University of Michigan Athletic Director Warde Manuel issued a letter Monday afternoon outlining the major financial and structural implications of the House v. NCAA settlement, confirming the athletic department faces a projected $15 million deficit for the 2025-26 academic year even after substantial cost-saving measures.

The settlement, finalized Friday by Judge Claudia Wilken, paves the way for historic changes across college athletics, including a new revenue-sharing model, redefined roster limits, and unlimited scholarships up to those new roster caps.

“The settlement results have a significant impact on the finances of our department and the way college athletics are structured,” Manuel said. “Three key changes are coming to college sports.”

At the forefront is the new revenue-sharing system, which allows each school to distribute up to $20.5 million annually to student-athletes. That figure is determined by averaging media rights, ticket sales, sponsorships and licensing revenues across Power 4 schools and is expected to increase over time. Michigan plans to pay out the full amount to stay competitive.

“We will support our student-athletes with the full amount allowed each year to remain competitive for Big Ten Conference and National championships,” Manuel wrote.

In addition to the $20.5 million in revenue sharing, Michigan Athletics must also absorb an estimated $6.2 million in new scholarship costs due to the expansion of roster limits. For the fall of 2025, the department will add 82.1 scholarships across 19 sports, bringing the total annual scholarship commitment to nearly $40 million.

The total projected shortfall—originally pegged at $27 million—was reduced to $15 million through a combination of staffing attrition, hiring freezes, operational cuts, and adjustments to university revenue allocations. Budget cuts totaling more than $10 million have been implemented, while the university’s share of TV revenue was reduced from $8 million to $2 million. A revised travel policy saved nearly $1 million this fiscal year.

To further combat rising costs, Michigan is leaning on new revenue streams, including hosting large-scale events and expanding concessions. Recent concerts and sporting events have generated millions in revenue, and the implementation of alcohol sales at Michigan Stadium, Crisler Center, and Yost Ice Arena produced $2.25 million in 2024 alone.

“These changes have been a tremendous undertaking for our department, but we know they are just the beginning,” Manuel said. “We ask for your continued support and understanding.”

Despite the financial challenges ahead, Manuel emphasized Michigan’s commitment to providing top-tier support for its student-athletes and competing at the highest level.

“Go Blue!” he concluded.

The Michigan Wolverines’ athletic department has been committed to adapting to the ever-changing world of college sports. With the House vs. NCAA settlement inching closer to approval, Michigan athletic director Warde Manuel has dug his feet into the ground on how the university plans to allocate those funds.

Michigan won a football National Championship in 2023-24, currently sits in second place in the Big Ten men’s basketball standings, and the women’s basketball team is poised to make another NCAA Tournament run. And many non-revenue sports cannot stop winning Big Ten titles.

The allocation of funds

To put it frankly, Michigan has a success problem. While the House settlement was originally decided to give $23 million to college athletes as part of a revenue-sharing metric, the number has come down to $20.5 million. And according to Manuel, it is expected to stay there if the settlement gains final approval.

Michigan’s athletic department is committed to sharing the $20.5 million with its three main revenue drivers. Approximately 75 percent of that will go to football, with the other 25 percent being split between the men’s and women’s basketball teams.

It’s apparent Michigan has the money to pay its athletes, especially since the athletic department has been self-sustaining for years, paying back every scholarship the university gives to its athletes. However, there will need to be more ways to generate revenue in order to keep up with the changing landscape.

In-stadium advertising

Manuel has already spoken about the possibility of putting advertisements inside of Michigan Stadium in 2025, and he was committed to that approach once again on The Michigan Insider Podcast with Sam Webb this past week.

“Yeah, there will be no permanent advertising,” Manuel said. “We have the Gatorade brand, and we have the Nike apparel, and we put the headsets on. But there will be nothing permanent on the scoreboard or anything that we’re putting in signage on the scoreboard, anything like that at this time.

“But there is a time. And I think part of it is putting out the survey is to get our fans to give us their thoughts about what they would find acceptable. I mean, $20 million is really $20.5 million. That’s real dollars that we have to find in terms of sharing, revenue sharing with our student athletes. So we’re cutting almost $8-9 million out of our budget for next year. We’re doing different things to drive more revenue through where we currently have revenue.”

