Copyright © 2016 Albuquerque Journal
The University of New Mexico athletics department recorded a deficit of $1.54 million for the fiscal year that ended June 30 — the most red ink in a decade as athletics missed its ticket revenue projections by nearly $1 million.
“We’ve got to do a better job of managing our funds, but we also need help,” said Vice President for Athletics Paul Krebs. “We need help from our fans to continue to support us and I think we’re going to have to continue discussions with the university. Are there other ways that we can get additional support like our peers do?”
Asking for more support from the rest of the cash-strapped university could be a challenge.
“We’re not happy,” said UNM President Robert G. Frank, who for the last two years has pledged athletics would make budget. “That’s a concerning number and we’re going to have to work harder to fix it.”
According to a report to University regents on Monday, UNM fell short of ticket revenue projections by $975,000 and missed fundraising goals by $200,000.
Team operations cost and event/game management expenses exceeded projections by $1.2 million.
UNM athletics has failed to make its budget in seven of the past nine years, and is now technically in accumulated debt to the university $4.3 million, according to the figures released on Monday.
Krebs and Andrew Cullen, associate vice president in the office of planning, budget and analysis, delivered the bad news.
Both made it clear it doesn’t mean there are bills not being paid or sports being cut.
“It will just reside on the books,” Cullen said when asked by regent Marron Lee about last year’s deficit. “Because of the overall fiscal health of the university, the sum total is covered. So it’s not as if we have to go out and get a loan to cover this. Overall, the university reserves cover it.”
UNM had projected a $33 million budget. It only raised about $31.8 million — about $20 million through ticket sales, fundraising and other revenue sources and received about $12 million in subsidies — and overspent its budget by about $400,000.
The report indicated the other nine full members of the Mountain West Conference (not counting the United States Air Force Academy) bring in an average of $17.9 million in subsidies from three sources: state support, institutional support and student fees.
UNM brings in $11.6 million from those sources ($2.9 million from the state, $3.2 from UNM and $4 million in student fees), the second lowest figure in the league.
“Our funding needs to equal our expectations,” Krebs said. “Our expectation is to win championships and to graduate our student athletes. We’re at record graduation. We’ve led the Mountain West Conference in the past four years in student athlete academic awards. Over the last five years, we’ve won 36 conference championships. …
“But you can see that the people we are competing against are getting much more significant help (from) either state or institutional dollars and I think we need help.”
Eliminating any of UNM’s 22 varsity sports, the second highest number in the conference, is not on the agenda.
“We’re not anywhere near that day today,” Frank said.
Lee, who chairs the finance and facilities committee, was adamant about that point.
“No. We do not have too many sports,” Lee said, also pointing out the academic achievements in recent years of the athletics department. “… We do a really good job with athletics at the University of New Mexico and I can’t think of one sport where I’d say, ‘Well, you have to be on the chopping block because we have a deficit.'”
Red flag football
The sport that remains the largest expense is football, though one that all at UNM seem to be in agreement with has the biggest potential for financial growth.
While Krebs didn’t have specific sport-by-sport figures on Monday, he acknowledged football, despite a winning season and a bowl game appearance, lost money and men’s basketball, despite a downturn in ticket sales, made the largest profit in the department.
Of the 24 athletic department employees who draw annual base salaries of at least $100,000, the Lobos football team has 10 of them (nine on the coaching staff and a strength and conditioning coach assigned to football).
“This is not about football,” Krebs said. “This is about the whole department. This is about all of our programs being fiscally responsible, living within their budgets, helping driving donations, helping drive revenues wherever they can. Helping control expenses wherever they can.”
Frank echoed that sentiment, throwing his full support behind fifth-year football head coach Bob Davie and his program.
“Football is the biggest cost, but it’s the biggest opportunity,” Frank said. “I’m a big Bob Davie fan. I’m a big Bob Davie believer. We’re going in the right direction with Bob. You have to have patience with football. Basketball you can turn around in two years. Football, you turn around in multiple years. We’re going in the right direction, but it’s going to take awhile.”
That optimism, and the fact the Lobo football team is coming off a winning season and a bowl game, was mentioned frequently Monday about how things will improve for the coming fiscal year.
If only the fans, who lead the conference in attendance in several other Lobo sports, start to show up to University Stadium for football.
It’s a keep your fingers crossed mentality that Lee insists won’t be more of the same moving forward.
“I’d say it’s optimism with accountability,” Lee said. “Obviously we have concerns. We have the fiduciary responsibility of the entire university. And we appreciate that they wanted, in full transparency, to come to us. This could have been very easily swept under the rug or hidden, but they wanted in full transparency to get us fully aware and fully briefed on that.
“So, yes, concerns are there, but we remain fully optimistic that we’re getting new revenue generated. If you look back at Lobo athletics, we’ve had some rocky years, but we’re moving forward and I think with the idea that we are putting in more benchmarks and we’re going to be having more accountability and more revenue generated, we’re optimistic.”
The department faces financial challenges for fiscal year 2017 such as:
• Paying a fired women’s basketball coach $150,000.
• A decrease in student fees that Frank said he can’t guarantee will be made up by the university until he sees what happens with the state budget.
• An increase of nearly $300,000 in the cost of attendance stipends given to all student athletes.
• A decrease in money from the NCAA basketball distribution due to the league’s poor showing in recent years.
On the other side of the ledger, UNM is supposed to get $800,000 in corporate sponsorship deals from WisePise ($600,000) and U.S. Bank ($200,000) this year in addition to the football team bringing in $900,000 to play at Rutgers in September.
It all points to a coming sports season very much under pressure to improve the bottom line.
“The record speaks for itself,” said Frank, who each of the past two summers has told the Journal he expected athletics to make budget.
“We haven’t done what I told you we would do last year.”