Penn State sponsors consider pulling ads

STATE COLLEGE, Pa. -- State Farm is pulling its ads from Penn State football broadcasts, while General Motors is reconsidering its sponsorship deal and Wall Street is threatening to downgrade the school's credit rating, suggesting the price of the sexual abuse scandal could go well beyond the $60 million fine and other penalties imposed by the NCAA.

State Farm, which is based in Bloomington, Ill., said it had been reviewing its connection to Penn State since the arrest of retired assistant football coach Jerry Sandusky last November. The insurance company said it will pull ads from broadcasts of Nittany Lions home games but continue to advertise during Penn State's away contests.

"We will not directly support Penn State football this year," State Farm spokesman Dave Phillips said yesterday. "We just feel it was the best decision."

With Penn State's once-sterling reputation in tatters, the university could face an exodus of sponsors unwilling to have their brands linked to scandal, said Kevin Adler, founder of Chicago-based Engage Marketing Inc.

Adler said he would advise sponsors to pull out of their deals with Penn State, adding that most contracts have morality clauses giving advertisers an out.

"I think the public perception is pretty clear and definitive at this point. That brand is damaged beyond the point of short-term repair," Adler said. "None of the sponsors owe Penn State anything."

GM spokesman Pat Morrissey said the automaker is reviewing its sponsorship but has not made a decision.

Other sponsors said they plan to stick with Penn State, including PepsiCo Inc., Pittsburgh-based PNC bank and Pennsylvania's largest health insurer, Highmark Inc.