It just ain’t working anymore.
And if more financial help — from the state, the main campus or through student fees — isn’t on the way, some very “tough decisions” that could include the elimination of sports at the University of New Mexico could be on the horizon.
That was the message UNM athletic director Paul Krebs delivered to the Board of Regents finance and facilities committee on Wednesday afternoon.
“We’re at a point where some tough decisions are going to have to be made in athletics,” Krebs told the committee of his department, which is coming off a fiscal year 2016 deficit of $1.54 million and is off to a dismal start financially this fiscal year.
That deficit was covered by university reserve funds, but as executive vice president for administration, COO & CFO David Harris said Wednesday, those days may soon be over.
“Our top priority here is to benefit academic programs, not instructional,” Harris said. “So we don’t really have the capability to backstop athletics in ways that we have in the past.”
Krebs said the department has budgeted in years past with a mentality that they will simply cover increased costs by generating more and more revenue, and UNM typically has generated numbers at or near the top of the Mountain West Conference.
But Krebs also feels the department may have reached its revenue generating limit in a struggling New Mexico economy and noted just last week the state legislature decided to cut an additional $140,000 from the current year’s budget. And he repeated concerns that UNM doesn’t receive the same levels of state or student fee assistance as many MWC peers.
“We’re either going to have to find additional help or revenue long term or we’re going to have to look at some very difficult decisions from an expense standpoint,” Krebs said. “I just don’t think the model can sustain itself. It’s unrealistic for us to continue to expect to generate more and more revenues from the fan base in this community based on the economy. So, whether it’s student fees or looking at the number of sports we offer, I think some things have to be reviewed because I think we’re going to be sitting here at this table every year unless there are some tough decisions made.”
The department has failed to make budget in seven of the past nine years, though, as Krebs pointed out after the meeting, many of those years were “close.”
Krebs said the 22 varsity sports in the department (second most in the MWC behind only the Air Force Academy, which requires all students to participate in a varsity sport) have essentially operated with flat budgets for three years in every way except for increased travel costs that continue to hurt the department. He also said there are seven positions in the department currently vacant and there are talks about making some positions in athletics “shared services” positions with the Office of the Provost, though specifics were not given.
Student Regent Ryan Berryman, who works for the Lobos men’s basketball team as the acting operations director, questioned Krebs far more than any of his fellow regents. He asked if football could start playing more than one “buy game” a season. It received $900,000 last month for playing at Rutgers.
Krebs said the MWC’s non-conference scheduling philosophy has been for schools to schedule one FCS team, one “buy game” and two “comparable” or like opponents.
Berryman also cut to the chase on one matter nobody else seemed interested in directly addressing.
“The last option, then, would be cutting sports, right?” Berryman asked. “… Is that accurate?”
Krebs acknowledged, “I think that’s fair, yes.”
After the meeting, however, he further explained that cutting sports is not on the table in his mind yet.
“Any discussion about eliminating sports is very painful,” Krebs said. “I prefer not to talk about it. I prefer not to have that discussion. I think it impacts a lot of people. If and when that comes, and I don’t believe it’s on the table at this point, but if and when it does, the university is going to have to weigh in, be it the president and the Board of Regents. It’s not something you do in a vacuum.”
A big issue continues to be the drop in ticket sales for the department.
Last year, the department’s $1.54 million hole was dug primarily by the school’s three traditional revenue generating sports, with football (by $400,000), men’s basketball ($350,000) and women’s basketball ($150,000) significantly missing budgeted ticket sales projections.
After a winning 2015 season and a bowl game, Krebs said the department was optimistic ticket sales for football would improve and did not adjust the $2 million ticket sales budget projection for that sport. Instead, season ticket sales remained flat. Through three of the team’s six home games this season, UNM is already $100,000 off of where it was a year ago after three games.
UNM is averaging 20,054 fans per home game, 3,500 fewer per game than last year. He said beer and wine sales at football games have brought in “roughly” $40,000 in net revenue for the department thus far, but also noted concession sales also are hurt by low attendance.
For men’s basketball, which doesn’t start its season for another month, the department shaved $200,000 from ticket sale predictions, but Krebs acknowledged season ticket renewals and sales to date are down from even the adjusted projections.
As for the WisePies naming rights deal on the Pit, Krebs was asked if he expects the local pizza chain to make its payment in December of $600,000 despite much slower business growth than expected when the deal was struck with UNM two years ago.
“I do,” Krebs said. “Absolutely. Yes.”