Penn State Merchandise Sales Slump 40% in Wake of Child Sex-Abuse Scandal
Sales of Penn State T-shirts, caps and other merchandise have plunged by almost 40 percent from previous years since a child-sex scandal led to the firing of football coach Joe Paterno and the university president, according to the company that runs the school’s online store.
“Whether they’re disenchanted with the brand or if they’re angry, people aren’t necessarily motivated to go out and buy a bunch of the team’s merchandise,” Fanatics LLC Vice President of Business Development Brian Swallow said in a telephone interview. He declined to provide financial details.
Fanatics, a wholly owned company based in Jacksonville, Florida, is the largest retailer of licensed team sports merchandise in the U.S. by sales and volume, Swallow said, again declining to provide figures. The company runs the online stores of the National Football League, National Basketball Association, Major League Baseball and more than 48 colleges, including Penn State and the University of Alabama.
College-branded merchandise generates $4.3 billion a year in sales, according to Swallow.
Former defensive coordinator Jerry Sandusky, 67, is accused of assaulting children that he met through his Second Mile charity. The charges led to the ouster of Paterno, 84, after 46 seasons as the Nittany Lions’ coach and the removal of Graham B. Spanier, 63, as school president over their actions after being told by an eyewitness of Sandusky’s alleged behavior. Neither is charged in the case.
Athletic Director Timothy Curley, 57, and Senior Vice President Gary Schultz, 62, who oversaw the university police, were charged with failing to report allegations that Sandusky assaulted a boy in the athletic complex’s showers and for lying about what they knew of the incident.
Officials Leave
The university announced on Nov. 7 that Schultz would step down and return to retirement, while Curley would be placed on administrative leave to focus on his defense.
Sandusky, Schultz and Curley deny the charges.
Penn State is typically one of the top 10 colleges in merchandise sales, Swallow said. He said the scandal will have a greater effect on the Nittany Lions’ brand than violations of National Collegiate Athletic Association rules by Big 10-rival Ohio State University this year. Football coach Jim Tressel was fired and quarterback Terrelle Pryor was among players suspended in a case involving the exchange of sports memorabilia for tattoos and other benefits.
“When you do have a negative situation arise, undoubtedly it affects your retail performance,” he said.
Special Inquiry
Penn State’s board of trustees has set up a special committee to examine the school’s role in the scandal. That, plus on-field success, may help sales to rebound, Swallow said.
“If the Penn State athletic teams are performing well and this gets handled appropriately, certainly you’re going to see a bounce back,” he said. “It’s too early to tell how long this will last.”
As merchandise sales have dropped, ratings have climbed. The Nittany Lions’ 17-14 loss to the University of Nebraska on Nov. 12 was the most-watched noon game on Walt Disney Co. (DIS)’s ESPN in more than 10 years, the network said yesterday in an e-mail. Penn State, 8-2 on the season, plays at Ohio State Nov. 19.
To contact the reporters on this story: Eben Novy-Williams in New York at enovywilliam@bloomberg.net
To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net
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