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Rutgers Finances: The numbers get better, despite HBO

Money will always be an issue at Rutgers, regardless of Big Ten revenues or anything else. And athletics and health services and computer networks are all part of the equation.

By rvc73
Jim O'Connor-USA TODAY Sports

About two weeks ago, HBO's Real Sports dd a segment on college athletics' arms race.  And you just know who they included in that discussion.

Gannett's Ryan Dunleavy wrote about what he took away from the broadcast report.  And from what he wrote, I'm happy I didn't waste my time watching it.  The broadcast pretty much rehashed what we've all known about, well, forever. You can read his full story, but here are Dunleavy's highlights.

1. You should recognize the critics.

2. Rutgers spends big at the Hyatt Regency in New Brunswick

3. The athletics subsidy is an emphasis

4. Mike Rice tapes live on.

5. One student's troubling tale

The only part that made me say, "Huh", was the last one, where a student claims he doesn't eat some days because he just doesn't have the money.  If that's the case, he needs to approach the financial aid people; that should - and can - be corrected.

The critics are old foes, economics professor Mark Killingsworth and anthropology professor David Hughes.  They have criticized athletic spending and authored the report setting out what Rutgers and its athletic arm should do to cut costs and right the ship.  Thank you for playing, gentlemen, we have lovely parting gifts for you.  Don't let the door hit you in the ass on the way out.

One of the things the HBO report didn't touch on, and that was covered in another Dunleavy story, was student fees used to support athletics. Rutgers has relied heavily on the university subsidy (or "direct institutional support" as the NCAA financial report terms it) and student fees to pay for athletics.

Ryan got some pushback on Twitter, with a few people questioning why this is a story, considering that in a few years Rutgers will be reaping the benefits of full membership in the Big Ten including the anticipated new TV deal with Fox.

The fact is, funding of virtually everything at Rutgers is an issue and a story.  As with most states, New Jersey public universities are receiving less and less support from their state governments; Rutgers is no exception.  Operating the university and all that it entails is worth discussing.

According to Dunleavy's story, "student fees account for 45 percent of Rutgers' $23.8 million athletics subsidy - No. 17-highest in the nation after back-to-back years at No. 1.  Athletics spending ($70.5 million) accounts for about two percent of the overall university budget".  We'll touch on those figures a bit later. Taking it a step further, money allocated to athletics accounts for about 12.5% of the total student fees that Rutgers' full time students pay.  The rest of their fees covers a wide range of services including health services, recreation centers, student centers, student events and concerts, along with campus buses.

Only four Big Ten schools impose a student fee for athletics.  It should be no surprise that Maryland ($11.6 million) and Rutgers ($10.8 million) had the largest income from those fees. Illinois ($3.16 million) and Iowa ($650,000) were the other two.  And many Big Ten schools do charge separately for football and other tickets.  But how big a burden is the student fee?  Or perhaps the flip side of the question should be asked: How important is the student fee to Rutgers Athletics?

Over the last four years, student fees collected by Rutgers have edged upward each year, and the raw number jumps significantly.

But, again, how significant is that to Rutgers Athletics? Seemingly a lot, but the growth in student fees is not as significant when you look at it in terms of total athletic expenditures and also when looking at other revenue sources and their growth.

No one questions the need and value of eventually eliminating the University's "subsidy" support.  And it would be better - not necessarily perfect - if student fees were not necessary at all.  The argument there is made by Killingsworth, taken here from Dunleavy's story:

"It means that lots and lots of students who don't have any particular interest in athletics are nevertheless being made - without having any say at all - to fork over $300-plus every year to subsidize athletes," said Killingsworth, the economics professor. "What we don't have is a situation where the actual person attending (an event) pays the price."

But at Rutgers and probably every other college, students pay fees that they don't benefit from, as noted above.  Is it simply a trade off?

As many have said, eventually Rutgers will benefit from being fully vested as a Big Ten member and the larger payday that accompanies it.  But until that day arrives - and in truth, well after it as well - Rutgers will need to generate revenue in other ways.  And it has, especially in terms of ticket revenue and donations.  And in both those areas, the percent of the total budget that they cover is increasing.

For the last two reporting cycles (2013-14 and 2014-15) direct institutional support has also dropped.  Long lambasted for having the highest subsidy in D1 athletics, Rutgers has changed the numbers.

Speaking of changing the numbers, if you look at the USA Today tabulation of subsidies, the institutional support for Rutgers is listed as $23.8 million.  Yet the NCAA report filed by RU shows $12.9 million in "institutional support".  The USA Today number is explained as the "sum of student fees, direct and indirect institutional support and state money", meaning they combine university funds and student fees to explain the "subsidy".  It is all a subsidy, but it seems more accurate to break out the different parts.

The Targum Factor

When Killingsworth or others speak of students being forced to pay for something they don't want, or aren't aware they're paying, he is being unrealistic and a bit disingenuous.  As we noted, student fees in many areas pay for things that students may or may not use.  There are also items on a student's term bill that are "optional".  One of those is for the Daily Targum, the student newspaper that dates back to the time of the creation of football in New Brunswick. The Targum is independent, receiving no University funds but getting student fees.  And periodically, the newspaper needs to go out to the student body in a referendum to determine if there is still student support for it.  They did so this year, and the Targum nearly disappeared.

The Targum goes the referendum route because it is independent of the University, but looks for student support in the form of an annual fee to operate.  That voting isn't the case with athletics, or any of the other things that student fees cover.  But what if it did?  What if students had the option of not paying for certain parts of their experience at Rutgers?  I'm pretty healthy so I'm not going to pay for health services.  I'm only on one campus, so I don't want to pay for bus services.  It would be chaos.  The simple fact is, like many aspects of life, we pay for things, through taxes for example, that we may not use.  I no longer have kids in school, yet I pay school taxes...for the common good.  I may not use the public library in my town, but part of my taxes go to it....for the common good.  Sometimes, things are done for the greater good of all.  I'd like to see those student fees reduced, as I'm sure many students would, but sometimes there are larger issues at play and the greater good is being served.