UNBF gets $3.7 million for Pepsi deal

In an exclusive interview with the Brunswickan, University of New Brunswick Comptroller Daniel Murray revealed at last that the UNB Fredericton campus will receive an estimated $3.7 million dollars as a result of the exclusive "Cold Beverage Argeement" with Pepsi Cola. In total, Murray estimates that $4.9 million in revenue from the agreement will be shared between unb, unb St. John and St. Thomas University.

Citing ongoing confidential negotiations, unb officials has previously refused to release the specifics of both the proposals obtained through the tendering process and the final proposal from Pepsi Cola. The release of the financial details of the Pepsi deal marks a new gesture of openness form the Parr-Johnston adminstration. The decision to release the information came one day after a Brunswickan request for an interview with the President to discuss the specifics of the deal.

According to Parr-Johnston, releasing the funding formula to the University was simply the right thing to do.

"We think it is an important arrangement that has positive benefits for the students and the University community. Disclosing it helps all concerned better understand the benefits."

The decision to reach an agreement was similarily an easy decision for the Administration, Parr-Johnston said. "The last arrangement expired in May of 1998, and it’s not unusual to make this sort of deal, so we proceeded with the request for proposals."

According to Murray, the University has a specific set of goals and financial targets entering into the request for proposals (rfp) process. All, he said, were met.

"We wanted to ensure that all stakeholders who benefitted under previous UNB arrangements continue to receive at least the same level of benefits under our new arrangement with Pepsi," he said.

While Murray expects that "somewhere, somehow there is some small group we missed," he is of the belief that the University’s groundwork prior to the rfp was as thorough as possible. The rfp and subsequent evaluation of bids was facilitated by Spectrum Marketing.

Acknowledging that the unb agreement sees the Campus Shoppe, Aitken University Centre and Social Club amalgamated under the unb line-item, Murray indicated that pleasing current tenants was a concern for the university.

" On the retail side, we wanted to ensure that all campus vendors receive at least the same level of benefits under this new agreement," he said.

"As for direct benefits to student organizations, we sought a deal which would see more funds accrue to them. Our goal was to double direct payments to recognized student government organizations and to unb Fredericton athletics."

In each of the ten years of the contract, the unb Student Union will receive a direct annual payment of $12,160 from unb, while the Graduate Students’ Association and campus will receive $2,960 each. Meanwhile, the Athletics department will receive a total of $37,000 over the deal’s 10 year lifespan.

Murray stressed that like all figures in allocation breakdown, disbursements to student organizations are based on total volume sales on campus. The Comptroller’s Office used present-day sales figures to estimate the total revenue which might be generated under the Pepsi proposal.

Under the Pepsi agreement, direct payments to student organizations and Athletics are double what they were under the University’s previous contract with Coke. Direct payment to student organizations and Athletics represent a component of unb’s $3.2 million dollar share of revenue from rights fees and vending.

The lion’s share of funds under this line item–nearly $1.7 million–will be allocated to unb scholarships, bursaries, athletics and to student employment ventures. Other funds allocated from rights fees and vending include $300,000 to Residence Life and Conference Services and $445,000 to retailers previously under unb’s contract with Coke. An additional $200,000 has been set aside to cover legal and administrative costs associated with the deal, Murray explained.

The financial benefits to student organizations and athletics do not end with the noted direct payments. According to the figures released by Murray, student organizations will receive $90,000 in "Over and Above" support, with an additional $54,000 of the same being allocated to Athletics.

Finally, $60,000 in over and above funds are earmarked for the purchase of score clocks for athletics and signage for both student organizations and athletics, Murray said.

Over and Above funds, Murray explained, constitutes direct funding of student and athletic ventures by Pepsi Cola. He cited the SafeRide van, concert promotions and direct student services offered by the rfp Student Union as examples of areas which might benefit from sponsorship through the Over and Above line item.

"The areas which might benefit from Over and Above support are based on requirements identified in the rfp process," said Murray, "and Pepsi had a number of suggestions during the bidding process. In the end, however, the funds will be spent based on discussions between Pepsi the student groups and athletics. The university’s emphasis here is on putting students in the driver’s seat."

An additional $150,000 has been earmarked from the creation of specific "Pepsi scholarships," though Murray was quick to point out that unb will set the criteria for scholarship eligibility.

"We’re really happy to secure extra funds for scholarships," he said, "but they will be allocated between the campuses based on the number of students at each institution, and at unb our normal Scholarships and Awards Committee will determine the criteria for the scholarships."

Finally, the deal provides for specific marketing funds, with $60,000 being allocated to "vending promotions, other retail promotions and promotions through other student organizations and athletics," said Murray. The marketing funds have been structured so as to extract maximum benefit for the University, he explained.

"It’s not the typical allocation for marketing," said Murray, "these have been structured so that they function more like Over and Above funds. They’ll include typical ‘under the cap’ sorts of promotions, but there will be more tangible benefits as well," he concluded.

At press time, no details were available from Pepsi detailing how marketing funds might be spent. While pleased with the deal and applauding Parr-Johnston for making the funding arrangements public, unb Student Union President Kate Rogers has some questions for Pepsi. In particular, she is waiting to hear how the giant multinational corporation might want to spend the marketing funds.

"It’s a very positive deal for unb, especially with the doubling of funds to student organizations and Athletics and the possibility of new funds for scholarships and bursaries. It’s really encouraging that the Parr-Johnston administration is making student services such a priority," she said.

"And telling the University community where the money is being spent is that much better an idea. I still have concerns, namely that students remain involved with Pepsi in every stage of the implementation process."

Rogers appears, however, to have some issues with Pepsi’s handling of the implementation process. "Pepsi could have done a lot more to advertise and popularize the deal," she emphasized, "we encouraged them, but have been disappointed that they have not done more, beyond changing over the vending concessions and what have you, to make their presence known on-campus. If this is a positive deal, they should be making a positive presence here."

Pepsi officials have long declined to comment on the specifics of the deal. Voicemail messages left by the Brunswickan on the direct telephone line of local Pepsi marketing representative Jeff Murrins went unreturned this week and last.

Leave a comment