Rutgers University and the former Big East collegiate athletic conference have been fighting in Rhode Island federal court over the amount that the school would pay as an ‘exit fee’ – a penalty levied on Rutgers for leaving the for Big East conference early and joining the Big Ten later this year. Now, both sides have agreed on a settlement deal where Rutgers will hand over $11.5 million instead of the original $15 million exit fee. The school has paid a portion of the fee already and the remainder will be paid out over the next four years.
Despite the large penalty, the school believes that its move to the Big Ten will generate roughly $200 million in additional revenues from joining the more prestigious conference. School officials hope that the new money coming in will help make the Rutgers sports department self-sufficient, as Rutgers currently receives a large amount of criticism for utilizing university funds to subsidize the athletic departments – money that could be put towards furthering academic initiatives. Rutgers President Robert Barchi stated, “The one-time costs that we are incurring during this transition period will provide us with the ability to generate the stable, predictable and growing revenues that will minimize the subsidy going forward.” Much of the projected revenue will come through the way of increased marketing and sponsorship deals. Rutgers affirmed its commitment to bringing in this type of revenue when it inked an 11-year, $65 million deal with the collegiate marketing company IMG College last year.
Deals like this one appear to be relatively common. The University of Louisville recently reached a similar deal with former Big East (now referred to as the “American Athletic Conference” or “AAC”) last year when it agreed to pay the conference $11 million for its own early exit. Elsewhere, Pittsburgh and Syracuse Universities both paid $7.5 million to join the ACC a year ahead of schedule.
Mike Aresco, the current commissioner for the ACC, issued the following statement: “We wish Rutgers University well and appreciate the contributions the university has made to our conference over the years.
Rutgers and former Big East conference announce $11.5M deal to settle lawsuit