UConn's athletic subsidy

[Scarletnut]

Just found this link. Funny how no one busts on UConn for their subsidy but hammers us and yet their subsidy doesn't include their stadium yet ours is included in our athletic debt.

http://www.courant.com/sports/uconn-huskies/hc-uconn-sports-subsidies-1117-20151116-story.html

 

[mal359]

BUT MOM! EVERYONE ELSE IS DOING IT!

 

[RUChoppin]

No one busts on UConn because nobody cares about UConn.

 

[soundcrib]

No one busts on UConn because nobody cares about UConn.

Hoops.

 

[Cantbelieveit99]

No one busts on UConn because nobody cares about UConn.

This. No one gives a crap about UConn. This is like keeping tabs on your high school classmates that never made it in an attempt to make yourself feel better about where you are. UConn is in the rearview mirror along with the folks up at Siberia University. Our peers are now OSU MSU Michigan Penn State Maryland etc.. . stop worrying about hasbeens and never was like Syracuse and UConn.

 

[RUChoppin]

Hoops.

They finished one game over .500 in the powerhouse AAC last year. No one cares.

 

[Scarlet_Scourge]

Stop posting about Uconn. LOL, we have B1Gger things to worry about.

 

[cubuffsdoug_rivals]

UConn and Syracuse can't go a day without mentioning Rutgers on their boards. Yet, neither ever considered Rutgers a rival. That to me screams rivalry. Too bad it will never happen again. One's a G5 and down for the count. Basketball don't make enough to carry both BB and football at UConn. Syracuse might as well be a G5 because the glory days are gone. No more cherry picking some top talent from NJ. Ever since that well dried up SU has been a shell of itself. Now, even BB is in question as soon as their HC retires.

 

[Scarletnut]

UConn and Syracuse can't go a day without mentioning Rutgers on their boards. Yet, neither ever considered Rutgers a rival. That to me screams rivalry. Too bad it will never happen again. One's a G5 and down for the count. Basketball don't make enough to carry both BB and football at UConn. Syracuse might as well be a G5 because the glory days are gone. No more cherry picking some top talent from NJ. Ever since that well dried up SU has been a shell of itself. Now, even BB is in question as soon as their HC retires.

Yea, SU doesn't consider us a rival yet has a 118 page thread dedicated to RU. UConn basks in their perceived glory that they win in every sport they play in. I only posted their subsidy to highlight how we live in the media capital of the world (and in NJ where we eat our own), and how the media jumps on RU at every chance they can without doing any research to show the accounting methods that RU uses vs the methods use by every other college, painting a picture of Rutgers as a money sucking drain on the taxpayers, when in reality our subsidy is much closer to the competition than what is printed.

 

[rurichdog]

It will be a great day to no longer be on that list

 

[RURod]

The Cuse and UConn FB fans (to the extent they exist) just can't stop comparing themselves to RU. On the one hand they belittle RU, and on the other hand they obviously believe RU must fail for their programs to succeed. I know I should be a bigger person and move on, but my hatred for them continues to burn.

 

[cubuffsdoug_rivals]

The Cuse and UConn FB fans (to the extent they exist) just can't stop comparing themselves to RU. On the one hand they belittle RU, and on the other hand they obviously believe RU must fail for their programs to succeed. I know I should be a bigger person and move on, but my hatred for them continues to burn.

Continue to preach.

 

[Caliknight]

They are both totally irrelevant. We are B1G. Much bigger fish to fry.

 

[Upstream]

without doing any research to show the accounting methods that RU uses vs the methods use by every other college, painting a picture of Rutgers as a money sucking drain on the taxpayers, when in reality our subsidy is much closer to the competition than what is printed.

I've seen this claim on this board multiple times, with zero evidence to back it up. What makes you think that Rutgers uses accounting methods different from other institutions which make the subsidy look significantly worse.

As best as I can tell, the subsidy comparisons are based of standardized NCAA reporting
( http://records.rutgers.edu/sites/records/files/2014 NCAA FINANCIAL REPORT.pdf )


Sure, there is some leeway in the reporting. For example, facility costs for the RAC could be divided between MBB, WBB, other sports that use the building, or the facility costs could just be lumped together as non-sport specific. And while that may impact the P/L for a specific sport, it is fairly negligible when looking at Athletics as a whole.

