Updated throughout the day with quick takes from staff.
Oklahoma State University has this odd relationship with billionaire oil tycoon T. Boone Pickens. To be specific, T. Boone sort of owns the athletic program lock, stock, and barrel in a way that only Phil Knight at Oregon can really rival, having given the university $165 million that ballooned to $300 million dollars at the peak of its value.
One wrinkle, though: the donation was left in a hedge fund by Pickens, who insisted on a loan for the purchase of the materials for improvements to Lewis Field and other athletic buildings on the Stillwater campus, which totaled around $200 million. The money in the hedge fund -- swollen by massive global oil prices -- was used as collateral. Early warning signs last week pointed to a reduction in the value of the money making all of this borrowing possible, but now the situation may be far, far worse: the entire donated sum may have been eaten up by cratering oil prices and inept line calls made by T. Boone's fund managers.
From OUInsider, via 100% Injury Rate:
Officials were told that actually, the entire $ 165 million donation, and the earnings, which once inflated the gift to over $300 million, had recently been eliminated by margin calls due to drastically falling oil prices.100% Injury Rate wonders if a university has ever declared bankruptcy, but that seems drastic. Remember that the really wealthy never go broke, they just "manage illiquid financial situations through proactive partnership with investors and capital solutions" or if you like English, they "borrow more money" or "sell stuff." Pickens himself is still worth a huge amount of money even in a bearish oil market, and could probably bail out the university's liability on the loan by himself.As of Monday OSU's gift had flat-lined completely and was declared 'gone.'
Being A MAN WHO IS 40 (times two), he probably will do something like this, but for the moment take note of two things. First, Oklahoma State University at this instant may have an outstanding liability on a football stadium used six or seven times in a given year that exceeds 40% of their net 2009 projected general revenue as a university. Two, the global financial crisis has finally affected even precious football, whose economic demand has been notoriously inelastic and impervious to the effects of numerous recessions.
This post originally appeared on the Sporting Blog. For more, see The Sporting Blog Archives.
6 comments
Comments
This "donation" was outright fraud. It was done right in the middle of football recruiting season (about 2 weeks before signing day), and not a dime changed hands. It looks now like it never will.
Where is the NCAA?
by plamberson on Oct 24, 2008 11:51 AM EDT reply actions
Some people will believe anything they read. Boone’s $165 million is Ok State’s, period. He promised the $165 million no matter what. He is rich and still has money to pay if forced to. He just invested it in his fund to try and help Ok State fund the "Athletic Village" they are building.
And, the money isn’t gone, Boone said so himself:
http://www.cnbc.com/id/27240502
"Darren: Are you still in the positive on that initial $165 million investment?
Pickens: We’re up a little bit. Not much though."
James Hale is a convicted felon and a complete hack. I have heard him on the radio trash a 5 star recruit who didn’t choose OU then go on and on about a 2 star. Most of the time the 2 star never sees the field. The guy hates OSU and has written multiple Ok State articles on OUinsider, all have stretched the facts and shown his hate for Ok State.
by KurtisWH on Oct 24, 2008 12:37 PM EDT reply actions
1. Your link doesn’t work
2. Where is the money? I don’t see you arguing that OSU has the money, but just that Pickens promised it and can pay "if forced to." That doesn’t sound like a donation.
by plamberson on Oct 24, 2008 1:30 PM EDT reply actions
Why in the hell would you believe ANYTHING about OSU published in the freakin OU Insider?
The initial capital is all there, but the profits have pretty much dissolved.
by Heywood Stoops Blome on Oct 24, 2008 3:58 PM EDT reply actions
Way to go using an anonymous message board post which cites and quotes none as "fact." To bad you’re wrong.
"Rumors circulating that the funds generously donated by Boone Pickens
to Oklahoma State University’s athletic program have been completely
depleted and the massive west end zone project will not be finished
are, without question, false. They are simply not true."
http://www.okstate.com/ViewArticle.dbml?DB_OEM_ID=200&ATCLID=1610821
Congratulations Mr. Hall on lacking any form of journalistic integrity. Absolutely disgusting.
by GetYourFactsStraight on Oct 24, 2008 9:35 PM EDT reply actions
by GetYourFactsStraight on Oct 24, 2008 9:36 PM EDT reply actions
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