Wait, *why* is Rutgers so dang broke?

Good morning, and thanks for spending part of your day with Extra Points.

Quick reminder: I am still out of town. I’m teaching another class at Penn State today and then (weather permitting) will fly back to Chicago tonight. I’ll do my best to catch up on all of your emails on the flight home!

I probably shouldn’t do this, but part of me still twitches a little bit whenever I hear a lawmaker, academic, administrator or fan talk about how, well, the majority of even power conference athletic departments lose money.

This common line comes from each school’s financial disclosures to the NCAA, the MFRS report I talk about so often. MFRS reports show itemized breakdowns of athletic department revenues and expenses, delineated by sport. And it’s true; the majority of schools do show either more expenses than revenues or, somehow, that revenues and expenses were exactly the same.

When I’m teaching a class or giving an interview, I always say I don’t think we should treat these reports as profit/loss statements; nonprofits follow different accounting practices than we do in our household budgets, and large institutions often have political (or other) incentives to not show a “profit.” If push came to shove, I am confident that most Power 4 athletic departments, as well as several others beyond the P4, could produce an accounting statement that showed a cash surplus.

And then I pause, smile for a second and say, “Well … except for Rutgers.”

The university began to release its fiscal year 2025 report to reporters (including Extra Points) last week, and the data shows quite a bit of red ink. From our friends at NJ.com:

In my humble opinion, $516.9 million is a lot of money.

How does a school with access to Big Ten TV money and a huge enrollment — which is also near such massive media markets — manage to finish in such a huge financial hole?

Last week, I reached out to Rutgers’s athletic department, asking if I could get clarification on a few things on the report. The school did not respond to my request. But even without its direct comments, drawing on other interviews, our own Extra Points Library data and my knowledge from reading so many of these dang reports for so long, I do have a few clues.

And no, not all of this is actually the school’s fault.

My pal Katie Davis, a CPA at James Moore who helps actually create some of these reports, likes to say that even though the MFRS report looks standardized, trying to compare two schools is closer to “apples-to-rocket ships” than apples-to-apples. Not every school files particular expenses (or revenues) exactly the same way as its peers.

Here’s a great example, via the NJ.com interview:

According to the Extra Points Library, Rutgers spent $38,689,373 in FY24 on coaching salaries across all sports and $46,072,727 in FY25. We don’t have every Big Ten school’s FY25 report yet (I’m still waiting on Michigan, Maryland, Purdue, Penn State, Indiana and Iowa), but Rutgers would have been FOURTH in coaching salary spending in the conference in FY24, behind only Ohio State, Michigan and Penn State.

That doesn’t feel right. An accounting disparity, plus the higher cost of living in New Jersey, may explain some of it.

Sadly, not all of the balance sheet problems are just a reflection of different accounting practices.