Copyright © 2020 Albuquerque Journal
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 Athletics officials pondered during a public meeting that discussed the school’s new media rights contract.
And there are 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 Athletics 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 multimedia 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 Athletics 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 Athletics Department an additional $750,000 this year, which department officials said is needed to stay within its roughly $32 million budget for the year, which relies on $3.5 million in multimedia rights. The Athletics Department will then essentially pay back Outfront $75,000 annually for the next 10 years.
Athletics 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 moneymakers for the UNM Athletics 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 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 in at least 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 American 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 bases, 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.”
Athletics Director Eddie Nuñez told regents on Tuesday that the new contract is the right one for UNM. He said it provides incentives for 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 and 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 it is making.
It’s a much different agreement from UNM’s prior multimedia rights deal, which was for guaranteed payments.
Under the previous contract, Learfield Communications had to make guaranteed payments to UNM of between $4.6 million and just over $5.1 million. Learfield’s most recent contract with UNM had been from the 2013 through 2020 fiscal years.
In May 2018, UNM agreed to break ties with Learfield at the end of June 2019. The agreement reduced how much money Learfield had to pay and ended the contract a year earlier than the original June 2020 end date, according to the amended contract.
Before the contract was amended, Learfield was for years 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 short in 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 Athletics Director Paul Krebs in which the company returned assets to the Athletics 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.”