Report of U Making $16 Thousand in Beer Sales is False.

[Dr.Don]

Here is a report from the PP:

http://www.twincities.com/gophers/c...esota-stadium-alcohol-sales-lost-money-school

 

[gopherdudepart2]

I think the U anticipated this loss the first year based on start up costs.

Here is a report from the PP:

http://www.twincities.com/gophers/c...esota-stadium-alcohol-sales-lost-money-school

Seems like they went a little overboard on the amount and types of security they hired for the beer garden though. That kind of overhead likely cut in to there profit. That and they should have not let Aramark and the beer vendor take such a large cut of the profits. Next time around they better negotiate a larger share of the pie.

 

[Gopherdrummer]

The start-up costs make absolute sense. It is pretty tough to turn an automatic profit when you are starting from scratch on almost everything in the general admission area. I hope they renegotiate that contract with Aramark in the long run. Those terms are pretty awful unless they were hoping to offset Aramark's cut with increased marginal ticket sales.

 

[Dr.Don]

Personally, I don't care if they lose a little as long as the fans that want a beer can have one. With the millions invested for each game, what the hell.

 

[jamiche]

Personally, I don't care if they lose a little as long as the fans that want a beer can have one. With the millions invested for each game, what the hell.

Agreed, and I don't go to that many games and the thought of a beer at 11am in late October or early November does nothing for me.

For the people who are going to make a big deal out of this, how many start ups make a profit in their first year of operation?

 

[BleedGopher]

STrib: TCF Stadium beer sales end up costing U nearly $16,000

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 profits 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.

http://www.startribune.com/politics/statelocal/199065391.html

Go Gophers!!

 

[Dr.Don]

Bleed, thanks for giving a much more thorough and complete report than I could give, based on the news release only.

You are the best, my friend.

 

[kellyleeks]

You'd think the U could use accrual basis accounting, so the numbers aren't distorted.

 

[year of the gopher]

You'd think the U could use accrual basis accounting, so the numbers aren't distorted.

The U like most non profit or public organizations uses a modified accrual basis. But these startup costs can't be amortized anway as they're not capital assets. Very few private businesses make money the first year. Plus I've mentioned before that I thought the U went overboard on security. It looks like they recognize that.

 

[Parski1]

Personally, I don't care if they lose a little as long as the fans that want a beer can have one. With the millions invested for each game, what the hell.

This may have been one of your better posts.

 

[Chris Monter]

i think that for the most part teachers and police are very underpaid for the work that they do for us, the common citizen. However, based on the numbers in the story "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." I figured that 24 employees with seven home games and six hours per game equals $48 dollars per hour, which seems a bit high

I always wondered how much revenue liquor sales would really provide, much like I questioned how bar gambling money was going to pay for the new Viking stadium. However, it is hard to believe that anyone could lose money on $900,000 dollars on revenue.

Just my two cents.

Chris Monter

 

[Ole]

First. Aramark is a crock company. Horrible at what they do but big enough to bully and lowball. They are basically a generic food service company. If I was in charge they would have had the door slammed on their face as soon as they walked in to propose working in TCF bank.

Second.
Hopefully the U learns from this. Beer is not meth. Beer is not crack. Beer will not turn a stadium from peaceful to murderous simply by being available, especially at 7.25 a pop.
Do they seriously not realize why police incidents went down this year?
There are 2 stinking reasons and they look like a skunk in a popcorn box and a yellow and black pigeon.

I'd love for them to PUBLICLY throw some red meat to the media about how bad the fans from iowee and wisky are. We all know, anyone who's been to one of those games knows. Call them out.

Third.
Whoever has been negotiating stadium related contracts should be fired, today.
22%? Why would ANYONE take that small of a cut in the profits.
Add in the bad deal the vikings sold us, and the horrible tailgating and parking situation.
It's like our dealmakers are seriously trying to sabotage the football gameday experience and the athletics dept.
/RANT

 

[AO54]

i think that for the most part teachers and police are very underpaid for the work that they do for us, the common citizen. However, based on the numbers in the story "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." I figured that 24 employees with seven home games and six hours per game equals $48 dollars per hour, which seems a bit high

They only sell Beer from one-hour before kickoff until the end of halftime, so it's more like $100/hr.

