University of Michigan Athletic Department Latest to Cut Staff Amid House Settlement

The University of Michigan is the latest D-I school to announce that it will be slashing staff at its athletic department in the wake of the recent House settlement that brings with it the financial burden of paying athletes. 

Athletic director Warde Manuel said in a letter to fans that he plans to cut spending with the aim of covering a projected $27 million budget deficit for the 2025-26 academic year. 

The NCAA estimates that all schools who opt in to the House settlement will have a cap of around $20.5 million to distribute to athletes. Manuel has previously said that 75% of that money could go to football, with another 5 to 15 percent to men's and women's basketball. 

“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.

Michigan will host six football games this year, two less than in 2024, representing a $19.1 million decline in year-over-year revenue. 

Manuel also said that staff cuts will be a part of the solution going forward, with the athletic department aiming for a 10% cut in personnel. 

"To combat the added cost, the department staff will gradually decline in number through two methods: attrition, with a long-term goal of a 10 percent reduction in total staff, and through a stricter approval process for new hires," Manuel wrote. "The department has committed to more than $10 million in budget cuts for the coming fiscal year, and has worked with the main campus to reduce its allocation from TV revenue to the university from $8 million to $2 million. We also revamped our travel policy, which resulted in over $900,000 in savings during 2024-25."

Michigan isn't alone in seeking budget cuts. Both the University of Kansas and the University of Oklahoma have recently announced similar belt tightening measures.  

Read the entire letter from Manuel below:

Dear Michigan Fans, Alumni, and Supporters,

On Friday evening (June 6), Judge Claudia Wilken gave final approval of the House vs. NCAA case, which will drastically change the landscape of college athletics. The settlement results have a significant impact on the finances of our department and the way college athletics are structured. Three key changes are coming to college sports as a result: first, the introduction of a revenue sharing model which allows schools to fund and share up to $20.5 million with student-athletes; second, new roster limits will be phased in over time for all sports; third, unlimited scholarships up to a sport’s newly established roster limit.

The prospect of these added costs left U-M 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). With only six home football games this fall, our projected year-over-year decline in revenue of roughly $19.1 million steepens these costs. The department has implemented several measures to counteract these new expenses. 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.

I would like to explain how we improved our financial position and why we still need your continued support.

A fixed factor in this equation is the revenue sharing money as defined by the House settlement. A maximum of roughly $20.5 million per school can be shared with student-athletes for this coming year. Schools can distribute that money any way they see fit. That figure is calculated using a formula that incorporates revenues from media rights, ticket sales, sponsorships, and licensing, calculated at an average across Power 4 institutions. Those inputs are tracked annually, meaning the $20.5 million total will rise in future years. That money, combined with the value of tuition, room and board, and the many other benefits already provided, leaves NCAA student-athletes in a position to receive a similar percentage of revenue shared with professional sports athletes. We will support our student-athletes with the full amount allowed each year to remain competitive for Big Ten Conference and National championships.

Another fixed factor to consider is scholarship costs, which are rising. The results of the House settlement will allow departments to offer full scholarships for every roster spot on every team, directly connecting a team’s ability to compete to its level of scholarship support. With 82.1 new scholarships added across 19 sports for fall 2025, at a cost of an additional $6.2 million, Michigan Athletics will be supporting athletic scholarships at an annual total cost of nearly $40 million.

To combat the added cost, the department staff will gradually decline in number through two methods: attrition, with a long-term goal of a 10 percent reduction in total staff, and through a stricter approval process for new hires. The department has committed to more than $10 million in budget cuts for the coming fiscal year, and has worked with the main campus to reduce its allocation from TV revenue to the university from $8 million to $2 million. We also revamped our travel policy, which resulted in over $900,000 in savings during 2024-25.

Our athletic department is also producing more revenue from events in our facilities, such as our partnerships with Upper Deck Golf and AEG/Zach Bryan. Events such as international soccer matches and the 2014 NHL Winter Classic generated between $750,000 and $3 million each for the department in the past. The 2024 calendar year saw the implementation of alcohol sales at Crisler Center, Yost Ice Arena, and Michigan Stadium, which generated over $2.25 million for the department. We will continue to evaluate other opportunities to generate additional revenue throughout the department.

These changes have been a tremendous undertaking for our department, but we know they are just the beginning. We ask for your continued support and understanding, and welcome your questions, comments, and concerns.

Go Blue!

Warde Manuel

Donald R. Shepherd Director of Athletics