You don't see the logic, because you don't understand what he is saying.
People continue to think he is threatening to take it away. He is not saying that in any way. All this discussion about how taking football away would be dumb is not understanding how this works. He is saying in the event that they do not fix the budget, the school will run out of money in April. There would not be any money to pay the staff, and they would have to declare bankruptcy. This would force all students to receive "incompletes" on their transcripts, thus making student-athletes ineligible for the fall. It would also allow those players to transfer to any university without sitting out a year, more than likely.