Penn State's Coaching Search Could See a Significant Cash Infusion

The Big Ten is negotiating a $2.4 billion investment from a California pension fund that would boost Penn State's athletics budget.

Fireworks are seen prior to a game between the Penn State Nittany Lions and the Oregon Ducks at Beaver Stadium. | James Lang-Imagn Images

Penn State wants to hire a high-value, high-cost football coach, and financial reinforcements might be coming to help. A fascinating weekend report by Yahoo! Sports' Ross Dellenger detailed the Big Ten's potential $2.4 billion deal that could infuse a jolt of liquidity into Penn State's athletic department.

Which means, Penn State Athletic Director Pat Kraft could finance a significant contract with a new coach like Texas A&M's Mike Elko or Alabama's Kalen DeBoer, whose names surfaced in search conversations Saturday at the Penn State-Indiana game.

According to Dellenger's report, the Big Ten could vote soon on accepting an investment of about $2.4 billion from a University of California pension fund. The complex proposal is meeting resistance from Michigan and USC but could move forward without them, Dellenger reported.

The financial package would be significant and come as Penn State is funding major capital projects, notably the $700 million renovation of Beaver Stadium, and a new football coaching contract. How significant? According to Yahoo!:

• Penn State would be among three schools (with Michigan and Ohio State) to receive $190 million in initial funding from the proposal. Other schools would receive less.

• Penn State also would join Michigan and Ohio State in receiving 5.5 percent of the Big Ten's annual revenue. Other schools would get 5 percent or less.

That money couldn't arrive at a better time for Penn State.

RELATED: Why Terry Smith could be a great general manager at Penn State

Penn State is funding major projects

Penn State athletic director Pat Kraft gives two thumbs up to the student section following a Nittany Lions win. | Dan Rainville / USA TODAY NETWORK

Kraft is juggling multiple major financial projects in addition to the $20.5 million in revenue-sharing new to the athletic budget this fiscal year. The two most high-profile are the stadium renovation and the new head football coach's contract. Kraft said this summer that the Beaver Stadium project is on budget and on schedule for its 2027 completion.

The stadium project has generated more than $130 million in donations, including $50 million from West Shore Home for field-naming rights. That didn't stop one Penn State fan from wearing a shirt at the Nittany Lions-Hoosiers game that read, "It's Paterno Field. Period."

The next coach to work at West Shore Home Field at Beaver Stadium is going to be expensive. Indiana's Curt Cignetti, whose team remained unbeaten with a dramatic 27-24 win over Penn State, recently signed a new eight-year contract worth $11.6 million annually.

Penn State likely will surpass that, perhaps going as high as $14 million per year for the coach. That brings plenty of candidates into play. Several sources said before Saturday's Penn State-Indiana game that Elko and DeBoer are among the most high-profile candidates for the job. That's not new, as the Centre Daily Times' Jon Sauber reported their candidacies recently as well.

With a bigger check from the Big Ten, Kraft not only can write a large contract but also promise resources for revenue-sharing and NIL. Indeed, Penn State also has signed deals with adidas and PlayFly with NIL funding in mind.

Kraft previously has challenged the concept of private-equity investment, calling it intrusive. This summer, Penn State denied a Sportico report that it had entered into a private-equity deal with Elevate, with which it has an athletics ticketing contract.

"Why do I need private equity — for someont to tell me I'm stupid?" Kraft said at Big Ten media days in 2024. "I have enough people around me to tell me I'm stupid. ... Private equity runs businesses. [Penn State Athletics is] a business, I'm not disputing that. We're a $200+ million business, but my business is to take care of my kids."

The Big Ten's proposal is not with a private equity firm, though the California pension fund would acquire 10 percent of a new conference business, according to Yahoo! But if Penn State is guaranteed to be in the top tier of schools receiving distributions from the deal, Kraft can spin that money in a variety of ways — including toward a coaching contract.

What's next for the coaching search?

Texas A&M Aggies head coach Mike Elko prior to the game against the Arkansas Razorbacks. | Nelson Chenault-Imagn Images

Penn State will be able to afford Elko or DeBoer, but can it afford to wait for them? Elko's Aggies improved to 9-0 with a 38-17 win over Missouri and were ranked No. 3 in the first College Football Playoff rankings. Alabama (8-1) is right behind at No. 4. These are the top two teams in the SEC and could meet Dec. 6 for the conference title.

Kraft doesn't need to be in a hurry with either coach, though their timelines will start to compress in late November. Alabama has a 95.6-percent chance to make the playoff, according to ESPN's College Football Power Index. Texas A&M has a 98.9 chance to qualify. The playoff begins Dec. 19.

College football's early signing period opens Dec. 3, when 2026 recruits can begin signing their contracts. The more important date is Jan. 3, when the lone transfer-portal window opens. If a coach isn't in place by then, Penn State's 2026 roster situation could be dire.

Once the timeline becomes tighter, Kraft will turn toward secondary candidates. They could include Missouri's Eli Drinkwitz and Louisville's Jeff Brohm. That both teams lost this past weekend (Louisville at home in overtime to California) isn't a specific concern. Kraft is assessing body of work, not individual 2025 game results.

But if you're looking for a favorite, it's currently Drinkwitz, according to the predictive market Kalshi. The Missouri coach has supplanted Brohm and has a 32-percent chance to become Penn State's next coach, Kalshi's traders say. Ohio State offensive coordinator Brian Hartline is second at 13 percent.

Penn State's search won't follow market forces, though, and is several weeks from concluding.