How we did it: Uncovering $265M in Rutgers athletics debt
When the internal debt for the athletics program at Rutgers University jumped from $40 million to $120 million in one year, it raised a red flag — and plenty of questions.
Our research ultimately led to a story revealing that Rutgers athletics has quietly racked up $265 million in debt, much of it to cover regular yearly operating expenses, not capital construction projects.
At first, Rutgers officials provided answers to our queries that only raised more questions. Then their sports officials said they would not provide the additional details we were seeking.
That led us on a time-consuming scavenger hunt for Rutgers financial documents, with many of our initial requests under the state’s open records act denied for being overly broad. Even when we asked for specific information, we were told that we needed to know the names of the documents we sought. A description of them wasn’t enough.
‘Unsustainable’:How Rutgers athletics quietly racked up $265M in debt
Yet we were eventually able to obtain some documents that led to other financial records, a process that took months as we slowly received paperwork and began piecing together the true nature of Rutgers athletics' finances.
We read financial statements and audits. We examined university policies. We reviewed NCAA reporting guidelines. We read consultants’ reports. We researched other schools in the Big Ten Conference and in other top conferences. And we looked behind the numbers in reports that stated, for example, that Rutgers athletics only had a $10.6 million deficit in fiscal 2020. On closer observation the gap was $73 million.
We found the athletic debt included not only $70 million for new capital projects, but also $84 million in loans the university made to athletics to cover the annual deficits that the sports programs had been running year after year. They had taken another $48 million in loans from the Big Ten, which also helped close budget shortfalls.
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In other words, Rutgers athletics was covering shortfalls by adding to their future debt payments, which could create even larger deficits in the future. These loans from the university became an annual practice, with larger and larger loans planned as expenses such as coaches' salaries grew while revenues — particularly for football, which is supposed to support other sports — tanked.
But using loans to cover operating losses was contrary to Rutgers’ policy that limited such loans to capital projects. Rutgers changed the policy to allow loans for deficits after we asked about it — six years after the practice began. The policy also required loan agreements — and when we asked for them, Rutgers said they had none. Officials later went back and created those loan documents — loans dated back as far as 2017 were all signed last month.
Rutgers had been reporting the loans to the NCAA in a category reserved for revenue generated by the athletic division — contrary to NCAA guidelines.
In addition, the university couldn't produce its contract with the Big Ten because it didn't have a copy — though Rutgers was not alone. The University of Maryland also did not have a copy of its Big Ten contract to provide, and the Big Ten declined to discuss why its members don’t have copies of their contracts.
After repeated requests, Rutgers officials spoke with us. They gave us a tour of their new athletic facilities for multiple sports. Rutgers president Jonathan Holloway, who took over last year, told us the practice of covering deficits with loans was “unsustainable” and that the university is considering forgiving the loans, though that has not yet been decided.
To learn more, watch the video where we outline the story, and read the story for the full picture, including Rutgers’ anticipated windfall when the Big Ten renegotiates its TV contracts after 2023.
Abbott Koloff and Jean Rimbach are investigative reporters for NorthJersey.com. To get unlimited access to their watchdog work that safeguards our communities and democracy, please subscribe or activate your digital account today.
Email: rimbach@northjersey.com, koloff@northjersey.com
Twitter: @jeanrimbach @abbottkoloff