So, is Moody's looking for a reality show? This has to be the most incompetent group of people in New York, a state run by incompetent and corrupt people. After it's moronic downgrade of U.S. debt, a time when investors have never put more confidence in U.S. debt, Moody's chasing some crazy idea that a sex scandal, which will blow over in about 4 weeks, will affect in any way PSU's ability to service debt is about as dumb and pathetic as it comes. This will not impact PSU fundamentally in any way whatsoever.
It's as if Moody's is seeking publicity or something as its CEO went all over TV several months ago parading its lunatic theory on U.S. debt, which the other rating agencies and investors have laughed at.
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.
The agency on Friday said it will consider whether to lower its assessment on the university's $1bn of debt, which is now rated Aa1, just one notch below triple A.
The Pennsylvania attorney-general has filed criminal charges involving child sexual abuse against Jerry Sandusky, a former assistant football coach, as well as perjury and failure to report charges against two senior university officials, including the chief financial officer.
The university board this week fired Penn State's president and Joe Paterno, the school's beloved head football coach, who has been criticised for not doing more to stop the alleged abuse.
Mr Paterno coached the "Nittany Lions" team for nearly five decades. His programme was revered as one of the most successful and ethical in college sports.
"Higher education is first and foremost a business that is driven by reputation," said John Nelson, head of higher education research at Moody's. "Student demand, the attraction of faculty and the ability to draw donations are all based on reputation."
Moody's said it will evaluate "the potential scope of the reputational and financial risk" arising from the allegations, including potential lawsuits and settlements, weaker student demand or philanthropic support, changes in the university's relationship with the state and significant management or governance changes.
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.
"The football programme does not have a large direct financial impact compared to other business lines," Mr Nelson said. "The larger potential impact of recent events is reputational."
Officials at the university could not be reached for comment.