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Sports Biz
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CNBC.com Boone Pickens |
In a strange twist, this team located in Stillwater, Oklahoma, is likely the team that is most directly affected by the economic downturn in all of sports.
You see, when oil magnate and school booster Boone Pickens made the largest single donation in NCAA history of $165 million in Dec. 2005, the condition of his donation was unique. Pickens insisted that the money be managed by his company, BP Capital. For Oklahoma State, it was a no brainer. Pickens was known as one of the smartest men in the entire business world and the money could grow faster with him than if you put it in a bank or randomly put it in the market.
In 2006 and 2007, Oklahoma State's athletic department coffers were busting, with Pickens' funds reportedly pulling in some $3.7 billion over that time period. But Pickens' fund has fallen on hard times and therefore so has Oklahoma State.
On July 9, Pickens told me that his donation to the program was up 120 percent, meaning that the donation was now worth $363 million to the Cowboys.
But that was coming off a month when Pickens, who had bet long on oil, saw barrels of crude rise to an all-time high of $126. A month later, oil prices started plummeting and athletic director Mike Holder said that the rough times for Pickens had delayed the construction timeline of the new $50 million indoor practice field.
Late last month, Pickens told the Wall Street Journal that his fund had lost $1 billion. A week later, when oil was at $98.63, he told CNBC, his losses were worse.
While it's not clear, what that means exactly for Oklahoma State in terms of where that money is at now, we're going to give Cowboys fans a guide to what they need to hope for.
1 -- Root for the price of oil to go up. Pickens has said that he expects the price of oil to be back up to $150 a barrel by next year, so he's still betting long. But he also said that his fund has done some things to protect itself if that doesn't happen.
2 -- Hope the overall market turns around. Pickens said his greatest losses actually came in equities.
3 -- Go with the wind. The new "Pickens Plan" is all about utilizing power-generating wind turbines across the country.
Two weeks ago, Pickens said on CNBC that about 15 percent of people who held a position in his fund expressed that they wanted out by the end of the year. With the Cowboys playing in Boone Pickens Stadium, that's clearly not an option for the Oklahoma State athletic department. Withdrawing the funds would be a slap in the face to their biggest benefactor.
The Cowboys should win this Saturday on homecoming against 3-3 Baylor. But make no mistake, their tougher opponent is the economy.
Questions? Comments?
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