UNM sports cuts based on seriously flawed analysis

One would hope that before UNM decided to reduce and eliminate sports programs – a decision that has angered the community, left over 65 student-athletes without a team and cost coaches their jobs – the university would at least have made sure its financial analysis was correct. In fact, the analysis that UNM has used is fundamentally flawed.

The UNM regents concluded that eliminating various teams, including the highly popular and successful men’s soccer program, and reducing the rosters of others, was necessary in order to deal with Athletic Department financial issues and Title IX concerns. This decision was based on recommendations and reports provided by the UNM administration, including a financial analysis prepared internally by the Athletic Department.

The regents’ decision was met with public uproar, as well as criticism of UNM’s financial analysis. Among those who found fault with UNM’s analysis was Andy Schwarz, a nationally known economist who specializes in collegiate athletic financial issues.

Schwarz and his firm, OSKR Consulting, have worked on many cases involving college sports accounting issues and are considered leading experts in assessing potential savings and costs that accrue to a university when adding, eliminating or roster-managing sports programs.

The overall conclusion by Schwarz was that UNM’s internally prepared financial analysis was seriously flawed. Schwarz focused primarily on UNM’s assertion that it would save $467,485 annually by no longer having to provide grants-in-aid – athletic scholarships – to students on the eliminated or reduced teams. Schwarz determined UNM had seriously erred in assessing how much money each eliminated scholarship would actually save and had failed entirely to take into account the lost revenues from the tuition and fees paid by non-scholarship athletes on these teams. His conclusion: Not only would the grants-in-aid portion of the cuts not save UNM $467,485 annually, it would actually cost the university $328,830 annually due to lost revenues.

Therefore, this independent analysis demonstrated the financial information provided by the Athletic Department was materially flawed by an annual amount totaling approximately $796,000. Considering that the UNM administration asserted that the cuts as a whole would save UNM about $1.15 million per year, that meant UNM’s figures were overstated by at least half.

UNM and the regents have had this information since August. Community members provided it to them for their further consideration with an offer to respond to questions on Schwarz’s conclusions. At no time have UNM representatives or regents expressed any interest in meeting and discussing the results of this OSKR analysis, and when community members have raised these issues at regents’ meetings, the regents have showed no interest in further addressing them.

Surprisingly, a document recently released by UNM regarding the athletic cuts concedes the financial issues related to cuts were “minimal to the overall scope of the university,” an unbelievable admission by UNM at this late date…

Given the significance of the regents’ decision to cut and reduce sports and the apparent legitimacy of the independent third-party analysis, it seems unreasonable and illogical that the regents and UNM administration would not now take the necessary steps to sit down and discuss these financial inconsistencies.

While significant new state monies and bipartisan support for changing this decision exist and will manifest themselves at the upcoming legislative session, we encourage reasoned and financially qualified individuals – both from within and from outside UNM – to arrange collaborative communication in order to resolve these financial inconsistencies.

Only if this happens can the regents truly know they have made appropriate and responsible decisions that will impact the university for many future years.

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