Subsidy down to $23.8 Million

[Knight Shift]

http://www.app.com/story/sports/col...s-23-million-inaugural-big-ten-year/79332824/

In addition to fewer unusual expenses, ticket sales increased by $3.4 million department-wide, including about $2.9 million for football, which reached $11.6 million in ticket sales.

“I think what it does is it confirms what folks here have been saying for a while and that is: The trend is going to continue," athletics director Pat Hobbs said. "You are going to see the institutional support decline as we move toward full participation in the Big Ten. Certainly this year was evidence of it. It was hard to see in the last two years because you had special items, particularly the exit fee with the Big East."
“We look at this on a five-year basis and an investment in our future based on what we know our capabilities will be,” Barchi said at the time. “It’s a little different than it was five years ago where every year was a year that we had to build from scratch and we were concerned what the next year would look like.

“We know very well what the next years will look like and we have confidence in the financial picture looking forward. We can now see ourselves in a position of building and investing what we need to invest to be competitive.”

 

[bac2therac]

Thank you Julie!

 

[jdeer1976]

Great news for the athletics department.

 

[Beancounter88]

Is the $23M+ a good number? What did they expect the deficit to be in 2015?

 

[bac2therac]

Barchi was clearly lectured by Delaney, Christie, and maybe even some BOG members

 

[Knight Shift]

Thank you Terry Shea, Doug Graber, and Kyle Flood!

 

[PhilaPhans]

Considering it was about $36.3M last year, it's going in the right direction.

 

[AreYouNUTS]

Deduct the $10m in student fees that, IIRC, no other schools include in their accounting, and down to $13.9M.

 

[Cheesesteak Vegas]

Deduct the $10m in student fees that, IIRC, no other schools include in their accounting, and down to $13.9M.

I can only speak for one other university, but I believe PSU's student fees have nothing to do with athletics and students need to buy their season tickets, whereas free tickets are available to students at Rutgers. I'm not going to get into a debate about RU's accounting, because I'm sure you know more than I do and frankly I'm not that interested, but I have to believe comparing budgets between all B1G schools can't be done by simply removing one line item. Different schools use monies differently.

 

[Upstream]

Is the $23M+ a good number? What did they expect the deficit to be in 2015?

The financial plan from Feb 2014 had the subsidy at $23.8MM for the fiscal year ending June 2015. So the reported number is pretty much right on plan.

 

[RUsojo]

We all knew this was coming. It's just a shame the meadia neglected the fact that the problem would be more than solved in due time while they incessantly bashed the program.

 

[RU31trap]

Four years ago I said in a thread that once Big Ten money begins to flow in STATE appropriations will get cut. This in turn will force Rutgers to cut their support of the athletic department. You see, while the fanbase was tickled pink to be part of the B10, Trenton was the happiest of all for reasons that too numerous to mention.

 

[Upstream]

Deduct the $10m in student fees that, IIRC, no other schools include in their accounting, and down to $13.9M.

No school reports a "subsidy". That is a definition that is created by USA Today. The NCAA financial reporting form does not contain a spot for subsidy. So USA today calculates the "subsidy" from reported items like "Direct Institutional support" and "Student Fees".

USA Today calculates the "subsidy" as follows:

Total Subsidy: The sum of students fees, direct and indirect institutional support and state money. The NCAA and others consider such funds "allocated" or everything not generated by the department's athletics functions.​

 

[derleider]

Deduct the $10m in student fees that, IIRC, no other schools include in their accounting, and down to $13.9M.

In their own internal accounting they might not - but in the NCAA report they do. Whether the school itself intends to include the $10 million in its accounting of a budget neutral department is up the school and its press machine. I think ours is on the high side (both per student and overall), but in the end it wont matter because rising conference payouts, rising giving, etc will put the department over the total deficit by 2021.

We all knew this was coming. It's just a shame the meadia neglected the fact that the problem would be more than solved in due time while they incessantly bashed the program.

That will be to our benefit, when the obvious thing that is going to happen happens. By making such a big deal of the deficit to a mostly clueless readership, they set themselves up to have the same readership think well of RU when the deficit goes to zero in the next five years.

 

[derleider]

Four years ago I said in a thread that once Big Ten money begins to flow in STATE appropriations will get cut. This in turn will force Rutgers to cut their support of the athletic department. You see, while the fanbase was tickled pink to be part of the B10, Trenton was the happiest of all for reasons that too numerous to mention.

Trenton has been cutting RU appropriations for a decade now.

 

[Sideline20]

Trenton has been cutting RU appropriations for a decade now.

And it shows.

 

[JPhoboken]

The best part of the subsidy article was pointing out the total athletic dept. budget is only 2% of the total overall Rutgers budget. Yet we constantly see multiple articles and have to defend the silly idea that Rutgers football is taking pencils and paper away from our professors and their budgets get cut because of Rutgers sports.

 

[RU from Jersey]

If Men's basketball was just average, that number would probably be down by another 2 million or so. Maybe double that reduction if RU basketball was good.

 

[RU31trap]

Trenton has been cutting RU appropriations for a decade now.

