| I want to update all University of Michigan stakeholders regarding developments in the class action lawsuits collectively referred to as House vs. NCAA and how this will impact our athletic programs. On Monday, the US District Court issued a preliminary approval of the settlement agreement between the parties, with final approval scheduled for April 7, 2025.
Once finally approved, this landmark settlement will have a significant impact on Michigan Athletics, our peer Big Ten institutions, and all of collegiate athletics. We plan to continue an approach that was established when Michigan started competing in intercollegiate athletics in 1865: providing championship-level support to each of our NCAA varsity sports. This approach best positions our teams to compete for conference and national championships.
Assuming final approval of the settlement occurs in Spring 2025, the following changes will be implemented starting with the 2025-26 academic year based on the negotiations with the plaintiffs:
- Institutions will be permitted to compensate student-athletes through revenue sharing, anticipated to be between $22-23 million annually; previously, student-athletes could only earn money through athletic scholarships and NIL funded by entities outside of the University.
- Additionally, all Division I college athletes who participated on teams in 2016-2021 are eligible for name, image and likeness (NIL) backpay; the court found that these student-athletes were prevented from earning NIL dollars. The parties to the suit have negotiated a settlement that the NCAA will pay nearly $3 billion in damages to those class members.
- The judge will decide how those back damages will be distributed, and the University of Michigan will have no say in that.
- The plan to cover the cost calls for the University of Michigan to receive $1.5 million less per year from the NCAA revenue distribution for the next 10 years to cover its portion of those back damages.
- All NCAA sports now have roster limits, meaning there is a maximum number of individuals who can be on a team’s roster and compete with that team in a given year; previously, this was not the case.
- Upon final approval Universities can provide as many scholarships as there are roster spots; previously scholarship limits were based on NCAA rules per sport.
| 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. 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.
Michigan Athletics has always been a self-sustaining unit of the university. Unlike many athletic departments across the country, we do not receive funds from the state, the university or any student fees. All revenue that the department receives through conference media rights, licensing, ticketing, sponsorships, donations and other sources is used to fund our annual operating budget in order to support our teams throughout the year.
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. 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.
Accomplishing these goals in today’s college athletics landscape takes all of us. Together, our commitment to embracing these changes, our openness to developing new revenue streams, and our continued responsible stewardship of Michigan Athletics’ assets and finances will ensure our continued success.
There is still a significant need to support the NIL initiatives of our student-athletes. For the foreseeable future, collectives such as Champions Circle will continue to be an important source for our student-athletes’ NIL opportunities. NIL support will continue to play a role in our success, especially through recruitment and retention of student-athletes.
This is a challenging time in higher education and college athletics, but it is also an opportunity to show the world who we are at Michigan. To help secure the long-term success of our athletics programs, we need the support of everyone associated with Michigan Athletics.
I hope that you will continue to make the choice to help us remain the Leaders and Best.
Thank you for your continued support and Go Blue! | |
| Warde Manuel
Donald R. Shepherd Director of Athletics |
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