How much money is Rutgers getting from the Big Ten and what it means?
By
Keith Sargeant | NJ Advance Media for NJ.com The Star-Ledger
on January 28, 2016 at 6:30 AM,
PISCATAWAY — It was a question that has lingered over the
Rutgers athletics department since Nov. 20, 2012, the day the university formally accepted an invitation to join the Big Ten Conference.
How much money would Rutgers receive from the Big Ten in its first year of membership?
By now, you've heard all about the six-year integration plan that Rutgers and the other new Big Ten members — Nebraska and Maryland — have to go through before they become full financial partners with the other 11 schools.
We've also heard various financial estimates that have put Rutgers' first full-share check at anywhere between $30 million and $45 million. Rutgers' distribution share is projected to go up gradually each year between now and July 2021, but what is the starting point?
Both Big Ten and Rutgers officials have declined to specify that amount when pressed on that question over the past three-plus years.
Sure, there were a few hints. In February 2014, several media outlets,
including The Star-Ledger, obtained an internal financial projections document that reported Rutgers' projected revenue from the Big Ten at just over $10 million for its first season. Four months later, university President Robert Barchi told
Gannett NJ in a June 2014 interview: "We are expecting at a minimum of something in the neighborhood of $9 and $9.5 million (in conference-distribution revenue) in Year 1.''
As for Jim Delany, the Big Ten Commissioner
told The Star-Ledger after Rutgers defected the Big East and joined the Big Ten: "What will happen is, in six years (from 2014-15), everyone who comes in — whether it was Nebraska, Rutgers or Maryland — will be in the same place. But in the transition they're all a little bit different. They will be made (financially) whole at a certain time. Everybody's different because everybody is coming from a different place.''
The Big Ten's goal, Delany
told NJ Advance Media last October, was "to keep our (traditional) institutions whole, to keep the (new) institutions coming in whole relative to where they were, and then at a certain point in time they'll become a full member of the conference.''
Essentially, Rutgers' Year 1 check from the Big Ten is the same figure that the university would've received had it remained in the old Big East.
In its final season in the Big East (2012-13), Rutgers received a check for $9.5 million as its conference distribution, according to the school's Fiscal Year 2013 report filed to the NCAA. The year prior Rutgers' conference distribution was $9.7 million.
Those two figures are important to note as Rutgers fans digest the school's Year 1 Big Ten distribution: $9.4 million.
"If you look at the level of support Nebraska had in their old conference, the level of support that Maryland had in their old conference, you should be able to see that for us (the $9.4 million Big Ten check) is really (what) the old Big East (distributed),'' said Janine Purcaro, Rutgers athletics chief financial officer. "When we negotiated in, it was at the level of support from the old Big East — not the one year in the American Athletic that declined.''
Nebraska — which doesn't receive its first full-revenue share until 2018 — received $17.5 million from the Big Ten following its first season, according to the school's 2012 financial report obtained by NJ Advance Media. Maryland's 2015 athletics ledger is expected to reveal that the program received more than three times the amount that Rutgers drew following its first Big Ten campaign.
But if you think that Nebraska and Maryland cut better deals than Rutgers when they negotiated their way into the Big Ten, think again.
"This will be the first year that people look at the three schools next to each other and (ask) who's getting what? And so I think it's an important side note to know that the premise was to keep each of the new schools in the conference at the level of support that they had in their previous conference so that they didn't take a back step in terms of support,'' said Purcaro, who assisted in the Rutgers-Big Ten negotiation meetings in the fall of 2012.
According to a
DailyPress.com report in June 2015, Maryland was set to receive $18 million in its final year of ACC membership (the money was withheld as part of a court settlement over the university's defection to the Big Ten). The report also listed Maryland's fee to exit the ACC at approximately $31 million.
"When you look at Maryland, people are going to say, 'Whoa, Maryland got a huge amount of money.' They're borrowing from their future,'' Purcaro said. "They had a huge exit fee, so for them to make the change in conference they had a huge nut to pay. Not that $11.5 million (Rutgers' exit fee from the Big East/AAC) isn't a large nut, but they had $50 million (owed to the ACC) plus a lot of unrest in their fan base in terms of making the switch.
"So they are doing what we are not doing. We are not borrowing from our future revenues from the Big Ten. We're trying to hold the line, get through our integration period. Use some of the increased revenues that we have from the other positive impacts in the Big Ten to get us to where we need to be.''
Whatever the full-share distribution is in July 2021 — possibly $40 million-plus — Rutgers will rake in the entire amount. Maryland won't.
"Maryland, when they get to that final end of the integration period when we do in 2021, their check is not going to be the same check that we get,'' Purcaro said. "They're not going to have the increased check because they're going to have payback from all of these years that they're borrowing forward.
"We're not doing that. That's why their number is going to look so much bigger. They didn't negotiate a better deal.''