The U of M somehow lost money on TCF Bank Stadium booze sales, leaving legislator baffled

Despite selling nearly a million bucks worth of booze, the U still ended up in the red.
Despite selling nearly a million bucks worth of booze, the U still ended up in the red.
Image by Tatiana Craine

Remember earlier this year when the University of Minnesota was being criticized by the Wall Street Journal and legislature for having lost control of its spending? If the latest news is any indication, it looks like not much has changed the past couple months.

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Two weeks after a U of M official told the legislature the school made $16,000 from booze sales during football games last season at TCF Bank stadium, an AP investigation revealed the school actually lost just under $16,000 despite selling more than $900,000 of beer and wine.

The AP's investigation identifies "hiring additional police and security officers, setting up tents and other facilities, and equipment rental" as factors that drove expenses up past the $900,000 mark. "Roughly half of its revenues went directly to Philadelphia-based Aramark Corp., which had the contract to sell beer and wine," the AP found.

For what it's worth, those expenses are expected to come down next year now that the school has taken care of one-time preparatory costs, and the U is also hoping to "adjust its contract" with Aramark. Officials expect to make a profit off TCF Stadium beer and wine sales next year, but then again, they told us two weeks ago that they made a profit this past season.

Rep. Dan Schoen, D-St. Paul Park, wanted to extend U of M alcohol sales to other sporting events. But in wake of the latest news, he now says he'll hold off on that effort.

"I think the average Minnesotan would have a very difficult time understanding how any business could do $900,000 in sales and lose $16,000 doing it," Schoen told the AP. "With this information, we probably need to take a deeper look."

:::: UPDATE ::::

A bit more information comes via a Star Tribune blog post:

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...

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...

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.

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