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:
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.