Michigan AD Manuel Expects $50M in New Athletics Costs After NCAA's $2.78B Settlement

University of Michigan athletic director Warde Manuel has sent an email to school stakeholders outlining potential costs related to a judge's recent preliminary approval of the NCAA's $2.78 billion settlement with current and former athletes that is expected to pave the way for schools to pay student-athletes. 

According to Michigan Rivals, Manuel explained  that as a result of the settlement "institutions will be permitted to compensate student-athletes through revenue sharing, anticipated to be between $22-23 million annually."

As part of the new rules, roster numbers will also be capped, while schools will be able to expand the number of scholarships they can offer. In fact, schools will now be able to offer scholarships to all players on rosters, which represents a significant hit to athletic department budgets. 

"Maintaining a high level of support for our 29 NCAA athletic programs will take an elevated commitment from everyone. The anticipated annual payment of $22 million will go directly to the athletes starting with the 2025-26 academic year, with those payments estimated to increase every year to maintain a proportional revenue share. Should our department also decide to meet all the new NCAA scholarship limits for each of our 29 teams, education costs to support those additional student-athletes are expected to increase by $29 million annually."

Manuel said the expansion equates to a roughly $50 million expansion of the school's budget. 

"Consequently, the cost to support our budget with new revenue share and scholarship opportunities, will take a combination of generating more revenue and reducing expenses, to cover approximately $50 million in additional dollars each year."

According to Manuel, Michigan is committed to keeping all of its 29 athletics programs. 

"We intend to maximize the revenue-sharing opportunities presented by these new policies to support and recognize the NIL contributions of our student-athletes to the full extent allowed by the NCAA and the agreed upon settlement," Manuel wrote. "Their hard work in athletics and commitment to the community and classroom help drive our collective passion for Michigan Athletics. We are continuing to assess the number of additional scholarships that our department will be able to fund, but we are firm in our commitment not to eliminate any sports or reduce the number of scholarships we currently offer."