The Athletic Department will have a balanced budget in fiscal year 2016 based on operating revenues of $153.6 million and operating expenses of $153.6 million. The budget was presented to the Board of Regents on Thursday.
Highlights of the projected 2015-16 operating budget are as follows:
• Football season ticket prices remain unchanged for the public for a second year.
• Student football season ticket prices will be reduced by 37.5 percent in addition to offering need-based discounts based on federal Pell Grant eligibility in football, men’s basketball and ice hockey.
• Similar to FY ’15, the FY ’16 budget reflects a seven-game home football schedule.
• Budgeted conference distributions are projected to increase to $34.7 million from $32 million budgeted in FY ’15.
• Premium seating areas are sold out at Crisler Center and nearly sold out at Michigan Stadium.
• Facility revenues decreased year-over-year because there are no planned major, special-event rentals in FY ’16.
• Total operating expenses budgeted for FY ’16 increase by 0.4 percent from the projected actual operating expenses in FY ’15.
The Athletic Department will make a $5 million transfer to a deferred maintenance fund compared with $5 million in FY ’15 and $4.75 million in FY ’14. The deferred maintenance fund is used as a means to provide for major repair and rehabilitation projects for athletic facilities. The department expects to set aside additional funds in future years.
Based on preliminary results, the Athletic Department currently projects a $7.9 million operating deficit for FY ’15. The operating deficit will be offset by operating reserves. The unfavorable operating outcome is primarily due to lower-than-budgeted spectator admissions, higher-than-budgeted compensation costs, and an unbudgeted increase in food costs following new NCAA regulations for student-athlete nutrition and support.
“Finances can change very quickly and, as we have seen this year, we are not immune to the inherent risks of guiding a large intercollegiate athletic program,” said Jim Hackett, interim athletic director. “This is an interesting time for college athletics and we are committed to providing an exemplary student experience. I wish to thank our alumni and fans who join in that commitment in order to ensure that the University of Michigan remains a special place.”
During the 2014-15 academic year, Michigan was the only school to achieve exemplary Academic Progress Rate marks in football (above 990), men’s basketball (995 and above) and women’s basketball (995 and above). Additionally, all 14 U-M men’s varsity athletic teams recorded perfect scores while 10 of the 15 women’s varsity teams also earned perfect scores.
Further, Michigan is the only Big Ten Conference institution to earn NCAA Public Recognition Awards in both football and men’s basketball, with men’s basketball now having earned the award in four straight years. U-M set an institutional record in 2014-15 with 10 Public Recognition Awards for ranking among the top 10 percent of their respective sports in the most recent multiyear APR report.