I don't think he's referring to sports. The vast majority of PSU's income comes from tuition, grants & appropriations, and the medical center. Football revenue is a drop in the bucket.
Considering this, it is in the University's best interest to get rid of their football program for a few years.
The source of a University's success is its reputation. A famous school with a good reputation will attract more, richer, students. Thus, a University with a prestigious reputation is in a position to make more off of Tuition than a similar, less prestigious school. This is why the higher-ups at Penn State were so desperate to keep this atrocity under-wraps.
At this point though, the football program's crimes have been made public and the damage to the school's reputation has already been done. It is in the University's best interest to do everything they can to recover their good name, and as such, they should purge their management of those responsible and suck up the short term loss from eliminating their football program for a few years.
Unfortunately for Penn State, the people in charge are either too caught up in Paterno worship, or too concerned with covering up their own asses to even look at things from a cold cost-benefit analysis, let alone do the right thing. Leaving that statue up and keeping the football program will do more damage to the school long term than the alternative.