NEW BRUNSWICK, N.J. – The Rutgers University Department of Intercollegiate Athletics has agreed to a settlement with the American Athletic Conference (AAC) that will allow the university to enter the Big Ten Athletic Conference.
The settlement will require Rutgers to pay a negotiated exit fee of $11.5 million. The negotiated exit fee is $3.5 million less than the $15 million exit fee the AAC had originally sought from Rutgers.
The university has projected that over the next 12 years the increase in revenue from moving to the Big Ten will approach $200 million.
“This settlement will allow us to continue along the path to self-sufficiency for our athletic programs. One-time restructuring costs like this settlement and the costs associated with canceling a previous marketing contract are more than offset by anticipated revenues from the Big Ten and from our new marketing partner IMG College,” said Rutgers President Robert Barchi.
“The increased ongoing revenue resulting from these one-time investments will provide the financial support necessary for the athletic department to move toward financial stability,” he added.
In April 2013, Rutgers canceled a 13-year marketing relationship that generated approximately $30 million for the university. Three months later, in July of 2013, the university entered into an initial 11-year, $65 million agreement that will partner the university’s athletic programs with collegiate marketing giant IMG College. The agreement includes an option to extend the partnership for an additional three years and generate a projected $87 million. The agreement will more than double the revenues to the university and will capitalize on enhanced opportunities for national corporate support.
“These are essential investments that are a part of our program to enable Rutgers athletics to operate from a position of financial self-sufficiency,” Barchi said.
“Driving down the structural subsidy is a focus of the university administration and our boards. 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,” he added.
The Big Ten Conference is an association of world-class universities whose member institutions share a common mission of research; graduate, professional and undergraduate teaching; and public service. Founded in 1896, the Big Ten has sustained a comprehensive set of shared practices and policies that enforce the priority of academics in student-athletes’ lives and emphasize the values of integrity, fairness and competitiveness. The broad-based athletic programs of the 12 Big Ten institutions provide in excess of $141 million in direct financial aid to more than 8,200 student-athletes playing on more than 300 teams in 43 different sports. The Big Ten sponsors 26 official conference sports, 13 for men and 13 for women, and will add men’s and women’s lacrosse as the 27th and 28th official sports for the 2014-15 academic year.
IMG College is the nation’s leading collegiate multimedia, marketing and licensing/brand management company, representing more than 200 of the nation’s top collegiate properties, including the NCAA and its 89 championships, NCAA Football, leading conferences and many of the most prestigious colleges and universities in the country. IMG College connects brands with the largest and most demographically attractive fan base in sports through partnership opportunities in multimedia rights, sponsorship sales, licensing, marketing, ticketing, seating, fundraising, premium events and hospitality, stadium and arena development, and consulting. IMG College is a division of IMG Worldwide, a global sports, fashion and media business.