I think there is no chance that any major athletics contest happens with fans through at least summer 2021 (and that includes the Olympics).
As for how to handle it: the Power 5+ND have their own governance structure within the NCAA, so my guess is that they will settle it amongst themselves. It will be interesting to see how much TV money is guaranteed even if games are not played; more guaranteed money will make it easier to cancel the season. Almost all revenue for an entire athletic department comes from football, between TV rights and game day revenue, and the former is probably much more important than the latter, even for a team that sells out 100K seats each game. If U-M averaged $100/seat/game in revenue between mandatory donations and ticket sales (and that's probably way too high; the students have about 20% of the stadium, and pay less than half that) the total admissions take is about $70M, which is less than half of the total athletics department budget of ~$190M. U-M recorded expenses about $1M below revenues last year. I don't know how much more they can cut from expenses. Even if the attendance figure is high, and the excess revenue is low, it will take many years to make up for the losses. And U-M is lucky in that it's one of the dozen or so programs that isn't already subsidized by the other units of the University.
That said, I very much hope U-M does not play this year. The students are already taken advantage of in the current structure. Asking them to play under the circumstances that e.g. baseball is considering (complete isolation from family and friends during the season) is going WAY too far. A part of me hopes that this is the beginning of the end of big-money college athletics, but I recognize that's a pipe dream.
