Rutgers got $30M from Big Ten last year. After COVID testing, debt payment, what was left?
Six years after Rutgers University joined the Big Ten Conference, the school has received its first full share of the league’s revenues — but documents show it will be far from enough to get the athletics division out of the red.
While the COVID-19 pandemic played a role in reducing revenues and increasing expenses, athletics’ debt payments alone — including $1.4 million in interest and $8 million in principal to the Big Ten — helped eat away the additional earnings.
The Big Ten distributed a combined $157 million less to its members in the 2020-21 fiscal year than it did the previous year, with revenues taking a hit from the pandemic, according to documents obtained by NorthJersey.com and the USA Today Network New Jersey.
Rutgers received $29.6 million from the Big Ten, about $18 million more than it had been getting annually during its first six years in the league.
Despite that, another large budget shortfall is expected for 2020-21. For months, Rutgers has refused to release even the most basic athletics division spending and revenue figures for the fiscal year that ended on June 30, 2021. Those numbers are expected to become public as early as this week after the university’s deadline to submit that data to the NCAA.
Again last week, the university declined to release financial information for the 2020-21 fiscal year, saying “the total expenses and revenues are currently under audit and will be ready once the NCAA report is complete.”
Athletics has routinely posted large operating deficits, including a $73 million shortfall in fiscal 2019-20, that were covered in part by university subsidies and loans — money that comes from state taxpayers and student tuition. An investigation by NorthJersey.com and the USA Today Network New Jersey revealed in September that the athletics division has borrowed more than $80 million from the university to cover operating deficits over the years, a practice that was contrary to university policy.
The shortfalls appeared to be smaller in financial documents because Rutgers has been counting loans as revenue, contrary to NCAA guidelines.
Years ago, Rutgers officials said they expected fiscal 2021 to be the year that its athletics division would finally break even as it received a full share of conference revenue. But the division has more than $250 million in debt, and costs have been growing since it joined the Big Ten — including a near-doubling of its coaches’ salaries.
The Big Ten distributed a combined $532 million to its 14 member schools for 2020-21, according to invoices provided by Rutgers in response to a public records request. That was down from $689 million the previous year, when 12 schools each received a full share of at least $53 million, according to federal tax documents for the Big Ten.
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In all, the conference deducted $55.8 million for COVID testing in 2020-21. It also was expected to lose television revenue because fewer football games were played.
Rutgers’ conference revenues of just under $30 million in 2020-21 reflected a $4 million deduction for COVID testing and another $6 million deduction to begin repaying a $10 million loan from the Big Ten. On top of those deductions, the athletics division began repaying another $38 million loan from the conference — paying back $2 million in principal and $1.4 million in interest. Documents show that the loan payments will be made through 2026.
The annual interest payments for the loan going forward have not been made public. Rutgers responded to a records request by saying it does not possess a debt schedule for that loan.
Rutgers owed $40 million to the Big Ten going into the 2021-22 fiscal year.
Even without the Big Ten loans, the athletic division debt payments will increase by more than $10 million annually over the next several years, according to the division’s most recent debt schedule. That does not include debt that athletics is expected to incur for a new football operations center and indoor training facility and for significantly upgrading or replacing its basketball arena.
The university president, Jonathan Holloway, told NorthJersey.com last summer that he is considering forgiving university loans to athletics that are related to covering its annual operating costs.
Rutgers and Maryland, as the conference's newest members, were left out of an additional pot of money that came to $29 million — from an insurance policy that paid for basketball games canceled in March 2020 and deferred Rose Bowl revenue paid in 2021. The Big Ten did not have a team in the Rose Bowl in 2021 when the bowl hosted a college playoff game.
Those payments provided an additional $2.4 million each for the 12 other member schools.
Rutgers did get $4.3 million as its share of $60 million of conference bowl revenue distributed for the 2020-21 fiscal year, even though it did not go to a bowl game.
Abbott Koloff and Jean Rimbach are investigative reporters or NorthJersey.com. To get unlimited access to their watchdog work that safeguards our communities and democracy, please subscribe or activate your digital account today.
Email: koloff@northjersey.com - Email: rimbach@northjersey.com
Twitter: @abbottkoloff - @jeamrimbach