Penn State's athletics department is one of a handful across the country that are self-sustaining, meaning it receives no funding from the commonwealth or its taxpayers for its annual operating expenses. Likewise, it also receives nothing from the university via tuition payments, student fees, etc.
Further, Penn State is a "state" university in name only. In fact, it is state-related, along with Pitt, Temple and Lincoln, and not categorized with schools like West Chester, Bloomsburg, etc. This means PSU receives non-preferred appropriations from the state, which have dwindled consistently for years now. Legally, PSU is a private entity. I believe Pennsylvania is the only state in the nation with a public-private hybrid system.