Michigan athletics projects $26.1 million deficit in 2021 fiscal year
The University of Michigan's athletic department projects a $26.1 million deficit for the 2021 fiscal year.
Athletic director Warde Manuel presented the department’s operating budget at Thursday’s Board of Regents meeting, hosted virtually via Zoom. The university's overall budget was voted down by the Board, who split the vote, 4-4. It wasn't immediately clear whether the athletics budget would change when the overall budget is approved.
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The athletic department projected the deficit based on operating revenues of $135.8 million and operating expenses of $161.9 million. The expected deficit is due to the COVID-19 pandemic.
U-M's fiscal year begins July 1.
According to Manuel's presentation, the athletic department projects that revenues from spectator admissions will decrease $29.2 million between the 2020 fiscal year and the 2021 fiscal year "due to lower anticipated attendance for all sports." Preferred seat contributions are projected to decrease $17 million, due to both lower anticipated attendance and potential refunds. Total revenues are expected to decline close to $65 million, Manuel said.
Expenses are also expected to decrease. Salaries, wages and benefits are projected to decrease $6 million because of "various expense reduction initiatives." Team and game expenses are projected to decrease $6.5 million, for the same reason.
The COVID-19 pandemic also affected Michigan's 2020 fiscal year. As the outbreak occurred in mid-March, halting all athletics (including ongoing winter and spring sports such as men's and women's basketball, softball and baseball), conference distributions decreased $5.3 million because of reduced NCAA revenues and "potential for reduced television contract revenues." Preferred seat contributions decreased $2.7 million compared to the 2020 fiscal year budget because of "extended payment timelines and uncertainty regarding next year's competitions."
Expenses for the 2020 fiscal year also decreased by nearly $8 million, according to Manuel, because of reduced operations and the cancellation of spring team activities.
"We're projecting, as we close out this month, an operating surplus for this fiscal year," Manuel said, referring to the 2020 fiscal year.
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