 

[Scarlet Jerry]

I think it has to do with the debt service for athletic facilities (our recently expanded stadium). For example, Florida State has classrooms and office in their stadium. Did they include their stadium construction in their athletic debt?

https://en.wikipedia.org/wiki/Doak_Campbell_Stadium

-Scarlet Jerry

 

[RUChoppin]

I've seen this claim on this board multiple times, with zero evidence to back it up. What makes you think that Rutgers uses accounting methods different from other institutions which make the subsidy look significantly worse.

As best as I can tell, the subsidy comparisons are based of standardized NCAA reporting
( http://records.rutgers.edu/sites/records/files/2014 NCAA FINANCIAL REPORT.pdf )


Sure, there is some leeway in the reporting. For example, facility costs for the RAC could be divided between MBB, WBB, other sports that use the building, or the facility costs could just be lumped together as non-sport specific. And while that may impact the P/L for a specific sport, it is fairly negligible when looking at Athletics as a whole.

I have heard that facilities aren't always reported under the athletic department, and can be moved to the general university's facilities and grounds P/L. Don't have confirmation of this, but I believe it's if the facility is used for more than just sports, it can be moved o the general ledger. For instance, how much of the proposed Rutgers 2030 stuff would fall to our athletic P/L vs. the overall university P/L? You could really take that one either way, if you wanted to - don't need to put the parking structure combo building under athletics, as it also meets the needs of the proposed hotel and conference center across the street (and general student/staff parking).

I've also read that scholarship dollars can be reported different ways. If the tuition is $30K and the athletic department pays the school $20K, it's a $10K subsidy... but the school could choose to offer them a discounted tuition, and it would be $0 subsidy.

Every school chooses to report things and conduct their accounting in their own way.

 

[Upstream]

I have heard that facilities aren't always reported under the athletic department, and can be moved to the general university's facilities and grounds P/L. Don't have confirmation of this, but I believe it's if the facility is used for more than just sports, it can be moved o the general ledger. For instance, how much of the proposed Rutgers 2030 stuff would fall to our athletic P/L vs. the overall university P/L? You could really take that one either way, if you wanted to - don't need to put the parking structure combo building under athletics, as it also meets the needs of the proposed hotel and conference center across the street (and general student/staff parking).

I've also read that scholarship dollars can be reported different ways. If the tuition is $30K and the athletic department pays the school $20K, it's a $10K subsidy... but the school could choose to offer them a discounted tuition, and it would be $0 subsidy.

Every school chooses to report things and conduct their accounting in their own way.

In the NCAA reporting, the school either reports the facility costs as Direct Facility costs (if it appears on the Athletics budget) or Indirect Facility costs (if it doesn't appear on the budget). Either way it shows up as a cost on the NCAA reporting. Same thing with student aid; the amount reported on the NCAA form is the cost of tuition plus any discounts to tuition.

Sure, there may be some accounting tricks to reduce the amount reported as a subsidy. But you are talking about a $1MM change, not a $36MM change. If all it took was a change in accounting for Rutgers to eliminate the political problem of the athletic subsidy, then Rutgers would just make the change.

The claim that accounting practices are the reason for the high subsidy sounds like wishful thinking, not reality. It is absurd to claim (especially with no actual facts to back up the claim) that accounting practices are the reason that Rutgers has a subsidy that is $10MM more than UConn and $18MM more than the next highest P5 school.

 

[RUChoppin]

In the NCAA reporting, the school either reports the facility costs as Direct Facility costs (if it appears on the Athletics budget) or Indirect Facility costs (if it doesn't appear on the budget). Either way it shows up as a cost on the NCAA reporting. Same thing with student aid; the amount reported on the NCAA form is the cost of tuition plus any discounts to tuition.

Sure, there may be some accounting tricks to reduce the amount reported as a subsidy. But you are talking about a $1MM change, not a $36MM change. If all it took was a change in accounting for Rutgers to eliminate the political problem of the athletic subsidy, then Rutgers would just make the change.

The claim that accounting practices are the reason for the high subsidy sounds like wishful thinking, not reality. It is absurd to claim (especially with no actual facts to back up the claim) that accounting practices are the reason that Rutgers has a subsidy that is $10MM more than UConn and $18MM more than the next highest P5 school.

From the article:

"Mike Enright, a spokesman for UConn, cautioned against comparing UConn's spending against the 234 other public universities with Division 1 sports teams.
"Every school does their budget differently. It's not as neat and clean as comparing one school to another," he said.
He said some schools don't include spending on intramural sports or student scholarships in the athletics budgets."

