Bloomberg News

Rutgers Academic Gains Seen Buoyed by Big Ten Payment

November 26, 2012

Rutgers Academic Gain Seen Buoyed by $25 Million Big Ten Subsidy

Chartered in 1766 as Queen’s College, Rutgers changed its name in 1825 to honor Revolutionary War veteran Henry Rutgers. In 1869, it played the first-ever college football game against what is now Princeton University. Photographer: Patrick McDermott/Getty Images

Rutgers University will benefit academically by switching to the Big Ten Conference, an athletics powerhouse, school officials say. Yet, that may depend on how it spends its new-found wealth.

The move means Rutgers will play against football titans Ohio State University and the University of Nebraska, and step up into a more exclusive academic club. Like Rutgers, all Big Ten colleges except Nebraska are in the Association of American Universities, an invitation-only group of 62 research schools. The conference also makes up the Committee on Institutional Cooperation, which facilitates sharing of academic resources.

The biggest benefit to Rutgers’s scholars may be in gaining a share of Big Ten revenue -- $265 million in 2010 -- which could help erase the annual payment the university doles out of its budget to the athletic department. That subsidy, which reached $28.5 million in June 2011 and could grow in the years ahead, was the largest among 54 U.S. public universities in the six biggest football conferences, according to data compiled by Bloomberg.

“That’s the whole point,” said Paul Panayotatos, a professor of electrical and computer engineering and chairman of the university senate at the New Brunswick, New Jersey-based school. “Rutgers has been No. 1 in subsidies to the athletic department, and the faculty in general have been quite upset about it. The more money we can save for academic endeavors and not siphon it off, the better off we are.”

No Guarantee

There’s no guarantee that the money from the Big Ten will be enough to erase the subsidy, said Catherine Lugg, a professor in the graduate school of education. Very few college athletic departments make money and most are subsidized, she said.

“It assumes that they will have better TV deals and it assumes that they can win in the Big Ten,” she said. “Will it affect academic performance? It’s way too early to tell.”

Public Big Ten athletic departments received an average subsidy from their university of $2.6 million in fiscal 2011, less than a tenth of the size of Rutgers’ payment.

At a Nov. 20 news conference announcing the move, Rutgers President Robert Barchi said he “wouldn’t be surprised” if the Big Ten membership meant the subsidy could be eliminated. Still, “we’re talking about quite a few years from now as that fully materializes itself,” he said.

Fewer Tests

Over the years, as Rutgers used university resources to help pay for sports programs, state funding fell and tuition increased. Academic units were forced to cut budgets. The history department stopped paying for faculty telephones and the chairman of the psychology department issued a directive suggesting professors give shorter and fewer tests to save money on photocopying.

The public universities in the Big Ten received an average of $24.5 million from the conference in fiscal 2011, much of that coming from television deals. Rutgers received $6.35 million from its current conference, the Big East, in the same period. All but one of the 14 schools in the Big Ten, including Rutgers and fellow new member University of Maryland, are public. Northwestern University is the lone private school.

Rutgers share of the Big Ten revenue is subject to a “financial integration plan,” Scott Chipman, a spokesman for the conference, said in an e-mail. He wouldn’t say how long it will take for Rutgers to receive a full share.

Erase Subsidy?

If the subsidy is eliminated, money could be used for hundreds of millions of dollars in deferred maintenance across the campus, Panayotatos said. It would also prove to the state legislature that the university had its financial house in order and would be a responsible steward of more state money, he said.

“When you’re in the national news for siphoning off all that money to the athletics department, it’s hard to plead poverty,” he said.

Chartered in 1766 as Queen’s College, Rutgers changed its name in 1825 to honor Revolutionary War veteran Henry Rutgers. In 1869, it played the first-ever college football game against what is now Princeton University. Graduates include the late economist Milton Friedman and Elizabeth Warren, the U.S. senator-elect from Massachusetts who attended the law school.

Rutgers, New Jersey’s flagship public university, is ranked 68th in the 2013 U.S. News & World Report rankings of best colleges, tied with Big Ten member University of Minnesota. Among Big Ten institutions, it trails Northwestern University, University of Michigan, University of Wisconsin, Pennsylvania State University, University of Illinois, Ohio State, Maryland and Purdue University.

Rutgers is ranked ahead of Michigan State University, University of Iowa, Indiana University and Nebraska.

Professors at Rutgers are encouraged that Barchi, who took office Sept. 1, has pledged to reduce the athletic subsidy, said Patrick Nowlan, executive director of the faculty union.

‘His Word’

“The new president has said the right words about the academic mission, about the teaching, the research,” Nowlan said. “We want to hold him to his word. We want to make sure we’re not just recycling the money back into the athletic program.”

While being a Big Ten school doesn’t guarantee admission into the Committee on Institutional Cooperation, all its members are on the committee, along with the University of Chicago.

The CIC lets universities combine buying power for supplies and pool resources to support a computer network and study- abroad programs, said Barbara McFadden Allen, executive director of the Champaign, Illinois-based group. It saves $5.5 million a year for goods and services, which total $50 million to $60 million, she said.

The CIC also works to foster collaboration among the schools, holding conferences for department heads, Allen said. While similar consortia exist among smaller colleges, the CIC is the only one among large research universities, she said.

Bound Together

“It’s really, really hard to get a group of universities to do the same thing at the same time,” she said. “Many other groups of universities have attempted these sorts of efforts and they’re really hard to sustain over the long term. The peer nature of the institutions binds us together.”

Rutgers’s academic programs may benefit simply by their association with other universities in the Big Ten, said Donald Heller, dean of the education school at Michigan State.

Penn State, which joined the Big Ten in 1990, has seen its academic reputation grow in the past two decades, said Heller, although it’s hard to measure how much is a result of its membership.

“For the average professor it’s probably not going to have a big impact in their lives, at least not in the short term,” he said.

Reputation Risked

Remaining in the Big East might have been risky for Rutgers’ reputation. Among current members, only Rutgers and the University of Pittsburgh are AAU members, and Pittsburgh is leaving for the Atlantic Coast Conference along with Syracuse University, in 2013. The Big East also lost West Virginia University this year.

Those colleges are expected to be replaced by schools including the University of Houston, Boise State University and San Diego State University, although Rutgers’s defection may jeopardize the future of the league.

“It’s pretty clear that the Big East is going to be in turmoil,” Heller said. “There’s a huge amount of uncertainty about what’s going on in that conference. A lot of the institutions that have joined are not as strong academically as the ones they have lost.”

To contact the reporter on this story: Oliver Staley in London at ostaley@bloomberg.net

To contact the editor responsible for this story: Lisa Wolfson at lwolfson@bloomberg.net


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