While no one wants to be bombarded with ads, there is a balance that — if done right — could bring upwards of $10 million next year without overly impeding on the fan experience. If done, that would replace the cuts Manuel alluded to.

Committing to 29 programs

Manuel has also stayed committed to not cutting any of the 29 athletic programs at Michigan, a big statement in favor of athletes and the people that work for those teams. But the money needs to come from somewhere in order to sustain what Michigan already has.

“We don’t get any in ‘no student fee’ area,” Manuel said. “At both of the places I was at before, we got student fee dollars, and we have support from the university. And so, it’s one of those things where there’s a lot to think about, there’s a lot that we want to continue to do.

“But with the success of the 29 programs, we’re not dropping the sport at all. It’s not even been a conversation, a point in the conversation. We’re not laying people off … We’re gonna take a look at open positions and do our due diligence as to what we need moving forward. So it’s about looking at revenue, but it’s also about looking at expenditure.”

Thinking outside the box

Another way the Wolverines plan on generating revenue for players is using Michigan Stadium for events. Music artist Zach Bryan will be playing at the Big House at the end of September, and the show sold out within 36 hours.

Not only was the move a money-maker for the school and the artists, but Michigan will only get six home games in 2025 compared to the eight it had the previous four seasons. The lost revenue of two home football games is a large margin, so adding the concert is a big way to make up for it.

The fact is Michigan is being asked to cough up $20 million more than it has ever had to spend before. In a self-sufficient budget, money is typically earned and distributed until there isn’t a penny left to spend. Suppose the Wolverines want to keep up that model without adding more fees to its students and fans, asking the university to pay for the full scholarships or take away current athletic programs. In that case, in-stadium advertising and outdoor concerts are a start to getting back even with the budget.

The more success the department has, the easier it is to sell. With the recent success of various athletic programs, the time is now to capitalize on demand.

In an effort to offset the costs Michigan’s athletic department is facing with U.S. District Judge Claudia Wilken’s approval of a landmark settlement last week that opens the door for revenue sharing with student-athletes, Michigan athletic director Warde Manuel, in a letter Monday to fans and alumni, outlined how the department will handle the escalating budget.

The $2.8 billion, 10-year settlement will pay past players (from 2016-24) for name, image and likeness opportunities that were missed and allow colleges to directly pay current players starting July 1. Manuel touched on how the revenue sharing model will allow schools to share up to $20.5 million with their athletes and the new roster limits tied into the unlimited scholarships for the sports.

“The prospect of these added costs left UM Athletics facing a projected deficit of nearly $27 million for the 2025-26 academic year ($20.5 million to fully participate in revenue sharing and $6.2 million in new scholarships),” Manuel wrote. “With only six home football games this fall, our projected year-over-year decline in revenue of roughly $19.1 million steepens these costs.”

Manuel said the department personnel will gradually decrease with a goal of a 10% reduction in total staff through attrition and a stricter approval process for new hires. More than $10 million in budget cuts has been committed by the department for the upcoming fiscal year, Manuel wrote.

The athletic department receives a substantial annual TV revenue allocation from the Big Ten and it will now give the university $2 million instead of $8 million. Manuel also said changes were made this past athletic season to the travel policy with more than $900,000 in savings.

“The department has implemented several measures to counteract these new expenses,” he wrote. “Through adjustments to university financing, budget cuts, travel policies, not filling select positions when vacated and the utilization of new revenue streams, we have reduced our estimated need from $27 million to $15 million for the coming year.”

Schools can distribute the money to athletes in any way they chose.

“We will support our student-athletes with the full amount allowed each year to remain competitive for Big Ten Conference and national championships,” Manuel wrote.

The House v. NCAA settlement will allow departments to offer full scholarships for every roster spot on every team. Manuel wrote that the athletic department will face an annual cost of nearly $40 million for scholarships considering 82.1 new scholarships added across 19 sports at a cost of an additional $6.2 million this fall.

Manuel asked Michigan fans and alumni for their “understanding” as well as their questions and comments.

