mal attendance and that the demand for beer has not changed, how much could EMU pay for infrastructure and still earn a profit over a six-game season?…
Assuming normal attendance and that the demand for beer has not changed, how much could EMU pay for infrastructure and still earn a profit over a six-game season?
Normal attendance: 6,000 people
Demand for beer: 1 out of 8 people per game
Price of beer $7
In an effort to find alternate revenue streams for their athletic program, as well as to enhance the game day experience for fans, Eastern Michigan University recently ran a pilot program to sell beer at a home football game. Despite an approximate $3,000 net loss on the program, the pilot was deemed a success because it gave them valuable information needed about fan interest and required infrastructure if they decide to move forward with more football beer sales in the future.
One potential reason for the net loss was the low attendance at the Sept. 26, 2015 game against Ball State University. Attendance for the game was 4,463, much lower than their normal attendance of approximately 6,000 fans. However, you should assume that the demand for beer (i.e., the percentage of fans that buy beer) has been correctly estimated by the pilot. In a normal season, EMU has six home football games.
For this pilot program, EMU rented some infrastructure items (i.e., tables, tents, hedges and other equipment) that would be purchased if they decided to sell beer on an ongoing basis. One of the goals of the pilot program was to give administrators information on how much they could pay for this infrastructure and still earn a profit.
Eastern Michigan University’s trial run at selling beer during its home football game against Ball State wasn’t profitable, according to a report from The Eastern Echo.
The campus newspaper reported that the program paid about $7,000 to facilitate the beer truck and increased security, but only netted about $4,000 from sales at its Sept. 19 game at Rynearson Stadium.
EMU sold 559 16-ounce beers for $7 each. Greg Steiner, the school’s assistant athletic director for media relations, told The Echo that there are no plans for selling beer at any other football games for the remainder of the season.
Heather Lyke, EMU’s vice president and athletic director, said the pilot programwas implemented to increase the fan experience and to add another revenue stream to the athletic department.
The Ball State game was the least-attended of EMU’s three home games this season, with just 4,463 people in the stands. Each of Eastern’s other two home games drew more than 6,000 people.
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