Rutgers Faculty Sharpening The Long Knives

[zls44]

http://www.nj.com/news/index.ssf/2012/02/growing_resentment_evident_in.html

 

[Johnbuoy]

This could end up going the way that Maryland did...eliminate 8 sports...but not football of course.

 

[2Infinity]

http://www.nj.com/news/index.ssf/2012/02/growing_resentment_evident_in.html

Looks to me like Schiano knew just when to get out! He leveraged other job offers for personal gain with the university. This past season he was making $2.5 million, highest among all conference coaches. He convinced the trustees to spend $102 million on a stadium expansion, after just one truly great season. The trustees bought into the idea by approving it, only to see the waiting line for season tickets dry up and then see football attendance fall well below both projections made and stadium capacity. All the while, the expenses of the athletic dept., and football program in particular, continued to rise, while revenues did not keep up. The dept. and football team are being subsidized by the BOT with money coming out of the general fund AND through deductions from student fees. This year, the annual shortfall reached a new high of $28.7 million. There had been projections and promises made that after the expansion was complete, the revenues from the football program would rise significantly. That has not happened, and in fact, continue to fall further behind expenses. As of the previous year, for which information was available, Rutgers already had one of 10 highest operating losses in major programs in the country. The Rutgers athletic dept. has some serious decisions to make in the near future. They may already have begun doing so. They are rumored to have offered potential new coach Mario Cristobal significantly less pay than what Schiano had been making. It's been reported that he turned down their offer during the contractual negotiations. Ultimately, they selected Kyle Flood, an assistant coach under Schiano, who signed a contract that will pay him less than $1 million per year. If you're Greg Schiano, from a financial standpoint at least, it looks as if you picked a very good time to be leaving the program.

 

[SAMCRO]

Some of my favorite excerpts:
Faculty members who packed Voorhees Hall said the 174-3 vote shows their growing resentment over pumping millions into an athletic department that is among the biggest money-losers in the nation. "There is deep and broad dissatisfaction among the faculty with the decisions the board of governors have made, the direction the administration has pursued and the catastrophic failure and waste of the athletic program," Richard Ebright, a professor of chemistry, told the crowd of professors.

Mark Killingsworth, a economics professor who pushed for the resolution since the fall, said the increased emphasis on athletics has taken a toll on the school’s academic standing.
"Parents need to know that the value of a Rutgers degree is under threat," said Killingsworth, noting that it has dropped in the rankings by several important publications and organizations.

AND MY FAVORITE:
"Mr. Pernetti keeps saying the subsidies will decrease in the future," said Lee Jussim, a psychology professor.
"We can't dispute that. The future is infinite, so it’s always possible."

 

[coachRD]

He convinced the trustees to spend $102 million on a stadium expansion, after just one truly great season. The trustees bought into the idea by approving it, only to see the waiting line for season tickets dry up and then see football attendance fall well below both projections made and stadium capacity. .

Funny how they used the infamous Season Ticket "waiting list" as part of the rationale for moving forward on a costly stadium expansion....I am a high school teacher, and I see ALL THE TIME our kids organize fundraisers and team orders of t-shirts etc., even these 16 year olds always note things like "Well, 30 kids told us they want to order t-shirts, but WE KNOW they won't all financially commit when the time comes, so we're only going to order 20..."

Weird-even teenagers get it.

 

[upstater]

Looks to me like Schiano knew just when to get out! He leveraged other job offers for personal gain with the university. This past season he was making $2.5 million, highest among all conference coaches. He convinced the trustees to spend $102 million on a stadium expansion, after just one truly great season. The trustees bought into the idea by approving it, only to see the waiting line for season tickets dry up and then see football attendance fall well below both projections made and stadium capacity. All the while, the expenses of the athletic dept., and football program in particular, continued to rise, while revenues did not keep up. The dept. and football team are being subsidized by the BOT with money coming out of the general fund AND through deductions from student fees. This year, the annual shortfall reached a new high of $28.7 million. There had been projections and promises made that after the expansion was complete, the revenues from the football program would rise significantly. That has not happened, and in fact, continue to fall further behind expenses. As of the previous year, for which information was available, Rutgers already had one of 10 highest operating losses in major programs in the country. The Rutgers athletic dept. has some serious decisions to make in the near future. They may already have begun doing so. They are rumored to have offered potential new coach Mario Cristobal significantly less pay than what Schiano had been making. It's been reported that he turned down their offer during the contractual negotiations. Ultimately, they selected Kyle Flood, an assistant coach under Schiano, who signed a contract that will pay him less than $1 million per year. If you're Greg Schiano, from a financial standpoint at least, it looks as if you picked a very good time to be leaving the program.

Just wondering about the new football expansion. Since the school paid for that building, is the debt service on the expansion paid for by the school, or does it come from the athletic department? In other words, do they lose more than 28.7 million?

 

[2Infinity]

Just wondering about the new football expansion. Since the school paid for that building, is the debt service on the expansion paid for by the school, or does it come from the athletic department? In other words, do they lose more than 28.7 million?

