Money Pit

Here Lies WisePies: “Less is More”

By Daniel Libit

It was always only a matter of time.

Even before The Pit was renamed WisePies Arena, in December 2014, those negotiating the naming-rights deal on behalf of the University of New Mexico and UNM Foundation assumed it would never reach maturity.

It was, from the very beginning, a PR stopgap, designed to get the monkey of public accountability off the backs of those who insisted, with blithe assurance, that the $60 million renovation of University Arena would be easily affordable. That renovation, mind you, was itself begotten by a series of promises and pledges (better food options; future NCAA Tournaments; just a slight reduction in seating capacity) that have mostly fallen flat.

On Thursday, after weeks of media inquiry (and following a public records lawsuit by this website targeting the deal), UNM announced that it had asked WisePies to relinquish the naming rights agreement to The Pit, and that WisePies had consented. UNM Athletic Director Paul Krebs told the Albuquerque Journal that this announcement was the predicate for a yet-announced superior agreement with a new naming-rights partner. Were it not for that, Krebs declared, the WisePies deal would have continued apace. Or so he says.

Krebs, according to the Journal, refused to talk about the deal by phone Thursday, answering questions only by email. Neither he nor UNM Athletic spokesperson Frank Mercogliano responded to NMFishbowl.com’s emailed questions about the timing of the announcement or the Athletic Department’s contradictory statements of the recent past. Earlier this month, UNM Deputy AD Brad Hutchins told the Journal, “Nothing has changed with the agreement between WisePies Pizza & Salad and the University of New Mexico.” As a literal statement, these words remain technically true, but as a public statement, they were, at best, intentionally misleading.

And in that way, they were quite befitting.

From the day it was announced, the notion that this historic building would carry the dissonant, unfamiliar name of WisePies instantly made the state’s skin crawl. How completely bushleague it felt. But then, the WisePies deal was just another in a series of misrepresentations and missteps that have turned an iconic sports venue into a tomb of bureaucratic woe.

The end of the WisePies story was much like the beginning: a furtive effort from Lobo officials to string things out, just long enough, to save face.

On April 5, the Journal published a story about how UNM planned to pay off Craig Neal’s $1 million buyout, given the financial struggles of the Athletic Department. In that piece, Krebs mentioned that the University was currently in negotiations for a “seven-figure” naming rights deal of an unidentified UNM sports facility. By then, I had been hearing that the WisePies deal was already on the ropes.

On the morning of April 6, I emailed Krebs and Mercogliano, asking them to confirm whether WisePies had, in fact, made good on its $600,000 payment last year. Additionally, I asked whether UNM had any indication that the WisePies agreement would not continue beyond 2017, or whether there had been any conversations about terminating the agreement prematurely. I received no response. The Journal’s Jessica Dyer concurrently pressed Krebs and Deputy Athletic Director Brad Hutchins on similar questions.

“There is no news here,” WisePies spokesperson Season Elliott emailed Dyer in a coordinated response with UNM. “Nothing has changed with the agreement between WisePies Pizza & Salad and the University of New Mexico.” On Twitter, Elliott responded to a question I asked, saying that WisePies’ checks from last year had all cleared. (UNM and the UNM Foundation continue to refuse repeated requests to provide documentary proof that the payments were furnished on time, per the terms of the naming-rights agreement. Among other things, NMFishbowl.com’s public records lawsuit against the UNM Foundation seeks evidence of these payments.)

But UNM certainly knew that the WisePies deal was about to end. That seems evident in  emails NMFishbowl.com obtained from April 6, in which Krebs directs Hutchins to be obtuse to Dyer’s inquires. “Less is more,” the AD wrote to his deputy.

Less is more: that might well be the perfect epitaph for the WisePies deal. But then, less is really what was expected all along.

UNM’s deal-makers, including  Krebs, knew that the 10-year, $5-million “gift agreement” signed by WisePies was as binding as a pinky swear. It allowed the company to opt out at any point, for the mere penalty of signage removal fees. Back in November, this website was launched with a story that reported the internal doubts privately expressed by UNM officials over the money the school would ultimately end up with.

Nonetheless, UNM repeatedly insisted that it had the utmost confidence in this upstart pizza chain (barely anybody in Albuquerque had heard of) to come through in the end. Based on this professed confidence, the school agreed to give WisePies the first two years of naming-rights publicity for next to nothing ($100,000 per), because the company would then, theoretically, pay $600,000 annually for the next eight years. Even as WisePies publicly floundered — with tax liens and ownership changes — UNM vouched for the business and the sanctity of the agreement.

The deal inhabited a mutually reinforcing conspiracy of professed faith: UNM officials wanted to prove that they had not been taken for a ride; and WisePies wanted to prove that it was a salient enterprise. This gave both parties reason to pretend.

But the game of pretend is over, at least on this account. For all the kabuki, for all the embarrassment, WisePies will have paid $800,000 to UNM for three years of naming-rights to The Pit, or about $266,000 per year. Even in a poor state, even post-recession, even in a fit of desperation: that’s a measly sum. On the other hand, it was a great deal for WisePies, arguably the company’s savviest business move yet. In a statement to the Journal, a spokesman for the company concurred, saying that the goal of launching the business off the imprimatur of The Pit was a success.

The official line now is that WisePies has magnanimously decided to step aside so that UNM could pursue a better naming rights deal. Even if a better deal comes along soon, you’d be wise to question that official story. And the next deal.

On Thursday, UNM Athletic officials tried to lipstick the pig and shame the inquisitors.

Ultimately, that is what the naming-rights deal couldn’t actually handle: heat. But the saga of WisePies Arena is an instructive one, and even if Lobo officials desire to move onwards, if not upwards, there’s still much to linger over: the UNM Foundation’s role in the WisePies agreement; the broader financial relationships between Steve Chavez and the university; and, just maybe, the Lobos’ other marquee naming-rights agreements. That, or you could just take their word for it.

Postscript: On Friday, WisePies owner Steve Chavez penned an op-ed in the Albuquerque Journal, in which he defended the truncated naming-rights agreement. In so doing, Chavez stated that he had provided “a letter from my financial institution verifying [The WisePies] payment” to the paper’s editors. Additionally, the Journal reported that UNM will continue to sell WisePies pizza in The Pit.