin-Williams paint was removed from a news conference banner last week, and the school has removed a listing of corporate sponsors from its athletic department website.

Penn State donors and alumni also might be less willing to make contributions to the school because of the scandal -- or they might donate even more money to help their alma mater.

"It's impossible to say," Maloni said. "We've seen different situations like this even increase donations during times like these."

Vince Dooley, who dealt with scandals as Georgia's football coach and as athletic director, said most alumni and boosters will remain loyal to a school even during difficult times.

"People that are loyal to a school are very loyal," Dooley said. "I think the loyal supporters recover pretty fast. They're ready to rise and fight again. Sometimes they feel like they were mistreated and they'll defend their school, whether right or wrong."

Although no scandal in college athletics is directly comparable to what's happening at Penn State, Dr. Brian Goff, director of Western Kentucky University's Center for Applied Economics, said the closest case study is the Baylor basketball murder.

Using university endowment as a measure of brand value, Goff said the scandal had a measurable effect on Baylor -- but only in the short term. Before 2003, Baylor's endowment had increased at a rate near the national average. However, in 2003, just months after the scandal broke, Baylor saw its endowment lag the national average by 8 percent. The next year, Baylor's endowment again trailed the national average, this time by 12 percent.

[+] EnlargePenn State fans
AP Photo/Matt RourkeDespite the scandal, Penn State fans rallied together during Saturday's game.

However, from 2005 to 2006, Baylor's endowment increased by 30 percent compared with the national average of 12 percent. Goff said this suggests a rallying of supporters once the scandal was two years behind the school.

"The same loyalties of PSU fans and alumni that cause them to pull back in disgust are likely to be the factor that bring them back after a year or two," Goff said.

Goff said Penn State's choice of its next head coach will greatly affect the school's ability to put this scandal behind it. He said that when SMU returned to football after the NCAA-imposed "death penalty," the university treated the team as if it were playing at a lower level. If Penn State hires the right coach and wins games, Goff said he believes alumni will be there to support the program -- as fans and with donations.

Andrew Zimbalist, Robert A. Woods professor of economics at Smith College and author of many books on the economics surrounding professional and collegiate athletics, suggests Penn State will weather this storm better than many are suggesting. The time frame for recovery depends entirely on how the situation is handled going forward, Zimbalist says, particularly how quickly Paterno's replacement is hired.

Although Zimbalist said Penn State's situation is "more reprehensible" than past scandals at other schools, he says that, in his view, "It is not something that reflects distinctly on the athletic enterprise at Penn State." Zimbalist described the situation as co-workers having closed ranks around Sandusky, something he thinks is common in FBS athletic departments.

"All FBS [athletic] departments have lots of dirty laundry, albeit of a different nature, and it is in their culture to protect the department from outside intruders and the media," Zimbalist said.

In the end, Zimbalist believes the half-life of news items in our society is very short, with outrage quickly followed by collective amnesia. Thus, he predicts that if Penn State takes the correct steps, it can recover more quickly than most would expect.

But other crisis management experts aren't so sure.

"They're going to be living with this for an entire generation, not just a couple of years," Paul said.

Sports business reporter Kristi Dosh contributed to this report. You can read more from Dosh here.

Mark Schlabach covers college sports for ESPN.com. You can contact him at schlabachma@yahoo.com.

Mark Schlabach | email

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