PSU pays $6 million to Paterno estate
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Penn State University paid the estate and family of football coaching legend Joe Paterno about $6 million to fulfill contractual and other obligations, including a $3 million retirement bonus and family use of a Beaver Stadium suite for 25 years, officials said Thursday.
Bill Mahon, a university spokesman, said the payout stems from a school trustees decision on Nov. 9, the day the board fired Mr. Paterno amid an exploding scandal over the arrest of former assistant football coach Jerry Sandusky on child sex charges.
Trustees decided that day that Mr. Paterno's contract would be honored "as if he had retired at the end of the 2011 season," Mr. Mahon said in a statement posted Thursday on the school's website.
"That contract recognized Coach Paterno's decades-long contributions to our football program and to the entire University," he said.
Mr. Paterno, 85, the winningest coach in major college football, died in January of complications from lung cancer.
Penn State said the payments, as well as forgiveness of $350,000 in loans, are in four categories.
The first category, income owed to Mr. Paterno under his employment contract prior to its August 2011 amendment, includes:
• A final, pro rata, base salary payment of about $34,000.
• A death benefit of roughly $51,000.
• An annual head coach bonus of $425,000.
• Deferred $1,000 monthly compensation to Mrs. Paterno for the rest of her life.
• Access to a suite at Beaver Stadium by Coach Paterno's family for 25 years, valued by Penn State at roughly $1.5 million.
• A total of $900,000 in television and radio revenue for last year.
The second payment category, resulting from Mr. Paterno's August 2011 contract amendment, includes:
• Forgiveness of $250,000 in outstanding indebtedness.
• Career bonus of $3 million if Coach Paterno retired at the end of the 2011 season.
• Status as head football coach, emeritus if Coach Paterno retired at the end of last season.
• Forgiveness of an additional $100,000 in loans if Coach Paterno retired at the end of the 2011 season.
The third payment category, described as "additional amounts and benefits provided without contractual obligation," include:
• A $50,000 bowl bonus.
• On campus parking privileges for Mrs. Paterno and access to the Lasch Building to use specialized hydrotherapy equipment.
The fourth category, stemming from a 1986 consulting agreement, included $350,000 to be paid over five years, "that remained due as a payable benefit," the university said.
In a statement Thursday night, Wick Sollers, Paterno family attorney, said the payments are not a settlement but rather "straightforward payment of monies indisputably owed" to the Paterno estate.
"The university had requested that the family agree to a full release in return for the payments under the contract," Mr. Sollers said. "That request was declined and no release was signed."
Mr. Sandusky, 68, is charged with sexually assaulting 10 boys over 15 years, some on campus.
The firing of Mr. Paterno, ending a six-decade career, sparked outrage among his supporters and calls for the board's resignation.
Trustees responded by saying that Mr. Paterno -- though he met his legal obligation -- should have done more that just tell his immediate superior upon learning of an allegation in 2002 that Mr. Sandusky sexually assaulted a boy in a campus shower.
First Published April 20, 2012 12:51 am