My Take on the Buyout Costs

Jtung230 said:

Since you mentioned concept of business and university works. Please tell us your qualifications. RU is a public university. I’m not sure all the ifs and the hypotheticals will fly during a budgeting process. We have 2 options. Find the money or borrow money. It’s time for Keli to prove her worth.

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yesrutgers01 said:

My apologies upfront for this long post-

I agree with much of this, but I think we're missing a much bigger financial question.

Everyone keeps talking about what it would cost Rutgers to move on from Schiano. But what is it costing Rutgers to keep him?

Maybe it's just the way my business mind works, but if I'm running an organization, I'm not looking solely at the cost of making a change. I'm also looking at the cost of doing nothing.

SHI Stadium holds 52,454 fans. Let's use 20,000 empty seats per game, which I don't think is unreasonable based on what we're seeing.

At an average of $75 per ticket, that's $1.5 million in potential ticket revenue per game.

Now add parking, concessions and merchandise. Using some fairly reasonable estimates, you're looking at approximately $2.2 million in potential gross revenue per home game.

Over 6 or 7 home games, that's roughly $13–15.5 million in potential annual revenue.

Now, I'm not suggesting every empty seat represents a lost ticket sale, or that all of that money would be pure profit. But those numbers alone should be part of the conversation.

And to me, that's not even the biggest financial concern.

Look at what Keli Zinn is being tasked with accomplishing. Rutgers needs major donors, corporate sponsors, NIL-related financial support, and substantial investment in facilities and improvements if we're going to compete in the Big Ten.

How much harder does that become when you're trying to sell the future of a football program that's losing games, fans and television viewers?

These are people and businesses being asked to commit serious money, sometimes millions of dollars. They want to believe in the direction of the program. They want to see excitement, growth, visibility and a reason to invest.

And while the Big Ten media rights agreement provides Rutgers with substantial revenue regardless of our weekly television ratings, that doesn't mean declining viewership and fan interest have no financial consequences. Rutgers still has its own sponsorships, advertising relationships, fundraising efforts and brand value to worry about.

That's where I think the real financial exposure could be.

Losing a few million dollars in ticket revenue is one thing. Losing the confidence of major financial supporters, or failing to attract new ones, could have consequences for years.

And let's not forget where Rutgers is located.

We're sitting in one of the largest and wealthiest markets in the country. And like it or not, NY/NJ has a history of jumping on the bandwagon when teams start winning.

We saw it ourselves in 2006 and the years immediately following. Rutgers football became a hot ticket. Season tickets were selling, waiting lists were growing, and people who had never cared about Rutgers football suddenly cared.

And that was before we were even in the Big Ten.

I'm certainly not suggesting that hiring a new coach guarantees success. You have to get that hire right, and there's financial risk involved.

But there's also risk in continuing down the same road.

So when everyone is debating a buyout that would be paid over multiple years, why aren't we also asking what the projected financial damage could be over those same years if nothing changes?

What does continued declining attendance cost? What happens to corporate sponsorships? What happens when major donors decide to hold off on funding facilities or supporting player compensation initiatives because they've lost confidence in the direction of the program?

And what is the potential financial upside if the right coach turns Rutgers around?

Those are the questions I'd expect the leadership of any major organization to be asking.

The buyout is a known expense. I understand that.

But the cost of doing nothing is very real too, even if it's harder to put an exact number on it.

Sometimes the most expensive business decision is the one you decide not to make.

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