LINKEDINCOMMENTMORE

The operating deficit of Michigan’s athletic department is substantially less than interim athletic director Jim Hackett projected to Regents last June, according to an independent audit presented last week.

Hackett told the Regents the department had a projected deficit of $7.9 million, but six weeks later told The News that because of unforeseen positive outcomes, that deficit, the first the department has had in more than a decade, would be decreased.

The PricewaterhouseCoopers audit is part of a consolidated financial statement that was presented to the Regents. The audit revealed the operating deficit for the fiscal year is $342,000. The Regents will be asked to approve the statement at their November meeting.

Initially, the athletic department was nearly $8 million in debt, in part because of sagging ticket sales but mainly because of large buyouts to former athletic director Dave Brandon and former football coach Brady Hoke.

Each was to receive $3 million, Hoke’s payment over two years and Brandon’s in four installments.

Hackett, however, told The News in late July that because Brandon had become CEO of Toys R Us, a large portion of the deficit was alleviated. Per the settlement agreement with Brandon, Michigan no longer had to make payments after its first installment of $700,000.

That, along with robust ticket sales heading into the current football season, including money from seat licenses, all counted before the end of the fiscal year.

“There’s some relief because Dave got a new job,” Hackett said in July. “We weren’t counting on that; we got that. The operations are really humming and, of course, the prospective football revenues — we get some of that ahead of the fiscal year because of seat licenses. Things are selling, donors went up. I’m humbled by it.”

The total from preferred seat donations, as Hackett indicated, did get a boost in fiscal year 2015. The athletic department received $29.1 million in seat donations, an increase of $637,000 from 2014.

Perhaps most interesting from the audit is $8.3 million loss in spectator revenue in 2015 from the previous year. Michigan had $50.21 million in spectator admissions in fiscal year 2014 and $41.9 million in 2015. (In 2013, admissions generated $45.12 million).

“The decrease in spectator admissions resulted from a decrease in football, men’s basketball and hockey admissions,” according to the audit. “Football single game tickets were negatively impacted by a home game schedule that excluded two rivals.”

Last season, Michigan had a home schedule that featured games against Appalachian State, Miami (Ohio) and Maryland. Based on data obtained by The News through an Open Records request, football revenue was $39.69 million last season, with the night game against Penn State generating the most income at $6.79 million.

That was a decrease in revenue of $6.39 million from the previous season. In 2013, Michigan’s scheduled featured home games against Notre Dame and Ohio State and earned $46.09 million, an average of just more than $6.5 million a game versus $5.67 million a game in 2014.

Big Ten Conference distributions took a big leap from $27.45 million in 2014 to $32.42 million in 2015 “due to increases attributable to television rights contracts and postseason bowl distributions,” according to the audit.

The athletic department paid $7.8 million more in salaries, wages and benefits in 2015 than it did in 2014, in part because of “the investment in new football staff,” the audit states.

Jim Harbaugh and his staff were hired after Hoke and his staff were fired.

achengelis@detroitnews.com

twitter.com/chengelis

LINKEDINCOMMENTMORE