BEER BUST: U of M loses $16K on booze sales at The Bank - FOX 26 News | MyFoxHouston

BEER BUST: U of M loses $16K on booze sales at The Bank

MINNEAPOLIS (KMSP) -

The University of Minnesota was skeptical about experimenting with alcohol sales all along -- and now we know why. Even though the fans left happy, the U lost thousands despite nearly $1 million in sales.

Make no mistake, money was made off of all the booze sold at The Bank -- but the U wasn't banking it.

At $7.50 apiece, Gopher fans bought a lot of beer last season. Alcohol sales topped $900,000 -- but despite what sounded like a windfall, the school lost money on the deal.

"I think it's hard for the average Minnesotan to understand how you have a million dollars' worth of business and then end up losing $16,000," said Rep. Dan Schoen.

Schoen had sponsored a bill to expand alcohol sales at university venues like Marriuchi and Williams arenas, but that idea has since been tabled for the year. Even so, Schoen admits he's been approached by plenty of people who say something seems off.

Although the university failed to turn a profit, a closer look at the contract with its vendor, Aramark, shows that the U was only slated to receive 22.5 percent of the alcohol sales. That adds up to just over $185,000 -- but the school spent more than that to operate the beer garden.

Some of the school's expenditures included:

  • $50,000 for the tent
  • $22,000 for electricity to keep the beer cold
  • $45,000 for additional security
  • $25,000 for cash registers, credit card readers, and ATMs

Even so, Schoen says the endeavor is not a total loss.

"People made that beer. People delivered that beer. People poured that beer," he said. "That's jobs."

It's also $80,000 in sales tax going to the state.

Some say the school negotiated a lousy deal, but the reality is that in order to make the transition a smooth one, they had to farm out the concessions to a vendor for a turn-key operation. No risk, no reward -- however, longtime event promoter Randy Levy was a bit more blunt.

"It's not possible to sell $900,000 in beverage sales and lose money unless you are so woefully inept at administrating," Levy said.

According to Levy, the U should have walked away with about 45 percent of the till, and the U says they hope to be profitable in the future by charging more money for premium seating. They expect to make about $14,000 next season.

  • LocalMore>>

  • Halliburton reaches $1B Gulf oil spill settlement

    Halliburton reaches $1B Gulf oil spill settlement

    Tuesday, September 2 2014 5:22 PM EDT2014-09-02 21:22:25 GMT
    Halliburton says it has agreed to pay $1.1 billion to settle a substantial portion of plaintiff claims arising from the 2010 Gulf of Mexico oil spill.
    Halliburton's agreement to pay more than $1 billion to settle numerous claims involving the 2010 BP Gulf of Mexico oil spill could be a way for the company and victims of the spill to avoid years of costly litigation -...
  • Usher, Maroon 5 to perform in upcoming concerts at Toyota Center

    Usher, Maroon 5 to perform in upcoming concerts at Toyota Center

    Tuesday, September 2 2014 4:26 PM EDT2014-09-02 20:26:30 GMT
    Although singer Usher and Maroon 5 lead vocalist Adam Levine are well-known for their roles as judges on a popular televised talent show, they also share upcoming scheduled concert dates at Toyota Center in Houston, according to statements released by Live Nation Entertainment.
    Although singer Usher and Maroon 5 lead vocalist Adam Levine are well-known for their roles as judges on a popular televised talent show, they also share upcoming scheduled concert dates at Toyota Center in Houston, according to statements released by Live Nation Entertainment.
  • Ex-fire chief in Southeast Texas accused of theft

    Ex-fire chief in Southeast Texas accused of theft

    A former volunteer fire chief in Southeast Texas has surrendered on theft-related counts after about $70,000 in department money allegedly was misspent.
    A former volunteer fire chief in Southeast Texas has surrendered on theft-related counts after about $70,000 in department money allegedly was misspent.
Powered by WorldNow

KRIV FOX 26
4261 Southwest Freeway
Houston, TX 77027

Phone: (713) 479-2801
Fax: (713) 479-2859

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices