College Football’s Top Teams Are Built on Crippling Debt

From Bloomberg:

It is one of a series of articles Bloomberg ran on College Football’s Financial Woes

And some schools are using the sports revenues to help balance the overall budget.

Next year’s budget includes $10.9 million in cash revenue that will be transferred to campus.

And some some schools in the same conference are drowning in debt.

Michigan Athletic Department Is $240 Million In 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.

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.


I’m not worried about any of these schools ending their sports programs.

If you can’t run Michigan’s athletic department at a profit, you’re doing it WRONG.

Also, how can television revenue be “dwindling”? The Big10 network has proven to be hugely successful. Perhaps that article is overplaying the issue? They have the revenue to support that debt.


I think we need to consider how debt does not tell the whole story - or if it is even a fair indicator of financial wellbeing for athletics programs. Michigan Athletics is able to cover all its operating expenses, and usually then some. Debt is unavoidable when it comes to building new facilities. Anyone involved in college development will tell you that large colleges rarely pay for major renovations or new facilities/buildings with all cash (unless a donation is involved) - there is almost always some sort of debt taken out. Michigan has done a good job on repaying its debts.

When you can borrow at the rates UM can (4% or so) spending cash for buildings is not smart.–PR_339695

I’d love my income to “dwindle” like this