‘Unsustainable’: How Rutgers athletics quietly racked up $265M in debt

[Tango Two]

This was the year Rutgers University athletics expected to be on firm financial ground.

Instead, the athletic division has been losing more money than ever. And almost half of its $265 million in outstanding debt has not gone toward new buildings — it has instead been used to cover the ever-rising operating costs associated with joining the Big Ten Conference.

‘Unsustainable’: How Rutgers athletics quietly racked up $265M in debt

This was the year Rutgers University athletics expected to be on firm financial ground. Instead, the move to the Big Ten means anything but that.

www.mycentraljersey.com

 

[ScarletDave]

WAHHHH oh well … we will be making $55 million next year and when the TV is back up in 2025 it’ll be $70 million … by the time the current recruits are seniors at RU debt will be gone

 

[17Q66]

WAHHHH oh well … we will be making $55 million next year and when the TV is back up in 2025 it’ll be $70 million … by the time the current recruits are seniors at RU debt will be gone

Pinning a reminder in my calendar for May 2026 to check back with you on this.

-- or did you mean 5th year seniors? I don't want to misquote you.

 

[garyrc70]

WAHHHH oh well … we will be making $55 million next year and when the TV is back up in 2025 it’ll be $70 million … by the time the current recruits are seniors at RU debt will be gone

I hope you're right but somehow I doubt it. It's like the federal deficit, no way to get it in the black

 

[NJDOVES]

Rutgers caved in to the greedy Big Ten right from the get go. Hey, someone (RU) failed negotiating 101. Don’t want to even rehash it. They have little respect for us (and Maryland).
Even the B1G network has little respect for us, although I’m sure it’s the same people pulling the strings.
At some point, it will change but we were so far behind the 8 ball from day one, it’s been a tough financial road. Of course, no one could foresee 2020 and no fans. Ugh!
Eventually / hopefully, we’ll see some respect and gain (financially) in the near future.

 

[HeywoodGiant]

What about the Lakewood orthodo? are they bleeding the state?

 

[RUScrew85]

I hope you're right but somehow I doubt it. It's like the federal deficit, no way to get it in the black

Actually it's easy to get both in the black. It just requires the decision to not spend more than you take in.

 

[GoodOl'Rutgers]

Actually it's easy to get both in the black. It just requires the decision to not spend more than you take in.

that's for an established biz.. we're still investing in big ten level.. everything

 

[RUfromSoCal?]

Why I constantly ask if we’re getting paid yet? And when someone tries to explain to me how we totally are getting a full share now but we took advances, I just shake my head.

we provided full price fodder at discount prices. And, we’ll be digging out of the hole for years and years.

 

[Barnaby&Neill]

Facilities are obviously important for training, recovery, medical care, etc. but I wonder if the NIL stuff makes the Clemson-type facility arms race somewhat unnecessary.

A guy is going to pick money in the bank over living in a shopping mall.

 

[Scarlet_Scourge]

I am sure non of that was due to lost of ticket sales and packages last year.

 

[Greene Rice FIG]

This is before the demands of NIL have kicked in.

I think it is pretty obvious where this is going for Rutgers and many schools like us.

it is a shame.

 

[rufeelinit]

Very simply, we have a spending problem compared to the amount of revenue we are taking in. Sounds like it goes well beyond the need for infrastructure improvements and that our basic operating costs well exceed what we bring in. Again NIL will create competition for limited donor funds between infrastructure improvements that should benefit a generation of student athletes and trying to compete for high level recruits who now expect a package well beyond the scholarship and stipend. Thus more pressure on the operating budget to fill the gap.

There is no chance the debt is gone within the next ten years. Those who think it will be probably also think yesterday's game was really a sell out. They only way we get out of debt more quickly is to start cutting non revenue producing sports and I would hate to see that happen.

