Athletics and Rutgers Stadium

December 12, 2008

Members of the Rutgers Community:

Over the past several months, information we have received about the Division of Intercollegiate Athletics has pointed to the need for tighter financial controls and for stronger administrative oversight by the Rutgers Board of Governors and by me. I want to report to you on the progress we are making and on important decisions that have been made this week.

Today was the first meeting of the full Board of Governors since the Athletics Review Committee (ARC) issued its report. The ARC report made strong recommendations for change in the areas of governance, departmental operations, and authority to enter into contracts on behalf of Rutgers. As I made clear in my initial statement on the ARC report, my administration is committed to working in concert with the board to make the improvements spelled out in the report. Specific actions taken today by the board expand the duties of the newly titled senior vice president and general counsel, Jonathan Alger, to include service as the university’s chief compliance officer and establish a new process of approval for all salaries above $300,000—a process that will involve both the president and members of the board. In addition, my administration will increase the size of the Internal Audit Department over the next several years. I have appointed a committee to review signatory authority on contracts that Rutgers employees enter into on behalf of the university. And we are updating and revising university policy and practices related to sponsorship agreements. (See http://speakup.rutgers.edu/intercollegiate.shtml for information on the ARC report and the steps we are taking.)

Earlier this week, I removed Bob Mulcahy from his position as the director of intercollegiate athletics, effective at the end of this month. I did so with reluctance, because Bob has achieved a great deal in his decade of leadership. The successes of our sports teams on his watch have opened windows onto many other Rutgers programs. Our victories have energized the people of New Jersey and caused them to admire Rutgers. Bob has worked tirelessly and skillfully on behalf of our student athletes, the coaching staff, and the many thousands of Scarlet Knight fans. His achievements can be seen everywhere in the program.

Now it is time to seize the opportunity to build on all that he has accomplished for Rutgers and for the people of New Jersey. I believe, based on recent events, that the time is right for new leadership for our athletics program. We will act quickly, and search nationally, for Bob’s successor. That man or woman will inherit a legacy of accomplishment—both on the field of play and in the classroom. Rutgers will go forward and will continue to show that success in intercollegiate athletics and success in our academic programs are truly complementary.

Finally, I want to report on the decision the board has made regarding Rutgers Stadium.

Two months ago, I asked University Facilities and the Division of Intercollegiate Athletics to develop options that would continue to place priority on constructing additional seats while reducing the overall cost. I was concerned that the bids we received for the second phase of the project—construction of more than 11,000 end zone seats—were too high and would exceed the $102 million threshold established by the board. We needed to consider ways to complete the project at a lower cost, especially because private fundraising for the project was moving very slowly.

We evaluated a number of options, and it became clear that some models might have immediate political appeal but would fail economically both in the near and long term. In the end, there was a clear best option that was the right course of action for Rutgers and was financially sound. I recommended, and today the board approved, continuing the stadium expansion at a cost of $102 million, the project budget the board approved in January. To stay within that budget, we will have to scale back the scope of the project. The plan approved by the board puts aside the project’s non-revenue-generating features, including locker rooms and the media room, but moves ahead on the revenue-generating elements, including seats and concessions.

The board granted the university authority to issue additional debt obligations up to the $102 million limit, which will be financed by revenues generated by the 12,000 new seats and other revenues from the stadium itself. While we are confident that we can cover the debt service on the full $102 million project, we will continue aggressively to pursue private fundraising because every dollar we raise for this purpose will be put toward reducing the debt and helping achieve the expressed goal of moving our athletics program toward greater financial self-sufficiency.

This direction makes economic sense for Rutgers. It is not truly feasible to shut the project down, even for a year, because that would cost us millions of dollars. We need to build—and fill—the seats. Completing the stadium also makes sense for New Jersey. This is a major capital project that will provide jobs for hundreds of working people at a challenging time for our state’s job market. (See http://speakup.rutgers.edu/stadium.shtml for a press release and other information on the stadium expansion.)

Rutgers is committed to a high quality, well-managed, and competitive athletics program to complement our excellence in academics, research, and outreach. The actions we are taking, both in the management of the Division of Intercollegiate Athletics and in the construction and financing of Rutgers Stadium expansion, will serve the university, the state, and our many Rutgers fans and supporters well.

Richard L. McCormick
President
Rutgers, The State University of New Jersey