SBD/October 14, 2013/Colleges

Report Suggests Rutgers Should Temper Fiscal Expectations For Move To Big Ten

The Big Ten promises national exposure and lucrative television contracts for Rutgers
Rutgers Univ.'s hope that its entrance next year into the Big Ten "will help its sports programs get out of the red" is an "elusive goal, because the vast majority of athletic departments in the country -- and the conference -- operate at a loss," according to a financial report cited by Patricia Alex of the Bergen RECORD. The report, issued Friday by Moody's Investors Service, states that "athletic departments in the Big Ten average annual losses" of about $10M, with some schools losing more than $20M. The Big Ten "holds the promise of more national exposure and lucrative television contracts" for Rutgers. Rutgers BOG Vice Chair Greg Brown "projected the move would mean gains" of $200M over "the next dozen years." Moody's analysts said that entrance into the Big Ten "could boost the school’s 'branding' and help it in recruiting and fundraising." Moody's VP & Senior Credit Officer Edie Behr said that Rutgers would also "benefit from joining the Committee on Institutional Cooperation -- the academic consortium of the Big Ten." But Moody's also warned that there are "financial risks inherent in pursuing big-time college athletics." The report noted while the promise of more revenue exists, big-time athletic programs "generally cost more to run and subsidies from schools have increased" by a median of about 25% at schools across the country during the past five years (Bergen RECORD, 10/11).

COUNTRY ROADS, TAKE ME HOME
: In West Virginia, Dave Hickman reported the West Virginia Univ. athletic department is "back in the black" after reporting a $4.2M profit for the fiscal year that ended June 30. The surplus comes a year after the department lost almost $13M, "perhaps the largest deficit in its history." WVU's revenue-sharing check from the Big 12, which was worth $10M instead of $8-9M, was one reason for the change, as it was "larger than expected" (WVGAZETTE.com, 10/11).
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