u only made $181k off beer last season at football games?

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Go4

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so two years ago we lost money, this year we made a modest $181k. what kind of margins are we dealing with?

<blockquote class="twitter-tweet" lang="en"><p>U of Minnesota asking state legislature to continue to allow alcohol sales at stadium. Made $181K off beer & wine last season</p>— darren rovell (@darrenrovell) <a href="https://twitter.com/darrenrovell/statuses/435059032551084032">February 16, 2014</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
 

Go4 said:
so two years ago we lost money, this year we made a modest $181k. what kind of margins are we dealing with?
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So when the U turns a healthy profit on alcohol sales, people will start bitching that they charge too much. No win situation for the U. Unless you don't drink at the games, you're just pooping in our own nest by complaining they don't make enough on sales.

I know some people will say the reason the U doesn't make a bigger profit is because they don't know what they're doing. There may have been some truth to that argument the first year of sales but I don't buy it now. It was never intended as a get rich quick scheme for sales to the general public. The real profit was in selling the suites and that is what is missing from this equation. We'll never know but how fewer suites would have been sold these past two years without the sale of alcohol?
 

Go4 said:
so two years ago we lost money, this year we made a modest $181k. what kind of margins are we dealing with?

<blockquote class="twitter-tweet" lang="en"><p>U of Minnesota asking state legislature to continue to allow alcohol sales at stadium. Made $181K off beer & wine last season</p>— darren rovell (@darrenrovell) <a href="https://twitter.com/darrenrovell/statuses/435059032551084032">February 16, 2014</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
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It's not about margins. It's about negotiating contracts.

http://www.bringmethenews.com/2013/...s-better-beer-wine-deal-for-tcf-bank-stadium/

I don't believe the Gophers have a traditional Food and Beverage Manager.:rolleyes:
 


There are a lot of stadiums and arenas throughout the country that sell beer, and I am pretty sure many of them do it through a third party. Does anyone know of a place where we can see how other arenas/stadiums do on their margins for alcohol sales? I feel like that would be pretty informative as to whether we have a standard deal with Aramark or whether we are getting jobbed.
 


bleedsmaroonandgold said:
There are a lot of stadiums and arenas throughout the country that sell beer, and I am pretty sure many of them do it through a third party. Does anyone know of a place where we can see how other arenas/stadiums do on their margins for alcohol sales? I feel like that would be pretty informative as to whether we have a standard deal with Aramark or whether we are getting jobbed.
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No doubt we are getting jobbed because a third party will only pitch in to increase their own profits. That's why they are so successful.
 

Dr.Don said:
No doubt we are getting jobbed because a third party will only pitch in to increase their own profits. That's why they are so successful.
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But the question is, are we doing as well as other stadiums that use third parties?
 

How much profit were you expecting?
Before you set your expectations in the millions of dollars, please consider a few things.
It is a 50,000+ seat stadium.
They play 7 games, not 8 regular season plus 2 pre-season games like the Vikings.
The non-conference games were not well attended.
Demographics are different than Vikings games. 30% of the crowd is probably too young or too old to drink.
They only sell beer for the first half.
They only sell beer in a few locations. They don't have beer sales in every vendor in the concourse or have vendors selling in the aisles.
There were at least three maybe 4 games out of seven where the weather was more conducive to selling large amounts of hot chocolate instead of beer.
 

Go4 said:
so two years ago we lost money, this year we made a modest $181k. what kind of margins are we dealing with?

<blockquote class="twitter-tweet" lang="en"><p>U of Minnesota asking state legislature to continue to allow alcohol sales at stadium. Made $181K off beer & wine last season</p>— darren rovell (@darrenrovell) <a href="https://twitter.com/darrenrovell/statuses/435059032551084032">February 16, 2014</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
Click to expand...

Now, is $181k a fair measurement?.. that I can't opine on.

But, per the U's reported figures, the $181k profit is on $1.061MM of sales.. so, a profit margin of around 17%. In year 1, AFTER the adjustment to the revenue split, profit was $21k on $977k, or a 2% profit margin.

The U plans to expand point of sale locations throughout more of the stadium so if attendance holds up, I'd expect an uptick in sales (there was an increase of roughly 6% in beer sales per capita in year 2).

The bigger issue may be... how much do alcohol sales help premium seating full-season sales?... especially when anyone can buy alcohol? Total (measured in season tickets sold across the various premium seating types - outside & inside club, loge and suites) premium seating season tickets went up in 2012 (year 1) from 2011... but then fell below 2011 in 2013 (year 2).
 



I wonder how much they made at the outdoor hockey game. They were selling beer at every concession stand in cans and everyone I saw going up came back double fisting em.
 

drinks at Northpoint said:
How much profit were you expecting?
Before you set your expectations in the millions of dollars, please consider a few things.
It is a 50,000+ seat stadium.
They play 7 games, not 8 regular season plus 2 pre-season games like the Vikings.
The non-conference games were not well attended.
Demographics are different than Vikings games. 30% of the crowd is probably too young or too old to drink.
They only sell beer for the first half.
They only sell beer in a few locations. They don't have beer sales in every vendor in the concourse or have vendors selling in the aisles.
There were at least three maybe 4 games out of seven where the weather was more conducive to selling large amounts of hot chocolate instead of beer.
Click to expand...

