Michigan held its first training camp at City Island Stadium in Daytona Beach, Florida, sifting through over 75 players. On Monday, March 7, 1983; the Panthers opened the season with a 9–7 win over the Birmingham Stallions at Legion Field in Birmingham, Alabama. This was the first professional football game ever broadcast on ESPN. Serbian kicker (via Central Michigan) Novo Bojovic kicked the winning field goal from 48 yards out in the waning moments.

The Panthers then dropped their next four contests, losing on March 12 to the Tampa Bay Bandits (19–7); Mar. 19 at home to the Oakland Invaders (33–27); Mar. 27 at the Washington Federals (22–16 in OT) and April 4 at home to the Denver Gold (29–21). Their slow start was attributed mostly due to a very porous offensive line that struggled to create holes or time for their offensive stars. Management addressed the issue by signing a bevy of experienced offensive linemen in OT Ray Pinney (Pittsburgh Steelers), OG Tyrone McGriff (Pittsburgh Steelers) and OG Thom Dornbrook (NY Giants). Dornbrook and McGriff would both make USFL all-league teams in 1983.

The Panthers had a six-game winning streak. Then, on May 23, they and the Birmingham Stallions were tied 20–20 in the fourth quarter. Michigan would have had the lead, but the extra point attempt was blocked. The game went into overtime and was won by Birmingham thanks to a 46-yard field goal by Stallions placekicker Scott Norwood.

The Panthers would bounce back with a 42–7 thrashing of the stellar Tampa Bay Bandits, coached by future Florida Gators head coach Steve Spurrier. The additions on the offensive line, combined with installing rookie Bobby Hebert as quarterback, helped the Panthers win 11 of their next 13 contests to finish with a 12–6 record. They actually tied the Chicago Blitz for the best record in the Central Division, but were awarded the division title after sweeping the Blitz in the regular season.

In the playoffs, the Panthers hosted the Western Division champion Oakland Invaders before a USFL-record crowd of 60,237. The Panthers' decisive 37–21 victory vaulted them to the inaugural USFL Championship Game in Denver, Colorado.

On July 17, 1983, the Panthers captured the USFL's first championship with a 24–22 win over the Atlantic Division champion Philadelphia Stars. QB Bobby Hebert hit WR Anthony Carter on a 48-yard touchdown strike with 3:11 left in the fourth quarter for what proved to be the deciding score. Hebert was named MVP of the game, throwing for 319 yards and three touchdowns.

The Panthers' late season surge (counting the playoffs, they went 13–2 to finish the season) was fueled by the addition of NFL-comparable talent at several positions. Indeed, they were one of three USFL teams, along with the Stars and Blitz, that observers believed could have made a good account of themselves in the NFL. It came at a high price, however; they spent $6 million during the season—three times what USFL founder David Dixon recommended that a team spend in a single season.

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