Evidently Boone is about as good at gambling in the market as Tom Kivisto, and it seems that there is no one out there who is willing to question his decisions.

Three years ago Pickens donated $165 million to Oklahoma State’s athletic department in an effort to buy OSU’s way back into contention in the Big 12 Conference. Brand new indoor practice facilities for every sport on campus, a revamped football stadium, press facilities, etc. It was all worth doing, and Pickens was going to foot the bill to do it.

Just to make sure everyone knew he was serious, he allowed the school to take out a $10 million life insurance policy, you know, just in case.

But what’s striking about all this is that Pickens didn’t just donate the money to the school.  He took the money and plunked it down in BP Capital Management, a hedge fund controlled by none other than Pickens himself.

It turns out, BP Capital Management isn’t immune to the current market forces, and has had nearly all of the $165 million in “donation” wiped out by margin calls.

So now the University is stuck with an ongoing project (that has now been put on hold) with no way to fund current development, much less see the project through to completion.  The football stadium expansion was funded with loans backed by what was a $300 million chunk of collateral in BP Capital.  That was when times were good and oil was expensive.

Oh how the times have changed.

The initial gift kept growing and growing as it sat in BP Capital, thanks to the increasing oil prices after the hurricane action in the gulf gave an instantaneous jolt to the oil markets.  But what goes up must come down.

As oil prices started to fall, BP found itself “on the wrong side of the market” so to speak.

So now the stadium project (named after Pickens, naturally) generates over $1 million in interest payments per month.

Hopefully this will serve as a lesson to major institutions that there is no substitute for cold hard cash.

May the common investor take note.

Energy, Finance, Sports donations, hedge funds, Oklahoma State, T. Boone Pickens

A little weekend entertainment.

This would make college football that much more fun to watch!

“Givin’ him the business…”

Now that’s funny.

Sports college footbal, officiating, sports commentary