UNM, Dreamstyle in tiff over finances
Naming rights agreement included many twists
It seems we’ve been down this road before.
While the high-dollar naming rights marriage of New Mexico native Larry Chavez, owner of Dreamstyle Remodeling Inc., and the University of New Mexico Athletics Department was widely celebrated in May 2017, just three years later the two sides are at odds over what is owed, what has been paid and how, if at all, to move forward on what was supposed to be a 10-year, $10 million naming rights agreement between the two.
Both sides seem to agree that at least $1.5 million has been fulfilled by Chavez since 2017.
But the original agreement, depending on interpretation of how the initial $1 million payment was to be applied, indicates that Dreamstyle by the end of the 2019 fiscal year should have already paid either $2.6 million or $1.8 million.
Payment for this past year is another matter.
Chavez has expressed concerns from the start of his agreement with UNM about where his money was going, but he told the Journal on Wednesday that he is not behind on payments and hopes to continue the partnership with the
school — if only its new multimedia rights company would get with him to set up a new contract.
The Dreamstyle deal was signed when UNM’s multimedia partnership was with Learfield/IMG, to whom Chavez was to make his payments.
That partnership ended a year ago, and Chavez said he’s waiting to get a new deal set up with Outfront, UNM’s new athletic multimedia rights company.
“There is no deal in place right now, but we want there to be,” Chavez said.
“We are waiting for that to get done because we do want to support UNM. That’s the intent. We were not happy with the way the money was used up front … but we hope we can get a new deal in place and continue our relationship with UNM. We want to help UNM.”
He added, however, that what the new deal will entail might be different from the old one.
“(With new COVID-19 restrictions), the future of sports is completely uncertain, as is the value of any sporting arena naming rights agreement,” Chavez wrote in a two-page statement. “Dreamstyle still desires to support UNM and move forward with a naming rights agreement, but we must sit back and assess what we can justify for such a sponsorship at this time. When will there be fans in The Pit again? We now have to work through that.”
Chavez provided to the Journal on Wednesday a document from Learfield written in October 2019 stating he had fulfilled his final payment to them of $100,000 and his account had a “$0 balance,” adding “this payment will make the agreement dated April 24, 2017, between Lobo Sports Properties and Dreamstyle Remodeling void and terminated.”
UNM, meanwhile, has made clear it believes it has not received the money it was promised, even prior to the end of the Learfield deal, though it will not publicly state what it thinks Chavez owes, according to athletic director Eddie Nuñez.
The deal between Chavez and UNM was signed in April 2017 under former athletic director Paul Krebs. Nuñez replaced him in August 2017, inheriting, among other things, the Dreamstyle naming rights deal.
“Our intentions from the first day I got here was to assure Dreamstyle that their money was going to go where they desired,” Nuñez said. “Currently, yes, there are some payments that have not been made and we’ve been trying to work through these. Unfortunately at this point, there is no direction. Our legal group is reviewing this as we speak. We hope to come to a resolution, but at this point, we have to resolve the past before we can move forward.”
The Journal on Wednesday filed an Inspection of Public Records Act request with UNM for proof of payments as well as any addendum to the original contract, amendments, signed new agreements or correspondence that reflect an agreement to change the original deal that the Journal obtained from Chavez, over the objection of UNM and the
UNM Foundation, on May 3, 2017.
That agreement was identified as a “sponsorship agreement” between Dreamstyle Remodeling, Inc., and Lobo Sports Properties, LLC, a private business that worked under UNM’s multimedia rights partner Learfield/IMG.
Chavez intentionally wrote the original $1 million check out to UNM, not Learfield, telling the Journal, “I wasn’t going to write a check to anybody else. I want to write a check to UNM.”
The original agreement called for Chavez to pay $1 million up front followed by 10 years of $800,000 annual payments for a total of $9 million earmarked for athletics and another $1 million to support such non-athletics entities as the UNM Children’s Hospital, Popejoy Hall and the Anderson School of Management, of which Chavez is a graduate and member of the school’s Hall of Fame.
“The initial Naming
Rights agreement between LSP and Dreamstyle laid out a $1 million upfront payment to be spread out over the 10-year life of the agreement,” Chavez told the Journal in an email Wednesday. “Since Learfield left the market, the $1 million must be applied to the balance owed for the actual duration of the contract with Learfield, which ended up being only two years. We need UNM’s agreement to this before entering into a new agreement.”
The Journal also obtained a signed amendment to the original agreement in which Chavez agreed to pay Learfield $200,000 for the 2017-18 fiscal year and UNM $600,000. He also agreed to pay UNM $800,000 over five payment dates for the 2018-19 year. He paid UNM $300,000 and Learfield $200,000.
“(The 2019 amendment) was contingent upon (UNM) providing a proper and full accounting of Dreamstyle’s $1MM payment, and most importantly, the university entering into a new sponsorship agreement with Dreamstyle for the duration of the original (10-year deal).”
Neither occurred, Chavez says.
Chavez also made clear that from Day One, he was not pleased that UNM wasn’t able to give him a clear accounting of where his money was going and was never able to prove the stipulated amount of $400,000 initially went to the football team.
UNM has said the money did go to football debt. But Chavez has said he never intended his money to be used to pay off past debts of the department.
For the Dreamstyle deal, Learfield was supposed to get 10% of the $10 million pledged and also give to Chavez several marketing and other perks, including suites for football and basketball and free flights on the football charters.
As for this past year, Chavez wrote, “If anything is due for the prior fiscal year it needs to be determined once UNM provides documentation as to what assets were actually delivered during that period, and a value to each of those assets needs to be mutually agreed upon. This is what we currently are working through with UNM.”
THERE IS NO DEAL IN PLACE RIGHT NOW, BUT WE WANT THERE TO BE. LARRY CHAVEZ OWNER, CEO OF DREAMSTYLE REMODELING