Big changes are coming to college athletics as the House Settlement was approved on Friday in the House vs. NCAA lawsuit. Now, schools can directly pay their student-athletes. This will be huge for big schools like Michigan as the Wolverines have roughly $20.5 million to distribute to their athletes. However, that $20.5 million doesn’t just appear out of nowhere. With all of the new financial changes coming, Michigan will face a big deficit.
Michigan athletic director Warde Manuel sent a letter to Wolverines fans detailing the financial situation that the athletic department is looking at. Originally, the projected deficit was $27 million, but Michigan found a way to get that down to $15 million.
“The prospect of these added costs left U-M Athletics facing a projected deficit of nearly $27 million for the 2025-26 academic year ($20.5 million to fully participate in revenue sharing and $6.2 million in new scholarships),” Warde Manuel wrote. “With only six home football games this fall, our projected year-over-year decline in revenue of roughly $19.1 million steepens these costs. The department has implemented several measures to counteract these new expenses. Through adjustments to university financing, budget cuts, travel policies, not filling select positions when vacated and the utilization of new revenue streams, we have reduced our estimated need from $27 million to $15 million for the coming year.”
Manuel went on to discuss how the school plans on addressing these added costs now and in the future. Budget cuts and staff decline will occur.
“To combat the added cost, the department staff will gradually decline in number through two methods: attrition, with a long-term goal of a 10 percent reduction in total staff, and through a stricter approval process for new hires,” Manuel added. “The department has committed to more than $10 million in budget cuts for the coming fiscal year, and has worked with the main campus to reduce its allocation from TV revenue to the university from $8 million to $2 million. We also revamped our travel policy, which resulted in over $900,000 in savings during 2024-25.”
The University of Michigan will also see added revenue from varying events at Michigan Stadium. The Big House is one of the most iconic venues in sports, and it has hosted much more than just Michigan football games. International soccer games, NHL games and even golfing has taken place at the stadium. This fall, the Big House will host its first ever concert as country artist Zach Bryan will perform during a football bye week in September.
“Our athletic department is also producing more revenue from events in our facilities, such as our partnerships with Upper Deck Golf and AEG/Zach Bryan,” Manuel said. “Events such as international soccer matches and the 2014 NHL Winter Classic generated between $750,000 and $3 million each for the department in the past. The 2024 calendar year saw the implementation of alcohol sales at Crisler Center, Yost Ice Arena, and Michigan Stadium, which generated over $2.25 million for the department. We will continue to evaluate other opportunities to generate additional revenue throughout the department.”
Michigan is aware that adjustments are needed because of these big changes to college athletics, and it looks like a long-term plan is in place.
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