OT - Rutgers AD is $265 million in debt
Apparently Rutgers University (84 million) and the B1G conference (48 million) have recently lent them massive loans to stay afloat. One would think that something has to give eventually because this doesn't seem sustainable.
But at least the conference got the NYC TV market, right?
September 8th, 2021 at 11:05 AM ^
this that slumdog millionaire bollywood flow
September 8th, 2021 at 8:19 AM ^
But at least the conference got the NYC TV market, right?
Well it seems like it helped the conference, who actually loaned them money, to help with their deficit. Rutgers problem, according the the article is Rutgers. It sounds like they don't support their athletic teams with donations, or attendance.
September 8th, 2021 at 8:22 AM ^
Well in fairness to Rutgers it must be noted that the teams whose games they don't attend or donate money to kinda suck.
September 8th, 2021 at 8:29 AM ^
I mean, have you seen some of their other varsity sports play? It would be rather hard to donate to THAT in some cases....
Actually, I think their faculty union might have raised a rather big fuss (rightly so) in the recent past about the university funneling money to the athletics department, which reportedly couldn't make a profit even if it sold every last damn asset, they are that far in a financial hole.
September 8th, 2021 at 8:31 AM ^
We could have had Fordham….
September 8th, 2021 at 10:03 AM ^
Or UCONN for that matter.
September 8th, 2021 at 10:40 AM ^
Let's extend an offer to Slippery Rock.
September 8th, 2021 at 8:43 AM ^
The graph showing revenue from ticket sales is near the end of the article, but it surprisingly shows a drop in ticket sales, parking and concessions from $16M in 2015 to $13M in 2019, with an even bigger drop in 2020 due to the pandemic. I suspect donation and corporate sponsorship revenue is correlated and dropping as well.
That's the price of having a terrible coach in Chris Ash. For the good of the conference, I hope Schiano can get the fans excited about Rutgers football again.
Reading through the article, the rising expenses don't seem that out of line with the trend across college football and athletics in general. Yes, coaches salaries went up 90% since 2015, but they probably started relatively low compared to peer schools, and had to catch up. Their financial issues are primarily on the revenue side, not expense.
September 8th, 2021 at 8:31 AM ^
Hey Rutger..... www.gofundme.com
It seems there's no limit to what people will use it for.
September 8th, 2021 at 8:37 AM ^
I have served on a bunch committees dealing with athletic departments' budgets and have even advised a couple of universities. The number of departments that are in deep financial problem is staggering. There are only about 20-30 schools that are on a sustainable path -- everyone else is in trouble. The problem is that a sinking boat will take them down as well. Unfortunately, football is the main driving force behind this sorry state. A number of schools have considered moving to lower divisions but savings are not that significant (football scholarships are not a major cash outflow). I know of 3 schools that are considering shutting down many programs, including football. Pandemic accelerated the downward spiral and there is no easy solution.
September 8th, 2021 at 8:47 AM ^
The bubble is absolutely going to pop as the current arms race in coaching salaries, facilities and other residule expenses is not sustainable. I believe you are right that when one goes it's going to take down others and it's only a matter of time before the first one sinks.
I think we'll see college sports, and football in particular, separate into semi-pro (SEC) and amateur staus groups with different rules for each. There's no way a school like Kansas for example, can keep up with the Alabama's of the world and it would benefit them greatly to stop trying.
September 8th, 2021 at 9:22 AM ^
I'm guessing Kansas basketball does a decent job supporting other sports.
September 8th, 2021 at 12:24 PM ^
Thanks for your thoughts, MassBlue and MGrowOld.
They prompt me to wonder how these issues overlap with the prospective superconference of the SEC.
September 8th, 2021 at 8:53 AM ^
The only way that financially-struggling athletic depts at public institutions can survive is through massive subsidies from the schools, which is essentially payments by taxpayers. In an era of shrinking state government support for higher education, that's a tenuous proposition.
September 8th, 2021 at 8:55 AM ^
(football scholarships are not a major cash outflow).
If scholarships are not a major cash outflow, what are the main sources of cash outflow?
September 8th, 2021 at 9:25 AM ^
I'm guessing salaries and servicing capital payments. Scholarships are kind of funny money. Yes, food, board and books are expensive, but having an extra 85 kids taking classes is not an incremental cost for the school.
September 8th, 2021 at 9:59 AM ^
You are spot on, but that's not how it works. Each department, unit, etc. has a budget, most of which are shrinking year over year. So your faculty/admin/staff are already feeling burdened. I don't know the exact academic administrative structure at UM, but you'd need a few different decision makers to force budget decreases on units/colleges below them which currently get the scholarship funding from the athletic department. Similar with dorms/campus life. You don't usually keep your positions as President/Provost/VP/Dean by pissing off faculty, so it's easier to tell the AD to deal with it or find donors.
