What UNM has done well (for this year) is great....but it has little bearing on Wyoming's decline in college athletics over the last 30 years. To the extent that UNM has some sort of advantage .... It would probably be only in relation to Wyoming and it's the same one that almost every college we care to compete against has....They are pretty much all situated geographically in within a metro area that has about the same population of our entire state! As Joseph Stalin said "Quantity has a quality of its own". (May not have originated with him). I will say we are likely just a Craig Bohl level of coach away from being as good as UNM in football....that is not unimaginable.
Look...I am not some sort of econ expert...everything I think about this stuff is really just consuming what other people have said. Some of the stuff the experts say doesn't make much sense...but some of it rings true. My "expertise" is very much my own experience trying to attract and retain talent within the state of Wyoming in a specific industry. I, and people like me, are banging our heads on the wall when trying to get good people to staff positions in Wyoming. Wyoming is not a high cost of living state but we have to pay equal or more than the position would command in Denver just to get people interested. And then, when we do hit on a candidate, and make a successful hire....it is crushing when after 2 to 3 years, they leave us because they just eventually didn't like the isolation or the wind or whatever...even if they like the job. I am close to some people on the academic side at UW and you hear versions of this there as well.
Your second question about the amount you have to spend to overcome these types of challenges is one I'm thouroughly unqualified to answer. I'm confident I now the direction of these effects but the magnitude is not something I pretend to know.