Despite the University of New Mexico’s athletics budget spiraling toward a record shortfall, a proposal will be made Thursday to the Board of Regents to forgive in one fashion or another all but $1.1 million of the department’s deficit.
That would be cut from what now appears to be a total accumulated deficit owed to main campus reserves of more than $7.5 million, a figure that ballooned by about $3 million this fiscal year.
The remaining deficit for Lobo athletics, according to a memo written Tuesday to the Regents by first-year athletics director Eddie Nuñez in advance of Thursday’s campus-wide Budget Summit with the Regents, would be placed in a 10-year plan of $110,000 repayments for nine years and the remaining $140,824 paid in the final year.
“With direction from the University Administration,” Nuñez wrote in the memo, “the proposal is to have the Board of Regents buy out a substantial portion of the athletics department deficit using specific funds available to them which to date have not been designated for other purposes.”
Athletics has already received this year from main campus a $1.3 million transfer to help cover some of its shortfall this fiscal year, but is still projecting coming up an additional $2 million short.
Thursday, athletics is expected to propose “use of regent funding” of $5.6 million, according to the memo. Where exactly that “regent funding” is expected to come from, or who in the UNM administration exactly gave Nuñez the direction to even make such a unique proposal, is unclear for now.
Nuñez said Tuesday night he would wait until Thursday’s presentation to comment. UNM Regent President Rob Doughty, who last month acknowledged he was exploring options to forgive what then was thought to be a $4.7 million accumulated deficit, told the Journal on Tuesday night he had just received the memo and would reserve comment until Thursday’s presentation.
Thursday’s Budget Summit is geared at the Regents being presented with and possibly approving major 2019 fiscal year budget proposals from departments all over campus. In athletics, however, where there hasn’t been a balanced budget in eight of the previous 10 fiscal years and where the past 11 months have seen the retirement of former athletic director Paul Krebs after numerous questionable financial matters surfaced through intense media scrutiny and multiple state agency investigations into the department, there will be no new budget proposal.
Instead the entire portion of Thursday’s meeting devoted to athletics will focus on what is now projected to be a $3.3 million deficit this fiscal year.
That would be more than double any deficit in the past decade (the previous high was a $1.54 million in 2016).
In a portion of Nuñez’s memo with the heading of “Rationale for Reducing Cumulative Deficit,” he states: “The deficit has been accumulating since 2006 with numerous factors contributing to it. This includes expenses outpacing revenues, expenses being understated, revenues being overstated, a lack of consistent fiscal oversight within the department and university, and a lower level of institutional support compared to our peer institutions.”
The Journal has reported in each of the past several years that the athletics department made a habit of projecting ticket revenues for football, men’s basketball and women’s basketball that either had never been met before or only met in record-setting seasons. They were not based on historical data.
Last May athletics proposed football ticket revenue of $1.9 million (it missed this past fall by nearly $400,000), men’s basketball ticket revenue of $4.2 million (it missed by nearly $550,000) and women’s basketball ticket revenue of $330,000 (it cleared that by nearly $70,000).
The Journal asked athletics and the Regents then if that was appropriate to be projecting such optimistic numbers. Deputy Athletic Director Brad Hutchins said football was coming off another bowl game (in the 2016 season) and the hiring of new basketball coach Paul Weir were factored into their optimistic projections.
Doughty, who also questioned the ticket revenue projections at that May meeting, told the Journal afterward, “I’m very optimistic that athletics can hit the 2018 projection and have a balanced budget next year.”
UNM football won three games this past season and had an average home attendance of 21,194. Men’s basketball attendance was 10,833 per home, the lowest since the Pit opened.
In August 2016, when the Journal asked the regents the same question about building future budgets on optimistic projections shortly after what then was a $1.54 million deficit, Regent Maron Lee said “I’d say it’s optimism with accountability. Obviously we have concerns. We have the fiduciary responsibility of the entire university.”
Since Nuñez has been hired, he has maintained he has been continuing to evaluate all financial aspects of the embattled department and promises to be transparent moving forward with such things as realistic revenue projections.
In November, he told the Journal, “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.”
It is anticipated that David Harris, UNM’s Executive Vice President for Administration, CFO and COO, will be a part of Thursday’s presentation.
Other than ticket shortfalls, other major misses by UNM athletics in the current fiscal year appear to be coming up $600,000 short on fundraising, overspending a line called “supplies” by $480,000 and overspending on grant-in-aid (including scholarships and aid to student athletes) by almost $800,000.
Nuñez wrote he hopes to have the athletics budget for the 2019 fiscal year completed by the regents’ next Finance and Facilities committee meeting, which is scheduled for April 10.