Rutgers’ AD Keli Zinn Addresses Athletics Deficit on Big Business on Campus Podcast

Recently, Rutgers Athletics director Keli Zinn and Chairman of Scarlet Knight Enterprises Oliver Luck made an appearance on the Big Business on Campus Podcast, a podcast that talks all about the business that college sports has become, hosted by JohnWallStreet founder Corey Leff and Playfly Sports Chairman Michael Schreiber.

As should be expected, one of the first topics to come up in a podcast centered around the business of college sports and Rutgers was the near half-billion-dollar deficit that has accumulated for Rutgers Athletics since it joined the Big Ten in 2014. During this segment, Zinn was asked about the plan to balance the need to invest enough to compete in the modern Big Ten to show a path to long-term financial sustainability.

“Out the gate, we are going to own our circumstances financially, and it has to get better,” said Zinn during her response. “The move to Scarlet Knight Enterprises was a step in that direction for us… The current fiscal year that we are in, we are seeing a growth of roughly 117 percent in our revenue within Scarlet Knight Enterprises year over year compared to our performance last year. We currently have early projections of as much as 33 percent plus for the next fiscal year, so over the course of two years, that’s a 150 percent increase. Which is certainly a step in the right direction to increase our revenue, and that will cause some of those numbers in the picture externally to start looking better.”

Zinn also talked about getting some of the departments’ spending under control.

“There are some various expense categories that you are seeing in those numbers that we needed to get under control. We took a deep dive and benchmarked ourselves to our peers to recognize those areas where we need to cut back,” said Zinn.

However, Zinn also pointed out that there is context to those figures presented by the media that is not being shown.

“One, I can give you a list of a dozen or more institutions across the country that are showing a lot of support from their universities, support from their state level, that are not being accounted for in that expense deficit column. For example, there was a school that announced a million-plus surplus, yet the institution was sending over in excess of $40 million to get them that $1.3 million of balancing their books. In the case of a Rutgers, and the media reports that you are seeing, that’s treated as a deficit, not revenue, and certainly not something that is going to help balance a budget,” said Zinn. “The other thing surrounds the cost of doing business in some of those categories. Again, when you benchmark yourself to your peers, and those are the stories that are being written. Take, for example, here at Rutgers, we pay a 72 percent fringe rate. If the average fringe rate across the Power Four conferences is closer to 37-38 percent, and you have a $42 million payroll. Do the math there, your talking about fringe expenses and benefits that are being baked into those numbers, to the tune of $12-13 million a year. Add that up over a number of years, and therein lies what appears to be a Rutgers profit and loss statement that looks very different from some of the others and is subject to criticism. ”

The fringe cost that Zinn is speaking of refers to employee benefits beyond their regular wages. The New Jersey Education Association has called the rising healthcare costs in the state a “healthcare crisis.” From what Zinn has said on that, it seems that Rutgers Athletics has been affected by that as well.

She wrapped up the segment by restating that they need to address those issues by increasing revenue, managing costs, and finally by winning at a higher level.

To view the entire podcast, click the link here.