The initial plan, approved in January, gave the university permission to issue $72 million in state bonds, and called for the rest to be raised privately. But those efforts have foundered, with only $1.1 million being raised, according to Greg Trevor, a university spokesman. ​

The Board of Governors approved a resolution authorizing the university to borrow $102 million to finance the stadiumexpansion project. Under the revised financing plan, the university will issue $85 million in bonds; the remaining $17 million has been borrowed through low-interest commercial paper.

University officials say the stadium project will be financially self-sufficient, and they project that revenues from the stadium will exceed expenses beginning in the 2010-11 fiscal year. ​

So it looks as if they anticipated a lot of private money coming in ($30 million) to help finance the expansion. Instead, they only raised $1.1 million, so had to go back and ask for more. Stadium revenues have been, and continue to, fall far short of covering expenses as well. This is partially why they have a financial mess on their hands in the athletic department at Rutgers.

And who is paying for this you ask? Well it appears that the debt service on the bonds was originally projected to be paid with the growing revenues that the athletic dept. was anticipating. But when the revenues weren't rising anymore and in fact dropping off significantly, the university had to step in to cover them through deductions from the student fees and the university's general fund. This is what has so many outraged in NJ.

 

[UCHuskies08]

Some of my favorite excerpts:
AND MY FAVORITE:
"Mr. Pernetti keeps saying the subsidies will decrease in the future," said Lee Jussim, a psychology professor.
"We can't dispute that. The future is infinite, so it’s always possible."

 

[uconNYC]

Need to send this article to every NJ recruit and high school coach

 

[zls44]

The initial plan, approved in January, gave the university permission to issue $72 million in state bonds, and called for the rest to be raised privately. But those efforts have foundered, with only $1.1 million being raised, according to Greg Trevor, a university spokesman.​

​

​

UConn got four times as much cash from one family for a basketball practice facility which the general public will never see or use.​

​

$1.1 million? The CEO of Home Depot is an RU alum. To raise that little cash makes me wonder if they were rejecting checks. That's astounding.​

​

If the UConn soccer program needed $1.1 million by next Friday, the Friends of Soccer would ask who to write the check out to.​

 

[upstater]

The initial plan, approved in January, gave the university permission to issue $72 million in state bonds, and called for the rest to be raised privately. But those efforts have foundered, with only $1.1 million being raised, according to Greg Trevor, a university spokesman. ​

The Board of Governors approved a resolution authorizing the university to borrow $102 million to finance the stadiumexpansion project. Under the revised financing plan, the university will issue $85 million in bonds; the remaining $17 million has been borrowed through low-interest commercial paper.

University officials say the stadium project will be financially self-sufficient, and they project that revenues from the stadium will exceed expenses beginning in the 2010-11 fiscal year. ​

So it looks as if they anticipated a lot of private money coming in ($30 million) to help finance the expansion. Instead, they only raised $1.1 million, so had to go back and ask for more. Stadium revenues have been, and continue to, fall far short of covering expenses as well. This is partially why they have a financial mess on their hands in the athletic department at Rutgers.

And who is paying for this you ask? Well it appears that the debt service on the bonds was originally projected to be paid with the growing revenues that the athletic dept. was anticipating. But when the revenues weren't rising anymore and in fact dropping off significantly, the university had to step in to cover them through deductions from the student fees and the university's general fund. This is what has so many outraged in NJ.

This is not the case. Go back and look at Rutgers' revenues and fees. The $30 million loss is a long-standing problem that predates the expansion of the stadium. It's been going on for at least 5 years. This is why I state the debt service is not being counted under AD expenditures, though I could be wrong about that. Nonetheless, I'm absolutely certain that Rutgers was losing this kind of money since before expansion.

 

[FDNY99]

Upstater you are right. Around the time Pernetti announced the naming rights they just signed for part of the stadium, he also announced that the debt service payments were being taken iff the athletic dept debt and transferred to the school capital improvement line in the budget. If you search the Star Ledger ir Bergen Record for the article on the naming rights deal the quotes for the line item transfer are in there.

 

[B1GEast]

They deserve it. The Rutgers football program is all show no go. They want to be perceived as "big time", but they are smoke and mirrors. They expanded their stadium to 50k, paid their former coach 2 million and landed solid reccruiting classes, but it's artificial, there's only one way to be a big time program, and that's to do it on the field.

They haven't won anything, don't schedule anyone significant and they don't fill the stadium. They don't even have tradition even though they brag about being the nation's first football team. They are like a 80's built Detroit car, poorly designed with no performance.

 

[2Infinity]

This is not the case. Go back and look at Rutgers' revenues and fees. The $30 million loss is a long-standing problem that predates the expansion of the stadium. It's been going on for at least 5 years. This is why I state the debt service is not being counted under AD expenditures, though I could be wrong about that. Nonetheless, I'm absolutely certain that Rutgers was losing this kind of money since before expansion.

I'm not sure what you're referring to regarding a $30 million loss. Are you referring to the $28.7 million loss this year referenced in the original post I made? If so, they are two separate issues. The $30 million I referred to just above was the amount that RU had to raise to complete the stadium expansion. That was necessary because they fell WAY short of their goal in raising the private contributions portion of the financing. But that is not a "loss" per se.