Even UConn's spokesman is saying not to take the numbers at face value, and mentions scholarships. I don't know if it's as cut and dried as you are making it out to be.

 

[Upstream]

From the article:


Even UConn's spokesman is saying not to take the numbers at face value, and mentions scholarships. I don't know if it's as cut and dried as you are making it out to be.

There are certainly some differences in the way schools can report the numbers, as I indicated above. But those differences wouldn't change Rutgers' $36MM subsidy to a $12MM subsidy, as some here seem to imply. If it were that simple to change the reported subsidy, Rutgers would just do that and eliminate the political pressure that Rutgers faces every year when USA Today reports these numbers.

 

[srru86]

I've seen this claim on this board multiple times, with zero evidence to back it up. What makes you think that Rutgers uses accounting methods different from other institutions which make the subsidy look significantly worse.

In the last year University Dining Services managed stadium concessions we only netted $150,000 back to athletics. I don't think we really need a forensic accountant to surmise that a lot of revenue generated in the stadium by Athletics was skimmed into the university food operation.

That the Sodexho contract guaranteed us $875,000 in the first year proves we were leaving money on the table.

The fact that this $150,000 transfer was counted as part of the University "subsidy" to Athletics shows we are not accounting for this stuff the way a savvier program would.

 

[Upstream]

In the last year University Dining Services managed stadium concessions we only netted $150,000 back to athletics. I don't think we really need a forensic accountant to surmise that a lot of revenue generated in the stadium by Athletics was skimmed into the university food operation.

That the Sodexho contract guaranteed us $875,000 in the first year proves we were leaving money on the table.

The fact that this $150,000 transfer was counted as part of the University "subsidy" to Athletics shows we are not accounting for this stuff the way a savvier program would.

Maybe I missed it, but none of the articles you linked indicated that the concession revenue from Dining Services was counted as part of the subsidy (instead of as concession revenue as it should be). The articles do indicate that the switch to Sodexo would help reduce the subsidy, but that is because the expectation was that Sodexo-run concessions would generate more revenue, not because subsidy money is reclassified.

But even if the $150,000 revenue from Rutgers Dining Services was counted as part of the Subsidy, and through accounting changes it could be removed from the Subsidy line to the Concession Revenue line, making the Subsidy look smaller, that really just proves the point that I am trying to make. These changes in accounting practices only make marginal differences. Even if there are 20 changes that can each move $150K off the Subsidy line, that only reduces the $36MM subsidy by $3MM to $33MM. BFD. Rutgers would still have the highest subsidy of any P5 school by a $15MM margin.

 

[derleider]

In the last year University Dining Services managed stadium concessions we only netted $150,000 back to athletics. I don't think we really need a forensic accountant to surmise that a lot of revenue generated in the stadium by Athletics was skimmed into the university food operation.

That the Sodexho contract guaranteed us $875,000 in the first year proves we were leaving money on the table.

The fact that this $150,000 transfer was counted as part of the University "subsidy" to Athletics shows we are not accounting for this stuff the way a savvier program would.

We had almost a $40 million subsidy a couple of years ago. This is not the reason. The reason is - we spend like a P5 team and make money like a G5 team. WHich is exactly what is happening to UConn. Im assuming Cinncinnati and USF have also seen their subsidies exploe for this reason.

I suspect the answer is because the size of thei subsidy is new. Basically in the Big East they were making $10-15 million more than in the non-P5 AAC. And so they had maybe a $12 million subsidy instead of $27 million.

I wouldnt be surprised however, to start seeing calls for the FB team to drop back to D1AA and the BB team to rejoin the BIg East if the FB continues to struggle.

 

[srru86]

Maybe I missed it, but none of the articles you linked indicated that the concession revenue from Dining Services was counted as part of the subsidy (instead of as concession revenue as it should be). The articles do indicate that the switch to Sodexo would help reduce the subsidy, but that is because the expectation was that Sodexo-run concessions would generate more revenue, not because subsidy money is reclassified.

Your own example about capital costs is a much bigger deal. You really can't overstate what a big deal that is.

I don't know that it every made it into the press but I heard Pernetti say to a group of supporters that this Dining services transfer was counted as part of subsidy so Sodexo was a tow-fer. Reduce the outgo and increase the revenue. Of course it is small potatoes, but evidence that bureaucratic fiefdoms at Rutgers were allowed to vampire off the football program. Before Muclahy Athletics had to pay facilities a crazy reimbursement for upkeep on the turf when it was grass and Athletics had to work around the groundskeepers schedule. I know it sounds nuts but this is RU. Who knows what else is out there?

