Michigan anticipates $26.1 million deficit for 2021, including pay cut for Jim Harbaugh

Yahoo Sports

Michigan’s athletic department is projecting it will operate at a $26.1 million deficit for the 2021 fiscal year. 

UM athletic director Warde Manuel said Monday that his department is currently projecting operating revenues of $135.8 million with projected expenses of $161.9 million for 2021. Those figures — and the steps Michigan is taking to reduce expenses — reflect the grim reality athletic departments around the country are facing amid the ongoing coronavirus pandemic.

Michigan expects its revenue from “spectator admissions” at sporting events to decrease by 50 percent from 2020 to 2021, a figure the school emphasized is “a projection.”

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The athletic department said it has reduced its expenses in “all areas” except financial aid for student-athletes. Financial aid will actually increase by $800,000 mainly due to UM athletes remaining on scholarship for an additional year following the cancellation of the 2020 spring season, plus “anticipated increases in tuition.”

Other drops in revenue include a projected $6.5 million decrease in “team and game expenses” and an additional $6 million decrease in salaries, wages and benefits. As part of the expense reductions, Manuel, senior-level administrators and “many head coaches,” including football coach Jim Harbaugh and men’s basketball coach Juwan Howard, will take 10 percent pay cuts from Aug. 1 through the end of the fiscal year. 

Harbaugh, entering his sixth season as the head coach at his alma mater, was set to earn just over $8 million for the 2020 season. Howard signed a five-year, $11.2 million deal when he was hired by UM last June. He was due $2.1 million in the second year of his contract. 

Elsewhere in the athletic department, full-time staff members who earn between $100,001 and $150,000 will see a 7.5-percent salary reduction. Those who earn between $50,000 and $100,000 will see a five-percent salary reduction. Staff members that earn less than $50,000 will not have their salaries reduced. 

The Michigan athletic department is anticipating it will operate at a $26.1 million deficit for the 2021 fiscal year. (Photo by: Harry How/Getty Images)
The Michigan athletic department is anticipating it will operate at a $26.1 million deficit for the 2021 fiscal year. (Photo by: Harry How/Getty Images)

Similar budget issues around the country

With the pandemic still present and the college football season around the corner, athletic departments across the country will face similar budgetary issues. Football is the financial engine that allows college athletics to operate, with football and men’s basketball as the only two sports that bring in any sort of revenue at most major universities. Attendance will surely vary from university to university, but the usual attendance figures athletic departments rely upon will be affected immensely. 

Nonetheless, FBS schools have players back on campus and are attempting to progress toward a season while several smaller schools are beginning to make decisions about the fate of the 2020 season. In New England, Division III Williams College announced Monday it would not participate in fall sports, joining conference mate Bowdoin College in that decision. 

Last week, it was Division II Morehouse College canceling its football and cross country seasons and Patriot League, an FCS conference, announcing protocols for fall sports that made it pretty clear some non-conference football games will not be played. Meanwhile, the Ivy League is reportedly mulling moving its season to the spring, something Yahoo Sports’ Pete Thamel reported has been a topic of discussion at the Power Five level, too.

With football season set to begin in two months, there will be other tough decisions made in the coming weeks. 

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