The NCAA and Pennsylvania State University (“Penn State”) entered into an unprecedented Consent Decree that the NCAA acknowledges is a “matter…unlike any matter encountered by the NCAA in the past.”  By entering into the Consent Decree, Penn Stated agreed “not to challenge the consent decree and waives any claim to further process, including, without limitation, any right to a determination of violations by the NCAA Committee on Infractions, any appeal under NCAA rules, and any judicial process related to the subject matter of this Consent Decree.”

Without further investigation by the NCAA or response by Penn State, the NCAA concluded the findings of the Criminal Jury and the Freeh Report established the following breaches and violations of the NCAA Constitution and Bylaws:

1.         A failure to value and uphold institutional integrity demonstrated by inadequate, and in some instances non-existent, controls and oversight surrounding the athletics program of the University, such as those controls prescribed by Articles 2.1, 6.01.1, and 6.4 of the NCAA Constitution.

2.         A failure to maintain minimal standards of appropriate and responsible conduct.  The NCAA seeks to foster an environment and culture of honesty, as exemplified by NCAA Bylaws 10.01.1 and 11.1.1, and by Bylaw 10.1 on ethical conduct.  Indeed, NCAA Bylaw 10.1 enumerates a non-exhaustive list of examples of inappropriate conduct.  In addition, Article 2.4 of the NCAA Constitution requires athletic programs to adhere to fundamental values of respect, fairness, civility, honesty, and responsibility.

3.         A lack of adherence to fundamental notions of individual integrity.  An institution’s head coach should promote an atmosphere for compliance and monitor activities of all assistant coaches and other administrators involved with the program who report directly or indirectly to the coach.  Further, NCAA Bylaw 19.01.2 consistent with Article 2.4 of the NCAA Constitution, demands the employees associated with intercollegiate athletics to serve as positive moral models for students in order “for intercollegiate athletics to promote the character development of participants, to enhance the integrity of higher education and to promote civility in society.”

As a result of the foregoing, the NCAA imposed the following punitive sanctions:

1.         The NCAA imposes a $60 million fine, equivalent to the approximate average of one year’s gross revenue from the Penn State football program, to be paid over five years beginning in 2012 with a minimum annual payment of $12 million.

2.         The NCAA imposes a 4-year bowl ban beginning with 2012-13 and expiring at the conclusion of 2015-16.

3.         For a period of 4 years commencing with the 2013-14 academic year and expiring at the conclusion of the 2016-17 academic year, the NCAA imposes a limit of 15 initial grants-in-aid and for a period of 4 years commencing with the 2014-15 academic year and expiring at the conclusion of the 2017-18 academic year a limit of 65 total grants-in-aid.

4.         5 years of probation.

5.         Penn State shall vacate all victories from 1998-2011 and Coach Paterno’s record shall reflect the vacation of victories.

6.         Any entering or returning football student-athlete will be allowed to immediately transfer and will be eligible to immediately compete at the transferring institution.

7.         The NCAA reserves the right to initiate a formal investigation and impose sanctions on individuals after the conclusion of any criminal proceedings.

As a result of the foregoing, the NCAA imposed the following corrective sanctions:

1.         The NCAA requires Penn State to adopt all recommendations for reform as set forth in Chapter 10 of the Freeh Report.

2.         Penn State shall enter into an “Athletic Integrity Agreement” with the NCAA and Big Ten Conference, which requires Penn State to 1) establish a compliance officer for ethics and compliance; 2) create a Compliance Council composed of faculty, University administrators, and the compliance officer for athletics to oversee ethical, legal, and compliance obligations; 3) create a disclosure mechanism including a hotline to report, disclose, or request advice on any identified issues relating to compliance; 4) appoint a coach, manger, or administrator for each team assigned to monitor and oversee activities for compliance with ethical, legal, compliance, and University standards and obligations; 5) the athletics director shall annually certify compliance with all ethical, compliance, legal and University obligations to the Compliance Council, Board of Trustees, and NCAA; 6) create a athletics code of conduct to codify the values of honesty, integrity, and civility; 7) all student-athletes, employees, and staff associated with the athletics department shall complete a yearly training course addressing ethics, integrity, civility, standards of conduct, and reporting violations.

3.         Penn State shall appoint an independent Athletics Integrity Monitor for a 5-year period to prepare quarterly reports to the University’s Board of Trustees, Big Ten Conference, and NCAA regarding Penn State’s execution and maintenance of the provisions of the Athletics Integrity Agreement.

For any questions, feel free to contact Christian Dennie at cdennie@bgsfirm.com.