September 8th, 2021 at 9:41 AM ^
EMU spent $23.1 million from its general fund (i.e., the university's subsidy for the athletic department) in 2018, a typical figure that hasn't gotten any better; 40% of that comes from scholarships, the remaining 60% on salaries, buildings, equipment, marketing, etc. This article has one of my top "how unaware can you be?" quotes of all time from EMU's AD.
"If you are going to drop down to Division II, is that the reputation we want? We compare ourselves to a Western Michigan, a Central Michigan, a Toledo and Bowling Green. Do we want to all of a sudden compare ourselves to Oakland, Saginaw Valley or Grand Valley?"
https://www.mlive.com/news/ann-arbor/2018/03/eastern_michigan_pays_23m_1000.html
Uh...yeah? Grand Valley, and to a lesser extent Oakland, are doing much better than EMU in terms of attracting students. Students absolutely cross-shop EMU, WMU, CMU, GVSU, Oakland, etc. So if EMU currently thinks they are "above" GVSU or Oakland, they need to wake up.
Reader: they have not woken up.
It is shocking to me that some Michigan politician(s), regardless of party, haven't taken the layup and continually beat the drum for the MAC schools to either a) fix their annual $15-$25 million athletic department deficit or b) state funding will be cut off. Why the general fund is paying:
- $2,400,000+ salaries
- $692,000 in travel costs
- $488,000 in equipment costs
- $270,000 in recruiting expenses
- $499,000 in marketing, promotional and fundraising expenses
- $165,000 in gameday expenses
...every year just for football is beyond me.
You can probably count on two hands the number of students, who are not players, who go to EMU so they can watch Div 1A in-person. The remaining 99.9% of students would not give a shit if a now Div II Eastern Michigan played its football games against Grand Valley, Ferris State, etc, instead of FBS teams. But they would like more faculty to be hired so they could finish their degree more quickly, and more staff so their classrooms are cleaner.
Rutgers is an awful athletic department, and it sucks that they are in the Big Ten. But as a Michigander, I'm more concerned our directional universities are cutting staff, faculty, and student support so they can pretend they are "big time" by staying in Division 1. It's past time for a change.
September 8th, 2021 at 10:46 AM ^
Sounds like Scott Weatherbee is a classic case for deployment of the "people in charge of things are just in charge of them for no reason" tag. Talk about out of touch.
September 8th, 2021 at 2:35 PM ^
I've thought for a long time that either the directional Michigan schools and the big D2 Michigan schools could form a D-1A league to save the directionals money. That would aslo bring GVSU, SVSU, Wayne St, Ferris and such up a tier. Or they should all drop to D2 with the GLIAC.
It truly makes zero sense to subsidize those programs, even though I do realize (as an accountant) much of that subsidy is funny money, just like the $84 million Rutgers "borrowed" from the University.
September 8th, 2021 at 8:19 PM ^
Apparently the guy at EMU hasn't looked at his enrollment numbers lately. GVSU and Oakland are bigger schools than Eastern.
September 8th, 2021 at 10:30 AM ^
Salaries, travel with so many kids, staff and the equipment, facilities, room & board, etc. Most of the scholarship costs are just book entries. Though there are some real costs associated with the academic scholarships (e.g., faculty advisors, tutors, special classes, etc).
September 8th, 2021 at 8:41 AM ^
Good thing they hired Schiano at 8 yrs/$32M
September 8th, 2021 at 4:53 PM ^
$4 million/year for Schiano seems a "bargain" compared to some of the other Division 1 coaches out there...
Heck, it's only good for 13th out of 14 teams in the B1G:
https://www.si.com/college/indiana/football/tom-allen-new-deal-makes-hi…
September 8th, 2021 at 8:47 AM ^
idk, GS will put a few more in the win column.... not sure how you turn things around unless you're winning.
you have to cut waste, but you can't reduce your sales force and expect sales to increase.
September 8th, 2021 at 8:50 AM ^
How about this: Trade Rutgers to the AAC for Cincinnati. Rutgers can go to a conference they can compete in on the field and financially and Ohio gets a second B1G school, which OSU would just love. Now that NYC folks have witnessed the superior product known as BTN, I'm sure they'll fight to keep it on the air.
