The Rutgers Way

Meet the Bizarro Butts-Mehre.

All of which brings us to the athletic department’s 2016 financial report to the N.C.A.A. The Star-Ledger obtained this document recently; it showed a blood-red deficit of $28.6 million. The 64-page report had a one-line notation: “Other Operating Revenue: $10,495,912.”

It turned out that the university bank quietly lent $10.5 million to the athletic department to keep it afloat and pay severance costs for expensive and failed coaches. That loan came weighted with an interest rate of 5.75 percent; the cost of repaying it will run north of $18 million, according to university documents.

Rutgers also diverted $11 million in student fees and $17.1 million from its general fund to cover the athletic shortfall. The average undergraduate now pays more than $300 in activities fees exclusively for the university’s N.C.A.A. teams…

Late last month, I requested an interview with the athletic director, Patrick Hobbs. A day later, I also asked to speak with the president, Robert Barchi. These requests were met with silence.

On Thursday, I asked again, and a spokeswoman offered an off-the-record interview with Hobbs. I declined. An email statement soon arrived, saying in part, “Rutgers Athletics will be in a position to generate a positive cash flow for the university after we receive our full share of Big Ten revenues in 2021.”

Let me translate: That the athletic department has been run with no regard for sound financial practice is a trifle. Soon enough, piles of dough from the Big Ten’s billion-dollar-plus television contract will be deposited on the front steps of the athletic department. Its take could amount to $40 million.

This is like handing Jesse James the keys to Fort Knox.

Yeah, Jim Delany sure can pick ’em.

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18 Comments

Filed under Big Ten Football, It's Just Bidness

18 responses to “The Rutgers Way

  1. gastr1

    But that New York media market!

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  2. Chunky A

    So Senator, we all know how you feel about the Georgia Way of managing money, AND we know that you feel there is a healthy medium between UGA and Rutgers….but assuming you MUST choose an extreme…which side would you fall on? The side of seemingly doing nothing with your money, or doing something even at the rsik of major debt?

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    • ATL Dawg

      Greg, is that you?

      Like

    • Sherlock

      As I have mentioned multiple times, the reserve fund holds a little more than seven months of expenses. The standard procedure for Non-Profit Organizations is to hold 3-6 months of expenses in reserve if they have high flexibility in reducing expenses and 6-12 months if they do not. The Athletic Association does not unless it cuts sports. The “healthy medium” between Georgia and Rutgers is called ‘fiscal irresponsibility”. McGarity may be a visionless boob and a public relations disaster, but he is handling the finances properly.

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      • South FL Dawg

        $77 million is 6 months of expenses where, on the French Riviera?

        But seriously I don’t think this as much about the reserve fund or having 6 months in reserve as it is about new revenues and new expenses. The athletic assn’s revenue has multiplied several times over depending on how far back you go (TV money, extra games, championships). But that money has apparently all been spent.

        Whereas in the old days it may have been OK to ask for donations, with the new and increased revenue streams it’s reasonable for fans to wonder why not “reserve” some of that money for the projects and give the donors a break? Especially when to hear them tell it, the facilities arms race is pretty much an ongoing thing and not a one-time outlay.

        This isn’t just a Georgia problem; it’s all of big time college sports. Some schools handle it like Georgia and some handle it like Rutgers, but it’s 2 faces of the same problem. College football in general sucks at handling their finances.

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    • Bulldog Joe

      Why choose an extreme?

      The Georgia Way and The Rutgers Way are two flavors of the same sandwich.

      One is skimming athletic money to the university. The other is skimming athletic money to (apparently) themselves and their contractors.

      Neither are competing for championships and both are selling their student-athletes and contributors short.

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  3. Cojones

    Doesn’t anyone recognize a business punt when seeing one ? It’s in the sky above ESPN waiting to come down during leaner years for all.

    Delaney’s crapping Scarlet.

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    • ATL Dawg

      Watching some sports bubbles burst/deflate in the coming years is going to be entertaining. College football, the NFL, and ESPN are ripe for it.

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      • Mayor

        The NBA is the worst one. I don’t know anybody who actually pays for tickets to Hawks games. They get them for free from corporations that buy in bulk and give them out like candy as perks. Plus ESPN and other networks pay really big dough. If the TV revenue dries up and the NBA has to rely on real people paying real dollars for tickets……….

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        • Gaskilldawg

          The NBA is popular all around the world. It commands broadcast rights fees and licensing fees from worldwide markets.

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  4. Russ

    I suspect Rutgers isn’t an outlier.

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    • Sherlock

      They are not an outlier; we are. Georgia is one of about 20-25 Universities where the Athletic Association is not a financial burden on the school.

      Like

  5. Hogbody Spradlin

    Even the bullshit is weak. Calling a loan ‘operating revenue’? Oy.

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  6. sniffer

    University Bank? Who is that, Tony Soprano?

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  7. Hogbody Spradlin

    Tony, at 5.75%? Nah.

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  8. 92 grad

    This is where I get twisted up. What was our athletic budget before the sec network was launched?

    The network throws $20-40 million at our school that didn’t exist a few years ago and now they act like the margins are thin and they can’t afford stadium updates for ticket holders? This tv money is going to breed some serious problems if these athletic departments can’t exist without it like they’re entitled to it.

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  9. Go Dawgs!

    Why in the world does Rutgers have to wait until 2021 to get a full share of the Big Ten money?! Are they not already giving the league its desired inroad to the New York media market? Where’s the cash, B1G?

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