I realize they've been cutting appropriations for quite a while but Rutgers past Presidents always appealed and sometimes met with Governors for an increase. Trenton politicians know full well that your invite to the B10 translates into tens of millions in additional funding for your athletic department and what I said several years ago was 100% correct. They will cut a major percentage of B10 funding from their annual appropriations.

 

[ru66]

thank you true RU football fans--not those who said they would stop buying seats

 

[czxqa]

Thank you Julie!

Really? Give this idiotic garbage a rest already. Next you'll be thanking her and Gruninger for the sun rising each day.

 

[bac2therac]

The best part of the subsidy article was pointing out the total athletic dept. budget is only 2% of the total athletic budget. Yet we constantly see multiple articles and have to defend the silly idea that Rutgers football is taking pencils and paper away from our professors and their budgets get cut because of Rutgers sports.

my nephew who is a freshmen at RU this year and who is not into sports at all was complaining about because Rutgers just had to go into the Big 10 that its raising the student fees and rising tuition.....he had this ingrained in his head from his mother my sister in law so I didn't even bother trying to set the facts straight because once people here these sound bites they don't change their mind.

 

[bac2therac]

Really? Give this idiotic garbage a rest already. Next you'll be thanking her and Gruninger for the sun rising each day.

well her directive was to reduce the subsidy and get the Olympic sport programs up to speed for the Big 10 so now with the news that the subsidy was reduced to its goal, I would say you have to give her credit, she was the AD. I don't get your anger at all. Are you saying no one is responsible for the subsidy being cut. Maybe Pernetti did it...right

 

[czxqa]

well her directive was to reduce the subsidy and get the Olympic sport programs up to speed for the Big 10 so now with the news that the subsidy was reduced to its goal, I would say you have to give her credit, she was the AD. I don't get your anger at all. Are you saying no one is responsible for the subsidy being cut. Maybe Pernetti did it...right

According to your logic you should give Pernetti credit for the B1G invite but you are very quick to deny that.

As Pat said, the subsidy is down because the one time items associated with the Big East exit are gone. But go ahead and feel free to spin, spin spin all you want. Just do it like Julie did, alone in your office not allowed to talk to anybody else.

 

[Scarlet_Scourge]

We all knew this was coming. It's just a shame the meadia neglected the fact that the problem would be more than solved in due time while they incessantly bashed the program.

LOL, yes but lying gets more clicks.

This is great news. Of course we still got a long way to go but this is a really nice step in a positive direction.

 

[JPhoboken]

well her directive was to reduce the subsidy and get the Olympic sport programs up to speed for the Big 10 so now with the news that the subsidy was reduced to its goal, I would say you have to give her credit, she was the AD. I don't get your anger at all. Are you saying no one is responsible for the subsidy being cut. Maybe Pernetti did it...right

Not sure why the anger in CZ's post, I actually chuckled. Very similar to a poster the other day saying Obama single handedly prevented a recession in the US.

We know you liked her, but from looking from the outside, you may not see it, but you have a lovefest with her.

JH did her job, no more or less than anybody else at Rutgers who job it was to worry about athletic spending. Singling her out for credit means you think she did something special to lower the subsidy? She didn't cut anything, the lowering was from additional revenues, an\d/or like the exit payment which made it higher previously. Yes donations are up, give her some credit for that, but much of that was forced for football parking and seat fees.

So, while I won't kill JH, I don't see any extraordinary achievements to single her out for lowering the subsidy either.

If it goes down again next year, will you single out Hobbs for this as well?

I hope I explained it a little better with less anger than CZ, but I think this is what he was trying to say.

 

[RutgersRaRa]

I can only speak for one other university, but I believe PSU's student fees have nothing to do with athletics and students need to buy their season tickets, whereas free tickets are available to students at Rutgers. I'm not going to get into a debate about RU's accounting, because I'm sure you know more than I do and frankly I'm not that interested, but I have to believe comparing budgets between all B1G schools can't be done by simply removing one line item. Different schools use monies differently.

^^Correct.

 

[RutgersRaRa]

The best part of the subsidy article was pointing out the total athletic dept. budget is only 2% of the total overall Rutgers budget. Yet we constantly see multiple articles and have to defend the silly idea that Rutgers football is taking pencils and paper away from our professors and their budgets get cut because of Rutgers sports.

+1. Additionally, the budget may be 2% of the university's total budget, but when the roughly $60mm in revenues are subtracted out from the 2% figure, the total subsidy is roughly .5% of the university budget. Then when another $8mm or so is subtracted from the subsidy due to the in-kind nature of scholarship athletes sitting in desks that are already in the classroom, athletics costs a lot less than the public thinks--somewhere around .15% of the budget, and this is during a growth phase. When most people hear "subsidy" they think it goes to football, when in reality it goes to everything but football and men's basketball.

Athletics will be soundly in the black before the full share of BTN money is realized, and if we're smart we'll plow the surplus back into facilities or coaches or something to make us revenue neutral.

 

[Upstream]

Yes donations are up, give her some credit for that, but much of that was forced for football parking and seat fees.

