SBJ/September 19-25, 2011/Colleges

Colleges weigh risks, rewards of stadium beer sales

Editor's note: This story is revised from the print edition.

For 35 years, Colorado State University has sold beer to the general public during college football games at Hughes Stadium.

The school’s hometown, Fort Collins, sits in Coors’ backyard, and its half-dozen microbreweries have earned it the unofficial title of “Napa Valley of beer,” said Paul Kowalczyk, Colorado State’s athletic director. Beer plays an important role in the culture and business climate of the city.

Beer can also be bought in the stands at the University of Nevada’s Mackay Stadium in Reno, a gambling town where alcohol flows 24/7 in the city’s downtown casinos. At the University of Louisiana-Lafayette, a two-hour drive west of New Orleans and Bourbon Street, athletic officials say there is nothing taboo about selling beer at Cajun Field.

But these schools and a few others stand in contrast to most of the college football world, where sales of beer as well as liquor, especially at on-campus facilities, are allowed only in luxury suites, club seats and premium lounges. A range of restrictions by states, conferences or colleges keep beer from being sold in the stands, where many of the students are under the legal drinking age.

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Fans in general seating areas can buy beer at Houston’s Robertson Stadium.
Against that backdrop, West Virginia made the decision over the summer to sell beer this season in public spaces at Milan Puskar Stadium and persuaded the school’s board of governors to change its policy on the matter. School executives saw several opportunities, starting with a chance to modify fan behavior, that moved them to make the switch. Given the potential to significantly increase concessions and sponsorship revenue, it’s a decision other athletic departments, and the school presidents and governing boards who would have to approve such changes, will be watching closely.

After talking to four other Big East Conference schools that have public beer sales at on-campus stadiums, West Virginia estimated it could generate $500,000 to $1.2 million annually in new revenue, depending on weather, team performance and other variables. “We budgeted conservatively,” said Oliver Luck, West Virginia’s athletic director. “We can safely say we will generate half a million bucks. That’s our cut after [concessionaire] Sodexo takes its share.”

The change affected not only beer sales within the stadium but also the school’s sponsorship sales. With the change in policy comes more sponsorship revenue from Anheuser-Busch, MillerCoors and the Morgantown Brewing Co., who are all selling their products at the stadium. The school previously had only a small radio advertising deal with A-B, but now sales opportunities have grown from one five-figure deal to three deals with total revenue in the mid-six figures annually, Luck said.

No beer signs are visible inside the seating bowl or outside the stadium, as in the past, but small signs on the concourse indicate which brands are served at permanent concession stands. The three brewers also receive commercial time on football radio broadcasts and program ads.

Pouring rights agreements are not necessarily tied to sponsorship deals. MillerCoors recently signed a deal covering 23 schools, but marketing and sales are separate components, and the schools and their concessionaires decide whether to pursue beer sponsorships apart from pouring their products, MillerCoors spokesman Scott Bussen said.

But as Luck pointed out, sponsorships “are more attractive for the beer companies if you’re selling beer than if you’re not selling beer.”

West Virginia’s decision also took into account the demands of today’s sports fans, shaped by attending games at pro stadiums. As more schools upgrade their football facilities, they are charging big league ticket prices, said food service consultant Chris Bigelow. In return, college football fans expect big league amenities such as beer, whether it is served in general concessions or premium areas.

Luck, whose administrative background is in pro sports, attended the Final Four in Houston this year, where beer was for sale at the Bracket Town fanfest. “But then you walk into Reliant Stadium for the games and they don’t sell beer because it is an NCAA championship event,” he said. “It is no secret that a lot of people grumble about that.”

Public beer sales can’t be discussed without taking fan behavior and security issues into account. At West Virginia, selling beer was considered a solution, not a problem.

Binge drinking in the tailgating areas outside the stadium had become an issue officials could no longer ignore, Luck said, so starting this season the school no longer allows fans to leave the stadium and come back into the building by showing their ticket stub. As strange as it sounds, officials believe that by putting a stop to the old “pass-out” policy, as many schools already have, and introducing public beer sales inside the building, West Virginia will curb binge drinking in the parking lots and the issues it brings inside the gates.

“What people were doing, as you would expect, is leaving the stadium at halftime and rushing back to their tailgate and consuming significant amounts of alcohol to get their buzz on again,” he said. “Our police and public safety folks said, ‘Listen, Oliver, if you stop this … the beer sales is really not an issue at all.’ There was lots of alcohol being consumed, but we weren’t in control and that leads to obvious problems.”

Luck says more schools are looking into public beer sales, judging from his staff’s research and the phone calls he has received from other schools, which means more schools will be examining the security issues that can accompany suds in the stands.

Nationally, the NCAA, with the exception of its championships, has no rule preventing schools from selling alcohol at sports events. Among the biggest conferences, the Southeastern Conference has rules prohibiting public alcohol sales at its members’ stadiums, but other conferences do not.

