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.
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