Article posted on July 9, 2012

By: Phil Landes

Our review of more than  40  current  FBS  athletic  concession  contracts  yielded  three  integral  financial  components  written  into  the  over whelming  majority  of  agreements,  as well  as emerging  market  trends  adding  value  to  agreements.

Executive Summary excerpted from The Winthrop Report: a 100+ page major revenue primer for Athletic Directors only that encompasses four subject areas: apparel rights, pouring rights, multi-media rights and concessions.

Revenue Share Structure

The diverse, varying ways in which schools and concessions partners contract to divide collected revenue are critical to assessing the value of a given agreement, both on a stand-alone basis and especially in relation to peers. Our report identifies and describes eight distinct revenue-sharing setups embedded in concessions rights agreements, which schools utilize to varying degrees across FBS. In the appendix to our detailed report, we present the most current, detailed revenue-sharing terms of each school to assist athletic administrators in assessing the value of their current agreement and thinking about ways to improve value in future agreements.


Capital Investments

Capital investments paid by the concessions rights partner are a significant component of agreement value for athletic departments. We consider capital investments to be all payments (both upfront and over the life of the concession agreement) for such items as equipment replacement, capital and leasehold improvements, renovations of concession areas, signing bonuses, and capital projects.

Our analysis revealed a wide gap in the median amount of capital investment received by schools. Median investments in the Big Ten and Southeastern Conference are over $1.5 million, while the Big East and non–Big-6 are $200,000 and below. Sorting by concessions rights partner, we found Sodexo and Aramark are the two most employed partners, and are similar in terms of median investment given to schools at $500,000 and $450,000, respectively. The combined catch- all for all other partners, however, is considerably higher at over $1.1 million. Finally, we found football and men’s basketball attendance is a strong proxy for the amount of capital investment received by a school.


Maintenance Accrual Accounts

Labeled differently in each school’s specific agreement is a type of facility and/or equipment enhancement and replacement account. These accounts are funded either upfront by the concession partner or accrued based on the percentage of concession sales over a given period. As implied in the title, the purpose of these accounts is to provide funding for regular equipment and facility enhancement/replacement as well as provide funding of routine maintenance required on concession equipment and facilities. In so far as maintenance costs would otherwise be the responsibility of the school, these accrual accounts are another major value- adding piece of concessions rights agreements. Included in our full report is a detailed listing of the specific accrual accounts and terms on a school-by-school basis to once again help athletic administrators assess the value of their current agreement and think about how to improve value in future agreements.


Emerging Market Trends

Aside from the three integral financial components, we identified four additional areas in which schools are generating recurring value from their concessions rights partners. Although not currently in a great number of agreements at the FBS level, we foresee the revenue areas emerging in a growing number of agreements and believe they will be- come more standard in future agreements.

  • Ticket/Suite Purchases and/or Booster Club Membership
  • Marketing/Sponsorship Initiatives
  • Scholarship Funds
  • Catering & Food/Beverage Funds



Learn more about The Winthrop Report