THE GIST
A “pay-to-play” controversy regarding the right to serve beer at athletic events hosted by the University of North Carolina-Wilmington has emerged after two Anheuser-Busch InBev-focused distributors each paid $10,000 to help secure an agreement to sell their products at university games.
The news comes at a time when universities are reaping millions in sales after new laws and campus policies have allowed alcohol to be served at football and basketball games. Those sales have come almost exclusively from multinational brands owned by AB InBev and MillerCoors, while smaller breweries have sought partnerships to brew officially licensed beers for colleges to be sold in local stores rather than on campus.
But the rewards of selling a beer that stays at a tailgate party aren’t necessarily as lucrative or community-oriented as being in a stadium itself, as is evidenced by the one-time cash payments made by the wholesalers “in support of the University.” Rob Brickels, associate athletic director for external affairs at UNCW, says that the $20,000 “is not ear-marked for anything specific.”
“It will, however, assist the athletic department in covering the costs of tuition increases, team travel expenses and additional funding for student-athlete support services,” Brickels tells GBH.
Wilmington's Port City Daily recently broke the story, asking UNCW spokesperson Christina Schechtman why the $10,000 cash payments were needed. She replied that “certain types of recognition of and participation by sponsors of Athletics games and via other outlets are discussed by both parties.” Contracts with Adams Beverages and Coastal Beverage Company will allow the distributors to "provide complimentary beers" at alumni and fan events for the university, as well as earn the rights to announcements at "basketball and baseball games, radio and television commercial spots, and premium ad space on basketball game programs."
Confirming details separately to Good Beer Hunting, Brickels says that UNCW customizes sponsorship packages “based on need and budget of the client,” and that monetary agreements for marketing range from $1,000 for posters and magnets, up to to $35,000, which would include an array of media materials, from radio and TV ads to signage, giveaways, and a web presence in coordination with the college. That upper range also includes other “marketing opportunities that allow for year-round visibility for the sponsor,” according to Brickels.
According to the university, the distributors' $10,000 agreements amount to "advertising rights and four-season passes to all sporting events."
With 19 locally owned breweries operating in the three counties that include and surround Wilmington, North Carolina, members of the local industry were left wondering why they weren’t given more of an opportunity to represent the nearby beer community.
“The overall feeling is that it felt a little like a kick in the teeth,” says Jeremy Tomlinson, president of the Cape Fear Craft Beer Alliance and owner of the Wilmington Ale Trail. “We have several local breweries who’ve donated beer to UNCW for a while, so there was already some kind of relationship set up.”
Tomlinson admitted that the agreement was legally responsible in terms of “pay to play”—a slang term for when a business exchanges money to effectively “buy” placement of a product—but that the Alliance would still “investigate all our options” because of the clear open transactional nature of the agreement. Tomlinson believes UNCW leadership may not have been “fully informed” about what their actions could imply, so the Alliance is planning to send a letter to the university and state Alcoholic Beverage Control Commission expressing concern over the actions of the distributors.
Requests for comment weren’t returned from the two distribution companies.
“Funding from any source assists the Athletics Department in meeting the expenses in providing our student-athletes the best opportunity to succeed, not only on the court or field, but in the classroom,” Schechtman told the Daily. “Sponsorship funds are also directed toward enhancing a fan experience at games and events.”
WHY IT MATTERS
College sports stadiums have become a new battleground for beer over the last few years, as universities seek new revenue streams for athletic and other departments.
At West Virginia University, $1.4 million worth of beer and wine was sold during the 2018 football season, about $676,000 of which went back to the athletic department. The University of Mississippi will bring in an estimated $1 million in revenue during this football season. In a recent analysis of Ole Miss beer sales, Coors Light (5,348 cans), Miller Lite (3,106 cans), and Blue Moon (2,406 cans) were the best-selling options during an Oct. 20 home game against Texas A&M University. With a seating capacity of 64,038, the school sold about 15,400 total beers in one game, showing how valuable such an event can be for major breweries like MillerCoors. Michelob Ultra has even gotten its own named seating section at the University of South Alabama.
The opportunity is proving to be so lucrative that even Duke University’s Cameron Indoor Stadium, one of the most iconic sporting venues in the country, is considering alcohol sales for all fans.
But for smaller breweries, there’s less appeal. Mark Anthony Mueller, brand manager at Wilmington’s Waterline Brewing Company, was succinct in his impression of the deal: “It was pretty shitty.”
This year will be the fourth straight he’s helped organize sponsorships for UNCW’s “Seahawk Club” supporters, donating three kegs of beer before each men’s basketball game. When North Carolina passed a law to allow for alcohol sales at college sporting events to start in 2019, he asked UNCW for the opportunity to make a pitch to include Waterline beers during games as well.
He says he never got a chance to have that meeting, but doesn’t place blame on UNCW for overlooking its many local options. Rather, he’s disappointed the university didn’t understand or see the value in what that agreement could have meant. Mueller didn’t feel comfortable discussing the idea of “pay-to-play,” but says he’s seen those kinds of tactics locally in the past.
In a response sent to Port City Daily, Brickels said that the university "will not be pursuing a partnership with any local breweries during this fiscal year,” which ends June 30, 2020. He also added that the school doesn’t “anticipate incorporating a local brewery into our ‘pouring rights’ portfolio for the fiscal year 2020-2021.”
Should discussions open up to local options, Michelle Savard hopes Wilmington Brewing Company will be a part of it. Unlike Mueller, Savard, Wilmington Brewing’s co-owner, had a meeting with UNCW that went "lovely," although she says she was told that "there are a lot of things that factor into academia," and she quickly got the idea that there wouldn't be an opportunity to re-engage until next year.
After adding enough capacity to double the brewery's output to 6,000 barrels this year, Savard proposed to make a customized beer with the university to be branded and sold at games, similar to what New Belgium Brewing Company accomplished with North Carolina State University and their Old Tuffy American Lager. Notably, another North Carolina business, Appalachian Mountain Brewery, has its own officially-licensed product with a university, making Yosef Golden Ale in partnership with Appalachian State University.
In the case of Old Tuffy, that beer is sold statewide and in NC State facilities, with a portion of sales going to the school's fermentation science program. In-game sales figures aren’t available, but in grocery, convenience, and other chain stores in North Carolina, Old Tuffy sold about 3,000 BBLs’ worth of beer in its first four months of availability.
“We’re the closest brewery to the university, we have the dedicated tank space, and we’ve always wanted to do these kinds of special products,” says Savard. Wilmington Brewing is located just a half-mile drive from campus. “But we were told we weren’t the first ones to approach the university, which makes sense, but I didn’t think about distributors being an option, to be honest.”
“I think if you’re in different worlds, it can be difficult to navigate and understand what could be thought of as ‘pay-to-play’ or a sponsorship,” Savard says of UNCW’s decision. But given the rise of local options in recent years, she adds that it’d benefit the college to explore nearby brewery options, thanks to the connections and goodwill smaller breweries have built up locally.
“It’s cool that Wilmington gets to have this conversation because it wasn’t too long ago it wouldn’t have come up in the first place,” Savard says.
Still, the circumstances surrounding that conversation have left some perturbed, and could serve as another demonstration of how small vs. big works in the world of beer.
“It makes me sad that local breweries have ingrained themselves in their community,” says Tomlinson. “So many different events and other universities have embraced local beer, and we can’t guarantee that locally spent money stays in our community.”
Words by Bryan Roth