On Thursday, University Athletic Director Dave Brandon presented the department’s budget for the 2013-2014 fiscal year to the University’s Board of Regents, during which he noted the department’s sustainable financial position.
The Athletic Department estimated a total of about $146.4 million in operating revenues and proposed a budget of about $137 million in operating expenses for 2013-2014 fiscal year.
There would be about $49.3 million expected earnings from game ticket revenue and about $33.2 million from preferred seating donations, Brandon said. For the upcoming fiscal year, preferred seat donations have been sold out at both Michigan Stadium and Crisler Center — creating an additional $4.9 million in revenue.
During a presentation to the Regents, Brandon said the $8.9 million surplus would stem, in part, from a $4.75 million transfer to the deferred maintenance fund and $2.5 million from the National Hockey League for the Winter Classic event to be held on Jan. 1, 2014.
The Winter Classic was scheduled to take place at the beginning of the year, but was cancelled after the NHL season was postponed due to the lockout. The University was scheduled to profit last year but will instead see a boost in revenues during this upcoming fiscal year.
“It felt really bad last year when the Winter Classic was delayed, but it feels really good to have it back” Brandon said. “Now it’s in our number and we’ll take full advantage of that.”
Last year, the athletic department spent a total of $123.3 million — $1.3 million less than budgeted. The athletic department has not operated with a deficit since fiscal year 2001, Brandon reported.
“We continue to grow and we continue to invest,” Brandon said.
“We invest in talent, we’re investing in facilities and we’re investing in support services for our student athletes,” he added. “We’re investing in new sports and new activities around what we’re doing at Michigan athletics.”
The athletic department also continues to increase its corporate sponsorship profits, data reported. After its projected $15 million revenue last year, the athletic department is slated to bring in an added $800,000 in corporate revenue.
The addition of women’s lacrosse as a varsity sport, as well as the inclusion of both cheer and dance squads in the department, will be one of several factors contributing to increased operating expenses.
Team and game expense make up about $22 million, or 16 percent, of all operating expenses. The athletic department’s largest expense incurred continues to be salaries, wages and benefits — which cost about $48.8 million, or 36 percent.
“We also are budgeting a higher amount for incentive-based pay for our coaches, because we seem to be winning a lot of championships and we reward them when they do,” Brandon said. “I tell our coaches that we have an unlimited budget for winning championships.”
The athletic department is also in the midst of its expansion of South Campus, as it creates new facilities while renovating old ones. The current renovation to Schembechler Hall and the renovation to the Donald R. Shepard Softball Building were approved by the Regents at a combined cost of $14.3 million.
There are 14 proposed projects to be started in the next six years, including a new indoor and outdoor track facility. The total cost for all 14 projects is estimated to be at $341 million.
“As we move down the road, we get a little bit crisper in terms of activities you approved,” Brandon said. “Those are straw man numbers that give us some sense of the scope and scale of these things.”