 

[tjb]

I hope you're right but somehow I doubt it. It's like the federal deficit, no way to get it in the black

The fed typically rolls over its debt. The growing economy renders it smaller (relatively) over time; the ability to control interest rates gives it control over the value of fiat currency. This has been going on since the end of World War II and the Great Depression, and the abandonment of the gold standard - eighty years and counting.

The explosive growth of B10 revenue is attributable to Jim Delany's prescient judgment of what TV rights would be worth. This has been going on for 15 years or so.

It's possible that that B10 revenue growth will continue, creating the same sort of math for the RU athletics department.

But I'm not sure the analogy is quite right. The US economy is a giant engine. The value of broadcast/streaming rights is a smaller one.

Some potential snags: How long will the Big 10 be able to demand (extort?) cable monopolies into extracting monthly payments from people who don't watch college sports? How popular will college sports be now that NIL court decisions have ripped away the fig leaf of amateurism?*

I do like the long-haul chances for the US economy, at least!


* I think the Big 10 Network should get into the NIL business, and stock up players for network schools. There's no Delany around to jump on this obvious opportunity.

 

[joeydavid]

WAHHHH oh well … we will be making $55 million next year and when the TV is back up in 2025 it’ll be $70 million … by the time the current recruits are seniors at RU debt will be gone

That makes a lot of sense if you if can run an athletic department for nothing...

 

[RUinPinehurst]

National debt is $28 trillion. RU will be on sound financial footing by the time our natl debt reaches $31 trillion.

 

[RU85inFla]

I understand the debt is unsustainable but on the other hand wasn’t there a study showing we were $500 million behind in facilities when we entered the B1G.

I understand asking the donors to carry a big price but the University decided to play with the big boys and hadn’t invested at all for decades. This is not mismanagement today but rather the price to pay fro mismanagement for the decades since the ‘80’s when Rutgers decided to go big time.

 

[MADHAT1]

Couldn't dead the article because it's a subscribers only article.
But figure it's about the same complaint about sports that has constantly been part of RU FB coverage once the football program starts drawing excitement..

I'll add it ( sight unseen) to all the ones that popped up after Greg1 started making RU FB a winner.

 

[WhichReligionIsRight]

Pay walled. Can someone provide a cliff notes version of what the article says?

 

[MADHAT1]

Pay walled. Can someone provide a cliff notes version of what the article says?

like you couldn't read article but will post an unsubstantiated assessment , based on past articles during the last 20 years about RU Sports finances :
bitch, moan , complain, whine cry and carry on about money spent to make RU sports the type of programs to be proud of and worth attending the games.

 

[czxqa]

That headline number is bullshit. It includes all the "loans" from the Rutgers bank AND the direct institutional support. We owe on the bonds for the stadium expansion, the BIG loans and the bonds to build the Barnabas and Rodkin Centers. The piece is really long, and admits it is long on speculation and short on facts. I think I have an unpaywalled link somewhere. I will post if I find it.

 

[batts]

if you have an iPhone, you can probably access it. The article exposes long held fallacies about how Big 10 revenue is going to pay for Rutgers huge Athletic Department debt that has grown far worse trying to keep up with the the rest of the Big 10. Apparently, Rutgers, among othe forms of financial sight of hand, has been counting loans as revenues.

 

[Spursupalways]

like you couldn't read article but will post an unsubstantiated assessment , based on past articles during the last 20 years about RU Sports finances :
bitch, moan , complain, whine cry and carry on about money spent to make RU sports the type of programs to be proud of and worth attending the games.

It is not the same old complaint. Rutgers Athletics is $225 million in debt and the financial losses are Growing by 47% annually. That’s more than twice the rate of the next most financially challenged university athletic department. There has been some false financial reporting of Approx. $40 million to the NCAA. There has also been some false reporting of loans and other debt to the State and the Big Ten. Essentially the Athletic department has been reporting millions in loans as revenue in an attempt to hide some of the loses. The next few weeks are going to be interesting to watch Rutgers.