“These changes have been a tremendous undertaking for our department,” Manual wrote, “but we know they are just the beginning.”

achengelis@detroitnews.com

@achengelis

Eddie Pells

Associated Press

At Tennessee, they are adding a ‘talent fee’ to the price of sports tickets. At Arkansas, they will charge 3% more at the concessions stands. At Michigan and Michigan State, athletic directors sent letters alerting boosters that winning is going to start costing more. And, in a first, Clemson is going to start adding an athletic surcharge to tuition bills.

Winning at big-time college sports has never been free, but in a rapidly changing era in which players are allowed to earn money and be paid by their own schools, it has never been clearer that fans will be picking up a bigger part of the tab.

“College athletics hasn’t professionalized as much as I think it was capable of,” said Nels Popp, a University of North Carolina sports-business professor who believes most schools still rely on fans’ emotional, long-held school ties more than bottom-line marketing strategies. “And now, I think this is forcing them in that direction.”

When the NCAA reluctantly approved payments to players for use of their names, images and likenesses (NIL)in 2021, boosters who used to give to schools and their athletic departments started funneling money to collectives – independent organizations that raised the money and paid the athletes. Those collectives are becoming more and more closely linked to the universities.

Under terms of a $2.8 billion lawsuit settlement that is on track to take effect next year, the NIL deals will remain in full force and the schools themselves will be dealing with other multimillion-dollar changes to their bottom lines, including:

▶ Each school with the money to do it will be allowed to share as much as $22 million in annual revenue with athletes – money they get from tickets sales, TV contracts and other sources. They can share less, but top recruits will be front of mind in the arms race for talent.

▶ The amount the NCAA pays more than 350 Division I schools every year is going to drop. The organization is on the hook to cover some $1.2 billion in damages under the settlement and the rest will be covered by conferences that will see less money shared each year from the NCAA and its lucrative men’s basketball tournament.

▶ Schools will be allowed to offer more scholarships across all sports and that costs money. For instance, a school could offer up to 20 additional scholarships for a total of 105 in football. Michigan athletic director Warde Manuel said adding scholarships across sports could add $29 million in education costs to the department’s bottom line. And that’s on top of the revenue sharing.

“Maintaining a high level of support for our 29 NCAA athletic programs will take an elevated commitment from everyone,” Manuel wrote to Wolverines fans last month.

One possibility for Michigan might be placing advertising inside of Michigan Stadium, a practice the Wolverines have steadfastly avoided over the decades. The school also sent out a recent survey asking, among other questions, if fans were willing to pay between $3,000 and $4,000 for a new tranche of chairback seats, which are rare outside of club sections at The Big House.

Not all fans are signing on amid ‘donor fatigue’

In 2023, it cost two fans an average of around $180 to attend a college football game and about $340 to go to an NFL game. After all, college sports didn’t have to worry about the biggest expense on a pro team’s budget – player salaries.

NIL started chipping away at that, and once the terms of the lawsuit settlement go into effect, that dynamic will shift even more. Michigan State AD Alan Haller told Spartans fans his department’s ’25-26 budget will include between $25 million to $30 million in added expenses.

“As a department, we will continue to explore new opportunities for both revenue generation and cost containment,” Haller said. “However, without a doubt, your continued generosity and involvement will be paramount to our quest for excellence.”

Some fans will undoubtedly keep writing checks to keep the players – and hopefully, the wins – coming, along with retaining their “rights” to buy a certain number of tickets for football games.

A tour around the parking lot before this season’s Michigan-Michigan State game found others who sounded more reluctant.

“The price of the education is out of hand,” said Michigan State fan Mike Bouchard, citing a more than $55,000 price for an out-of-state undergrad to attend his alma mater. “There’s absolutely no way I’m going to dig into my pocket over and above that amount. Tell them to use their hundreds of millions in endowments.”

“Absolutely not,” said Ann Arbor resident Michael Ketslakh when asked if he would give more to support Michigan athletics. “I think it’s excessive. It’s bad for the sports.”

Rick Karcher, the faculty athletics representative at Eastern Michigan, said fans continue to pay because, unlike pro sports where everyone knows the profits go to billionaire owners, the economic models in college are often hard to nail down.

