Michigan AD Warde Manuel: Playing football could cut deficit by $20 million
Michigan's athletic department still faces a significant budget deficit for the current fiscal year.
But the strain could be lessened with the return of college football, said athletic director Warde Manuel.
"We don’t know the final potential impact of playing less games, but based on our estimates, if we do have the ability to play the games this year and get through everything, our deficit would go from $100 million to about $80 million,” Manuel said on the latest episode of the "Conqu'ring Heroes" podcast with Jon Jansen on Tuesday afternoon.
The Wolverines, among the largest athletic departments in the nation, have been able to avoid cutting sports but have still felt the squeeze since the COVID-19 pandemic began. In early September, Manuel announced that the department was laying off 21 employees to offset revenue loss, and highly-paid figures like Manuel, football coach Jim Harbaugh and men's basketball coach Juwan Howard have all accepted salary reductions of up to 10%.
Manuel painted a grim picture of the department's financials during a previous appearance on the podcast, saying Michigan's budget could take up to a $100 million hit shortly after the Big Ten postponed all fall sports (including college football) in mid-August.
The athletic department has operated at a surplus since at least 2005, according to USA TODAY's annual financial database. The football program is a big reason why: During the 2019 fiscal year, the sport generated $122.3 million, which was most of the athletic department's $197.8 million in revenue that year.
The return of football will help, and Manuel said Big Ten commissioner Kevin Warren is "doing a great job of working with television, to work with our television partners and our television subcommittee."
But even with the return of football, Michigan's still facing a "significantly reduced revenue stream."
“It’s complicated and it's a struggle," Manuel said.
He praised the actions of season-ticket holders and donors, who have donated close to $6 million to the athletic department after Manuel wrote a letter soliciting their help. "About 71 to 72%" of Michigan's fans, meanwhile, have chosen to move their ticket payments forward to next year, as the Big Ten is not allowing fans to watch games in-person this fall.
All of it, Manuel says, has helped greatly.
"I don’t want people to think that we won’t be able to get through it, but we’re able to get through it because we have great fans, we have great donors who have supported us," Manuel said. "We’ve had our season-ticket holders and donors who have donated almost $6 million in tickets and their preferred seating contributions back to the department this year.
"It’s been amazing. We’ve had an increase in the number of donors who contributed to our Champions Fund this year to support our student-athletes and our department through these tough times. That helps us mitigate long-term borrowing that we’re gonna need to support where we are."
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