The University of Michigan athletic department seems to be headed in the right direction. The football team, under the guidance of Jim Harbaugh, is as successful as it has been in a number of years and appears as if it will be competitive for years to come.
Yes, things are certainly trending in the right direction for the Wolverines athletic program.
Unless, of course, you look at the bottom line.
The Michigan athletic department is reportedly in $240 million worth of debt.
Hard to believe, isn’t it? With an arsenal of deep pocketed donors and a butt in every seat on Saturdays, Michigan’s debt problem is complex and without a definite solution. The root of the problem are the multi-million dollar construction projects and renovations to existing facilities that the school has undertaken.
The Wolverines also hold the distinction of being the only program with three assistants making over $1 million in salary and one of the highest paid head coaches in the FBS.
With dwindling television revenue, the Wolverines find themselves in a bind. Consumers now have an array of options in which they can consume game day action, and without a number creative solutions to turn profit off of things like Twitter updates and Snapchat, they might need to look elsewhere for funding. Michigan’s debt is expected to grow substantially, estimates put it around $371 million by 2046.
The Wolverines plan to begin repaying the debt at $20 million per year in 2019. That number will decrease to $15.7 million by 2022.
Michigan CFO Kevin Hegarty has stated that ticket increases could be put into effect if they find that their conservative debt estimates prove inaccurate.