So, while I won't kill JH, I don't see any extraordinary achievements to single her out for lowering the subsidy either.

Except the expansion of forced donations, dynamic ticket pricing, tiered parking picing, revised parking donation requirements, etc., are all new initiatives that Hermann implemented to raise revenue.

Why shouldn't she get credit for her new initiatives that helped reduce the subsidy.

 

[koleszar]

The best part of the subsidy article was pointing out the total athletic dept. budget is only 2% of the total overall Rutgers budget. Yet we constantly see multiple articles and have to defend the silly idea that Rutgers football is taking pencils and paper away from our professors and their budgets get cut because of Rutgers sports.

I especially like the part in Sargents article(I had to click a positive article they're just so rare) where he states Gov't support for athletics is $13,184. That's a big eye opener for a lot of their viewers when they finally realize their tax dollars actually don't go towards athletics.

 

[jdeer1976]

well her directive was to reduce the subsidy and get the Olympic sport programs up to speed for the Big 10 so now with the news that the subsidy was reduced to its goal, I would say you have to give her credit, she was the AD. I don't get your anger at all. Are you saying no one is responsible for the subsidy being cut. Maybe Pernetti did it...right

Julie was always supposed to dramatically increase donations. Although donations were up, they were only up by 700k. With the entrance into the B1G is hoped for a bigger increase. With Hobbs' energy and enthusiasm I see donations jumping in 2016.

 

[RC1978]

According to your logic you should give Pernetti credit for the B1G invite but you are very quick to deny that.

As Pat said, the subsidy is down because the one time items associated with the Big East exit are gone. But go ahead and feel free to spin, spin spin all you want. Just do it like Julie did, alone in your office not allowed to talk to anybody else.

You are wrong on so many points but if it feels good for you to beat someone down who is gone, go at it.

 

[JPhoboken]

Except the expansion of forced donations, dynamic ticket pricing, tiered parking picing, revised parking donation requirements, etc., are all new initiatives that Hermann implemented to raise revenue.

Why shouldn't she get credit for her new initiatives that helped reduce the subsidy.

I don't see those as great achievements that she should be singled out for, IMO, just more like doing her job. But if you think she deserves special credit, thats your opinion, no issues.

 

[czxqa]

You are wrong on so many points but if it feels good for you to beat someone down who is gone, go at it.

What specific points am I wrong on? Please feel free to name them rather than state a categorical rejection of what I'm not even sure

 

[ruhudsonfan]

Approximately 62% of RU's total budget goes to Salary, wages and total benefits. If any professor thinks football is the reason they don't have fresh markers for their whiteboard, I'll be happy to offer them my remedial accounting class.

 

[bac2therac]

I don't see those as great achievements that she should be singled out for, IMO, just more like doing her job. But if you think she deserves special credit, thats your opinion, no issues.

she should be singled out as getting credit because the subsidy was reduced under watch and she was the AD.... many fans here and the shitholes on twitter endless bashed her as if she was the worst AD in history...in the meantime she went about doing her job with things that needed to be done here but some others would rather have heard sound bytes instead that give them the warm fuzzies. Sorry for them but stuff was getting accomplished here and priority #1 was reducing the subsidy.

as for fundraising it was up 17% per a report two months back

and no not all the the subsidy reduction came from the one time paytimes, as Upstream outlined other things were put in place...and I am sure Hobbs would tell you that to and I would give credit to Hobbs next year when the subsidy is reduced again, why wouldn't I, I support him

 

[Upstream]

I don't see those as great achievements that she should be singled out for, IMO, just more like doing her job. But if you think she deserves special credit, thats your opinion, no issues.

As I told Willis when explaining why Pernetti gets credit for the Big Ten invite (https://rutgers.forums.rivals.com/t...-pernetti-stayed-ad.66674/page-3#post-1345867), you don't have to do something magical to get credit for good things that happen on your watch.

So Hermann implemented some revenue enhancing programs. Maybe they were low hanging fruit; maybe they were fairly obvious. But she is still the one who implemented them, and they helped raise revenue. Kudos to her.

 

[Caliknight]

LOL, yes but lying gets more clicks.

This is great news. Of course we still got a long way to go but this is a really nice step in a positive direction.

I'd say it's more than a nice step. It was a massive cut. Once we have full shares and a continued moderate increase in donations, the dept. will fund itself.

 

[Best7Years]

^^Correct.

The student fees also include the cost of the recreational centers. I'd love for RU to move this to the general fund, since it really has nothing to do with the athletic department. Increase tuition by $700/year to cover the cost of the running the student recreation centers and then charge for student tickets for games. Not only would this make the AD budget more legit, but it would also shed light on which sports are money pits.

 

[Upstream]

I'd say it's more than a nice step. It was a massive cut.

That's a bit misleading. The subsidy was abnormally high the past 2 years due to a lot of extraordinary expenses, especially costs related to switching conferences. In 2012, the subsidy was $28MM. So we reduced the subsidy by 15% since 2012.

If you want to be more generous, since there is not a plan to eliminate the student fee, you could claim that we reduced direct institutional support be 24% since 2012.