 

[rutgersguy1]

These are figures from a different article in the SL earlier this year.

The AD had $140.3 million in loans from the university bank as of Jan. 21 of this year. Spent a record $114 million in 2020 and Rutgers had $45.4 million in internal athletics debt in Jan. 2019. The internal loans are suppose to be fully repaid in 2048.

The university also has $74.5 million in external debt tied to the expansion of SHI Stadium supposed to be repaid in 2039.

Two thirds of the debt increase is due to internal loans for the RWJBarnabas Center at $43 million and the Rodkin Center 23.7 million.

This was a statement the university released in response to that article.


The pandemic has affected every aspect of the university’s finances. Just as there are fewer students in classrooms, dining halls and libraries, we have been unable to have fans in our stands. Games throughout the Big Ten Conference, for which we would receive direct and indirect revenue, have been canceled while unexpected expenses have been incurred by the university and our Athletics programs.

Budgets across the university, including Athletics, are under review as we work through the pandemic toward a return to normalcy that we hope will be achieved by 2023.

These are unprecedented times with an uncertain outlook. To speculate on what our finances will be would be constructive and informative to no one. Meanwhile, we remain steadfast in our commitment to provide the best university experience possible for our students, our faculty, our student-athletes and every member of our Rutgers community.

 

[AreYouNUTS]

It is not the same old complaint. Rutgers Athletics is $225 million in debt and the financial losses are Growing by 47% annually. That’s more than twice the rate of the next most financially challenged university athletic department. There has been some false financial reporting of Approx. $40 million to the NCAA. There has also been some false reporting of loans and other debt to the State and the Big Ten. Essentially the Athletic department has been reporting millions in loans as revenue in an attempt to hide some of the loses. The next few weeks are going to be interesting to watch Rutgers.

No, they really aren’t, other than on the playing field.

 

[Spursupalways]

No, they really aren’t, other than on the playing field.

People are going to lose their jobs over this. Read the article. It’s really bad.

 

[rutgersguy1]

It is not the same old complaint. Rutgers Athletics is $225 million in debt and the financial losses are Growing by 47% annually. That’s more than twice the rate of the next most financially challenged university athletic department. There has been some false financial reporting of Approx. $40 million to the NCAA. There has also been some false reporting of loans and other debt to the State and the Big Ten. Essentially the Athletic department has been reporting millions in loans as revenue in an attempt to hide some of the loses. The next few weeks are going to be interesting to watch Rutgers.

I’ve always assumed the loans/institutional support were included in the “revenue” because whenever you see revenue/expenses in those AD budget tables articles for revenues/expenses they pretty much exactly matched and how does that happen. I assumed it’s because the loans are making up the shortfall in “real revenue” to match whatever the expenses for that year are. Until the pandemic I assumed that number was shrinking annually and then the pandemic happened and it might have ballooned it again.

 

[LotusAggressor]

I can see how this will probably go. Schiano will make RU a competitive B10 program. When RU goes to their next bowl game, the same people complaining about this will be asking for free tickets.

 

[Spursupalways]

I can see how this will probably go. Schiano will make RU a competitive B10 program. When RU goes to their next bowl game, the same people complaining about this will be asking for free tickets.

Because of the huge amount of debt the Athletic Dept. is facing, construction of the football field house Schiano asked for in his contract, has been delayed until the school can raise $75 million dollars to cover half of the project. How’s that going to sit with Greg?

 

[AreYouNUTS]

Because of the huge amount of debt the Athletic Dept. is facing, construction of the football field house Schiano asked for in his contract, has been delayed until the school can raise $75 million dollars to cover half of the project. How’s that going to sit with Greg?

I could swear that was the case from Day 1.

 

[Knight Shift]

Because of the huge amount of debt the Athletic Dept. is facing, construction of the football field house Schiano asked for in his contract, has been delayed until the school can raise $75 million dollars to cover half of the project. How’s that going to sit with Greg?