“College sports fans, students and boosters are willing to continue absorbing the operational costs while the team’s coaches and administrators get richer because they view athletics as separate from the university,” he said.

Schools look for other ways of absorbing higher costs

Earlier this fall, Texas Tech said it was budgeting $14.7 million for this fiscal year – about $9 million more than the previous year – in support for the athletic program, which has a budget of nearly $129 million.

“I think if any unit on this campus was facing a 20-something-percent cut in their revenue, we would have to look at how we might respond, and we will in this case,” school President Lawrence Schovanec explained.

Texas Tech is hardly alone in contributing to its athletic program, but not every school runs by the same model. At Florida, for instance, sports are run by the University Athletic Association, which not only has funded sports but has often given money back to the school.

A story in the student-produced Florida Independent Alligator said UF sports revenue was eighth-highest in the nation; two of its biggest boosters have given eight-figure sums to the UAA’s fundraising arm.

Clearly, though, it’s not only eight-figure donations that will keep college sports running.

Tennessee was among the first to grab headlines early in the football season when AD Danny White said the school was adding a 10% “talent fee” for 2025 football ticket renewals. That was on top of a 4.5% hike in ticket prices.

“That connection between resources and competitiveness has never been tighter,” White said. “Only now we have the ability to share these resources with our athletes.”

At Arkansas, AD Hunter Yurachek explained the 3% fee on concessions in a letter to fans that noted the importance of continuing to “maximize additional revenue opportunities” At Clemson, which long prided itself on not charging fees or ticket prices to students, the plan is to raise between $7 million and $8 million by adding a $150 “athletic fee” per semester to the price of tuition. The Tigers have been to four national title games over the past decade and won it twice.

“I think it’s kind of ridiculous, but there comes a point when we have good enough sports teams that it’s kind of valid,” student Sam Gault told South Carolina’s WSPA-TV when the fee was unveiled earlier this month.

To win big, schools will have to pay big, and simply fielding a competitive team is no longer a given. The question hanging over college sports is where the money will come from.

“You can pay more for tickets, put a sponsor patch on the uniforms, cut non-revenue sports or (start calling) the Big 12, the ‘Dr. Pepper Conference,’” said Popp, the professor at North Carolina. “I don’t think fans are anxious for any of those, but what might they be willing to accept? I think that’s what athletic departments have to figure out.”

AP Player of the Week

The Associated Press national player of the week in college football for Week 10 of the season:

Jaxson Dart, Mississippi

Dart threw for a Mississippi-record 515 yards and rushed for 47 in the Rebels’ 63-31 win at Arkansas. His 562 total yards broke Archie Manning’s school-record of 540, set in 1969 against Alabama. Dart also threw six of the Rebels’ record-tying seven touchdown passes.

Dart joined Missouri’s Drew Lock (2017) as the only Southeastern Conference quarterbacks to throw for at least 500 yards and six TDs in a game.

Dart’s school-record 13th game throwing for 300-plus yards came with national receiving leader Tre Harris out because of injury. Jordan Watkins picked up the slack, and then some, setting school records with 254 receiving yards and five touchdowns on eight catches.

Runner-up

Cam Ward threw for 400 yards and five touchdowns in a 53-31 victory over Duke, and he orchestrated a third comeback from a double-digit deficit in the second half for the unbeaten Hurricanes. Ward has 29 touchdown passes, tied with Steve Walsh for the school single-season record.

Three of his TD passes went to Xavier Restrepo, who finished with eight catches for 146 yards to move past Santana Moss for first place on the Miami career receiving yards list with 2,573.

Honorable mention

Isaac Brown ran 20 times for 151 yards, including a game-clinching 45-yard touchdown, in Louisville’s 33-21 win over Clemson. … South Carolina freshman QB LaNorris Sellers ran for 106 yards and threw for 244 in a 44-20 win over Texas A&M. Sellers threw for two touchdowns and ran for another. … Omarion Hampton had a career-high 265 all-purpose yards and became the first North Carolina player since 1981 to score five touchdowns in a game in a 35-11 win at Florida State. … UAB’s Kam Shanks set the school record for single-game all-purpose yards with 311 in a 59-21 win over Tulsa. He caught five balls for 153 yards and three TDs and returned a punt 58 yards for another.

