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For Rutgers Athletics, it's all - and always - about the money

Barchi has a financial plan for moving ahead despite faculty concerns

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Big Ten money. It all gets better in 2021.

That’s been the mantra for RU fans since we entered the Big Ten. When we get our full share of the Big Ten pie, all will be right with the world.

Maybe.

Let’s start this off by acknowledging Keith Sargeant’s work in ferreting out information that, for the most part, has been out of sight or not in existence until now. His report in nj.com on Rutgers Athletics’ financial plan makes a lot of things more clear. And is the basis for this post.

It all comes down to a letter sent by University President Robert Barchi to the Board of Governors (BoT) and the Board of Trustees (BoT) in which he lays out the “...roadmap for Big Ten Conference support....based upon public reports of expected conference distributions at the University of Michigan for FY2018 and previous public comments by Commissioner Jim Delany.”

According to the report, Barchi indicates there is a good deal of confidentiality that must be upheld in terms of what is being distributed, and much of this is based on an internal document from Michigan that was obtained by the Detroit Free Press back in June.

When is a windfall not a windfall

One thing that Barchi makes very clear is that “direct institutional support” - the term the NCAA uses to identify university funds being used to support athletics - will decrease.

Five years ago, I committed to reduce the direct support to Athletics from the University by $1m per year. That commitment is reflected in this budget. Direct institutional support for the Division of Intercollegiate Athletics will continue to decrease annually, until FY2021, when it will drop to zero.

That means that other sources of revenue, which would include conference distributions, would be needed to create a budget to compete in the Big Ten.

That would also indicate that whatever the amount is that is received from the Big Ten will not become a great addition to the current budget. Not if university funds are diminishing more and more on a yearly basis over the next three years.

Key points

  • There’s more coming in....now. From to the Sargeant story:

According to the university’s 10-year projections document in 2012, the Big Ten was expected to give Rutgers $11.2 million in 2017, $11.5 million in 2018, $14.9 million in 2019 and $19.3 million in 2020.

Rutgers’ new five-year projections plan shows a dramatic increase in those figures. The Big Ten is now expected to give Rutgers $12.6 million in 2017, $24.6 million in 2018, $27.1 million in 2019 and $29.4 million in 2020.

  • When Rutgers gets its first full Big Ten cut in ‘20-’21, both Rutgers and Maryland will have smaller portions because of their respective advances.
  • Rutgers will still provide funds for “direct institutional support” for Title IX
  • Athletics will still be required to repay a loan it took from the University for $18.4 million. It will be paid back in full by 2021 at 5.75% interest for a total of $23.7 million.

This is a business, a very expensive one. One of the reasons Barchi addressed this was due to a critical resolution from the Rutgers New Brunswick Faculty Council. It found the spending on athletics to be a bad thing and for Rutgers to get an outside opinion on what could and should be done to stop the large financial support from the University. Barchi’s letter to the BoG and the BoT tried to quell the negative attitude.

“I hope that this information helps to resolve the concerns of some in our community about the University’s long-term financial plan for our Division I athletics program. As I have often stated, the program must become revenue-positive and financially self-sufficient, and this now-public financial plan is evidence of our University’s firm commitment to that goal.''

Trying to wrap your head around the numbers, the timelines, and the plan is daunting. It is clear, though, that Barchi and the Athletics team - led by Pat Hobbs - now have a clear plan as to how they will proceed. “We’ll continue to try to be very careful in terms of our expenditures,’’ Hobbs said. “We need to make investments in order to grow revenues in the future. We’re making those investments, and people are seeing early signs of success from those investments.’’