What exactly are Aramark's costs here if the U is paying for the facilities, equipment rental, security and the beer? Are they only responsible for paying the servers? I'm thinking that they managed to pay the servers less than the $450k they received.

 

[RochesterGopher]

This just makes no sense to me. County fairs opperate beer gardens and make bank. I guess Im just curious what factors went into this loss.

 

[2nd Degree Gopher]

Whoever has been negotiating stadium related contracts should be fired, today.
22%? Why would ANYONE take that small of a cut in the profits.

The article from the Star Trib uses the term “profits” when they mean “revenue.” From piecing together the two reports, it appears that the University didn’t go back to the premium seat holders to re-do those deals, so they are still operating with the discounted “no alcohol” prices there and will apparently do so again this year. It also looks like the 22% of revenue deal is what they had in place with Aramark under some existing contract, not a separate deal negotiated just for the beer and wine sales. I don’t know how long that deal runs, but they should be able to get a better return on the beer and wine sales once they negotiate that separately. No reason for Aramark or any vendor to make as much handing over beers as they do for preparing and serving other concessions that require more preparation, monitoring, etc.

“Associate Athletic Director Tom McGinnis said the university never expected to turn a profit from alcohol sales.” If that’s true, why didn’t somebody tell us that last year before the sales started? It’s called managing expectations.

 

[Pewterschmidt]

First. Aramark is a crock company. Horrible at what they do but big enough to bully and lowball. They are basically a generic food service company. If I was in charge they would have had the door slammed on their face as soon as they walked in to propose working in TCF bank.

Second.
Hopefully the U learns from this. Beer is not meth. Beer is not crack. Beer will not turn a stadium from peaceful to murderous simply by being available, especially at 7.25 a pop.
Do they seriously not realize why police incidents went down this year?
There are 2 stinking reasons and they look like a skunk in a popcorn box and a yellow and black pigeon.
I'd love for them to PUBLICLY throw some red meat to the media about how bad the fans from iowee and wisky are. We all know, anyone who's been to one of those games knows. Call them out.

Third.
Whoever has been negotiating stadium related contracts should be fired, today.
22%? Why would ANYONE take that small of a cut in the profits.
Add in the bad deal the vikings sold us, and the horrible tailgating and parking situation.
It's like our dealmakers are seriously trying to sabotage the football gameday experience and the athletics dept.
/RANT

 

[2nd Degree Gopher]

What exactly are Aramark's costs here if the U is paying for the facilities, equipment rental, security and the beer? Are they only responsible for paying the servers? I'm thinking that they managed to pay the servers less than the $450k they received.

I would also like to know how much they made. One major expense item is the liquor liability insurance. I’d hope that Aramark is the licensee, not the U, and has the responsibility to procure the coverage and has assumed the liability for any “illegal sales” of the alcohol. But they still had to have made a significant profit.

 

[Catechol]

First of all, spreadheet error? Classic U bureacracy. Perhaps they shouldn't be using Microsoft Excel to run a nearly $1 million business operation

Secondly, I wonder what Aramark took home in profit, since it looks like the U fronted most of the overhead costs? Edit: I realize this is redundant, someone posted the same Q just before me.

 

[FireDaveLee]

Personally, I don't care if they lose a little as long as the fans that want a beer can have one. With the millions invested for each game, what the hell.

Of course you don't; it's not your money that's being lost.

 

[wait!what?]

So if the U is being less than honest about beer $...why? something is being obfuscated here but i cannot get a clear undertanding of the motive.

 

[RodentRampage]

It's pretty small either way. There were about $30,000 in one-time costs that will be off the table for next season. The U erred on the side of caution with security, so the security expenses will be lower next season. They are talking about switching to bottles, that might speed up the lines and result in more sales. What was the financial impact from being able to have beer in the suites?