Six stats

▶ Boise State’s Ashton Jeanty, at 190.6 yards per game, is on track to post the highest rushing average since LaDainian Tomlinson’s mark of 196.2 for TCU in 2000.

▶ Twenty-two of the Big 12’s 44 conference games have been decided by one score, most among FBS leagues.

▶ Florida has scored in 456 straight games since 1988, the longest streak in the country.

▶ Army is the only team to have not trailed in a game this season. The Black Knights have not trailed in 12 games since Oct. 28, 2023. Since 2003, the only team with a longer streak without trailing is Alabama (14 games from 2020-21).

▶ Georgia’s Carson Beck is the only FBS quarterback to throw three interceptions in three games this season, according to Sportradar. Beck has thrown three in two straight games.

▶ Nebraska is 0-7 since last season in games in which a win would have made the Cornhuskers bowl-eligible.

In yet another sign of the changing times in college athletics, the Michigan athletic department will soon seek advice from fans and season-ticket holders by sending out a survey on ways to generate additional revenue.

This comes from Michigan athletic director Warde Manuel, who addressed a number of topics on a recent episode of “Conqu’ring Heroes,” U-M’s in-house podcast, given that revenue sharing is now on the doorstep after a recent settlement in the House vs. NCAA lawsuit.

The long and the short of it: Michigan intends to distribute $22-23 million among student-athletes annually, the most amount schools are allowed to pay, beginning in the 2025-26 academic year when the settlement takes effect.

“There’s actually a lot of things we’ve left on the table,” Manuel said. “We look forward to (sending out) that (survey) and hearing back. Not that we are looking to implement all of what we’re surveying them on, but just to get a sense of where our fans are and to get their feedback.”

Perhaps the most notable among those options is in-stadium signage. Michigan is one of a dwindling number of universities to not have third-party signage inside Michigan Stadium, Crisler Center or any of U-M’s athletic facilities, nor are there corporate logos or sponsors with affiliations to the stadium or field name.

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Even with the increasing costs, Manuel remains steadfast that the school does not plan to cut any sports after revenue sharing goes into place.

“We are firm in our commitment not to eliminate any sports or reduce the number of scholarships we currently offer,” Manuel wrote in a letter published last Wednesday. “We plan to continue an approach that was established when Michigan started competing in intercollegiate athletics in 1865: providing championship-level support to each of our NCAA varsity sports.”

Among the changes coming next year: Athletes who played in 2016-21 are eligible for nearly $3 billion in back pay. To cover that, U-M will be docked $1.5 million from its NCAA revenue distribution for a decade. Additionally, schools will be allowed to pay athletes from a pool of an estimated $22-23 million annually. Roster sizes will be capped under the new model, but departments will be allowed to issue scholarships to all players on all teams.

The lack of scholarship limits, Manuel estimates, could cost an additional $30 million draw from the scholarship fund. It’s also perhaps the main reason he’s looking into the “source that’s untapped at this time” — advertising in the largest stadium in America.

“There’s no commitment to doing it — but one of the things that stands out is in our stadium, in Michigan Stadium,” Manuel said. “We have prided ourselves, we’ve had a history of no signage, no advertising in Michigan Stadium. As our fans go to other locations, they’ll see how people have utilized their stadiums to bring in revenue. Now, the good news is, we have a source that is untapped at this point in time.

“Not that we have plans right now to do that, but that’s one of the sense of questions that we want to get our fans to say: How would you like to see us develop revenue streams that would support our student-athletes? Is it ticket price increases? Is it through corporate sponsorship? Is it through looking at other premium options that others have, those kind of things?”

Michigan already this year began a premium pregame lounge experience inside Michigan Stadium at the Mortenson Plaza called the “All-Star Lounge,” which requires a separate ticket to enter. Manuel said it has been “well-received,” and that U-M is always looking for ways to generate additional revenue.

In their most recent projections, the U-M athletic department estimated revenue of $255.7 million with $253.6 million in operating expenses in the 2024-25 fiscal year.