How LSU and other schools can sell booze without breaking the rules

A work-around utilized regularly by a pair of smaller schools creates an interesting potential loophole for schools like LSU, whose personnel have expressed desire to sell alcohol to all ticketed fans at sporting events but are barred from doing so by conference rules.

The sale of alcohol and all the peripheries that come with it can be big money at sporting events like college football games. A pair of smaller schools have mapped out a way that LSU and others that are barred from doing so by conference rules or other regulations could get a cut of that money while staying in compliance.

The “Florida Classic” is the name of the annual football game between Bethune-Cookman University and Florida A&M University. The game itself is just the grand finale to a week of other events, all operated under the umbrella of an identically-named 501(c)(3) which is co-owned by the two schools.

According to Jordan Culver of the Tallahassee Democrat, FAMU made $870,000 off the non-profit last season.

Not only does this provide both B-CU and FAMU with some tax relief (revenue generated by a 501(c)(3) isn’t taxed until an individual or business takes the money as income) but it also provides a channel that FAMU athletic director Milton Overton Jr. spoke about:

"…What that does is it gives you the opportunity to execute third-party agreements without risk to the institution. It’s a separator. It gives you flexibility, in the end, to generate a few dollars and work with third parties.”"

That separation and flexibility to work with third parties, like alcohol distributors, is exactly what officials like LSU AD Joe Alleva could take advantage of.

At the SEC spring meetings last month, Alleva talked about his desire for the SEC’s rules on selling alcohol at games to change. By utilizing this model, Alleva wouldn’t have to wait.

In simple theory, LSU could partner with a conference opponent on its annual schedule like Alabama, Auburn or Texas A&M to create a 501(c)(3) co-owned by the two schools. That 501(c)(3) could then hire staff to create, manage and operate events leading up to the annual game between the two schools’ football teams. The 501(c)(3) could negotiate contracts with alcohol distributors.

At all the events including the football game, the space utilized by the 501(c)(3) could sell alcohol as long as the alcohol sales weren’t taking place inside the stadium on game day. Neither school would be in violation of the conference rules because they wouldn’t be making the alcohol sales directly. To further legitimize the 501(c)(3), part of the revenue could be donated to a charitable cause like medical research.

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There might be significant costs to starting up and initial funding of the 501(c)(3), but those would quickly be covered by revenue from the events. It’s probably preferable for Alleva and LSU to just let its existing concessions and events partners handle alcohol sales once/if the conference restrictions are lifted. Until then, however, this is one way that LSU and other schools like it wouldn’t have to wait to get a cut of the the enormous profit from alcohol sales that their football games create.