 

[Iceland12]

It's pretty small either way. There were about $30,000 in one-time costs that will be off the table for next season. The U erred on the side of caution with security, so the security expenses will be lower next season. They are talking about switching to bottles, that might speed up the lines and result in more sales. What was the financial impact from being able to have beer in the suites?

With Iowa and the drunken, bloody Badger fans coming back to TCF this year who do we write to tell them NOT to speed up sales or God forbid, start selling throwable bottles at least on September 28 or November 23?

 

[RodentRampage]

A thrown plastic bottle could only do damage if it was full. What are the odds of a Badger or Hawkeye fan throwing a full bottle. No, the only throwing of alcohol they will be doing is throwing up.

 

[Iceland12]

A thrown plastic bottle could only do damage if it was full. What are the odds of a Badger or Hawkeye fan throwing a full bottle. No, the only throwing of alcohol they will be doing is throwing up.

Though since they usually come to the game already drunk out of their minds....

 

[Formo]

It's pretty small either way. There were about $30,000 in one-time costs that will be off the table for next season. The U erred on the side of caution with security, so the security expenses will be lower next season. They are talking about switching to bottles, that might speed up the lines and result in more sales. What was the financial impact from being able to have beer in the suites?

YES. People, there were a few things that inflated this year's lack of profit of beer sales. First is what RR said.. One time start up costs. That won't be there next year. But here's another figure that's linked to the beer/wine sales but wasn't factored: Suite Sales. The purpose of getting a beer garden in the first place is to sell those Suites out. That money wasn't factored as well.

So, this isn't as big of a deal as it may seem.

 

[supadupafly]

Seems like they went a little overboard on the amount and types of security they hired for the beer garden though. That kind of overhead likely cut in to there profit. That and they should have not let Aramark and the beer vendor take such a large cut of the profits. Next time around they better negotiate a larger share of the pie.

the contract language with aramark from when TCF Stadium first opened (i.e. when the plan was only to have alcohol sales in premium seating) was still in effect regarding any alcohol sales on site. so the U was stuck in pickle from that standpoint as far as the percentages each party received. remember this whole idea and the inefficiencies created by having to sell stadium wide was forced upon them last minute and therefore they really were not able to do much pre-planning from a P&L standpoint to put themselves in the best financial position. the legislature should have realized that when this whole dance was going on politically. going forward i believe the U is now able to renegotiate the alcohol sales contract with aramark and cut some of the other overhead costs out of the process.

 

[CP Gopher]

$12,000 for plants? Did I read that right?

 

[AO54]

Commission from Aramark 185,025.99$

Athletics Event/Set Up Expenses (186,198.84)

Alcohol Costs for Indoor Club (14,389.00)

Net Profit for Athletics (15,561.85)

Police 12 PD Officers 38,661.00

CSC Security - 10 additional ushers ($16/HR - 6 hours) 6,720.00

CSC Security - 2 additional supervisors ($21/HR - 6 hours) 1,764.00

Generator - power source for trailers 22,400.00

Lights for night game (total) 500.00

Signage 2,000.00

Freestyle (tents, tables, stanchions) 51,626.80

Cash register rental 11,244.00

Cash register support / set up/ tear down 6,000.00

CC Readers 7,613.00

ATM technician 6,006.00

Cables for CC readers 850.00

Stretch Wrap 120.00

Gate A Parking Spaces 980.00

Total Expenses 156,484.80

Pumps and regulators in premium spaces 3,800.00

Plants 12,000.00

ATM infrastructure 9,599.00

Locks for suite cabinets labor 1,195.04

Locks for suite cabinets (total) 1,500.00

Yellow line painting 1,620.00

 

[Catechol]

Almost $16,000 in ATM expenses? Is this normal? Why so much is there are already ATMs in the area and they also spent over $8,000 on CC readers too. Get rid if the ATM and it's a break even operation.

 

[mplsbadger]

Almost $16,000 in ATM expenses? Is this normal? Why so much is there are already ATMs in the area and they also spent over $8,000 on CC readers too. Get rid if the ATM and it's a break even operation.

I'd have thought you get paid to have an ATM?