The NCAA never threatened the Death penalty. According to Ed Ray, it was never on the table. Here's a new angle that I headslapped myself that I hadn't thought of: Money! Yes, the almighty dollar.
The Big Ten recently added Nebraska to the conference....why...MONEY! they wanted the 12th team to have the lucrative Football Conference Championship game. Everybody else was doing it, why not the B10? Sure, the B10 was making lots of money, but you can never have enough money, especially if you have to split it.
Now here's how a fly on the wall might have seen this play out (and a President with any semblance of a spine):
Erickson gets a call from Emmert and says we are going to announce sanctions and penalties, unless PSU agrees to a 4 year Death Penalty. Erickson says to hold on, calls Delaney at the B10 office, tells him that Emmert wants to cancel PSU FB for 4 years, and goodbye to your conference championship game for the next 4 years. Delaney realizes that MONEY is going to be gone, and tells Emmert to pound sand.
Simple. Instead, Erickson caved and signed away.
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