The Rutgers Student Newspaper recently reported that teachers suspected that their athletic club was secretly funded by campus leaders. Their suspicions were confirmed after teachers sued the school for financial information.
Rutgers failed to disclose $ 76.1 million in “internal debt” in its NCAA financial report. The Rutgers University Athletics Department treated a $ 38 million campus loan in 2017 as revenue when it should have been recorded as a liability. This accidentally inflated the financial health of the athletic club.
Fortune’s August 2021 report revealed a bigger problem at Rutgers. Therefore, there appear to be an additional $ 20 to $ 30 million in unreported debt repayment costs. The track and field sector budget allows $ 16.5 million in capital and maintenance costs, but they are below that limit. “
After the University of Illinois responded to a FOIA request from Sportico last November, news reports reported that the Smith Football Center and Ubben expansion project were fully funded by an “internal loan” from the UI system. Specifically, the Ubben construction project is $ 32.5 million. .. The football loan amount has not been reported, but The News-Gazette reported in July 2017 that the project would cost $ 79.2 million.
Unlike Rutgers, Illinois appears to have properly booked these loans in the NCAA financial report. According to the annual report, Illinois’ total athletics debt was $ 246,518,481 in 2018 and $ 323,509,449 in 2019. The difference (about $ 77 million) is roughly the same as the internal loan amount of the soccer practice facility.
Sportico also reported that the Illinois Athletics Department agreed to repay the loan within 13 years and required only interest payments for the first three years. It has not been reported if interest rates are 1%, 3% or any other number.
How does the athletic club carry out this pledge?
As part of a survey of NCAA schools’ ability to pay athletes, we obtained a copy of the Night Committee of the University of Illinois NCAA Financial Report for 2020.
2020 figures: “Athletics-related total debt” was $ 315,822,286. “Annual debt repayment for athletic facilities” was $ 21,564,413 (interest on debt). These huge debts in 2020 were actually a slight improvement from 2019.
“External donations” in 2020 totaled $ 25,736,449, including $ 6.7 million in funding for specific sports.
“Exercise-related student support” totaled $ 13,017,478.
What do you conclude?
In 2020, Illinois Athletics gradually scraped off its huge debt. Contributions exceeded interest payments by approximately $ 4.2 million. Predicted for over 13 years, at this pace there is no reward for UI systems.
Illinois athletics also spent $ 8.5 million more on facility interest payments than athletic scholarships. This reinforces the case of employment models for college athletes who are lacking due to biased budget priorities.
Illinois seems to properly report “internal loans” on the NCAA form, but it’s difficult to get this information. Still, the report only discloses general information and does not disclose the terms of these loans.
More importantly, these loans are not reported to the two campus budget committees or the athletic committee. Our campus group performs monitoring functions. Helps ensure budget transparency. We will also ask you questions. With the right information, our committee reduces the potential for mismanagement, financial gimmicks, and hidden remedies.
If these loans are not reported (even to the campus budget committee), how can those terms be enforced? Can UI system executives allow these loans without reporting anything? Loans can be a hidden subsidy, like the Rutgers turmoil.
Where did this loan come from? Taxpayer? What are the student tuition and fees? Another source?
Did New Jersey and Illinois lawmakers deliberately approve the athletics loan when they passed the spending bill?
Is there a better way to lend these large sums of money at the University of Illinois? Perhaps to expand financial support to low- and middle-income students whose parents pay income tax in Illinois?
Professor Rebecca Giban of Rutgers University told the campus newspaper: I think it’s time for the administration to clarify the financial situation of Rutgers Athletics and to honestly discuss our university priorities. “
In Illinois, her words apply to students, their parents, faculty and staff, and perhaps taxpayers and lawmakers. We all deserve to participate in that important financial conversation.
Michael LeRoy is a professor of labor relations at the University of Illinois.
City Hall | Do taxpayers pay for Big Ten facilities? University-Illinois
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