Michigan athletic director Warde Manuel has eliminated 21 department positions to slow the bleeding from what he projects will be a financial gut punch of $100 million, roughly half of the athletic department’s normal budget, because of the effects of the COVID-19 pandemic.
With the Big Ten’s suspension of fall sports, including football, the cash cow of the athletic department, Manuel was forced to make the job cuts, and that’s on top of a hiring freeze earlier this summer that has resulted in 15 unfilled positions. Manuel, football coach Jim Harbaugh and basketball coach Juwan Howard already have taken 10% cuts and there have been salary reductions ranging between 5 and 10% in the athletic department.
Michigan announced the cuts Tuesday afternoon.
“The decision to implement staffing reductions was not made lightly and is difficult because of the deep impact on all aspects of our department and especially those who are directly affected,” Manuel said in the release. “We will continue to identify all necessary strategies to mitigate our circumstances, and we will continue to support our dedicated colleagues who have been so greatly affected.”
Manuel, appearing Tuesday on the “Conqu’ring Heroes” podcast with host Jon Jansen, said expenses have been cut and difficult choices have been made for what he called the “long-term health of the department.”
Big Ten commissioner Kevin Warren announced Aug. 11 the postponement of fall sports because of lingering COVID-19-related health and safety issues. The decision was made less than a week after the conference released a 10-game Big Ten-only composite football schedule.
“The impact is upwards of almost half our budget, about $100 million,” Manuel said on the podcast. “We’re still working through some models that hopefully we’ll have at some point in September, finalized and sort of nailed down exactly what everything will be.
“It is a significant loss, so we have to take as many significant reductions as we can and cutbacks as we have already as we continue to do a budget, salary reductions and those kinds of things. We just keep moving through and trying to figure it out.”
How important is football to the athletic department annual budget? Michigan football generated $122,270,243 of the department’s $148,637,051 total revenue last year according to data from the U.S. Department of Education’s Equity in Athletics Data Analysis.
Iowa last week announced the elimination of four sports, while Nebraska is reducing its budget 10% and will make job cuts across the athletic department. At Purdue, football coach Jeff Brohm, and basketball coaches Matt Painter and Sharon Versyp and athletic director Mike Bobinski have all taken voluntary 20% pay cuts.
In a letter to his athletic department staff, which was released as part of the statement, Manuel explained why the cuts were made.
“Staff reductions are always painful, particularly when those affected are our close colleagues and friends you may have worked alongside for many years,” Manuel said in the letter. “These decisions were not made lightly, and I and the Leadership TEAM are aware of the stress and anxiety this process has created over the last few months.
“The evaluation and decision-making process for evaluating these positions was deliberate and thorough. It included looking at current and projected workloads, staff’s ability to assume additional responsibilities, and a deep look at what initiatives we can continue to support and afford as an athletic department. I want you to know that we intend to give all of those employees who are impacted our full support to transition to other roles here at the University or elsewhere.”