To sponsor or not to sponsor…

Penn state is an iconic brand it itself. This brand’s football team alone generates $53 million in revenue annually from the football games, and the entire athletic program receives an additional $24 million in sponsorships and merchandising deals. The team’s brand: The Nittany Lion, has been in jeopardy since the sexual abuse scandal began unraveling and continues to be making headlines in the news. With the story still on the minds of students and faculty, it is still a heavy situation for the sponsors of the school and team. Pepsi announced on Wednesday that it will remain a sponsor of the school and its team. Pepsi has been one of the university’s largest corporate partners, and is on prominent on both in both the sports stadiums as well as Penn State’s main State College campus. In its original deal with the school in 1992, Pepsi Co. paid Penn State $14 million over 10 years for exclusive vending and advertising rights. In this deal, soft drinks are served in Pepsi cups on game day and the signage is anchored by a permanent Pepsi logo on the scoreboard of the 106,537-seat football stadium.

The Penn State situation eerily reflects the Tiger Woods scandal along with his loss of sponsors. The status of Penn State’s other advertisers other than Pepsi remains uncertain. Mohegan Sun Casino in Uncasville, Conn, on Wednesday expressed that the casino’s deal with Penn State football “technically” ended for the year. Penn State also has sponsors from AT&T (T), Berks Hot Dogs and Chesapeake Energy (CHK). For now, these sponsors still remain, but the future of their sponsorships of the university are uncertain.

Other high-profile sponsors such as Chevrolet, PNC Financial, John Deere, State Farm Insurance and the American Red Cross are staying put for now. So what does this all mean? Large corporations are also in jeopardy of being in the line of fire for continuing to sponsor a school that has done nothing to protect victims of sexual molestation. Iconic Brands like Penn State and Pepsi have a developed a strong relationship over the years, and will continue to keep their partnership. It poses the question that when is a situation too much for a corporation; what is the breaking point? With modern-day heroes such as Joe Paterno (Penn State) and Tiger Woods, being the center of major scandals which in turn led to the loss of major sponsorship and thus embarrassment for them and their sponsors;  is it in the best interest of Pepsi to remain with Penn State? You be the judge?

— Michela Noreski, Jordan Hill, Ashley Nelson