Does ever other program have this stuff. Don't know, but doubt it. Does every other program do a better job of sinking costs elsewhere. Don't know, but I imagine many do.

Example: Does any program out there bury a portion of costs for security on game day in a public safety budget? Of course I can't prove it but you don't have to be a Charles Ponzi to figure out how to do that and make it look perfectly legit.

 

[Upstream]

I suspect the answer is because the size of thei subsidy is new. Basically in the Big East they were making $10-15 million more than in the non-P5 AAC. And so they had maybe a $12 million subsidy instead of $27 million.

The numbers in the article are for the fiscal year ending in June 2014, when UConn (along with Rutgers) received distributions from the ACC which were in line with what was previously earned in the BE. It is in the following fiscal year (ending June 2015) that UConn will see a dramatic drop in conference distributions, and probably a comparable increase in subsidy.

 

[RUinPAC10land]

I am embarrassed that this thread even exists.

 

[srru86]

we spend like a P5 team and make money like a G5 team.

Yes, this is of course the cardinal point. But in a few years it will be moot.

 

[Upstream]

Your own example about capital costs is a much bigger deal. You really can't overstate what a big deal that is.

I don't know that it every made it into the press but I heard Pernetti say to a group of supporters that this Dining services transfer was counted as part of subsidy so Sodexo was a tow-fer. Reduce the outgo and increase the revenue. Of course it is small potatoes, but evidence that bureaucratic fiefdoms at Rutgers were allowed to vampire off the football program. Before Muclahy Athletics had to pay facilities a crazy reimbursement for upkeep on the turf when it was grass and Athletics had to work around the groundskeepers schedule. I know it sounds nuts but this is RU. Who knows what else is out there?

Does ever other program have this stuff. Don't know, but doubt it. Does every other program do a better job of sinking costs elsewhere. Don't know, but I imagine many do.

Example: Does any program out there bury a portion of costs for security on game day in a public safety budget? Of course I can't prove it but you don't have to be a Charles Ponzi to figure out how to do that and make it look perfectly legit.

I don't disagree that there are variations in accounting practices. And I don't disagree that it isn't very complicated to figure out how to make the subsidy look smaller without looking like you are gaming the system. And if it made a significant difference, then Rutgers would just do it and eliminate all the heat they get for the subsidy.

So yeah, you can find 2 dozen examples like turf grass upkeep or concession services, each worth a hundred thousand or so. But added all together, they still don't make a noticeable dent in the subsidy.

The biggest area that Rutgers could possibly hide money is in Direct Facilities Expenses, where Rutgers currently reports almost $11MM in expense. The other P5 schools with subsidies above $10MM report facilities expenses as follows: Maryland $11.5MM, Virginia $15MM, Oregon St $11 MM, and Arizona St $6 MM. So even if Rutgers follows whatever accounting tricks ASU follows, and cuts another $5MM out of facility expenses (on top of the $3 MM you save from items like turf grass), you've now reduced the subsidy from $36MM to $28MM, more than $10MM more than the next highest P5 program, and more than $18MM more than all but 4 other P5 programs.

BFD. And that is assuming that the $11MM that Rutgers reports doesn't contain any accounting tricks to make it look lower. Comparing to other B1G programs that don't have to rely on accounting tricks, it looks like Rutgers already takes advantage of accounting tricks to reduce the reported expenses for facilities. Only 2 schools report facility costs lower than Rutgers, and the average for the conference is more the $7MM more than reported by Rutgers.

 

[Scarletnut]

I don't disagree that there are variations in accounting practices. And I don't disagree that it isn't very complicated to figure out how to make the subsidy look smaller without looking like you are gaming the system. And if it made a significant difference, then Rutgers would just do it and eliminate all the heat they get for the subsidy.

So yeah, you can find 2 dozen examples like turf grass upkeep or concession services, each worth a hundred thousand or so. But added all together, they still don't make a noticeable dent in the subsidy.

The biggest area that Rutgers could possibly hide money is in Direct Facilities Expenses, where Rutgers currently reports almost $11MM in expense. The other P5 schools with subsidies above $10MM report facilities expenses as follows: Maryland $11.5MM, Virginia $15MM, Oregon St $11 MM, and Arizona St $6 MM. So even if Rutgers follows whatever accounting tricks ASU follows, and cuts another $5MM out of facility expenses (on top of the $3 MM you save from items like turf grass), you've now reduced the subsidy from $36MM to $28MM, more than $10MM more than the next highest P5 program, and more than $18MM more than all but 4 other P5 programs.

