Why the University of Florida Gets a ~$20M Cut of Gatorade Profits Every Year (The Hustle)

Why the University of Florida Gets a ~$20M Cut of Gatorade Profits Every Year

As the clock ticked down in the 4th quarter of the 2020 Cotton Bowl football game against the University of Florida, 2 Oklahoma players snuck behind head coach Lincoln Riley with a heavy orange cooler and lifted it over his head, and soaked him with Gatorade.

Per one of the most enduring traditions in college football, Oklahoma’s 55-20 victory was official.  

But despite the loss, Florida still had a reason to celebrate: Every bottle of Gatorade sold in the world — and every drop poured on unsuspecting coaches during football season — signals a win.

An undisclosed share of Gatorade’s profits flows to a Gatorade Trust. The trust then sends 20% to the university, which employed the professor who invented the drink nearly 60 years ago.

In 2015, Florida announced it had accumulated ~$250M from the royalties. Its annual take over the last few years has been ~$20M, according to the university.

The importance of trademarking 

Patents expire after 20 years, but trademarks are forever, as long as you renew them.

Cade knew this, and the registered trademark of Gatorade — originally filed by Stokely-Van Camp after making the deal with the Gatorade Trust — is the only reason PepsiCo owes royalties. 

The company has not been able to get out of the arrangement, even as it has transitioned away from a Gatorade logo to ‘G’ for the last several years.  

“There was some wrangling over that: ‘Hey, you know, we may not have to pay you guys because it doesn’t say Gatorade,’” Jim O’Connell, Florida’s assistant vice president for technology transfer, told The Hustle. “But I’ll say it this way: They are paying us royalties on those products.”

Florida has used its royalties to bolster its research and entice new researchers looking to make lucrative discoveries.

The university patents around 140 inventions each year and made ~$500M off licenses between 2008 to 2018, placing it near the top of the market. In 2018, the total licensing revenue from university-affiliated patents was ~$2.9B.

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