On March 31, a class action lawsuit was filed against Rutgers University, led by Rutgers graduate and New Jersey resident, Hector Rodriguez. The complaint alleges that since Rutgers joined the Big Ten Conference in 2014, the University has misappropriated funds by diverting operating revenues from state taxes, tuition, and mandatory student fees to support the failing athletic program. The first charge alleges that the University leadership breached their fiduciary duties by continuing to fund the athletics program despite their knowledge of the magnitude of its losses. The second charge asks for declaratory judgement declaring that the athletics expenditures are unlawful and a waste of public funds.
The lawsuit was filed in response to the fiscal report released by the University in early 2026 showing that the 2025 athletics deficit was over $70 million, the third time in the last five years. Since 2014, the total deficit has grown to $526 million. Rutgers is not the only school operating in an athletics budget deficit. In the 2021-2022 academic year, 98.6% of the 2,023 colleges and universities offering collegiate sports across all levels had operating losses.
Despite these losses, universities continue to fund their athletics programs for a variety of reasons. The most common arguments for keeping college sports are that they foster school pride, which in turn results in more donations, and that athletics promote the school’s brand, which increases enrollment and thus tuition revenue. While many schools do not see a return on their investment from the athletics program directly, they keep the programs alive because they see those funds come in through other streams.
While athletic department budget deficits are far from uncommon in college sports, the issue with Rutgers has been their inability to compete with their conference rivals. As a member of the Big Ten, Rutgers has had to spend much larger amounts of money to field competitive teams than they had previously spent in the Big East Conference prior to 2014. The complaint alleges that their athletics spending has increased 374.7% since 2014, while revenue has only increased 107.8% over that same period. One of the biggest issues with this is that Rutgers has not seen the return on these investments in other revenue streams. According to NJ.com, Rutgers consistently ranks last in the Big Ten in ticket sales and revenue derived from royalties, licensing deals, and sponsorships. This failure to generate a respectable return in value in relation to its peers despite a comparable investment in athletics is the basis for the complaint alleging that Rutgers has continued “to throw good money after bad.”
The complaint asks the court for a declaratory judgement enjoining the University leadership from funding athletic deficits, and calls for more transparency and oversight. While this would not result in the University paying any damages, judgement in the Plaintiffs’ favor would fundamentally change the stability of Rutgers’ athletics. Without being able to operate in a deficit, Rutgers would have to take dramatic measures such as leaving the Big Ten or discontinuing certain sports. Either of these would have rippling effects throughout the college sports world.
