Rutgers Athletics overspends its operating budget by $2.3 M.
Generating $96.9 million in revenue but spending $99.2 million, Rutgers Athletics incurred a $2.3 million operating deficit as it outspent its operating revenue for the 2017 fiscal year.
The Asbury Park Press obtained this information from the annual report on the athletic department’s operating budget through an Open Public Records Act request, according to it's article.
The $99.2 operating budget is the highest ever spent on athletics, up from fiscal year 2016, which topped at $83.97 million. The department also received an increased subsidy at $33 million, compared to the $28 million mark it received the year prior, according to the article.
These subsidies are comprised of student fees and direct, institutional support from the University. In 2017, athletics received $11.77 million in student fees and $21.32 million in direct, institutional support.
The University’s total operating budget for 2017 was $3.9 billion, a.
Pat Hobbs, Rutgers' director of Athletics, said the resultant $10 million loan from the University was necessary to cover costs related to coach buyouts and investments in future competitiveness that will pay back the University.
"The University is demonstrating a commitment to success in the Big Ten. They recognize that we can't simply wait until 2021," he said. "We have to gain competitiveness now. With an expectation and some certainty around future stream of payments, you can model that financially where it allows us to make investments today that we'll pay off in the future."
The “future stream of payments” refers to when Rutgers becomes a full-equity partner in Big Ten revenue shares in the 2020-2021 season. In the 2017 fiscal year, Rutgers received $16.1 million from the Big Ten — an increase from the $9.8 million it received for the previous fiscal year, according to NJ Advance Media.
The full revenue share in 2017 was $51.1 million, according to the Asbury Park Press article.
Because the University will not receive the $51.1 million share until 2021, Rutgers is getting less than its conference counterparts such as Ohio State and Penn State. Since joining the conference in 2014 it is still getting just a fraction of the distributed money.
In March, following the deficit noted in the 2016 Rutgers Athletics financial report, the University's New Brunswick Faculty Council passed a resolution deploring the shortfall and asking for an outside consultant to review the financial problems, .
“President Robert (L.) Barchi remains committed to ensuring the Athletics Department becomes self sufficient as soon as possible. Rutgers Athletics will be in a position to generate a positive cash flow for the University after we receive our full share of Big Ten revenues in 2021. Membership in the Big Ten brings numerous benefits for Rutgers students, faculty and researchers, including shared academic resources and research collaborations with our peer institutions in the Big Ten,'' said Karen Ayres Smith, a Rutgers spokesperson, in a statement to NJ Advance Media.