CNBC sports biz reporter says beer at TCF Bank Stadium is worth $2M/year

[anonymous]

Interesing little piece here:

http://www.cnbc.com/id/31375653

Two interesting paragraphs:

"It’s obvious that Bruininks was concerned about the perception of serving alcohol in a stadium when 75 percent of the student body is underaged. But what about financial concerns?

The unconfirmed number on the money the school pulled in from beer sales at games is around $2 million. Can the school that is not part of the “haves” in the Big Ten afford to do this? Can a school whose stadium is $40 million over budget afford to do this?"

 

[grunkiejr]

Interesing little piece here:

http://www.cnbc.com/id/31375653

Two interesting paragraphs:

"It’s obvious that Bruininks was concerned about the perception of serving alcohol in a stadium when 75 percent of the student body is underaged. But what about financial concerns?

The unconfirmed number on the money the school pulled in from beer sales at games is around $2 million. Can the school that is not part of the “haves” in the Big Ten afford to do this? Can a school whose stadium is $40 million over budget afford to do this?"

That estimate is too high. $2,000,000/7 games = $285,714.29/game. Avg attendance at the Dome was ~ 50,000.

$285,714.29/50,000 = $5.71 per person or approximately 1 beer per person. As an assumption it is probably a little to the high side but reasonable. However, the key error they are making is that the U of M wouldn't have had anywhere near that much in the budget for alcohol sales at TCF. The plan from day one was to sell beer only in the premium seats.

Suites: 45 suites * 20 people per suite = 900 people
Loge boxes: 50 loge boxes at (4-6 people) ~250
Indoor club = 250 people
Outdoor club = 1,250 people
Total premiium seat holders ~ 2,650

Obviously the per capita consumption of beer in the suite area would exceed what it was at the Metrodome as a whole because you are dealing with a higher percentage of patrons of legal drinking age. If we assume 2 beers per person @ $6 per beer: 2 * 2,650 = $31,800 / game * 7 games = $222,600 in budgeted alcohol sales at TCF Bank Stadium. To get $2 mm in beer sales would require $107.82 of beer purchases per person per game from the 2,650 premium seat holders. That sounds like a fun party but I wouldn't want to be the one cleaning up afterward.

 

[Bronko Nagurski Gopher]

That estimate is too high. $2,000,000/7 games = $285,714.29/game. Avg attendance at the Dome was ~ 50,000.

$285,714.29/50,000 = $5.71 per person or approximately 1 beer per person. As an assumption it is probably a little to the high side but reasonable. However, the key error they are making is that the U of M wouldn't have had anywhere near that much in the budget for alcohol sales at TCF. The plan from day one was to sell beer only in the premium seats.

Suites: 45 suites * 20 people per suite = 900 people
Loge boxes: 50 loge boxes at (4-6 people) ~250
Indoor club = 250 people
Outdoor club = 1,250 people
Total premiium seat holders ~ 2,650

Obviously the per capita consumption of beer in the suite area would exceed what it was at the Metrodome as a whole because you are dealing with a higher percentage of patrons of legal drinking age. If we assume 2 beers per person @ $6 per beer: 2 * 2,650 = $31,800 / game * 7 games = $222,600 in budgeted alcohol sales at TCF Bank Stadium. To get $2 mm in beer sales would require $107.82 of beer purchases per person per game from the 2,650 premium seat holders. That sounds like a fun party but I wouldn't want to be the one cleaning up afterward.

well said grunkie.....well said

 

[Rouser]

Not sure of the math but the "intangible" is that many suite owners would not find it as attractive a buy if they knew beer was not available. I've been to a few suites/lofts and everyone expects a couple cold ones in the fridge. The price of the beer is cheap compared to the unhappy corporate / wealthy customers who spend a lot of cash buying the suites thinking beer would flow.

With no beer..there will be a PR hit regarding the customers who paid for the suites under the assumption beer would be there.

 

[koppco1]

I'm still wondering if they will allow BYOB for suite holders. I believe some schools do this. At a minimum, I'm guessing security won't be checking too closely at the premium seating entrance. This law won't last more than a year or two.

 

[anticallihan]

I'm still wondering if they will allow BYOB for suite holders. I believe some schools do this. At a minimum, I'm guessing security won't be checking too closely at the premium seating entrance. This law won't last more than a year or two.

Don't be crazy. If you don't think this story is already sitting on the desk of Channel 5, you are nuts. The media would love to run with a story about how the U has a "lapse" in security to "allow" alcohol for the premium seats.

The last thing the U needs is negative press on this front.

I do believe they will be able to reverse this law for the next season. Just give it a year. The only reason this isn't going to change this year is because this session has ended. Right now we don't have the ability to meet with people and get anything changed.

 

[Rog]

The way to solve the problem

Invite the Legislators to the games in the private boxes and serve them salty potato ships without anything to wash them down with. just don't say anything, they will get the message.

