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UNM athletics predicts a shortfall of up to $13.8 million

UNM men’s basketball coach Paul Weir is now being forced to give potential recruits virtual tours of the facilities due to the pandemic. (Roberto E. Rosales/Albuquerque Journal)

Copyright © 2021 Albuquerque Journal

Practices have returned.

And there is the occasional bustle of a mass vaccination effort in recent weeks on the concourse level of the Pit.

But, as the end of the 2020-21 college basketball season approaches – mercifully, some might say – the University of New Mexico’s iconic sports venue is on the verge of not hosting a single game in a season for the first time since the beloved home of Lobo basketball opened more than half a century ago.

It appears the toll that inactivity will take on the finances of the University of New Mexico Athletic Department – not unlike harsh COVID-19 realities that so many in the state and country have had to deal with – will be dramatic.

And the university missing out on the cash cow of Pit ticket sales is only part of the problem.

UNM Athletics this past week cautioned members of its Board of Regents that it is projecting a budget shortfall of between $12.4 million and $13.8 million for fiscal year 2021, which ends June 30.

That would be on top of an existing $1.6 million deficit the department started the fiscal year with, which could have been worse had it not been for nearly $2 million in CARES Act money that helped offset losses from last spring that were directly related to events cancelled due to COVID-19.

“We’re estimating at this time, by the end of the year … anywhere between the $10 (million) and $14 million range, as far as a deficit,” UNM Athletic Director Eddie Nuñez said Tuesday in a UNM Board of Regents Facilities and Finance Committee meeting. “We’re continuing to do everything we can and trying to figure out where we can save (on expenses).”

UNM Controller Liz Metzger reported to regents in a presentation: “Athletics could see a current year deficit from $12.4M to $13.8M.”

Nuñez said how the university will cover projected losses has not been determined, but he noted that his department has been in constant communication with UNM President Garnett Stokes and the regents on the matter.

Nuñez noted that about $400,000 in personnel costs have already been saved this fiscal year by holding vacant jobs open.

Unique challenges

UNM is not alone in projecting large-scale shortfalls this fiscal year due to COVID-19 restrictions. It has been a season where fans largely have not been allowed in arenas or stadiums.

In the fall, Colorado State was projecting an $18 million loss in sports revenue. San Diego State reported last summer that it could face a $12 million shortfall.

Regent Robert Schwartz asked Nuñez how UNM compares to peer universities. He added that college athletics nationwide have faced “catastrophic” circumstances that could not have been controlled for during budgeting.

Nuñez said, “COVID has shown us some areas that we’re all vulnerable in. It exposes areas that, honestly, in situations like ours, we’re 75% dependent on self-generated (funds) when many of our peers are in the 40% or 50% range.

“We, as an institution here, have our own challenges that are different than others.”

UNM has an annual athletics budget of roughly $31 million to $32 million, of which 25%-30% a year comes via institutional support from such sources as university subsidies, student fees and state appropriations.

Among Mountain West Conference peers, only Nevada and Boise State are in a similar 30% bracket for institutional support. The rest receive significantly more.

New Mexico State University, which operates with an athletics budget of about $18 million to $20 million, receives a significantly higher percentage of its overall budget from institutional sources.

The Aggies, which pushed its football season back to spring and is just starting that sport, is projecting a deficit of about $3.7 million.

The numbers

Athletic department personnel from UNM and NMSU will participate Saturday morning in a virtual hearing with the N.M. House Appropriations and Finance Committee concerning their financial situations.

They are expected to be asked to explain their decisions to relocate teams out of state. New Mexico was the only state in the country with a prohibition on college teams practicing and playing at home this academic year.

On Saturday, UNM is prepared to tell lawmakers its relocation of the Lobo football team to Las Vegas, Nevada, for the season cost about $600,000.

That, combined with estimated relocation costs for basketball – minus the money UNM will bring in for its Mountain West television contract – should result in a $2 million net gain for UNM, the department states in financial documents reviewed by the Journal.

But those numbers don’t take into consideration losses in other revenue sources.

Significant reductions include:

• Student fees: Down 18% from $3.3 million to $2.7 million.

• State appropriation: Down 7% from $4.1 million to $3.8 million.

• Naming rights: Down 100% (UNM budgeted for $800,000, but remains in a dispute with DreamStyle Remodeling).

• Special events: Potential 100% loss of $3.2 million budgeted. The total loss has not yet been determined as spring sports in the state may still be allowed, with high school sports using UNM facilities, as well as potential parking revenue if fans are allowed for Albuquerque Isotopes and New Mexico United home games.

• Men’s basketball tickets: Potential 100% loss of $3.3 million budgeted. As it did with football, UNM has recently asked basketball season ticket holders if they would consider donating season ticket money, despite there not being a season.

• Football tickets: Budgeted $800,000, collected $157,292 from season ticket holders willing to donate their ticket costs.

• Women’s basketball: $350,000 budgeted. As with men’s basketball, a loss TBD.

• Football guarantee games: Budgeted $2.2 million, expected to be $425,000. UNM lost paydays from canceled games at USC and Mississippi State, but added a $175,000 travel subsidy from the Mountain West for playing at Hawaii on Nov. 7, and $250,000 of the guaranteed $1.6 million payment for a 2026 game scheduled to be played at Oklahoma, which is due April 1.

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