The athletic department has indeed been operating with annual losses for the last few years. And naturally, with the revenues produced being less than projected, the expansion has only helped contribute to the athletic department's annual losses. They are only growing each year and that is what has the faculty concerned at RU!

 

[freescooter]

The only thing I will say on the stadium situation is that one can make the case that a stadium, like any other captal improvement, is a general university facility and therefore should be "on the university's books." rather than the athletic department's. No different from a new chemistry building or a new performing arts building or a new dorm. The problem here is that it was originally sold as being an athletic dept expense and had to be moved back to the general university capital fund. the issue with having these things built off budget, so to speak, is that thye are no longer subject to critical review nor do they have to compete and be justified. One might have come to a somewhat different decision on the stadium expansion if the question had been stadium or chemistry building for example.

 

[UCHuskies08]

The only thing I will say on the stadium situation is that one can make the case that a stadium, like any other captal improvement, is a general university facility and therefore should be "on the university's books." rather than the athletic department's. No different from a new chemistry building or a new performing arts building or a new dorm. The problem here is that it was originally sold as being an athletic dept expense and had to be moved back to the general university capital fund. the issue with having these things built off budget, so to speak, is that thye are no longer subject to critical review nor do they have to compete and be justified. One might have come to a somewhat different decision on the stadium expansion if the question had been stadium or chemistry building for example.

How do you figure the stadium is a general university facility?

 

[freescooter]

It is part of the general infrastructure of the University. No different from a performing arts center or a basketball arena or anything else. It has nothing to do with who gets to use it...you can't go into any old lab in the UCONN Chemistry buiklding any more than you can just walk into Gampel and shoot around whenever you feel like it. You can't walk inot Jorgenson and start playing the trumpet whenever you want either. Football stadium is no different. If yo think of the University as a city for example, there are some places that are open to the general public public, roads, bridges, parks. some are open to limited members of the public or on limited schedules, for example schools, your mayor's office...you can't just walk in and put your feet up on his desk, unless you're the mayor...you need some kind of invitation, even though his office is in a public building. Then some are really not open to the public at all, or only on a very limited basis...they won't let you wander through the sewer plant unattended for example, or the water treatment plant both for your saftey and others, the police lockup...you can only go there when and if they allow or force you there. Public universtity facilities are pretty much the same. Anyone pretty much can walk aroudn the campus, go through the student center, you might have to pay to go into the performing arts center or the football stadium, and you might not be allowed into the biology lab where thye are studying infectious deseases under any circumstances. But all of those facilities are par tof the University's infrastructure. theBio lab doesn't just belong to the Biology department. The performance center doesn't belong to the art department and the footballs tadium doesn't, or shouldn't, just belong to the athletic department.

 

[upstater]

I'm not sure what you're referring to regarding a $30 million loss. Are you referring to the $28.7 million loss this year referenced in the original post I made? If so, they are two separate issues. The $30 million I referred to just above was the amount that RU had to raise to complete the stadium expansion. That was necessary because they fell WAY short of their goal in raising the private contributions portion of the financing. But that is not a "loss" per se.

The athletic department has indeed been operating with annual losses for the last few years. And naturally, with the revenues produced being less than projected, the expansion has only helped contribute to the athletic department's annual losses. They are only growing each year and that is what has the faculty concerned at RU!

I'm referring to the annual losses. It's been around $30 million for awhile, up to $35 million at certain points.

As well, it hasn't been shown that the expansion has contributed to AD losses. We don't even know if the debt service is being paid by the AD.

 

[upstater]

The only thing I will say on the stadium situation is that one can make the case that a stadium, like any other captal improvement, is a general university facility and therefore should be "on the university's books." rather than the athletic department's. No different from a new chemistry building or a new performing arts building or a new dorm. The problem here is that it was originally sold as being an athletic dept expense and had to be moved back to the general university capital fund. the issue with having these things built off budget, so to speak, is that thye are no longer subject to critical review nor do they have to compete and be justified. One might have come to a somewhat different decision on the stadium expansion if the question had been stadium or chemistry building for example.

This just isn't the proper way to look at it, IMO. You have to measure cost versus benefit. if you don't, I could erect a million dollar teepee in the center of a quad and say it's for everyone's use.

There was already a stadium there for students. I'm sure for intramural soccer the students can care less about the extra 10k seats. Makes no difference to them. But beyond that, your theory assumes there's an infinite amount of money to build other necessary revenue producing buildings. You can get yourself into a situation like what happened at Oklahoma State University. They built up their stadium after T. Boone Pickens donated $180 million to the school for the stadium, but he insisted that the money be invested in a hedge fund that he ran. When the hedge fund went belly up, all the money was lost including some extra university funds. The school was then stuck with all the debt service, and then lenders were reluctant to give the school money at decent rates to built a research building necessary to complete work toward a huge private research grant. T. Boone Pickens was good for the lost $180 million, he pledged it again. Good for him. But in the two-year interim, the plans for the new building fell through, and the huge research grant won by the faculty was revoked.

So, if you're spending school money on new infrastructure, it has to be spent wisely. A lot of those research grants come with strings attached.