In what might be a record amount for a university, Michigan State has agreed to pay $500 million to victims of Larry Nassar. That staggering figure would crush most schools, but Michigan State has decided to take the hit to get the controversy behind it. The school is in a similar position to Penn State in terms of paying out massive fees and damages while trying to keep its alumni support base. It has worked for Penn State which (like Michigan State) has a fiercely loyal base built around its football program. However, half a billion dollars could chill some donors who want their money to go to the school and not litigation.
Under the agreement, 332 claimants will divide $425 million and the remaining $75 million will be held in reserve for two years for any new victim claims. Michigan State would not have to make admissions on the claims made against it.
As for Nassar, he accepted a plea and was sentenced to up to 175 years in state prison for criminal sexual conduct. He is also serving a 60-year federal prison sentence after pleading guilty to child pornography charges.
What is most interesting is that this is only the settlement of Michigan State. Other defendants include USA Gymnastics; the U.S. Olympic Committee; and Twistars, the local gym Nassar’s used with patients. Those parties will either have to reach separate settlements or go to trial.