Coke contract up for approval, revised agreement could net $1 million

A proposed expansion of UW–Madison’s contract with Coca-Cola would make the soft drink the exclusive choice at the Kohl Center and could generate more than $1million in revenue.

The revised contract would expand exclusive soft drink “pouring, marketing and sponsorship rights” for Coca-Cola to all athletic facilities, including the Kohl Center, and includes a guaranteed payment to the Athletic Department of $735,250. Other financial incentives could increase revenue to more than $1 million over the next four years.

The proposal, which the UW System Board of Regents is scheduled to act on when it meets Thursday and Friday, Sept. 9-10, would extend the university’s current contract with Coke by 18 months to June 30, 2003.

First approved in 1992, the existing contract provides for the exclusive sale of Coke products at the UW Field House, Camp Randall Stadium and University Ridge Golf Course in exchange for beverage dispensing equipment. Currently, it does not include any payment to UW–Madison, although Coca-Cola does pay $85,000 annually for scoreboard sponsorship.

The proposed contract extension would apply only to campus athletic facilities.

“With the construction of the Kohl Center, UW–Madison determined that it was appropriate to conduct a competitive bid/negotiation process with potential suppliers to provide service at that facility, as well as other facilities,” the regents document states.

Vince Sweeney, associate athletic director, says it is standard procedure for university athletic facilities to feature one soft drink vendor such as Coke. Pepsi also competed for the revised contract. “We’ve always sold soda at athletic events, so this is just an expansion of what we had already been doing,” he says. “In addition, it’s part of our ongoing effort to continue to self-fund the athletic department.”

The proposed contract expansion also includes limited additional sponsorship opportunities for Coke, including signs and scoreboard displays at the Kohl Center and ads in athletic programs, but still gives UW–Madison the final say over their use.

The regents must approve any contract between the university and a private, for-profit group that exceeds $500,000. The contract is with Coca-Cola Company and Midwest Coca-Cola Bottling Company.