UM Renegotiates Stadium Alcohol Contract After Losing Money

The University of Minnesota has renegotiated the concessions contract for its 51,000-seat TCF Bank campus stadium with Aramark after losing $16,000 last year on alcohol sales despite gross sales of more than $900,000. Aramark has also agreed to pay the university an additional $37,000 for the 2012 season, resulting in a net profit of $21,000.

The original Aramark contract included a commission structure for alcohol sales in premium seating areas only. It did not include a separate revenue sharing structure for general seating areas. After reviewing the initial season’s sales, both parties agreed to amend the contract to ensure Gopher Athletics earned a more reasonable share of the sales revenues.

“This agreement enhances the partnership between Gopher Athletics and Aramark,” says Minnesota Director of Athletics Norwood Teague. “This contract benefits both organizations and ensures the university gets a more appropriate share of revenues from the expansion of alcohol sales to the entire stadium."

The original, 2012 agreement included a 22.5 percent commission on alcohol sales in premium and general seating areas. The amended agreement will retain the 22.5 percent commission for premium seating and increases the general seating sales commission to 35 percent on the first $475,000 in alcohol sales revenues and 40 percent on all sales revenue above that amount.

If total alcohol sales at TCF Bank Stadium are similar in 2013 to those in 2012, the university will realize a net profit of $110,000. This includes new revenue from the amended commission structure, as well as the elimination of one-time startup expenses incurred in 2012.

The Aramark contract will be revisited in the spring of 2014, as the university evaluates the two-year pilot of alcohol sales.