The University of Michigan athletic department has announced a significant change in its operational structure, planning a 10 percent reduction in staff as a response to a recent settlement that permits schools to compensate student-athletes. In a letter addressed to fans, alumni, and supporters on Monday, athletic director Warde Manuel outlined the department's strategy to manage spending and implement necessary cost-cutting measures aimed at addressing a projected budget deficit of $27 million for the 2025-26 academic year.
According to the new settlement approved by Judge Claudia Wilken on Friday, nearly $20.5 million of the expected $27 million in new funds will be allocated to student-athletes. Manuel indicated that a substantial portion, potentially up to 75 percent, could be directed toward the football team, while men’s and women’s basketball teams may receive between 5 to 15 percent. Furthermore, the settlement imposes roster limits but allows institutions to offer an unlimited number of scholarships, with Michigan set to introduce 82.1 new scholarships across 19 sports this fall, costing approximately $6.2 million.
To manage these costs, Manuel stated that Michigan will reduce the number of home football games from eight to six this fall, leading to an estimated $19.1 million decline in revenue year-over-year. As a response, the athletic department has committed to implementing $10 million in budget cuts for the upcoming year. This will be achieved through adjustments to travel policies, delaying the filling of certain vacant positions, and collaborating with the university to cut its share of TV revenue from $8 million to $2 million.
Manuel emphasized that the Michigan athletic department will gradually reduce its staff numbers through two primary methods: natural attrition and a stricter hiring approval process. The long-term goal is to achieve a 10 percent reduction in total staff. These proactive measures have already helped to reduce the deficit by $12 million, leaving the department with a remaining need of $15 million for the next fiscal year.
In a bid to generate additional funds, Michigan has successfully brought in $2.25 million in new revenue during 2024 through alcohol sales at Michigan Stadium, Crisler Center, and Yost Ice Arena. Moreover, the athletic department is set to host its first-ever concert at the football stadium, featuring country singer Luke Bryan on September 27. Manuel highlighted previous successful events at Michigan Stadium, such as international soccer matches and the 2014 NHL Winter Classic, which generated between $750,000 and $3 million each.
In his letter, Manuel reassured supporters, saying, “We will support our student-athletes with the full amount allowed each year to remain competitive for Big Ten Conference and National championships.” He acknowledged the challenges ahead and emphasized the importance of community support during this transitional period. Manuel concluded by inviting feedback, stating, “We ask for your continued support and understanding, and we welcome your questions, comments, and concerns.”
For those interested in reading the full letter from Warde Manuel, please click here.
