Report and Recommendations on the Athletics Program's Revenues, Expenditures, and Deficit

Introduction

The Rutgers athletic program is in serious financial trouble.  For many years, expenditures have substantially exceeded revenues, resulting in a very large deficit.  Between 2004-05 and 2011-12, the cumulative deficit came to $190 million; in 2012-13, the deficit ballooned to $47 million.  Although some of this was attributable to "extraordinary" (i.e., one-time) events, a substantial portion is chronic and structural, i.e., a large excess of regular and recurring expenditures over regular and recurring revenues, year in and year out.  Finally, as we note below, the University's financial plan for the athletic program calls for a cumulative deficit of an additional $183 million between 2013-14 and 2021-22.  In sum, since 2004-05, the athletic program deficit, actual or projected, will substantially exceed $400 million.  Moreover, the program will still be operating at a deficit (albeit a greatly reduced one) even in 2021-22, the last year of the university's current financial plan for athletics.

 The deficit has been, and in future years will continue to be, financed by University discretionary funds and student fees.  The discretionary funds are not earmarked for athletics; rather, they could have been used (and, in future years, could be used) to support the University's academic agenda.  Thus, a dollar from University discretionary funds used to pay for the athletics deficit is a dollar that cannot be used for academics.  Thus, as President Barchi has said, athletics is "siphoning dollars" from our academic programs. The use of student fees to cover part of the athletics deficit does not directly affect our academic programs, but adds several hundred dollars per year to the fees paid by each fulltime undergraduate on the New Brunswick campus.

 Many faculty members are greatly concerned by the use of large amounts of University discretionary funds to cover the athletics deficit while academic departments and programs have suffered repeated budget cuts in recent years, to the detriment of our academic mission. In late April 2013, therefore, the New Brunswick Faculty Council voted to establish an ad hoc committee on the athletic program.  The committee was charged with investigating the current state of and future plans for the athletic program's finances and reporting its findings and recommendations to the full Faculty Council.

 The ad hoc committee was established by Faculty Council Chair Martha Cotter in early fall 2013, and held its first meeting on October 11, 2013.  At that meeting, the committee approved a set of questions on the athletic program’s finances and procedures and charged Cotter with writing to Athletic Director Julie Hermann to transmit our questions, to request a meeting with her and Athletics CFO Janine Purcaro to obtain answers, and to ask for a number of documents to help us prepare for the meeting.  Cotter e-mailed Hermann twice but received no response; she then wrote to President Barchi (to whom Hermann reports directly) asking for the information and documents being sought.  In response, President Barchi met with Cotter on January 29, 2014, and agreed to provide essentially all the information and documents requested. While we deplore the failure of the Athletics Administration to respond to our requests in a timely fashion, we thank President Barchi for his very helpful response.  We take this as a welcome indication that the administration is committed to working constructively with us on this matter.

 See the attachment for the remainder of this report.