 

[hubbabubba]

Regarding the $2 million dollar figure that has been quoted, I'm of the understanding that that number includes alcohol sales at all three venues that sell the stuff - TCF Bank Stadium, Mariucci Arena and Williams Arena. When you consider how many home games men's hockey and men's basketball have, it's not too hard to believe the U will be losing $2 million per year just from alcohol sales. Throw in the potential for lost premium seat sales in all three venues thanks to this misguided law, and $2 million could just be the start of lost revenue for the athletic department. Once again, great work by the legislature/Pawlenty.

 

[2nd Degree Gopher]

They don't sell alcohol at Williams or Mariucci, they give it away.

 

[Bronko Nagurski Gopher]

Invite the Legislators to the games in the private boxes and serve them salty potato ships without anything to wash them down with. just don't say anything, they will get the message.

too funny and so true! great sense of humor.

 

[Bronko Nagurski Gopher]

They don't sell alcohol at Williams or Mariucci, they give it away.

exactly, so one can't count those two venues. even though i think the $2MM number that was quoted as "unconfirmed" by the CNBC guys is a bit too high it still doesn't change the fact that Pawlenty and the legislature really f-ed up on this one.

 

[grunkiejr]

exactly, so one can't count those two venues. even though i think the $2MM number that was quoted as "unconfirmed" by the CNBC guys is a bit too high it still doesn't change the fact that Pawlenty and the legislature really f-ed up on this one.

I've actually provided some of this type of data for CNBC in the past so I'll just say that analysts will throw unconfirmed numbers around haphazardly at times and it will be reported as if it is fact. This stuff happens all the time when analysts are looking at things like sales of a product and the halo effect that it may have on purchases of other products. I could give you some good stories but this probably isn't the forum.

 

[UpnorthGo4]

Quote: it still doesn't change the fact that Pawlenty and the legislature really f-ed up on this one.

Since you can't stop posting about this issue, you force me to keep posting too. Pawlenty and the legislature are not losing any sleep about this issue, and they are not going to change their votes next year. Why would they? The U is going to lose hundreds of millions of dollars in state funding over the next two years and layoff 1200 employees and very few people seem to care about it. And futhermore, I think most people who don't post in GopherHole or GI support what Pawlenty and the legsilature did.

 

[oak_street1981]

Hey Mr. Populist/ great mind, when are you going

to apoligize for representing and promoting a level of stupidity that will destroy some of the momentum that has been created the last three years?

2. How many beers did the brilliant beer rights advocate UPnorth drink an average visit to his beloved Metrodome? One or zero?

Nice job on picking those battles, big shooter.

Another poster, who has clashed with me in the past, predicted the outcome of this legistative foolishiness several weeks ago, and he was proven 100 percent correct.

Now that your side "won" maybe you can now start calling the Sid Hartman show and ask if the garbage burner can be moved so they can spend 175M to build a roof for the 3 rainouts a year, so you can travel from Bayfield with no fear of that horrible rainout.

 

[anonymous]

The thing that is difficult to put a finger on is what the value of suites are in an alcohol-free environment. Is it less? I think so, but it's difficult to know by how much.

While people on this board buy tickets/donate money/etc. because they are fans or care about the university, that isn't the deal for many to most of the suites/premium seats. This isn't charity or fun, this is marketing and business. They are going to use the suites to wine and dine and reward clients and top performers. And if you're going to be in the suite business in a town where there are several other venues where there are suites, you better be able to get a beer. It's about making sure customers have a good time and a deal gets closer to being done.

I would not be surprised to see one or two suite holders at one of the three buildings impacted to use this as an opportunity to get out of their contract with the U.

This is a sticky situation for the U of M. Because while the Legislature put restrictions on what the U could do in terms of alcohol, the school at the end of the day is making the decision to not go forward with alcohol.

 

[at the bar]

I would not be surprised to see one or two suite holders at one of the three buildings impacted to use this as an opportunity to get out of their contract with the U.

This is a sticky situation for the U of M. Because while the Legislature put restrictions on what the U could do in terms of alcohol, the school at the end of the day is making the decision to not go forward with alcohol.

While the U has been limited in their options, very few are saying that the U is deciding to lose this income. Some smaller sports could get cut due to this decision. I personally don't care about crew, golf, gymnastics, tennis etc. but donors will be asked to pay up or lose programs.

Also, this isn't good PR since suites are still available for purchase at Target Field!

 

[GoAUpher]

While the U has been limited in their options, very few are saying that the U is deciding to lose this income. Some smaller sports could get cut due to this decision. I personally don't care about crew, golf, gymnastics, tennis etc. but donors will be asked to pay up or lose programs.

Also, this isn't good PR since suites are still available for purchase at Target Field!

Of course they are making the decision, but they are making a decision that is consistent with the stated mission of the University and that is in line with the decisions of like minded institutions with the same mission. Its not like the U is pulling a fast one here...that would be the legislature and governor.

I doubt the U will have to cut sports over this, but it will affect the dept's ability to repay the debt on TCF and accomplish other projects like the new baseball stadium or bball practice facility.