BFD. And that is assuming that the $11MM that Rutgers reports doesn't contain any accounting tricks to make it look lower. Comparing to other B1G programs that don't have to rely on accounting tricks, it looks like Rutgers already takes advantage of accounting tricks to reduce the reported expenses for facilities. Only 2 schools report facility costs lower than Rutgers, and the average for the conference is more the $7MM more than reported by Rutgers.

You've posted BFD a few times. These BFD's add up. Rutgers also plays with the appreciation/depreciation figures related to the stadium which adds many millions more to the subsidy. You can discount all these things but in order to get a true accounting of schools' subsidies, everyone has to apply the same accounting procedures in order to make a fair assessment.

 

[dvb91]

I don't disagree that there are variations in accounting practices. And I don't disagree that it isn't very complicated to figure out how to make the subsidy look smaller without looking like you are gaming the system. And if it made a significant difference, then Rutgers would just do it and eliminate all the heat they get for the subsidy.

The thing is, we live in NJ, and aren't supported by our local press. If RU suddenly reduced the subsidy based on accounting tricks, I'm sure our intrepid band of reporters would look into it and say we're playing a shell game. Unfortunately, whoever started keeping these accounts set up RU with a horrible baseline.

 

[derleider]

You've posted BFD a few times. These BFD's add up. Rutgers also plays with the appreciation/depreciation figures related to the stadium which adds many millions more to the subsidy. You can discount all these things but in order to get a true accounting of schools' subsidies, everyone has to apply the same accounting procedures in order to make a fair assessment.

No he pretty much showed why they dont add up.

Our subsidy is so much higher that its clearly not just accounting tricks.

In act you can look at the other numbers and see that its the combined lack of conference revenues, basketball and football revenues that make the difference, not some accounting tricks.

Upstream - are you sure about that. I thought that the AAC contract swithced over in 2013-14 - our last year in the league, to the new lower numbers. Maybe i am wrong though. If so, UConn is going to get ALOT of heat in the near future to switch back to the BE and D1AA FB. No way can they run $40 million deficits every year for the sake of a 4-6 win FB team.

 

[srru86]

Never disputed that we have pumped a bunch of money onto the athletics program. Of course we did and do for now. Of course that is not sustainable over the long run. It was a short term investment to get us to a better place. We are there and the solvency issue clears up soon. But the faculty union, ill informed newspaper writer lament that this is all about money for football was never true. It remains true, and often unsaid, that a big chunk of that money goes to the operate the non-revenue sports.

 

[Knight Ed_rivals]

There are certainly some differences in the way schools can report the numbers, as I indicated above. But those differences wouldn't change Rutgers' $36MM subsidy to a $12MM subsidy, as some here seem to imply. If it were that simple to change the reported subsidy, Rutgers would just do that and eliminate the political pressure that Rutgers faces every year when USA Today reports these numbers.

Actually, if Rutgers changed their accounting methodology to make the bottom numbers look better it would be a PR nightmare. NJ.com would make it headline news about Rutgers cooking the books.

 

[Upstream]

Upstream - are you sure about that. I thought that the AAC contract swithced over in 2013-14 - our last year in the league, to the new lower numbers. Maybe i am wrong though. If so, UConn is going to get ALOT of heat in the near future to switch back to the BE and D1AA FB. No way can they run $40 million deficits every year for the sake of a 4-6 win FB team.

I went back and checked the BE/AAC form 990's. UConn received $10.7MM from the ACC in the FY ending June 2014. That is less than the $13.7MM they received in 2013, but more than the $10.0MM they received in 2012.

And they will certainly receive a lot less going forward. Financially, they're in deep doo-doo, unless they drastically cut expenses. http://www.courant.com/sports/uconn-huskies/hc-jacobs-column-0531-20150530-column.html

 

[Upstream]

Actually, if Rutgers changed their accounting methodology to make the bottom numbers look better it would be a PR nightmare. NJ.com would make it headline news about Rutgers cooking the books.

Not at all. Rutgers already changed the methodology to take the stadium costs off the football-line and onto the non-sport-specific line (justified by playing lacrosse games at HPSS instead of the lacrosse stadium). This had the effect of changing football from a money loser to a money maker. After mentioning this, the press seemed to forget about it within 36 hours.