September 8th, 2021 at 8:58 AM ^
THE ohio state penitentiary will never allow that
September 8th, 2021 at 9:03 AM ^
Jesus, why would you want Cinci over Rutgers?? Given the local NJ talent and their proximity to the rest of the NE states, which Don Brown taught us DO have talent, with competent coaching they could be good. Very good in fact.
Cinci is as good as it will ever get right now, with 20+ years of success from Kelly to Fickell, and they still aren't good/big enough to go anywhere but the flaming carcass of the Big 12.
That's not even mentioning the sub difference from the BTN being on most/all cable networks in NYC compared to... Cincinnati, where I'm sure OSU has had them covered forever.
September 8th, 2021 at 9:26 AM ^
But does Gers even get any addl BTN subscriptions???
September 8th, 2021 at 10:02 AM ^
BTN is part of a few million cable packages in the NYC market because of Rutgers. Cable packages that didn’t have BTN previously due to no team in the area.
You pay for channels as part of your cable package whether you watch them or not. That’s why it was so beneficial to add teams that bring in big markets.
The simple fact that millions more homes now have BTN was a huge boost to the B1G TV deal.
September 8th, 2021 at 1:47 PM ^
Gers?? If you're going to type four letters what's another three?
September 8th, 2021 at 11:52 AM ^
I was being sarcastic, but in all seriousness, we didn't need Rutgers to recruit NJ talent. It's not as if those kids are coming down to us and Rutgers as their final two schools. If anything, NJ kids now have the option to transfer back home and still play in a Power 5 conference if they don't like the depth chart here.
Also, Cinci football/basketball has been far better than Rutgers over the past 20-30 years. Put them in the B1G and I think they start to siphon off some of the talent going to OSU. That's why it'll never happen unless there are enough Bearcat grads in the state legislature to throw their weight around.
September 8th, 2021 at 9:53 AM ^
I’d like to jettison Rutgers too, but why would they leave the B1G and their rich payouts and take a pay cut to go to a lesser conference? Wouldn’t this make the problem worse? Unless they are forced out I don’t see it happening.
September 8th, 2021 at 8:55 AM ^
How soon until Rutgers goes the way of Chicago State and reverts to a purely educational institution?
September 8th, 2021 at 10:05 AM ^
Chicago State has athletics though…
September 8th, 2021 at 11:16 AM ^
University of Chicago, not Chicago St.
That's not a whole lot different than mixing up MSU and "Michigan University" when referring to U of M.
September 8th, 2021 at 4:29 PM ^
University of Chicago has athletics too though
September 8th, 2021 at 11:17 AM ^
University of Chicago? They have athletics at Div III. Used to be in the B1G.
September 8th, 2021 at 11:50 AM ^
The University of Chicago is part of the Division III University Athletic Association and competes against some of the academic elites in the country – Carnegie-Mellon University, Case-Western Reserve University, Emory University, New York University, the University of Rochester, and Washington University of St. Louis.
September 8th, 2021 at 9:02 AM ^
Sell naming rights to the entire school.
Herpecin State University seems apropos and has a nice ring to it.
September 8th, 2021 at 9:16 AM ^
What about The Banana Boat State University, as the brand and their products would resonate with their fanbase and seems like an overall fitting name for the school....
September 8th, 2021 at 9:14 AM ^
Rutger is a rowing and wrestling school
RRR U
September 8th, 2021 at 9:19 AM ^
Operating like the EU now? Michigan and OSU are the UK and Germany and we have to fund the Greece's of the union in Rutgers.
September 8th, 2021 at 10:05 AM ^
its the new normal..... not just in the EU
September 8th, 2021 at 9:50 AM ^
Is Rutger even getting their full share of conference revenue?
September 8th, 2021 at 10:26 AM ^
They didn't receive their full share for their first six years in the conference, so they are now. But as the article mentions, they have borrowed heavily from future Big Ten earnings so their future income won't look like a full share.
September 8th, 2021 at 8:28 PM ^
When they were joining the B1G they said they'd have to operate at huge deficits and probably have to borrow money from the conference until they got the full share. They knew they'd have to spend a fortune to upgrade their facilities. It was just made worse by Covid. It's not surprising at all
September 8th, 2021 at 10:11 AM ^
It's getting pretty absurd the amount some schools are subsidizing their respective athletic departments. Like thousands of dollars per year per student absurd. But at least they get free student tickets!!!!
I would imagine at some point in the next ten years certain schools will end up dropping football i.e. UConn for starters.
September 8th, 2021 at 10:17 AM ^
It feels like UConn has been mulling that decision over for around 5 years now. I'm honestly surprised they didn't use Covid as a convenient excuse to rip that bandaid off last year.