Chasing Big Sports Goals,
Rutgers Stumbles into a Vat of Red Ink
Sports of The Times
By MICHAEL POWELL
MARCH 12, 2017
NEW BRUNSWICK, N.J.
Ah, how grandness beckoned. When Rutgers officials announced
in 2012 that their university would join the Big Ten, one of
the nations premier athletic conferences, the sun itself
seemed to burn brighter.
Teams from Rutgers, New Jerseys state
university, would battle mighty Ohio State and Michigan. High
school seniors would forward applications by the truckload. And
the money from those gilded television contracts oh, good
God, that money would pour in.
Barchi, CEO, Rutgers Univ.
Its a transformative day for Rutgers University,
Tim Pernetti, the athletic director then, told reporters.
I recently placed a call to Mark Killingsworth, a Rutgers economics
professor and football fan, and asked about that transformation.
He sighed. He had led a faculty revolt against Rutgerss
money loser of an athletic department, which continues to siphon
off tens of millions of dollars intended for academics. And Rutgerss
tuition costs rank high nationally
Its not rocket science; this program is a mess,
Killingsworth said of the athletic program. We are not
champions at much, but our deficit is the biggest in the Big
The faculty council is set to vote on a motion deploring this
state of affairs. The athletic department has run an annual deficit
of at least $20 million since 2006; its current deficit is slightly
larger than the sum of all the deficits in every other Big Ten
All of which brings us to the athletic departments 2016
financial report to the N.C.A.A. The Star-Ledger obtained
this document recently; it showed a blood-red deficit of $28.6
million. The 64-page report had a curious one-line notation:
Other Operating Revenue: $10,495,912.
It turned out that the university bank quietly lent $10.5 million
to the athletic department to keep it afloat and pay severance
costs for expensive and failed coaches. That loan came weighted
with an interest rate of 5.75 percent; the cost of repaying it
will run north of $18 million, according to university documents.
Rutgers also diverted $11 million in student fees and $17.1 million
from its general fund to cover the athletic shortfall. The average
undergraduate now pays more than $300 in activities fees exclusively
for the universitys N.C.A.A. teams.
This is the section of this column I customarily would set aside
for Rutgers officials to respond. They could slice and dice numbers,
and explain why the ink is not as crimson as it appears. They
could assert the department is run with a steely hand on the
Late last month, I requested an interview with the athletic director,
Patrick Hobbs. A
day later, I also asked to speak with the president, Robert Barchi.
These requests were met with silence.
Hobbs ("WE ARE BIG
On Thursday, I asked again, and a spokeswoman offered an off-the-record
interview with Hobbs. I declined. An email statement soon arrived,
saying in part, 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.
Let me translate: That the athletic department has been run with
no regard for sound financial practice is a trifle. Soon enough,
piles of dough from the Big Tens billion-dollar-plus television
contract will be deposited on the front steps of the athletic
department. Its take could amount to $40 million.
This is like handing Willy Sutton the keys to Fort Knox.
Deficits are not the only problem plaguing Rutgers athletics.
Its football and basketball teams are impressively scandal-scarred.
Here is a brief recap:
In 2012, not long after Rutgers announced it was joining the
Big Ten, Pernetti, as athletic director, received a video that
showed the Scarlet Knights basketball coach, Mike Rice
Jr., berating his players and using homophobic slurs. For punctuation,
the coach hurled basketballs at their heads. Eventually Pernetti
suspended Rice for a few games. A few months later, ESPN obtained
and broadcast the video. This time, Pernetti fired Rice.
Alas, this was too late. Pernetti, who engineered Rutgerss
entrance into the Big Ten, tumbled out the door, followed by
the universitys general counsel.
Barchi, the president, hired Julie Hermann as athletic director.
He described her as one of the most respected athletic
administrators in the country. Her pay and benefits were
nearly half a million dollars.
More or less immediately, it was reported that Hermann, who earlier
served as the volleyball coach at Tennessee, had demeaned her
players as whores, alcoholics and learning disabled.
Hermann was shown the door in 2015 in a purge that also claimed
Kyle Flood, the football coach.
