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Regents give first OK to new media rights deal

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Lobo quarterback Coltin Gerhart,is flipped upside down by Wyoming’s Andrew Wingard,center left, and Logan Wilson,right, during a game in 2018. Roberto E. Rosales/Journal

ALBUQUERQUE, N.M. — Load up a trailer with Lobo radio personalities, food and drinks and have a local car dealership tow “Lobo One” to Las Vegas, Nevada, for some postseason hoops.

That’s just one idea University of New Mexico athletic officials mused during a public meeting that discussed the school’s new media rights contract.

And there’s more brainstorming sessions to be had. Because while it’s not entirely clear how much revenue the new contract will bring in this year, UNM athletic department officials acknowledged it will be far less than the $5 million in guaranteed money that the former media rights holder was at one point under contract to pay UNM.

A UNM Board of Regents committee on Tuesday gave a preliminary green light to a draft contract between the university and Outfront Media Sports, which will hold the UNM Lobo multi-media rights for the next decade or longer if the deal gets final regent approval. The deal calls for the university to keep 85% of whatever profits Outfront can make by selling the Lobo brand.

Deputy athletic director Dave Williams said that midway through the fiscal year, it looks like UNM’s share will be about $2.75 million. And Outfront has agreed to pay the athletic department an additional $750,000 this year, which department officials said is needed to stay within its roughly $32 million budget this year, which relies on $3.5 million in multimedia rights. The athletic department will then essentially pay back Outfront $75,000 annually for the next 10 years.

Athletic department officials are hopeful that the annual revenue will grow significantly in future years. It’s been a bit of a scramble for Outfront to land the sponsorships this school year. It was early August, weeks before the start of the football season, before regents approved a bridge contract that Outfront has since been operating under.

“They’ve been in a total scramble (to make money) and we anticipate being a little short of $3.5 million for the first year,” Williams said. “We don’t know what that number is going to be, but we do expect to be a little short.”

He added: “We feel very confident in where this is going and we feel very confident that this structure is the best for Lobo athletics and UNM at this moment.”

The multimedia rights contract is one of the biggest money makers for the UNM athletic department, which — despite striving to be a leader among the Group of Five schools — has struggled to stay within budget in recent years and is facing a nearly $5 million, 10-year deficit-reduction plan to pay back the rest of the university for years of overspending.

At one point, UNM’s multimedia rights for this school year belonged to Learfield Communications Inc., which was to pay UNM more than $5 million in the 2020 fiscal year for the rights as part of a contract that was signed in 2013. UNM and Learfield agreed in 2018 to part ways a year early.

The sharp decline in how much UNM was guaranteed under Learfield to how much it will make at least in the first year under Outfront doesn’t speak poorly of the Lobo brand, Williams said. Rather, he said it’s just a sign of the times in college athletics.

Schools from the major conferences, the so-called Power Five, are becoming more profitable and teams from the conferences like the Mountain West and the America Athletic Conference — the Group of Five — are struggling to keep up, he said.

“The national market has changed. Those multimedia rights companies aren’t offering the kind of numbers that they were seven to 10 years ago,” Williams said. “The large companies … made more of a focus on the Power Five schools. When the Power Five schools have all the TV money, all the exposure that they get and all the fan basis, those companies figure they could make a larger amount of the pie from those schools rather than dealing with a medium level property like ourselves.”

Athletic director Eddie Nuñez told regents on Tuesday that the new contract is the right one for UNM. He said it incentivizes both the school and Outfront to work together to find sponsors and create connections between Lobo sports teams and the community.

“They’ve got skin in the game. This isn’t them cutting a check and going about their business,” Nuñez said.

And it appears the two sides have already come up with some ideas that fans might notice in the near future. Nuñez and Williams told regents about “Lobo One,” a traveling trailer from which a radio team could broadcast that could be on-site at home and away games and other sporting events. It could also double as a way to sell food and beverages. Lobo and sponsors’ symbols could mark the outside and towing the trailer is another sponsorship opportunity.

There was also talk Tuesday of developing a new mobile app and a new marquee outside of athletic venues.

As the holder of UNM’s media rights, Outfront can sell signage at all UNM fields; sponsorships for radio shows, television broadcasts, coaches shows; corporate sponsorships of athletic and entertainment events, game programs, scoreboards and many other sources, according to the draft agreement. To help those broadcasts and shows offer fans insight into the teams, UNM will make coaches available for interviews before, after and during games, according to the documents.

Outfront is also getting some “premium and unique access rights,” according to a draft of the agreement. Those rights include seats on team charter flights, access to team hotel and other road game amenities and the ability to host dinners and special events at coaches’ homes. The company also gets luxury suites at football and basketball games.

The contract calls for Outfront in the future to give the university quarterly projections on how much money they are making.

It’s a much different agreement than UNM’s prior multi-media rights deal, which was for guaranteed payments.

Under the prior contract, Learfield Communications had to make guaranteed payments to UNM between $4.6 million to just over $5.1 million. Learfield’s most recent contract with UNM had been from the 2013 through 2020 fiscal years.

UNM in May 2018 agreed to break ties with Learfield at the end of June 2019. The agreement reduced how much money Learfield had to pay and also ended the contract one year earlier than the original June 2020 end date, according to the amended contract.

Prior to that amended contract, Learfield for years was paying UNM less than what was stated in its original contract with the university.

In 2017, state auditors found that Learfield was hundreds of thousands of dollars of its annual payments to UNM, according to an audit report. UNM auditors later reached similar findings.

Nuñez said that Learfield had worked out an agreement with former athletic director Paul Krebs where the company returned assets to the athletic department, such as suites at sporting events, and in turn got to reduce its annual payments to the university.

“Learfield thought they were paying us the amount they owed us and UNM thought they were collecting the amount they were supposed to be collecting. There was a miscommunication on the contract,” Williams said. “It wasn’t like there was anything devious going on.”

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