One-Time Increase in Expenditures

Over the course of the past several months, there has been withering commentary and discourse about the supposed “waste” of money by Rutgers Athletics. Most recently, there was this stellar lightweight article in USA Today, “Subsidy of Rutgers athletics jumps 67.9% to $47 million.” As one reads over this content, it becomes readily apparent that the “journalism” efforts are nothing more than a rehash of shallow comments without a fundamental understanding of the actual budgetary issues facing the University and the Athletics Department in general. Would it take too much time for the so-called “investigative journalists” to actually “investigate” the topic they are reporting on?

Anyone who peruses articles about Rutgers Athletics during 2013 would be able to easily identify the reason for the $19M increase. This was due to predominantly one-time expenses; so the ongoing deficit based on those numbers is still ~$28M per year. However, that is clearly a problem that needs to be addressed. But let’s itemize for the lazy:

$7M – Buy out from the Nelligan deal

$5M – exit fee from the AAC

$1.2M – Mike Rice buyout (thank you over-zealous fear mongers on the Left)

$1.25M – Tim Pernetti buyout (again, thanks to the fear mongers on the Left)

~$5M – to cover debt service

$19M

The new deal with IMG is already paying dividends with the potential for a $14M Return On Investment (ROI) per year. That, in and of itself, is a quality business decision.

The one-time exit fee is a standard for any conference, even if a school is dissolving its athletics program. As a member of the American Athletic Conference, formerly the Big East, Rutgers was receiving a grand total of $5M per year, plus any percentage from bowl games they took part in. In fact, RU will be getting approximately $7.5M from the B1G in our FIRST year alone (2014-15). During the first decade of membership, Rutgers will receive a percentage of the full vesture amount until 2023 when it is fully vested in the Big Ten. During that time, the Big Ten will also be renegotiating the TV contract it currently has. The current contact provides for a payment to each member of the Big Ten of approximately $33M per year. The renegotiation, especially with the NYC market included thanks to Rutgers’ inclusion in the Big Ten, has the potential to be double that amount per year, but minimally a half more or $49.05M.

As much as people insist upon shrilly baying about “coaches salaries” and attempting to spin everything as a negative, the reality is these one-time charges allow the University to position itself far more advantageously than in the past. Moreover, connecting with the Big Ten offers far greater opportunities for ticket sales and connecting with fans, alumni, and donors who actually care about the University and want to see it continue to grow and develop, unlike the people here who are insistent upon degrading and dragging the University down.

Let’s also remember that ONLY BECAUSE RU is joining the B1G for athletics, that the academic side of the house was able to join the prestigious Committee on Institutional Cooperation (CIC), in which membership is restricted to B1G member and the University of Chicago. As a result of this membership, the ACADEMIC side of RU is getting a $200M slice of the research pie from the CIC that was not previously available to us. https://www.cic.net/home

This is clearly a win-win situation for all involved!

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About VigilantKnight

Living life on my terms.
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