I think given time to build up their lobby power and argument the U should be able to get this law changed to meet the U's mission. They were basically blindsided this session and I don't expect that will happen again. I've also noted with interest that one of the regents quoted for recent stories noted that the legislature is infringing on the autonomy of the U. This would would seem to be a direct reference to the U's Constitutional Autonomy and might suggest that the U would consider challenging the law in court if they don't get the changes they seek.

 

[GophBen]

I think part of the number is case sales to suites. If you've ever bought one, you'd know it's an obscene number. I'd try to remember an exact number, but it was for a bachelor party and the details are hazy.

 

[koreangopher]

This article actually made the main page of Digg.com. A very recognizable site if you've never been there. I believe it is on page 4 right now.

http://digg.com/football/How_Much_Is_Beer_Worth

 

[casual observer]

3MM

Regarding the $2 million dollar figure that has been quoted, I'm of the understanding that that number includes alcohol sales at all three venues that sell the stuff - TCF Bank Stadium, Mariucci Arena and Williams Arena. When you consider how many home games men's hockey and men's basketball have, it's not too hard to believe the U will be losing $2 million per year just from alcohol sales. Throw in the potential for lost premium seat sales in all three venues thanks to this misguided law, and $2 million could just be the start of lost revenue for the athletic department. Once again, great work by the legislature/Pawlenty.

I spoke with a rep at the U today. The # is at least 3MM in losses 2009/2010 in alcohol sales and non renewals of suite sales in Mariucci/Williams and TCF. The U's accounting arm is running refund scenarios to premium ticket holders. They are talking 25% refunds scaled throughout life of contracts (which can now be cancelled)... They couldnt afford a one time refund of this amount, fyi. They are completely strapped.

The premium ticket holders made 3,5,10 year commitments - and, got jacked. Contributions and contracts are now in severe jeopardy because the main demographic in the club was 40-55 yr old business owners and decision makers who bought seats for biz/personal with full service promise, which included beer and wine.

The reps/clowns who pushed this law just mortally wounded or killed 2 sports at least. And, probably 2 to 5 high level positions in sales at the U. Additonally, they squashed work for 30 to 50 college kids who would have worked the clubs (bartending, waitering, cleaning,etc...) in the clubs (all venues).

It's a debacle. The State has MNPass which allows solo drivers to pay premium tolls to get around traffic jams... It's a paid for perk!!!!!!!! ELITIST - TWO CLASS SYSTEM...

If you think the U deserves a chance to compete for B10 titles, make an effort to support the people who paid thousands to help the Gophers do it... Call your legislators and tell them they made an egregious error in this matter.

Over n Out.

 

[harrys ghost]

I spoke with a rep at the U today. The # is at least 3MM in losses 2009/2010 in alcohol sales and non renewals of suite sales in Mariucci/Williams and TCF. The U's accounting arm is running refund scenarios to premium ticket holders. They are talking 25% refunds scaled throughout life of contracts (which can now be cancelled)... They couldnt afford a one time refund of this amount, fyi. They are completely strapped.

The premium ticket holders made 3,5,10 year commitments - and, got jacked. Contributions and contracts are now in severe jeopardy because the main demographic in the club was 40-55 yr old business owners and decision makers who bought seats for biz/personal with full service promise, which included beer and wine.

The reps/clowns who pushed this law just mortally wounded or killed 2 sports at least. And, probably 2 to 5 high level positions in sales at the U. Additonally, they squashed work for 30 to 50 college kids who would have worked the clubs (bartending, waitering, cleaning,etc...) in the clubs (all venues).

It's a debacle. The State has MNPass which allows solo drivers to pay premium tolls to get around traffic jams... It's a paid for perk!!!!!!!! ELITIST - TWO CLASS SYSTEM...

If you think the U deserves a chance to compete for B10 titles, make an effort to support the people who paid thousands to help the Gophers do it... Call your legislators and tell them they made an egregious error in this matter.

Over n Out.

If $3M is a real number, it would seem a constitutional autonomy suit to allow the U to server alcohol would be a no-brainer.

 

[grunkiejr]

If $3M is a real number, it would seem a constitutional autonomy suit to allow the U to server alcohol would be a no-brainer.

I'm pretty sure casual observer made it up. If you look at his post history he has been railing on this issue for a while now. He said the same number a little over a week ago and then comes back and says he just had a conversation where someone from the athletic dept. told him the number. The timeline doesn't match and they don't have hard figures on non-renewals yet so passing on hard numbers for renewals seems pretty stupid.

It wreaks of someone with an agenda.

 

[harrys ghost]

It wreaks of someone with an agenda.

Here?!? I am shocked.

Regardless, it would seem that the U would have a reasonably strong case based on the issue of serving alcohol. In effect, the legislature is telling the U who they can serve to. My understanding is that the U needed a liquor license for sales. That part of the equation could well be outside the issue of constitutional autonomy.

In any event, it will be interesting to see how this plays out.