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UNM looks to rein in its budget optimism

Copyright © 2017 Albuquerque Journal

The season wasn’t what UNM wanted: on the field or at the gate.

The University of New Mexico collected $1,539,833 in ticket revenue for football this season – $320,000 more than last year, but more than $360,000 below the optimistic projections budgeted for this fiscal year.

The athletics department wrote into its budget this fiscal year a $1.9 million ticket revenue projection despite having not hit that number since the 2008 season, Rocky Long’s last as head coach and after having brought in just $1.2 million in revenue last season.

Adding to fiscal concerns for this year, the men’s basketball team closed season ticket sales earlier this week at 8,057. That’s a low point in at least 12 years and well below the 8,805 sold a year ago.

In May, when presenting the budget projections to the Board or Regents, deputy athletic director Brad Hutchins noted that the football team was coming off a nine-win season and had the benefit this fall of having a home game against New Mexico State University, which for years has been the top revenue draw for the Lobos in odd-numbered years when the annual in-state rivalry is played in Albuquerque.

The Lobos lost that game to NMSU 30-28 before the season’s largest announced attendance, 32,427. And Friday, the Lobo football team finished the season 3-9 and on a seven-game losing streak with a 35-10 loss at San Diego State. The announced turnout for UNM’s final home game, a 38-35 loss to UNLV on Nov. 17, was 14,744.

New UNM athletics director Eddie Nunez said the overprojections are a concern that need to be addressed.

“First of all, we’re going to look a lot more into history – the historical data – and we’re going to gauge fan interest and everything else when we make our projections,” he said.

He noted that declining attendance isn’t just a UNM issue, but a national trend. But he acknowledged that doesn’t excuse projecting trends into revenue projections inaccurately.

In August, UNM’s Interim President Chaouki Abdallah noted the trend of poor projections was likely a part of the consistent financial problems for Lobos athletics.

“Potential contributing factors,” Abdallah said on Aug. 8, “may include optimistic estimates of attendance and revenues.”

UNM projected $2 million in football ticket sales for 2016 and missed by $800,000. This year, it dropped projections by only $100,000.

Men’s basketball missed projections last season by $800,000 and dropped this fiscal year’s projections by $600,000.

Nunez did not have a hand in creating this year’s athletics budget and has said since he was hired that the revenue projections practices in the department is one area he hopes to shore up.

“We can’t project it perfectly,” Nunez said. He noted contributing factors that can change attendance at a sporting event include weather, how well the team is performing and start times changed by television contracts.

“But we’re going to do the best that we can to get this right with the data we all have available to us. That is our job.”

In recent years, the university has consistently overestimated projected ticket revenue in its athletics budgets, which have contributed to deficits eight of the past 10 fiscal years. And last month the Board of Regents was warned this current fiscal year, which ends June 30, is on pace to post a $1.3 million deficit. UNM officials – in athletics and from the main campus – have said they will be meeting in the coming weeks to adjust current budget projections to reduce that projected deficit.

In August 2016, when the department had just posted a $1.54 million deficit for fiscal year 2015-16, the Journal asked former athletic director Paul Krebs, former President Robert Frank and Regent Marron Lee about the trend of over-projecting ticket sales.

At the time, all three said they expected good sales for the 2016 football season because the football team was coming off a bowl appearance in 2015.

Added Lee when the Journal asked if it was wise for the department to continue budgeting with optimism and not on history, “I’d say it’s optimism with accountability.”

Last fiscal year, coinciding with the 2016-17 and sports seasons, the three primary revenue generating sports of men’s basketball, women’s basketball and football missed budgeted revenue projections by $1.7 million. Still, in May the department presented to the Board or Regents a budget, which was approved by the Regents, that projected revenue numbers in all three sports that were above the amount reached last year.

The projected deficit figure would mark a ninth shortfall for athletics in 11 years and grow its current accumulated debt that has been covered by the university’s central reserves to $6 million. New Mexico Higher Education Secretary Barbara Damron asked for updates on UNM’s deficit reimbursement plan for athletics in October when placing the university on an “enhanced fiscal oversight program” due to the growing, and seemingly unaddressed, debt.