You seem to only be active in threads that portend trouble and controversy. Why is a Texas fan on this site commenting on these issues? Just wondering.

 

[AreYouNUTS]

People are going to lose their jobs over this. Read the article. It’s really bad.

People lose their jobs every single day. Bet THAT doesn’t bother you.

 

[AreYouNUTS]

You seem to only be active in threads that portend trouble and controversy. Why is a Texas fan on this site commenting on these issues? Just wondering.

DING DING DING!!

 

[Greene Rice FIG]

Very simply, we have a spending problem compared to the amount of revenue we are taking in. Sounds like it goes well beyond the need for infrastructure improvements and that our basic operating costs well exceed what we bring in. Again NIL will create competition for limited donor funds between infrastructure improvements that should benefit a generation of student athletes and trying to compete for high level recruits who now expect a package well beyond the scholarship and stipend. Thus more pressure on the operating budget to fill the gap.

There is no chance the debt is gone within the next ten years. Those who think it will be probably also think yesterday's game was really a sell out. They only way we get out of debt more quickly is to start cutting non revenue producing sports and I would hate to see that happen.

We don’t have a spending problem. We are in a business that requires spending. We have a location problem.

 

[RUskoolie]

No one should care. RU is hurting so much financially that they chose to shut their entire school down for a year, right? You don’t do that if you’re so poor. Don’t be fooled by this stuff.

 

[djrc89]

it’s the same old story at Rutgers. We want to play with the big boys but don’t know how. And it becomes self fulfilling. The mistakes don’t just reflect the athletic dept. they were essentially a little ivy like institution taking up a couple of blocks in New Brunswick. They made the decision to become a state university. So what did they do .. expanded across the river with an extensive bus system. Athletics went “bigger” time. All without space and a real plan. Students resent it. Kids don’t want to go because they’re afraid of big bad buses. It’s all typical ru. People need to donate and they will “ when “ we win. Will we win enough to really compete and really play the game the way it needs to be played ? And now with nil? There are mistakes that have been made. I don’t think we can deny that. Those mistakes have created a less than ideal experience which leads to less donations. We’re very critical when it comes to not getting a water at the game but when there is an expose we close ranks like we’re guarding the bathroom at penn state.

 

[Spursupalways]

DING DING DING!!

Have you read the investigation that was just published? If you have you can’t deny Rutgers is In trouble.

I’ve been watching Rutgers Athletics for years and their finances never make sense. It was clear to me that Rutgers has always been cooking the books. I don’t feel good about someone losing their job, but It’s hard to cheer for anyone who you’re pretty sure is cheating. Now that the truth is starting to come out, it’s hard not to say I told you so. I’ll save that for the day sanctions and pink slips starting hitting the Athletic Department.

 

[AreYouNUTS]

Have you read the investigation that was just published? If you have you can’t deny Rutgers is In trouble.

I’ve been watching Rutgers Athletics for years and their finances never make sense. It was clear to me that Rutgers has always been cooking the books. I don’t feel good about someone losing their job, but It’s hard to cheer for anyone who you’re pretty sure is cheating. Now that the truth is starting to come out, it’s hard not to say I told you so. I’ll save that for the day sanctions and pink slips starting hitting the Athletic Department.

Dude…you are SOOOOO “that guy.” Enjoy your miserable life.

 

[MADHAT1]

All this means to me is:
Josh & Ted reinvented .

 

[RU_03]

Have you read the investigation that was just published? If you have you can’t deny Rutgers is In trouble.

I’ve been watching Rutgers Athletics for years and their finances never make sense. It was clear to me that Rutgers has always been cooking the books. I don’t feel good about someone losing their job, but It’s hard to cheer for anyone who you’re pretty sure is cheating. Now that the truth is starting to come out, it’s hard not to say I told you so. I’ll save that for the day sanctions and pink slips starting hitting the Athletic Department.

Sanctions from who? LOL.