Flood was accused of trying to persuade a dance appreciation
teacher to change a failing grade for one of his players. Seven
of his players were arrested, on charges including armed burglary
and an unprovoked punch that broke a students jaw. An additional
16 players tested positive for banned substances, reportedly
marijuana, which under university rules merited suspensions.
The football staff covered this up.
More seriously, Rutgers, like other big-time schools,
chooses pretty female students as ambassadors to
show male recruits around campus. The N.C.A.A. has accused Rutgers
of allowing two ambassadors to meet with the recruits in dorm
rooms, which is prohibited.
Rutgerss fired athletic officials will draw severance payments
for years to come. Hermann is owed about $1.2 million over the
next two years. Flood will pull down $2.1 million. Eddie Jordan,
the basketball coach who, refreshingly, was fired for losing
rather than for abusing his players, will receive almost $1.9
Hence the athletic departments need for a loan.
Pernetti no longer draws a university check. No wolf has arrived
at his door. In one of his last acts as athletic director, he
persuaded Rutgers to pay $7 million to end its contract with
a sports marketing firm. Shortly after he was fired, Rutgers
signed an 11-year, $65 million contract with IMG College to handle
sports marketing for the university.
Two years ago, IMG hired Pernetti as president for multimedia,
covering Rutgers and other colleges.
An intriguing aspect of Rutgerss dive into big-time sports
is that each time a coach or an athletic director left soaked
in scandal, the successor received more money. The departed football
coach made $1.25 million; the new coach makes $2 million. The
departed basketball coach made about $1.1 million; the new coach
makes $1.6 million.
As athletic director, Hobbs earns $110,000 more per year than
Hermann did. Hobbs is quick-witted. He described the piling up
of severance payments to dismissed coaches as investments
that need to be made.
Hobbs once served as dean of Seton Halls law school, where
he displayed a gift for fund-raising and an impressive ear for
politics. Over the years, Jon Corzine, the former New Jersey
senator and governor, had donated $1 million to Seton Hall. In
2004, his girlfriend, Carla Katz, applied to Seton Halls
law school. He wrote a letter of recommendation for her.
Katz was president of the
states largest public employees union. The law school
awarded her a coveted presidential scholarship. Hobbs said he
had no idea Corzine had written a letter of recommendation. He
took exception to suggestions that a law school student could
receive a scholarship as a favor.
Gov. Chris Christie was a graduate of the Seton Hall law school
and a donor to his alma mater. When he served as a federal prosecutor,
he got to know Hobbs. After an investigation of Bristol-Myers
Squibb in 2005, Christies office cut a deal. It would not
charge the company with securities fraud, and in exchange the company
would pay a fine to fund a $5 million professorship of business
ethics at the law school. (The Justice Department since has barred
this practice, out of concern that prosecutors would start creating
what it called summer camps at favored institutions.)
Rutgers alumnus "Chris" Christie. talking to reporter
at NJ sporting event, displays undying school spirit and Nike
When Christie was elected governor, he appointed Hobbs to his
transition committee. After that unfortunate business with the
George Washington Bridge, he made Hobbs his $75,600-a-year part-time
ombudsman. Hobbs had no office in the Capitol and produced no
public work product.
A month ago, Hobbs and Killingsworth, the economics professor,
agreed to answer questions for NJ.com, in a de facto email debate.
Hobbs waxed joyful.
Our teams and student-athletes have enjoyed a great deal
of success in the Big Ten, he said, citing womens
soccer, wrestling and lacrosse.
These are fine sports. The Big Ten, however, prays at the altar
of the grand moneymakers, football and basketball. The Rutgers
football team finished 2-10 over all in 2016, 0-9 in the Big
The mens basketball
team, Hobbs noted, got off to a fine 11-1 start. Alas, the team
was beating up on creampuffs. When it stepped into the maw of
the Big Ten season, Rutgers won three games and lost 15 before
going 1-1 in the conference tournament.
The athletic department has already budgeted for a 2 percent
increase in student fees, Killingsworth said. I have
a novel idea: Why dont they learn to live within their
Copyright (c) New York Times 2017
Thats a small-time question for a big-time athletic program.