ALBUQUERQUE — The University of New Mexico athletic department has selected New York-based Outfront Media as its new multimedia rights partner.
UNM athletic director Eddie Nuñez and his staff got approval from the board of regents’ Finance and Facilities Committee to begin contract negotiations during Tuesday afternoon’s committee meeting on UNM’s main campus.
Outfront is a national advertising firm with a small role in amateur athletics. It has partnerships with a number of college programs, including LSU, Virginia, Maryland and Wichita State, as well as eight high school athletic associations — including the New Mexico Activities Association. Nuñez is a former assistant athletic director at LSU and had a previous working relationship with Outfront while at that school.
David Williams, UNM’s deputy athletic director for external affairs, said one of the more appealing aspects of Outfront is that New Mexico is its only new client in college athletics, meaning the company is focused on a small number of schools.
“We felt that Outfront expands very carefully, and we were honored that they would want to expand with us,” Williams said.
If approved by the regents, Outfront would replace Learfield IMG College as the multimedia partner for UNM Athletics and begin a working relationship immediately for the 2019-20 academic calendar. The football season opener is Aug. 31 at home against Sam Houston State.
Nuñez admitted it’s pretty late in the game to make a major shift in business practices, but the findings of an exhaustive audit that showed numerous accounting deficiencies within the athletic department that contributed to an operating deficit of more than $4.5 million spurred the need for change. UNM decided to terminate its agreement with Learfield this summer, opening a search that eventually produced five prospective candidates.
Among them was Learfield, a company Nuñez said the school is still on good terms with.
“We also wanted to make sure we didn’t walk away upset,” Nuñez said. “It was a good partnership. For many years they did some great things for UNM.”
Nuñez said the idea is to have Outfront contract finalized as early as next week’s board of regents meeting. The regents meet in regular session Aug. 13. They must approve the contract before both sides can begin their working relationship.
Terms of the partnership were not immediately available, although some details have come to light.
Outfront has agreed to a profit-share model that allows UNM to keep a vast majority — up to 85 percent — of the total profits from advertising sales and multimedia rights. UNM Athletics administrators will meet with Outfront executives prior to each school year to determine expenses and the volume of inventory to be sold.
Outfront would then sell the multimedia rights to prospective clients and advertisers, including signage in the football stadium and basketball arena and all other Lobo facilities, as well as radio broadcasts and amenities for an undisclosed number of luxury suites in Dreamstyle Stadium and The Pit, through corporate accounts.
UNM is expected to cover the cost of operational expenses, estimated between $1.5 million and $2 million annually. Operational expenses include the cost to generate signage and lend support to multimedia responsibilities, among other items, such as paying support staff and digital marketing. Those expenses are then made back through sales conducted by Outfront.
Learfield’s contract with UNM came with an annual payment to the athletics department of $4.5 to $5 million for exclusive rights to multimedia properties for Lobo athletics. To equal that figure, Outfront would have produce approximately $7.5 million in sales to offset UNM’s operational expenses and meet Outfront’s presumed financial cut.
Williams said Learfield worked with a guarantee plus revenue-share model. It made a guaranteed payment that covered the athletic department’s operational expenses, although Williams said it was never made clear to UNM exactly what those expenses were.
The agreement came with what was referred to as a revenue share hurdle, a predetermined financial amount that was 21/2 times the guaranteed payment.
If the hurdle was cleared by Learfield profits — estimated between $11 million and $12.5 million annually — UNM was entitled to a 50/50 split of any revenue above the hurdle.
“In the 10 years of that contract, UNM Athletics never got above their share hurdle,” Williams said. “We never got more money than the guaranteed amount.”
The most public part of a multimedia rights agreement is the broadcast rights for radio and local television. To that end, the school and media partner have the option of changing who handles the play-by-play duties for flagship teams like football, men’s basketball and women’s basketball. Longtime radio man Robert Portnoy has been the voice of the Lobos for men’s basketball and football since the early days of Learfield’s involvement while Josh Suchon handles the call for women’s basketball.
“Our intention is everybody stays on board,” Nuñez said. “They’re going to do it. I think they’ve already had communication with them with the anticipation of moving forward. So, hopefully, I think contractually they’ll work it all out here sooner rather than later.”