Don't ever say that to Dr.Don.:drink:
 

So they made $71,000 more than they expected. I'd say they didn't get jobbed.

$181K is the U's part of the $512K profit, as far as I can figure. There was a 35% share on the first $475K and 40% on everything after that.

2012 start up costs were $200,587 and they made $185,025 in "profit," resulting in the overall loss of -$15,562. That was at 22.5%.

Somehow, the numbers don't jive. I think the $181K doesn't include the subtracted costs related directly to selling the alcohol--extra security manpower for one.

Maybe someone else could crunch these numbers.
 

highwayman said:
So they made $71,000 more than they expected. I'd say they didn't get jobbed.

$181K is the U's part of the $512K profit, as far as I can figure. There was a 35% share on the first $475K and 40% on everything after that.

2012 start up costs were $200,587 and they made $185,025 in "profit," resulting in the overall loss of -$15,562. That was at 22.5%.

Somehow, the numbers don't jive. I think the $181K doesn't include the subtracted costs related directly to selling the alcohol--extra security manpower for one.

Maybe someone else could crunch these numbers.
Click to expand...

1. As was stated 'making money' was not their #1 goal. Trying to create the right atmosphere(and of course satisfy suite holders) was the main goal in year one.

2. Sounds like first year costs were all expensed....nothing depreciated.

3. Lousy contract from lousy company.
 



I have never gotten a beer while at the Gophers football game for the main reason that selling it like they currently do it is ridiculous. However at the Hockey game I bought several rounds because of the ability to buy it directly at the concession windows.

That very point is in my opinion why they are not currently maximizing the income potential from booze sales.
 

AF_Howie_2180 said:
I have never gotten a beer while at the Gophers football game for the main reason that selling it like they currently do it is ridiculous. However at the Hockey game I bought several rounds because of the ability to buy it directly at the concession windows.

That very point is in my opinion why they are not currently maximizing the income potential from booze sales.
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Yes, but don't worry. The limited sales points weren't because the U was worried about kids so much as it was they were worried about the flip flopping they had done and the PR battle.

They will attempt to allow the booze to flow far more freely this coming year (i.e., sell it at more spots throughout the stadium... and sales will rise).
 

Why do people obsess so much about the profits on beer sales? Yes, it looked ridiculous that they initially lost money in year 1 before a contract renegotiation but that loss still included significant startup costs expensed up front (as is the accounting practice of most public entities for these types of expenses).

But now we're fretting that they only made a 17% margin and that they're not maximizing profits?

I wonder how they're doing on nacho sales. We better find out if they're making money on mini-donuts. I only know of one mini-donut stand so I suspect there's huge untapped potential there. :rolleyes:

Look, they sell beer now, which is nice. I can go get one if I want but I usually don't. Many people do buy beers and the U is making money on them. That's all good enough for me.
 

I believe Louisville also sells beer in their stadium which is similar in size to TCF. For people looking for a comparison, that might be a spot to start looking.
 

I actually think its terrific. Makes the suites more marketable. I'm a math guy, and the numbers didn't jive. I think that the original problem was the suite sales had to be discounted 20%.


This won't make up financially for the screw-job the State legislature and Tom Rukavina originally put upon them, but it will help in the long run.
 

highwayman said:
So they made $71,000 more than they expected. I'd say they didn't get jobbed.

$181K is the U's part of the $512K profit, as far as I can figure. There was a 35% share on the first $475K and 40% on everything after that.

2012 start up costs were $200,587 and they made $185,025 in "profit," resulting in the overall loss of -$15,562. That was at 22.5%.

Somehow, the numbers don't jive. I think the $181K doesn't include the subtracted costs related directly to selling the alcohol--extra security manpower for one.

Maybe someone else could crunch these numbers.
Click to expand...

From your linked article:

The 199K is 22% of Revenue 907k. U has 14k or 7% subtracted for sales tax. This leaves them with 185k

There were 200k in costs for a loss of 15k.

Problem lies in the terms. U's share comes out of total revenue (top line).
 

atsgopher said:
From your linked article:

The 199K is 22% of Revenue 907k. U has 14k or 7% subtracted for sales tax. This leaves them with 185k

There were 200k in costs for a loss of 15k.

Problem lies in the terms. U's share comes out of total revenue (top line).
Click to expand...

I was talking about 2013. If they are getting 35-40% of the revenue and received $181K, the U sold far less alcohol in 2013 than they did in 2012.

In 2012, it was roughly the same payout (startup costs aside) with a far smaller cut. I just want someone to calculate how many cups were sold in each year.
 

They'd make far more and beautify the stadium if they moved it out of the tent city and into the concession stands.
 

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