The University of Minnesota sold nearly $1 million of beer and wine at TCF Bank Stadium last year — and lost money on the deal.
By the university’s count, Gopher fans bought more than $907,000 worth of alcohol in the first year of legal sales at the stadium. But by the time the vendors took their cut and the university finished paying for security and startup costs, the university was out $15,516.
How can anyone lose money selling beer at $7.25 a cup?
The university’s contract with its vendor, Aramark Corp., gives the school a 22 percent cut of the revenue from stadium alcohol sales. That came to $185,025 for the season after taxes. The university’s alcohol-related expenses for the first year? $200,587.
“Going into the first season, we knew it wasn’t going to be profitable,” said Associate Athletics Director Tom McGinnis.
The long list of startup expenses that cut into the school’s beer profits range from extra security to $12,000 worth of oversized plants to screen the A Gate beer kiosk from the view of visitors to the nearby Tribal Nations Plaza.
The university brought in a dozen extra campus police, 10 more ushers and two security supervisors to keep tabs on the football crowds once the beer started flowing. The extra manpower cost almost $50,000, but police incidents actually went down at the stadium, compared to the previous dry season.
“Maybe we were overstaffed,” said McGinnis, noting that the university will be reviewing its expenses and making adjustments for the coming season. “Hopefully, going forward (alcohol sales) will actually have some return for us.”
Eventually, the university does hope to turn a profit from beer and wine sales. By next year. and in years to come, it expects to clear a modest profit of $14,000 or so.
But the real money was never going to come from the sale of alcohol in the cheap seats.
Once the initial two-year trial period at the Bank is over, UofM hopes to be able to charge higher prices for its premium and box seating, based on the availability of alcohol. University spokesman Matt Hodson said officials didn’t think it would be fair to increase the premium prices until the trial period ends.
In testimony before the Minnesota Legislature earlier this month, the university initially reported a modest $16,000 profit on beer and wine sales. That, university officials later realized, was a spreadsheet error.
The revised figure raised eyebrows.
“It certainly seems to raise a certain concern when you look at those numbers,” said state Rep. Dan Schoen, DFL-St. Paul Park, who had been pushing legislation that would have opened the taps for hockey and basketball fans at the U.
At the university’s request, Schoen said he will hold off his bill, which seeks to legalize general beer and wine sales at Mariucci and Williams arenas, until next year, to give the school more time to study sales at the Bank. In the meantime, he said, it might be time for the university and the Legislature “to have a discussion” about its vending policies.
Below is the university's estimate of its expenses from the first year of stadium alcohol sales: