You asked several questions about the structure of the college bookstores at UConn, the Connecticut State Universities (CSUs), and the community-technical colleges (CTCs). Specifically, you wanted to know (1) how the bookstores are operated, (2) if they are under contract management, (3) the terms of the contracts, and (4) how much the colleges and universities receive from the contract firms.

SUMMARY

UConn's bookstores are operated by the UConn Co-op, a nonprofit, cooperative corporation. The Co-op pays the university an annual lease and debt service payment for the Storrs campus bookstore; it does not make any payments for the branch bookstores. UConn's Division of Athletics receives a commission payment on items sold at sporting events or through the athletics website and catalog, otherwise the university receives no portion of the bookstores' revenue.

Each CSU campus contracts separately with Barnes & Noble (B&N); each contract contains different terms and durations. The CSUs receive anywhere from 9% to 14% of bookstore sales from B&N.

Eight of the 12 CTC bookstores are managed by the Follett Corporation. The other four are owned and operated by the respective institutions. The colleges where Follett manages receive around 5% of bookstore revenue, but this varies depending on the institution's contract with Follett. The CTC system is currently negotiating a master bookstore services contract for the eight colleges.

UCONN

Bookstore Operations

UConn's bookstores are operated by the UConn Co-op, a nonprofit, cooperative corporation established to provide bookstore services for the university community. The Co-op is owned by approximately 30,000 members, including UConn students, faculty, and staff. The university owns the buildings that house the bookstores.

Contract Terms

According to William Simpson, the president of the UConn Co-op, the Co-op pays the university an annual lease payment of $ 300,000 a year for the Storrs campus bookstore. Part of the lease payment goes towards the bond payments associated with the bookstore's facilities. The Co-op does not pay the university for the branch bookstores. According to Simpson, the branch bookstores operate at a loss due to the small enrollments at their branch campuses. In addition, the Co-op pays the salary, utility, and maintenance charges associated with the bookstores.

The university does not receive a percentage of bookstore revenue. However, the Division of Athletics receives a commission payment on items sold at sporting events or through the athletics website and catalog. The Co-op also issues patronage rebates to its members. Moreover, Simpson noted that the Co-op makes substantial donations for student scholarships and academic programs throughout the university.

The agreement between the Co-op and the university does not have a termination date, but it includes a provision permitting the university to terminate the contract. According to Simpson, the Co-op has approximately 20 years remaining on its lease agreement with the university.

CONNECTICUT STATE UNIVERSITIES

Bookstore Operations

Each CSU campus contracts separately with B&N; each contract contains different terms and durations. All four of the bookstores operate out of university-owned buildings, and each university pays the overhead costs associated with the building (e. g. utilities and maintenance costs). With one exception, the bookstore employees are employed by B&N.

Contract Terms

Pamela Kedderis, vice chancellor for finance and administration for the CSU system, provided further details on each of the CSU's contracts with B&N.

Central Connecticut State University (CCSU). CCSU's contract with B&N runs from July 1, 2002 through June 30, 2007. Under the arrangement, B&N pays CCSU 10% of gross sales up to $ 3. 5 million and 12% of gross sales over $ 3. 5 million. In FY 2006, CCSU received $ 492,730 from B&N. B&N also gave CCSU $ 25,000 per year for student scholarships for the first three years of the contract.

Eastern Connecticut State University (ECSU). ECSU's new bookstore is expected to open around June 30, 2007. At that time, its contract with B&N is scheduled to renew for a new 5-year period. B&N outfitted the bookstore with furnishings and equipment. Under the new contract, B&N pays ECSU 9% of gross sales up to $ 2. 5 million and 11. 5% over $ 2. 5 million. In FY 2006, B&N paid ECSU $ 151,351 and the rental expenses for a trailer used as a temporary bookstore.

Southern Connecticut State University (SCSU). SCSU's contract runs from April 1, 2005 to March 31, 2010. B&N pays SCSU the greater of (1) $ 600,000 annually or (2) 12% of gross sales up to $ 4 million and 14% of gross sales over $ 4 million. In FY 2006, SCSU received $ 758,937 from B&N.

B&N also agreed to:

1. donate the temporary trailer that housed the bookstore before completion of the bookstore facility, valued at $ 150,000,

2. contribute $ 300,000 to SCSU to renovate and equip the bookstore facility,

3. make an annual donation of $ 7,500 for textbook scholarships, and

4. make a one-time $ 100,000 donation to be used at the university's discretion.

Unlike the other CSUs, one bookstore employee at SCSU is employed by the state. However, under the current arrangement B&N is required to abide by state personnel regulations and reimburse the state for “for all present and future compensation including salary, wages, and fringe benefits costs for all who retain their state employee status. ”

Western Connecticut State University (WCSU). WCSU's contract runs from July 1, 2004 through June 30, 2009. B&N pays WCSU the greater of (1) $ 200,000 annually or (2) 10% of gross sales up to $ 2 million and 11. 5% over $ 2 million. In FY2006, WCSU received $ 283,000 from B&N.

B&N also agreed to:

1. make an annual $ 10,000 donation to the WCSU endowment fund, and

2. provide up to $ 100,000 to upgrade current bookstore facilities.

COMMUNITY-TECHNICAL COLLEGES

Bookstore Operations

Eight of the 12 CTC college bookstores are managed by the Follett Corporation. The other four colleges' bookstores are owned and operated by the respective institutions. Table 1 lists the colleges according to their bookstore arrangement.

Table 1: Bookstore Ownership

Contract Terms

Paul Susen, director of academic affairs for the CTCs, stated that each of the eight colleges where Follett manages has its own contract. The contracts are staggered; the last one set to expire on June 30, 2007.

Under the contract arrangements, Follett staffs and operates the bookstores and the colleges receive a percentage of the revenue. According to Susen, a college typically receives around 5% of the revenue, but this varies depending on the special contract. The fee covers the overhead costs incurred by the bookstores, which are all housed in the colleges' main buildings. In FY 2006, Follett paid the CTC system approximately $ 700,000 in commission payments for the eight colleges it manages.

Susen notes that the CTC system is currently negotiating a master bookstore services contract for the eight colleges. They have already received bids and are close to making a final decision. All of the colleges covered by the contract will be held to the same policies, which include deadlines for orders and textbook buyback procedures. This will enable the firm to purchase the textbooks in bulk, which Susen hopes will result in lower textbook prices for students.

Susen's ultimate goal is that all 12 community colleges will be included in the contract. While collective bargaining issues precluded the other four institutions from joining the master contract at this time, it is something that the CTC system is considering in the future.

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