T Boone Pickens $165m Donaton-- Gone

Baby Arm! · October 22, 2008

STILLWATER -- "It can't get any worse," that's what one Oklahoma State Regent said Tuesday morning, after getting another dose of bad news regarding funds earmarked for OSU athletics.

Yesterday all indications were that OSU Regents were reportedly told Friday afternoon that a large portion of the Boone Pickens donation in the BP Capital hedge fund was virtually wiped out by margin calls on the funds investments in the third quarter.

Today the news was a little more grim, as 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.

As of Monday OSU's gift had flat-lined completely and was declared virtually 'gone.'

Ironically Pickens will become both the hero and the goat in the drama of high stakes energy gambling, and of forunes won, lost and regained. Pickens made his historic gift in 2005, declaring "I'm tired of losing," when asked why he donated the huge amount to OSU athletics.

But the gift came with a stipulation, as Pickens insisted that he and appointee Mike Holder, who he later named Athletics Director, be given total authority over how the funds were to be spent, and by whom.

And the move appeared to be a stroke of genius as oil prices soared in a post Katrina economic climate, swelling the initial gift to over $ 300 million. That was before things began to turn in 2007, as international demand for oil failed to meet projections, causing the fund to come to a sudden standstill, and then dropping on mistakes made, and repeated by fund managers, managed by Pickens.

As oil prices started to slide in early 2008 Pickens increasingly found himself on the wrong side of the volatile oil futures game, betting 'short' as prices rose to $ 100, and then long as they began to fall, wiping out much of the two year gain in just four months, and causing AD Holder to announce that OSU's future 'Athletic Village' facility expansion had been put on hold in July.

Now the project looks like it will be shelved, as O-State Regents try to just keep their heads above water while swimming in debt.

The school had borrowed almost all funds used in the celebrated stadium expansion, using the almost $ 300 million balance in BP Capital as collateral.

Some OSU Regents are livid that their pragmatic warnings were not heeded when the fund was flush with cash.

Pickens and Holder apparently both resisted pleas by some OSU Regents to bank a good deal of the balance out of the fund when it exceeded $ 300 million, just 14 months ago. Instead both endorsed a plan of borrowing almost $ 200 million needed to expand and renovate Boone Pickens Stadium on the Stillwater campus.

Ironically, the stadium had been re-named after Pickens following his generous donation in 2005. But now that stadium sits as a drain of over $ 1 million per month in interest payments alone, on an already strapped athletic budget, which annually ranks between 8th and 9th in the Big XII conference.

Today, the problem is how to fund the surprise interest that is expected to top $ 13 million annually, when just months ago the school was going full steam ahead on an aggressive expansion of facilities that it believed were already paid for.

Quoner · October 22, 2008

Well, COBA did fumble away most of a $10M donation a few years back and blamed in on 9/11? Does that count?

Stan R · October 22, 2008

o u c h

SilverEagle · October 22, 2008

If only something like this would happen to OU.....and UT.....and A$M........and epecially SMU!!!!!

Green Mean · October 22, 2008

If only something like this would happen to OU.....and UT.....and A$M........and epecially SMU!!!!!

They aren't that stupid.

Quoner · October 22, 2008

I hear Dallas Jesuit is doing well and investing wisely.

ADLER · October 22, 2008

Gee Dad, I know you suggested Mayfield Power but it wasn't really doing anything. Eddie said that Jet Electro was a sure thing.

Well, Ward wasn't around to bail out Wally and Beav this time.

Green Dozer · October 22, 2008

TRADE REC CENTER FOR A STADIUM

T. Boone donated some money to the YMCA in Dallas, and made the presentation on a bike. Saw it on the news last night. I thought to myself if he would donate that kind of money to UNT, we'd give him a bike and an eliptical. Heck, he we could trade him the rec center for a the new stadium.

NT80 · October 22, 2008

Pony up-set?

NT80 · October 22, 2008

Ironically, the stadium had been re-named after Pickens following his generous donation in 2005. But now that stadium sits as a drain of over $ 1 million per month in interest payments alone, on an already strapped athletic budget, which annually ranks between 8th and 9th in the Big XII conference.
Today, the problem is how to fund the surprise interest that is expected to top $ 13 million annually, when just months ago the school was going full steam ahead on an aggressive expansion of facilities that it believed were already paid for.

So now instead of OSU having a paid off new 65K seat stadium they are $13 mil in debt each year and many phases never started. Only wish it was OU instead.

SUMG · October 22, 2008

Pickens has done other donations tied to hedge funds. He got a lot of good pub for giving UT Southwestern Medical School.....$50 million a while back. I thought it was odd then, that the donation had to be put into a hedge fund, that would grow into $500 million in 25 years. And, at that point, UT Southwestern could start using the money.

http://www.utsouthwestern.edu/utsw/cda/dep...les/386156.html

So, he gets his ass kissed for his donation....but if the hedge fund fails.....the schools don't get crap.

Not saying that OSU knew that this donation was iffy....but they've already renamed their stadium Minute Maid Field.

kingwoodgreen · October 23, 2008

Gee Dad, I know you suggested Mayfield Power but it wasn't really doing anything. Eddie said that Jet Electro was a sure thing.
Well, Ward wasn't around to bail out Wally and Beav this time.

We have to be the same age or close. Your humor really hits home sometimes. If we ever meet the first round is on me.