The new era of paying college athletes is taking a big toll on the University of Minnesota’s athletic budget. Citing “dramatic change in college athletics,” Gophers athletic director Mark Coyle presented a budget to the university’s Board of Regents on Wednesday that projects a $8.75 million deficit.
The reason for that shortfall is being felt by athletic departments nationwide. The recently approved House v. NCAA settlement allows schools to distribute $20.5 million annually to athletes in direct compensation. That landmark decision cleared the way for schools to start paying athletes on July 1.
“There’s no doubt it’s going to be a stretch to get there as we start this new fiscal year,” Coyle said in a recent interview.
With the exception of the COVID-19 pandemic years, Coyle has operated with a balanced budget. He has his work cut out for him to close that gap between revenue and expenses over the coming year.
Coyle noted to regents that his department projected a $3.5 million deficit last year but managed to come in right at budget by the end of the fiscal year.
The new shortfall didn’t appear to cause sticker shock with regents. Coyle received only one question about it, with co-vice chair Penny Wheeler inquiring about future issues in this new era of college sports.
Coyle committed to pay the full amount of that $20.5 million cap, meaning revenue sharing will account for 12% of expenses this year. He said his department will work with the university to manage the deficit.
“We feel comfortable that we will be able to navigate [it],” he said.