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Posted on 11/12/2011 1:52:26 PM PST by tcrlaf
Moody’s Investors Service said it may downgrade the credit ratings of Pennsylvania State University in a sign of the potential scope of the fallout from a sexual abuse scandal at the school. (SNIP)
The university now carries high ratings because it has been popular with prospective students, top professors and generous donors, but also because of its efforts over the past 20 years to develop its research capabilities. The university owns the Hershey Medical Center, a hospital that contributed 26 per cent of the school’s $4.6bn in operating revenues in the year ended June 30.
Penn State’s football programme contributes about 2 per cent of revenues. Additional large contributors are tuition and other student-based revenue at 40 per cent and federal research grants at 19 per cent. The university receives 7 per cent of its operating revenue from the state government of Pennsylvania.
(Excerpt) Read more at ft.com ...
Interesting that 19% comes from the FEDERAL GOVERNMENT, for things like Micheal Mann's Climate Fraud Center.
The credit ratings agencies are throwing their weight around a lot these days.
Seems to me this is a play for notoriety on the part of Moody’s. Why would you join into that fray now, except to say “I’m the boss around here & don’t you forget it”
Because Moody's has an obligation to it's subscribers (investors, suppliers, major contractors) to keep the information current so they weigh the risks of doing business with Ped State
Not so. That would be the case if they actually decided to change anything.
Jumping in now with a story about ‘reviewing’ achieves nothing except notority for the ratings agency.
This is not “information current”.
Saying that football contributes “2%” makes it sound insignificant, but Joe Paterno was CEO of PSU Football Inc, a $91M operation. Follow the money.
Whatever point you’re making is not clear to me. A bidder looking to start a major construction job for Ped State should be able to have current information about the schools credit worthiness snd it’s ability to pay it’s bills. Moody’s announcement tell all subscribers that the schools numbers are under review
The point I’m making is that the credit ratings agencies are throwing their weight around a lot these days, and the power they wield is dangerous and disproportionate.
Read your subscribers contract and you’ll see that there is a premium on getting it right, getting it soon and being aggressive about both goals.FWIW, I am responsible for millions of dollars worth of contracts annually with Moody’s, S&P, Fitch and Bloombergs and I have an inkling about what I am saying. What looks like throwing their weight around is the aggressive pursuit of timely accuracy.
The facts are the facts a lot of students will leave this place and a lot of next years freshmen will not show up.
More interesting is where this money will be going...early estimates put the cost of the Sandusky scandal at $100 million(and that’s just in damages payments to the victims). And what’s worse, that may be a low ball number. The sharks called tort lawyers haven’t seen this much blood in the water since Big Tobacco rolled over. You’re going to see dozens of victims filing lawsuits against PSU, and the final payout will probably be somewhere north of $200 million. Couple that with a concurrent drop in donations—and decreased revenue from the football program—and Penn State’s finances are going to take a major, major hit.
I’m not interested in excuses. I’m not saying you can’t concoct a plausible reason for them to do it. I’m interested in the underlying realities.
The underlying truth is that the credit ratings agencies are throwing their weight around a lot these days, and the power they wield is dangerous and disproportionate.
Okay, with your vast experience in this area based upon a feeling, you must be right and I must be wrong. Silly me, I thought I understood the business I have been responsible for for all these years.
Trying to explain the business to you is spending my time unwisely
Of course there should be a warning regarding PSU’s financial status Right Now as the investigation is likely to cause untold damage and the real possibility of $100 of Millions in lawsuits and a dramatic fall in student registration. I’ll be surprised if most of the leadership of the PSU Administration does not get convicted and imprisoned. Don’t forget the potential homicide of a PA DA also.
Research is going to take it in the shorts because of Obamacare deficits and all the other debt.
From straw man to ad hominem in one easy move! Bravo!
I have a theory that you can track who is winning an argument by what level of argument they pitch. The further down the scale of reason they go, the deeper hole they are in. What do you think?
Since you’ve demonstrated an inadequate level of reason to understand the nature of Moody’s business which I’ve tried to explain and still cling to your emotional response to your uninformed perception, I’ll leave it to you to determine how that fits into you argument scale theorem.
Still ad hominem. That must be the bottom.
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