Penn State Has Signed a Reported $1 Billion Contract for Beaver Stadium Ticketing
I’m a trustee and am being told I have no business knowing the terms.
On Tuesday, August 27, 2024 in Centre County, Pennsylvania court my legal team of Attorneys Terry L Mutchler, Erika Silverbreit, and Justin Boehret of Obermayer Rebmann Maxwell & Hippel LLP filed an amended complaint against the Penn State Board of Trustees and Matt Schuyler in his capacity as Chair. I strongly suggest you read the amended complaint here, I think you’ll find it very interesting.
Read the original complaint, filed July 16, 2024 here.
Read Penn State’s preliminary objections, filed August 7, 2024 here.
This amended complaint has been made possible by the overwhelming support of the friends and alumni of Penn State University. When I filed the original lawsuit I did so pro se (representing myself), because I felt that the grounds were narrow and that I had a good understanding of the case law regarding trustee legal access to information. Since then, the Board of Trustees has moved to aggressively abrogate the rights of all alumni by rewriting the bylaws, ending the alumni’s 149 year right to elect their trustees (see Penn State Board of Trustees to Alumni: Drop Dead), as well as adding new elements to the Bylaws that shred trustee's First Amendment rights, transfering even more power to the secretive Executive Committee, and increasing censorship by Board leadership of University information.
These actions are illegal, and someone has to hold them accountable.
Several supporters reached out to me and offered to start a GoFundMe fundraising campaign to finance hiring the best legal team we could find. Seeing that Board leadership was intent on doubling-down on their power grab, I accepted the generous offer with gratitude. They quickly raised the initial $10,000 needed to retain Attorney Terry Mutchler, a nationally recognized specialist in Transparency law. Terry successfully represented Pennsylvania Senator Katie Muth in her similar lawsuit against PSERS in 2022, and feels passionately about legal access to public records and First Amendment issues. Terry is also a 1987 Penn State grad who was recognized by the university with the 2021 Alumni Fellow Award.
The work Terry and her team have done so far has been excellent, but this is only the beginning. We want to make sure we can keep them going and need your support. If you can donate, please use this link to give. This lawsuit belongs to all of us.
Terry, Erika, and Justin suggested amending the original complaint to include a recent denial by Board leadership of a request for information I made April 24, 2024 regarding the Elevate Ticketing contract. Here’s a brief summary of the situation (as presented in paragraphs 89 through 103 of the amended lawsuit):
Among its many tasks, Penn State Intercollegiate Athletics (ICA) is responsible for the maintenance and upkeep of all the ICA facilities at University Park campus including Beaver Stadium, the Natatorium, Rec Hall, and Jeffrey Field. In addition to deferred maintenance accrued, ICA has close to $1 billion in approved capital projects. Most of that funding will be borrowed (including most of the $700 million for the Beaver Stadium renovations).
ICA’s primary revenue sources are ticket sales and Penn State’s share of the Big10 Conference media rights, with merchandise sales, seat licensing programs, and other income streams contributing as well. When the ICA project budget falls short of meeting the needed expenditures, they must go to the Board of Trustees for approval to borrow money (like in this example), with Penn State responsible for the debt service.
This spring, the Penn State administration announced that a $700 million partial upgrade to Beaver Stadium had been decided on, and presented their conclusion at a public Board of Trustees meeting May 21st (link to video of the presentation meeting here).
A key point was the announcement by Vice President of Finance Sarah Thorndike and Vice President of Athletics Pat Kraft that to fund this renovation and other ICA needs, Penn State proposed partnering with a third party agency, Elevate Ticketing, as the exclusive ticketing partner for Penn State sports. The provisions of this contract, they said, would allow ICA to fully fund the renovation debt service as well to as provide future ICA income. No details about the partnership were provided, and when I requested a brief outline of the details I was refused.
I had first asked for the parameters of the proposed contract during a meeting on April 24th and was told "You bet". Weeks passed and despite frequent requests, no further information was forthcoming. I then received a communication from Board Chair Matt Schuyler and Vice-Chair Dave Kleppinger denying my request, stating “your request is not objectively or reasonably related to your duties as a trustee. Additional information regarding Elevate will be provided to all trustees in the ordinary course.”
No further information was provided to trustees, so on July 15th I wrote to Chair Schuyler again requesting an update on the status of the Elevate deal and a copy of any executed contracts. Trustee Mary Lee Schneider replied, and acknowledged that the Elevate contract had been executed but that due to confidentiality provisions some trustees including myself would not be provided with copies or any details. “This level of detail is not reasonably or objectively necessary to your role as a trustee.”
I wish to state that I am not aware of, or am making accusations of, any malfeasance or misconduct on the part of those who negotiated with Elevate Ticketing or Elevate Ticketing itself. It is my belief that all the fiduciaries of the University have a duty to review any proposed contract that will reportedly provide over $1 Billion of revenue to the university and will directly impact a major asset like Beaver Stadium. I refuse to blindly take the word of some trustees who have seen the contract and who refuse to share that information with other trustees upon request.
Trustees Schneider, Schuyler, Kleppinger, and I all share the ‘same level of detail’ necessary to perform our duties as trustees. There is no provision in Pennsylvania law that allows one group of trustees the authority to decide what information other trustees get. We all operate under the same legally enforceable confidentiality agreement, so that argument is specious as well.
To conclude, this enormous contract was executed and is binding, and university trustees know nothing about it, including the terms, basis for revenue projections, severability, or even who is setting the ticket prices.
On August 8th, Penn State announced the partnership with Elevate with great fanfare and no details. On the same day, Sports Illustrated wrote “According to one report, the ‘massive’ long-term deal could generate up to $1 billion in revenue.” Later in the article, Elevate is quoted as saying “It’s too soon to project revenue growth”.
When PSU said the cost will fully be from Athletic Funding, I expect that they would not use or "borrow" any cent from PSU.