All told, 21 out of 120 Football Bowl Subdivision schools sell beer to the public at their stadiums, according to research by SportsBusiness Journal. Eleven of those schools play at university-owned stadiums.

In Morgantown, West Virginia officials believe they have done all the right things to ensure their new system works. The school invested a six-figure sum to ramp up the program, an expense covering increased staffing, more rest rooms and surveillance camera technology, Luck said. In late August, TEAM Coalition, an alliance of teams, leagues, service providers and other groups, trained more than 700 concession and security workers for football games on how to serve alcohol responsibly.

Because Milan Puskar Stadium’s beer license belongs to Sodexo, the concessionaire assumes the liability risk, similar to concessionaire deals in the pros, Luck said.

Beer is sold exclusively in the concourses with a two-beer limit for each purchase. In addition to aggressive pricing ($7, $8 and $9, depending on the brand), Sodexo checks the identification of everyone who buys beer and stops sales in the middle of the third quarter. The beer companies whose products are served at West Virginia sponsor a designated driver program.

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“There was lots of alcohol being consumed, but we weren’t in control, and that leads to obvious problems.”
Oliver Luck
West Virginia athletic director
West Virginia learned ahead of time what restrictions were required by talking to other schools selling beer to the public. Schools like Colorado State and Nevada have already sorted through some of the issues that accompany beer sales, and both have added more teeth to their alcohol policies after experiencing the same tailgating issues that have occurred in Morgantown.

At Nevada and its sister school UNLV up the road in Las Vegas, the feeling among officials is they would most likely be “crucified” if they did not allow public beer sales at their football stadiums, said Cary Groth, athletic director in Reno.

Most important, Nevada football games generate $350,000 in beer sales annually, providing a big boost to the bottom line of Wolf Pack athletics. Keeping that important source of revenue in mind, three years ago, Groth sat down with Milton Glick, then the school’s president, to address the issue of drunken tailgaters causing problems inside Mackay Stadium (Glick died in April). Together they came up with a list of improvements to take greater control on game days. Those measures included designating alcohol-free zones inside and outside Mackay, increasing the price of beer to $7 and establishing a system for fans to text security if they observed rowdy behavior.

The school also worked with the Western Athletic Conference and sports networks to change 7 p.m. kickoffs to 1 p.m. starts “so people don’t juice up for the night games,” Groth said.

“Personally, I feel selling beer doesn’t belong in a college football stadium, but we have seen a significant decrease in incidents after making those changes,” she said. “I am comfortable with the measures we have in place.”

At Colorado State, where beer sales at football games represent 55 percent of the stadium’s annual concessions revenue, keeping up with Fort Collins’ brewing reputation over the years has come with some major headaches for school officials.

In years past, fan behavior grew so rowdy the school considered ending stadium beer sales in 1991. Instead, officials tightened alcohol policies and formed a peer group, Positive Impact, as a first line of defense to prevent students who had too much to drink from hurting others and themselves. The system works well, Kowalczyk said.

Not all of the movement in college athletics is toward public sales of beer. In December 2005, the California State University chancellor signed an executive order prohibiting the sale of alcoholic beverages at athletic events in university-owned and operated facilities to stop alcohol abuse. There was one caveat: State-run colleges whose concessionaires sold beer at their stadiums could sell beer under the existing terms of their contracts until those deals expired.

Fresno State did not wait to take action. Before the 2006 season, the Western Athletic Conference school eliminated beer sales in public spaces at Bulldog Stadium, even though, under the terms of its original deal, concessionaire Ovations Food Services could still be selling beer this season at the 41,031-seat facility.

As a result, Fresno State has lost $1 million in potential revenue based on historical averages of $250,000 in annual stadium beer sales, said Athletic Director Thomas Boeh.

“We pulled [beer] out several years earlier than we needed to for the best interest of the school, the safety and security of our athletes, game officials and our fans,” Boeh said. “We saw a marked improvement in fan behavior in the first year after alcohol sales were discontinued. At one time, it was very much part of the game-day culture [and] some sectors of our constituency were not happy when we took alcohol out.”

“We took a hit and absorbed it,” he said. “The issue is not even discussed anymore.”

In Morgantown, the issue is settled for now. For the Mountaineers’ first home football game, played on Sunday afternoon over Labor Day weekend, Sodexo reported gross beer sales of $160,656 ($75,781 of that went to the athletic department). For the second home game, Sept. 10, the school’s take was about $57,000 from total beer sales of $120,797.

West Virginia will evaluate the program for possible changes after the season, when some of its industrial engineering students will study the effect public beer sales had on behavioral patterns over the seven 2011 home games. They will analyze arrest reports and compare that data with past records. The information will be part of a report Luck gives to the board of governors in June.

“I am not sure we can trace all the issues back to beer, but we’ll see,” he said. “It will be an interesting exercise with some interesting data, not just for us, but for all the schools considering doing it.”

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