The University of Michigan Athletic Department released its budget projections Monday, predicting a deficit for the next fiscal year.
For the current fiscal year, the department expects a one million dollar surplus as a result of reduced team activities and operations expenses following the COVID-19 pandemic. The official department revenue comes out to $187.4 million while accruing $186.4 million in costs.
During the 2020-21 fiscal year, beginning on July 1, the athletic department expects its revenue to drop to just $135.8 million while its expenses decrease to $161.9 million, which would lead to a deficit of $26.1 million. The revenue decrease is based mainly on a 50 percent decrease in spectator admissions revenue, while the expenses are dropping due to a mixture of decreased expenditures in all areas, including team and game expenditures, and a salary cut for senior level employees — including 10 percent reductions from athletic director Warde Manuel, football coach Jim Harbaugh and men’s basketball coach Juwan Howard.
“Full-time staff members earning between $50,000-$100,000 will have salaries reduced by 5 percent, and employees earning between $100,001-$150,000 will have wages reduced by 7.5 percent during the same period,” the University said in a statement. “Staff earning less than $50,000 will not see any reduction in pay.”
One expense that is not projected to have cuts is student-athlete financial aid:
“That category will see an increase of $0.8 million,” the release said. “Primarily due an increase in the number of student-athletes remaining on scholarship following the cancellation of the 2020 spring athletic season and anticipated increases in tuition.”
Perhaps the most lofty goal is a decrease in admissions revenue by just 50 percent, in a time when the United States is experiencing a second wave of COVID-19. Most of that revenue comes from football game days, and until Michigan and the Big Ten create a policy on how many spectators are allowed within stadiums, that number will remain an optimistic projection.
Michigan, with one of the largest athletic departments, is better-suited to withstand the detriments of the current crisis than smaller programs. Still, the downriver effects may be significant, especially with the uncertainty surrounding whether there will be fans in the stadium — or sports at all.