RandBall: Where’s the money? Gophers budget shortfall raises questions

It would be nice if the Gophers athletics budget were as simple as 1-2-3, but nothing related to money and college sports is easy these days.

Instead, recent developments have shown us the financial math at the University of Minnesota broadly and the athletic department specifically is as complicated as 6-7-8.

As in: Tuition for in-state undergrads at the Twin Cities campus is going up 6.5% next season, academic programs are getting cut by 7% and the athletic department projects an $8.75 million deficit between revenues and expenses in 2025-26.

The math, as they say, is not math-ing.

The only easy part is understanding why the athletic department has such a gap. At this time last year, the Gophers’ budget presented by AD Mark Coyle was projected at around $150 million.

This year, Coyle is projecting revenues at $165.47 million and expenses at $174.22 million.

The additional revenue largely seems to come from TV and media money paid out by the Big Ten. That was pegged at about $63 million in the 2024 fiscal year, while estimates have put it around $75 million for the 2025 fiscal year, a bump of $12 million.

The additional expenses are almost all from settled lawsuits that allow schools to pay their athletes. The Gophers are paying the full allowable amount, about $20.5 million, a huge new expense that accounts for about 12% of their budget.

The difference between the new expense of paying players and the increased TV revenue is almost the exact amount of the projected budget deficit.

The complicated question, which Chip Scoggins and I tried to get at on Friday’s Daily Delivery podcast, is how to close that gap this year and beyond.

The Gophers have taken some steps already to cut costs or raise money, like restructuring debt, trying to cut down on travel expenses for non-revenue programs, eliminating positions in the athletic department, adding a $100-per-semester athletic fee for students and hosting large non-sports events on campus.

There is also a hopes and dreams bucket: Betting on increased ticket revenue from major sports, particularly men’s basketball after the hiring of new coach Niko Medved, to boost the bottom line.

That puts a lot of pressure on Medved and football coach P.J. Fleck (who also just got a new contract, by the way), but that’s what they signed up for (and are being paid to do).

Closing the $8.75 million gap this season is a steep challenge. Coyle closed a $3.5 million projected shortfall last year by the end, but this year’s deficit is more than twice as large.

While there is certainly room for growth in ticket revenue, particularly with men’s basketball, my sense is that a continued increase in media revenue is Minnesota’s best shot at balancing future budgets.

When the Big Ten’s most recent media deal was announced in 2022, estimates suggested that payouts to teams could eventually reach between $80 million and $100 million a year, which would be considerably more than the estimated $75 million schools received most recently. An expected expansion to a 16-team College Football Playoff could bring in even more money as the Big Ten’s share increases.

In that sense, the Gophers are extremely fortunate to be in the Big Ten with its massive media rights contracts. As long as they can fight against runaway expenses, future Gophers budgets could look better — even if nothing feels easy in the increasingly professionalized world of college sports.

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