I'm Boone Pickens and I'm an oil man.

[LonghornDave]

And he’s also a shitty investor and philanthropist.

So, T. Boone Pickens donated $165 million to Oklahoma State. It seemed a little poor in taste to donate solely to the athletic department, but regardless, it was his money and he made a large donation to a cause he believed in. What was strange is the structure of the donation. He said it had to be invested in his hedge fund, BP Capital Management. He also made sure he and newly appointed athletic director, Mike Holder (whom he essentially chose), had total authority over how the funds were to be invested. It seemed like a pretty good deal when the investment grew to over $300 million in 2007. Then, as the board of regents began insisting that some of the funds be cashed out, he resisted and instead allowed the investment to be used as collateral to secure a greater than $100 million loan. The purpose of the loan was to renovate and expand the football stadium named, “Boone Pickens Stadium”.

Unfortunately, now is when the story turns sour. It turns out that Mr. Oil Man went short on an investment when oil first hit $100 (ouch) then he went long when oil hit the upper $140s (double ouch). Now it looks like he has lost a huge portion of the investment. Rumors say that essentially the entire amount has been lost. This was part of more than $1 billion that his hedge fund has lost this year. Let’s see, where does this leave Oklahoma State University. Well, now they are stuck with over $100 million in debt with interest payments of approximately $13 million per year. They have also had to stop construction on their new Boone Pickens athletic village. I guess it will be up to the taxpayers of Oklahoma to pick up the mess. Nice job, asshole.

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Here is the rumor that has been circulating but doesn’t seem like it has hit the major news stories yet.

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.

[Rand_Rover]

Funny for a guy with “Longhorn” in his username to be worried about anything in Oklahoma.

Also, seems like there’s a saying about chickens and hatching that would perfectly cover this situation.

[WarmNPrickly]

That is hillarious. I figured that dude was going to try and pull a Ross Perot in 2012 by the way he has been running ads out here. He was clearly trying to make the point that he was a rational moderate. He is a class A asshole.

[Dewey_Finn]

If he were responsible, he’d make another, cash contribution to get them out of the hole they’re in as the result of the debt. That said, they were crazy to accept such restrictive terms, and to accept such a lavish gift only for the benefit of the athletic department.