Where to begin with the damage to the Pennsylvania State University brand?
For starters, Netflix no longer has to worry about finishing atop any 2011 "brand disasters" lists. Penn State has wrapped up that "honor" in a way only possible by associating your brand with "child rape cover up."
While Penn State administrators struggle with the current day to day PR nightmare the university is managing, what is the future of the school's brand? Which brand partners will stand with it and which are fleeing? That Penn State will recover is a foregone conclusion; time is always the best reputation rejuvenator.
But will it fully recover? That is not so clear.
The background of the Penn State case is this. In 2002, a football assistant witnessed another team assistant, Jerry Sandusky, raping a minor in a facility shower. He reported it to head coach Joe Paterno, who in turn kicked it up to the school's athletic director. Nobody was fired. Nobody was suspended. Nearly ten years later, a grand jury indicts the alleged rapist and the story leaks out.
One week ago, at age 84, the legendary Paterno became the winningest college football coach of all time. ESPN Sportscenter was flooded with clips of him humbly accepting the congratulations. He was a football god, one of the most famous names in the sport. Penn State was practically synonymous with the football program the man known as "Joe Pa" built. Some said he was the most powerful man in Pennsylvania. He was recommended for America's highest civilian honor, the Presidential Medal of Freedom.
A week later and Paterno has been fired a few days before the team's most important game of the season.
But it is exactly Paterno's inseparable brand relationship with Penn State that has left the school helpless and flailing as it becomes the most despised academic institution in the nation.
Founded in 1855, Penn State's University Park campus is home to around 45,000 students. After the announcement of Paterno's firing, a small number of students rioted (near a statue depicting Paterno) in opposition to he coach's removal. The students overturned a news van, smashed windows and some were subdued with mace. To the world watching, Penn State was now synonymous with the sexual abuse of children. And it wasn't just the nation; Taiwan's ever "understated" NMA assessed the scandal as only it can:
Like any huge university, Penn State has faced damage before. After several black students were attacked on campus in 1988, protesters staged a sit in, protesting racial inequality at the school. Nearly 100 police were called to remove the group. Other bumps in the road for Penn State's reputation have been minor and the school is (was?) held in high regard, sometimes called a "public school ivy."
In the immediacy, Penn State's football program is in a shambles. On a technical level, its recruiting abilities have been damaged severely in the short term. How many from outside Pennsylvania will want to play on "the child rapist team?" Already, one of the team's best recruits has backed out from playing for Penn State. When the top recruits jump ship, disaster can become a self-fulfilling prophecy.
Then there is a more severe immediate problem — money.
As part of the very lucrative Big Ten Conference, Penn State football games bring in big money. At least six advertisers pulled their sponsorships from running on ESPN's Saturday broadcast of the Penn State-Nebraska game. Cars.com has also pulled its ads from ESPN's broadcast of next Saturday's game against Ohio State as well.
One brand that is (so far) firmly standing its ground is Nike. Nike is the official equipment supplier of the Penn State Nittany Lions football team. The Lion's Pride web store for the university even hosts a specific Nike section. Moreover, Nike's headquarters is home to the unfortunately-named Joe Paterno Child Development Center, which it's (so far) declining to rename.
Asked if Nike planned any action, the brand told The Washington Post, "Our relationship with Penn State remains unchanged. We are deeply disturbed by the claims brought forth in the indictments. We will continue to monitor the situation closely."
Forbes is already claiming that Nike "will eventually be proven right with its decision to stick with Penn State."
It's not a surprise that if any brand was going to gut it out through a sex scandal PR disaster, it would be the swoosh. As superstar Tiger Woods' reputation disintegrated and his endorsements fled, Nike stood by the golf god. (Join our debate on Nike's Paterno decision here.)
Meanwhile, Moody's Investors Service announced that it would review Penn State as an investment, with a downgrade a real possibility.
Whatever Penn State's brand was before, it is irrevocably altered for at least one generation. This is a fact. Penn State must deal with that.
While the Nittany Lions football program will bear some damage for decades, there is hope that the university's brand will someday, maybe even soon, suffer the child rape scandal only as an unpleasant entry in its Wikipedia page.
There are numerous universities that have weathered brand-damaging events.
In 1970, four protesting students were shot and killed on the campus of Kent State University in Ohio, a black day forever commemorated in the Crosby Stills Nash & Young song, Ohio.
In 1963, the National Guard was deployed to the University of Alabama to force desegregation after the governor called in state police and blocked African Americans from entering the enrollment office. Alabama's chant of "Segregation now! Segregation tomorrow! Segregation forever!" scarred the university's reputation through the 1960s.
A case that may most closely mirror Penn State's situation is the 2006 allegations that the Duke University lacrosse team gang raped a young woman. Although these allegations later proved to be false, Duke's reputation suffered all the same, and to this day "Duke lacrosse" is a punchline to many jokes.
Now, Penn State is facing a firestorm of criticism. "It's hard to look to the past. We have to look to the future," said Pennsylvania Governor Tom Corbett on a Sunday morning talk show. Penn State faces a dual challenge: repair its internal brand with its students, employees and alumni as well as rejuvenate its reputation to the rest of the world. In this regard, the school may have had the best possible outcome Saturday during its big game against Nebraska.
America is not probably not ready for a victorious Penn State team, one that seems to win despite what has happened under its program. But proud Penn State students do not want their school to become a punching bag over something most students did not support, nor had any knowledge of.
As for Paterno, his reputation outside of Penn State is forever destroyed. While he will always occupy top positions on stat sheets and in hallowed halls of the sport, as a brand he's irrevocably tainted and his legacy is sullied. His name is being scrubbed from the Big Ten championship trophy, while eBay which has been flooded in the last few days with Paterno memorabilia—signed footballs, collectors items from Joe Pa's career. There are few bids.
One Joe Pa item that has attracted numerous bids? A collector Joe Paterno card released by The Second Mile, the youth organization the accused Penn State pedophile coach headed up, and which also welcomed Sandusky's sympathetic judge as a volunteer.