A Closer Look at the Drivers of Rider’s Financial Difficulties – The Rider News

By Arthur Taylor

In response to any criticism of Rider’s financial situation, Chairman Gregory Dell’Omo and his supporters quickly fall back on a series of weak excuses: “a tough market”, “tough times” or the most common excuse. : “it is complicated”. But the causes of Rider’s fragile financial situation are not complicated. They are rather simple.

Rider’s “market” has slowed – the number of high school graduates has fallen slightly, but this decline is not the cause of Rider’s steep drop in enrollment before the pandemic. If this were true, then other schools in our market would be in the same financial position as Rider, and they are not.

Rider’s peer institutions, schools that the administration frequently identifies as “our market,” all experienced gains in net program revenue (student revenue) between 2015 and 2019. Fairleigh Dickinson, Monmouth, Rowan, and Seton Hall have all recorded net revenue gains. between 8 and 23%. Notably, Rowan recorded a 22% net gain in program revenue and Monmouth recorded a 17% net gain in program revenue during this period. Rider, however, recorded a loss of 5% of the program’s net revenue while increasing its total expenses by $12 million, a combination that clearly explains Rider’s losses in 2019. Thus, this loss and the resulting financial losses arise are not due to uncontrollable fluctuations in the market. Instead, they are the direct result of Chairman Dell’Omo’s key management decisions from 2015.

Beginning in 2015, regardless of opposition from faculty, parents and students over the decision to sell Westminster Choir College, President Dell’Omo opted to spend millions on the failed effort and began a six-year decline in enrollment at what had been a fully enrolled college. . Then in 2019, after failing to sell Westminster Choir College, he opted to spend hundreds of thousands of dollars and spend millions on duplicating facilities to move from Princeton’s world-class facilities to Lawrenceville, a decision which further exacerbated the decline in enrollment. at University. The loss of students from this program alone drained more than $6 million a year in income from Rider’s income statement.

Excessive building was also a feature of President Dell’Omo’s tenure and had a significant impact on Rider’s inflated expenses. Between 2016 and 2020, Rider’s financial statements show $67 million was spent on construction projects positioned as “investments” that would increase enrollment. Rider’s cumulative indebtedness now stands at an unprecedented $110 million after additional bond debt was added in fiscal 2021. All of this debt is due to be repaid in approximately 10 years, which which requires an annual cash outlay of almost $10 million for the university. So it’s not really complicated. The truth is that Rider’s precarious financial situation is not due to the pandemic, the “market” or “hard times”. It is almost entirely self-inflicted. The seeds of this predicament were sown years before the pandemic and are the direct result of strategic decisions made by President Dell’Omo.

Arthur Taylor, Ph.D.

Professor, Directorate of Information Systems and Supply Chain Management

College of Business Administration

Originally printed in the 2/16/22 issue.

Earnest L. Veasey